South Georgia College, Douglas, Georgia, report on review of the financial statements for the fiscal year ended June 30, 2002

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'SOUTH ,GEORGIA COLLEGE-

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DOUGLAS. 'GE, ORGIA

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. REPORT ON' REVIEW,

OF,THE FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30', 2002

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Russell W. Hinton . State Auditor

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SOUTII GEORGIA COLLEGE -TABLE OF CONTENTS-

SECTION!

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

3

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

11

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

12

C STATEMENTOFCASHFLOWS

13

D NOTES TO THE FINANCIAL STATEMENTS

14

SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULESOFREVENUESANDEXPENDITURESCOMPAREDTO

BUDGET - (NON-GAAP BASIS)

I

RESIDENT INSTRUCTION

31

2

LOTTERY FOR EDUCATION

32

3 RECONCILIATION OF SALARIES AND TRAVEL

33

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION l FINANCIAL

RL,,~11 \\'. H1 ....TO',
STATE AUC'ITOR 10&>656-2174

DEPARTl\1ENT OF AUDITS AND ACCOUNTS
2)4 \V.1,hmg10n ~ircc1 ~ \V Suite:! 14 AIIJnlJ Georgia 10314-8400
December 18, 2002

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the Umvers1ty System of Georgia
and Honorable Edward D Jackson, Jr, President South Georgia College
INDEPENDENT ACCOUNTANTS COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen
We have reviewed the accompanymg baste financial statements (Exh1b1ts A through D) of South Georgia College, an organ1zat1onaI umt of the State ofGeorgia, as ofand for the year ended June 30, 2002, m accordance with Statements on Standards for Accounting and Review Services issued by the Amencan Institute of Certified Pubhc Accountants All mformatlon mcluded m these financial statements 1s the representation of the management of South Georgia College
A review consists pnnc1pally of mqumes of South Georgia College personnel and analytical procedures apphed to financial data It 1s substantially less m scope than an audit m accordance with audttmg standards generally accepted m the Uruted States of Amenca, the obJect1vc ofwh1ch 1s the expression of an op1mon regardmg the fmanc1al statements taken as a whole Accordmgly, we do not express such an opm1on
Based on our review, we are not aware of any matenal modifications that should be made to the accompanymg financial statements m order for them to be m conformity with accountmg pnnc1ples generally accepted m the Umted States of Amenca
As dcscnbed m Note I, South Georgia College adopted the prov1s1ons ofGovernmental Accountmg Standards Board (GASB) Statement No 35, Basic Fmancwl Statements - and Management's D1scusswn and Analvszs -for Public Colleges and Unzvers111es, as amended by GASB Statement No 37, Basu Fmancwl Statements - and Management's D1scusswn and Analvszs -for State and Local Governments, and GASB Statement No 38, Certain Fmancwl Statements Note Dzsclosures, as of July I, 2001, to implement a new financial reportmg model
02ARL-66

Management's D1scuss1on and Analysis 1s not a required part of the basic financial statements but 1s supplementary mformal!on required by the GASB We have applied ccnam limited procedures, which consisted pnnc1pally ofmqumes of management regardmg the methods of measurement and presental!on of th.Is supplementary mformat1on, and we are not aware of any matenal modifications that should be made thereto
Our review was made for the purpose of expressmg hnuted assurance that there are no matenal mod1ficat1ons that should be made to the financial statements m order for them to be m conformity with accountmg pnnc1ples generally accepted m the Umted States of Amenca The accompanymg supplementary mformat1on (Schedules I through 3) 1s presented for addJtional analysis purposes Such mformatlon has been subjected to the mqwnes and analytical procedures applied m the review of the financial statements, and we are not aware of any matenal modJficat10ns that should be made to such data
_ _..:.R;.;;e~s,pectfully subnutted,
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Hmton State Auditor
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REQUIRED SUPPLEMENTARY INFORMATION -I-

SOUTH GEORGIA COLLEGE
Management's Discussion and Analysis

Introduction

South Georgia College 1s one of the 34 mstltutlons of the Umverslly System of Georgia The College, located m Douglas, Georgia, traces its roots to 1906 when the Eleventh D1stnct Agncultural and Mechanical School was estabhshed by an Act of the Georgia General Assembly In 1927 the mstltullon became the first state-supported Jumor college m Georgia and four years later emerged as one of the onginal umts of Georgia's system ofpubhc higher education Today, the College offers Associate of Arts and Associate of Science degree programs that prepare students for transfer m a mull!tude ofbaccalaureate program maJors The mstltullon also offers Associate ofApphed Science degrees and certificates designed to prepare md1v1duals for careers m several areas of busmess, human services, and technology Through Its Associate of Science m Nursmg degree program the College prepares md1v1duals to become registered nurses and thereby meet reg10nal health care needs South Georgia College enthus1ast1cally embraces new technology, mnovatlve methods, and collaborative efforts to advance the m1ss10ns ofthe Umvers1ty System of Georgia The ms11tut1on contmues to grow as shown by the companson numbers that follow

Faculty

Students

FY2002 FY2001 FY2000

63

1.325

47

1,267

46

1,226

OvervieH' ofthe Financial Statements and Financial Analysis

South Georgia College 1s proud to present its financial statements for fiscal year 2002 The emphasis of d1scuss1ons 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 This d1scuss1on and analysis of the College's financial statements provides an overview of its financial act1v1t1es for the year South Georgia College has elected to not restate pnor penods for purposes ofprov1dmg the comparative data for this Management's D1scuss1on and Analysis However, m future years, when pnor penod mformallon 1s ava1lable, a comparative analysis will be presented

Statement ofNet Assets

The Statement of Net Assets presents the assets, hab1ht1es, and net assets ofthe College as ofthe end ofthe fiscal year The Statement ofNet Assets ts a pomt ofllme financial statement The purpose of the Statement of Net Assets 1s to present to the readers ofthe financial statements a fiscal snapshot of South Georgia College The Statement of Net Assets presents end-of-year data concemmg Assets (current and non-current), L1ab1ht1es (current and non-current), and Net Assets (assets mmus hab1ht1es) The difference between current and non-current assets will be discussed m the notes to the financial statements

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From the data presented, readers of the Statement of Net Assets are able to determme the assets available to continue the operations ofthe instttutton They are also able to determme how much the mstttutton owes vendors, investors and lendmg instnuuons

