Review report, state of Georgia, Southern College of Technology, Marietta, Georgia, year ended June 30, 1996

GA A7;co .RI
Sb1 Iqq5 -Cf(;,
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

REVIEW REPORT STATE OF GEORGIA SOUTHERN COLLEGE OF TECHNOLOGY MARIETTA, GEORGIA YEAR ENDED JUNE 30, 1996

SOUTHERN COLLEGE OF TECHNOLOGY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANTS COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALL FUND 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

22

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

23

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICTED

25

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

26

2

LOTTERY FOR EDUCATION

28

SCHEDULES OF OPERATIONS

3

LOAN FUNDS

29

4

ENDOWMENT AND SIMILAR FUNDS

30

5 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

AGENCY FUNDS

31

6 CASH AND CASH EQUNALENTS

32

7 ~STMENTS

33

8 ACCOUNTSRECENABLE

35

9 CHANGES IN ~STMENT IN PLANT

36

10 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

38

SOUTHERN COLLEGE OF TECHNOLOGY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SUPPLEMENTARY INFORMATION

SCHEDULES

11 SCHEDULE OF REVENUES

CURRENT FUNDS

40

SCHEDULES OF EXPENDITURES BY OBJECT

12

CURRENT FUNDS

42

13

PLANT FUNDS

46

14 RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL

47

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 23, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe Board ofRegents ofthe University System of Georgia
and Honorable Stephen R. Cheshier, President Southern College ofTechnology
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 Southern College of Technology 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 Southern College of Technology.
A review consists principally ofinquiries of College 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 College 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 $845,035.56 as ofJune 30, 1996, and the net change in fund balance for the year ended June 30, 1996, would be decreased by $67,632.99.
Our review was made for the purpose ofexpressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying supplementary information (Exhibits E through G and Schedules 1 through 14) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and an3Iytical 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-

SOUTHERN COLLEGE OF TECHNOLOGY COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30. 1996

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Inventories ~repaid Items Investment in Plant
Total Assets

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$

815,217.81 $ 147,808.12 $

5,149.95

1,899.38

895,921.34

246,322.79

926,708.62

465,821.07

75,866.97

$

2,252,827.19 $

394,130.91 $

933,757.95

LIABILITIES AND FUND BALANCES
Uabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees Other Deposits Held in Custody for Others Capital Lease Obligations
Total Uabilities
Fund Balances U. S. Government Grants Refundable Institutional Loans - Restricted Endowment Quasi-Endowment - Restricted Net Investment in Plant Restricted Unrestricted
Total Fund Balances

$

461,843.66

61,062.59

1,163,869.18 16,198.50

$ 1,702,973.93

$ 806,203.57
127,554.38

$ 394,130.91

$

549,853.26

$

549,853.26 $ 394,130.91 $ 933.757.95

Total Uabilities and Fund Balances

$ 2,252,827.19 $ 394,130.91 $ 933,757.95

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-

ENDOWMENT AND SIMILAR
FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only)

$ 533,531.35 $ 245,504.51 $

97,623.32

$ 162,829.96 $ 2,007,665.02

1,899.38

63,666.31

146,699.51

2,279,318.57

465,821.07

75,866.97

_ _ _ _ _ _ $ 53,541,518.21

53,541,518.21

$ 533,531.35 $ 309,170.82 $

97,623.32 $ 53,541,518.21 $ 309,529.47 $ 58,372,089.22

$ 308,590.82

$ 308,590.82

$ 314,861.80 218,669.55
$ $ 533,531.35 $

580.00 $ 580.00 $

$ 533,531.35 $ 309,170.82 $

$ 212,361.09 $ 982,795.57 61,062.59

$

68,845.48

97,168.38

1,163,869.18 16,198.50 97,168.38 68,845.48

$

68,845.48 $ 309,529.47 $ 2,389,939.70

$ 53,472,672.73 97,623.32 97,623.32 $ 53,472,672.73

$ 806,203.57 127,554.38 314,861.80 218,669.55
53,472,672.73 394,130.91 648,056.58
$ 55,982,149.52

97,623.32 $ 53,541,518.21 $ 309,529.47 $ 58,372,089.22

-3-

SOUTHERN COllEGE OF TECHNOI..OGY COMBINED STATEMENT Of CHANGES IN FUND BA!ANCES
ALL FUND GROUPS
YEAR ENDED JUNE 30 19l16

REVENUESANDOTHERAQPOlONS
UnreatrIc:ted Cumlllt Fund R - . State Appropriations
Regular Major Repeir8lRehabllitation Funds
LolIery ProceD FedenII Granla lIIld Contracts State GnInIs lIIld Contracts PrivlIIe Gifts, GnlnIa, lIIld Contracts Investment Income
EndcMment Other Intenlst on Loans Receivable AdjUlltmenls Prior Yeal'&' Expenditures/Accounts Payable Expended for PIanl Facilities Cumlllt Funds Plant Funds
Unexpended Renewals and RepIacemenls Georgia State Financing and Investment Commission Other Additions Insurance Recoveries Proceeds from Sale 01 Plant Assets
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General ExpendItures Auxiliary Enterprises Expenditures Indirect Costs Recovered Remittances to the Board 01 Regents of the
University System 01 Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Yeal'&' R8MllueslAccounts Receivable
Loan Cancellations and Write-Otrs Administrative and Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized DisposalslDeletionslAdjustments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Mandatory Investment Income for Principal
Nonrnandatory Renewals and Replacements Capital Projects
Total Transfel'& Between Funds
Net Increasel(Decrease) for the Year
FUND BALANCES JULY 1 1995
FUND BALANCES JUNE 30 1996
See Indepandent 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.
-4-

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$ 26,582,381.83

$ 5,109,409.22 $ 809,370.50
1,G42,559.56 70,851.68
37,979.16

31,639.50 27.156.11
216.00 14,764.65

$ 26,630,341.09 $ 7,132,190.96 $_......:.;73...,n:...:..:;6=.26:..

