Review report, state of Georgia, North Georgia Technical Institute, Clarkesville, Georgia, year ended June 30, 1996

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REVIEW REPORT STAlE OF GEORGIA NORTH GEORGIA lECHNICAL INSTITUlE CLARKESVILLE, GEORGIA YEAR ENDED JUNE 30, 1996

STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334
(

NORTH GEORGIA TECHNICAL INSTITUTE - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

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

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BAS1S)

ALL FUND TYPES

5

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

6

STATEMENTS OF FUNDS AVAILABLE AND EXPENDITURES

\
::::S'

COMPARED TO BUDGET

3
D

BUDGET FUND "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

10

E

"B" LOTTERY FOR EDUCATION

Ii

F STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

12

G NOTES TO THE FINANCIAL STATEMENTS

13

SUPPLEMENTARY INFORMATION

H COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

30

I COMBINING STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

BUDGET FUND

31

J COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

32

K COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUNDS

35

SCHEDULES

1 CASH AND CASH EQUIVALENTS

36

2 INVESTMENTS

37

3 SCHEDULE OF FEDERAL REVENUES

38

4 RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL

39

NORTH GEORGIA TECHNICAL INSTITUTE - TABLE OF CONTENTS -
SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
September 13, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe State Board ofTechnical and Adult Education Members ofthe Local Board ofDirectors
and Honorable Judy Hulsey, President North Georgia Technical Institute
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through G) ofNorth Georgia Technical Institute as of and for the year ended June 30, 1996, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management ofNorth Georgia Technical Institute.
A review consists principally ofinquiries of Institute personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware ofany material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Our review was made for the purpose ofexpressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibits H through K and Schedules 1 through 4) is presented only for supplementary analysis purposes. Such information has been

96ARL-4T

subjected to the inquiries and analytical procedures applied in the review of the financial statements, and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
~,.......~
Claude L. Vickers State Auditor
CLV:gp 96ARL-4T

FINANCIAL STATEMENTS
- 1-

NORTH GEORGIA TECHNICAL INSTITUTE COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE30 1996

ASSETS
Cash and Cash EqUivalents
Investments
Accounts Receivable State Funds Federal Financial Assistance Student Notes Other
Fixed Assets Equipment
Amounts to be Provided for Payment of
Accrued Compensated Absences

GOVERNMENTAL

FIDUCIARY FUND TYPES

FUND TYPE NONEXPENDABLE

BUDGET

TRUST

AGENCY

$

561,650.17 $

$

$

26,353.43

53,274.38

180,658.93

$

260,286.74

437.21 $ 38,544.04 35,000.00
$ 8,040.00 48,995.00
$ 57,035.00

Total Assets

$

821,936.91 $

35,437.21 $ 95,579.04

LlABILIT!ES AND FUND EQUITY
liabilities Accounts Payable Salaries Payable Payroll Wlthholdings Deferred Revenue Tuition and Fees Funds Held in Custody for Others Compensated Absences
Total liabilities
Fund Equity Investment In General Fixed Assets Fund Balance Reserved Endowment Corpus Federal Financial Assistance For Refund to Georgia Department of Technical and Adult Education Administrative Central Office live Work Projects Private Donations Unreserved Designated Surplus Regular Lottery for Education Undesignated
Total Fund Equity

$

619,654.85

5,724.68

1,578.91

165,741.00

$

792,699.44

$ 95,579.04 $ 95,579.04

$

35,000.00

$

0.00

13,762.63

15,000.00

472.29 2.55

437.21

$

29,237.47 $

35,437.21

Total Liabilities and Fund Equity

$

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.

The notes to the financial statements are an integral part of this statement.

-2-

821,936.91 $

35,437.21 $ 95,579.04

ACCOUNT GROUPS

GENERAL GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30,1995

$ 600,631.42 $ 469,657.29 $ 35,000.00 $ 35,000.00

$ 26,353.43 $ 53,274.38 8,040.00 229,653.93

25,058.29
Q,254Zf
8,040.00 60,333.30

$ 317,321.74 $ 160,685.86

$ 2,913,9n.28

$ 2,913,9n.28 $ 2,575,083.83

$ 416,890.13 $ 416,890.13 $ 361,387.89

$ 2,913,9n.28 $ 416,890.13 $ 4,283,820.57 $ 3,601,814.87

$ 619,654.85 $ 5,724.68 1,578.91

$ 416,890.13

165,741.00 95,579.04 416,890.13

$ 416,890.13 $ 1,305,168.61 $

541,635.21 0.00 0.00
10,992.50 62,163.09 361,387.89
976,178.69

$ 2,913,9n.28

$ 2,913,9n.28 $ 2,575,083.83

35,000.00

35,000.00

0.00 13,762.63 15,000.00

24.18 13,040.65
0.00

$ 2,913,9n.28

472.29 2.55
437.21

1,396.23 396.58 694.71

$ 2,978,651.96 $ 2,625,636.18

$ 2,913,9n.28 $ 416,890.13 $ 4,283.820.57 $ 3,601 ,814.87

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THIS PAGE LEFT BLANK

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
ALL FUND TYPES YEAR ENDED JUNE 30,1996