Finally, the Statement ofNet Assets provides a picture of the net assets (assets mmus hab1httes) and thetr ava1lab1hty for expenditure by the instttutton Net assets are d1v1ded into three maJor categones. The first category, invested in capital assets, net of debt, provides the instttutton's equity in property, plant and eqmpment owned by the 1nstttut1on The next asset category 1s restncted net assets, wh.tch 1s divided into two categones, nonexpendable and expendable. The corpus of nonexpendable restncted resources 1s only available for investment purposes Expendable restncted net assets are available for expenditure by the institution but must be spent for purposes as determined by donors and/or external entitles that have placed time or purpose restnct1ons on the use of the assets The final category 1s unrestncted net assets Unrestncted assets are available to the instltut10n for any lawful purpose of the institution

Statement of Net Assets, Condensed (thousands of dollars)

Assets Current Assets Capital Assets, Net Other Assets

S 837 7,394 210

Total Assets

S 8 441

Liabilities Current L1ab1httes Non-Current L1ab1httes

S 595 50

Total Liabilities

S 645

Net Assets Invested m Capital Assets, Net of Debt Restncted - Nonexpendable Restncted - Expendable Unrestncted
Total Net Assets

S 7,393 154 123 126
$ 7 796

Statement ofRevenues, Expenses and Changes in Net Assets

Changes in totaJ 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 1s to present the revenues received by the institution, both operating and nonoperatmg, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gams and losses received or spent by the institution Generally speaking operating revenues are received for prov1dmg goods and services to the vanous customers and constttuenc1es of the

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mstllullon Operatmg expenses are those expenses paid to acqmre or produce the goods and services provided m return for the operatmg revenues, and to carry out the m1ss10n of the msutuuon Nonoperatmg revenues arc 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 mstltution without the Legislature directly rece1vmg commensurate goods and services for those revenues
Statement of Revenues, Expenses and Changes m Net Assets, Condensed (thousands of dollars)

Operatmg Revenues Operating Expenses

S 3,977 11 943

Operatmg Loss

$ -7,966

Nonoperatmg Revenues and Expenses

6 787

Decrease m Net Assets

$ -I 179

Net Assets at Begmnmg ofYear, as Onginally Reported

S 30,020

Cumulative Effect of Changes m Accountmg Pnnc1ple

-21,045

Net Assets at Beginnmg ofYear Restated
Net Assets at End of Year

$ 8 975
s 7.796

The Statement of Revenues, Expenses and Changes m Net Assets reflects a negative year with a decrease m the net assets at the end ofthe year Some h1ghhghts ofthe mformatlon presented on the Statement of Revenues, Expenses and Changes m Net Assets are as follows

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Revenue By Source (thousands of dollars) For The Year Ended June 30, 2002

Operatmg Revenue Tmhon and Fees Grants and Contracts Sales and Services of Educahonal Departments Aux1hary Other
Total Operatmg Revenue
Nonoperatmg Revenue State Appropnahons Grants and Contracts Investment Income
Total Nonoperatmg Revenue
Total Revenues
Expenses (thousands of dollars) For The Year Ended June 30, 2002

S 752 1,496 448 1,176 105
$ 3 977
$ 6,543 224 20
$ 6 787
$ )0,764

Operatmg Expenses Instruction Academic Support Student Services Insutuhonal Support Plant Operations and Mamtenance
Scholarships aria Fellowslups
Aux1hary Enterpnses Unallocated Deprec1at1on

S ' 3,452
651 1,540 1,752 2.205
594 I, 105
644

Total Expenses

$ I 1,943

Statement of Cash Flows

The final statement presented by South Georgia College 1s the Statement of Cash Flows The Statement of Cash Flows presents detailed mformat1on about the cash act1v1ty of the mstltut1on dunng the year The statement 1s d1v1ded mto five parts The first part deals with operatmg cash flows and shows the net cash used by the operatmg act1v1t1es of the mstttutton The second sect10n reflects cash flows from non-capital financmg actlVJtles This section reflects the cash received and

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spent for nonoperatmg, non-mvestmg, and non-capital financmg purposes The third section reflects the cash flows from mvestmg act1v11Ies and shows the purchases, proceeds, and mterest received from mvestmg acllvllles The fourth section deals with cash flows from capital and related financmg act1v1t1es This section deals with the cash used for the acqms1t1on and construction of capital and related items The fifth secllon 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 Operatmg Acllv11Ies Non-Capital Fmancmg Acllv1t1es lnvestmg Acllv11Ies Capital and Related Fmancmg Act1v1t1es

$ -6,463 6,779 -30 -72

Net Change m Cash Cash, Begmrung of Year

$ 214 316

Cash, End of Year

$ 530

Capital Assets

The College had capital asset add1t1ons for hbrary collections and eqmpment m the amount of $50,465 m fiscal year 2002

For mformauon concernmg Capital Assets, see Notes I, 6. 8, and 9 m the notes to the financial statements.

Economic Outlook

With employment opportumlles more hmlled than m the recent past, the College anllc1pates contmued enrollment growth for the next academic year However, any mcrease m tmllon revenue may be more than offset by a decrease m state appropnat1on due to the slow economy

Edward D Jackson, Jr , President South Georgia College

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BASIC FINANCIAL STATEMENTS
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SOUTH GEORGIA COLLEGE STATEMENT OF NET ASSETS
JUNE 30 2002
ASSETS
Current Assets cash and Cash Equivalents Short-Tenn Investments Accounts Receivable, Net Federal Fmanc,al Assistance Other Prepaid Items lnventones
Total Current Assets
Nona.,rrent Assets
cash and Cash Equivalents Notes Receivable, Net
capital Assets, Net /See Nole 6J
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Llab1htres Salanes Payable Payroll Wrthhold1ngs Accounts Payable Deferred Revenue Funds Held for Others Compensated Absences
Total Current L1abtl1bes
Noncurrent l.Jab1hbes Compensated Absences
Total L1abll1bes
NETASSETS
Invested m Capital Assets, Net of Related Debt
Restncted for
Nonexpendable Expendable Unrestncted
Total Net Assets
See Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information
The notes to the finanoal statements are an integral pert of this statement
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EXHIBIT"A"

$ 376,652 49 50,000 00
14,448 25 238 930 13
12 983 01 143 750 96
$ 836 764 84
$ 153,79812 5680241
7,393,556 14
$ 7 604 156 67
$ 8 440 921 51

$

17,219 98

10,024 20

147,569 63

48 799 75

140,421 58

230,678 63

$ 594 713 77

$

49 851 04

$ 644 564 81

$ 7,393 55614
153,79812 123,11504 125 887 40

$ 71796.356 70

SOUTH GEORGIA COLLEGE STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30 2002

