North Georgia Technical College, Clarkesville, Georgia, management report for fiscal year ended June 30, 2011

NORTH GEORGIA TECHNICAL COLLEGE
CMRKESVILLE, GEORGLA
MANAGEMENT REPORT
FOR FISCAL YEAR ENDED
JUNE 30,2011
A Member College of the Technical
College System of Georgia
Georgia I Aa&b and Accopltlts
.' LI
I State Auditor

NORTH GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I

LETTER OF TRANSMITTAL

SELECTED FINANCIAL INFORMATION

EXH IBlTS

A STATEMENT OF NET ASSETS - (GAAP BASIS)

B STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS (GAAP BASIS)

C STATEMENT OF CASH FLOWS - (GAAP BASIS)

D SELECTED FINANCIAL NOTES

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET - (STATUTORY BASIS) - BUDGET FUND

16

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(STATUTORY BASIS) BUDGET FUND

17

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

18

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

20

5 RECONCILIATIONOF SALARIES AND TRAVEL

23

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

SECTION I FI NANClAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1- 156
Atlanta, Georgia 30334-8400
November 1 6 , 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and HonorableSteve Dougherty, President North Georgia Technical College
Ladies and Gentlemen:
As part of our audit of the basic financial statements of the State of Georgia presented in the State of
Georgia ComprehensiveAnnual 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, 2011, we have performed certain audit procedures at North Georgia Technical College. Accordingly, the financial statements and compliance activities of North Georgia Technical College 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 North Georgia Technical College as of and for the year ended June 30, 2011. Information contained in this report is a by-product of our audit of 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.
This report is intended solely for the information and use of management of North Georgia Technical College, members of the Local Board of Directors, 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.
. Respectfullysubmitted,

~&sselWl . Hinton, CPA, CGFM State Auditor

SELECTED FlNANClAL INFORMATION

NORTH GEORGIA TECHNICAL COLLEGE STATEMENT OF NET ASSETS (GAAP BASIS)
JUNE 3 0 . 2 0 1 1
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Prepaid Items Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Deferred Revenue Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted
Expendable Unrestricted
Total Net Assets

EXHIBIT "A"

NORTH GEORGIA TECHNICAL COLLEGE STATEMENTOF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (GAAP BASIS)
YEAR ENDED JUNE 30,2011
OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalties Sales and Services Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Local Gifis Interest and Other Investment Income Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts Federal State Nongovernmental Loss on Disposal of Capital Assets
Total Other Revenues, Expenses. Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXHIBIT "B"

NORTH GEORGIA TECHNICAL COLLEGE STATEMENT OF CASH FLOWS (GAAP BASIS)
YEAR ENDED JUNE 3 0 , 2 0 1 1
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 Other Receipts (Payments)
Net Cash Provided (Used) by Operatlng Activities
CASH FLOWS FROM NONCAPITAL FINANCINGACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Recetpts
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Cap~taAl ssets
Net Cash Provided (Used) by Cap~taal nd Related FinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments
Net Increase (Decrease) In Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONCILIATION OFOPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operatlng income (Loss) Adjustments to Reconcile Operating Income t o Net Cash
Provided (Used) by Operating Activit~es Depreciation Expense Change in Assets and Liabilities: Accounts Receivable Inventories Prepaid Items Salaries Payable Accounts Payable Deferred Revenue C o m ~ e n S a t e dAbsences
Net Cash Provided (Used) by OperatingActivit~es
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

EXHIBIT "Dm

North Georgia Technical College is one of twenty-six (26) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of North Georgia Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of ten (10) members serving staggered three-year terms who are appointed by the State Board of the Technical College System of Georgia. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount of State appropriations to be received by North Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, North Georgia Technical College is considered an organizational unit of the Technical College System of Georgia for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial R e ~ o r t i n Sg tandards.
NET ASSETS
The Technical College's net assets are classified as follows:
Invested in capita/ assets, net of related debt: This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
- Restrictednetassets expendable: Restricted expendable net assets include resources in which
the Technical College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties, except for unexpended grant funds of $10.00 due to grantor agencies.
U n m net~ ass~ets: Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $7,073.76. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of the State Treasurer.
When an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011

EXHIBIT "D"

NOTE 2: DEPOSITS
DEBSOSITS
The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) 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, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia.

