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 SAVANNAH STATE UNNERSITY - TABLE OF CONTENTS- 
 
SECTION I 
 
FINANCIAL 
 
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 
 
REQUIRED SUPPLEMENTARY INFORMATION 
 
MANAGEMENTS DISCUSSION AND ANALYSIS 
 
3 
 
BASIC FINANCIAL STATEMENTS 
 
EXHIBITS 
 
A STATEMENT OF NET ASSETS 
 
II 
 
B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 
 
12 
 
C STATEMENT OF CASH FLOWS 
 
13 
 
D NOTESTOTHEFINANCIALSTATEMENTS 
 
14 
 
SUPPLEMENTARY INFORMATION 
 
SCHEDULES 
 
SCHEDULES OF REVENUES AND EXPENDITIJRES COMPARED TO 
 
BUDGET - (NON-GAAP BASIS) 
 
I 
 
RESIDENT INSTRUCTION 
 
31 
 
2 
 
LOTTERY FOR EDUCATION 
 
32 
 
3 RECONCILIATION OF SALARIES AND TRAVEL 
 
33 
 
SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 SAVANNAH STATE UNIVERSITY -TABLE OF CONTENTS- 
SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
 
 SECTION I FINANCIAL 
 
 R,'o,SEU W. H, ......" 
STATE AUDITOR 
f.lOA; 656 217.: 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 WJ ...hlngLOn Street S W, SUJlC ::! 14 Allanta, Georgld 30J34-R400 
March 3, 2003 
 
Honorable Sonny Perdue, Governor Members of the General Assembly of GeorgIa Members of the Board of Regents of the Uruverslty System of Georgia 
and Honorable Carlton E. Brown, PresIdent Savannah State UruVerslty 
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 
Ladies and Gentlemen 
We have audIted the accompanymg basiC financial statements (ExhIbIts A through D) ofSavannah State Umverslty, an orgaruzatlOnal umt of the State of GeorgIa, as of and for the year ended June 30, 2002 These finanCIal statements are the responsiblhty of the Umverslty's management Our responslblhty IS to express an opinion on these finanCial statements based on our audIt. 
Except as dIscussed m the followmg paragraph, we conducted our audJt m accordance WIth audJtmg standards generally accepted m the Uruted States of Amenca Those standards reqUITe that we plan and perform the audIt to obtam reasonable assurance about whether the finanCIal statements are free of matenal rmsstatement. An audit mcludes examIning, on a test basIS, eVidence supportmg the amounts and diSclosures m the finanCIal statements An audJt also mcludes assessmg the accountmg pnnclples used and slgruficant estimates made by management, as well as evaluatmg the overall financIal statement presentaoon We beheve that our audit proVides a reasonable basIS for our 0plruon 
We were unable to obtam suffiCIent documentation to support all accounts receIvable reported by the Umverslty In addloon, the UniversIty could not provide suffiCIent documentation for a major pornon ofAccounts Payable Accordmgly, we were unable to saosfy ourselves as to the accuracy of the amounts reported as accounts receivable and accounts payable on the Statement ofNet Assets as of June 30, 2002 AddJtlonally, we were unable to determme the effects these matters may have on the basIC finanCial statements 
 
02ARL-62X 
 
 As discussed In Note I, the financial statements ofSavannah State UruvefSlty are Intended to present the financial posItion and changes In financial posltlon (including cash flows) ofonly that portion of the bUSiness-type actIVIties ofthe State of Georgia that IS attnbutable to the transactions ofSavannah State Umverslty They do not purport to, and do not, present fauly the finanCial positIon and changes In financial positIOn (including cash flows) of the State of Georgia, In conformity With accounting pnnclples generally accepted In the Umted States of Amenca. 
As descnbed In Note I to the finanCial statements, the Umverslty did not recognize June 30, 2001, encumbrances as expenses In the June 30, 2002, basiC finanCial statements To conform to generally accepted accounting pnnclples, encumbrances should be recogmzed as expenses and habIlJtles In the penod that goods and Services are received. The effects on the basiC finanCial statements of thiS departure from generally accepted accountmg pnnclples were not reasonably determinable. 
In our oplmon, except for the effects of such adjustments, If any, as might have been determined to be necessary had we been able to examine documentation supporting accounts receivable and accounts payable and, except for the effects on the basiC financial statements ofthe matter discussed In the fifth paragraph, the basiC financial statements referred to above present faJrly, In all matenal respects, the financial posItion ofSavannah State Umverslty as ofJune 30, 2002, and Its changes In financial pOSItion (mcludrng cash flows) for the year then ended In conformity With accountmg pnnclples generally accepted m the Umted States of Amenca. 
As descnbed In Note I, Savannah State Umverslty adopted the provISIOns of Governmental Accounting Standards Board (GASB) Statements No 35, BasiC Financial Statements - and Management's DISCUSSion and Ana~vsls - for Public Colleges and Universities, as amended by GASB Statement No. 37, BasiC Financial Statements - and Management's DISCUSSIOn and Ana~vslS for State and Local Governments, and GASB Statement No. 38, Certain Financial Statements Note Disclosures, as of July 1,2001, to IIDplement a new fmanclal reportmg model 
Management's DISCUSSion and AnalYSiS IS not a required part ofthe basiC finanCial statements but IS supplementary information reqwred by the GASB. We have apphed certam hmlted procedures, which consisted pnnclpally ofInqumes ofmanagement regarding the methods ofmeasurement and presentation of thJs supplementary information However, we did not audit thJs mformatlOn and express no opinIOn on It. 
Our audit was conducted for the purpose of forming an 0plllion on the basiC financial statements taken as a whole The accompanYing supplementary informatIOn (Schedules I through 3) IS presented for purposes of additional analYSis and IS not a required part of the basiC finanCial 
02ARL-62X 
 
 statements of Savannah State UnIversity Such mfonnalion has been subjected to the auditing procedures applied by us In the audit of the basiC financial statements and, In our OpinIOn, based on our audit, IS fairly stated In all rnatenal respects In relatIOn to the basiC finanClaJ statements taken as a whole. 
 
Respectfully submitted, 
 
 
 
RWH:gp 02ARL-62X 
 
Rus 11 W Hinton State Auditor 
 
 REQUIRED SUPPLEMENTARY INFORMATION - 1- 
 
 SAVANNAH STATE UNIVERSITY 
Management's Discussion and Analysis 
 
Introduction 
 
Savannah State Umverslty IS one of the 34 InStitutIOns of the Umverslty System of GeorgIa The Umverslty, located In Savannah, GeorgIa, was founded In 1890 as a department of the State UmversIty for the education and tralmng of Negro students. Savannah State UmvefSltynow serves a diverse student population as a sernor umverslty of the Umverslty System of GeorgIa The Umverslty serves a pnmanly Afncan-Arnencan student population, ennched by a dIVersIty of tradItional and nontrachtlonal students from other countries, cultures, and races The educational goal IS realIzed through program offenngs In the College ofBusmess Admlmstratlon, the College of LIberal Arts and SOCIal SCIences, and the College of SCIences and Technology, whIch lead to baccalaureate and master's degrees Tlus WIde range of educational OPPOrtunIties attracts a highly quahfied faculty and a student body ofaround 2,300 students each year The Institution continues to grow as shown by the companson numbers that follows. 
 
Faculty 
 
Students 
 
FY2002 FY2001 FY2000 
 
135 
 
1,831 
 
116 
 
1,688 
 
144 
 
1,747 
 
Overview ofthe Financial Statements and Financiill Analysis 
 
Savannah State Umverslty IS proud to present Its finanCIal statements for fiscal year 2002. The emphasiS ofdiSCUSSIons about these statements will be on current year data. There are three finanCIal statements presented: the Statement of Net Assets, the Statement of Revenues, Expenses and Changes m Net Assets, and, the Statement of Cash Flows. Tlus dISCUSSIon and analYSiS of the Umverslty's financial statements proVIdes an OVerview of its finanCIal actIVIties for the year Savannah State Umverslty has elected to not restate pnor penods for purposes of proVldmg the comparative data for thIS Management's DISCUSSIon and AnalysIS However, In future years, when pnor penod Information IS aVaIlable, a comparatIve analYSis WIll be presented 
 
Statement ofNet Assets 
 
The Statement ofNet Assets presents the assets, hablhtles, and net assets ofthe Umverslty as ofthe end of the fiscal year. The Statement of Net Assets IS a pomt of time finanCial statement. The purpose ofthe Statement ofNet Assets IS to present to the readers ofthe finanCIal statements a fiscal snapshot of Savannah State Umverslty. The Statement of Net Assets presents end-of-year data concermng Assets (current and non-current), Llablhtles (current and non-current), and Net Assets (assets mmus hablhtles). The dIfference between current and non-current assets WIll be chscussed m the notes to the finanCIal statements 
 
-3- 
 
 - - - - - - - - - - - - - - - - - -- --- 
 
From the data presented, readers of the Statement of Net Assets are able to detenrnne the assets avaliable to contmue the operatIOns ofthe Institution They are also able to detenrnne how much the Institution owes vendors, Investors and lendmg Institutions 
 
Fmally, the Statement ofNet Assets provides a picture of the net assets (assets mmus habliltles) and their aVaIlablhty for expenditure by the mstltUtlon Net assets are divided Into three major categones. The first category, mvested In capital assets, net ofdebt, provides the Institution's eqwty In property, plant and equipment owned by the IDStltutlOn. The next asset category IS restncted net assets, wluch IS dIvIded mto two categones, nonexpendable and expendable. The corpus of nonexpendable restncted resources IS only aVBllable for Investment purposes Expendable restncted net assets are aVBllable for expenditure by the InstitutIon but must be spent for purposes as determmed by donors and/or external entIties that have placed tIme or purpose restnctions on the use of the assets The fmal category IS unrestricted net assets Unrestncted assets are aVaIlable to the Institution for any lawful purpose of the InstitutIon. 
 
Statement ofNet Assets, Condensed (thousands of dollars) 
 
Assets Current Assets Capttal Assets, Net Other Assets 
 
$ 4,561 31,137 1.957 
 
Total Assets 
 
$ 37,655 
 
Liabilities Current LIabtlttles Non-Current LlablhtIes 
 
$ 1,749 495 
 
Total Liabilities 
 
$ 2,244 
 
Net Assets Invested In Capital Assets, Net of Debt Restricted - Nonexpendable Restricted - Expendable Unrestncted 
 
$ 31,137 1,105 916 2.253 
 
Total Net Assets 
 
$ 35.411 
 
Statement ofRevenues. Expenses and Changes in Net Assets 
 
Changes m total net assets as presented on the Statement of Net Assets are based on the activity presented In the Statement of Revenues, Expenses and Changes m Net Assets The purpose of the statement is to present the revenues received by the mstitution, both operatIng and nonoperating, and the expenses paId by the institutIon, operatIng and nonoperatIng, and any other revenues, expenses, gaIns and losses received or spent by the InstItutIon. Generally speakIng operatmg revenues are receIVed for provldmg goods and seI"Vlces to the varIOus customers and constltuencles of the 
 
-4- 
 
 mstltutIon Operatmg expenses are those expenses paid to acqUIre or produce the goods and seTV1ces provided m return for the operatIng revenues, and to carry out the miSSion of the InstitutIOn Nonoperatmg revenues are revenues receIved for which goods and services are not provIded For example state appropnatlons are nonoperatmg because they are provided by the LegIslature to the mstltutlon Without the LegIslature duectly receIVIng commensurate goods and services for those revenues 
 
Statement ofRevenues, Expenses and Changes m Net Assets, Condensed (thousands of dollars) 
 
OperatIng Revenues OperatIng Expenses 
 
$ 12,688 39,659 
 
OperatIng Loss 
 
$ -26,971 
 
NonoperatIng Revenues 
 
27,515 
 
Increase m Net Assets 
 
$ 544 
 
Net Assets at BegInnIng of Year, as OngInally Reported 
 
$ 83,412 
 
Cumulative Effect of Changes m Accountmg Pnnclple 
 
-48,545 
 
Net Assets at Beginnmg ofYear Restated 
 
$ 34,867 
 
Net Assets at End of Year 
 
$ 35,111 
 
The Statement of Revenues, Expenses and Changes In Net Assets reflects a posItIve year WIth an mcrease In the net assets at the end ofthe year. Some lughbghts ofthe mformatlon presented on the Statement of Revenues, Expenses and Changes m Net Assets are as follows: 
 