EXHIBIT "B"

OPERATING REVENUES
Student Turt1on and Fees Less Scholarst,,p Allowances
Grants and Contracts Federal
Sales end SeMces of Educational Departments Auxiliary Enterpnses
Residence HaUs Bookstore Food Serv,ces Per1dng/Transporta11on lntsrcolleg1Bte Alhlebcs Other OrgeruzebOnS Other Operating Revenues
Total Operahng Revenues
OPERATING EXPENSES
Salanes Faculty Steff
Employee Benefits Travel Scholarshtps end Fellowships Ubhbes Suppl~ and Other SeTV1ces Depreciat.10n
Totel Operabng Expenses
Operabng Income (Loss)
NONOPERATING REVENUES (EXPENSESl
State Appropnabons Grants encl Contracts
Federal State Nongovernmental Interest and Other Investment Income
Net Nonoperatmg Revenues
lnaeasel(Decreese) m Net Assets
Net Assets Net Assets- Beginning of Year, es Onglnalty Reported Cumulatcve Effect of Changes m Accounting Pnnaple
Net Assets - Beg1nmng of Year, Restated
Net Assets - End of Year
See Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary tnfonnetron
The notes to the financial statements ere en integral part of thtS statement
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s 1,679,448 07
-926,801 14
1496047 12 447,947 79
369,379 81 451,860 73 160 824 73
13,126 70 158 623 07
21 622 03 104 995 45
s 3 977 074 36
s 1 908,086 15
2 688 842 37 1 417,108 86
74,865 56 705,072 16 608 133 64 3 826,052 00 714 431 63
s 11,942,592 37 s -7 965 518 01
s 6 542,674 71
82 176 67 100,000 00 42,118 24 20 140 22
$ 6 787 109 84
s -1178.408 17
s 30 019 656 89
-21,044.892 02
s 8.974.764 87
S_...;.,7.7.96=3::.56=7"-0

SOUTH GEORGIA COLLEGE STATEMENT OF CASH FLOWS YEAR ENPEP JUNE 30 2002
CASH FLOWS FROM OPERATING ACTMTIES Tuition and Fees Grants and Contracts
siues and Services of Educanonal Dllpartmants
Payments to Suppliers Payments to Employee Paymentl for Schcxartihlpt and Felowlhips Loans Issued to Students and Employeel
-Colecbon of Loan to Students and Employees
Auxmery EnterpnMI Chargu Relldence HaUs
FoodSeMceo Parir.lng!Tran partabcn lntercalegrate Athlebcs Other OrganwatJons Other Raceipts (Paymal'ltl)
Net Cuh PrCMdecl (Uud) by Operating Acbvrtlel
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropnabon1 Agency Funds Tranucbonl Gd'bi and Gnints Rac::iatYed for Other than Caprtal Purposes Other Nonoperal.Jng Receipts
Net Cah Flows Pl'O\'lded (UNCI) by Noncllprtal Finanang Ac:IMbes
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Pun::halft of Ce.pltal Auetl PnnapaJ Pu::I en Capttal Debt and Lease
Net Cash Pl'O\'lded (lJaed) by Caprtal and Related FlfWIClng Ac:bvtb91
CASH FLOWS FROM INVESTING ACTMTIES lnternt on ln'leltmentl PurchaMI of lnvntrnentl
Net Cash PrtMded (Used) by Investing Ad/vibes
Nat lncrenel(Oecraue) 1n Cash
Cash and CUh Equrvala.nu - Beginning of Ye.er
Gash and Cash Equrndents - End of Yeer
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTMTIES
Operating 11'\COme {Lou) AdJUltrnentl to Reccncie Net Income (Leu) to Net Cuh
UIOd by Operabng Actlvil.JM Dep,aaat,on Chllnii19 in Auets and LJ.abilltles kmunts ReatMlbltts Net lnventcr1M Prapud Items Notes R11Ce1Yablel Net Accoun1a Payal>le Saianes Payable Payroll Wl1hholdlngs DefemtdRevenue Compenu.ted Absencel
Net Gash Pl'OVJded (UMCI) by Operating Acbvlwl
See Independent Accourrt11nr1 Combined Report on RSVl8W of Basac Fll"lllnaal Statements and Supplemantary tnforma110n
The notes to the finane1al 1tatementa are an integral part cf th11 atatement 13

EXHIBIT "C"

s

788 739 49

1 493 253 93

447 947 78

-5 767 951 45

-4 !594 402 17

-705 072 16

-!51 536 84

637 0&4 98

369 379 61 489 462 12 160 824 73
13 126 70 158 623 07
21,622 03 95 696 07
s -6 462 989 90

s 6 542 674 71
-50 405 49 226 413 01
60 732 94
s 6 n9 415 11

s

-50 46!5 26

-2194200

s

-72 407 25

s

20 140 22

-50 000 00

s

-29 l!.59 78

s

21-4 156 21

316 292-40

s

530 450 e1

s -7 965 518 01
714 431 53
48 138 52 18 728 53
1 460 85 585 526 14 12695211
--4 040 39 6 230 13 -6 306 14 11403 73
s -6 4152 889 90

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOilltllNG POLICIES
NATURE OF OPERATIONS South Georgia College serves the state and nallonal comrnuml!es by providing !Is students with acadermc instruct10n that advances fundamental knowledge, and by disseminating knowledge to the people of Georgia and throughout the country
REPORTING ENTITY South Georgia College 1s one of thirty-four (34) State supported member instltullons of higher educallon in Georgia which compnse the Uruvers!ly System ofGeorgia, an orgaruzallonal unit ofthe State of Georgia The accompanying financial statements reflect the operallons of South Georgia College as a separate reporting enl!ty
The Board of Regents has conslltul!onal authonty to govern, control and manage the Umvers!ly System of Georgia Tlus authonty includes but 1s not hm1ted to the power to designate management, the ab1hty to s1gn1ficantly influence operal!ons, the authonty to control ins1Itut10ns' budgets, the power to determine allotments of State funds to member instnullons and the authonty to prescnbe accounting systems and admin1stra1Ive pohc1es for member inst1tut10ns South Georgia College does not have authonty to retain unexpended State appropnallons (surplus) for any given fiscal year Accordingly, South Georgia College 1s considered an organ1za11onal umt ofthe Board of Regents of the Umvers1ty System of Georgia reporting enl!ty for financial reporting purposes because of the s1gn1ficance of its legal, operallonal, and financial relallonslups with the Board ofRegents as defined in Secl!on 2100 of the Governmental Accounting Standards Board (GASB) Cod1fica11on of Governmental Accounting and Financial Reporting Standards
FINANCIAL STATEMENT PRESENTATION In June I 999, the GASB issued Statement No 34, Basic Financial Statements and Management Discusswn and Ana(vs1sfor State and Local Governments This was followed in November I999 by GASB Statement No 35, Basic Financial Statements and Management's D1scusswn and Analvs1s for Publtc Colleges and Umvers1t1es The State of Georgia 1s required to implement GASB Statement No 34 as of and for the year ended June 30, 2002 As an orgamzattonal umt of the State of Georgia, the College 1s also reqmred to adopt GASB Statements No 34 and No 35 as amended by GASB Statements No 37 and No 38 The financial statement presentat10n required by GASB Statements No 34 and No 35 as amended by GASB Statements No 37 and No 38 provides a comprehensive, en11ty-w1de perspective of the College's assets. hab1hlles, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspecuve previously reqmred
The College has elected to not restate !Is 2001 financial statements to conform with the new financial statement presentallon, therefore comparative financial mformatlon will not be presented for fiscal year 2002 S1gmficant accounting changes made in order to comply with the new reqmrements include (I) adopllon ofdeprec1anon on capital assets, and (2) recognition ofcompensated absences

