Review report, state of Georgia, Skidaway Institute of Oceanography, Savannah, Georgia, year ended June 30, 1996

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334

REVIEW REPORT STATE OF GEORGIA SKIDAWAY INSTITUTE OF OCEANOGRAPHY SAVANNAH, GEORGIA YEAR ENDED JUNE 30, 1996

SKIDAWAY INSTITIJTE OF OCEANOGRAPHY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALLFUND GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

ALL FUND GROUPS

4

C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

6

D NOTES TO THE FINANCIAL STATEMENTS

7

SUPPLEMENTARY INFORMATION

E COMBINING BALANCE SHEET

CURRENT FUNDS - UNRESTRICTED

20

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

21

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICTED

22

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

23

2

OTHER ORGANIZED ACTMTIES

24

3

LOTTERY FOR EDUCATION

25

4 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

AGENCY FUNDS

26

5 CASH AND CASH EQUIVALENTS

27

6 ACCOUNTSRECENABLE

29

7 CHANGES IN INVESTMENT IN PLANT

30

8 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

32

SKIDAWAY INSTITUTE OF OCEANOGRAPHY TABLE OF CONTENTS

SECTION I

FINANCIAL

SUPPLEMENTARY INFORMATION

SCHEDULES

9 SCHEDULE OF REVENUES

CURRENT FUNDS

34

SCHEDULES OF EXPENDITURES BY OBJECT

10

CURRENT FUNDS

36

11

PLANT FUNDS

40

12 RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL

41

SECTIDNll FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 28, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe Board ofRegents ofthe University System of Georgia
and Honorable Herbert L. Windom, Director Skidaway Institute of Oceanography
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through D) of Skidaway Institute of Oceanography as of and for the year ended June 30, 1996, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Skidaway Institute of Oceanography.
A review consists principally of inquiries of Institute personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, with the exception of the matters described in the fourth and fifth paragraphs, we are not aware ofany material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.
As disclosed in Note 1 to the financial statements, generally accepted accounting principles require encumbrances to be recorded as a reservation of fund balance. However, in accordance with Georgia Law and State budgetary policy, management recorded encumbrances as expenditures and liabilities. The effects ofthis departure from generally accepted accounting principles on the financial statements were not reasonably determinable.

96ARL-67

As disclosed in Note 1 to the financial statements, the Institute did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting principles. Ifcompensated absences were reported, liabilities would be increased and fund balance would be decreased by $238,069.50 as ofJune 30, 1996, and the net change in fund balance for the year ended June 30, 1996, would be decreased by $30,710.08.
Our review was made for the pwpose ofexpressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying supplementary information (Exhibits E through G and Schedules 1through 12) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review ofthe financial statements, and except for the effects of the matters discussed in the fourth and fifth paragraphs, we are not aware of any material modifications which should be made thereto.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 96ARL-67

FINANCIAL STATEMENTS - 1-

SKIPAWAY INSTITUTE OF OCEANOGRAPHY COMBINEP BALANCE SHEET ALL FUND GROUPS JUNE 30, 1996

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES liabilities
Accounts Payable Due to Other Fund Groups
Total liabilities Fund Balances
Net Investment in Plant Restricted Unrestricted
Total Fund Balances
Total liabilities and Fund Balances

CURRENT FUNDS UNRESTRICTED RESTRICTED UNEXPENDED

$

531,332,45

$

9,683.68 $ 232,603.57

211.08

10,216.32

135,911.73

4,774.53

$

687,355,26 $ 232,603.57 $ _ _4..,7.7.4....5..3..

$

670,223,56

$ 129,932.76

$

670,223,56 $ 129,932,76

$ 102,670,81

$

17,131.70

$

4,774,53

$

17,131.70 $ 102,670,81 $

4,774.53

$

687,355,26 $ 232,603,57 $ ====.:.14,=77..4..,;,;;,5=3

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information,
The notes to the financial statements are an integral part of this statement. -2-

EXHIBIT "A"

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only)

$

6,963.23

$

______ $ 8,621,437.28

$ 6,220.17

543,070.21 248,507.42
211.08 10,216.32 135,911.73 8,621,437.28

$

6iOolr';,;96;,;;3~.2_3 $ 8,621,437.28 $

6,220.17 $ 9,559,354.04

$

4,610.14

$

4,610.14

$

241.20 $ 675,074.90

5,978.97

135,911.73

$

6,220.17 $ 810,986.63

$ 8,621,437.28

$

2,353.09

$

2,353.09 $ 8,621,437.28

$ 8,621,437.28 102,670.81 24,259.32
$ 8,748,367.41

$ _ _-=6=:,,.9.6=3,;,;;;.2,.3 $ 8,621,437.28 $

6,220.17 $ 9,559,354.04

-3-

SKlpAWAY INSTITUTE OF OCEANOGRAPHY COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS . YEAR ENDED JUNE 30. 1996

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Major RepairslRehabllitation Funds Lottery Proceeds Federal Grants and Contracts State Grants and Contracts Other States Grants and Contracts Private Gifts, Grants, and Contracts Investment Income Expended for Plant Facilities Current Funds Plant Funds
Unexpended Renewals and Replacements
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered
Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Expended for Plant Facilities Capitalized Noncapitalized
Disposals/Deletions/Adjustments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements
Net Increase/(Deqrease) for the Year
FUND BALANCES JULY 1. 1995
FUND BALANCES JUNE 30.1996
See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement
-4-