-5- 
 
 Revenue By Source (thousands of dollars) For The Year Ended June 30, 2002 
Operating Revenue TUitIon and Fees Grants and Contracts Rents and Royalties Sales and Services ofEducational Departments AuxIliary Other 
Total OperatIng Revenue 
NonoperatIng Revenue State AppropnatIons Grants and Contracts Gifts Investment Income Other 
Total Nonoperatmg Revenue 
Total Revenues 
Expenses (thousands of dollars) For The Year Ended June 30, 2002 
Operatmg Expenses InstructIon Research Public Service AcademiC Support Student ServiCes InstItutIonal Support Plant Operations and M3.1ntenance Scholarships and Fellowslnps AUXIliary Enterpnses Unallocated DepreciatIon 
Total OperatIng Expenses 
 
$ 2,545 4,503 26 198 5,052 364 
$ 12,688 
$ 19,764 6,569 192 162 828 
$ 27.515 
$ 40,203 
$ 10,923 1,689 2,433 3,267 2,431 5,567 4,846 1,525 5,128 1.850 
$ 39659 
 
-6- 
 
 Statement ofCash Flows 
. 
The final statement presented by the Savannah State Umverslty IS the Statement ofCash Flows The Statement of Cash Flows presents detailed mformatlon about the cash actiVIty of the mstltutlon dunng the year The statement IS diVIded mto five parts The first part deals WIth operatmg cash flows and shows the net cash used by the operatmg actlVllJes of the mstltutlon The second section reflects cash flows from non-capital financmg activIties ThIs sectIOn reflects the cash received and spent for nonoperatmg, non-mvestmg, and non-eapltal financmg p11I]>Oses The t1urd section reflects the cash flows from mvestmg actiVIties and shows the purchases, proceeds, and mterest received from mvestlng actiVitIes The fourth section deals WIth cash flows from Capital and related financmg actlVltles ThIs sectIon deals WIth the cash used for the acqUIsItIOn and constructIon of capItal and related Items The fifth section reconCIles the net cash used to the operatmg mcome or loss reflected on the Statement of Revenues, Expenses and Changes m Net Assets 
 
Cash Flows for the Year Ended June 30, 2002, Condensed (thousands of dollars) 
 
Cash PrOVided (Used) By. Operating ActlVltles Non-CapItal Fmancmg ActiVIties Investing ActiVIties Capital and Related Fmancmg ActiVIties 
 
$ -28,367 27,465 152 -893 
 
Net Change m Cash Cash, Begmnmg of Year 
 
$ -1,643 3.393 
 
Cash, End of Year 
 
$ ],750 
 
Capital Assets 
 
The Umverslty had no slgmficant capItal asset addJtlons for facllitles m fiscal year 2002 
 
For addltlonalmformatlOn concermng CapItal Assets, see Notes 1 and 6 m the notes to the financial statements. 
 
Economic Oudook 
 
The Umverslty IS not aware of any currently known facts, decISIOns, or conditions that are expected to have a slgl1lficant effect on the finanCIal pOSItion or results of operations dunng this fiscal year beyond those unknown vanatlons havmg a global effect on VIrtually all types ofbusmess operations. The UI1IVerslty's overall finanCIal position IS strong. Even With a relatively flat funded year, the Umverslty was able to generate a modest mcrease m Net Assets The Umverslty anticipates the current fiscal year WIll be much like last and WIll mamtam a close watch over resources to mamtam the Ul1Iverslty's ability to react to unknown mtemal and extemallssues. 
 
Carlton E Brown, President Savannah State Ul1Iverslty 
 
-7- 
 
 BASIC FINANCIAL STATEMENTS -9- 
 
 SAVANNAH SJAIE UNWERSITY 
STATEMENT OF NET ASSETS JUNE 30, 2002 
ASSETS 
Current Assets Cash and Cash EquIValents Short-Term Investments Accounts ReceiVable, Net Federal Flnanoal Assistance Other Prepaid Items Inventones 
T01aI Current Assets 
Noncurrent Assets Cash and Caah EqulVlllents Investments Note. RecelVllble, Net Capl\el Assets, Net (See NoIs 5) 
T01aI Noncurrent Assets 
Total Assets 
LIABILmES 
Current liabilities saJanes Payable Payroll Wlthholdll'llS Accounts Payable Deferred Revenue 
Funds Held lor Others 
Compensated Absences Other lIabllllJes 
Total Current LJabIIlbea 
Noncurrent lJab,lrbeB Compensated AbBene:ea 
Total Uabllrbes 
NET ASSETS 
Invested ,n Cepolal Assets, Net of Relaled DellI Restneted lor 
Expendable Nonexpendable Unrestrk:led 
Total Net Assets 
th,. The notes to the financial statements ara an Integral part of statement 
- 11 - 
 
EXHIBIT"A" 
 
$ 1,460,75889 411.41115 
986.10152 1,105,100 80 
5,17661 592,41029 
$ 4.560,95926 
 
$ 
 
289,736 71 
 
814.868 48 
 
852,69792 
 
31 ,137.164 01 
 
$ 33,094,467 12 
 
S 37,655,426 38 
 
$ 
 
288,960 33 
 
7.29619 
 
558,084 59 
 
255,36754 
 
101.45508 
 
478,08390 
 
59.38917 
 
S 1.748,636 80 
 
495,42596 $ 2.244.062 76 
 
$ 31.137,184 01 
916,738 19 1,104.605 19 2,252.856 23 
 
$ 35,411.38362 
 
 SAVANNAH STATE UNI'JERSrry 
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET ASSETS 
YEAR ENDED JUNE 30 2002 
 
EXHIBIT-e" 
 
OPERATING REVENUES 
Student Turtron and F_ Less SCholarship Allowances 
Grants and Contracts Federal 
Rents and Royalbes 
sales and 80MceS of Educabonal Departments 
AuxIliary Enterprises Residence Halls Bookston! Food Services Health 8oMCOS InI8ra>Uegl8te Athlebca 
Other Operallng Revenues 
Tolal Operating RlMlnues 
OPEBAT!NG EXPENSES 
Salanes Faculty Staff 
EITllloyee Benefits Travel Schola~hlpsand Fellowships U11lrbes Supplies and Other Services Depreciation 
Totel Qperatlng Expenses 
Operating Income (Lou) 
NQNOPEBAT!NG REVENUES (EXPENSES) 
Ste18 ApplOPnabonS Grants and Contracts 
Federal Slate GIftII Interest and Other Investment Income Qthet' Nonoperating Revenues 
NeI Nonoperating Revenues 
Nel_ InaeaseJ(DecrBa..) In 
NetAssela Net Aaaets - Beglnn,ng of Year, as Originally Reported Cumula_ Effect of Cl\anges In Acx:oun1tng Pnndple 
Net Assets . Beglnntng of YearI Restated 
Net Assets  End of Year 
 
S 5.585,400 21 
-3.039.61553 
4.502.73721 25.83942 
198,00300 
586.46970 1,116,20258 1,713,78508 
303,221 92 1,331,840n 
364,41531 
S 12.888.299 67 
 
S 7,n6,604 21 
10,248,098 96 5,018,398 36 
397,n569 2,703,02337 1,967,024 59 9,698,600 86 1.849,582 61 
S 39.659.108 85 
S -28,970,808 98 
 
S 19,783,96116 
 
6,372.796 74 195,821 20 192.650 00 182,446 55 827,562 50 
 
S 27.515.23815 
 
S 
 
544.42917 
 
S 83,412,33520 
-48,545,400 75 
S 34,866,934 45 
 
The notes to the finanCialltatementa are an Integral part of thIS statBmenl - 12 
 
 SAVANNAH STATE UNIVERSITY STATEMENT OF GASH FLOWS 
YEAR ENDED JUNE 30 2002 
CASH FLOWS FROM OPERATING ACTMTIES Tulbon and Fees 
Grants and Contracts 
Sales end SeMCeS of Educabonal Departments Payments to Supplte~ Payments to Employees Payments for SCI1ola~h,ps and Fellowships boan. Issued to Students and Employees ColIedlon of Loans to Sludanta and Employees AuxJ~ary Enterpnse CIlafges 
ReSIdence HaDs Bookstore Food ServIces Health 5elVlces Inte<collaglBte All1IeIK:s Other Rece,pts (Payments) 
Net caoh ProvIded (lJsed) by Operadng AdMbas 
CASH FLOWS FROM NONCAPITAl FINANCING ACTMTIES State Appropriadons Agency Funds Transacbono GIfts and Grants ReeelYOd for Other than Capllal Purpose. Other No~ Recelplo 
Net caeh Aows Provided (Used) by Noncapllal FIIlIIIlQIlg AdIvrtNlo 
CASH FLOWS FROM CAPITAl AND RELATED FINANCING ACTIVITIES Purchases of CoprtaI Assets 
CASH FLOWS FROM INVESTING ACTMTIES Interest on Invesbnenls 
Net Increa,,",(Deaease) In caoh 
Cosh and Cash EqUMIIanIs - June 30. 2001 Leoo Short-Term Inwotmento 
Cosh and cash Equ.....1anIs - Beg,nnlng of Year 
Cash and ca.h Equlva_ - End of Year 
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTMTIES 
Operatlng Income (Loss) Adjustments to Reconcile Net Income (boss) to Ne1 caeh 
Provlded (Used) by Operadng AdivIbes Depreaa\JOn Change m Assets and LJabiJibes Accounts Receovables. Net Inventories Prepaid hemo Not.. Receivables. Net Accounts Payable Salarleo Payable Payroll Whhholding and Employer Matching Benefits Other uabIhtleS Compensated Absences 
Net Caoh ProvIded (Used) by Operabng AclMbeo 
The noteo to the finanCial atatements are an ,ntegral part of lhls Btelement 
- 13 - 
 
EXHIBIT "C. 
 
$ 2,721,088 92 3709,61527 198,00300 
-19922,43222 -17,949,68986 
-2,703,02337 -58,740 40 75,05724 
577.31410 1.211.97049 1.713.78508 
303.221 92 1.331.84077 
424,75644 
$ -28,367,232 62 
 
$ 19,763.96116 -492.240 86 7.292.627 93 900,78504 
$ 27.465.133 27 
 
$ 
 
-1193,465 59 
 
$ 
 
152,89701 
 
$ -1,842.667 93 
 
$ 4.609.893 82 -1,216.730.29 
 
$ 3.393.163 53 
 
$ 1,750:495 60 
 
$ -26.970.80898 
1,849.582 61 
-495.51785 71486 
9.398 18 16.31684 -2.858.041 95 123.996 36 7,296 19 -1.18583 -48,98305 
$ -28,367,23262 
 
 SAVANNAH STATE UNNERSITY 
NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT"D" 
 
NOTE l' SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
NATURE OF OPERATIONS 
Savannah State UruVerslty serves the state, and national commurntles by provllhng Its students With academic Instruction that advances fundamental knowledge, and by dlssetDJnatIng knowledge to the people of Georgia and throughout the country. 
REPORTING ENTITY 
Savannah State University IS one of thirty-four (34) State supported member institutions ofJugher education In Georgia winch compnse the University System ofGeorgia, an organizational urnt ofthe State of Georgia The accompanymg finanCial statements reflect the operations of Savannah State UniVersity as a separate repOrting entity. 
The Board of Regents has constitutional authority to govern, control and manage the UruVerslty System of Georgia TIns authonty Includes but IS not liIDIted to the power to designate management, the abilIty to SIgnificantly Influence operations, the authonty to control institutiOns' budgets, the power to deterIDIne allotments of State funds to member mstItutions and the authonty to prescnbe accounting systems and admImstrative poliCies for member mstItutions. Savannah State UruVerslty does not have authonty to retain unexpended State appropnatIons (SurplllS) for any given fiscal year. Accordingly, Savannah State Uruverslty IS considered an orgaruzatIonal urnt ofthe Board ofRegents of the Uruverslty System of Georgia reporting entity for finanCial reporting purposes because ofthe Significance of its legal, operatIonal, and finanCial relationslnps With the Board ofRegents as defined In Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial ReportIng Standards. 
FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, BasiC Fmanclal Statements and Management DISCUSSion and AnalysISfor State and Local Governments. TIns was followed In November 1999 by GASB Statement No 35, BasiC FmanClaI Statements and Management's DISCUSSIOn and AnalysIS for Public Colleges and Universities. The State of Georgia IS reqUIred to Implement GASB 
Statement No 34 as ofand for the year ended June 30,2002. As an orgaruzatIonal urnt ofthe State ofGeorgia, the University IS also reqwred to adopt GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38. The financial statement presentation reqUired by GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38 proVIdes a comprehensive, entity-Wide perspective of the UruVerslty'S assets, liabilities, net assets, revenues, expenses, changes In net assets, cash flows, and replaces the fund group perspective preVIOllSly reqUired 
The University has elected to not restate Its 200 I finanCial statements to conform With the new finanCial statement presentation, therefore comparative finanCial Information Will not be presented for fiscal year 2002 Sigmficant accounting changes made In order to comply With the new requirements Include (1) adoption of depreciation on capital assets, and (2) recognitiOn of compensated absences Generally Accepted Accounting Pnnclples (GAAP) reqUIreS that the 
- 14 - 
 
