University of North Georgia, management report for the fiscal year ended June 30, 2013

UNIVERSITY OF NORTH GEORGIA - TABLE OF CONTENTS -

SECTION I

FINANCIAL

LETTER OF TRANSMITTAL

EXHIBITS

SELECTED FINANCIAL INFORMATION

A STATEMENT OF NET POSITION - (GAAP BASIS)

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION (GAAP BASIS)

C STATEMENT OF CASH FLOWS - (GAAP BASIS)

D SELECTED FINANCIAL NOTES

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET - (STATUTORY BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(STATUTORY BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET
BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND
4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND
5 RECONCILIATION OF BUDGET TO GAAP 6 RECONCILIATION OF SALARIES AND TRAVEL

Page
2 3 5 6
24 25 26 28 30 31

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I FINANCIAL

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
December 2, 2013

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of Regents of the University System of Georgia
and Honorable Bonita Jacobs, President University of North Georgia

Ladies and Gentlemen:

As part of our audits of the basic financial statements of the University System of Georgia presented in the Annual Financial Report for the University System of Georgia, the basic financial statements of the State of Georgia presented in the State of Georgia Comprehensive Annual Financial Report and the issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2013, we have performed certain audit procedures at University of North Georgia. Accordingly, the financial statements and compliance activities of the University of North Georgia were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the 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 the University of North Georgia as of and for the year ended June 30, 2013. Information contained in this report is a by-product of our audits of the basic financial statements of the University System of Georgia and the basic financial statements of the State of Georgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1 is enumerated in the Table of Contents.

As discussed in Note 1 of the Selected Financial Notes, on January 8, 2013, North Georgia College and State University and Gainesville State College merged to become the University of North Georgia. This Management Report contains the combined information of the two previous entities as the University of North Georgia.

This report is intended solely for the information and use of the management of the University of North Georgia, members of the Board of Regents of the University System of Georgia and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully,

GSG:as

Greg S. Griffin State Auditor

SELECTED FINANCIAL INFORMATION - 1 -

UNIVERSITY OF NORTH GEORGIA STATEMENT OF NET POSITION - (GAAP BASIS)
JUNE 30, 2013
ASSETS
Current Assets Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Due from Affiliated Organizations Inventories Prepaid Items
Total Current Assets
Noncurrent Assets Noncurrent Cash Investments (Externally Restricted) Notes Receivable Capital Assets, Net (Note 4)
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Unearned Revenue (Note 5) Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences
Total Noncurrent Liabilities
Total Liabilities
NET POSITION
Net Investment in Capital Assets Restricted for:
Nonexpendable Expendable Unrestricted
Total Net Position
- 2 -

EXHIBIT "A"

$ 26,831,615 1,971,785
650,244 3,220,736
31,851 1,641,841
225,019
$ 34,573,091

$

1,064,356

1,455,802

1,318,581

289,251,517

$ 293,090,256

$ 327,663,347

$

587,532

177,183

54,595

1,837,256

4,169,683

619,455

2,116,324

1,919,429

$ 11,481,457

$ 147,050,143 1,608,628
$ 148,658,771
$ 160,140,228

$ 140,085,050 2,649,952 2,158,931
22,629,186
$ 167,523,119

UNIVERSITY OF NORTH GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - (GAAP BASIS)
YEAR ENDED JUNE 30, 2013
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 Other Personal Services 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 Other Gifts Interest and Other Investment Income Interest Expense Loss on Disposal of Capital Assets
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 in Net Position
Net Position - Beginning of Year (Restated)
Net Position - End of Year
- 3 -

EXHIBIT "B"

