Review report, state of Georgia, Albany Technical Institute, Albany, Georgia, year ended June 30, 1996

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

REVIEW REPORT STATE OF GEORGIA ALBANY TECHNICAL INSTITUTE ALBANY, GEORGIA YEAR ENDED JUNE 30, 1996

ALBANY TECHNICAL INSTITUTE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

STATEMENTS OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

D

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

7

E

"B"LOTTERYFOREDUCATION'

8

F NOTES TO THE FINANCIAL STATEMENTS

9

SUPPLEMENTARY INFORMATION

G COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

26

H COMBINING STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

BUDGET FUND

27

I COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

28

J COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUNDS

31

, SCHEDULES

1 CASH AND CASH EQUIVALENTS

32

2 SCHEDULE OF FEDERAL REVENUES

33

3 RECONCILIATION OF SALARIES AND WAGES, AND IRAVEL

34

ALBANY TECHNICAL INSTITUTE - TABLE OF CONTENTS -
SECTION II 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 9, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members of the State Board of Technical and Adult Education Members ofthe Local Board ofDirectors
and Honorable Anthony Parker, President Albany Technical Institute
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 F) of Albany Technical Institute as ofand 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. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation ofthe management of Albany Technical Institute.
A review consists principally of inquiries of Institute personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, with the exception ofthe matter described in the following paragraph, 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 the basis of accounting described in Note 1.
As more fully discussed in Section II, Findings and Improper or Questioned Costs, material discrepancies were noted in the equipment inven~ory records of Albany Technical Institute. Equipment inventory comprises the General Fixed Assets Account Group. We were unable to determine the effects these discrepancies may have on the financial statements.

96ARL-5T

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 the basis of accounting described in Note 1. The accompanying supplementary information (Exhibits G through J and Schedules 1 through 3) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review ofthe financial statements, and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm 96ARL-5T

FINANCIAL STATEMENTS - 1-

ALBANY TECHNICAl. INSTITUTE coMBlNEP BALANCE SHEET (STATUTORY BASIS>
ALL FUND TYPES ANPACCQUNT GROUPS
JUNE 30, 1996

EXHIBIT "A"

MEI
Cash and Cash Equivalents
Accounts ReceivlIbie State Funds Fedenli Financilll Assistance Other
Inventories
Fixed Assets Equipment
Amounts to be Provided for Payment of; Accrued Compensatsd Absenc:es Capital L.... Commitments

GOVERNMENTAl.. FIDUCIARY

FUND TYPE FUND TYPE

BUDGET

AGENCY

ACCOUNT GROUPS

GENERAl.. GENERAl..

FIXED

LONG-TERM

ASSETS

DEBT

TOTAlS (Memorandum Only) JUNE 30,1996 JUNE 30,1995

$

750,769,33 $ 158,720,75

$ 909,490,08 $ 854,367,62

$

<490.760.25

204,915.43 $ 13,227.00

375,162.99 10,996.57

$ 1,070,838.67 $ 24,223,57

$

218,568,14

$ 490.760.25 $ 218,142.43 388,159.56
$ 1,095,062,24 $
$ 218,568.14 $

8,870.40 103.500.18 131,353,42
241,724,00
170.703.73

$ 3,045.912,96

$ 3,045.912,96 $ 1,840,070,05

$ 362,433,62 $ 53.119,38
$ 415,553.00 $

362,433.62 $ 53,119.38
415,553.00 $

313.668.45 76,n3,48
390,391,93

TobIl Assets

$ 2,040,176,14 $ 182,944.32 $ 3,045,912.96 $ 415,553.00 $ 5,684,586.42 $ 3,297,257.33