CURRENT FUNDS UNRESTRICTED RESTRICTED
$ 2,285,013.16
$ 2,192,434.00 1,135,580.39 108,784.55 33,785.27

$ 2,285,013.16 $ 3,470,584.21
$ 2,265,797.84 $ 2,871,633.82 10,653.97 654,049.27
857.25 385.28

$ 2,277,694.34 $ 3,525,683.09

$

-1,029.83

$

6,288.99 $ -55,098.88

10,842.71

157,769.69

$

17,131.70 $ 102,670.81

EXHIBIT"B"

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$

$

51,000.00

23,051.12

$

74,051.12 $

$ 2,285,013.16

. 92,003.00 $

5,026.00

92,003.00 51,000.00 2,192,434.00 1,135,580.39 108,784.55 38,811.27 23,051.12

1,082,599.12 1,082,599.12

50,999.30 71.129.69

50,999.30 71,129.69

92,003.00 $ 1,209,754.11 $ 7,131,405.60

$

1,491.46

50,999.30 $ 18,2n.29

$

70,768.05 $

$ 5,137,431.66 10,653.97
654,049.27

71,129.69 20,873.31
$
92,003.00 $

2,348.71

385.28

147,072.59

122,128.99 39,150.60 147,072.59

147,072.59 $ 6,113,221.07

$

$

3,283.07 $

1,491.46

1,029.83

$

0.00

1,029.83 $ 1,062,681.52 $ 1,018,184.53

1,323.26 7,558,755.76 7,730,182.88

$

4,n4.53 $ _ _.....,;2""",3..,5.3..0..9.. $ 8,621,437.28 $ 8,748,367.41

-5-

Net Increasel(Decrease) in Fund Balances

$

6,288.99 $ -55,098.88 $

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

SKIDAWAY INSTITUTE OF OCEANOGRAPHY NOTES TO TIlE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Skidaway Institute ofOceanography, a unit ofthe University System of Georgia (an organizational unit ofthe State ofGeorgia), conducts oceanographic research that is coordinated with other marine research activities of the University of Georgia. The accompanying financial statements reflect the operations of Skjdaway Institute of Oceanography as a separate reporting entity.
The Board ofRegents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Skidaway Institute of Oceanography does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Skidaway Institute of Oceanography is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because ofthe significance ofits legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING In order to ensure observance oflimitations and restrictions placed on the use ofthe resources available to the Institute, the accounts ofthe Institute are maintained in accordance with the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund~ however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group.
Within each fund group, the Institute's fund balance allocations and designations represent those portions of the fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies.
Fund groups and funds presented in the accompanying financial statements are as follows:
CURRENT FUNDS
UNRESTRICTED - The fund used to account for those economic resources over which the Institute retains full control to use for purposes of performing the primary functions ofthe Institute, e.g., research, institutional support and auxiliary enterprises.
RESTRICTED - The fund used to record externally restricted funds which may only be utilized in accordance with the purposes established by their source. Restricted current funds are recorded as revenues and expenditures when expended for current operating purposes.
- 7-

SI<J])AWAY INSTITUTE OF OCEANOGRAPHY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "D"

.NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
PLANT FUNDS
UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement ofinstitutional properties.
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value ofall physical properties owned by the Institute. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the Institute less the amount ofany indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the Institute as custodian or fiscal agent for individual students, faculty, staffmembers, and organizations.
BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis ofaccounting, which is materially the same as the accrual basis ofaccounting applicable to colleges and universities prescribed in the American Institute of Certified Public Accountants' audit guide reporting model. The modified accrual basis ofaccounting is defined as that method ofaccounting in which expenditures, other
than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures ofthe fiscal period.
Contractual obligations for goods and services which have not been received at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition ofencumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording ofencumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accOrdance with generally accepted accounting principles.
Compensated absences represent obligations of the Institute relating to employees' rights to receive compensationfor future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of $238,069.50 and the related current year expenditure of $30,710.08 have not been reported in the current funds as required by generally accepted accounting principles.
- 8-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY NOTES TO THE FINANCIAL STATE:MENTS JUNE 30,1996

EXHIBIT "0"

NOTE 1: SUWviARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. The effect of this departure is deemed to be immaterial to the fair presentation ofthe financial statements.