$

65,670,316

-13,676,444

73,858 2,042,507

9,992,275 6,594,367 7,077,938 3,256,655
877,332 2,518,174
125,433 2,167,996

$

86,720,407

$

34,855,383

34,610,596

20,656,244

373,812

1,168,054

13,586,710

4,196,173

31,240,917

16,318,538

$ 157,006,427

$

-70,286,020

$

40,968,231

26,172,269 109,890
1,684,801 345,345 -39,432
-8,702,815 -819,852

$

59,718,437

$

-10,567,583

$

23,592,771

2,192,000

$

25,784,771

$

15,217,188

152,305,931

$ 167,523,119

(This page left intentionally blank)

UNIVERSITY OF NORTH GEORGIA STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2013
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 Gifts and Grants Received Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases
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
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
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable Inventories Prepaid Items Notes Receivable Accounts Payable Unearned Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations Change in Fair Value of Investments Recognized as a Component of Interest Income Change in Accrued Interest Payable Affecting Interest Paid Gift Reducing Proceeds of Gifts and Grants Received for Other Than Capital Purposes Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts
- 5 -

EXHIBIT "C"

$

52,391,654

92,096

2,042,508

-58,123,693

-69,292,722

-13,586,710

-87,880

86,488

10,020,894 6,974,384 7,497,067 3,308,355 875,584 2,500,042 122,522 3,152,595

$

-52,026,816

$

40,968,231

155,682

28,312,307

$

69,436,220

$

1,822,674

14,879

-7,753,937

-2,091,249

-8,565,442

$

-16,573,075

$

3,703

48,388

$

52,091

$

888,420

27,007,551

$

27,895,971

$

-70,286,020

16,318,538
-354,771 206,624 2,480,813
-1,393 -635,662 -211,331 265,833 190,553

$

-52,026,816

$

12,183,958

$

-87,820

$

-137,373

$

23,258

$

23,962,097

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY On January 8, 2013, North Georgia College and State University and Gainesville State College merged to become the University of North Georgia. The University of North Georgia is one of thirtyone (31) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of the University of North Georgia 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. The University of North Georgia does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the University of North Georgia 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.
FINANCIAL STATEMENT PREPARATION The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the University's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows.
BASIS OF ACCOUNTING For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues, are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-University transactions have been eliminated.
In fiscal year 2013, the University adopted the Governmental Accounting Standards Board (GASB) Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements. The provisions of this Statement establish accounting and financial reporting standards for governments who enter into Service Concession Arrangements (SCA) with other governmental or nongovernmental entities. As of June 30, 2013, the University has not entered into any arrangements that meet the qualifications to be reported as a SCA in accordance with this standard.
In fiscal year 2013, the University adopted the Governmental Accounting Standards Board (GASB) Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in PreNovember 30, 1989 FASB and AICPA Pronouncements. The provisions of this Statement incorporate certain accounting and financial reporting guidance into authoritative GASB literature.
In fiscal year 2013, the University adopted the Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. The provisions of this Statement establish financial reporting standards for the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government's net position. The University changed its presentation of net assets to net position for fiscal year 2013. There were no other applicable reporting changes for the University.

- 6 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

NET POSITION The University's net position is classified as follows:
Net Investment in Capital Assets: This represents the University's total investment in capital assets, net of outstanding debt obligations and deferred inflows, or resources 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 the net investment in capital assets.
Restricted - nonexpendable: Nonexpendable restricted net position consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia.
Restricted - expendable: Restricted expendable net position includes resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.
Unrestricted: Unrestricted net position represents resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the the University of North Georgia 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 $313,142.66. 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 State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.
RESTATEMENT OF PRIOR YEAR NET POSITION The University of North Georgia has a restatement of prior year capital assets decreasing beginning capital assets obtained through a capital lease by $19,619,823. This decrease is offset by a decrease to lease obligations of the same amount, which results in no overall effect to beginning net position. This change is due to a change in the methodology of reporting leases by the the University of North Georgia Foundation. This change is in accordance with generally accepted accounting principles.
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 of North Georgia'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.