 SAVANNAHSTATE~ERSITY 
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002 
 
EXHIBIT"D" 
 
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
FINANCIAL STATEMENT PRESENTATION reporting of summer school revenues and expenses be between fiscal years rather than In one fiscal year. Due to the lack ofmatenalIty, Institutions ofthe Uruverslty System ofGeorgta WIll continue to report summer revenues and expenses In the year In wluch the predominate activity takes place 
At June 30, 2001, encumbrances (contractual obhganons for goods and setVlces not receIved at fiscal year end) were recorded as expenditures by the UruVerslty Instead ofreservations offund balance as reqwred by generally accepted accounting pnnclples For fiscal year 2002, the Umverslty changed Its method ofrecordmg encumbrances such that encumbrances at June 30, 2002 were not recorded as expenses. T1us change IS In accordance WIth generally accepted accounting prmclples. 
No adjustments however, have been made on the finanCIal statements to restate the fund balance at July 1,2001 for the June 30, 2001 encumbrances recorded as expenditures In fiscal year 2001. The net effect of the above aecountlng treatment resulted In an understatement of expenses on the accompanymg finanCIal statements for pnor year encumbrances which should have been reflected as expenses In the penod when goods and servtces were received 
BASIS OF ACCOUNTING For finanCial reportmg purposes, the UmveISIty IS considered a specIal-purpose government engaged only In bUSiness-type actiVIties. Accordmgly, the Uruverslty'S fmanclal statements have been presented using the econormc resources measurement focus and the accrual basIS of accounting, except as noted In the precedmg paragraphs. Under the accrual basIS, revenues are recogrnzed when earned, and expenses are recorded when an obhganon has been inCurred All slgmficant IntraumVerslty transactiOns have been elImmated. 
The Umverslty has the option to apply all FInanCIal Accounting Standards Board (FASB) pronouncements ISSUed after November 30, 1989, unless FASB COnflICts WIth GASB The Umverslty has elected to not apply FASB pronouncements ISSUed after the applIcable date 
RESTATEMENT OF NET ASSETS - BEGINNING OF YEAR As a result of the adoption of GASB Statement No. 34, the Umverslty was also reqwred to make certam changes In accounting pnnclples, specifically (1) adoption of deprecIatIon on CapItal assets, and (2) recordmg of compensated absences GASB Statement No. 34 reqUITes certam summer semester revenues be recogrnzed between fiscal years rather than the fiscal year 10 which the semester was predommantly conducted The Uruverstty System ofGeorgta has chosen to continue to record summer revenue m the year m wluch the semester was predormnantly conducted. Net assets at July 1,2001 were reduced by $48,545,400 75 for the cumulatlve effect of these changes. 
 
- 15 - 
 
 SAVANNAB STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT "D" 
 
NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
CASH AND CASH EQUIVALENTS/SHORT-TERM INVESTMENTS Cash and Cash EqUIvalents consist of petty cash, demand deposits and time deposits m authonzed financIal msl1tutIons, and cash management pools that have the general charactensl1cs of demand deposIt accounts 
INVESTMENTS The UniVersity accounts for ItS mvestments at fau value m accordance with GASH Statement No 31, Accounting and Financial Reportlngfor Certain Investments andfor External Investment Pools. Changes m unrealiZed gam (loss) on the carrying value of mvestments are reported as a component ofmvestment mcome m the statements of revenues, expenses, and changes m net assets 
ACCOUNTS RECEIVABLE Accounts receIvable COnsISts of tuitIOn and fee charges to students and auxihary enterpnse ServiCes provided to students, faculty and staff, the maJonty of each residing m the State of Georgia. Accounts receIvable also mclude amounts due from the Federal government, state and local governments, or pnvate sources, m connection With reImbursement of allowable expenditures made pursuant to the UniVersIty'S grant and contracts. Accounts receIvable are recorded net of esl1mated uncollecl1ble amounts 
PREPAID ITEMS Prepwd Items are payments made to vendors m advance ofthe receIpt ofgoods and SeJVIces that WIll benefit periods subsequent to the balance sheet date 
INVENTORIES Consumable supplIes are carned at the lower of cost or market on the fIrst-m, first-out ("FIFO") basiS. 
Resale Inventones are valued at cost usmg the fIrst-m, first-out method. 
NON-CURRENT CASH AND INVESTMENTS Cash and Investments that are externally restncted and CWInOt be used to pay current lIabllitles are clasSified as non-current assets m the statements of net assets 
CAPITAL ASSETS CapItal assets are recorded at cost at the date of acqwsIlJon, or fwr market value at the date of donatIon In the case of gifts For eqUIpment, the Umverslty's capltallzanon polIcy mcludes all Items with a umt cost of $5,000.00 or more, and an esnmated useful lIfe of greater than one year. Renovatlons to bUlldmgs, mfrastructure, and land Improvements that exceed $100,00000 and slgmficantly mcrease the value or extend the useful lIfe of the structure are capitalIzed. Routine 
 
- 16 - 
 
 SAVANNAH STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30. 2002 
 
EXHIBIT"D" 
 
NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
CAPITAL ASSETS replllrs and maintenance are charged to operatmg expense In the year In which the expense was Incurred DepreciatIon IS computed using the strlllght-iine method over the estImated useful lIves of the assets, generally 10 to 40 years for bUlldmgs, 10 to 25 years for Infrastructure and land IDIprovements, 10 years for lIbrary books, and 3 to 15 years for eqUIpment 
To obtam the total picture of plant additIons in the Umverslty System, It IS necessary to look at the actIVItIes ofthe GeorgIa State Financmg and Investment Comnussion (GSFIC) - an orgamzatIon that IS external to the System GSFIC ISSUes bonds for and on behalf of the State of GeorgIa, pursuant to powers granted to It In the ConstItutIOn ofthe State ofGeorgJ.a and the Act creating the GSFIC. The bonds so ISSUed constItute dJrect and general oblIgatIons of the State of GeorgIa, to the payment of which the full flllth, credit and taxing power of the State are pledged. 
EffectIve July 1, 2001, the GSFIC retains construction m progress on their books throughout the constructIon penod and transfers the entIre project to Savannah State UniVersity when complete. 
DEFERRED REVENUES Deferred revenues Include amounts received from grant and contract sponsors that have not yet been earned 
COMPENSATED ABSENCES Employee vacation pay is accrued at year-end for finanCial statement purposes The liahllity and experlSe Incurred are recorded at year-end as accrued vacatIon payable In the Statement of Net Assets, and as a component of compensation and benefit expense m the Statements of Revenues, ExperlSes, and Changes In Net Assets. Savannah State Umverslty had accrued liability for comperlSated absences m the amount 0$1,022,492.91 as of July 1,2001. For Fiscal Year 2002, $429,100.85 was earned m compensated absences and employees were pllld $478,083 90, for a net decrease of$48,983.05 
NON-CURRENT LIABILITIES Non-current lIabilItIes Include (1) liahilitles that Will not be pllld Within the next fiscal year; (2) capital lease obligatIOns with contractual matunlJes greater than one year; and (3) other liabllilIes that, although payable wIthIn one year, are to be paid from funds that are classified as non-current assets. 
 
- 17- 
 
 SAVANNAHSTATE~RSITY 
NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT "D" 
 
NOTE I SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES 
NET ASSETS The UruVerslty'S net assets are classified as follows 
Invested In capital assets, net ofrelated debt Tlus represents the UniVersity'S total mvestment m capital assets, net ofoutstandIng debt obligations related to those Capital assets. To the extent debt has been mcurred but not yet expended for Capital assets, such amounts are not mcluded as a component ofmvested m capital assets, net ofrelated debt. (The term "debt obhgatlOns" as used m thIs defirutlon does not mclude debt of the GSFIC as dIscussed above.) 
Restricted net assets - nonexpendable. Nonexpendable restncted net assets COnsiSt of endowment and sunilar type funds m wluch donors or other outside sources have stipulated, as a condluon ofthe gift mstrument, that the pnnclpalls to be mamtamed mVIolate and in perpetuity, and mvested for the purpose of producmg present and future mcome, wluch may either be expended or added to pnnclpal The University may accumulate as much ofthe annual net mcome ofan mstltutional fund as IS prudent under the standard established by Code Secuon 44-15-7 ofAnnotated Code ofGeoTgia 
Restricted net assets - expendable Restncted expendable net assets mclude resources m which the Uruverslty IS legally or contnlctually obhgated to spend resources m accordance With restnctlons Imposed by external thIrd parnes 
Unrestricted net assets Unrestncted net assets represent resources derIved from student twuon and fees, state appropnatlons, and sales and SerVIces of educatIOnal departments and auxIhary enterpnses. These resources are used for transactions relatmg to the educational and general operations of the UruVersIty, and may be used at the wscretJon of the governmg board to meet current expenses for those purposes, except for unexpended state appropnatlons (surplus) of $436.13 Unexpended state appropnanons must be refunded to the Board of Regents of the UniVersIty System of GeoTgia - AdmmIstratlve Central Office for remittance to the Office of Treasury and FIscal SerVICes. These resources also mclude auxlhary enterpnses, wluch are substantially self-suppomng acuVIues that proVide SerVIces for students, faculty and staff. 
When an expense IS mcurred that can be paId usmg either restncted or unrestncted resources, the UniversIty'S pohcy IS to first apply the expense towards unrestncted resources, and then towards restricted resources. 
INCOME TAXES Savannah State UruVerslty, as a pohtlcal subdivision of the State of Georgta, IS excluded from Federal mcome taxes under Section 115(1) ofthe Internal Revenue Code, as aInended. 
CLASSIFICATION OF REVENUES The University has clasSified ItS revenues as either operating or non-operatmg revenues m the Statement ofRevenues, Expenses, and Changes m Net Assets accordmg to the followmg cnterIa 
- 18 - 
 
 SAVANNAHSTATE~RSITY 
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002 
 
EXHIBIT"D" 
 
NOTE I' SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
CLASSIFICATION OF REVENUES Operatmg revenues Operatmg revenues mclude actlvll1es that have the charactenStlcs ofexchange transacl1ons, such as (I) student tuIl10n and fees, net ofscholarslnp allowances, (2) sales and ServICes of aUXiliary enterpnses, (3) most Federal, state and local grants and contracts and Federal appropnal1ons, and (4) mterest on mstJtutlonal student loans, 
Non-operatmg revenues Non-operating revenues mclude actlVlUes that have the charactensUcs of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operatmg revenues by GASB No, 9, Reportmg Cash Flows of Propnetary and Nonexpendable Trust Funds and Governmental Entities That Use Propnetary Fund Accountmg, and GASB No. 34, such as state appropnatlons and mvestment mcome 
SCHOLARSHIP ALLOWANCES 
Student tuItion and fee revenues, and certain other revenues from students, are reported at gross WIth 
a contra revenue account ofscholarslnp allowances m the Statement of Revenues, Expenses and Changes in Net Assets. Scholarslnp allowances are the dIfference between the stated charge for goods and services proVlded by the Umvers1ty, and the amotmt that 1S pald by students and/or tlnrd parttes maktng payments on the students' behalf. Cerlaln governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs, are recorded as either operal1ng or nonoperatmg revenues m the Umversity's financial statements To the extent that revenues from such programs are used to sausfY tuItion and fees and other student charges, the Umverslty has recorded contra revenue for scholarship allowances. 
NOTE 2 CASH AND CASH EOillVALENTS; OTHER DEPOSITS, AND INVESTMENTS 
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Ftmds belonging to the State ofGeorgra (and thus Savannah State Umvers1ty) cannot be placed m a depoSitory paytng mterest longer than ten days WIthout the depOSitory proVldmg a surety bond to the State In lieu of a surety bond, the depOSitory may pledge as collateral anyone or more of the followmg secuntles as enumerated m the OffiCial Code of Georgra Annotated Section 50-17-59. 
I Bonds, bill, certtficates ofmdebtedness, notes, or other dIrect obligalions ofthe Umted Stales or of the State of Georgra. 
2. Bonds, bills, certificates of mdebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia 
3 Bonds ofany public authonty created by the laws ofthe State ofGeorgia, provldmg that the statute that created the authonty authonzed the use of the bonds for thiS purpose. 
4 Industnal revenue bonds and bonds of development authonties created by the laws of the State ofGeorgia 
- 19 - 
 
 SAVANNAH STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT"D" 
 
NOTE 2 CASH AND CASH EOONALENTS, OTHER DEPOSITS: AND INVESTMENTS 
 
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES 5. Bonds, bills, certIficates of Indebtedness, notes, or other obhgatlons of a SUbSidIary corporatIon ofthe Umted States government, winch are fully guaranteed by the Umted States government both as to pnnclpal and Interest, or debt obhgatlons ISSUed by the Federal Land Bank, the Federal Home Loan Bank, The Federallntermed.tate 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 ofaccounts proVIded by the Federal DepOSIt Insurance Corporation 
 
As authonzed In the OffiCIal Code of GeorgIa Annotated Section 50-17-53, the State DepOSitOry Board has adopted pohcies winch allow agencIes of the State ofGeorgIa (and thus Savannah State Umverslty), the option of exempting demand depOSits from the collateral reqwrements 
 
The Treasurer ofthe Board ofRegents is responsible for all details relative to furmslung the reqwred depository protection for all umts of the Umverslty System of GeorgIa. 
 