EXHIBIT-B"

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information,
The notes to the financial statements are an integral part of this statement
-5

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1996

EXHIBIT"C"

FUNDS AVAILABLE
REVENUES
STATE FUNDS Allotment from Georgia Department of Technical and Adult Education - Administrative Central Office
FEDERAL REVENUES (See Schedule)
OTHER REVENUES RETAINED Allotments from Georgia Department ofTechnical and Adult Education - Administrative Central Office Construction Reserve Trust Fund Contracts Georgia Department of Human Resources PEACH Project Georgia Institute of Technology Satellite Technology Program Rabun Council of Economic Development Organization Donations Fees Application Parking Registration/Continuing Education Testing Other Reimbursements from Various Sources Sales and Services (Net) Tuition Vending Other Sources
Total Other Revenues Retained
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Live Work Projects
Total Carry-Over from Prior Year

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$ 5,536,689,76 $ 5,448,158.94 $ 697,275.52 $ 732,223.82

$

97.00 $

0.00

20,146.20

17,442.10

9,262.69

15,229.09

284.06 15,000.00

88,926.81 0.00

12,330.00 153.00
198,350.25 14,608.00 95,531.94 54,658.70
248,200.82 773,852.68
1,045.10 15,554.86

12,600.00 0.00
161,493.36 19,944.00 29,400.00 55,897.94
312,508.67 553,346.91
0.00 2,076.62

$ 1,459,075.30 $ 1,268,865.50

$ 7,693,040.58 $ 7,449,248.26

$

13,040.65 $_---'-10""',.;..;;18-.9,;,,;;;.6""-5

$

13,040.65 $_---'-10""',.;..;;18-.9,;,,;;;.6""-5

Total Funds Available

$ 7,706,081.23 $ 7,459,437.91

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement.
-6-

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 3D. 1996

EXHIBIT"C"

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

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30,1996

EXHIBIT"C"

TOTALS YEAR ENDED JUNE 3D, 1996 JUNE 3D, 1995

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30,1996

EXHIBIT"C"

$ 7,706,081.23 $ 7,459,437.91
See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement
-9-

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
wAwDEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30,1996

EXHIBIT wOw

FUNDS AVAILABLE REVENUES
State Funds Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 5,537,332.00 $ 5,536,689.76 $

811,868.00

697,275.52

2,444,309.00

1,458,978.30

$ 8,793,509.00 $ 7,692,943.58 $

-642.24 -114,592.48 -985,330.70
-1,100,565.42

0.00

13,040.65

13,040.65

$ 8,793,509.00 $ 7,705,984.23 $ -1,087,524.77

EXPENDITURES
Personal Services-Institutions .Operating Expenses-Institutions Adult Literacy Grants Job Training Partnership Act

$ 5,380,415,00 $ 5,036,599.64 $

2,667,971.00 2,041,593.51

604,877.00

566,597.97

140,246.00

32,421.77

343,815.36 626,377.49
38,279.03 107,824.23

$ 8,793,509.00 $ 7,677,212.89 $ - - - '1-,'1;16",2"9:6'.1-128,771.34

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
. The notes to the financial statements are an integral part of this statement.
- 10 -

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30. 1996

EXHIBIT "E"

FUNDS AVAILABLE REVENUES
Other Revenues Retained

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$

97.00 $

97.00 $ - - - - - -0.00

EXPENDITURES Repairs and Renovations

$

97.00 $

97.00 $

-.;.0.;.;..0.;..0

Excess of Funds Available over Expenditures

$

0.00 $ ========0.:=00...