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

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.
At June 30, 2013, the carrying value of deposits was $29,182,093 and the bank balance was $31,911,728. Of the University's deposits, $31,806,123 was uninsured. Of these uninsured deposits, $1,035,000 were collateralized with securities held by the financial institution's trust department or agent in the University's name and $30,771,123 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name.
INVESTMENTS The University of North Georgia 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 of each institution has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy, and applicable Federal and state laws.
The University's investments as of June 30, 2013, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

Investment Type

Fair Value

1 - 5 Years

Investment Maturity 6 - 10 years

More than 10 Years

Debt Securities General Obligation Bonds

$

1,079,183 $

207,884 $

775,552 $

95,747

Other Investments Equity Securities - Domestic Miscellaneous Holdings

369,723 1,769

Investment Pools Board of Regents Short-Term Fund Office of the State Treasurer Georgia Fund 1

528,325 140,677

Total Investments

$

2,119,677

The Board of Regents Investment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents Investment Pool is voluntary. The Board of Regents Investment Pool is not rated. Additional information on the Board of Regents Investment Pool is disclosed in the audited Financial Statements of the Board of Regents of the University System of Georgia System Office (oversight unit). This audit can be obtained from the Georgia Department of Audits Education Audit Division or on their web site at http://www.audits.ga.gov. The Board of Regents Short-Term Fund is reported as Cash and Cash Equivalents on Exhibit "A" of this report.

The Georgia Fund 1 Investment Pool, managed by the Office of State Treasurer, is not registered with the Securities and Exchange Commission as an investment company, but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. This investment is valued at the pool's share price, $1.00 per share. The Georgia Fund 1 Investment Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the fund is 43 days.

Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The University does not have a formal policy for managing interest rate risk.

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the university will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The University does not have a formal policy for managing custodial credit risk for investments.

At June 30, 2013, $1,079,183 of the University's applicable investments was uninsured and held by the investment's counterparty in the University's name.

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The University does not have a formal policy for managing credit quality risk.
The investments subject to credit quality risk are reflected below:

Fair Value

AA

Restricted Debt Investments General Obligation Bonds

$

1,079,183 $

1,079,183

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The University does not have a formal policy for managing concentration of credit risk.

INVESTMENT: General Obligation Bonds - Cetera (Alpharetta Development Authority) General Obligation Bonds - Cetera (DeKalb County Building Authority) General Obligation Bonds - Cetera Gilmer County Building Authority) General Obligation Bonds - Cetera (Gwinnett County Water & Sewer) Equity Securities - AT&T
NOTE 3: ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at June 30, 2013.

Total 5.0% 7.2% 7.3% 7.0% 7.8%

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal, State and Private Funds

Georgia State Financing and Investment Commission

Due from Affiliated Organizations

Other

1,243,815 879,704 650,244 457,206 31,851
1,291,270

Less Allowance for Doubtful Accounts

$

4,554,090

651,259

Net Accounts Receivable

$

3,902,831

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

NOTE 4: CAPITAL ASSETS

Following are the changes in the University's capital assets for the year ended June 30, 2013:

Beginning

Balance

Ending

July 1, 2012

Balance

(Restated)

Additions

Reductions

June 30, 2013

Capital Assets, Not Being Depreciated:

Land

$

5,801,893 $

2,192,000

Construction Work-In-Progress

135,935

1,393,055 $

$ 635,148

7,993,893 893,842

Total Capital Assets, Not Being Depreciated $

5,937,828 $

3,585,055 $

635,148 $

8,887,735

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

$

4,933,066

166,188,091 $

13,354,348

9,029,468

140,427,993

9,250,407

25,931,216 $ 280,114
2,262,222 12,183,958
335,347

$ 2,657,532
357,781
65,713

4,933,066 189,461,775
13,634,462 10,933,909 152,611,951
9,520,041

Total Assets Being Depreciated

$

343,183,373 $

40,992,857 $

3,081,026 $

381,095,204

Less: Accumulated Depreciation:

Infrastructure

$

3,057,932 $

Building and Building Improvements

49,572,344

Facilities and Other Improvements

5,321,862

Equipment

6,558,471

Capital Leases

15,484,610

Library Collections

6,663,959

253,200 $ 6,377,305
845,022 943,722 7,421,800 477,489

477,640 $ 1,835,077
345,505 -477,640
65,712

2,833,492 54,114,572
6,166,884 7,156,688 23,384,050 7,075,736

Total Accumulated Depreciation

$

86,659,178 $

16,318,538 $

2,246,294 $

100,731,422

Total Capital Assets, Being Depreciated, Net $

256,524,195 $

24,674,319 $

834,732 $

280,363,782

Capital Assets, Net

$

262,462,023 $

28,259,374 $

1,469,880 $

289,251,517

NOTE 5: UNEARNED REVENUE Unearned revenue consisted of the following at June 30, 2013.
Prepaid Tuition and Fees Other Unearned Revenue
Total Unearned Revenue

$

3,006,358

1,163,325

$

4,169,683

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

NOTE 6: LONG-TERM LIABILITIES The University's Long-Term liability activity for the year ended June 30, 2013 was as follows:

Beginning Balance July 1, 2012 (Restated)

Additions

Reductions

Ending Balance June 30, 2013

Current Portion

Leases Lease Obligations

$ 138,936,385 $ 12,321,331 $

Other Liabilities Compensated Absences

3,337,504

2,440,658

2,091,249 $ 149,166,467 $

2,250,105

3,528,057

2,116,324 1,919,429

Total Long-Term Obligations $ 142,273,889 $ 14,761,989 $ 4,341,354 $ 152,694,524 $ 4,035,753

NOTE 7: NET POSITION

Changes in Net Position for the year ended June 30, 2013 are as follows:

Beginning Balance July 1, 2012 (Restated)

Additions

Reductions

Ending Balance June 30, 2013

Net Investments in Capital Assets

$ 123,525,638 $

30,350,623 $

13,791,211 $ 140,085,050

Restricted Net Position

4,802,952

28,307,907

28,301,976

4,808,883

Unrestricted Net Position

23,977,341

136,059,111

137,407,266

22,629,186

Total Net Position
NOTE 8: LEASE OBLIGATIONS

$ 152,305,931 $ 194,717,641 $ 179,500,453 $ 167,523,119

The University of North Georgia is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment, and also is obligated under capital leases and installment purchase agreements for the acquisition of real property and equipment.
CAPITAL LEASES Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2013 and 2040. Expenses for fiscal year 2013 were $10.8 million of which $8.7 million represented interest. Total principal paid on capital leases was $2.1 million for the fiscal year ended June 30, 2013. Interest rates range from 2.40 percent to 6.12 percent. The following is a summary of the carrying values of assets held under capital lease at June 30, 2013:

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

Description
Land Infrastructure Buildings

Gross Amount (+)

Accumulated Depreciation
(-)

Net Position Held Under Capital Lease at June 30, 2013
(=)