CATEGORIZATION OF DEPOSITS The Umverslty's cash depoSIts are categonzed by nsk as follows' 
 
Category 1 - Amounts covered by depository InsUrance or collateralized WIth secuntles (at fau value) held by the Umversity or by its agent in the Umvemty's name 
 
Category 2 - Amounts collateralized WIth secunties (at fair value) held by the pledging financial InstJtutlOn's trust department or agent In the UmversJty's name 
 
Category 3 - Amounts collateralIzed WIth secuntles (at faIr value) held by the pledgmg finanCIal InstitutiOn, or by Its trust department or agent but not in the Umverslty's name, and amounts uncollateralized. 
 
Cash DepOSIts as of June 30, 2002 are as follows 
 
Cash DepoSIts 
 
Carrymg 
AmoUDt 
 
Bank 
Balances 
 
Risk CBte&OOes 
 
2 
 
3 
 
S I 74785840 S 492764872 S 322 44680 S 17284842 S 4212 35 3 50 
 
CATEGORIZATION OF INVESTMENTS Savannah State Umverslty's Investments are Invested In an Investment pool managed by another governmental entity and are not reqwred to be categonzed since the Umverslty did not own any specIfic, Identifiable Investment securities of the pool. 
 
- 20- 
 
 SAVANNAHSTATE~RSITY 
NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT "0" 
 
NOTE 2 CASH AND CASH EOUNALENTS: OTHER DEPOSITS; AND INVESTMENTS 
 
CATEGORIZATION OF INVESTMENTS 
 
Investments Not Subject to Categonzatlons Board ofRegents 
Short-Term Fund Total Return Fund 
 
$ 266,147.55 960,132.08 
 
Total Investments 
 
$ 1.226,279 63 
 
NOTE 3 ACCOUNTS RECEIVABLE 
 
Accounts receivable consisted of the follOWing at June 30, 2002. 
 
Student TUItion and Fees AwnIJary Enterpnses and Other Operatmg ActiVIties Federal, State, and Pnvate Funds Other 
 
$ 634,604,85 112,97224 
1,343,21206 65,264,57 
 
$ 2, I 56,053,72 
 
Less Allowance for Doubtful Accounts 
 
64,851,40 
 
Net Accounts Receivable 
 
$ 2,091,202 32 
 
NOTE 4 INVENTORIES 
 
Inventories COnsisted of the follOWing at June 30, 2002: 
 
Bookstore Central Stores PhYSical Plant 
 
$ 508,86275 18,73484 64,81270 
 
Total 
 
$ 522,410.29 
 
NOTE 5 NOTESILOANS RECEIVABLE 
 
NoteslLoans receIVable at June 30, 2002, pnmanlycollSlst ofstudent loans made through the Federal Perkms Loan Program (the Program). The Program proVIdes for cancellation of a loan at rates of 10% to 30010 per year up to a maximum of 1000/. Ifthe participant comphes WIth certam proVISIOns, The Federal government reimburses the Umverslty for amounts cancelled under these proVISIOns As the Umvemty determines that loans are uncollectible and not eligible for reimbursement by the Federal government, the loans are wntten offand assigned to the U, S, Department of Education, 
 
- 21 - 
 
 SAVANNAH STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT"D" 
 
NOTE 6 CAPITAL ASSETS 
 
The balance at July 1,2001 was adjusted for accountmg changes requIred m Implementmg GASB Statements 34 and 35 as dtsclosed m Note I Followmg are the changes m capltaJ assets for the year ended June 30, 2002 
 
Adjusted Balance July I. 2001 
 
Addthns 
 
Reductions 
 
Balance June 30, 2002 
 
Capital Assets, Not Being Deprectated 
 
Land and Land Improvements 
 
S 575,975 16 
 
S 575975,16 
 
CapItal Assets, Being DeprecIated BUIlding and BuoIding Improvements FacIlIties and Other Improvements 
EqUIpment LIbrary Collections CapItalIzed Colleellons 
 
S 42,572,957 00 2,520.259 00 5,037,50224 S 5,492,891 23 55,28500 
 
573,49834 S 319,96725 
 
S 42,572,957 00 
2,520.259 00 60,95661 5,550,043 97 12,26593 5,800,592 55 
55.285,00 
 
S 55,67889447 S 89346559 S 73.22254 S 56499 13752 
 
Less Accumulated Oeprec1atlon 
 
BUIldings and BUIlding Improvements S 16,794.24934 S 
 
FacilIties and Other Improvemems 
 
799,973 29 
 
EqUIpment 
 
2,685,075 99 
 
LIbrary Colleellons 
 
3,807,90230 
 
CapItalIzed Colleellons 
 
I 165,14 
 
1,083,072 lOS \ 17,898 44 408,654 95 239,47500 482 12 
 
000 S 17,877,321 44 917,87\ 73 
3,093,73094 4,047,377 30 
164726 
 
S 24 088 366 06 S I 849582,61 S 
 
000 S 25 937248 67 
 
Total Capital Assets, Being DeprecIated, 
 
Net 
 
S 31,590,S28 41 S -956 117 02 S 
 
Capital Assets, Net 
 
$ 32 166 S93 57 S .256 JJ792 S 
 
7322254 S 30561,188 85 
s 73272 54 31 )3716401 
 
NOTE 7 DEFERRED REVENUE 
 
Deferred revenue COnsIsted of the followmg at June 30, 2002, 
 
Research Gifts and Grants 
Federal 
 
$ 184,869,44 70A98,IO 
 
TotaJs 
 
$ 255367,54 
 
NOTE 8 LONG-TERM LIABILITIES 
 
Long-term hablhty actlVlty for the year ended June 30, 2002, was as follows 
 
Other LiabilItIes Compensated Absences 
 
Balance July I. 2001 
 
Additions 
 
RedUCtlDS 
 
Balance JUDe 30 2002 
 
Current 
Portion 
 
$ 102249291 $ 429 '00 85 S 47808390 $ 973 S09 86 $ 478083 9Q 
 
- 22- 
 
 SAVANNAH STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHIBIT"D" 
 
NOTE 9 RETIREMENT PLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA 
 
Plan Description Savannah State UruveISlty partiCipates m the Teachers Retirement System ofGeorgIa (TRS), a costshanng multiple-employer defined benefit pension plan establIshed by the General Assembly of Georgia for the purpose of provIChng retirement allowances and other benefits for teachers of the State ofGeorgia TRS provides service retirement, dIsabihtyretJrement, and SurviVOr'S benefits for its members m accordance WIth State statute The Teachers Retirement System ofGeorgIa Issues a separate stand alone financial audit report and a copy can be obtaIned from the Georgia Department of Audits and Accounts 
 
funding Polley Employees of Savannah State University who are covered by TRS are reqUIred by State statute to contribute 5% oftheIr gross earnings to TRS Savannah State UniVeISJty makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance WIth State statute and as adVlSed by theIr mdependent actuary. For fiscal year 2002, the employer contribution rate was 9.24% for covered employees. Employer contributions for the current fiscal year and the precedmg two fiscal years are as follows: 
 
Fiscal Year 
 
Percentage Contributed 
 
Required Contribution 
 
2002 2001 2000 
 
100% 100% 100% 
 
$ 1,112,152.15 $ 1,404,295 16 $ 1,462,846.34 
 
REGENTS RETIREMENT PLAN 
 
Plan Description The Regents Retirement Plan, a smgle-employer defined contribution plan, IS an optional retirement plan establIshed and admIrustered by the Board of Regents of the UruVerslty System of Georgia, under wlnch It may purchase annwty contracts for the purpose ofproVldIng retIrement and death benefits for eligible faculty and pnnclpal admInistrators. Benefits depend solely on amounts contributed to the plan plus mvestment earrungs. Benefits are payable to partJclpatmg employees or theIr beneficlanes m accordance With the tenus of the annwty contracts. 
 
Funding Policy Member contribution requirements are establIshed by the Board of Trustees of the Teachers Retirement System Employer contributions are estabhshed by statute and may be amended only by the General Assembly ofthe State ofGeorgia. The employer contnbutes 9.62% ofthe partlclpatmg employee's earnable compensation Employees contribute 5% of theIr earnable compensation Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times. 
 
- 23- 
 
 SAVANNAHSTATEUNNCRSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30. 2002 
 
EXHffiIT"D" 
 
NOTE 9 RETIREMENT PLANS 
REGENTS RETIREMENT PLAN 
Funding Policy Savannah State UniversIty and the covered employees made the reqwred contributIons of $397,487.66 (9 62%) and $211,542.88 (5%), respectively. 
GEORGIA DEFINED CONTRIBUTION PLAN 
Plan Description Savannah State Umversltypartlclpates m the Georgia Defined Contnbutlon Plan (GDCP) whIch IS a smgle-employer defined contnbutIon plan estabhshed by the General Assembly of Georgia for the purpose ofproVldmg retIrement coverage for State employees who are temporary, seasonal, and parttIme and are not members of a pubhc retirement or pensIon system. GDCP is adrmmstered by the Board of Trustees of the Employees' Retirement SYSlem of GeorgJa. 
Benefits A member may retIre and elect to receive penodic payments after attamrnent ofage 65. The payment Will be based upon mortality tables and mterest assumptions to be adopted by the Board ofTrustees Ifa member 1Jas less than $ 3,500.00 credited to lus/her account, the Board ofTrustees 1Jas the option 
of requmng a lump sum dIstributIon to the member in lieu of makmg penodIc payments. Upon the 
death ofa member, a lump sum dtstrlbution equahng the amount credited to lus/her account will be 
paid to the member's deSIgnated benefiCIary. Benefit proVISIOns are estabhshed by State statute. 
Contributions and Vesting Member contnbutIons are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contnbutlOns. Contnbutlon rates are estabhshed by State statute Earnmgs are crcdtted to each member's account m a manner estabhshed by the Board of Trustees Upon termmatIon of employment, the amount of the member's account IS refundable upon request by the member. 
Total contnbutlOns made by employees dunng fiscal year 2002 amounted to $40,284.50 wluch represents 7.5% of covered payroll These contributIons met the reqwrements of the plan 
NOTE 10 RISK MANAGEMENT 
Savannah State Umverslty IS a particIpant m the Board of Regents of the UniVersIty System of GeoTgJa Health Benefits Plan, wluch IS a self-insurance program of health and dental benefits for employees and retIrees of the UniversIty System of Georgia. Savannall State Umversity and partlclpatmg employees and retirees pay premIUms to the Health Benefits Plan for t1us health msurance coverage The Health Benefits Plan IS mcluded m the finanCIal statements ofthe Board of Regents of the Umverslty System of Georgta - Admlmstra1Jve Central Office. All umts of the Umverslty System of Georgia share the risk of loss for clatrnS of the Health Benefits Plan The 
- 24- 
 