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary tnformation. The notes to the financial statements are an integral part of this statement.
- 11 -

NORTH GEORGIA TECHNICAL INSTITUTE STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30. 1996

EXHIBIT "F"

REVENUES Interest Earned
EXPENDITURES Operating Expenses Scholarships
Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1. 1995

LENORAM. SARLING
SCHOLARSHIP FUND

$

18;.,;;8-..7=.5,;;..0

$ _ _.:.2.r.:..14.:.;:5.:;;.0.:..0

$

-257.50

35.694.71

FUND BALANCE JUNE 30.1996

$ ===3=5=,4=:37=,2=1

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement.
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NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

EXHIBIT"G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES /
REPORTING ENTITY
North Georgia Technical Institute is one of twenty-nine (29) State supported member institutes of postsecondary education in Georgia which comprise the Georgia Department of Technical and Adult Education, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations ofNorth Georgia Technical Institute as a separate reporting entity.
The Institute's Local Board ofDirectors is composed of nine (9) members serving staggered three-year terms who are appointed by the State Board of Technical and Adult Education. Appropriation of State funds is made to the Georgia Department ofTechnical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount of State funds to be received by North Georgia Technical Institute. The Institute does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, NorthGeorgia Technical Institute is considered an organizational unit ofthe Georgia Department ofTechnical and Adult Education for financial reporting purposes because of the significance ofits legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING
North Georgia Technical Institute uses funds and account groups to report on its financial position and the results ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a selfbalancing set ofaccounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number offunds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds.
Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1995-1996. This fund also includes operations from various institutional services provided to students, faculty, and/or staffwhich are funded by fees charged to participants that are directly related to, but not necessarily equal to, the cost of service. The Budget Fund is similar in nature to a General Fund as defined in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
FIDUCIARY FUND TYPES
NONEXPENDABLE TRUST FUND - The fund used to account for assets, revenues, and expenses utilized in accordance with the provisions ofthe trust established by individual agreement, statute, or administrative action. Nonexpendable trust funds are used when only the revenues earned on the principal (corpus) of the
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NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT IIGil

NOTE 1: SUM?vfARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
FIDUCIARY FUND TYPES
NONEXPENDABLE TRUST FUND trust may be expended for the purposes designated in the trust agreement and the principal of the trust agreement must remain intact.
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments,- or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed asset~ used in governmental fund type operations. Fixed assets purchased are recorded at cost or at estimated historical cost if historical cost is not practically determinable. Donated fixed assets are recorded at fair market value on the date d9nated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets.
The cost of normal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life ofthe assets are included in the General Fixed Assets Account Group.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments, and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources. In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, the Budget Fund returns its unreserved fund balance (surplus) to the Administrative Central Office of the Department ofTechnical and Adult Education for remittance to the Office of Treasury and Fiscal Services in the subsequent fiscal year. Nonexpendable trust funds, on the other hand, should be accounted for on a flow of economic resources measurement focus, in which all assets and all liabilities are included on the balance sheet. However, in accordance with accounting practices prescribed or permitted by the State of Georgia, the nonexpendable trust funds utilize the current financial resources measurement focus.

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NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGETFUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues that are accrued include primarily State funds, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources.
Contractual obligations for goods and services which have not been received at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
. Prior period adjustments and certain other items are reported as additions to and deductions from fund balance of the Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
FIDUCIARY FUND TYPES NONEXPENDABLE TRUST FUND
The Nonexpendable Trust Fund is maintained in accordance with the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and lIavailablell means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Revenues that are accrued include primarily interest income and certain amounts earned under terms ofthe trust agreements. Expenditures are recorded when the related fund liability is incurred.
A Statement ofCash Flows is not presented for the Nonexpendable Trust Fund in the accompanying financial statements as required by generally accepted accounting principles.
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NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXlllBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING FIDUCIARY FUND TYPES AGENCY FUNDS
Agency Funds are custodial in nature and do not measure results of operations or have a measurement focus. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.

BUDGET The Georgia Department of Technical and Adult Education - Administrative Central Office receives State appropriation allotments and certain Federal funds for the various technical institutes throughout the State. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 1995-1996. The budget allocation and disbursement ofthese funds is made to the various technical institutes by the Administrative Central Office. In addition, the technical institutes receive certain Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office.

CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents include currency on hand and demand deposits with banks and other authoriZed

financial institutions.

.

INVESTMENTS Investments are defined as those financial instruments with terms in excess ofthree months from the date of purchase and certain other securities held for the production of revenue. Investments are stated at cost.

ACCOUNTS RECEIVABLE Accounts receivable consist of allotments due from the Georgia Department of Technical and Adult Education - Administrative Central Office, reimbursements due from Federal, State. local, and private grants and contracts, and other receivables disclosed from information available.

Accounts receivable (Other) arising from operations are reported at gross value. Based on management's evaluation that amounts uncollectible are not material, no provision has been made for such amounts.