L!AB!L!DES ANp FUND EQUITY

Liabililies

Accounts Payable

$

Salaries Payable

Deferred Revenue

Tuition and Fees

Funds Held in Custody for Olhers

Compensatsd Absences

Capital Leases

TobIl Liabilities

$

Fund Equity

Investment in General FIXed Assets

Fund Balance

Reserved

Federal Financial Assistance

For Refund to Georgia Department

of Technical and Adult Education -

Administrative Central Office

$

For Expired Grant Balances

For Other

Flood Recovery Insurance Proceeds

Inventories

Live Work Projects

Matching Funds for Fedenli Grant

Prior Year Local Funds

Private Grants

Unreserved

Designatsd

Surplus

Regular

Lottery for Education

TobIl Fund Equity

$

1,353,736.28 56,388,91 3,912.00 $ 182,944.32
1,414,015.19 $ 182,944,32

$ 1,353,736.28 $ 56,366.91

$ 362,433.62 53.119,38

3,912.00 182,944.32 362,433,62 53,119,38

$ 415,553.00 $ 2,012,512.51 $

397,061.23 15,928,50
10,461.00 144,769,31 313,668,45 76,n3,48.
958,611.97

$ 3,045,912.96

$ 3,045,912.96 $ 1,840,070.05

0,00 1,040.24 22,690.46
11,75 121,696,44
22,679,41 12,217,90 408,375.23 29,531,99
7,917.53 0.00
626,160.95

$ 3,045,912,96

0.00 1,040.24 22,690.46
11.75 121,696,44 22,679,41
12,217.90 408,375.23
29,531,99

129.67 458,80 3,327.70 18,203,44 121,696,44 98,921,47
0.00 398,870,59
0,00

7,917,53 0,00

56,706.20 261,00

$ 3,672,073,91 $ 2,338,645.36

TobIl Liabilities and Fund Equity

$ 2,040,176.14 $ 182,944,32 $ 3,045,912.96 $ 415,553.00 $ 5,684,586.42 $ 3,297,257,33

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

ALBANY TECHNICAL INSTITUTE STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30, 1996

EXHIBIT"B"

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement. -3-

ALBANY TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1996

EXHIBITC

FUNDS AVAILABLE
REVENUES
STATE FUNDS Allotment from Georgia Department of Technical and Adult Education - Administrative Central Office
FEDERAL REVENUES (See Schedule)
OTHER REVENUES RETAINED Allotments from Georgia Department of Technical and Adult Education - Administrative Central Office Construction Reserve Trust Fund PEACH Project Compensation for Loss of Assets Contracts City of Albany Department of Community and Economic Development Job Training and Life Management Program Georgia Building Authority ADA Renovation Projects Georgia Department of Administrative Services GSAMS Network Projects Georgia Department of Education Model TechnoJogy Schools Project . Pre-Kindergarten Program Georgia Department of Human Resources PEACH Project Fees Application Insurance Registration/Continuing Education Returned Check Testing Other Interest Earned Sales and Services (Net) Tuition Other Sources
Total Other Revenues Retained
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Federal Financial Assistance Flood Recovery Insurance Proceeds Live Work Projects Prior Year Local Funds Private Grants
Total Carry-Over from Prior Year
Total Funds Available
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.
-4-

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995

$ 5,802,345.81$ 5,048,962.47 $ 928,663,61 $ 858,569,48

$ 200,765.45 $

0.00

23,350.97

0.00

287,782.65

661,492,20

29,150.00

0,00

39,005,00

18,612.68

5,000.00

0.00

197,090,82 68,449,07

0,00 119,432,88

12,217.90

0.00

28,950,00 13,443.13 464,438.30
1,512,50 14,833.38 62,879,44 23,743.09 267,744,99 1,340,895,86
1,087,49

23,100.00 5,999.00 434,178.09
905,00
10,825,00 1,076,20
21,706,35 145,303,28 987,250,00
9,196.49