 SAVANNAH STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2002 
 
EXHlBIT"D" 
 
NOTE 10' RISK MANAGEMENT 
Health Benefits Plan IS consIdered a self-sustammg nsk fund that proVIdes health coverage for ItS members up to a maxImum iJfetIme benefit of$2,OOO,000 00 per person and dental coverage up to an annual maxImum of $1 ,000.00 per person. The Board of Regents has contracted WIth Blue Cross Blue Slueld ofGeorgIa to process claIms m accordance WIth the Health Benefits Plan as establIshed by the Board of Regents 
The Department of AdnunistratIve SerVIceS (DOAS) has the responsIbIlIty for the State of GeorgIa of making and carrymg out decISIOns that WIll mlmmlze 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. Accordmgly, DOAS processes clauns for nsk of loss to which the State IS exposed, mcludmg general lIabilIty, property and casualty, workers' compensatIon, unemployment compensauon, and law enforcement officers' mdemmfication. LImited amounts of commercIal Insurance are purchased applIcable to property, employee and automobile lIabliJty, fideiJty and certam other risks. Savannah State Umverslty, as an orgamzatIonai unit of the Board of Regents of the UmvCTSlty System of GeorgIa, IS part of the State of GeorgIa reportIng entIty, and as such, IS covered by the State of GeorgIa nsk management program admInistered by DOAS PremIums for the nsk management program are charged to the vanous stale organizatIons by DOAS to proVIde claIms serVIcmg and clauns payment 
A self-InsUred program ofprofesslOnaliJabIlity for its employees was establIshed by the Board of Regents of the Umverslty System of GeorgIa under powers authonzed by the OffiCIal Code of GeorgIa Annotated Section 45-9-1. The program Insures the employees to the extent that they are not Immune from iJabIlity agaInst personaliJabllity for damages ansmg out of the perfonnance of theIr dutIes or m any way COmIected thereWIth The program IS admrrustered by DOAS as a SelfInsurance Fund 
NOTE II: CONTINGENCIES 
Amounts receIved or receIvable from grantor agencIes are subject to audIt and adJusUnent by grantor agencies. Tlus could result m refunds to the grantor agency for any expendItures whIch are disallowed under grant terms. The amount ofexpendItures wluch may be dIsallowed by the grantor camIOt be determmed at this tIme although Savannah State Umverslty expects such amounts, Ifany, to be Immatenal to its overall finanCIal posItIon 
LitIgatIon, claIms and assessments filed agaIDSt Savannah Stale UmversIty (an orgamzatIonai umt of the Board of Regents of the UmvCTSlty System of Georgia), If any, are generally consIdered to be actIons against the Stale of GeorgIa AccordIngly, slgmficant iJtIgatIon, claIms and assessments pendIng agaIDSt the State of GeorgIa are dIsclosed m the Stale of GeorgIa Comprehensive Annual Financial Report for the fiscal year ended June 3D, 2002. 
 
- 25- 
 
 SAVANNAH STATE l!NNERSITY NOTES TO THE FINANCIAL STATEMENTS 
ruNE 30, 2002 
 
EXHIBIT "D" 
 
NOTE 12 POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS 
Pursuant to the general powers conferred by the Official Code ofGeorgJa Annotated SectIOn 20-331, the Board of Regents of the Umverslty System of GeorgIa has establIshed group health and lIfe insurance programs for regular employees ofthe Umverslty System ofGeorgIa It IS the polIcy ofthe Board ofRegents to permIt employees ofthe Umverslty System ofGeorgJa elIgIble for retIrement or that become permanently and totally dIsabled to contmue as members of the group health and lIfe msurance programs. Employees who are elIgIble for retirement or disabIlIty under the cntena establIshed by the Teachers Rel1rement System ofGeorgIa and who have at least ten years ofservIce with the Umverslty System of GeorgIa are elIgible for these post-employment health and lIfe insurance benefits Organiz.atlonal umts of the Board of Regents of the UniVersIty System of GeorgIa pay the employer portion for group msurance for affected mdlVlduals. 
As ofJune 30, 2002, there were 169 employees who had retrred or were disabled that were receIving these post-employment health and life msurance benefits. For the year ended June 30, 2002, Savannah State Umverslty recognized as incurred $482,052.88 of expenditures, winch was net of $174,207.12 ofparhclpant contributIons 
 
- 26- 
 
 SAVANNAHSTATE~RSITY 
NOTES TO TIIE FINANCIAL STATEME1\'TS JUNE 30. 2002 
 
EXHIBIT "D" 
 
NOTE 13 NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS 
 
The Umverslty's operatmg expenses by functIonal classificatIOn are shown below. 
 
Statement of Operanng Expenses - Nawral V5 Funct.Jonal ClasslficabCll5 For the f-lscal Year Ended June 30. 2002 
 
FuncnOllAI aaudjcahon 
 
Haw! Clawficanon 
5.olanes 1-aculty 
s",tr 
Emplo)'ee Benefits Travel 5<:boIonb1J1' and 
FellOW!Iups Vbllnes Supplies and Other 
Services Deprec""'011 
ToLal Opera\Ulg bpcmes 
 
instructl OD 
 
Regan;b 
 
Public SeMce 
 
AcodemJc 
Support 
 
Student SgyJ'&S 
 
btsbtutlonaJ Support 
 
S 7.179,206 57 S 819,73125 
1.948,07841 35,04301 
115,11083 96,025 81 
729,56564 
 
359.02905 S 
 
89,52300 S 129.84559 S 
 
10.00000 S 
 
9.00000 
 
328..38609 
 
1,211,40108 
 
1,911,297 86 
 
1..362..337 05 
 
2.so5,448 65 
 
135.45201 
 
221,26893 
 
458.900 00 
 
358,35381 
 
1..320.659 65 
 
63.13391 
 
37,40600 
 
77,894 12 
 
49,490 04 
 
113,18386 
 
175.17926 12,429 30 
 
96,20224 17,950 51 
 
48000 91.746 78 
 
21,49350 49,51208 
 
319.486 07 80..33912 
 
615,097 76 
 
759.63887 
 
596.85639 
 
580,17586 
 
1,218,93205 
 
$ 19221 761 52 S 1 fiBS 797 } S 2 ill}90 f?} S 3 rt67 920 74 S 1431 361 M S S,567 {}42 49 
 
NabmlJ Cla.mflClbon 
Salanes Faculty Stalf 
Emplo)'ee Benefits Travel 5<:boIanb,po and 
Fellowships Utthbes SupplIeS and Other 
Semces DeprecIBIIon 
Total OpenIUlg Expenses 
 
Plant 
OpenbOl1S and MamtmlDClj 
 
FUDCbmaJ ClgslflCihon 
 
5<:bolmbtpS 
and Fellowsbms 
 
Awuhary fn!CWIJ&g 
 
Unallocated [)qw;ganon 
 
Total Open\Ulg Expeoses 
 
S 1..391,51340 138,11544 
8,537,52 
 
S 717.98358 437,570 II 
13,087 23 
 
S 7.776,604 21 10,248.098 96 
5.018..398 36 397,77569 
 
S 1,525..359 96 1,486,94714 
 
449,711 51 132,07385 
 
2,703,02337 1,967,02459 
 
1,820,57191 
S 4 M;i 685 41 
 
S I 8535996 
 
3,377,76238 
S :i !2R IRS 66 
 
S 1,849.582 61 S 181958261 
 
9.698.600 86 1849.58261 
$ 39659 '98 65 
 
- 27- 
 
 SUPPLEMENTARY INFORMAnON - 29- 
 
 SAVANNAH STATE UNWERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO 
BUDGET INON-QMP BASIS) RESIDENT INSTRUCTION 
YEAR ENDED JUNE 30, 2002 
 
SCHEDULE "1" 
 
REVENUES 
State Appropnatlons Other Revenues Retained 
 
BUDGET 
 
ACTUAL (1) 
 
VARIANCE FAVORABLE (UNFAVORABLE) 
 
$ 19,762.586 00 $ 19,762,586 00 $ 
 
28,759,701 00 
 
17,839,52906 
 
000 10,920,171 94 
 
$ 48,522,28700 $ 37,602,11506 $ -10.920.17194 
 
EXPENDITURES 
Personal Serw:es Education, General end Departmental Services Sponsored Operations 
Operating Expenses Education, General and Departmental SelVlces Sponsored Opera1Jons 
Caprtal Outlay Specaal Funding Inltlatlve 
 
$ 18.385,386 00 $ 18,334.981 84 $ 
 
4.226,199 00 
 
3,173.894 57 
 
5,154,991 00 18,334,57900 
1,488,54900 932,583 00 
 
5.130,206 B6 8.072.57452 1.951,32411 
919.08443 
 
50,404 36 1.052.304 43 
24,784 34 10,262,004 48 
-462,n511 13.498 57 
 
$ 48:522.28700 $ 37,582,06593 $ 10,940.221 07 
 
Excess of Revenues over Expenditures 
 
$ 
 
20,049 13 $ 
 
2~0;:.:,04=9~1~3 
 
(1) Actual amounts W8Ill prepared on e presa1bed basis of accounting that demonstrates complaance wtth budgelaJy statutes and regulations of the State of Georgaa, which Is a comprehensive basts of accounting other than generally accepted eccounlU1g principles 
 
See notes to the finanCIal statements 
 
- 31 - 
 
 SAVANNAH STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDiTURES COMPARED TO 
BUDGET !NON-GAAP BASIS} LOTIERY FOR EDUCATION YEAR ENDED JUNE 30, 2002 
 
SCHEDULE "2" 
 
REVENUES State Appropnatlons 
 
BUDGET 
 
ACTUAL (1) 
 
VARIANCE FAVORABLE (UNFAVORABLE) 
 
$ 224,07800 $ 224,07800 $ 
 
..=O..=OO:=.. 
 
EXPENDITURES 
EqUIpment, Technology and Construction Trust Fund 
Speasl Funding Inlbabves 
 
$ 125,04600 $ 125,04600 $ 
 
99,03200 
 
98,59587 
 
000 43613 
 
$ 224m8oo $ 223,641 87 $ 
 
--=4:::36~13::. 
 
Excess of Revenues over Expendrtures 
 
$ 
 
436 13 $ 
 
....;4~36~1,;:,3 
 
(1) Actual amounts were prepared on a prescribed baSIS of accounting that demonstrates compliance WIth budgetary statutes and regulabons of the State of Georg,a, which Is a comprehensive baSIS of accounbng other than generelly accepted accounting pnnClples 
 
See notes to the finanCIal statements 
 
32 - 
 
 SAVANNAH STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL 
YEAR ENDED JUNE 30, 2002 
 
SCHEDULE "3" 
 
Totals per Annual Supplement 
 
A=uals June 30, 2002 June 30, 2001 
 
Compensated Absences June 30, 2002 June 30, 2001 
 
Adjustments 
 
Shared selVlC98 on Jointly Staffed P9IllOI1nei 
 
Armstrong AUanbc State University 
 
Clark, 
 
Marline 
 
Johnson, OIls 
 
RIchardson, Joseph 
 
Shavers. 
 
Sonja 
 
Valdosta State UnMl1Slly 
 
Bngnatl, 
 
James 
 
SALARIES $ 17,905,83841 $ 
 
TRAVEL 397,77569 
 
288,96033 -1&4,963 97 
 
904,32871 -949.830 85 
 
-3.300 00 -9,60000 -e,073 00 -3.39000 62,82354 
$ 18,024,70317 $_.....:3~9:.:.7!..:.n.:.;5~6;:;9:. 
 