INVENTORIES No inventories of supplies are reported in these financial statements. Expendable supplies are recorded as expenditures at the time of purchase.

RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:

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NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

EXIllBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RESERVED FUND BALANCE

LIVE WORK PROJECTS In accordance with the Official Code of Georgia Annotated Section 20-4-14(c), the accumulated balance ofunexpended funds derived from student live work projects. This amount is restricted to expenditures for live work projects or for the benefit ofinstructional programs at the technical institute in subsequent fiscal years.

ENDOWMENT CORPUS The principal (corpus) of the Lenora M. Sarling Scholarship Fund. This amount must remain intact per provisions ofthe trust agreement.

PRIVATE DONATIONS The unexpended balance of private donations which is restricted for expenditur~ in future years for the specific purposes as designated by the grantors.

UNRESERVED FUND BALANCE

In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of

Georgia, the Budget Fund's unreserved fund balance is returned to the Georgia Department ofTechnical and

Adult Education - Administrative Central Office for remittance to the Office ofTreasury and Fiscal Services

in the subsequent fiscal year as surplus, as follows:

.

REGULAR - An amount ofunexpended regular appropriations designated for reappropriation by the State in subsequent years.

LOTTERY FOR EDUCATION - An amount ofunexpended lottery appropriations designated for future reappropriation by the State for Lottery for Education.

COMPENSATED ABSENCES Compensated absences represent obligations of the Institute relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual and compensatory leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the Budget Fund for the current portion ofthis obligation as this amount will not be liquidated withexpendable available financial resources. Funds are provided in the allotment of State funds each year to the Institute to cover the cost of annual leave paid to terminated employees.

The liability for compensated absences at year-end is reported in the General Long-Term Debt Account Group for governmental funds.

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NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 3D. 1996

EXlllBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
COMPARATIVE DATA Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding ofthe changes in the Institute's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding ofthe Institute's financial position and operations or would cause the statements to be unduly complex and difficult to understand.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations ofthe United States or ofthe State of Georgia.
(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations ofthe counties or municipalities ofthe State ofGeorgia.
(3) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe State of Georgia.
(5) Bonds, bills, certificates ofindebtedness, 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, or 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.
- 18 -

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT"G"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authorized in the Official Code ofGeorgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State of Georgia (which include technical institutes) the option ofexempting demand deposits from the collateral requirements.

CATEGORIZATION OF DEPOSITS

For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include

demand deposits and/or interest bearing accounts. The bank balances as ofJune 30, 1996, are categorized

below in order to provide information about the extent to which such deposits are exposed to custodial credit

risk:

.

Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Institute or by its agent in the Institute's name.

Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Institute's name.

Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution, or by its trust department or agent but not in the Institute's name, and amounts uncollateralized.

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 598631 42 $ 92999475 $ 271 531 01 $,==~Ql!olQ~Q $ 658463 74

CATEGORIZATION OF INVESTMENTS For purposes of analysis of custodial credit risk, investments consist of U. S. government securities. Investments are stated at cost, and are summarized and classified as to custodial credit risk within the three categories described below:

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

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

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

- 19-

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT IIGil

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS The carrying amounts of investment balances as ofJune 30, 1996, are categorized below:

Type ofInvestment U. S. Government Securities

Risk Categories

2

3

Carrying Amount

Market Value

$ 3500000 $

o 34 00 $,====-=~O~,OO~ $ 35 000 00 $

848 00

NOTE 3: OPERATING LEASES

North Georgia Technical Institute has entered into certain agreements to lease equipment which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the Institute has the option of renewing the lease on a year-to-year basis.

Expenditures for rental of equipment under operating leases for the year ended June 30, 1996, totaled $2,440.00.

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in Official Code of Georgia Annotated Section 50-16-161, only those items with an acquisition cost of$I,OOO.OO or greater are reflected in the General Fixed Assets Account Group.

The following is a summary ofchanges ofequipment for the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1995

$ 2,575,083.83

Additions Deductions

423,731.91 84.838.46

Balance June 30, 1996

$ 2.913.977,28

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1996, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group:

- 20-

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "G"

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT

Balance July 1, 1995

$ 361,387.89

Additions Annual Leave Earned and Utilized (Net) Salaries and Wages Salary-Related Fringe Benefits

53,391.71 2.110.53

Balance June 30, 1996

$ 416.890.13

NOTE 6: RISK MANAGEMENT

Public Entity Risk Pool

.