To the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalf of the Institute. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment.

The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses.

BUDGET The Board of Regents of the University System of Georgia - Administrative Central Office receives State appropriation allotments for units ofthe University System of Georgia. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 19951996. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises which is not subject to appropriation. The budget allocation and disbursement ofthese funds is made to the various organizational units by the Administrative Central Office. In addition, the organizational units receive Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office.

A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below:

Other Organized Activities Operating Expenses: Education, General and Departmental Services
Lottery for Education Equipment, Technology ~d Construction Trust Fund

$ 59387.04 $ 545.00

- 9-

SKIDAWAY.INSTITUTE OF OCEANOGRAPHY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXIllBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET These overexpenditures of budget constitute a violation of Board ofRegents policy, but do not constitute statutory violations of budget authority. Statutory violations of budget authority are reported at the departmental level.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist ofpetty cash and demand deposits in authorized financial institutions.
ACCOUNTSRECEWABLE Accounts receivable consist ofreimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. No provision has been made for an allowance for doubtful accounts within the accompanying financial statements.
INVENTORIES No inventories of expendable supplies are recorded in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
Inventories ofgoods for resale are valued at cost using the first-in, first-out method.
PREPAID ITEMS Prepaid items are payments made to vendors in advance ofthe receipt ofgoods and services that will benefit periods subsequent to the balance sheet date.
MEMORANDUM ONLY - TOTAL COLUMNS The total columns on the financial statements are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations ofthe United States or ofthe State of Georgia.

- 10 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT "0"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (2) Bonds, bills, certificates ofindebtedness, notes, or other obligations of the counties or municipalities ofthe State of Georgia.
(3) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia.
(5) Bonds, bills, certificates ofindebtedness, notes, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
(6) Guarantee or insurance ofaccounts provided by the Federal Deposit Insurance Corporation.
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which includes organizational units of the Board ofRegents of the University System of Georgia) the option of exempting demand deposits from the collateral requirements.
The treasurer ofthe Board ofRegents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as ofJune 30, 1996, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:
Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Institute or by its agent in the Institute's name.
Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Institute's name.
Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution, or by its trust department or agent but not in the Institute's name, and amounts uncollateralized.
- 11 -

SKIPAWAY INSTITUTE OF OCEANOGRAPHY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "D" .

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

CATEGORIZATION OF DEPOSITS
Carrying
Amount

Cash Deposits

$ 54207021

Bank Balances
$ 833611 56

Risk Categories

2

3

$ 100 000 00 $,==~Q00!96 $ 7336]] 56

NOTE 3: INVESTMENT IN PLANT

The following is a summary ofInvestment in Plant fixed assets as ofJune 30, 1996:

Land Buildings Improvements Other Than Buildings Eguipmerit Library Books and Collections
Total Investment in Plant

$ 449,460.00 1,828,514.68 1,757,331.65 4,441,534.54 144.596.41
$8.621.437.28

NOTE 4: RISK MANAGEMENT

Skidaway Institute of Oceanography is a participant in the Board ofRegents of the University System of Georgia Health Benefits Plan, which is a self-insurance program of health and dental benefits for employees and retirees ofthe University System ofGeorgia. The Institute and participating employees and retirees pay premiums to the Health Benefits Plan for this health insurance coverage. The Health Benefits Plan is included in the audit report of the Board of Regents of the University System of Georgia - Administrative Central Office. All units ofthe University System of Georgia share the risk ofloss for claims ofthe Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $1 ,000,000.00 per person and dental coverage up to an annual maximum of $1,000.00 per person. The Board ofRegents has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the Health Benefits Plan as established by the Board ofRegents.

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

- 12 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "0"

NOTE4: RISKMANAGEMENT
A self-insured program of professional liability for its employees was established by the Board ofRegents of the University System ofGeorgia under powers authorized by the Official Code ofGeorgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out ofthe perfonnance oftheir duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
NOTE 5: DEFERRED COMPENSATION PLAN
The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees ofthe State ofGeorgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the State of Georgia subject only to the claims of the State's general creditors. Participants' rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account for each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 6: .RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Skidaway Institute ofOceanography participates in the Teachers Retirement System of Georgia (TRS); a costsharing multiple-employer public employee retirement system (PERS) established by the General Assembly ofGeorgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by TRS was $1,655,158.18. The Institute's total payroll for all employees was $2,281,734.43.
Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless of age, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number ofyears of creditable service up to 40 years. Any member who has between 25 and 30 years of creditable service and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below
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SKIDAWAY INSTITUTE OF OCEANOGRAPHY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "0"

NOTE 6: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Benefits age 60, or by 10;/0 for each year or fraction thereofby which the member has less than 30 years of service. The nonna! retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date of death or up to the time of disability.

Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contnbutions occurs, but the member's contributions are refunded with interest.