$ 24,345,781.92 $ 6.954,797,08 1.983,310.70 86,791.18
5.709.19
30.816.50 $

2,086.92 6,861,53

$ 26,365,618.31 S 7,041.588.26 $ _ _.8...948:.="".45:..

$

-781.61

$

-147.689.08

-36.256.31

$

-183,945.39 $

-781,61

$

ao,m.39 $ 89,821.09 S 64,827.81

469,075.87

304,309.82

868,930.14

$

549,853.26 $ 394,130.91 $ 933.757,95

EXHI8IT"B"

ENDOWMENT AND SIMILAR
FUNDS

UNEXPENDED

PlANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$
$ 476,874.00 225,035.00 151,000.00

$

5,976.00

756.00

64,414.41

580.00

21,985.31

8,487.00 6.387.45

$

5,976.00 $ 955,519.17 $

0.00

$ 26,592,361.93

476,874.00

225,035.00

151,000.00

5,141,048.72

909,370.50

$

17,681.00

1,094,128.67

70,851.68 64,630.41 14,764.65

38,559.16

1,199,207.46 1,199,207.46

915,595.23 363,271.83 3,132,674.90

915,595.23 363,271.83 3,154,660.21

8,487.00 6.387.45

0.00 $ 5,628,430.42 $ 40,426.233.90

$

0.00

$ 31,300,579.00 1,983,310.70 86,791.18

$

4,499.17

10,208.36

30,816.50 2,086.92 6,861.53

915,595.23 $ 75,600.25

363,271.83 2,854.08 $

643,036.43

1,278,867.06 78,454.33
643.036.43

$

0.00 $ 995,694.65 $

366,125.91 $ 643,036.43 $ 35,421,012.01

$

781.61

$

$

781.61 $

$

6,757.61 $

526,773.74

$ 36.256.31
36,256.31 $ -3,919.17 $
4,499.17

$

0.00

147,689.08

0.00

0.00

147,689.08

$

0.00

-218,436.83 $ 4,985,393.99 $ 5,005,221.89

316,060.15 48,487,278.74 50.976.927.63

$ 533,531.35 $

580.00 $

97,623.32 $ 53,472.672.73 $ 55,982,149.52

-5-

SOUTHERN COLLEGE OF TECHNOLOGY STATEMENT OF CURRENT FUNDS REveNUES, EXPENDITURES,
AND OTHER CHANGES YEAR ENDED JUNE 30. 1996

EXHIBITC

Net Increasel(Decrease) in Fund Balances

$

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-

80.777.39 $

170.598.48

SQIITHERN COLLEGE OF TECHNOLOGY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Southern College of Technology is one of thirty-four (34) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit ofthe State of Georgia. The accompanying financial statements reflect the operations of Southern College ofTechnology. 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. Southern College ofTechnology does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Southern College of Technology is considered an organizational unit ofthe Board ofRegents ofthe University System ofGeorgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board ofRegents as defined in Section 2100 ofthe 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 of the resources available to the College, the accounts ofthe College are maintained in accordance with the principles offund 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 College'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 College retains full control to use for purposes of performing the primary functions of the College, e.g., instruction, research, public service, auxiliary enterprises, and student activities.
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-

SOIITHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXIllBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
LOAN FUNDS
The fund used to account for resources which have been made available for financial loans to students.
ENDOWMENT AND SIMILAR FUNDS
The fund used to account for endowment funds, and quasi-endowment funds. Endowment funds are subject to the restrictions ofgift instruments requiring that the principal be invested in perpetuity and income only be utilized. While quasi-endowment funds have been established by the College for the same purposes as endowment funds, any portion of quasi-endowment funds may be expended. Restricted quasi-endowment funds may be expended only for the purposes established by the source of such funds.
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 College. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the College less the amount of any indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the College as custodian or fiscal agent for individual students, faculty, staff members, 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 generallong-tenn debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures ofthe fiscal period.

- 8-

SOUTHERN COLLEGE OF TECHNOLOGY
NOTES TO THE FINANCIAL STA, TEMENTS JUNE 30. 1996

EXlDBIT "0"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING Contractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but is not e;onsistent 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 College relating to employees' rights to receive compensation for 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 $845,035.56 and the related current year expenditure of $67,632.99 have not been reported in the current funds as required by generally accepted accounting principles.
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 College. 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.
It is the policy of Southem College ofTecbnology to record assets acquired through capital leases as additions to Investment in Plant when received at the total acquisition cost including interest. The liability for such leases at fiscal year-end is recorded in Investment in Plant including interest. This presentation differs from generally accepted accounting principles in that the assets and the related liability resulting from capital leases should be recorded in Investment in Plant at the inception ofthe agreement at the net present value ofthe future minimum lease payments, not to exceed the fair value of the leased property. The effect of this departure is deemed to be immaterial to the fair presentation ofthe financial statements.