The State Personnel Board - Merit System ofPersonnel Administration administers for the State of Georgia

a program ofhea1th benefits for the employees ofunits ofgovernment ofthe State of Georgia, units of county

governments, and local education agencies located with the State of Georgia. This plan is funded by

participants covered in the plan, by employers' contributions paid by the various units of government

participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel

Board - Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield of Georgia to

process claims in accordance with the State Employees' Health Benefit Plan as established by the State

Personnel Board.

Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts ofcommercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Institute, as an organizational unit of the Georgia Department of Technical and Adult Education, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

NOTE 7: DEFERRED COMPENSATION PLAN

The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not

- 21 -

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT IIGil

NOTE 7: DEFERRED COMPENSATION PLAN
available to employees until tennination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account of each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 8: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description North Georgia Technical Institute participates in the Teachers Retirement System of Georgia (TRS), a costsharing multiple-employer public employee retirement system (PERS) established by the General Assembly ofGeorgia for the purpose ofproviding retirement allowances and other benefits for teachers ofthe State of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by TRS was $1,204,725.91. The Institute's total payroll for all employees was $4,133,301.03.
Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless of age, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number ofyears ofcreditable service up to 40 years. Any member who has between 25 and 30 years of creditable service and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by 7% for each year or fraction thereofby which the member has less than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date ofdeath or up to the time of disability.
Members become fully vested after ten years of service. If a member tenninates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.

- 22-

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT IIGil

NOTE 8: RETIREMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Contributions Required and Contributions Made Employees ofthe Institute who are covered by TRS are required to pay 5% oftheir gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees as advised by their independent actuary. For fiscal year 1996, the employer contribution rate was 11.81% for covered employees. The interest rate assumption (rate of return on investments) was 7.50%.

Total contnoutions to the plan made during fiscal year 1996 amounted to $202,516.97, of which $142,278.23 was made by the Institute and $60,238.74 was made by employees. These contributions represented 11.81% (Institute) and 5% (employees) of covered payroll.

Funding Status and Progress

Pension Benefit Obligation

,

The amount of the total pension benefit obligation is based on a standardized measurement established by

Statement No.5 of the Governmental Accounting Standards Board (GASB) that is required to be used for

reporting purposes. The standardized measurement is the actuarial present value ofcredited projected benefits.

This pension valuation method reflects the present value of estimated pension benefits that will be paid in

future years as a result of employee services performed to date and is adjusted for the effects of projected

salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was

adopted by the GASB to enable readers of the PERS financial statements to assess that PERS funding status

on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and

make comparisons among similar PERS.

The total unfunded pension benefit obligation ofTRS as ofJune 30, 1995, which was the latest information available, was as follows:

Total pension ,benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585 541.00000

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. Net assets available for benefits were valued as ofthe same date. TRS does not make separate measurements ofassets and pension benefit obligation for individual employers.

Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1996, were $607,274,559.00. The Institute's contribution for the year ended June 30, 1996, of $142,278.23 was actuarially determined and represented .0234% of total contributions made by all participating employers.

- 23-

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"G"

NOTE 8: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Trend Information Historical trend information is presented in the TRS June 30, 1996, financial report. This information gives an indication ofthe progress made in accumulating sufficient assets to pay benefits when due.
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description North Georgia Technical Institute participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowanceS for employees ofthe State of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by ERS was $2,429,257.96. The Institute's total payroll for all employees was $4,133,301.03.
Benefits The benefit structure. of ERS was significantly modified on July 1, 1982. Unless elected 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. All other members are "new plan" members subject to the modified plan provisions.
Under both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average ofthe member's highest eight consecutive calendar quarters of salary, the number of years of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. 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.
Contributions Required and Contributions Made As established by State statute, all full-time employees ofthe State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute.

- 24-

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"G"

NOTE 8: RETmEMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofcompensation and 4.75% ofcompensation paid by the Institute on behalf ofthe employee. Under the new plan, member contnbutions consist solely of 1.25% of compensation paid by employee. The Institute also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 1996, the ERS employer contribution rate for the Institute amounted to 14.89% ofcovered payroll and included the 4.75% contributed on behalfofthe employee under the old plan referred to above. The employer contributions are projected to liquidate the unfunded actuarial liability within 20 years based upon the actuarial valuation of June 30, 1995. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Actuarial assumptions used by the ERS to compute actuarially determined contribution requirements are the same as those used to compute the pension benefit obligation.
Total contributions to the plan made during fiscal year 1996 amounted to $421,219.90, ofwhich $391,293.06 was made by the Institute and $29,926.84 was made by employees. These contributions met the requirements ofthe plan.
Funding Status and Progress . Funding status and progress information is presented in the ERS June 30, 1996, financial report which may . be obtained through ERS.
Trend Information Historical trend information is presented in the ERS June 30, 1996, financial report which may be obtained through ERS. This information gives an indication ofthe progress made in accumulating sufficient assets to pay benefits when due.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description North Georgia Technical Institute 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 ofthe Employees' Retirement System of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by GDCP was $347,265.97. The Institute's total payroll for all employees was $4,133,301.03.