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SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 1 SUMMARY OF SIGNJFICANT ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION Generally Accepted Accountmg Pnnc1ples (GAAP) requires that the reportmg of summer school revenues and expenses be between fiscal years rather than m one fiscal year Due to the lack of matenal1ty, lnslltullons of the Umvers1tySystem ofGeorgia will contmueto report summer revenues and expenses m the year m which the predommate act1v1ty takes place
BASIS OF ACCOUNTING For financial reportmg purposes, the College 1s considered a special-purpose government engaged only m busmess-type act1v1t1es. Accordmgly, the College's financial statements have been presented usmg the economic resources measurement focus and the accrual basis of accountmg, ei.cept as noted m the precedmg paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obhgallon has been mcurred All s1gmficant mtra-college transachons have been ehmmated.
The College has the option to apply all Fmanc1al Accountmg Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB The College has elected to not apply FASB pronouncements issued after the apphcable date
RESTATEMENT OF NET ASSETS- BEGINNING OF YEAR As a result ofthe adoption ofGASB Statement No 34, the College was also required to make certain changes m accountmg pnnc1ples, specifically (1) adoption of depreciation on capital assets, and (2) recordmg of compensated absences GASB Statement No 34 requires certam summer semester revenues be recogruzed between fiscal years rather than the fiscal year m which the semester was predommantly conducted The Umvers1ty System of Georgia has chosen to contmue to record summer revenue m the year m which the semester was predommantly conducted Net assets at July I, 2001 were reduced by $21,044,892 02 for the cumulative effect of these changes
CASH AND CASH EQUIVALENTS/SHORT-TERM INVESTMENTS Cash and Cash Equivalents consist of petty cash, demand deposits and lime deposits m authonzed financial mst1tut1ons. and cash management pools that have the general charactensucs of demand deposit accounts
INVESTMENTS The College accounts for its mvestrnents at fau value tn accordance with GASB Statement No 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools Changes m unreahzcd gam (loss) on the carrymg value ofmvestments are reported as a component of mvestment mcome m the statements of revenues, expenses, and changes m net assets
ACCOUNTS RECEIVABLE Accounts receivable consists oftu11Ion and fee charges to students and auxthary enterpnse services provided to students, faculty and staff, the maJonty of each res1dmg m the State of Georgia. Accounts receivable also mclude amounts due from the Federal government, state and local
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SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICM'T ACCOUNTING POLICIES
ACCOUNTS RECEIVABLE governments, or pnvate sources, m connect10n with reimbursement of allowable expend1rures made pursuant to the College's grant and contracts Accounts receivable are recorded net of estimated uncollectlble amounts
INVENTORIES Resale Inventones are valued at cost usmg the first-m, first-out ("FIFO") basis
NON-CURRENT CASH AND INVESTMENTS Cash and mvestments that are externally restncted and cannot be used to pay current hab1ht1es are classified as non-current assets m the statements of net assets
CAPITAL ASSETS Capital assets are recorded at cost at the date of acqms1t1on, or fair market value at the date of donation m the case of gifts For eqmpment, the College's cap1tahzat1on pohcy mcludes all items with a urut cost of $5,000 00 or more, and an estimated useful hfe of greater than one year Renovations to bmldmgs, mfrastrucrure, and land improvements that exceed $ I00,000 00 and s1gmficantly mcrease the value or extend the useful hfe of the strucrure are cap1tahzed Routine repmrs and mamtenance are charged to operatmg expense m the year m which the expense was mcurred Depreciation 1s computed usmg the stnught-hne method over the estimated useful hves of the assets, generally 40 to 60 years for bu1ldmgs, 20 to 25 years for mfrastructure and land improvements, IO years for hbrary books, and 3 to 7 years for eqmpment
To obtmn the total picture of plant add1t1ons m the Umvers1ty System, it 1s necessary to look at the act1V1t1es ofthe Georgrn State Fmancmg and Investment Conumss10n (GSFIC) - an organ1zat10n that 1s external to the System GSFIC issues bonds for and on behalfofthe State of Georgia, pursuant to powers granted to it m the Constitution ofthe State of Georgia and the Act crcatmg the GSFIC The bonds so issued constitute d!fect and general obhgat1ons of the State of Georgia, to the payment of which the full fmth, credit and taxmg power of the State are pledged
Effective July I, 2001, the GSFIC retams construction m progress on theu books throughout the construction penod and transfers the entire proJect to South Georgia College when complete
DEFERRED REVENUES Deferred revenues mclude amounts received for tmuon and fees and certam aux1hary act1v1t1es pnor to the end of the fiscal year but related to the subsequent accountmg penod Deferred revenues also mcludc amounts received from grant and contract sponsors that have not yet been earned