2. Bonds, bills, certificates of indebtedness, notes, 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, 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 MortgageAssociation.
6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
At June 30, 2011, the carrying value of deposits was $2,565,609.53 and the bank balance was $3,068,846.22. Of the Technical College's deposits, $2,757,583.26 were uninsured. Of these uninsured deposits, $2,757,583.26 were collateralized with securities held by the financial institution's trust department or agency, but not in the Technical College's name.

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2011, consists of the following:

Student Tuition and Fees

$

10,421.91

Federal, State and Private Funds

566,265.44

Georgia State Financingand Investment Commission

31,753.92

Other

57,820.89

Total Accounts Receivable

NORTH GEORGIA TECH NlCAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011

EXHIBIT "D"

NOTE 4: CAPITAL ASSETS

Followingare the changes in capital assets for the year ended June 30, 2011:

Beanning Balance July 1,2010

Transfers From Other Technical
College

Additions

Reductions

Ending Balance June 30.2011

Capital Assets, Not Being Depreciated: land and land Improvements Construction Work In Progress

$ 560.722.00 $ 88,790.78

0.00

$

$ 960,532.06

0.00 $ 560.722.00 1,049,322.84

Total Capital Assets, Not Being Depreciated $ 649.512.78 $

0.00 $ 960,532.06 $

0.00 $ 1,610,044.84

Capital Assets, Being Depreciated: Buildingand BuildingImprovements Improvements Other Than Buildings Equipment Library Collections

$ 33,144,664.78 2,579,078.00 5,891.226.68 $ 796.716.61

$ 62,822.76

136,900.00

$ 33.281.564.78

2,579,078.00

731,923.64 $ 530,721.73 6,155.251.35

56,560.01 35,300.76

817,975.86

Total Assets Being Depreciated

$ 42,411,686.07 $

62,822.76 $ 925.383.65 $ 566.022.49 $ 42.833.869.99

Less: Accumulated Depreciation: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections

$ 5,777.564.44 1,760,518.05

$ 857.179.42 104,138.00

$ 6,634.743.86 1,864.656.05

Total Accumulated Depreciation

$ 12,805,020.23 $

62,822.76 $ 1,632.440.65 $ 564,256.68 $ 13,936,026.96

Total Capital Assets, Being Depreciated, Net $ 29,606,665.84 $

0.00 $ -707,057.00 $ 1,765.81 $ 28,897,843.03

Capital Assets, Net

NOTE 5: DEFERRED REVENUE

Deferred revenue at June 30, 2011, consists of the following

Prepaid Tuition and Fees Other Deferred Revenue
Total Deferred Revenue

$

104,123.70

NOTE 6: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2 0 1 1 was as follows:

Other Liabilities Compensated Absences

Beginning Balance July 1.2010

Additions

Reductions

Ending Balance June 30,2011

Current Portion

$ 861,78125 $ 597,298.12 $ 603,175.10 $ 855,904.27 $ 409.97815

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 3 0 , 2 0 1 1

EXHIBIT "D"

NOTE 7: NET ASSETS

Changes in Net Asset activity for the year ended June 30,2011 was as follows:
Beginning

Balance

July 1,2010

Additions

Reductions

Invested in Capital Assets

Net of Related Debt

$ 30,256,178.62$

253,475.06 $

1,765.81 $

Ending Balance June 30,2011
30,507,887.87

Restricted Net Assets

0.00

8,119,364.79 8,119,354.79

10.00

Unrestricted Net Assets

898,305.39 18,479,955.61 17.612.642.44 l,765,618.56

Total Net Assets

$ 3l,154,484.01$ 26.852.795.46 $ 25,733,763.04$ 32,273,516.43

NOTE 8: LEASE OBLIGATIONS
CPF~E!.~AT~PL~ETAGSES
North Georgia Technical College has entered into certain agreements to lease copiers and office space 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 of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised.
Expenses for rental of copiers and office space under operating leases for the year ended June 30, 2011, totaled $138,039.20.
SUMMARY OF I-EASE BBLIGATTBNS
Future commitments for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows:
Operating Leases
Year EndingJune 30: 2012 2013 2014 2015

Total Minimum Lease Payments

$

112,110.24

NOTE 9: RETIREMENT PLANS

North Georgia Technical College 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 North Georgia Technical College 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.