- 25-

NORTH GEORGIA TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

EXIllBIT "G"

NOTE 8: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits. A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to hislher account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death ofa member, a lump sum distribution equaling the amount credited to hislher account will be paid to the member's designated beneficiary.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination ofemployment, the amount ofthe member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 1996 amounted to $26,045.62 which represents 7.50% ofcovered payroll. These contributions met the requirements ofthe plan.
NOTE 9: LEAVB POLICIES
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1- Compensated Absences .
Employees earn one and one-quarter days ofsick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System ofGeorgia.
NOTE 10: NONMONETARY TRANSACTIONS
The Georgia State Financing and Investment Commission (GSFIC), a unit of State government, is responsible for the issuance of state debt and for the investment and accounting for proceeds derived from the issuance of state debt. In addition, GSFIC is authorized to acquire and construct projects for the benefit ofunits of State government or to contract with units of State government for the construction or acquisition ofcapital outlay projects. During the fiscal year ended June 30, 1996, the Georgia State Financing and Investment Commission paid $609,984.26 to various vendors for approved projects for the benefit of North Georgia Technical Institute.
- 26-

NORTH GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

EXHIBIT"G"

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 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 the Institute expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and aSsessments filed against North Georgia Technical Institute (as an organizational unit ofthe Department of Technical and Adult Education), ifany, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 12: BONDING INFORMATION
The President and all employees ofNorth Georgia Technical Institute are bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No. 1450-02-110723, on which the premium has been paid to October 1, 1996. Under this agreement, the public employee dishonesty coverage insures North Georgia Technical Institute to a maximum of $1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance of duty coverage insures the Institute to a maximum of$I,OOO,OOO.OO against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.
All employees ofNorth Georgia Technical Institute are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 6260116752 and 626 0122944, on which the premiums have been paid to October 1, 1996. Under these additional public employee dishonesty coverages, the policies insure the Institute to a maximum of $9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees and from failure of its employees to perform faithfully.

- 27-

THIS PAGE LEFT BLAHK

SUPPLEMENTARY INFORMAnON - 29 -

NORTH GEORGIA TECHNICAL INSTITUTE COMBINING BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30, 1996

EXHIBIT"H"

ASSETS
Cash and Cash Equivalents
Accounts Receivable State Funds Federal Financial Assistance Other

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

561,647.62 $

$

26,353.43

53,274.38

180,658.93

$ _ _-=2:;::,;60:.z:,2::.::8~6.:.:..7..:..4

2.55 $ 561,650.17
$ 26,353.43 53,274.38 180,658.93
$ 260.286.74

Total Assets

$

821 .934.36 $

2.55 $ 821,936.91

LIABILITIES AND FUND EqUITY
Uabilities Accounts Payable Salaries Payable Payroll Wrthholdings Deferred Revenue Tuition and Fees
Total Uabilities
Fund Equity Fund Balance Reserved Live Work Projects Private Donations Unreserved Designated Surplus Regular Lottery for Education
Total Fund Equity

$

619,654.85

5,724.68

1,578.91

165,741.00

$

792,699.44

$'

13,762.63

15,000.00

472.29 $

$

29,234.92 $

$ 619,654.85 5,724.68 1,578.91
165,741.00
$ 792,699.44

$

13,762.63

15,000.00

2.55 2.55 $

472.29 2.55
29,237.47

Total Uabilities and Fund Equity

$

821 ,934.36 $

2.55 $ 821,936.91

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
- 30 -

NORTH GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 1996

EXHIBIT "I"

FUND BALANCE - JULY 1
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures
Exhibit"J"
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30,1995
Refunds to Grantors Georgia Department of Technical and Adult Education - Administrative Central Office Federal Financial Assistance
Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCE - JUNE 30
(To Exhibit "Hi