- 9-

SQtITHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"D"

. NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING 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 and Student Activities which are 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:

Resident Instruction Personal Services Sponsored Operations Operating Expenses Education, General and Departmental Services Sponsored Operations Capital Outlay

$ 113,758.14
$ 527.577.52 $ 3.621 038.94 $ 181.317.39

These overexpenditures of budget constitute a violation of Board of Regents 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 of petty cash and demand deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts.

INVESTMENTS Investments are recorded at cost or in the case of gifts at fair market value on the date of the gift. Funds received by the College as endowments or for restricted purposes are invested according to conditions stipulated by the donor, grantor, or in accordance with the Board ofRegents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded.

- 10 -

SOUTHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "0"

NOTE 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTSRECEWABLE Accounts receivable consist of allotments due from the Board of Regents of the University System of Georgia - Administrative Central Office, reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available.
INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the first-in, first-out method.
Inventories ofgoods for resale are valued at cost using the weighted average 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 AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations ofthe United States or ofthe State of Georgia.
(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations ofthe counties or municipalities ofthe State of Georgia.
(3) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.

- 11 -

SOUTHERN COLLEGE OF TECHNOLOGY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe State of Georgia.

(5) Bonds, bills, certificates ofindebtedness, notes, or other obligations 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 of accounts 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 ofGeorgia.

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 infonnation 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 College or by its agent in the College's name.

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

Cash Deposits

Canying Amount

Bank Balances

Risk Categories

2

3

$121964365 $ 3774300 $ 3774300 $,==~QOO~ $,==~QOO~

- 12 -

SOUTHERN COLLEGE OF TECHNOLOGY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Investments are summarized and classified as to custodial credit risk within the three categories described below:

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

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

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

The carrying amounts ofinvestment balances as ofJune 30, 1996, are categorized below:

Type ofInvestment
Common Stock
Investments Not Subject to Categorizations:
Board ofRegents Balanced Income Fund Short-Tenn Investment Fund
Total Investments

Risk Categories

1

2

3

Carrying Amount

Market Value

$ 1 899 38 $,===="Q~OO~ $,===="Q~oo~ $ 1,899.38 $ 2,760.00

571,988.08 201.883.29
$ 775 770 75

582,313.26 201.046.50
$ 786 119 76

Funds invested in an investment pool managed by another governmental entity are not required to be categorized since the College did not own any specific, identifiable investment securities ofthe pool.

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 Eguipment Library Books and Collections
Total Investment in Plant

$ 753,396.56 35,205,823.98 2,553,899.95 11,686,321.95 3,342,075.77
$ 53,541.518.21

- 13 -

SOUTHERN COLLEGE OF TECHNOLOGY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHlBIT"D"

NOTE 4: CAPITALLEASES

As ofJune 30, 1996, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30

1997 1998 1999 2000

$ 32,334.63 26,249.77 8,882.58 1.378.50

Total Future Minimum Lease Payments

$ 68,845.48

NOTE 5: RISK MANAGEMENT

Southern College ofTechnology is a participant in the Board ofRegents ofthe University System of Georgia Health Benefits Plan, which is a self-insurance program ofhealth and dental benefits for employees and retirees ofthe University System of Georgia. The College 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 ofthe Board ofRegents ofthe University System ofGeorgia - 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 of Regents 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 ofmaking and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The College, 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.

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 of Georgia 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 peIformance oftheir duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.

- 14 -

SOUTHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "D"

NOTE 6: 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 of Georgia and county health departments, pennits 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 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Southern College of Technology 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 ofthe State of Georgia. The College's payroll for the year ended June 30, 1996, for employees covered by TRS was $11,656,074.94. The College's total payroll for all employees was $16,250,459.71.
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 ofcreditable 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 of years of creditable service up to 40 years. Any member who has between 25 and 30 years ofcreditable service and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by 7% for each year or fraction thereofby which the member has less than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

- 15 -

SOUTHERN COLLEGE OF TECHNOLOGY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXIDBIT "D"

NOTE 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Benefits 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 o.fservice) and compensation up to the date ofdeath or up to the time ofdisability.
Members become fully vested after ten years of service. Ifa 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 College who are covered by TRS are required to pay 5% oftheir gross earnings to TRS. The College 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 College contributed 5.60% 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 $2,093,216.60, of which $1,510,411.87 was made by the College and $582,804.73 was made by employees. These contributions represented 12.95% (College) and 5% (employees) ofcovered payroll.
Funding Status and Progress Pension Benefit Obligation
The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No.5 of the Governmental Accounting Standards Board (GASB) that is required to be used for reporting purposes. The standardized measurement is the actuarial present value ofcredited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers 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.

- 16 -

SOUTHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "0"

NOTE7: RETIREMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

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

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585 541.00000

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

Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1996, were $607,274,559.00. The College's contribution for the year ended June 30, 1996, of$I,510,411.87 was actuarially determined and represented .2487% oftotal 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 of the progress made in accumulating sufficient assets to pay benefits when due.

REGENTSRE~MENTPLAN

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 College's payroll for employees covered by the Regents Retirement Plan for the year ended June 30, 1996, was $2,748,037.63. The College's total payroll for all employees was $16,250,459.71.

The College and the covered employees made the required contributions of $109,921.86 (4%) and $137,402.27 (5%), respectively.