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 3 0 . 2 0 1 1

EXHIBIT "D"

X:rnpioyeesQRetirement 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 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 1 0 years of creditable service and attainment of age 6 0 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, North Georgia Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these North Georgia Technical College 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

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011

EXHIBIT "D"

contributions under the new plan and GSEPS are 1.25% of annual compensation. North Georgia Technical College 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 North Georgia Technical College contributions are not at any time refundable t o the member or his/her beneficiary.
Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows:
Old Plan* New Plan GSEPS
* 5.66% exclusive of contributions paid by the employer on behalf of old plan
members
Members become vested after 1 0 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 3 0 years of creditable service, regardless of age, or after 1 0 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 4 0 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 3 0 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. Death, disability and spousal benefits are also available.

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 3 0 , 2 0 1 1

EXHIBIT " D

TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 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 adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2008 actuarial valuation.

The following table summarizes North Georgia Technical College contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30,2009:

E RS Required Contribution

Percent Contributed

TRS

Required

Percent

Contribution Contributed

GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description North Georgia Technical College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500.00 credited to his/her account, the Board of 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.
The Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtained through ERS.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2011, for employees covered by GDCP was $1,442,616.54. The Technical College's total payroll for all employees was $9,519,668.80.
Total contributions made by employees during fiscal year 2 0 1 1 amounted to $108,210.44 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 3 0 , 2 0 1 1

EXHIBIT "D"

NOTE 10: POST-EMPLOYMENT BENEFITS

North Georgia Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department - OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices.

Retiree health benefits were previously funded through the Georgia Retiree Health Benefit Fund (GRHBF). In 2009, the General Assembly revisited the GRHBF and enacted legislation that, effective August 31, 2009, separated the GRHBF into two new funds: the Georgia School Personnel Postemployment Health Benefit Fund and the Georgia State Employees Post-employment Health Benefit Fund. The purpose of this change was to assure employers responsible for planning and funding future retiree health costs that their contributions will be dedicated to their respective retiree populations. Funds in the GRHBF were transferred to the Georgia State Employees Post-employment Health Benefit Fund or the Georgia School Personnel Post-employment Health Benefit Fund as described in the plan financial statements. The statute that created the GRHBF is repealed effective September 1,2010.

Georgia State Employees Postemployment Health Benefit Fund The Georgia State Employees Postemployment Health Benefit Fund (State OPEB Fund) is a costsharing multipleemployer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations (including technical colleges) and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).

The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.

Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The combined active and retiree contribution rates established by the Board for employers participating in the State OPEB Fund were as follows for the fiscal year ended June 30, 2011:

June 2010 July 2010 -April 2 0 1 1
May 2011- June 2 0 1 1

22.165% of covered payrollfor July coverage 25.586% of covered payrollfor August - May coverage 22.667% of covered payrollfor June - July coverage

No additional contribution was required by the Board for fiscal year 2 0 1 1 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.
-12-

NORTH GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 3 0 , 2 0 1 1

EXHIBIT "Dn

The following table summarizes North Georgia Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30, 2011, June 30, 2010 and

June 30,2009:

Percentage

Required

Fiscal Year

Contributed

Contribution

State Employees'Assurance Department - OPEB
State Employees' Assurance Department - OPE6 (SEAD-OPEB) is a cost-sharing multipleemployer defined benefit post-employment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees', Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1,2009. Pursuant to Title 47 of the OCGA, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems.
Contributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. For the fiscal year ended June 30, 2011, contributions of ERS "old plan" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS "new plan" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30,2011, June 30,2010 and June 30,2009.
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 expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although North Georgia Technical College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against North Georgia Technical College (an organizational unit of the Technical College 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 30,2011.
NOTE 12: AFFILIATED ORGANIZATIONS
The North Georgia Technical Foundation is a legally separate, tax exempt organization whose activities primarily support North Georgia Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement
No. 39, Determining Whether Certain Organizat-ionsare Component Units. Theref0re, the financiaI
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 North Georgia Technical College.