Contributions Required and Contributions Made Employees ofthe Institute who are covered by TRS are required to pay 5% oftheir gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees as advised by their independent actuary. For fiscal year 1996, the employer contribution rate was 11.81% for covered employees. In addition, the Institute contributed 4.87% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. The interest rate assumption (rate of return on investments) was 7.50%.

Total contributions to the plan made during fiscal year 1996 amounted to $278,102.14, of which $195,473.96 was made by the Institute and $82,628.18 was made by employees. These contributions represented 11.81% (Institute) and 5% (employees) of covered payroll.

Funding Status and Progress

Pension Benefit Obligation

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

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

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

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

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

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

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

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

make comparisons among similar PERS.

.

- 14 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT liD"

NOTE 6: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation
The total unfunded pension benefit obligation ofTRS as ofJune 30, 1995, which was the latest information available, was as follows:

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585,541.000,00

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

Retirement System Contributions Total contnbutions from all employers to TRS for the year ended June 30, 1996, were $607,274,559.00. The Institute's contribution for the year ended June 30, 1996, of $195,473.96 was aetuarially determined and represented .0322% of total contributions made by all participating employers.

Trend Information Historical trend information is presented in the TRS June 30, 1996, financial report. This information gives an indication ofthe progress made in accumulating sufficient assets to pay benefits when due.

REGENTS RETIREMENT PLAN

The State of Georgia provides optional pension benefits for eligible faculty and principal administrators through a defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings.

State legislation requires that the employer contribute 4% and the employee contribute 5% of the participating employee's earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. The Institute's payroll for employees covered by the Regents Retirement Plan for the year ended June 30, 1996, was $469,762.78. The Institute's total payroll for all employees was $2,281,734.43.

The Institute and the covered employees made the required contributions of $18,790.55 (4%) and $23,488.16 (5%), respectively.

- 15 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"D"

NOTE 6: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Skidaway Institute ofOceanography participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees ofthe Employees' Retirement System of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by GDCP was $11,852.43. The Institute's total payroll for all employees was $2,281,734.43.
Benefits .A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to hislher account, the Board ofTrustees has the option of requiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to hislher account will be paid to the member's designated beneficiary.
Contributions and Vesting , Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon tennination ofemployment, the amount ofthe member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 1996 amounted to $888.94 which represents 7.500icl of covered payroll. These contributions met the requirements ofthe plan.
NOTE 7: LEAVB POLICIES
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of emplpyment. See Note 1 - Basis of Accounting (Compensated Absences)
Employees earn one day of sick leave each month with no maximum accumulation established. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.

- 16 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXInBIT"D"

NOTE 8: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institute expects such amounts, ifany, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Skidaway Institute of Oceanography (as an organizational unit ofthe Board ofRegents of the University System of Georgia), ifany, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State ofGeorgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 9: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board ofRegents ofthe University System ofGeorgia has established group health and life insurance programs for regular employees ofthe University System of Georgia. It is the policy of the Board ofRegents to permit employees ofthe University System ofGeorgia eligible for retirement or that become permanently and totally. disabled to continue as members ofthe group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System of Georgia and who have at least ten years of service with the University System of Georgia are eligible for these postemployment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals.
As of June 30, 1996, there were 16 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1996, Skidaway Institute of Oceanography recognized as incurred $40,990.20 ofexpenditures, which was net of$14,222.97 of participant contributions.
NOTE 10: BONDING INFORMATION
The President and all employees ofSkidaway Institute ofOceanography are bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No. 1450-02-110723, on which the premium was paid to October 1, 1996. Under this agreement, the public employee dishonesty coverage insures Skidaway Institute ofOceanography to a maximum of$I,OOO,OOO.OO against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance of duty coverage insures the Institute to a maximum of $1,000,000.00 against loss sustained from failure of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.

- 17 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "D"

NOTE 10: BONDING INFORMATION
All employees of Skidaway Institute of Oceanography are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 6260116752 and 626 0122944, on which the premiums were paid to October 1, 1996. Under these additional public employee dishonesty coverages, the policies insure the Institute to a maximum of S9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees and from failure ofits employees to perform faithfully.