- 17 -

SOUTHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "D"

NOTE 7: RETIREMENTPLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Southern College of Technology participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contnbution plan established by the General Assembly ofGeorgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees ofthe Employees' Retirement System of Georgia. The College's payroll for the year ended June 30, 1996, for employees covered by GDCP was $692,547.31. The College's total payroll for all employees was $16,250,459.71.
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 his/her account, the Board of Trustees has the option ofrequiring a lump sum distnbution to the member in lieu ofmaking periodic payments. Upon the death ofa member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount ofthe member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 1996 amounted to $51,941.50 which represents 7.50% of covered payroll. These contributions met the requirements ofthe plan.
NOTE 8: LEAVE 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 of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. 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.

- 18 -

SOUTHERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "0"

NOTE 9: 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 College expects such amounts, ifany, to be immaterial to its overall financial position.
litigation, claims and assessments filed against Southern College ofTechnology (as an organizational unit of the Board of Regents 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 10: 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 ofthe 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 ofGeorgia 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 86 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1996, Southern College of Technology recognized as incurred $212,472.60 of expenditures, which was net of$49,516.80 of participant contributions.
NOTE 11: BONDING INFORMATION
The President and all employees of Southern College of Technology are bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No. 1450-02-110723, on which the premium was paid to October 1, 1996. Under this agreement, the public employee dishonesty coverage insures Southern College of Technology to a maximum of$I,OOO,OOO.OO against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance of duty coverage insures the College to a maximum of $1,000,000.00 againstloss 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.

- 19 -

SOUTIIERN COLLEGE OF TECHNOLOGY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT"D"

NOTE 11: BONDING INFORMATION

All employees ofSouthem College ofTechnology are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 011675 2 and 626 012294 4, on which the premiums were paid to October 1, 1996. Under these additional public employee dishonesty coverages, the policies insure the College to a maximum of$9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees and from failure ofits employees to perform faithfully.

NOTE 12: ENROLLMENT

The equivalent full..time student enrollment of Southem College ofTechnology was as follows:

Regular Term Fall Quarter, 1995 Winter Quarter, 1996 Spring Quarter, 1996

2,987 2,787 2,669

Average

2.814

Summer School, 1995

1.333

- 20 -

SUPPLEMENTARY INFORMAnON - 21 -

SOUTHERN COLlEGE OF TECHNOLOGY COMBINING BALANCE SHEET
CURRENT FUNDS - UNRESTRICTEP JUNE 30, 1M

EXHIBIT "E"

~
Cash lind Cash Equivlllenta Accounts Receivable Inventorie& Prepaid Item8

RESIDENT LOTTERY FOR AUXILIARY

STUDENT

INSTRUCTION EDUCATION ENTERPRISES ACTIVITIES

TOTAL

$ 453,685,96 $ 784,8n.86 82,857.83 62,274,18

94,365,53 $

105,193,35 $ 110,199,01 382,963.24 13,592.79

161,972.97 $ 844.67

815,217.81 895,921.34 465,821,07
75,88JS.97

Total Aa8eta

$ . 1,383,695,63 $

94,365.53 $ 611,948.39 $ 162,817,64 $ 2,252,827,19

L1ABILmES ANp FUNp BALANCES
Liabilities Accounts Payable Student Depoda Deferred Revenue Tuition and Fees Other
Total Liabilities
Fund Balances Unrestricted

$ 329,185,02 $
905,121,00 16,198.50
$ 1,250,504.52 $
133,191,11

94,365.33 $ 94,365.33 $

38,293.31 61,062.59 182,921.18 $
282,2n.08 $

$ 461,843.66 61,062.59

75,827,00

1,163,869.18 16,198.50

75,827.00 $ 1,702,973.93

0.20

329,671,31

86,990.64

549,853,26

Total Liabilities and Fund Balances

$ 1,383,695.63 $ 94,365.53 $ 611,948.39 $ 162,817.64 $ 2,252,827.19

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
-22 -

SOUTHERN COUGE OFTECHNOLQGY COMBINING STATEMENT OF CHANGES IN FUNp BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30, 1996

EXHIBIT -P'

FUNP BALANCES JUNE 30 1996

$ 133,191.11 $ _ _....O.iiii.2.O. $ 329,671.31 $ 86,990.64 $ 549,853.26

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-23-

I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I
I

SOUTHERN COLLEGE OF TECHNOLOGY COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 1996

EXHIBIT -G"

REVENUES
state Appropriations
Tuition and Fees Federal Grants and Contracts
PrIvate Gifts, Grants, and Contracts 8aIes and Services of Educational Activities 8aIes and ServIce8 of Auxiliary Enterprisea other Sources
Total Revenues
EXPENDITURES
Educational and General Instruction Public 5ervice Academic Support Student 8ervices Institutional Support Operation and Maintenance of Plant SCholarships and Fellowships
Auxiliary Enterprises Student Housing Food 8ervices Stores and Shops Intercollegiate Athletics Other 5ervice Units
Total Expenclitures
OTHER TRANSFERS AND APDITIONSI (DEDUCTIONS)
Transfers for Renewals and Replacements Transfers for Capital Projects Transfers in Lieu of State Appropriations Prior Period Adjustments (Net) Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Total Other Transfers and Additions/(Deductions)

RESIDENT LOTTERY FOR AUXILIARY

STUDENT

INSTRUCTION EDUCATION ENTERPRISES ACTIVITIES

TOTAL

$ 16,190,716,00 $ 5,641,416.35 46,478.42 47,479.46 10,293.88
1,692,323.72
$ 23,628,707,83 $