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

$

13,064.83

$

1,396,23 $

396.58

$

14,461.06 $

396.58 $

$

518.11 $

28,771.34

$

29,289.45 $

2.55 $ 2.55 $

$

1,396.23 $

396,58 $

78,71

13,040.65

$

14,515.59 $

396.58 $

$

29,234.92 $

2.55 $

TOTAL
13,064.83 1,792,81
14,857.64
520,66 28,771.34 29,292.00
1,792,81
78.71 13,040.65 14,912.17
29,237.47

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information,
- 31 -

NORTH GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30,1996

EXHIBIT HJ't

Total Funds Available

$

7,705,984.23 $====9=7.=0.0... $ 7,706,081.23

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

NORTH GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30,1996

EXHIBIT "J"

EXPENDITURES
PERSONAL SERVICES-INSTITUTIONS
Salaries and Wages Employer's Contributions for:
F.I.CA Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Merit System Assessment
OPERATING EXPENSES-INSTITUTIONS
Other Costs Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Publications and Printing
Travel Motor Vehicle Purchases Equipment
Equipment Purchases Computer Charges
Software Telecommunications Per Diem, Fees and Contracts
Per Diem and Fees Contracts
ADULT LITERACY GRANTS
Personal Services Salaries and Wages Employer's Contributions for: F.I.CA Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

liB" LOTTERY FOR
EDUCATION

TOTAL

$ 3,747,149.99
193,675.55 521,243.82 426,665.20
21,090.00 4,250.00 119,412.00 3,113.08
$ 5,036,599,64

$

26,913.41

535,757.02

75,295.48

360,338.10

11,291.49

17,953.00

121,883.81

44,056.35

44,877.37

35,245.22

576,012,16

60,286.11 45,602.13

85,766.86 315.00

$ 2,041,593.51

$

361,508.35

6,995.21 29,177.36 29,715.83
1,295.00 294.00
7,945.00

$ 3,747,149.99
193,675.55 521,243.82 426,665.20 21,090.00
4,250.00 119,412.00
3,113,08
$ 5,036,599.64
$ 26,913.41 535,757.02 75,295.48 360,338.10 11,291.49 17,953.00 121,883.81 44,056.35 44,877.37 35,245.22
576,012.16
60,286.11 45,602.13
85,766.86 315.00
$ 2,041,593.51
$ 361,508.35
6,995.21 29,177.36 29,715.83
1,295.00 294.00
7,945.00

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 33 -

NORTH GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30,1996

EXHIBIT"J"

EXPENDITURES
ADULT LITERACY GRANTS
Other Costs Supplies and Materials Repairs and Maintenance Utilities Rents (other than Real Estate) other Operating Expenses Publications and Printing
Travel Equipment
Equipment Purchases Computer Charges
.Software Telecommunications Per Diem, Fees and Contracts
Per Diem and Fees
JOB TRAINING PARTNERSHIP ACT
Personal Services Salaries and Wages Employer's Contributions for: F.I.CA Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance
Other Costs Supplies and Materials Utilities
Computer Charges Software
REPAIRS AND RENOVATIONS
Other Costs Repairs and Maintenance
Total Expenditures
Excess of Funds Available over Expenditures

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

54.837.99

1,377.00

4.762.60

2,527.72

16,578.33

1,279.74

15,432.11

23,453.00

2,064.86 5,893.29

1,460.58

$

566,597.97

$ 54.837.99 1,377.00 4,762.60 2,527.72
16,578.33 1,279.74
15,432.11
23.453.00
2,064.86 5,893.29
1.460.58
$ 566,597.97

$

24,642.69

347.34 1.788.00 1,892.34
185.00 42.00 1.135.00

280.23 462.17

1.647.00

$

32,421.77

$ 24,642.69
347.34 1,788.00 1,892.34
185.00 42.00 1,135.00
280.23 462.17
1,647.00
$ 32,421.77

$ $ 7,677,212.89 $
28,771.34

97.00 $

97.00

97.00 $ 7,677,309.89

0.00

28,771.34

$

7,705.984.23 $====9;;,;7,;,;:'0~0 $ 7.706,081.23

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

- 34 -

NORTH GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS
YEAR ENDED JUNE 30, 1996

EXHIBIT"K"

FUND Berry, R. Roger, Scholarship Funds Clarey, William C., Scholarship Fund Federal Supplemental Educational Opportunity Grants Fund Georgia Electrification Council Educational Loan Fund HOPE Scholarship Program Mount Vernon Mills Scholarship Fund Pell Grant Program Private Scholarship Fund Student Activities Fund