Outstanding Balances per Lease Schedules at June 30, 2013

$

815,443

$

815,443

9,229,994 $

1,471,394

7,758,600 $

8,708,702

143,381,957

21,912,656

121,469,301

140,457,765

$

153,427,394 $ 23,384,050 $ 130,043,344 $ 149,166,467

Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms.
In March 2007, the University of North Georgia entered into a capital lease of $2,616,915 whereby the University leased land and a building; Downtown Office Building for a 29.33 year period that began July 2007 and expires June 2036.
In March 2007, the University entered into a capital lease of $14,800,721 whereby the University leased a residence hall building for a 20 year period that began in March 2007 and expires June 2028.
In November 2008, the University entered into a capital lease of $24,230,285 whereby the University leased a Recreation Center/Parking Deck for a 28.17 year period that began November 2008 and expires June 2037.
In January 2009, the University-Gainesville entered into a capital lease of $7,660,088 whereby the University leased buildings and land: Oconee Campus for a 19.5 year period that began January 2009 and expires December 2027.
In December 2009, the University entered into a capital lease of $5,367,608 whereby the University leased parking decks; Gainesville Campus Parking for a 29.5 year period that began on December 2009 and expires on June 2040.
In August 2010, the University entered into a capital lease of $13,177,008 whereby the University leased a military dorm; Patriot Hall for a 30 year period that began July 2011 and expires June 2040.
In August 2010, the University entered into a capital lease of $20,416,598 whereby the University leased a resident hall building; North Georgia Suites for a 30 year period that began July 2011 and expires June 2040.
In August 2010, the University entered into a capital lease of $14,608,768 for a parking deck: Walker Drive Parking Deck for a 30 year period that began July 2011 and expires June 2040.
In July 2011, the University entered into a capital lease of $9,539,961 whereby the University leased a military dorm; Liberty Hall for a 30 year period that began July 2011 and expires June 2040.
In July 2011, the University entered into a capital lease of $17,535,427 whereby the University leased a dining hall for a 30 year period that began July 2011 and expires June 2040.
- 13 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

In July 2011, the University entered into a capital lease of $9,362,396 whereby the University leased a multi-use facility; Chestatee Building for a 30 year period that began on July 2011 and expires June 2040.
In August 2012, the University entered into a capital lease of $4,050,000 whereby the University leased buildings: Pilgrim Mill for an 11 year period that began August 2012 and expires June 2023.
In August 2012, the University entered into a capital lease of $7,936,794 whereby the University leased buildings; Gaillard Hall for a 27.5 year period that began on December 2012 and expires June 2040.
In January 2013, the University entered into a capital lease of$197,194 whereby the University leased building renovations; Choice Arts Complex for a 5.5 year period that began on January 2013 and expires on June 2018.
The outstanding liability at June 30, 2013 on these capital leases is $149,166,467. The University at its option may terminate the lease for the unamortized principal balance and the payment of $1.
OPERATING LEASES The University of North Georgia's noncancellable operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancelable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers, other small business equipment, and buildings.
Noncancellable operating lease rental expenses in 2013 were $192,481 for real property and/or equipment.

- 14 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

FUTURE COMMITMENTS Future commitments for capital leases (which here and on the Statement of Net Position includes other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2013, were as follows:

Real Property and Equipment

Capital

Operating

Leases

Leases

Year Ending June 30: 2014 2015 2016 2017 2018 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038 2039 - 2040

$ 11,122,565 $ 11,278,063 11,437,959 11,501,237 11,624,710 60,458,439 60,631,692 55,180,807 53,692,519 17,223,837

147,414 131,544
80,727 58,000 58,000 290,000 217,500

Total Minimum Lease Payments

$ 304,151,828 $

983,185

Less: Interest Less: Executory Costs

153,761,563 1,223,798

Principal Outstanding

$ 149,166,467

NOTE 9: RETIREMENT PLANS
The University of North Georgia participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that the University of North Georgia participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts

- 15 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are "new plan" members subject to the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, the University of North Georgia pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these The University of North Georgia contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The University of North Georgia is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These University of North Georgia contributions are not at any time refundable to the member or his/her beneficiary.

- 16 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

Employer contributions required for fiscal year 2013 were based on the June 30, 2010 actuarial valuation as follows:

Old Plan* New Plan GSEPS

14.90% 14.90% 11.54%

* 10.15% exclusive of contributions paid by the employer on behalf of old plan members
Members become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.
Teachers Retirement System of Georgia

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

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

TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.

Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Options are available for distribution of the member's monthly pension, at a reduced rate, to a designated beneficiary on the member's death. Death, disability and spousal benefits are also available.
TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as

- 17 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

adopted by the Board of Trustees for the fiscal year ended June 30, 2013, were 6.00% of annual salary. Employer contributions required for fiscal year 2013 were 11.41% of annual salary as required by the June 30, 2010, actuarial valuation.