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SUPPLEMENTARY INFORMATION

NORTH GEORGIA TECHNICAL COLLEGE BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 3 0 . 2 0 1 1
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EOUITY
Liabilities Salaries Payable Encumbrances Payable Accounts Payable Deferred Revenue Funds Held for Others
Total Liabilities
Fund Balances Reserved Bookstore Continuing Education Federal Financial Assistance lnventories Live Works Projects Sales and Services Technology Fees Tuition Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
-16-

NORTH GEORGIA TECHNICAL COLLEGE SUMMARY BUDGEICOMPARISON AND SURPLUSANALYSIS REPORT (STATUTORYBASIS)
BUDGET FUND YEAR ENDEDJUNE30.2011

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS
CARRY-OVER FROM PRIOR YEARS
Transfers from Resewed Fund Balance
Total Funds Available
EXPENDITURES
Adult Literacy Economic Development Technical Education
Total Exoendltures
Excess of Funds Available over Expendltures
FUND BALANCEJ U U
Reserved UnreSeNed
ADJUSTMENTS
Prlor Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Technical College System of Georgia Year Ended June 30,2010
Prior Year Reserved Fund Balance Includedin Funds Available

BUDGET

ACTUAL

SCHEDULE "2"
VARIANCE FAVORABLE (UNFAVORABLE)

SUMMARY OF FUND BALANCF
Reserved Bookstore ContlnulngEducat~on Federal Flnanc~aAl ssistance lnventortes Llve Work Projects Sales and Services Technology Fees Tultlon
Total Reserved
Unrese~ed Surplus
Total Fund Balance
Statutory Basis financ~allnformatlon was preparedon a prescribed basis of accountingthat demonstratescompl~ancew~thbudgetary statutes and regulationsof the State of Georgia. which is a comprehensive bas6 of accountingother than generally acceptedaccounting principles.

NORTH GEORGIA TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Adult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Spec~ficallyldentified Other Funds
Total Adult Llteracy
Economic Development Other Funds
Technical Education State Approprlatlon State General Funds Federal Funds Federal Funds Not Specifically ldentified Amerlcan Recoveryand Reinvestment Act of 2009 Federal Funds Not Spec~ficallyldent~f~ed Other Funds
Total Technical Education
Totals By Program

Original Appropriat~on

Amended Appropriat~on

F~nal Budget

Current Year Revenues

Statutory Basis financial ~nformattonwas prepared on a prescribed basis of accounting that demonstrates compllance wlth budgetary statutes and regulations of the State of Georgia. which is a comprehensive basis of accounting other than generally accepted accounting principles.

SCHEDULE 3"

Funds Ava~lableCompared to Budget

~ r l oyrear

Adjustments and

Total

Carry-Over

Program Transfers Funds Available

Var~ance Posltlve (Negative)

Expenditures Compared to Budget

Varlance

Actual

Posltlve (Negat~ve)

Excess (Def~clency) of Funds Available
Over/(Under) Expend~tures

NORTH GEORGIA TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011

Adult Literacy State Appropriatlon State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Adult Literacy
Economic Development Other Funds
Technical Education State Appropriatlon State General Funds Federal Funds Federal Funds Not Specifically ldentlfied American Recovety and Reinvestment Act of 2009 Federal Funds Not Specifically ldentlfied Other Funds
Total Technical Education
Total Operating Activity
Pnor Year Reserves Not Available for Expenditure Inventories
Budget Unit Totals

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2010
Surplus

Prior Period Adjustments

Statutory Basis financial information was prepared on a prescribed basis of accountingthat demonstrates compliance with budgetary statutes and regulations of the State of Georgia, whlch 1s a comprehensive basls of accounting other than generally accepted accounting principles.

SCHEDULE "4"

Other Adjustments

Early Return of Fiscal Year 2 0 1 1
Surplus

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

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Defic~t)

Total

Summary of Ending Fund Balance Reserved
Bookstore Continuing Education Federal Financial Assistance Inventories Live Work Projects Sales and Services Technology Fees Tuition Unreserved Sur~lus
Total Endlng Fund Balance - June 30

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Totals per Annual Supplement
Accruals June 3 0 . 2 0 1 1 June 3 0 , 2 0 1 0
Lag Salaries June 3 0 , 2 0 1 1 June 3 0 , 2 0 1 0
Compensated Absences June 3 0 , 2 0 1 1 June 3 0 , 2 0 1 0
Adjustments Agency Fund

NORTH GEORGIA TECHNICAL COLLEGE RECONCILIATIONOF SALARIES AND TRAVEL
YEAR ENDED JUNE 3 0 , 2 0 1 1
SALARIES

SCHEDULE "5" TRAVEL

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

NORTH GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS, QUESTIONEDCOSTS AND OTHER ITEMS
YEAR ENDED JUNE 30,2011
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.