- 16 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE l SUMMARY OF SIGNlFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES Employee vacat10n pay 1s accrued at year-end for financial statement purposes The liability and expense incurred are recorded at year-end as accrued vacat10n payable m the Statement of Net Assets, and as a component of compensation and benefit expense m the Statements of Revenues, Expenses, and Changes in Net Assets South Georgia College had accrued liability for compensated absences in the amount of $269,125 94 as of July 1, 2001 For Fiscal Year 2002, $242,082 36 was earned in compensated absences and employees were paid $230,678 63, for a net mcrease of $11,403.73
NON-CURREl','T LIABILITIES Non-current liabilities include hab1ht1es that WIii not be paid Within the next fiscal year
NET ASSETS The College's net assets are classified as follows.
Invested in capual assets, net of related debt This represents the College's total investment in capital assets, net of outstanding debt obliga!Ions related to those capital assets To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net ofrelated debt (The term "debt obhgat10ns" as used in this defimtlon does not include debt of the GSFIC as discussed above )
Restncted net assets - nonexpendable Nonexpendable restncted net assets consist of endowment and s1m1lar type funds m which donors or other outside sources have stipulated, as a condilion ofthe gift instrument, that the pnnc1pal 1s to be maintained inviolate and m perpetmty, and mvested for the purpose of producing present and future income, which may either be expended or added to pnnc1pal The College may accumulate as much of the annual net mcome of an mst1tut10nal fund as 1s prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia
Restricted net assets - expendable Restncted expendable net assets include resources m which the College 1s legally or contractually obligated to spend resources m accordance with restnct1ons imposed by external third parties
Unrestricted net assets Unrestricted net assets represent resources denved from student tu1!Ion and fees, state appropnalions, and sales and services of educational departments and auxiliary enterpnses These resources are used for transactions relating to the educational and general operations of the College, and may be used at the d1scret1on of the governing board to meet currenl expenses for those purposes, except for unexpended state appropnations (surplus) of$10,728 47 Unexpended state appropnat1ons must be refunded to the Board ofRegents of the Umvers1ty System of Georgia - Adm1mstrat1ve Central Office for remittance to the Office of Treasury and Fiscal Services These resources also mclude aux1hary enterpnses, which are substantially self-supportmg act1v11Ies that provide services for students, faculty and staff
- 17 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS When an expense 1s incurred that can be paid using either restncted or unrestncted resources, the College's pohcy 1s to first apply the expense towards unrestncted resources. and then towards restncted resources
INCOME TAXES South Georgia College, as a pohtlcal subd1v1s1on of the State of Georgia, 1s excluded from Federal income taxes under Section I I 5(1) of the Internal Revenue Code, as amended
CLASSIFICATION OF REVENUES The College has classified its revenues as either operating or non-operating revenues in the Statement of Revenues, Expenses, and Changes in Net Assets according to the following cntena
Operating revenues Operating revenues include activities that have the charactenstJcs ofexchange transactions, such as (I) student tuition and fees. net ofscholarship allowances, (2) sales and services of aux1hary enterpnses, (3) most Federal, state and local grants and contracts, and (4) interest on institutional student loans
Non-operating revenues Non-operating revenues include act1v1t1es that have the charactensucs of non-exchange transactions, such as gifts and contnbutlons, and other revenue sources that arc defined as non-operating revenues by GASB No 9, Reporting Cash Flows of Propnetarr and Nonexpendable Tmst Funds and Governmental Entllles That Use Proprietary Fund Accountmg, and GASB No 34, such as state appropnallons and investment income
SCHOLARSHIP ALLOWANCES Student tuition and fee revenues. and certain other revenues from students are reported at gross with a contra revenue account of scholarship allowances in the Statement of l{evenues. Expenses. and Changes in Net Assets Scholarship allowances arc the d1ITerence between the stated charge for goods and services provided by the College, and the amount that 1s paid by students and/or third parties making payments on the students' behalf Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs, are recorded as either operating or nonopcrating revenues in the College's financial statements To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the College has recorded contra revenue for scholarship allowances
NOTE 2 CASH AND CASH EQUIVALENTS AND OTHER DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State of Georgia (and thus South Georgia College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State In heu of a surety bond. the depository may pledge as collateral any one or more of the following secunues as enumerated in the Official Code of Georgia Annotated Section 50-17-59
- 18 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINA."NCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 2 CASH AND CASH EOUNALENTS AND OTHER DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES I Bonds, bill, certificates ofmdebtedness, notes, or other dITect obhgatlons ofthc Umted States or of the State of Georgia
2 Bonds, bills, certificates of mdebtedness, notes, or other obligations of the counties or mumc1paht1es of the State of Georgia.
3 Bonds of any public authonty created by the laws of the State of Georgia, prov1dmg that the statute that created the authonty authonzed the use of the bonds for this purpose
4 lndustnal revenue bonds and bonds of development authontles created by the laws of the State of Georgia
5 Bonds, bills, certificates of mdebtedness, notes, or other obligations of a subs1d1ary corporat10n ofthe Umted States government, which are fully guaranteed by the Umted States government both as to pnnc1pal and mterest, or debt obhgatlons 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 Assoc1al!on, and the Federal National Mortgage Assoc1at1on
6 Guarantee or msurance ofaccounts provided by the Federal Deposit Insurance Corporation
As authonzed m the Official Code of Georgia Annotated Section 50-17-53, the State Deposltory Board has adopted policies which allow agencies of the State of Georgia (and thus South Georgia College), the option of exemptmg demand deposits from the collateral reqmrements
The Treasurer of the Board of Regents 1s responsible for all details relative to fum1shmg the required depository protection for all umts of the Umvers1ty System of Georgia
CATEGORIZATION OF DEPOSITS The College's cash deposits are categonzed by nsk as follows
Category I - Amounts covered by depos1tory msurance or collaterahzed wllh secunlles (at fair value) held by the College or by its agent m the College's name
Category 2 - Amounts collaterahzed with secunt1es (at fair value) held by the pledgmg financial msl!tuhon's trust department or agent m the College's name
Category 3 - Amounts collateral1zed with secunl!es (at fair value) held by the pledgmg financial mstltutlon, or by its trust department or agent but not m the College's name, and amounts uncollaterahzed
- I9 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

E).'HIBIT "D"

NOTE 2 CASH AND CASH EQUIVALENTS AND OTHER DEPOSITS

CATEGORIZATION OF DEPOSITS Cash Deposits as of June 30, 2002 are as follows

Cash Deposits

Carrymg Amount

Bank
Balan~

Risk Categories
2

s 576 300 61 s s19 946 82 s Iso ooo oo s 382 946 a2 s_ __.o..,.o..o.