ASSETSI LIABILITIES
JULY 1.1995

ADDITIONS

DEDUCTIONS

ASSETSI LIABILITIES
JUNE 30, 1996

$

300.00

$

300.00

1.58 $

8.38 $

9.96

0.00

0.00

28,519.00

28,519.00

0.00

11,544.11 0.00
300.00 0.00
54.50 49,962.90

106.22 914,327.00
439,327.00 8,071.33
107,576.64

914,327.00
439,327.00 4,974.44 77,362.22

11,650.33 0.00
300.00 0.00
3,151.39 80,177.32

$

62,163.09 $ 1,497,935.57 $ 1,464,519.62 $=====9=5,=:57:;9=.0:=4

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
- 35-

NORTH GEORGIA TECHNICAL INSTITUTE CASH AND CASH EQUIVALENTS JUNE 30, 1996
NONINTEREST BEARING ACCOUNTS Habersham Bank, Cornelia, Georgia
INTEREST BEARING ACCOUNTS
Community Bank and Trust, Cornelia, Georgia
Money Market Account (3.04%)
Habersham Bank, Cornelia, Georgia
Money Market Accounts (3.00%)
OTHER
Cash on Hand Petty Cash

SCHEDULE -1-
$ 528,316.17 3,610.33
66,704.92 2,000,00
$ 600.631.42

See accompanying notes and Independent Accountant's Combined Report on Review of Financial State'ments and Supplementary Information.
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NORTH GEORGIA TECHNICAL INSTITUTE INVESTMENTS JUNE 30,1996

SCHEDULE "2"

NONEXPENDABLE TRUST FUND
Sarling, Lenora M., SCholarship Fund U. S. Treasury Securities Holdings Account No. 2000-007-9925 912827J78 912827M25

PURCHASE DATE

INTEREST RATE

MATURITY DATE

AMOUNT

May 17,1993 August 31, 1993

6.25% 4.75%

February 15, 2003 $ August 31, 1998

15,000.00 20,000.00

$

35,000.00

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information,
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NORTH GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30,1996

SCHEDULE "3"

BUDGET FUND
Education, U. S. Department of Adult Education - State Administered Basic Grant Program Through Georgia Department of Technical and Adult Education - Administrative Central Office
Federal Work-Study Program Direct
Vocational Education - Basic Grants to States Through Georgia Department of Technical and Adult Education - Administrative Central Office
Vocational Education - Consumer and Homemaking Education Through Georgia Department of Technical and Adult Education - Administrative Central Office
Tech-Prep Education Through Habersham County Board of Education
Health and Human Services, U. S. Department of Job Opportunities and Basic Skills Training Through Georgia Department of Human Resources Various Offices of Department of FamDy and Children Services
Labor, U. S. Department of Job Training Partnership Act Through Georgia Department of Technical and Adult Education - Administrative Central Office

CFDA NUMBER

AMOUNT

84.002 $ 165,104.79

84.033

78,452.00

84.048

341,997.76

84.049 84.243

38,276.00 15,000.00

93,561

28,308.02

17.250

30,136.95

$ 697,275.52

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Stater.nents and Supplementary Information.
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NORTH GEORGIA TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND WAGES. AND TRAVEL
YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

Totals per Annual Supplement Accruals June 30, 1996
Totals per Report
SUMMARy BY OBJECT CLASS BUDGET FUND Personal Services-Institutions Adult Uteracy Grants Job Training Partnership Act

SALARIES AND WAGES
$ 4,127,576.35 $

TRAVEL 60,309.48

5,724.68

$ 4,133,301.03 $ ====6='53=:9=.4=8

$ 3,747,149.99 $ 361,508.35 24,642.69

44,877.37 15,432.11

$ 4,133,301.03 $ ====6=0,=:30=:9::;.4=8

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
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SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

NORm GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30. 1996

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offindings disclosed in the review report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status ofFinding

838-95-01 838-95-02

Corrective Action Implemented See Audit Control Number 838-96-01

PRIOR YEAR/CURRENT YEAR

GENERAL LEDGER Agency Funds - Inadequate Accounting Records Financial Statements Audit Control Number 838-96-01

The review report for the year ended June 30, 1995, disclosed that North Georgia Technical Institute maintains a student loan program funded by the Georgia Electrification Council. As ofJune 30, 1996, this fund had a cash balance of $3,610.33 and student notes receivable of $8,040.00 that were included on the Combined Balance Sheet (Statutory Basis) of the Institute. The student notes receivable, totaling $8,040.00, are in default.

North Georgia Technical Institute's decision effective June 30, 1992 to discontinue the loan program was accepted by the Georgia Electrification Council with the stipulation that the Institute return the original principal of$10,000.00 less a deceased student's loan of$5oo.00 to the Council. As ofthe date ofthis report, a final disposition ofthe principal balance had not been made.