210,831.00 $

$
2,212,<407,74 941,65

$ 500,015,56
39,458.15

16,<401,547.00 6,141,431.91 46,478.42 47,479.46 10,293.88 2,212,<407.74
1,732,723,52

210,831.00 $ 2,213,349,39 $ 539,473,71 $ 26,592,361,93

$ 13,416,587.26 $ 86,688.27
2,347,081.15 1,619,285,31 3,541,430,01 2,640,546.13
200,542,00
$ 23,852,160,13 $

210,830.08

$ 13,627,417.34

86,688.27

2,347,081.15

$ 282,791.71

1,902,On.02

3,541,430,01

2,640,546.13

200,542,00

$ 659,106,38 580,793,<40 276,540.42 179,474,88 307,395,62

659,106,38 580,793,<40 276,540,42 179,474,88 307,395.62

210,830.08 $ 1,983,310,70 $ 282l91,71 $ 26,329,092,62

$ 223,766,00 13,942,90
-5,709,19 $ 231,999,71

$ -147,689,08

$ -147,689,08

-26,372,31 $ -9,884,00

-36,256,31

-25,168,00 -198,598,00

0,00

-6,650,64

-129,60

7,162,66

-5,709,19 $ -205,880,03 $ -208,611,60 $ -182,491,92

Net Increasel(Decrease) in Fund Balances

$

8,547,41 $

0.92 $

24,158.66 $ 48,070.40 $_...;;:80.,.m.;";,,,;;;,3.9.

see acqompanying notes and Independent Accountanfs Combined Report
on Review of Financial Statements and Supplementary Information.
- 25-

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30,1996

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 16,190,716,00

$

7,437,991.83 $ 6,954,797.08

701,909.00 102,030.17 $

$ 23,628,707.83 $ 6,954,797.08 $ 803,939,17 $

~O.:.;OO;;. O,;.;;,OO~

EXPENDITURES
Personal Services: Education, General ancJ Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations
Capital Outlay Special Funding Initiatives Research Consortium

$ 18,735,223.47 $

851,850.14

5,049,947.52
41,297,14 25,692.00

6,102,946.94 $

840,195.48 $

366,125.91

$ 23,852,160.13 $ 6,954,797.08 $ 840,195.48 $ _ _...;366,;;.=,1,;.;;25;';;';';.;;,91,;..

Excess of Revenues over Expenditures

$

-223,452.30 $

0.00 $

-36,256.31 $

-366,,,;,;1..2.5..9._.1
iOiOOl

(1) To eliminate tuition waivers not budgeted and to reclassify current year transfers and prior year fund balances budgeted as revenues.

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

TOTAL

ADJUSTMENTS

TOTAL

(1)

(Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 16,892,625.00 14,494,819.08 $

$ 16,892,625.00 $ 16,892,625.00 $ 425,606.22 14,920,425.30 10.787,054.00

0.00 4,133,371.30

$ 31,387,444.08 $

425,606.22 $ 31,813,050.30 $ 27,679,679.00 $ 4,133,371.30

$ 18,735,223.47 851,850.14
5,049,947.52 $ 6,102,946.94 1,206,321.39
41,297.14 25,692.00

$ 18,735,223.47 $ 19,030,280.00 $

851,850.14

738,092.00

-200,542.00

4,849,405.52 6,102,946.94 1,206,321.39
41,297.14 25,692.00

4,321,828.00 2,481,908.00 1,025,004.00
56,875.00 25,692.00

295,056.53 -113,758.14
-527,577.52 -3,621,038.94
-181,317.39 15,577.86 0.00

$ 32,013,278.60 $ -200,542.00 $ 31,812,736.60 $ 27,679,679.00 $ -4,133,057.60

$ -625,834.52 $

626,148.22 $ _ _...,;:,31.3.,;,;..7.0..

$

31.3..7..0..

-27-

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30. 1996

SCHEDULE "Z'

see accompanying notes and Independent Accountanfs Combined Report
on Review of Financial Statements and Supplementary Information.
-28-

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF OPERATIONS LOAN FUNDS YEAR ENDED JUNE 30, 1996

SCHEDULE "3"

FUND
U, S. GOVERNMENT GRANTS REFUNDABLE
Perkins Loan Fund
INSTITUTIONAL LOANS - RESTRICTED
Alford. John I., Loan Fund Associated Builders and.Contractors Loan Fund Emergency Loan Fund Southern Technical Institute Foundation Loan Fund Southern Technical Institute Foundation Professional
Development Loans

FUND BALANCE ADDITIONSI DEDUCTIONSI FUND BALANCE JULY 1,1995 TRANSFERS TRANSFERS JUNE 30. 1996

$

744,914.71 $

70,179.56 $

8,890.70 $

806,203,57

$

10,852.48 $

1,005.00

5.513.64

91,073.69

15.570.62

$ 124,015.43 $

216.00
2,587.82 $ 792.88
3,596.70 $

$ 57.75 57.75 $

11,068.48 1,005.00 5,513.64
93,603.76
16.363.50
127,554.38

$

868,930.14 $

73,776.26 $

8,948.45 $

933,757,95

RECONCILIATION OF STUDENT NOTES RECEIVABLE
Balance July 1, 1995 Add:
Loans to Students

Deduct:

Repayment of Loans

Loan Cancellations and Write-Offs

For Death

$

For Student Refunds

For Loans Written-Off

$
1,585.00 497.75 4.17

$ 890,354.58 246.691.00
$ 1,137,045.58 208,250.04

2,086.92

210,336.96

Balance June 30.1996

$ 926.708.62

See accompanying notes and Independent Accountanfs Combined Report on Re.view of Financial Statements and Supplementary Information.
-29-

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF OPERATIONS
ENDOWMENT AND SIMILAR FUNDS YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

FUND

FUND BALANCE ADDITIONSI DEDUCTIONSI FUND BALANCE JULY 1,1995 TRANSFERS TRANSFERS JUNE 30, 1996

ENDOWMENT

Barnett Scholars Program

$

Berger, Frederick J., Tau Alpha Pi

Award Fund

Lambert, Clark M., Memorial Fund

Marietta Kiwanis Scholarship Fund

Morton, Gordon K, Scholarship Fund

Ratner, Milton, Scholarship Fund

Stultz, Warren, Scholarship Fund

Weise, Duane M., Academic Excellence

Award

108,070.00 $
11,065.00 54,310.00 13,965.00 76,953.19 42,850.00 4,821.00
1,070.00

781.61 $ 976.00

0.00 $

108,851.61
11,065.00 54,310,00 13,965.00 76,953.19 42,850,00 5,797.00
1,070.00

$ 313,104,19 $

1,757,61 $

0,00 $

314,861,80

QUASIENDOWMENT UNRESTRICTED

General Scholarship Fund

213,669,55

5,000,00

0,00

218,669.55

$ 526,773,74 $

6,757,61 $

0,00 $

533,531,35

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

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
AGENCY FUNDS YEAR ENDED JUNE 30.1996

SCHEDULE "S"

SOUTHERN COLLEGE OF TECHNOLOGY CASH AND CASH EQUIVALENTS JUNE 30, 1996

SCHEDULE "6"

INTEREST BEARING ACCOUNTS
NationsBank, Marietta, Georgia
Commercial Interest Checking Account (5,12%)
SulTrust Bank,
Atlanta, Georgia
Cash Management Pools Board of Regents Balanced Income Fund Board of Regents Short-Term Investment Fund
OTHER
Cashon Hand Petty Cash

$ 1,219,643,65

$ 571,988,08 201,883,29

773,871,37 $ 1,993,515,02

14,150,00

$ 2,007,665,02

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

SOUTHERN COLLEGE OF TECHNOLOGY INVESTMENTS JUNE 30, 1996
Common Stock . 60 Shares of Florida Power and Ught Group, Incorporated

SCHEDULE ...,$ = = = 1,=89=9=,3=8

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

I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I
I

SOlD'HERN COLlEGE OF TECHNOLOGy ACCOUNTS RECEIVABLE JUNE 30. 1996

SCHEDULE "8"

CURRENT FUNDS UNRESTRICTED RESTRICTED

Stat ApproprIatIons

AIIoIment from the Bo8rd d Regents d the

UnIversIty System d Georgia

$

200.000.00

FedenII Grants and ConIr8c:Is R_rch and InsIruc:tion
SludentAid

$ 189,189.36 16.709.n

Slat8 GIlII'lls and ConIr8c:Is
SludentAid

221.80

PriYaa GIfts, Granls, and ContrllCtI R-.rch and InsIruc:tion

<W,201.86

Other

Center for Quality Excellence

1n.154.94

Continuing Education

49,031.99

Departmental Federal Financial Assistance

F'lIl8I1Cing System

Georgia Slate Financing and Investment

Commission

Retired Employees' Health Insurance

Student Accounts

302,909.03

Student Notes

$

Textile Education Foundation

Other

166.825.38

LOAN FUNDS

PLANT FUNDS UNEXPENDED

$ $ 21,985.31

926,708.62

23.000.00 18,681.00

AGENCY FUNDS
$
137,252.64 9.446.87

TOTAL
200.000.00
188,188.36 16,709.n
221.80
<W,201.86
1n,154.94 49.031.99 137,252.64 21,985.31 9.446.87 302,909.03 926.708.62 23.000.00 185,506.38

$ 895,921.34 $ 246,322.79 $ 926,708.62 $ 63,666.31 $ 146,699.51 $ 2,279,318.57

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

SOUTHERN COLLEGE OF TECHNOLOGY CHANGES IN INVESTMENT IN pLANT YEAR ENpEP JUNE 30.1996

Land Buildings Improvements Other Than Buildings Equipment Ubrary Books and Collections
SUMMARY OF INVESTMeNT College Capital Leases

BALANCE

CURRENT FUNDS

JULY " 1995 UNRESTRICTED RESTRICTED

$ 753,396.56

31,658,934.78 $

46,870.26

1,893,379.12

11,137,924.65

789,078.59 $ 150,000.00

3,128,817.16

213,258.61

$ 48,572,452.27 $ 1,049,207.46 "$ 150,000.00

$ 48,487;1.78.74 $ 85,173.53

1,049,207.46 $

150,000.00

$ 48,572,452.27 $ 1,049,207.46 $ 150,000.00

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
-36-

SCHEDULE "9"

PLANT UNEXPENDED

ADDITIONS
FUNDS RENEWALS AND REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