See notes to the finanCIal statements 
 
- 33- 
 
 SECTIONn AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 SAVANNAB STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FS-548-98-02 FS-548-99-03 FS-548-99-05 FS-548-00-01 FS-548-00-02 FS-548-00-03 FS-548-00-04 FS-548-00-05 FS-548-00-06 FS-548-00-07 FS-548-00-08 FS-548-00-09 FS-548-00-1O FS-548-00-11 FS-548-00-12 FS-548-01-01 FS-548-01-02 FS-548-0 1-03 FS-548-0 1-04 FS-548-01-05 FS-548-01-06 FS-548-0 1-07 FS-548-0 1-08 FS-548-01-09 FS-548-01-10 FS-548-01-11 FS-548-01-12 FS-548-01-13 FS-548-01-14 FS-548-0 1-15 FS-548-01-16 FS-548-01-17 
 
Unresolved - See Corrective ActlonIResponses PrevIOusly Reported Corrective Action Implemented PrevIOusly Reported Corrective Action Implemented Further ActIon Not Warranted Unresolved - See Corrective ActlonlResponses PrevIOusly Reported Correctlve Action Implemented Further Action Not Warranted Further ActIon Not Warranted Further ActIon Not Warranted PrevIOusly Reported Correctlve ActIon Implemented Previously Reported CorrectIve Actlon Implemented PrevIOusly Reported CorrectIve ActIon Implemented Partially Resolved - See Corrective ActIonIResponses Further ActIon Not Warranted Further ActIon Not Warranted Partially Resolved - See CorrectIve ActIonIResponses Unresolved - See CorrectIve ActionlResponses PrevIOusly Reported CorrectIve ActIon Implemented PreVIously Reported CorrectIve ActIon Implemented PreVIously Reported Corrective Actlon Implemented PrevIOusly Reported Corrective Actlon Implemented PrevIOusly Reported Corrective ActIon Implemented PartIally Resolved - See CorrectIve ActlonlResponses Unresolved - See Correctlve ActIonIResponses Partially Resolved - See Corrective ActIonlResponses PreVIously Reported CorrectIve ActIon Implemented PreVIously Reported Correctlve ActIOn Implemented PrevIOusly Reported Corrective ActIon Implemented PartIally Resolved - See CorrectIve ActIonlResponses Unresolved - See CorrectIve ActlOnlResponses Further ActIon Not Warranted Unresolved - See Corrective ActlonIResponses 
 
-I- 
 
 SAVANNAH STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CORRECTIVE ACTIONfRESPONSES 
EXPENDITURESILIABILITIESIDISBURSEMENTS DefiCIt Cash Balance Fmdmg Control Number: FS-S48-98-02 
As a lImited resource mstItul1on, Savannah State UruversIty has requested the Board of Regents for enhancement fundmg to address the Instoncal underfundmg of Its academIc programs, faculty and staffdevelopment, student development, operatIonal areas, capItal Improvements, as well as endowment and recruItment and scholarslnp actIVItIes If approved, tlus adchtIonal funding would asSISt m elIminatIng the NROTC defiCIt, m partIcular and augment Savannah State UruVerslty'S complex mission witlun the state's !ugher education enVIronment. 
REVENUESIRECENABLESIRECEIPTS 
Student Accounts ReceIvable Not Supported by FinanCIal AId Fmding Control Number. FS-S48-Qo..02 
ReconcilIahon ongomg. Students are only allowed to complete regIstral10n WIthout full payment of fees m two ClTCumstances. Each occurrence is supported by the expectation of receIving FmanClal AId The Caslner's Office IS presented WIth a deferment authorized by the Vice PresIdent for BUSiness and Fmance or the VIce PresIdent for Academic AffaIrs. There are situatIons where a student IS awarded Fmancial AId and It IS subsequently removed from the student's account. Management IS m0!Utonng to ensure complIance 
The Umverslty IS m the process ofreconcilIng the Banner Student System to the General Ledger. Reports have been IdentIfied to asSISt in the reconcIliation A reVIew IS underway to determine vanances on a student-by-student basIS. 
The procedure used in tins process IS as follows: A report (TGRRCON) IS run through the Banner Student System ThIs report lIsts the specific detail codes pOstIng to the General Ledger Account IdentIfied. An Aging Report (TGRAGES) IS then run through the Banner Student System to proVIde the detaIl by student for the detaIl codes requested A query IS also run through the PeopleSoft FinanCial System by student and account number. The two detaIl reports (TGRAGES) and the General Ledger query Will be compared on a student-by-student basIS to determine If they agree. Where dIfferences are detected, the student's account WIll be analyzed and the appropnate adjustment IS made to eIther the Ledger or Banner. 
The expected completIon date oftlus IS June 30, 2003 
-2- 
 
 SAVANNAH STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CORRECfIVE ACTIONIRESPONSES 
GENERAL LEDGER F31lure to Morutor Travel Advances Finding Control Number. FS-548-00-10 
All current year and maJonty of pnor year advances have been cleared. The remaJrung unresolved balances are those of former employees, no longer employees of Savannah State UniversIty. 
Plan of actIOn I) Determine accuracy and vahdIty ofreceivable. 2) Contact former employee - use skip tracing If necessary 3) If valid, collect receIvable or present finding to upper management for further action, wluchever IS apphcable. 
Scheduled final detemunatlOn: June 2003. 
CASH AND CASH EQUIVALENTS 
REVENUESIRECEIVABLESIRECElPTS EXPENDITURESlLlABILITIESfDlSBURSEMENTS Inadequate Separation of Duties Finding Control Number FS-548-01-01 
Internal control and separation offunctions are bemg addressed In the reorgaruzatlon ofthe Office of Student Accounts and Cashienng The reorganization was completed on December 1,2002. 
The UruVerslty IS in the process of preparmg a Cash Operations Manual The followmg are excerpts from tlus manual that address the UruVerslty'S stance on tlus Issue. The format of the manual states the Umverslty's pohcy followed by an outlined procedure to ensure adherence to the pohcy. The expected completion date oftlus manual IS January 31, 2003. Upon completion It Will be dlstnbuted to all UruVerslty staffInvolved In the cash handhng process. 
-3- 
 
 SAYANNAB STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
CASH AND CASH EQUIVALENTS REVENUESIRECEIVABLESIRECEIPTS EXPENDITURESILIABll.ITIESIDISBURSEMENTS Inadequate Separation of Duties Fmdmg Control Number FS-548-01-01 
SEPARATION OF DUTIES 
SeparatIOn of dutIes IS the one mtemal control winch most effectIvely assures the secure handling of cash TIns is attaIned by haVIng a dIfferent mdividual receIve cash, prepare the transmIttal, and reconcile the ledger sheets. This allows each person to serve as a control over the others, catclnng mIstakes and preventIng the nusappropnanon of funds. 
In a small office where separation of dutIes is difficult, It IS Imperative that the supervIsor review cash operations each day. 
CASH AND CASH EQUIVALENTS Theft ofFunds Fmdmg Control Number. FS-548-01-02 
Internal control and separation of functIons are beIng addressed m the reorganIZatIon ofthe Office of Student Accounts and Cashiering. The reorganization was completed on December 1,2002 In additIon, the outcome ofthe investigatIon bemg performed by the Georgia Bureau of InvestIgatIon IS still pendmg. 
The Umverslty IS m the process of preparing a Cash Operations Manual The followmg are excerpts from tins manual that address the UmveTSIty's stance on tins Issue. The format of the manual states that the Umverslty's polIcy followed by an outlIned procedure to ensure adherence to the polIcy. The expected completion date of tins manual is January 31, 2003 Upon completIon It WIll be dlstnbuted to all Umverslty staffmvolved m the cash handlIng process. 
-4- 
 
 SAVANNAHSTATEUN[VERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CORRECfIVE ACTIONfRESPONSES 
CASH AND CASH EQUNALENTS Theft of Funds Fmdmg Control Number. FS-548-01-02 
SEPARATION OF DUTIES 
Separation of dulles IS the one mternal control winch most effectIvely assures the secure handlIng ofcash ThIs IS attaIned by haVIng a dIfferent mdlvldual to receive cash, prepare the transmIttal, and reconcIle the ledger sheets ThIs allows each person to serve as a control over the others, catclnng mIstakes and preventIng the mlsappropnatlon of funds. 
In a small office where separation of dutIes IS difficult, It IS Imperallve that the superVIsor reVIew cash operations each day 
SAFEGUARDING OF ASSETS 
Cash IS prone to theft or mIsplacement. Accordmgly, It IS Important to have mternal controls m place to safeguard these assets so that access IS lImited to authonzed personnel only. 
GENERAL LEDGER Agency Fund Deficits and Lack ofPurpose Statements Fmdmg Control Number: FS-548-O1-08 
Procedures are bemg Implemented to ensure that agency accounts are establIshed only upon complellon of Trust Agreements, whIch are kept on file 
Pnor year defiCIts Will be elImrnated Budget momtors avaIlabilIty of funds 
GENERAL LEDGER Balance Sheet Accounts Not Supported by DetaIl FmdIng Control Number FS-548-01-09 
Dunng the year under reVIew, the Umverslty establIshed new Cleanng Accounts to separate the vanous Fmanclal AId categones Adjustments have been made to transfer amounts between the Cleanng Accounts as needed The old accounts are still bemg reconcIled. 
-5- 
 
 SAVANNAH STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
GENERAL LEDGER Balance Sheet Accounts Not Supported by Detail FmdIng Control Number: FS-548-01-09 
The procedure to reconcile the accounts follows' 
Quenes are run through the PeopleSoft Fmanclal System to provIde an Itermzed Instory of the vanous accounts. TIns hIstory IS venfied against the Tnal Balance to determme Ifthe two reports agree. A reconcilIatIon IS prepared by student to mchcate those transactIons that do not clear offdunng the reconcIlIatIon penod The reconcllmg Items mdlcate that a student has a balance due to the UruVerslty If It is a debIt or the UruVerslty eIther owes the student or funds need to be returned to the grantor agency If It IS a credit. Adjustments are forwarded eIther by Journal entry or an adjustment sheet to the appropnate office to remove the aId from the student's account and refund the agency Where funds are due to the UruVerslty, the student IS placed on Accounts ReceIvable and sent a bill 
The expected complenon date oftlns IS June 30, 2003, 
GENERAL LEDGER DefiCienCies m Accounnng Procedures Fmdmg Control Number. FS-548-01-10 
Management wIll address these defiCIenCIes and establIsh adequate mternal controls. 
GENERAL LEDGER Failure to Morutor Travel Advances Fmdmg Control Number. FS-548-01-14 
All current year and maJonty of pnor year advances have been cleared. The remaInIng unresolved balances are those of former employees, no longer employees of Savannab State Umverslty. 
Plan ofacnon. I) DetermIne accuracy and vallchty of receIvable 2) Contact former employee - use skIp tracmg If necessary. 3) If valId, collect receivable or present findIng to upper management for further action, whichever IS applIcable 
Scheduled final determination June 2003 
-6- 
 
 SAVANNAHSTATEUN~RSITY 
AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED.COSTS 
YEAR ENDED JUNE 30, 2002 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CORRECfIVE ACTIONIRESPONSES 
GENERAL LEDGER SubSIdIary Ledger ofStudents Accounts Receivable not ReconcIled WIth General Ledger Fmdmg Control Number FS-54801-15 
The UruVer5lty IS m the process ofreconcl1mg the Banner Student System to the General Ledger Reports have been IdentJfied to asSiSt m the reconcIlIation A reVIew IS underway to determme vanances on a student-by-student basIS 
The procedure used m tlus process IS as follows' 
A report (TGRRCON) IS run through the Banner Student System. ThIs report lIsts the specIfic detail codes posting to the General Ledger Account Identified An Agmg Report (TGRAGES) IS then run through the Banner Student System to provide the detail by student for the detail codes requested A query IS also run through the PeopleSoft Fmanclal System by student and account number The two detail reports (TGRAGES) and the General Ledger query WIll be compared on a student-by-student basIS to determme if they agree. Where chfferences are detected, the student's account WIll be analyzed and the appropnate adjustment IS made to eIther the Ledger or Banner. 
The expected completion date ofthis is June 30, 2003. 
FUND EQUITIES DefiCit to be Funded from Subsequent Years' Operation Fmdmg Control Number: FS-548-O1-17 
We concur WIth tlus findmg The InstJtutJon has been closely momtonng the budgets for the atWetics program. As a result, the defiCIt has been reduced over the years Management, along With the AtWetJc Director IS aggresSIvely workmg to obtain new sources of revenues, mcluslve of the creation of an atWetJc foundal1on For FIscal Year 2002, tlus program realIZed a surplus m the amount of $9,279.23 (net of deprecIation expense of $6,478 63), therebyreducmg the cumulattve defiCIt 
-7- 
 
 SAVANNAH STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 
 
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FA-S48-99-07 FA-S48-00-01 FA-S48-00-03 FA-S48-00-04 FA-S48-0D-06 FA-S48-0I-01 FA-S48-01-02 FA-S48-01-03 FA-S48-01-04 FA-S48-01-0S FA-S48-01-06 FA-S48-01-07 
 
Previously Reported CorrectIve ActIon Implemented PrevIOusly Reported Correclive Aclion Implemented PrevIOusly Reported Correclive Aclion Implemented Further Aclion Not Warranted Previously Reported Correclive ActIOn Implemented PrevIOusly Reported Correclive Aclion Implemented Parlially Resolved - See Correclive AclionlResponses PrevIOusly Reported Correclive ActIOn Implemented Unresolved - See Correclive ActlOnlResponses PartIally Resolved - See Correclive AclionIResponses PartIally Resolved - See Correclive AClionlResponses Partially Resolved - See Correclive AclionlResponses 
 
CORRECTIVE ACTIONIRESPONSES 
 
ALLOWABLE COSTS/COST PRINCIPLES ExceSSive and Improper Expenditures Higher EducatIOn -Inslitulional Aid (CFDA 84.031) FIndIng Control Number FA-S48-01-02 
 
We do not concur With thiS findIng. Funds were expended for Image BUilding acliVitIes as approved by the Department ofEducatIon. The DOE In Its letter ofDecember 7,2001, has authonzed that expenditures inCurred due to obligalions made pnorto June 27. 2001, are allowable. Our office IS currently correspondIng With the DOE Audit Resolulion Department to asSiSt With determInatIons on these findIngs We have submitted several fInancial records requested by the DOE In support ofthe questIonable expenditures Cited In the findIngs We anliclpate a determInalion Will be reached before the end of the current Fiscal Year June 2003. 
 