NOTE 3 ACCOUNTS RECEIVABLE

Accounts receivable consisted of the followmg at June 30, 2002

Student Tulllon and Fees Aux1hary Enterpnses and Other Operating Act:JVJ!Jes Federal, State, and Pnvate Funds Other

$ 40,297 90 16,868 95
199,583 67 8,595 86

$ 265,346 38

Less Allowance for Doubtful Accounts

11.968 00

Net Accounts Receivable NOTE4 INVENTORIES

$ ~S3,3Z~ J

Inventones consisted of the following at June 30, 2002

Bookstore NOTE 5 NOTES/LOANS RECEIVABLE

$ I43,750.96

Notes/Loans receivable at June 30, 2002, pnmanly consist ofstudent loans made through the Federal Perkins Loan Program (the Program) The Program provides for cancellalJon of a loan at rates of I 0% to 30% per year up to a maximum of I 00% 1f the part1c1pant comphes with certain prov1s1ons The federal government reimburses the College for amounts cancelled under these prov1s1ons As the College determines that loans are uncollecuble and not ehg1ble for reimbursement by the federal government. the loans are wntten off and assigned to the U S Department of Educallon At June 30, 2002, the College had assigned $543,314 06 ofuncollectible loans to the U S Department of Education

- 20 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE6 CAPITALASSETS

The balance at July 1, 200 I was adJusted for accounting changes reqmred in 1mplementing GASB Statements 34 and 35 as disclosed in Note 1 Following are the changes in capital assets for the year ended June 30, 2002.

Adjusted
Balance
i~b I i221

Addn1ons

Reductions

Balance June JQ 2QQi

Capua! Assets, Not Bemg Depreciated

Land and Land Improvements

s 197 146 48

$ )97.146 48

Capua! Assets, Bemg Depreciated Infrastructurc Bu1ld1ng and Bu1ldmg Improvements Facilities and Other Improvements
Equipment Library Collcct1ons

$ 1,293,392 00 16,460,328 18 1,239,613 00 1,152,216 33 $ )20).18335

siJM673~86 s

s
34,995 20 15 470 08
50 465 28 s

000 S 1,293,392 00 16,460,328 18 1,239,613 00 1,187,211 53 I 216.653 43
000 s el 397 198 14

Less Accumulated Dcprcc1anon

Infrastructure

s 125,027 89 s

Bu1ldmgs and Bu1ldmg Improvements I 0,5 I 4,296 66

Fac1ht1cs and Other Improvements

880,990 64

Equipment

859,975 76

Library Collect1ons

I I06 065,90

$ I 3,486 356 85 s

51,735 68 s
498,071 05 35,307 75 105 130 15 24 187 IXI
7J44~) ~~ s

0 00 S 176 763 57 11,012,367 71 916,298 39 965,105 91 I J3Q 252 90
0 00 s 14,200 788 48

Total Capital Assets, Bemg Depreciated,

Net

$ 78603760) S

Capital Assets, Net

s 80"2 S22 49 s

-663 %6 35 $
-6fj).96g." $

0 00 $ 7 )96 409 66 0 00 $ 7193 556 14

NOTE? DEFERRED REVENUE

Deferred revenue consisted of the following at June 30, 2002

Prepaid Tmtlon and Fees Other Deferred Revenue

$ 46,249 75 2,550 00

Totals

$ 48,799.75

- 21 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 8 LONG-TERM LIABILITIES

Long-term hab1hty activity for the year ended June 30, 2002, was as follows

Balance Jul~ I, 2001

Add111~;m~

Reductions

Balance June 3Q 2QQ2

Current e2m2n

Leases Lease Obhgauons

$ 27,295 22

s 27,295 22 $

000

Other L1ab1httes Compensated Absences

269,)25 94 s 242 082 36

230,678 63

280,529 67 s 210 678 61

,~z ,,a Total Long-Term Obhgauons s 226 ~~I 16 s ~~2 2s~ J6 s

22J " s 289 ~22 6:Z $

~2S 6,

NOTE 9 LEASE OBLIGATIONS

CAPITAL LEASES Capital leases are generally payable m mstallments rangmg from monthly to annually Expend!tures for fiscal year 2002 were $27,759 72 ofwluch $464.50 represented mterest Total pnnc1pal paid on capital leases was $27,295.22 for the fiscal year ended June 30, 2002 Interest rate was 6 31 percent

Certam capital leases provide for renewal and/or purchase options. Generally purchase options at bargam pnces of one dollar are exercisable at the expiration of the lease terms

South Georgia College had a capital lease for eqmpment which was paid off m the year under review

OPERATING LEASES South Georgia College's noncancellable operatmg leases haVJng remammg terms of more than one year expire m vanous fiscal years from 2003 through 2007 Certam operatmg leases provide for renewal options for penods from one to three years at the1r fair rental value at the time of renewal All agreements are cancelable 1fthe State of Georgia does not provide adequate fundmg, but that 1s considered a remote poss1b1hty In the normal course of busmess, operatmg leases are generally renewed or replaced by other leases Operatmg leases are generally payable on a monthly basis Examples of property under operatmg leases are copiers and other small busmess eqmpment

Noncancellable operatmg lease expenditures m 2002 were S89, 187 03 for copiers

SUMMARY OF LEASE OBLIGATIONS Future commitments for noncancellable operatmg leases havmg terms m excess of one year as of June 30, 2002, were as follows

- 22 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 9 LEASE OBLIGATIONS

SUMMARY OF LEASE OBLIGATIONS

Operatmg Leases

Year Endmg June 30 2003 2004 2005 2006 2007

$ 72,15337 65,952 00 65,952.00 27,957 00 5,182 00

Total M1mmum Lease Payments NOTE 10 RETIREMENT PLANS

$ 237 196.37

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description South Georgia College part1c1pates m the Teachers Relirement System of Georgia (TRS}, a costshanng multiple-employer defined benefit pens10n plan established by the General Assembly of Georgia for the purpose of prov1dmg retirement allowances and other benefits for teachers of the State of Georgia TRS proV1des service rel!rement, dJsab1hty retirement. and survivor's benefits for its members m accordance with State statute The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtamed from the Georgia Department of Audits and Accounts

Funding Policy Employees of South Georgia College who are covered by TRS arc reqmred by State statute to contnbutc 5% of their gross earmngs to TRS South Georgia College makes monthly employer contnbut10ns to TRS at rates adopted by the TRS Board of Trustees m accordance with State statute and as advised by their mdependent actuary For fiscal year 2002, the employer contnbul!on rate was 9 24% for covered employees Employer contnbut10ns for the current fiscal year and the precedmg two fiscal years are as follows

Fiscal Year

Percentage Contnbuted

Reqmred Contnhuuon

2002 2001 2000

100% 100% 100%

$ 306,062 37 $ 384.501 68 $ 402.644 86

- 23

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMEl\'TS
JUNE 30, 2002

EXHIBIT "D"