- 18 -

SUPPLEMENTARY INFORMAnON - 19 -

SKJDAWAY INSTITUTE OF OCEANOGRAPHY COMBINING BALANCE SHEET
CURRENT FUNpS UNRESTRICTEP JUNE 30, 1996

EXHIBIT -E"

ASSETS
Cash and Cash Equlvalenls Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups

RESIDENT INSTRUCTION

OTHER ORGANIZED ACTIVtTIES

LOITERYFOR AUXILIARY EDUCATION ENTERPRISES

TOTAL

$

0,00 $ 513,870,95 $

1,393.00 $

16,068.50 $ 531,332,45

9,683.68

9,683.68

211.08

211,08

10,216,32

10,216.32

135,911.73

135,911.73

Total Assets

$

0.00 $ 669,682.68 $

1.393.00 $

16,279.58 $ 687,355.26

LIABILITIES ANp FUND BALANCES

Liabilities Accounts Payable

Fund Balances

Unrestricted

$

Tctal Uabirlties and FUnd Balances $

$ 668.830.56 $

1,393.00

$ 670.223.56

0.00

852.12

$

16.279.58

17,131.70

0,;;;.0.0. $ 669,682.68 $

1,393.00 $

16,279.58 $ 687,355.26

see accompanying notes and Independent Accountanfs Combined Report
on Review of Financial Statements and Supplementary Information.
-20-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS UNRESTRICTED YEAR ENDED JUNE 30 1996

EXHIBIT-P

FUND BALANCES JUNE 30,1996

$

0,00 $

852.12 $

0.00 $

16,279.58 $

17""",,;,;;1.31.-.,7.0.

see acc:ompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and SUpplementary Information,
21

SK/OAWAY INSTITUTE OF OCEANOGRAPHY COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES.
AND OTHER CHANGES
UNRESTRICTED )'EAR ENDEp JUNE 30 1996
See IICCOII'IPlInying notes end Independent Acc:ountanfs Combined Repolt on Review d Finencilll Statements end Supplementary Information,
-22

SKJPAWAy INSTITUTE OF OCEANOGRAPHY
SCHEDULE OF REVENUES AND EXPENpJIURES COMPARED TO BUDGET RESIDENT INSmUCDQN
)'EAR ENDED JUNE 30 1996

SCHEDULE -1-

REVENUES
Slate Appropriations Other Revenues Relained

CURRENT

PlANTFUNOS

FUNDS

RENEWAlS AND

UNRESTRICTED UNEXPENDED REPLACEMENTS

TOTAL <Budget Basis)

BUDGET

VARlANCEFAVORABLE (UNFAVORABLE)

S

37,290.00

S

S 23.051.12

92,003.00 S 129,293.00 S 129,293.00 S

23,051.12

32,000.00

0.00 -8,948.88

S

37,290.00 S 23,051.12 S

92,003.00 S 152,344.12 S 161,293.00 S

-8,948.88

expENpJIURES
Cepilal Outlay Special Funding Initiative

S 18,276.59 S

92,003.00 S 110,279.59 S 124,003.00 $

13,723.41

S

37,290.00

37,290.00

37,290.00

0.00

S

37,290.00 S 18,276.59 S

92,003.00 S 147,569.59 S 161,293.00 S

13,723.41

Excess of Revenues over Expenditures S

0.00 S

4,774.53 S

0.00 S

4,774.53

S

4,774.53

See accompanying notes and Independent Aceounlanfs Combined Report on Review of Financial Slatements and Suppl,emenlary Information.
-23-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUpGET
OTHER ORGANIZED ACTIV!IIES YEAR ENDED JUNE 30, 1996

SCHEDULE "Z'

REVENUES
state ApproprIatIons Other Revenues Retained

CURRENT FUNDS

TOTAL

UNRESTRICTED RESTRICTED (Budge! Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

1,532,120.00

$ 1,532,120.00 $ 1,532,120.00 $

686,418,19 $ 2,871,633,82 3,558,052.01 3,933,958,00

0.00 -375,905,99

$

2,218,538.19 $ 2,871,633.82 $ 5,090,172.01 $ 5.466.078.00 $

-375,905.99

EXPENDITURES

Personal ServIces:

Education, General and Departmental

ServIces

$

Sponsorecl Operations

Operating Expenses:

Education, General and Departmental

ServIces

Sponsorecl Operations

1,550,457.80

$ 1,550,457.80 $ 1,668,658.00 $

$ 1,364,078.45 1,364,078.45 1,440,380.00

667,050.04

1,507,555.37

667,050.04 1,507,555.37

607,663.00 1,749,3n.00

118,200.20 76,301.55
-59,387.04 241,821.63

$

2,217,507.84 $ 2,871,633.82 $ 5,089,141.66 $ 5.466.078.00 $

376,936.34

Excess of Revenues over Expenditures $

1,030.35 $

0.00 $

1,030.35

$

1,030.35

see accompanying notes and Independent Accountanfs Combined Report
on Review of Financial Statements and Supplementary Information.
-24-

SKlQAWAY INSTITUTE OF OCEANOGRAPHY
SCHEDULE OF REVENUES AND EXpENDITURES COMPARED TO BUDGET
LOmRY FOR EDUCATION
YEAR ENDED JUNE 30 1996

SCHEDULE "3"

See accompanying notes and Independent Accounlanfs Combined Report on Review of Financial Statements and Supplementary Information.
-25-

SKlOAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF CASH RECEIPTS AND D'SBURSEMENTS
. AGENCY FUNDS
YEAR ENDED JUNE 30,1996

SCHEDULE..