The following table summarizes the University of North Georgia contributions by defined benefit plan

for the years ending June 30, 2013, June 30, 2012, and June 30, 2011:

ERS

TRS

Required

Percentage

Required

Percentage

Fiscal Year

Contribution

Contributed Contribution

Contributed

2013

$

2012

$

2011

$

Regents Retirement Plan

35,258 27,131 27,308

100% 100% 100%

$ 4,466,576 $ 3,885,178 $ 3,580,139

100% 100% 100%

Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from 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 The University of North Georgia makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2013, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
The University of North Georgia and the covered employees made the required contributions of $1,835,674(9.24%) and $1,095,052 (6%), 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 The University of North Georgia 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.

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THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2013 amounted to $277,118 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 10: RISK MANAGEMENT
The University System of Georgia offers its employees and retirees access to four different selfinsured healthcare plan options. For the University System of Georgia's Plan Year 2013, the following health care options were available:
Blue Choice HMO plan (Blue Cross Blue Shield) HSA Open Access POS plan (Blue Cross Blue Shield) Open Access POS plan Kaiser Permanente HMO plan
The University of North Georgia and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental loses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. University, as an organizational unit of the Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as
- 19 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

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 11: 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 expenditure disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the University of North Georgia expects such amounts, if any, to be immaterial to its overall financial positions.
Litigation, claims and assessments filed against the University of North Georgia (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, 2013.
NOTE 12: POST-EMPLOYMENT 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 of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The University pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2013 plan year, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.
As of June 30, 2013, there were 368 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2013, the University of North Georgia recognized as incurred $1,794,134 of expenditures, which was net of $723,122 of participant contributions.
- 20 -

THE UNIVERSITY OF NORTH GEORGIA SELECTED FINANCIAL NOTES JUNE 30, 2013

EXHIBIT "D"

NOTE 13: AFFILIATED ORGANIZATIONS
The University of North Georgia Foundation, Inc. is a legally separate, tax exempt organization whose activities primarily support The University of North Georgia. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, and GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from The University of North Georgia

- 21 -

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SUPPLEMENTARY INFORMATION - 23 -

UNIVERSITY OF NORTH GEORGIA BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30, 2013
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other Due from Affiliated Organizations Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accrued Payroll Encumbrances Payable Accounts Payable Unearned Revenue
Total Liabilities
Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$ 10,506,487.78 1,572,785.27
650,243.69 2,366,710.88
31,851.34 219,623.99
60,675.91
$ 15,408,378.86

$

160,662.90

7,539,119.98

289,572.96

3,506,835.32

$ 11,496,191.16

$

775,272.98

298,566.82

170,595.98

310,741.56

504,666.54

1,483,042.16

56,159.00

313,142.66

$ 3,912,187.70

$ 15,408,378.86

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 special purpose framework.
- 24 -

UNIVERSITY OF NORTH GEORGIA SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2013

SCHEDULE "2"

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 Teaching
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Unreserved Fund Balance (Surplus) Returned
to Board of Regents - University System Year Ended June 30, 2012
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Departmental Sales and Service Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 40,980,500.00 $ 40,980,500.00 $

0.00

99,997,958.00

93,593,783.02

-6,404,174.98

$ 140,978,458.00 $ 134,574,283.02 $ -6,404,174.98

0.00

-2,116.75

-2,116.75

0.00

2,900,393.17

2,900,393.17

$ 140,978,458.00 $ 137,472,559.44 $ -3,505,898.56

$

39,700.00 $

39,700.00 $

140,938,758.00

134,762,211.11

$ 140,978,458.00 $ 134,801,911.11 $

$

0.00 $

2,670,648.33 $

0.00 6,176,546.89
6,176,546.89
2,670,648.33

3,368,882.20 12,269.18

773,050.34

-12,269.18 -2,900,393.17

$

3,912,187.70

$

775,272.98

298,566.82

170,595.98

310,741.56

504,666.54

1,483,042.16

56,159.00

$

3,599,045.04

313,142.66

$

3,912,187.70

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 special purpose framework.
- 25 -