ELlGffiILITY SPECIAL TESTS AND PROVISIONS DefiCienCies In Internal Controls Student FInanCial Aid Cluster Program FIndIng Control Number. FA-S48-01-04 
 
Internal control and separalion of funclions are being addressed In the reorgaruzalion ofthe Office of Student Accounts and Casluenng The reorganlzalion was completed on December I, 2002 
 
-8- 
 
 SAVANNAHSTATE~RSITY 
AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2002 
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
CORRECfIVE ACTIONIRESPONSES 
ELIGffiILITY SPECIAL TESTS AND PROVISIONS DefiCienCies in Internal Controls 
Student Fmanclal Aid Cluster Program 
Fmdmg Control Number: FA-548-QI-04 
The mternal control Issue relatmg to the distrIbution of checks was addressed m the separation of the Cashier's Office and the Office of Student Accounts. Procedures have been put in place to segregate the duties and lImit access to the checks. The theft of funds IS slill bemg mVesligated by the GeorgIa Bureau of Invesllgallon. 
The Umversily IS m the process ofprepanng a Cash Operallons Manual The following are excerpts from this manual that address the Umverslty's posilion on thiS Issue. The format of the manual states the Umverslty's polIcy followed by an outlmed procedure to erISure adherence to the polIcy The expected complelion date of tlus manual IS January 31, 2003. Upon complelion, It Will be distrIbuted to all Umverslty stafImvolved m the cash handImg process 
SEPARATION OF DUTIES 
Separation of dulles IS the one mternal control which most effecllvely assures the secure handlIng of cash. This IS attained by havmg a different mdlViduai receive cash, prepare the tranSII1lttal, and reconcile the ledger sheets ThIs allows each person to serve as a control over the others, catchmg mIstakes and prevenllng the mIsappropriation of funds. 
In a small office where separation of dutIes IS difficult, It IS Imperallve that the superVIsor reView cash operallons each day. 
SAFEGUARDING OF ASSETS 
Cash IS prone to theft or misplacement. Accordingly, It IS Important to have internal controls m place to safeguard these assets so that access IS limIted to authonzed personnel only. 
- 9- 
 
 SAVANNAH STATE UNNERSITY AUDlTEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR EI\'DED JUNE 30, 2002 
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
EQUIPMENT AND REAL PROPERTY Inadequacies m Operation of Property Management System Higher Education - Instltullonal Aid (CFDA 84 031) Fmdmg Control Number FA-548-01-05 
I) The University mamtams an equipment mventory numbenng system that Identifies pieces of eqUIpment as Federally funded With the conversion to the PeopleSoft Asset Management software, we are allocatmg a field to house the program number Unfortunately, the software IS still not functiOning properly to date We are expectmg completion of thIs project by June 2003 
2) We do not concur With thiS findmg Equipment mentIOned are part of the Title III funded Acluevement Lab at the Library and the NROTC BUlldmg 
SPECIAL TESTS AND PROVISIONS DefiCienCies m Student Fmanclal AId Refund Process Student Fmanclal Aid Cluster Program Fmdmg Control Number FA-548-01-06 
The Umverslty has Implemented the follOWIng process to ensure refunds and repayments are processed correctly and m a timely manner 
Codes were set up m the Banner Student System to Identify those students that have never attended class ThIs code IS used to capture students that have unoffiCially WIthdrawn from the UnIVefSlty A report IS generated from thIS code by the RegIstrar and dlssemmated to the vanous offices for processmg 
Students that offiCially Withdraw from the University complete a WIthdrawal form m the Office of the Vice PreSident for AcademIC Affairs Tlus form IS then Circulated to the "anous offices for processmg Once the Registrar's Office enters the code and effective date, fees are assessed agam which adjusts the charges to the student's account lfnecessary The Office of Student Accounts performs a calculatIOn to determme If the student has excess funds remammg on their account This credit balance IS analyzed to determme If the funds should be refunded to the student or sent back to the grantor A refund request IS processed to cut a check, If the funds are due to the student A.!J adjustment form IS forwarded to the appropnate office to reverse the aid and return the funds, If due back to the grantor 
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 SAVANNAH STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002 
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
PERIOD OF AVAllABILITY DefiCit Fund Balances Student Fmanclal Aid Cluster Program Finding Control Number FA -548-01-07 
Fiscal Year 2000 and 200I are reconciled for both PELL and DIrect Lending Programs Weare working very hard to find an easy way of reconcIling our books with that of the Federal government records for Fiscal Year 1998 and 1999. It has become dIfficult and tIme consummg to fmd records for transactIons that occurred pnor to the conversIOn to Banner Two staff members are workmg on tlus project. It IS projected that the reconclilatIon process Will be completed by the end of Fiscal Year 2003. 
The follOWIng steps are used in the reconcIliatIon process. 
I) Generate finanCial aId disbursement record from Banner 2) Generate expenditure hIstory record from accountIng (CUFA) system 3) Generate LOC 732 In the case of Direct Loan and Year to Date Pell government 
records. 4) Copy these data mto flat files and convert It to excel spreadsheet 5) Process a three-way match of these records usmg student SOCIal secunty numbers 
and/or names. 6) Venfy the discrepanCIes In these three records Make the necessary adjustments. 
Some of the errors we IdentIfied so far are: 
a Adjustments of one FIscal Year were posted mto another year (debIt or credit). b CorrectIons were not sent to the DOE on tIme and therefore, loans were not 
booked In such ClTcumstances, the loans become Inslltutlonalloans. The CashIer's Office will establish a receivable account and wlil attempt to collect c Students never attended school but the finanCIal aId was not adjusted, whIch results In sending back the money to the government Etc . 
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 SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS 
 