$ 3,082,340.04 $ 2,439,077,17

$ 9,813,349,46 $ 8,346,609.12

$

3,327.70 $

24,863.29

18,203,44

0.00

98,921,47

88,684.29

398,870.59

393,342~71

0.00

15,00

$ 519,323,20 $ 506,905.29

$ 10,332,672.66 $ 8,853,514.41

ALBANY TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30,1996

EXHIBITC

EXPENDITURES
PERSONAL SERVICES-INSTITUTIONS
Salaries and Wages Employer's Contributions for:
F,I.CA Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance
OPERATING EXPENSES-INSTITUTIONS
Other Costs Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Publications and Printing
Travel Motor Vehicle Purchases Equipment
EqUipment Purchases LeaselPurchase of Equipment Rental of Equipment Computer Charges Software Equipment
Equipment Purchases Real Estate Rentals Telecommunications Per Diem, Fees and Contracts
.Per Diem and Fees Contracts
qUICK START PROGRAM
Personal Services Salaries and Wages Employer's Contributions for: F,I.C,A, Retirement Health Insurance
Other Costs Supplies and Materials Repairs and Maintenance Other Operating Expenses
Travel Per Diem, Fees and Contracts
Per Diem and Fees
See Independent Accountanfs Combined Report on Review of Financial Statements
and Supplementary Information,
The notes to the financial statements are an integral part of this statement.
-5-

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995

$ 4,912,131.74 $ 4,358,861.69

96,799.76 514,734.54 543,818.07
26,312.00 2,350.00
38,457.00

85,627.61 470,490.31 496,056.16
24,054.00 1,719.00
29,562.00

$ 6,134,603.11 $ 5,466,370.n

$

14,570.87 $

9,868.55

521,429.81

536,522.07

3n,932.40

554,035.51

253,242.61

216,326.92

65.98

104,57

11,329.30

8,698.79

300,792.08

268,312.23

1,916.20

1,272.65

47,341.04

31,750.44

155,702.25

0.00

997,912.22 42,840.18 580.89

310,227.05 43,886.57 3,644.38

84,300.98

73,540.08

0.00 12,280.00 61,146.65

125,683.43 15,356.00 61,987.90

149,683.75 51,176.25

321,426.34 37,118.25

$ 3,079,243.46 $ 2,619,761.73

$

59,805.84 $

14,496.00

630.56
7,254.08 7,701.91

184.68 1,711,92 1,812.00

4,798.22 0.00
193.20 785.06

7,394.04 708.34
1,689.72 934.49

7,an.37

66,323.96

$

89,046.24 $

95,255.15

ALBANY TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30.1996

EXHIBITC

EXPENDITURES
JOB TRAINING PARTNERSHIP ACT
Personal Services
Salaries and Wages
Employer's Contributions for: F.I.CA Health Insurance
Other Costs Supplies and Materials Other Operating Expenses
EQUIPMENT-TECHNICAL INSTITUTES
Equipment Equipment Purchases
REPAIRS AND RENOVATIONS
Other Costs
Other Operating Expenses
Per Diem, Fees and Contracts
Contracts
Talai Expenditures
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995

$

36,824.32 $

33,605.90

534.01 0.00

464.07 12.35

47.40 1,203.00

189.46 890.00

$

38,608.73 $

35,161.78

$ 293,209.24 $

83,000.00

$

765.45 $

0.00

200,000.00

0.00

$ 200,765.45 $

0.00

$ 9,835,476.23 $ 8,299,549.43

497,196.43

553,964.98

$ 10,332,672.66 $ 8.853,514.41

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

ALBANY TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30,1996

EXHIBIT"D"

FUNDS AVAILABLE REVENUES
State Funds Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 5,509,146,00 $ 5,509,136.57 $

1,198,717.00

928,663.61

3,589,038.00

2,881,574.59

$ 10,296,901.00 $ 9,319,374,77 $

-9.43 -270,053.39 -707,463,41
-977,526.23

10,000.00

519,323.20

509,323.20

$ 10,306,901,00 $ 9,838,697.97 $ _ _-4.....;..;...68;;..:;,2;;;.;;0....;;.,3.;..;.,03~

EXPENDITURES
Personal Services-Institutions Operating Expenses-Institutions Quick Start Program Job Training Partnership Act

$ 6,259,180.00 $ 6,134,603.11 $

3,579,761,00

3,079,243,46

89,537.00

89,046.24

378,423.00

38,608.73

124,576.89 500,517,54
490.76 339,814,27

Excess of Funds Available over Expenditures

$ 10,306,901.00 $ 9,341,501.54 $ - - - -96-5',3-99-.4-6
$ 497,196.43 $ ===4:::97=,1=9=6.=43=