UNIVERSITY OF NORTH GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2013

Special Funding Initiative State Appropriation State General Funds
Teaching State Appropriation State General Funds Other Funds
Total Teaching
Totals By Program

Original Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

$

0.00 $

0.00 $

39,700.00 $

39,700.00

$ 42,913,615.00 $ 42,913,615.00 $

90,727,080.00

90,727,080.00

40,940,800.00 $ 99,997,958.00

40,940,800.00 93,593,783.02

$ 133,640,695.00 $ 133,640,695.00 $ 140,938,758.00 $ 134,534,583.02

$ 133,640,695.00 $ 133,640,695.00 $ 140,978,458.00 $ 134,574,283.02

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 special purpose framework.
- 26 -

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

$

0.00 $

0.00 $

39,700.00 $

0.00 $

39,700.00 $

0.00 $

0.00

$

0.00 $

2,900,393.17

$ 2,900,393.17 $

706.27 $ -2,823.02

40,941,506.27 $ 96,491,353.17

-2,116.75 $ 137,432,859.44 $

706.27 $ -3,506,604.83

40,939,076.93 $ 93,823,134.18

-3,505,898.56 $ 134,762,211.11 $

1,723.07 $ 6,174,823.82
6,176,546.89 $

2,429.34 2,668,218.99
2,670,648.33

$ 2,900,393.17 $

-2,116.75 $ 137,472,559.44 $

-3,505,898.56 $ 134,801,911.11 $

6,176,546.89 $

2,670,648.33

- 27 -

UNIVERSITY OF NORTH GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2013

Special Funding Initiative State Appropriation State General Funds
Teaching State Appropriation State General Funds Other Funds
Total Teaching
Total Operating Activity
Prior Year Reserves Not Available for Expenditure Inventories Uncollectible Accounts Receivable

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2012
Surplus

Prior Period Adjustments

$

0.00 $

0.00 $

0.00 $

0.00

$

3,098.92 $

2,909,563.43

$ 2,912,662.35 $

$ 2,912,662.35 $

0.00 $ -2,900,393.17
-2,900,393.17 $
-2,900,393.17 $

-3,098.92 $ 100,563.44

-9,170.26

672,486.90

-12,269.18 $ 773,050.34

-12,269.18 $ 773,050.34

59,971.28 408,517.75

0.00 0.00

0.00 0.00

0.00 0.00

Budget Unit Totals

$ 3,381,151.38 $

-2,900,393.17 $

-12,269.18 $ 773,050.34

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 special purpose framework.
- 28 -

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2013
Surplus

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00

$

3,812.28 $

-96,148.79

$

-92,336.51 $

$

-92,336.51 $

0.00 $ 0.00
0.00 $
0.00 $

2,429.34 $ 2,668,218.99
2,670,648.33 $
2,670,648.33 $

106,805.06 $ 3,244,557.10

0.00 $ 3,038,219.50

3,351,362.16 $ 3,038,219.50 $

3,351,362.16 $ 3,038,219.50 $

106,805.06 $ 206,337.60

106,805.06 3,244,557.10

313,142.66 $ 3,351,362.16

313,142.66 $ 3,351,362.16

-3,812.28 96,148.79

0.00 0.00

0.00 0.00

56,159.00 504,666.54

56,159.00 504,666.54

0.00 0.00

56,159.00 504,666.54

$

0.00 $

0.00 $

2,670,648.33 $ 3,912,187.70 $ 3,599,045.04 $

313,142.66 $ 3,912,187.70

Summary of Ending Fund Balance Reserved
Departmental Sales and Service Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus
Total Ending Fund Balance - June 30