BlliQ
PAYROLL DEDUCTIONS
Feclerallncome Tax State Income Tax F.I,C,A Retirement Tax Deferred Annuities Group Insurance Gami&hment&lTax Levies Charitable Contributions
EMPLOYER'S CONTRIBUTIONS
F.I,C,A Retirement Group Insurance
OTHER FUNDS
Ocean Margin Conference Retired Employees' Insurance

BALANCE JULY 1, 1995

RECEIPTS

BALANCE DISBURSEMENTS JUNE 30,1996

$ 257,157.06 $

257,157,06

87,856.69

87,856,69

159,797,46

159,797.46

107,005,28

.106,963,98 $

"1,30

128,691.00

128,691,00

$

-76,00

95,952,38

95,676,48

199,90

5,234.40

5,234,40

3,006.00

3,006.00

$

-76,00 $ 844,700,27 $

844,383.07 $

241.20

$

0.00 $ 159,797,46 $

159,797.46 $

0.00

236,737.43

236,737.43

244,185.30

244,185.30

$

0.00 $ 640.720.19 $

640,720.19 $

0.00

$

1,505.00 $

$

-3,364.90

16.349.14

$

-3,364.90 $

17,854.14 $

1,505.00 19.204.41 $
20,709.41 $

-6,220.17 -6,220.17

$

-3,440.90 $ 1,503,274.60 $

1,505,812.67 $ _ _-.5.,.9.7..8;;,,;;.9.7..

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
- 26-

SKlpAWAY INSTITUTE OF OCEANOGRAPHY CASH AND CASH EQUIVALENTS JUNE 30.1996
INTEREST BEARING ACCOUNTS NationsBank of Georgia, Savannah, Georgia N.O.W. ACCount (5.11 %)
OTHER Cash on Hand Petty Cash

SCHEDULE "5"
$ 542,070.21
1,000.00
$ 543,070.21 .

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-27 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY ACCOUNTS RECEIVABLE JUNE 30.1996

SCHEDULE "6"

Federal Grants and Contracts Research
State Grants and Contracts Research
other States Grants and Contracts Research
Private Gifts, Grants, and Contracts Research
other other

CURRENT FUNDS UNRESTRICTED RESTRiCTED

AGENCY FUNDS

TOTAL

$ 171,492.94

$ 171,492.94

22,036.12

22,036.12

12,363.77

12,363.77

26,710.74

26,710.74

$

9,683.68

$

6,220.17

15,903.85

$

9,683.68 $ 232,603.57 $

6,220.17 $ 248,507.42

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 29-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY CHANGES IN INVESTMENT IN PlANT YEAR ENDED JUNE 30. 1996

Land BUildings Improvements Other Than Buildings Equipment Library Books and Collections

BAlANCE

CURRENT FUNDS

JULY 1, 1995 UNRESTRICTED RESTRICTED

$ 449,460.00

1,776,566.27

1,364,229.62

$ 373,920.75

3,831,651.95 $

83,873.96

617,055.92

136,847.92

7,593.49

155.00

$ 7,558,755.76 $

91,467.45 $ 991,131.67

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

SCHEDULE '7"

ADDITIONS PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

PRIVATE GIFTS

DEDUCTIONS DISPOSALSI DELETIONSI
ADJUSTMENTS

BALANCE
JUNE 30,1996

$ 449,460.00

$

51,948.41

1,828,514.68

19,181.28

1,757,331.65

$ 50,999.30

$

5,026.00 $ 147,072.59 4,441,534.54

144,596.41

$ 50,999.30 $

71,129.69 $

5,026.00 $ 147,072.59 $ 8,621,437.28

- 31 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF FUND BALANCES
CURRENT FUNDS AND PLANT FUNDS JUNE 3D, 1996

NET INVESTMENT IN PLANT Investment in Plant Facilities
RESTRICTED Designated for SUbsequent Years' Expenditures
UNRESTRICTED Designated For Inventory Reserve For Renewals and Replacements Reserve For SUbsequent Years' Expenditures Undesignated Surplus Regular Lottery for Education

RESIDENT INSTRUCTION

OTHER ORGANIZED ACTIVITIES

CURRENT FUNDS UNRESTRICTED
LOTIERYFOR AUXILIARY EDUCATION ENTERPRISES

$

211.08

16,068.50

$

0,00 $

852.12

$

0.00

$

0.00 $

852.12 $

0.00 $

16,279.58

$

0.00 $

852.12 $

0.00 $ _ ....1..-6,.27.9...5..8..