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.
-7-

ALBANY TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 1996

EXHIBIT"E"

FUNDS AVAILABLE
REVENUES
State Funds Other Revenues Retained

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 293,210.00 $ 293,209.24 $

200,766.00

200,765,45

-0.76 -0.55

$ 493,976,00 $ 493,974.69 $

---.;-1.;..;.3~1

EXPENDITURES
Equipment-Technical Institutes Repairs and Renovations

$ 293,210,00 $ 293,209,24 $

0,76

200,766,00

200,765.45

0.55

Excess of Funds Available over Expenditures

$ 493,976,00 $ 493,974,69 $

$

0,00 $

~1.~3~1
=0,:=00=

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.
-8-

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXlDBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Albany Technical Institute is one of twenty-nine (29) State supported member institutes of postsecondary education in Georgia which comprise the Georgia Department of Technical and Adult Education, an organizational unit ofthe State ofGeorgia. The accompanying financial statements reflect the operations of Albany Technical Institute as a separate reporting entity.
The Institute's Local Board ofDirectors is composed of nine (9) members serving staggered three-year terms who are appointed by the State Board of Technical and Adult Education. Appropriation of State funds is made to the Georgia Department ofTechnical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount of State funds to be received by Albany Technical Institute. The Institute does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Albany Technical Institute is considered an organizational unit ofthe Georgia Department ofTechnical and Adult Education for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 ofthe Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING Albany Technical Institute uses funds and account groups to report on its financial position and the results of its operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds.
Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1995-1996. This fund also includes operations from various institutional services provided to students, faculty, and/or statTwhich are funded by fees charged to participants that are directly related to, but not necessarily equal to, the cost of service. The Budget Fund is similar in nature to a General Fund as defined in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
FIDUCIARY FUND TYPE
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
-9-

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 3D. 1996

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental . fund type operations. Fixed assets purchased are recorded at cost or at estimated historical cost if historical . cost is not practically determinable. 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 general fixed assets.
The cost of normal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life ofthe assets are included in the General Fixed Assets Account Group.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmentallong-tenn liabilities, such as claims, judgments, and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources. In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, the Budget Fund returns its unreserved ~d balance (surplus) to the Administrative Central Office ofthe Department ofTechnical and Adult Education for remittance to the Office ofTreasury and Fiscal Services in the subsequent fiscal year.
GOVERNMENTAL FUND TYPE BUDGET FUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (Le., when they are "measurable and available"). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. Revenues that are accrued include primarily State funds, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

- 10-

ALBANY TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGETFUND
Contractual obligations for goods and services which have not been received at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion ofcontracts for goods and services. The recognition ofencumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances 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.
Contractual terms ofcertain Federal grant agreements received by the Institute for vocational training services require that grant funds earned be recorded as Federal revenues rather than as revenues from tuition and fees. Accordingly, it is the Institute's policy to record certain Federal grant funds as Federal revenues and also as other revenues retained with offsetting expenditures for student expenses charged to the other operating expenses expenditure account. This accounting policy results in an overstatement of both revenues and expenditures in the financial statements for such Federal grants. This policy is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but is not consistent with generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balance of the Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
FIDUCIARY FUND TYPE AGENCY FUNDS
Agency Funds are custodial in nature and do not measure results of operations or have a measurement focus. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.
BUDGET The Georgia Department of Technical and Adult Education - Administrative Central Office receives State appropriation allotments and certain Federal funds for the various technical institutes throughout the State. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 1995-1996. The budget allocation and disbursement ofthese funds is made to the various technical institutes by the Administrative Central Office. In addition, the technical institutes receive certain Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office.