$

775,272.98

298,566.82

170,595.98

310,741.56

504,666.54

1,483,042.16

56,159.00

$

$ 3,599,045.04 $

$

775,272.98

298,566.82

170,595.98

310,741.56

504,666.54

1,483,042.16

56,159.00

313,142.66

313,142.66

313,142.66 $ 3,912,187.70

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UNIVERSITY OF NORTH GEORGIA RECONCILIATION OF BUDGET TO GAAP
YEAR ENDED JUNE 30, 2013
Presented below is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "1")
Amounts reported for Business-Type Activities in the Statement of Net Position are different because:
Capital Assets used in Business-Type Activities are not reported in the Budget Fund.
Uncollectible accounts receivable are reported as an asset and reserved fund balance in the Budget Fund and as a contra-asset account on the Statement of Net Position.
Changes in the Fair Market Value of Investments are recognized on the Statement of Net Position, but are not reported in the Budget Fund.
Agency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity
Auxiliary Enterprises Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Auxiliary Enterprises Fund Activity
Endowment Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Endowment Fund Activity
Loan Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Loan Fund Activity
Student Activities Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Student Activity Fund Activity
The budgetary basis of accounting implemented by the State of Georgia recognizes expenditures when encumbered. The following adjustments were made to eliminate this activity for reporting on the Statement of Net Position. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Payables for goods and services provided in the current fiscal year reported in the Budget Fund as encumbrances payable are reported as accounts payable for GAAP reporting. Reimbursement from grantors reported as revenues in the Budget Fund that are for expenditures based on encumbrances are deferred for GAAP reporting. Total Net Effect of Encumbrance Activity
Certain Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund. Capital Leases Payable Compensated Absences Payable Contracts Payable Total Liabilities
Net Position of Business-Type Activities (Exhibit "A")
The supplementary information presented on Schedules 1, 2, 3 and 4 was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. The information was derived from, and relates directly to, the same information used to prepare the financial statements. However, the budgetary statutes and regulations of the State of Georgia require reporting of certain information that is not in accordance with generally accepted accounting principles. Presented on this schedule is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
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SCHEDULE "5"

$

3,912,187.70

289,251,517.00

$

1,036,824.31

-1,034,514.60

$ 16,501,662.35 -2,050,960.29

$

2,065,476.55

0.00

$

1,926,461.23

0.00

$

2,404,761.35

-283,951.56

-504,666.54 86,187.48 2,309.71
14,450,702.06 2,065,476.55 1,926,461.23 2,120,809.79

$

7,539,119.98

-150,801.24 -427,065.72

6,961,253.02

$ -149,166,467.00 -3,528,057.00 -54,595.00

-152,749,119.00

$ 167,523,119.00

UNIVERSITY OF NORTH GEORGIA RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2013

SCHEDULE "6"

Totals per Annual Supplement
Accruals June 30, 2013 June 30, 2012
Prepaid June 30, 2012
Compensated Absences June 30, 2013 June 30, 2012
Adjustments Shared Services on Jointly Staffed Personnel Board of Regents - Central Office Roger, Mike Georgia Gwinnett College Hayes, Daniel Georgia State University Caciula, Adrian Macon State College Miller, Charlotte University of Georgia Boozer, Jennifer Marshall, Angela Parks, Rodney Sale, Beth Wenworth, Ben Zwillich, Paula University of West Georgia Moore, Amy Unclaimed Property Buffington, Ryan Johnson, Aaron White, Randall
Rounding

SALARIES

TRAVEL

$ 69,141,367.37 $ 1,168,053.99

177,183.85 -150,702.91

20,327.00

3,277,340.21 -3,100,328.07

3,000.00
5,167.20
40,000.00
4,844.25
11,508.70 11,697.90
5,167.20 905.97
11,437.10 11,186.70
-5,072.50
443.50 489.48
16.00
0.05

0.01

$ 69,465,979.00 $ 1,168,054.00

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SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

UNIVERSITY OF NORTH GEORGIA SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2013
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.