CAPITAL LEASES

PRIVATE GIFTS

DEDUCTIONS DISPOSALSI DELETIONSI ADJUSTMENTS

BALANCE JUNE 30, 1996

$ 753,396.56

$ 112,825.74 $

254,518.30 $ 3,132,674.90

35,205,823.98

583,356.00

77,162.83

2,553,899.95

219,411.49

31,590.70

$ 22,158.83 $

17,681.00 $ 681,523.31 11,686,321.95

3,342,075.77

$ 915,595.23 $

363,271.83 $ 3,132,674.90 $ 22,158.83 $ 17,681.00 $ 681,523.31 $ 53,541,51821

$ 915,595.23 $

363,271.83 $ 3,132,674.90 -----$

$ 22,158.83

17,681.00 $

643,036.43 $ 53,472,672.73

38,486.88

68,845.48

$ 915,595.23 $

363,271.83 $ 3,132,674.90 $

17,681.00 $ 681,523.31 $ 53,541,518.21

-37 -

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF FUND BALANCES
CURRENTFUNDSANDPLANIFUNpS JUNE 30, 1996

NET INVESTMENT IN PLANT Investment in Plant Facilities
RESTRICTEP Designated for Subsequent Years' Expencfltures
UNRESTRICTED Designated For Athletic Facility For Bus Replacement Reserve For Intercollegiate Athletics For Inventory Reserve For Renewals and Replacements Reserve For SUbsequent Years' Expenditures For Uncollectible Accounts Undesignated Surplus Regular Lottery for Education

RESIDENT INSTRUCTION

CURRENT FUNDS UNRESTRICTED LOTTERY FOR AUXILIARY EDUCATION ENTERPRISES

$

85,000.00

45,100.76

$ 60,233,35 383,000.00
-121,131.12 7,569,08

3,090.35 _____ $ $ 133,191.11 $
$ 133,191.11 $

. ;:;.0;;::.2O=. .;:;.0;;::.2O=. $

329,671.31

0.;;;;2.0. $ 329.671.31

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

SCHEDULE -10"

STUDENT ACTMTIES

RESTRICTED

PLANT FUNDS

UNEXPENDED

LOTIERY FOR RENEWALS AND

REGULAR

EDUCATION REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 53,472,672.73 $ 53,472,672.73

$ 394,130.91

$ 394,130.91

$ 39,891.36
45,992.78 1,106.50

$

10,368.77

87,254.55

$

39,891.36

10,368.77

60,233.35

468,000.00

87,254.55

-75,138.34

53,776.34

$ 86,990.64

$

580.00

_____ $

$

580.00 $

$ 86,990.64 $ 394,130.91 $

580.00 $

-=O;.::.OO~
0.00 $ _ _....;:9~7,1.::623=.32~

3,670.35 0.20
$ 648,056.58

0.00 $

97,623.32 $ 53,472,672.73 $ 54,514,860.22

-39-

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

STUDENT ACTIVITIES

TOTAL

RESTRICTED RESIDENT
INSTRUCTION

TOTAL

$ 16,108,149.00 56,875.00 25,692.00
210,831.00
$ 16.401 ,547.00

$ 16,108,149.00 56,875.00 25,692.00
210,831.00
$ 16,401 ,547.00

$ 4,859,639.85 $ 500,015.56 1,281,792.06

$ 4,859,639.85 1,281,792.06

$ 177,448.05 4,900,612.09
46,478.42

177,448.05 4,900,612.09
46,478.42

150,000.00 759,370.50

150,000.00 759,370.50

47,479.46

831,835.77 121,166.36

831,835.77 121,166.36 47,479.46

10,293.88 2,212,407.74

14,364.31

14,364.31 10,293.88 2,212,407.74

11,080.23 28,377.92

1,585,378.85 12,021.88
135,322.79

1,585,378.85 12,021.88
135,322.79

$ 539,473.71 $ 10,190,814.93 $ 6,954,797.08 $ 17,145,612.01

$ 539,473.71 $ 26,592,361.93 $ 6,954,797.08 $ 33,547.159.01

- 41 -

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF EXPENDITURES BY OBJECT
CURRENT FUNDS YEAR ENDED JUNE 30,1996

SCHEDULE "12"