- 11 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand and demand deposits with banks and other authorized financial institutions.
ACCOUNTS RECEIVABLE Accounts receivable consist of allotments due from the Georgia Department of Technical and Adult Education - Administrative Central Office, reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available.
INVENTORIES Expendable supplies are recorded as expenditures at the time of purchase and are not reflected on the Combined Balance Sheet (Statutory Basis).
Inventories of goods for resale are recorded as assets at cost at the time of purchase. The Institute uses the first-in, first-out method in costing-out inventories based on sales.
RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:
FEDERAL FINANCIAL ASSISTANCE EXPIRED GRANT BALANCES
Expired grant balances represent the unexpended balance ofFederal financial assistance, other than through the Georgia Department ofTechnical and Adult Education .. Administrative Central Office, remaining after the expiration ofthe Federal program/project. This amount is refundable to the applicable grantor.
OTHER The residual portion ofFederal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from generally accepted accounting principles in that the unearned portion of Federal financial assistance should be reflected as deferred revenue.
FLOOD RECOVERY INSURANCE PROCEEDS The unexpended balance of insurance proceeds received from the State of Georgia Department of Administrative Services Risk Management Services which is restricted for expenditure in future years for the specific purpose offlood loss recovery.

- 12-

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESE. RVED FUND BALANCE
INVENTORIES
Reported inventories (resale), under ~e consumption method, are offset by a portion of State funds reserved to provide working capital for managing a reasonable level ofinventories for resale.
LIVE WORK PROJECTS
In accordance with the Official Code of Georgia Annotated Section 20-4-14(c), the accumulated balance ofunexpended funds derived from student live work projects. This amount is restricted to expenditures for live work projects or for the benefit ofinstructional programs at the technical institute in subsequent fiscal years.
MATCHING FUNDS FOR FEDERAL GRANT
The unexpended balance ofmatching funds required by Federal grantor provisions under aU. S. Department ofHealth and Human Services grant for the PEACH Project.
PRIOR YEAR LOCAL FUNDS
Effective July 1, 1988, Albany Technical Institute became a part of the Georgia Department of Technical and Adult Education. The Official Code of Georgia Annotated Section 20-4-23 provides the Institute may retain for future operations"...any unexpended nonstate funds that have been collected by, appropriated for, or otherwise earmarked for use by said postsecondary technical school operated by a local board of education or an area board...". These unexpended local funds are available for use in subsequent fiscal years.
PRIVATE GRANTS
The unexpended balance ofprivate grants which is restricted for expenditure in future years for the specific purposes as designated by the grantors.
UNRESERVED FUND BALANCE
In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund's unreserved fund balance is returned to the Georgia Department ofTechnical and Adult Education - Administrative Central Office for remittance to the Office ofTreasury and Fiscal Services in the subsequent fiscal year as surplus, as follows:
REGULAR - An amount ofunexpended ,regular appropriations designated for reappropriation by the State in subsequent years.

- 13 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPENSATED ABSENCES Compensated absences represent obligations of the Institute relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual and compensatory leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the Budget Fund for the current portion ofthis obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the allotment of State funds each year to the Institute to cover the cost ofannual leave paid to terminated employees.

The liability for compensated absences at year-end is reported in the General Long-Term Debt Account Group for governmental funds.

MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) 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 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.

COMPARATIVE DATA Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding ofthe changes in the Institute's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding ofthe Institute's financial position and operations or would cause the statements to be unduly complex and difficult to understand.

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:

(l) 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 of the 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 of the bonds for this purpose.

- 14 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

EXHIBIT "F"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

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

(5) Bonds, bills, certificates ofindebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.

As authorized in the Official Code ofGeorgia Annotated Section 50-17-53, the State Depository Board has adopted policieS which allow agencies ofthe State of Georgia (which include technical institutes) the option of exempting demand deposits from the collateral requirements.

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as ofJune 30, 1996, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:

Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Institute or by its agent in the Institute's name.

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

Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution, or by its trust department or agent but not in the Institute's name, and amounts uncollateralized.