NOTE IO RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Plan Description The Regents Rellrement Plan, a smgle-employer defined contnbut10n plan, 1s an opllonal ret1rement plan estabhshed and adnurustered by the Board of Regents of the Umvers1ty System of Georgia, under which 1t may purchase annmty contracts for the purpose of prov1dmg retirement and death benefits for ehgible faculty and pnnc1pal admm1strators Benefits depend solely on amounts contnbuted to the plan plus mvestrnent earmngs Benefits are payable to part1c1patmg employees or the1r benefic1anes m accordance with the terms of the annmty contracts
Funding Policy Member contnbutlon reqmrements are estabhshed by the Board of Trustees of the Teachers Retirement System Employer contnbutlons are estabhshed by statute and may be amended only by the General Assembly ofthe State of Georgia The employer contnbutes 9 62% of the part1c1patmg employee's earnable compensation Employees contnbute 5% of their earnable compensation Amounts attnbutable to all plan contnbutlons are fully vested and non-forfe1table at all times
South Georgia College and the covered employees made the reqmred contnbutlons of $99,886 32 (9 62%) and $51,916 27 (5%), respectively
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description South Georgia College part1c1pates m the Georgia Defined Contnbutlon Plan (GDCP) which 1s a smgle-employer defined contnbutlon plan established by the General Assembly of Georgia for the purpose ofprov1dmg reurement coverage for State employees who are temporary, seasonal, and parttime and are not members of a pubhc retirement or pension system GDCP 1s adm1mstered by the Board of Trustees of the Employees' Retirement System of Georgia
Benefits A member may retire and elect to receive penod1c payments after attamment ofage 65 The payment will be based upon mortahty tables and mterest assumptions to be adopted by the Board ofTrustees If a member has less than$ 3,500 00 credited to his/her account, the Board ofTrustees has the option ofrequmng a lump sum d1stnbut1on to the member m heu ofmakmg penod1c payments Upon the death of a member, a lump sum d1stnbut1on equalmg the amount credited to his/her account will be paid to the member's designated beneficiary Benefit prov1S1ons are estabhshed by State statute

- 24 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMEl\'TS
JUNE 30. 2002

EXHIBIT "D"

NOTEIO RETIREMENTPLANS
GEORGIA DEFlNED CONTRIBUTION PLAN
Contributions and Vesting Member contnbullons are seven and one-halfpercent (7 5%) ofgross salary There are no employer contnbuuons Contnbut1on rates are established by State statute Earnmgs are credited to each member's account m a mariner established by the Board of Trustees Upon termmat1on of employment, the amount of the member's account 1s refundable upon request by the member
Total contnbut10ns made by employees dunng fiscal year 2002 amounted to $6,392 48 which represents 7 5% of covered payroll These contnbutlons met the requ1rements of the plan
NOTE 11 RISK MANAGEMENT
South Georgia College 1s a participant m the Board of Regents of the Umvers1ty System of Georgia Health Benefits Plan, wluch 1s a self-msurance program of health and dental benefits for employees and retirees of the Umvers1ty System of Georgia South Georgia College and part1c1patmg employees and retirees pay premmms to the Health Benefits Plan for this health msurance coverage The Health Benefits Plan 1s mcluded m the financial statements of the Board of Regents of the Umvers1ty System of Georgia- Adm1mstrat1ve Central Office All units ofthe Uruvers1ty System of Georgia share the nsk of loss for clrums of the Health Benefits Plan The Health Benefits Plan 1s considered a self-sustrurung nsk fund that provides health coverage for its members up to a maximum hfellme benefit of $2,000,000.00 per person and dental coverage up to an armual maximum of $1,000.00 per person The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to process clrums m accordance with the Health Benefits Plan as established by the Board of Regents
The Department of Adm1mstrat1ve Services (DOAS) has the respons1b1llty for the State of Georgia of makmg and carrymg out dec1s10ns that will mm1m1ze the adverse effects of accidental losses that mvolve State government assets The State believes 1t 1s more economical to manage its nsks mtemally and set aside assets for clrum settlement Accordmgly, DOAS processes clrums for nsk of loss to wluch the State 1s exposed, mcludmg general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' mdemmficatlon L1m1ted amounts of commercial insurance are purchased applicable to property, employee and automobile hab1llty, fidehty and certam other nsks South Georgia College, as an orgaruzauonal umt ofthe Board ofRegents of the Umvers1ty System of Georgia, 1s part ofthe State ofGeorgia reportmg entity, and as such, 1s covered by the State of Georgia nsk management program adm1mstered by DOAS Premiums for the nsk management program are charged to the various state organ1zat1ons by DOAS to provide clrums serv1cmg and claims payment

- 25 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 11 RISK MANAGEMENT
A self-msured program of professional hab1hty for Its employees was established by the Board of Regents of the Uruvers1ty System of Georgia under powers authonzed by the Official Code of Georgia Annotated Secllon 45-9-1. The program msures the employees to the extent that they are not nnrnune from hab1hty agamst personal hab1hty for damages ansmg out of the performance of their dulles or m any way connected therewith The program 1s adrn1mstered by DOAS as a SelfInsurance Fund.
NOTE 12 CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result m refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount ofexpenditures which may be disallowed by the grantor cannot be determmed at this time although South Georgia College expects such amounts, 1f any, to be nnrnatenal to its overall financial pos11Ion
L1t1ga11on, claims and assessments filed agamst South Georgia College {an organ1zallonal urut ofthe Board of Regents ofthe Uruvers1ty System ofGeorgia), if any, are generally considered to be actions agamst the State of Georgia Accordmgly, s1gmficant hllgatlon, claims and assessments pendmg agamst the State of Georgia are disclosed m the State of Georgia Comprehensive Annual Fmanc1al Report for the fiscal year ended June 30, 2002
NOTE 13 POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-331, the Board of Regents of the Uruvers1ty System of Georgia has estabhshed group health and hfe msurance programs for regular employees ofthe Uruvers1ty System ofGeorgia It 1s the pohcy of the Board ofRegents to permit employees ofthe Uruvers1ty System of Georgia ehg1ble for retirement or that become permanently and totally disabled to contmue as members of the group health and hfe msurance programs Employees who are ehgible for rellrement or d1sab1hty under the cntena estabhshed by the Teachers Retirement System ofGeorgia and who have at least ten years of service with the Umvers1ty System of Georgia are ehg1ble for these post-employment health and hfe msurance benefits Organ1zat1onal umts of the Board of Regents of the Uruvers1ty System of Georgia pay the employer portion for group msurance for affected md!v1duals
As of June 30, 2002, there were 75 employees who had retired or were disabled that were rece1vmg these post-employment health and hfe msurance benefits For the year ended June 30, 2002, South Georgia College recogruzed as mcurred $185,464 38 of expenditures, which was net ofS69,566 18 of part1c1pant contnbutlons