STUDENT ACTIVITIES

TOTAL

RESTRICTED RESIDENT
INSTRUCTION

TOTAL

$ 72,386.45 $ 15,465,852.18 $ 738,660.41 $ 16,204,512.59

4,627.12 8,200.81 7,578.16

1,039,234.72 1,560,548.37 1,342,002.17
105,280.00 8,653.00
161,145.00 158.00

35,477.43 53,622.81 24,089.49

1,074,712.15 1,614,171.18 1,366,091.66
105,280.00 8,653.00
161,145.00 158.00

$ 92,792.54 $ 19,682,873.44 $ 851,850.14 $ 20,534,723.58

$

2,486.05 $ 213,512.76 $ 34,639.30 $ 248,152.06

20,424.92

20,424.92

19,859.81

862,701.21

13,243.58

875,944.79

1,978.71

305,561.09

305,561.09

923,149.57

923,149.57

16,847.80

66,154.11

3,019.19

69,173.30

52,230.93

52,230.93

75,272.24 34,059.69

4,222.66 260,125.53 495,801.41 319,559.75

54,957.17 5,795,513.26
17,605.19

59,179.83 6,055,638.79
513,406.60 319,559.75

9,999.80 6,940.18

196,944.21 10,020.75 68,256.90 49,900.00
301,979.73

3,947.23 3,289.25 5,779.77

200,891.44 10,020.75 71,546.15 49,900.00
307,759.50

20,159.89 1,200.00

885,952.76 709,238.53

20,953.00

906,905.76 709,238.53

1,195.00

21,218.98 601.444.16

150,000.00

150,000.00 21,218.98 601,444.16

$ 189,999.17 $ 6,368,399.96 $ 6,102,946.94 $ 12,471,346.90

$ 75,000.00

$ 75,000.00 -43 -

SOUTHERN COLLEGE OF TECHNOLOGY . SCHEDULE OF EXPENDITURES BY OBJECT
CURRENT FUNDS
YEAR ENDED JUNE 30, 1996

OTHER
SPECIAL FUNDING INITIATIVES Personal Services Salaries and Wages Employer's Contributions for: F.I.CA Retirement Group Insurance
Other Costs Travel Supplies and Materials Repairs and Maintenance Equipment Non-Inventory Software Per Diem, Fees and Contracts Per Diem and Fees Contracts Equipment Inventory
RESEARCH CONSORTIUM Personal Services Salaries and Wages Employer's Contributions for: F.I.CA Retirement Group Insurance
Other Costs Supplies and Materials Per Diem, Fees and Contracts Per Diem and Fees

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

UNRESTRICTED AUXILIARY
ENTERPRISES

$ 33,000,00
2,506.33 3,188,75 1,693.82
$ 40,388,90

908.24 $

4,250.00 2,653,00

17,352,91 1,483.00

8,505,72 10,170.00

91.415.45

$ 41,297.14 $ 135,830,08

$ 12,947.12 716.88
1,007,94 30.72
$ 14,702.66
989.34 10,000.00 $ 25,692.00 $ 66,989,14 $ 210,830.08

$ 23,852,160.13 $ 210,830.08 $ 1,983,310.70

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-44-

SCHEDULE "12"

STUDENT ACTIVITIES

TOTAL

RESTRICTED RESIDENT
INSTRUCTION

TOTAL

$ 33,000.00
2,506.33 3,188.75 1,693.82
$ 40,388.90
908.24 4,250.00 2,653.00
17,352.91 1,483.00
8,505.72 10,170.00
91.415.45
$ 177,127.22

$ 33,000.00
2,506.33 3,188.75 1,693.82
$ 40,388.90
908.24 4,250.00 2,653.00
17,352.91 1,483.00
8,505.72 10,170.00
91,415.45
$ 177,127.22

$ 12,947.12 716.88
1,007.94 30.72
$ 14,702.66
989.34 10,000.00 $ 25,692.00 $ 277,819.22

$ 12,947.12 716.88
1,007.94 30.72
$ 14,702.66
989.34 10,000.00 $ 25,692.00 $ 277,819.22

$ 282,791.71 $ 26,329,092.62 $ 6,954,797.08 $ 33,283,889.70

- 45-

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF EXPENDITURES BY OBJECT
PLANT FUNDS YEAR ENDED JUNE 30, 1996

SCHEDULE "13"

UNEXPENDED

LOTTERY FOR

REGULAR

EDUCATION

RENEWALS AND REPLACEMENTS

TOTAL

$ 840.195,48 $ 151,000,00 $

366,125,91 $ 1,357,321,39

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-46-

SOUTHERN COLLEGE OF TECHNOLOGY RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL
YEAR ENDED JUNE 30, 1996

Totals per Annual Supplement
Adjustments Allgood, Cristoffer K, Crim, Richard Gordon, John Moore, Joanne Scott, Todd
Totals per Report

SALARIES AND WAGES
$ 16,240,037,42 $

TRAVEL 249,311,30

-1,089,12 10,513,33
998,08

-25,00 -226,00

$ 16.250.459,71 $ 249,060,30

DISTRIBUTION BY FUND
CURRENT FUNDS Unrestricted Resident Instruction Regular Special Funding Initiatives Research Consortium Auxiliary Enterprises Student Activities Restricted Resident Instruction

$ 14,689.910,38 $ 33,000,00 12,947,12
703,555,35 72,386.45
738,660.41

205,499,33 908,24
5,527,38 2,486,05
34,639,30

$ 16,250,459,71 $ 249,060,30

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information,
- 47-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

SOUTHERN COLLEGE OF TECHNOLOGY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30. 1996
CURRENT YEAR
FUND EQUITIES Deficit Fund Balance Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 550-96-01
Our review ofPeli Grant Program receivables at June 30, 1996, revealed that the College had improperly reCorded receivables of$15,471.40. An adjusting entry was made to correct the receivables which resulted in a deficit of$15,471AO in the fiscal year 1995 Pell Grant Program. This deficit fund balance is the result of Pell Grant awards being made to students without submitting award information and receiving award approval through the Student Payment Summary Report process. The College should contact the Board ofRegents and the grantor agency regarding funding ofthis Pell Grant Program deficit.
REVENUE/RECEIVABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 550-96-02
An examination ofstudent accounts receivable at June 30, 1996, revealed that $38,683.00 were not supported by approved financial aid. This condition occurred because of management's failure to obtain approved documentation to support financial aid before disbursement offunds. There is no provision in the policies of the Board ofRegents for deferments ofstudent accounts without the student having approved documentation offinancial aid at the time of registration.
Collections ofstudent accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved financial aid. It is recommended that legal means be used to collect all accounts receivable, if necessary.