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

SCHEDULE "8"

RESTRICTED

PLANT FUNDS

UNEXPENDED

LOTIERY FOR RENEWALS AND

REGULAR

EDUCATION REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 8,621,437.28 $ 8,621,437.28

$ 102,670.81

$ 102,670.81

$

2,353.09

$

211.08

2,353.09

16,068.50

$

4,774.53

_____ $

$

4,774.53 $

$ 102,670.81 $

4,774.53 $

-=O;.:.::.O:.=,.O
0.00 $ _ _---=2::.L,3::.::5:.::;3:.:;.0~9

5,626.65 0.00
$ _--=24..:J.,2:.:5:.::.9:.:;.32=-

0.00 $=======2;;,.;,3;,;;5=3=.0=.9 $ 8,621,437.28 $ 8,748,367.41

- 33-

SKlpAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF REVENUES CURRENT FUNDS YEAR ENDED JUNE 30,1996

State Appropriations Allotments from the Board of Regents of the University System of Georgia Regular Special Funding Initiative Lottery Proceeds
Other Revenues Retained Federal Grants and Contracts Research Contract Overhead
State Grants and Contracts Research Contract Overhead
Other States Grants and Contracts Research Contract Overhead
Private Gifts, Grants, and Contracts Research Contract Overhead
Sales and Services of Auxiliary Enterprises
Other Sources Rents Salvage Sales Testing Fees Water Royalties Other

RESIDENT INSTRUCTION

OTHER ORGANIZED ACTIVITIES

$ 1,532,120,00

$

37,290.00

$

37,290.00 $ 1,532,120.00

$ 554,319.85 55,350.58 21,842.88 22,535.96

8,109.21 315.05
23,595.00 120.00 229.66
$ 686,418.19

$

37,290,00 $ 2,218,538,19

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 34-

SCHEDULE -9-

UNRESTRICTED

LOTTERYFOR

AUXILIARY

EDUCATION ENTERPRISES

TOTAL

RESTRICTED OTHER
ORGANIZED ACTIVITIES

TOTAL

$ _----'-1.;..:.1,O=O;..;;.O=.OO~
$ _---:.1...:.!1,~OO:;.;:O~.O~O

$ 1,532,120.00 37,290.00 11,000.00
$ 1,580,410.00

$ 1,532,120.00 37,290.00 11,000.00
$ 1,580,410.00

$ 1,656,197.89 $ 1,656,197.89

$ 554,319.85

554,319.85

55,350.58

1,077,509.35

1,077,509.35 55,350.58

21,842.88

74,849.29

74,849.29 21,842.88

22,535.96

63,077.29

63,077.29 22,535.96

$

18,184.97

18,184.97

18,184.97

8,109.21 315.05
23,595.00 120.00 229.66

8,109.21 315.05
23,595.00 120.00 229.66

$

18,184.97 $ 704,603.16 $ 2,871,633.82 $ 3,576,236.98

$

11,000.00 $

18,184.97 $ 2,285,013.16 $ 2,871,633.82 $ 5,156,646.98

- 35-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF EXPENDITURES BY OBJECT
CURRENT FUNDS YEAR ENDED JUNE 30, 1996
See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 36-

SCHEDULE "10"

UNRESTRICTED
LOTTERY FOR AUXILIARY EDUCATION ENTERPRISES

TOTAL

RESTRICTED OTHER
ORGANIZED ACTIVITIES

TOTAL

$

1,330.12 $ 1,135,466.76 $ 1,123,513.82 $ 2,258,980.58

97.12

92,482.45 137,322.42 162,877.41
17,844.00 1,800.00 4,092.00

65,670.66 96,775.05 . 78,118.92

158,153.11 234,097.47 240,996.33
17,844.00 1,800.00 4,092.00

$

1,427.24 $ 1,551,885.04 $ 1,364,078.45 $ 2,915,963.49

$ 19,538.97 $ 72,321.83 $ 91,860.80

4,916.36

4,916.36

$

2,725.71

226,644.74

405,090.85

631,735.59

15.00

61,636.43

131,270.77

192,907.20

4,560.80

131,188.50

131,188.50

2,445.00

2,445.00

12,376.11

21,108.00

33,484.11

239.68

30,198.03

26,106.66

56,304.69

8,165.02

8,990.59

17,155.61

1,684.04

7,219.82 199.00
9,651.58 52,221.64

539.00 7,000.00 3,584.50
15.00

7,758.82 7,199.00 13,236.08 52,236.64

5,523.92

11,715.06

17,238.98

1.50

18,697.20

202,602.19

221,299.39

85,654.45

617,210.92

702,865.37

$

9,226.73 $ 676,276.77 $ 1,507,555.37 $ 2,183,832.14

- 37-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF EXPENDITURES BY OBJECT
CURRENT FUNDS
YEAR ENDED JUNE 30, 1996

OTHER

RESIDENT INSTRUCTION

EQUIPMENT, TECHNOLOGY AND CONSTRUCTION TRUST FUND Other Costs Supplies and Materials Equipment Inventory