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

S 909 190 08 S 1 498878 14 S 228 13338 S 1270 744.76 S'====O!!.!lQQ~

- 15 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "F"

NOTE 3: OPERATING LEASES

Albany Technical Institute has entered into a certain agreement to lease motor vehicles which is classified as an operating lease (lease on assets not recorded on the balance sheet). This lease generally contains provisions that, at the expiration date ofthe original term ofthe lease, the Institute has the option ofrenewing the lease on a year-to-year basis. The future minimum lease payment for the operating lease as of June 30, 1996, is listed below. The amount is only for a cancellable lease for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1997

$ 10.200.00

NOTE 4: CAPITAL LEASES

Albany Technical Institute acquires certain equipment through multi-year capital leases with varying terms and options. These agreements contain fiscal funding clauses in accordance with Official Code of Georgia Annotated Section 50-5-64 which prohibits the creation ofa debt to the State ofGeorgia for the payment of any sums under such agreements beyond the fiscal year of execution ifappropriated funds are not available. Ifrenewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

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

Fiscal Year Ending June 30
1997 1998 1999 2000 Total Future Minimum Lease Payments Less: Amounts Representing Interest Present Value of Future Minimum Lease Payments

$ 43,153.20 6,542.13 5,784.48 482.04
$ 55,961.85 2.842.47
$ 53,11938

NOTE 5: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in Official Code of Georgia Annotated Section 50-16-161, only those items with an acquisition cost of$I,OOO.OO.or greater are reflected in the General Fixed Assets Account Group.

- 16-

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXlDBIT"F"

NOTE 5: CHANGES IN GENERAL FIXED ASSETS

The following is a swnnwy ofchanges ofequipment for the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1995 Additions Deductions Balance June 30, 1996

$ 1,640,070.05 1,926,194.15 520,351.24
$ 3,045,912.96

NOTE 6: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1996, follows:

Compensated Absences

Balance July 1, 1995

$ 313,668.45

Additions Annual Leave Earned and Utilized (Net) Salaries and Wages Salary-Related Fringe Benefits Current Year Leases
Deductions

47,809.15 956.02

Balance June 30, 1996

$ 362.433,62

Capital Leases $ 76,723.48

$ 390,391.93

15,611.57 39,215,67 $ 53,119.38

47,809.15 956.02
15,611.57 39,215,67 $ 415,553,00

NOTE 7: RISK MANAGEMENT

Public Entity Risk Pool The State Personnel Board - Merit System of Personnel Administration administers for the State of Georgia a program ofhealth benefits for the employees ofunits ofgovernment of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia, This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel Board - Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board.

Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks 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

- 17 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "Fit

NOTE 7: RISK MANAGEMENT
Other Risk Management law enforcement officers' indemnification. Limited amounts ofcommercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Institute, as an organizational unit of the Georgia Department of Technical and Adult Education, 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.
NOTE 8: 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, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participant's 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 of 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 9: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Albany Technical Institute participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing 'multiple-employer public employee retirement system (PERS) established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by TRS was $3,848,874.38. The Institute's total payroll for all employees was $5,008,761.90.
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 of creditable service and is at least 55 years
- 18 -

ALBANY TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "Fit

NOTE 9: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Benefits 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 101c 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 ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date of death or up to the time of disability.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
Contributions Required and Contributions Made Employees of the Institute who are covered by TRS are required to pay 5%' oftheir gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1996, the employer contribution rate was 11.81% for covered employees. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions to the plan made during fiscal year 1996 amounted to $646,995.61, of which $454,552.10 was made by the Institute and $192,443.51 was made by employees. These contributions represented 11.81% (Institute) and 5% (employees) of covered payroll.
Funding Status and Progress Pension Benefit Obligation
The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No.5 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 of the 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.

- 19 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "F"

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

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

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585.541.000.00

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

Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1996, were $607,274,559.00. The Institute's contribution for the year ended June 30, 1996, of $454,552.10 was actuarially determined and represented .07490!cl 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 ofthe progress made in accumulating sufficient assets to pay benefits when due.

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description Albany Technical Institute participates in the Employees' Retirement System of Georgia (ERS), a singleemployer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by ERS was $425,601.87. The Institute's total payroll for all employees was $5,008,761.90.

Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July I, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.