 SAVANNAH STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30. 2002 
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CASH AND CASH EQUNALENTS REVENUESIRECEIV ABLESIRECEIPTS EXPENSESILIABILITIESIDISBURSEMENTS GENERAL LEDGER CAPITAL ASSETS Inadequate Separation of Dulles FmdIng Control Number FS-548-Q2-01 
Our exarrunallon of the mternal accounllng control procedures revealed that the Uruverslty did not provide for adequate separallon of dulles m the performance ofthe followmg accountmg functIons and related procedures 
I) Cash receIptmg funcllons were not separated from cash dIsbursement and general ledger functIOns 
2) Cash collecllon functIons and m3.Intenance of dewl accounts receivable records were not separated from general ledger funcllons 
3) DepoSIt preparallon funcllons were not separated from cash receIpts funcllons 
4) Banner receivable and accounts receIvable funcllons were not separated from the check dIsbursement funcllons. 
5) SUperviSOry access level to the vanous functIOns WIthm the accounts payable, accounts receivable, human resources, capital assets and general ledger modules of the GeorgIaFzrst System were not separated 
These condIllons were the result of management's f3.IIure to asSIgn employee dutIes In a manner to adequately safeguard assets and/or promote effiCIency and accuracy m key accounllng funcllons. The UruversIty should review the accountmg procedures In place, desIgn procedures that would enhance segregatIon of dulles relallve to the above control categones and Implement procedures to strengthen the mternal controls over the accounllng funcllons 
REVENUESIRECEIVABLESIRECEIPTS F3.IIure to Morutor Out-of-State TUIllon Fee WaIvers Fmdmg Control Number. FS-548-02-02 
Our exammallon of fee W3.Ivers for the year under revIew, revealed that management f3.Iled to morutor out-of-state tUIllon fee W3.Ivers As a result, W3.Ivers for out-of-state tuIlIon granted by the UmversIty exceeded the amount allowable per Board of Regents polIcy by $247,493 73 The Uruversily also f3.Iled to properly record out-of-state tuIlIon fee W3.Ivers for Spnng 2002 and Summer 2002, totalmg $483,681 00. An audIt adjustment of$390,945 00 was made to reflect the out-of-state 
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 SAVANNAH STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2002 
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
REVENUESIRECEIVABLESIRECEIPTS FaIlure to MOnItor Out-of-State Twuon Fee WaIvers F1Od1Og Control Number: FS-548-02-02 
fees waIved for Spnng 2002. Fee WaIvers for Swnmer 2002 were not mcluded 10 the adjustment due to errors m 1OfonnaUon provIded. 
These defiCIenCies occurred because management dId not comply With the Board ofRegents PolIcy Manual, SeclJon 704.0302 winch states, "the number of such WaIvers 10 effect at any time does not exceed two-percent ofthe equIvalent full-tune students enrolled at the mstltulJon m the fall semester ImmedIately precedmg the semester for WhICh the out-of-state !wtlon IS to be WaIved" and faIled to appropnately recognIze and record out-of-state fee WaIvers for two semesters on the generaIledger. The UnIVersIty should follow polICIes and procedures to ensure that out-of-state tuItIon fee WaIvers are properly recorded for each semester and are WIthm the allowable lmut 
EMPLOYEE COMPENSATION Inadequate Payroll Procedures F1Od1Og Control Number. FS-548-02-03 
For the year under reView, our exanunatlon of employee compensatJon records for forty-two employees revealed the follOWIng defiCIenCies: 
I) Employment contracts for swnmer semester 2002, for fourteen employees were not aVaIlable for revIew. The UnIVersIty faIled to Issue contracts for all ten-month employees who prOVIded SerVICes dunng thiS penod. 
2) Documentation to support an overtIme payment could not be located. 
These deficienCIes were the result ofthe UruversIly'S failure to have polICIes and procedures 10 place to ensure that SIgned employment contracts are ISSUed, employment contracts are on file for all applIcable personnel and supportmg documentation for overtIme payments IS on file. The UruVerslty should Implement POlICIes and procedures to ensure that personnel files are properly maIntamed and that overtime payments are adequately documented. 
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 SAVANNAH STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30. 2002 
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
GENERAL LEDGER Agency Fund DefiCits and Lack of Purpose Statements Finding Control Number' FS-548-02-04 
At June 30, 2002, the Uruverslty had twenty-sIx agency funds that had defiCit balances totaling $473,602.67 In addillon, the Umverslty failed to provide purpose statements for SIX of the indivIdual agency funds 
These defiCienCies were the result of the Uruverslty disbursing funds pnor to or In excess of the receipt of funds and resulted from management's failure to estabhsh agency funds In accordance WIth Board of Regents poltcles and procedures The Uruverslty should IDlplement procedures to ensure that all funds are received pnor to the disbursement and new accounts are supported by reqUired purpose statements. The Uruverslty should seek reimbursement for the deficit balances from the orgamzalIons Involved. 
GENERAL LEDGER DefiCienCies In Accounung Procedures Finding Control Number FS-548-02-05 
Our examination and testing for the year under review revealed the follOWing defiCienCies In accounung for financial transacllons by Savannah State Umverslty 
I) Cash receipts were not posted to the general ledger for thirty or more days due to management's failure to create the reqUired Banner flat files necessary for the Interface between Banner and GeorgiaFlrst 
2) The Uruverslty failed to proVIde adequate documentation to support a $51,444 30 vanance between Banner receipts recorded on the general ledger and the actual bank depOSIt. In addition, two depoSits In transit on the June 2002 bank reconclhallon, totaling $119,740 94 failed to clear the bank unul November and December 2002 
3) Audit procedures determmed that sales, totaling $83,270 16, from August 2001, were not recorded In the appropnate sales account 
4) An adjustment of $74,462 57 was necessary to correctly record bookstore Inventory Vendor ISSUed credits were not maintained Wlthm the formal accounllng records The credits and/or refund checks were reViewed, maintained and/or receipted by bookstore personnel. 
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 SAVANNAH STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2002 
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
GENERAL LEDGER DefiCIenCIes In AccountIng Procedures FIndIng Control Number FS-548-02-05 
5) Twenty exceptIOns were noted In our expenditure sample of fifty-five vouchers Three vouchers could not be located, eleven vouchers dId not have adequate documentatIOn and SIX vouchers lacked purchase orders 
6) Checks outstandIng for more than mnety days were not vOIded In a timely manner 
These condItIons occurred because the Umverslty faded to have adequate accountIng poliCies and procedures In place The Umverslty should revIew current accounting poliCies and procedures, IdentItY weaknesses, and Implement procedures to ensure that cash receipts are recorded In the general ledger In a timely manner, bank depOSits are made timely, bookstore sales are correctly recorded, vendor credits are maintained Within the formal accounting records, vouchers are maIntained With adequate documentatIOn and checks outstanding for more than mnety days are VOIded 
GENERAL LEDGER InadequacIes In Control Over SubSidiary Ledgers Finding Control Number FS-548-02-06 
Our examinatIOn Included a review of the procedures utilized by Savannah State Umverslty In recording transactIOns to the vanous modules compnslng the GeorglaFIRSTaccountmg system Our testing revealed that, at June 30, 2002, the Umverslty's general ledger module dId not balance With the SUbSIdIary modules ThiS condition was pnmanly due to errors In posting subSidiary records dunng the conversIOn from the old College Umverslty Fmanclal AccountIng (CUFA) legacy accounting system to the new GeorgtaFIRST accounting system and due to transactIOns beIng posted to the general ledger module rather than the appropnate SUbSidiary modules. The Umverslty dId not proVide a reconCiliation of the general ledger balances to the subSidiary records wluch resulted In extensive work by the auditors to Identify reconCilIng Items at June 30, 2002 Management's failure to ensure that SUbSidiary records are reconCIled With the general ledger causes Internal reports to management, generated from the SUbSidiary modules, to be Inaccurate and IDlsleadmg This conditIOn can lead to erroneous deCISIOns by the Umverslty's management and result In Inaccurate reporting of finanCial information 
To ensure accurate and timely reporting of finanCial mformatlon from subSIdIary records, the Umverslty should post transactions correctly to the SUbSidIary ledgers rather than asJournal entnes In the general ledger The Umverslty should develop Internal accounting controls and procedures to ensure that reconCIliations of SUbSidiary ledgers and the general ledger are performed on a regular baMs 
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 SAVANNAH STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED ruNE 30, 2002 
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
ACCOUNTING CONTROLS (OVERALL) Inadequate ClOSing Procedures Finding Control Number FS-548-02-07 
Dunng fiscal year 2002, the Board ofRegent ofthe Umverslty System ofGeorgJa converted unIts of the Umverslty System from the College Umverslty Financial Accountmg (CUFA) legacy system to the new GeorgJaF,rst System (FInanclal,lnformatlon and Reporting System for TomolTOw). In Apnl of 2002, Savannah State Umverslty placed tIus accounting system Into productIOn 
The management of Savannah State UmvefSlty IS responsible for Implementing procedures to estabhsh and maIntam adequate control over the operation, utihzatlon, and mtegnty of their data processed WIth the GeorgJaFIRST System We encountered problems With the fmanclal data presented by the Umverslty. The Umverslty's faJiure to estabhsh and adhere to a final closmg for the year ended June 30, 2002, created a sltuatlon where data presented for review was mcomplete. ExtenSive audit procedures were necessary to determine the vahdJty of the mformatlOn proVided. 
To reduce the nsk ofreportmg mcomplete Information, the Umverslty should work WIth the Board of Regents Central Office to develop procedures that WIll result m complete reportmg of all financial data m a more effiCient and timely manner. 
CAPITAL ASSETS Inadequate Capital Assets Records Fmdmg Control Number FS-548-02-08 
Our review ofSavannah State Umverslty's Accounting procedures for the Capital Asset Management System determmed that procedures In place were InSuffiCient to proVIde adequate control over the Umverslty's Capital assets. The followmg defiCienCies were noted: 
1) The Umverslty did not reconcile the eqUIpment asset endmg book balance at June 30, 2001, to the adjusted begJnmng balance as of July I, 2001 
2) The Umverslty did not reconcile the property records to the capitals ledger. Extensive procedures were performed m an attempt to detenmne the vanances. Vanances were Identified m accumulated depreciation, eqUIpment and CapitaliZed collections. Net adjustments of$426,053.16 were made to obtam per audJt figures for capital assets 
3) The Umverslty was unable to proVIde a hstlng of equipment which mcluded all of the follOWing attnbutes. property descnptlon mcludJng senal number and decal number, source of funds used to purchase Item, acqUISItion date and cost, reference to ongJnatlng mVOlces and reference to phYSical locatIOn of the eqUIpment Item 
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 SAVANNAHSTATEUNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2002 
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
CAPITAL ASSETS Inadequate CapItal Assets Records Fmdmg Control Number FS-548-02-08 
These defiCIencIes are result ofmanagement's faIlure to Implement adequate polICies and procedures to ensure that the UruVerslty'S CapItal assets are properly maIntaIned The Uruverslty should establIsh appropnate procedures to strengthen controls and ensure that assets are properly accounted for and safeguarded. 
FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
ACTIVITIES ALLOWED OR UNALLOWED Improper ActIVIty Higher EducatIon - InstItutIonal Aid (CFDA 84.031) QuestIoned Cost $7,185.07 Fmdmg Control Number. FA-548-02-01 
At June 30, 2002 the UruVerslty'S accountmg records reflected $7,185.07 of expendItures for "Umverslty's Image BUlldmg" ActIVIty The U S Department of EducatIon determmed, 10 a memorandum dated June 27, 2001, that "UmversIty Image BuildIng IS an unallowable actiVIty" Furthermore, the U S. Department of Education dIrected that "as ofJune 27, 2001, any TItle Ill, part B funds for tins actiVIty that have not been expended are suspended" The addItIonal expendItures 10 thIS actiVIty were the result of management's disregard to comply WIth allowable actiVIties as set forth 10 the Federal regulatIons and mandates made by the U S Department of Education. The Umverslty should adhere to the Federal regulatIons governmg allowable actIVIties. The Umverslty should contact the U S. Department of Education for resolutIon of tins findIng. 
ALLOWABLE COST/COST PRINCIPLES DefiCIenCIes 10 Internal Controls Higher Education - Institutional AId (CFDA 84 031) Fmdmg Control Number FA-548-02-02 
Dunng the year under reView, a sample offorty-slx TItle ill expendItures revealed the Uruverslty'S faIlure to comply WIth the general provIsIon for allowable cost accordmg to OMB CIrcular A-21 SectIons C and J The follOWIng InstanCes were noted 10 the expendIture sample. 
1) Payments for meals at two workshops were based upon the number ofpersons lIsted on the purchase requISItion request rather than the number ofmdIVlduals that actually attended the events thIS resulted 10 the vendor recelvmg payment for SerVIces that were not prOVIded to the Umverslty. 
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 SAVANNAB STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30. 2002 
FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
ALLOWABLE COST/COST PRINCIPLES Deficiencies in Internal Controls Higher EducatIOn - Instltuhonal Aid (CFDA 84 031) Fmdmg Control Number FA-S48-02-02 
2) Seven expenchtures lacked adequate documentatIon. 
3) One voucher mcluded unallowable lodgmg cost of$136.46 T1us amount was approved m error as part of an employee's travel reunbursement 
4) Three vouchers were prod from dupbcated mvOlces rather than from the ongmal mVOlces 
These conditIons were the result of management's fll.l1ure to have adequate accountmg poliCies and procedures 10 place to ensure compliance WIth OMB Circular A-21 The Umverslty should develop and ID1plement poliCies and procedures to ensure that program expenchtures are allowable accordIng to Federal regulatIOns In adchtIon, the Umverslty should develop a momtonng process to ensure that controls are bemg followed The Umverslty should contact the U. S. DepartInent of EdueatlOn for resolution of this findmg 
ALLOWABLE COSTS/COST PRINCIPLES Improper Expenchtures Higher EducatIon - InstitutIonal AId (CFDA 84 031) QuestIOned Cost $1,112.00 Fmdmg Control Number. FA-S48-02-03 
Dunng the year under reView, the Umversltyutllized Title ill funds, m the amount of$l, 112.00, for duplicatIng fonus that are used m the general operatIng actIVitles ofthe Umverslty The use of TItle ill funds for general operatIng actiVitIes, that should be pll.ld utlhzmg State and local funds, constitutes noncompliance With the "supplement versus supplant" rule mcluded m 34 CFR 608.20 
A projection of questIoned cost could not readily be determmed. However, the likely questIOned costs are believed to exceed $10,000.00. 
The UmvefSlty should ID1p1ement poliCies and procedures to ensure that Title ill funds are used only to supplement (rather than supplant) State and local funds. The Umverslty should consult WIth the U. S Department of Education to resolve the questIOned cost of$1,112 00. 
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 SAVANNAH STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2002 
FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
ELIGIBrr..ITY SPECIAL TESTS AND PROVISIONS DefiCIencies m Student Fmanclal AId Refund Process Student Fmanclal AId Cluster Program QuestIoned Costs $3,99081 Fmdmg Control Number' FA-548-02-04 
For the year under reVIew, an exammatlon of the Umverslty's student finanCIal aId refund process revealed the follOWIng defiCienCies 
1) Unearned Title IV funds were not applIed by the Umverslty to the appropnate student finanCIal aId program for one student selected for refund testmg, resultmg In questioned cost of $234 82. In addItion, ten students were dIsbursed Title IV funds greater than the amounts earned resulting In addItIonal questIoned cost of$3,755.99. 
2) Unearned TItle IV funds were not applIed by the Umverslty to the appropnate student financial aId programs wltlun 30 days as reqwred by the Higher EducatIon Amendments of 1998, PublIc Law 105-244 
3) Due to the Umverslty's faIlure to notIfy students WItlun 10 days after refund checks are aVaIlable for dIsbursement, refund checks were cancelled and reIssued after 60 or more days 
4) Three refund checks were reIssued before the first refund check was cancelled 
A projectIon of questioned cost could not be readIly determmed However, the lIkely questioned costs are belIeved to exceed $1 a,OOO.DO. 
These defiCIenCIes were the result of management's faIlure to complete the refund process In accordance WIth Federal regulations The Umverslty should develop md Implement procedures to ensure that unearned funds are correctly retumed to the appropnate accounts m a timely marmer m accordance WIth the Higher Education Amendments of 1998, PublIc Law 105-244 The Umverslty should contact the U S. Department of Education regardmg resolution of thIS findmg 
Federal Programs/Awards Affected 
Student FmancIaI AId Cluster Programs U S Department of EducatIon Federal Supplemental EducatIOn Opportumty Grant (CFDA 84.007) Federal Work Study-Program (CFDA 84033) Federal Pell Grant Program (CFDA 84 063) Federal DIrect Student Loan Program (CFDA 84 268) 
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 SAVANNAH STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2002 
FEDERAL AWARD FINDINGS AND OUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT FaIlure to MaIntain a Property Management System HIgher EducatIon - instItutIonal AId (CFDA 84 03 I) Finding Control Number FA-548-02-05 For the year under reView, the University faIled to proVIde a Title ill equIpment Inventory report AudIt procedures relating to eqUIpment could not be performed The UniVersIty faIled to have Internal controls m place and operatIonal to ensure comphance WIth Federal requIrements for eqwpment as set forth In 34 CFR 74 and OMB CIrcular A-I 10, Subpart c 34 The UniVersity should estabhsh pohcles and procedures to ensure that eqUIpment purchases are IdentIfied by fund sources and grant award numbers, property records are maIntamed m accordance WIth Federal requirements and phYSical Inventones are conducted every two years. The U S Department of EducatIon should revIew these matters and determme appropnate actIon by the UniVersIty to resolve tlus findmg 
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