- 26 -

SOUTH GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 14 NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS

TheC, gc.:'s operating expenses by funct10nal class1ficat1on are shown below

Statcmen ...)per1.nng Expenses - Natural vs Functional Cl:w1ficanoos for the F1ieal Year Ended June 30, 2002

Natural OassJljcanon
S.lanes Faculty Staff
Employee Benefits Travel ~cholarshrps and
1-cllowshtps Ut1hhcs Supphes and Other
SerVlccs Depr=al!On
Total Operauns Expenses

Instructmn

E1,1nc11oni1l ~H!::!s1fi~t1Qn

Ac::idCTTUC
Suppon

Student
Sernccs

lnsunmonal
Support

s 1,901,976 15

s

35 00

316,835 05 s 407,863 40

570,62b 59 s 875,807 5H

529,960 07

11227351

152,11.i 22

479,753 07

20.521 16

4,887 31

19,204 10

21,682 2c:

1,272 00 35 749 34

5,217 75

6,870 86

95 893 66 10,102 53

645.262 70

96,763 RR
2418700

791,083 70

268,410 49

s J ~~I "Z~ :12 s ~"I 12~ ~ s ! liiJ2 2~:lJZ s I 2"11:t12 "8

Natur2l Cl35s1fic.a1-1on
Salanes Faculty Staff
Employee Benefits Travel ~holarsh1ps and
1-ello"'-shrps Ut1ht1cs Supplies and Other
Sm.ices Deprcc1a11on
Total Opcratmg Expenses

Planl
Operations and
M;nntenance

Euma121Jil ~s1fii;:iU!QD

Scholarships
and fellO"Y.:ShlPS

Auxiliary
totcmnscs

L.nallocatcd Pem:r;panon

Total ()per.lung
f..xnenscs

s 493 935 80
-7.290 42
5,011 74

s

t>,075 00

23,773 95

150,298 41

3,559 00

s 590,635 05
.143,819 56

17,271 45 6..)73 00

s 1908080 IS 2 688 842 17 I 417 108 86 74,865 5ti
705,0i.2 ](, 008 133 h4

1,160,49811

2,865 00

852,168 12
4" 790 )4 s 644 454 4Q

3,826,052 00 7)4 43) 61

s ~ ,11:122~ Z2 S "93 ~00 g~ s 11!!"~~ s w~~ S 11 2;1~ "2itJl

- 27 -

SUPPLEMENTARY INFORMATION -29 -

SOUTH GEORGIA COLLEGE SCHEDULE OF REVENUES AND EXPEND/TURES COMPARED TO
BUDGET fNON-GAAP BASIS\ RESIDENT INSTRUCTION
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

REVENUES
Sta1e Appropnallons Other Revenues Retained

BUDGET

ACTUAL (1)

VARIANCE FAVORABLE (UNFAVORABLE)

$ 6,412,985 00 $ 6,412,985 00 $

4,297,229 00

3949 377 37

000 -347 851 63

$ 10110 214 oo s 10 362,362 31 s _ _---'.34-'-1"",8""5_1-'-s~3

EXPENDITURES
Personal Services Educabon, General and Departmental Services Sponsored Operat,ons
Operabng Expenses EducatJon, General and Departmental Services Sponsored Operations
Capital Outlay Specal Funding lnibatlve

$

5,586,999 00 $ 5,642,251 87 $

157,50000

181,620 71

2,439,007 00 1,692,500 00
771,188 00 63 02000

2 186,828 57 1,544,791 18
748,403 07 63 02000

-55,252 87 -24, 120 71
252,178 43 147 708 82 22,784 93
000

Excess of Revenues over Expenditures

$ 10 710 214 00 $ 10,366,915 40 $ -----'34-"3'-",2C.C98~60~

$

-4 553 03 S _ _ _ _-4,;,,;5_5_3_0_3

(1) Actual amounts were prepared on a presa,bed basis of accounbng that demonstrates compt,ance with budgetary statutes and regulabons of the State of Georgia, which 1s a comprehenswe baSls of accounting other than generally accepted accounbng pnncples

See accompanying notes and Independent Accountant's Combined Report on Review of Basic F1nancal Statements and Supplementary lnformabon
31

SOUTH GEORGIA COLLEGE SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - (NON-GAAP BASIS) LOTTERY FOR EDUCATION
YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

REVENUES State Appropnat1ons

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$

130 680 00 $

130,680 00 $ _ _ _ _ _---=.0-=00-=-

EXPENDITURES
Equipment, Technology and Construc1Jon Trust Fund
Spec,al Funding lnrtlat1ves

$

66,164 00 $

66,164 00 $

64 516 00

64,516 00

$

1301680 00 $

130,680 00 $

000 000
000

Excess of Revenues over Expenditures

$

ooo $-=~--=o=o_o

(1) Actual amounts were prepared on a presa,bed basis of accounting that demonstrates compliance wrth budgetary staMes and regulabons of the State of Georgia, which Is a comprehensrve basis of accounbng other than generally accepted accounting pnnc,ples

See accompanying notes and Independent Accountant's Combined Report on Rev,ew of Basic Financ,al Statements and Supplementary lnforma11on
- 32 -

SOUTH GEORGIA COLLEGE RECONCIUATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

Totals per Annual Supplement

Compensated Absences June 30, 2002 June 30, 2001

AdJus1ments Shared SeMces on JomUy Staffed Personnel Board of Regents of the University System of Georgia Wmgblade, George B

Georgia lnstrtute of Technology

Reiman,

Richard A

SALARIES $ 4,651,335 18 S

TRAVEL 74 865 56

260,594 21 -250,000 87

-60,000 00 -5 000 00
$ 415961928 52 $ _ _7_,4;,;8;;;6~5;,;56;;.,.

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

SECTION II AUDITEE'S RESPONSE TO PRJOR YEAR FINDINGS AND QUESTIONED COSTS

SOUTH GEORGIA COLLEGE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PR1OR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PR1OR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATVS

FS-587-99-02 FS-587-01-01

Previously Reported Corrective Acllon hnplernented Previously Reported Corrective Acuon hnplemented