- 20-

ALBANY TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,1996

EXHIBIT "F"

NOTE 9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Benefits Under both the old plan and new plan, members become vested after 10 years ofcreditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with
areduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service
regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Contributions Required and Contributions Made As established by State statute, all full-time employees ofthe State ofGeorgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute.
Member contributions consist solely of 1.25% of compensation paid by employee. The Institute also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 1996, the ERS employer contribution rate for the Institute amounted to 14.890!cI of covered payroll. The employer contributions are projected to liquidate the unfunded actuarial liability within 20 years based upon the actuarial valuation ofJune 30, 1995. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Actuarial assumptions used by the ERS to compute actuarially determined contribution requirements are the same as those used to compute the pension benefit obligation.
Total contributions to the plan made during fiscal year 1996 amounted to $68,692.89, of which $63,372.11 was made by the Institute and $5,320.78 was made by employees. These contributions met the requirements of the plan.
Funding Status and Progress Funding status and progress information is presented in the ERS June 30, 1996, financial report which may be obtained through ERS.

- 21 -

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "F"

NOTE 9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Trend Information Historical trend information is presented in. the ERS June 30, 1996, financial report which may be obtained through ERS. This information gives an indication ofthe progress made in accumulating sufficient assets to pay benefits when due.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Albany Technical Institute participates in the Georgia Defined Contribution Plan (GDCP) which is a singieemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees ofthe Employees' Retirement System of Georgia. The Institute's payroll for the year ended June 30, 1996, for employees covered by GDCP was $508,711.93. The Institute's total payroll for all employees was $5,008,761.90.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $ 3,500.00 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu 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 $38,153.90 which represents 7.50% of covered payroll. These contributions met the requirements ofthe plan.
NOTE 10: LEAVB POLICIES
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1- Compensated Absences
- 22-

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "F"

NOTE I0: LEAVE POLICIES
Employees earn one and one-quarter days of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE II : NONMONETARY TRANSACTIONS
The Georgia Department of Technical and Adult Education - Administrative Central Office used lottery proceeds to purchase $236,914.00 of equipment for Albany Technical Institute during the fiscal year ended June 30, 1996. Those items with an acquisition cost of$I,OOO.OO or greater will be reflected as received in the General Fixed Assets Account Group in the accompanying financial statements. However, revenues and expenditures for these lottery proceeds are not reflected in these financial statements.
The Georgia State FinanCing and Investment Commission (GSFIC), a unit of State government, is responsible for the issuance of state debt and for the investment and accounting for proceeds derived from the issuance of state debt. In addition, GSFIC is authorized to acquire and construct projects for the benefit of units of State government or to contract with units of State government for the construction or acquisition ofcapital outlay projects. During the fiscal year ended June 30, 1996, the Georgia State Financing and Investment Commission paid $3,446,249.66 to various vendors for approved projects for the benefit of Albany Technical Institute.
NOTE 12: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institute expects such amounts, ifany, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Albany Technical Institute (as an organizational unit of the Department ofTechnical and Adult Education), ifany, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State ofGeorgia are disclosed in the State ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 13: SIGNIFICANT TRANSACTIONS
Albany Technical Institute sustained flood damage to part of its campus during July 1994. The Institute has recovered $949,274.85 in insurance proceeds from the State of Georgia Department of Administrative Services Risk Management Services as ofJune 30, 1996; however, the total loss incurred by the Institute could not be ascertained as of the date ofthis report, but is believed to be material to the financial statements.
- 23-

ALBANY TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "FH

NOTE 14: BONDING INFORMATION
The President and all employees ofAlbany Technical Institute 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 I, 1996. Under this agreement, the public employee dishonesty coverage insures Albany Technical Institute to a maximum of$1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance of duty coverage insures the Institute to a maximum of $1,000,000.00 against loss sustained from failure of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.
All employees ofAlbany Technical Institute are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626011675 2 and 626 012294 4, on which the premiums were paid to October I, 1996. Under these additional public employee dishonesty coverages, the policies insure the Institute 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.