OTHER ORGANIZED ACTIVITIES

SPECIAL FUNDING INITIATIVE Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Group Insurance
Other Costs Supplies and Materials Software

$ 22,753.85
1,644.35 2,332.93 3,496.00
$ 30,227.13
5,050.87 2,012.00
$ 37,290.00
$ 37,290.00

$ 37,290.00 $ 2,217,507.84

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 38-

SCHEDULE "10"

UNRESTRICTED

LOTTERY FOR

AUXILIARY

EDUCATION ENTERPRISES

TOTAL

RESTRICTED OTHER
ORGANIZED ACTIVITIES

TOTAL

$

5,187.00

5,813.00

$ _ _..:.1.:.11,0:;:0::.,:0.:.0,:.=..0

$

5,187.00

5,813.00

$

11,000.00

$

5,187.00

5,813.00

$

11,000.00

$

11,000.00

$

22,753.85

1,644.35 2,332.93 3,496.00

$

30,227.13

5,050.87 2,012.00

$

37,290.00

$

48,290.00

$

22,753.85

1,644.35 2,332.93 3,496.00

$

30,227.13

5,050.87 2,012.00

$

37,290.00

$

48,290.00

$

11,000.00 $

10,653.97 $ 2,276,451.81 $ 2,871,633.82 $ 5,148,085.63

- 39-

SKIDAWAY INSTITUTE OF OCEANOGRAPHY SCHEPULE OF EXPENDITURES By OBJECT
PLANT FUNDS YEAR ENDED JUNE 30,1996

UNEXPENDED

LOTTERY FOR

REGULAR

EDUCATION

RENEWALS AND REPLACEMENTS

TOTAL

CAPITAL OUTLAY

Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Other Expenses Per Diem, Fees and Contracts
Per Diem and Fees Contracts

$

11,021.07

328,00

44,00

5,054,76

1,828,76

$

35,067,09 $

46,088.16

38,817,85

39,145,85

181,50

225,50

5,054,76

5,309,24 12,627,32

7,138,00 12,627,32

OTHER

$ _----:.1.;;,,18,=.;27:..;:6;.;.;:,5~9

$ ----==92=,0=03=,00- $ 110,279,59

EQUIPMENT, TECHNOLOGY AND CONSTRUCTION TRUST FUND Other Costs Supplies and Materials Equipment Inventory

$

0.70

50,999.30

$

0,70

50,999.30

$ _---"-5.-.1,..;.,;OO;,,;;O=.O~O

$ _---"-5.-.1,..;.,;00;,,;;0=.0~0

$

18,276,59 $

51,000.00 $

92,003.00 $ 161,279.59

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
-40 -

SKIDAWAY INSTITUTE OF OCEANOGRAPHY
RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL
YEAR ENPEP JUNE 30, 1996

SCHEDULE -12-

Totals per Annual Supplement

Adjustments

Shared Services on Jointly Staffed Personnel

Armstrong State College

Byrd,

Dr, James T.

King,

Unda

SALARIES AND WAGES

TRAVEL

$ 2,278,272,20 $

91,860,80

13,688,99 -10,226,76

Totals per Report
DISTRIBUTION BY FUND
CURRENT FUNDS Unrestricted Resident Instruction Special Funding Initiative Other Organized Activities Auxiliary Enterprises Restricted Other Organized Activities

$ 2,281,734.43 $ ======9=1'6i::i86=:0=.8==0

$

22,753.85

1,134,136.64 $

1,330.12

1,123,513.82

19,538.97 72,321.83

$ 2,281.734.43 $ =====9=1,=86=0:=.8=0

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
- 41 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

SKIDAWAY INSTITUTE OF OCEANOGRAPHY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30. 1996

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR OUESTIONED COSTS

The status ofthe finding disclosed in the review report for the year ended June 30, 1995, is indicated below:

Audit Control Number

Status ofFinding

593-95-01

See Audit Control Number 593-96-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Audit Control Number 593-96-01

The review report for the year ended June 30, 1995, disclosed that Skidaway Institute of Oceanography did not provide for adequate separation of duties in the performance of accounting functions and related procedures. In the year under review, the Institute still did not achieve an adequate degree ofinternal control for certain control categories. This deficiency was a result of management's decision to limit the number of administrative staffresponsible for accounting functions. Management should periodically review this decision to determine ifemployee duties can be reassigned to achieve a higher degree of internal control with existing staff. These weaknesses in internal control pertain to all funds and programs administered by the Institute. The control categories affected are as follows:

(1) Cash and Cash Equivalents

(3) ExpenditureslLiabilitieslDisbursements

(2) RevenuelReceivableslReceipts

(4) General Ledger

Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control.

Memorandum Only Federal Grantor Agencies Affected:
National Science Foundation
U. S. Department of Commerce
u. S. Department ofEnergy
U. S. Department ofNavy U. S. Environmental Protection Agency