- 24-

SUPPLEMENTARY INFORMAnON - 25 -

ALBANY TECHNICAL INSTITUTE COMBINING BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30,1996

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
State Funds Federal Financial Assistance other
Inventories

"A"
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

"8"
LOTTERY FOR EDUCATION

TOTAL

$

739,652.77 $

11,116,56 $ 750,769.33

$

208,667.57 $ 282,092,68 $ 490,760.25

204,915.43

204,915.43

375,162.99

375,162.99

$

788,745.99 $ 282,092,68 $ 1,070,838.67

$

218,568.14

$ 218,568.14

Total Assets

$

1,746,966.90 $ 293,209.24 $ 2,040,176.14

LIABILITIES AND FUND EQUITY
Liabilities Accounts Payable Salaries Payable Deferred Revenue Tuition and Fees
Total Liabilities
Fund Equity Fund Balance Reserved Federal Financial Assistance For Expired Grant Balances For other Flood Recovery Insurance Proceeds Inventories Live Work Projects Matching Funds for Federal Grant Prior Year Local Funds Private Grants Unreserved Designated Surplus Regular Lottery for Education
Total Fund Equity

$

1,060,527.04 $ 293,209.24 $ 1,353,736.28

56,366.91

56,366.91

3,912.00

3,912.00

$

1,120,805.95 $ 293,209.24 $ 1,414,015.19

$

1,040.24

22,690.46

11.75

121,696.44

22,679.41

12,217.90

408,375.23

29,531.99

7,917.53 $

$

626,160.95 $

$

1,040,24

22,690.46

11.75

121,696.44

22,679.41

12,217.90

408,375.23

29,531.99

0.00 0.00 $

7,917.53 0.00
626,160.95

Total Liabilities and Fund Equity

$

1,746,966.90 $

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

293,209.24 $ 2,040,176.14

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

ALBANY TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDEp JUNE 30, 1996

EXHIBIT-r

FUNDS AVAILABLE
REVENUES
STATE FUNDS Allotment from Georgia Department of Technical and Adult Education Administrative Central Office
FEDERAL REVENUES
OTHER REVENUES RETAINED Allotments from Georgia Department of Technical and Adult Education - Administrative Central Office Construction Reserve Trust Fund PEACH Project Compensation for Loss of Assets Contracts City of Albany Department of Community and Economic Development Job Training and Life Management Program Georgia Building Authority ADA Renovation Projects Georgia Department of Administrative Services GSAMS Network Projects Georgia Department of Education Model Technology Schools Project Pre-Kindergarten Program Georgia Department of Human Resources PEACH Project Fees Application Insurance Registration/Continuing Education Returned Check Testing Other Interest Earned Sales and Services (Net) Tuition Other Sources
Total Other Revenues Retained
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Federal Financial Assistance Flood Recovery Insurance Proceeds Live W.ork Projects Prior Year Local Funds
Total Carry-Over from Prior Year

-AW
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

-Bw
LOTIERYFOR EDUCATION

TOTAL

$

5,509,136,57 $ 293,209,24 $ 5,802,345,81

$

928,663.61

$ 928,663.61

$ 200,765.45 $ 200,765.45

$

23,350.97

23,350.97

287,782,65

287,782.65

29,150,00

29,150.00

39,005,00

39,005.00

5,000.00

5,000,00

197,090,82 68,449.07

197,090.82 68,449.07

12,217.90

12,217.90

28,950.00 13,443.13 464,438.30 1,512.50 14,833.38 62,879.44 23,743,09 267,744.99 1,340,895.86 1,087.49

28,950.00 13,443.13 464,438,30
1,512.50 14,833,38 62,879.44 23,743.09 267,744.99 1,340,895.86 1,087.49

$

2,881,574.59 $ 200,765.45 $ 3,082,340.04-

$ 9,319,374,n $ 493,974.69 $ 9,813,349.46

$

3,327.70

18,203.44

98;921.47

398,870.59

$

519,323.20

$

3,327,70

18,203.44

98,921.47

398,870.59

$ 519,323.20

Total Funds Available

$

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

- 28 -

9,838,697.97 $ 493,974.69 $ 10,332,672.66

ALBANY TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1996

ALBANY TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1996

EXHIBIT-r

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

ALBANY TECHNICAL INSTITUTE

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

.

FlpUCIARY FUND TYPE - AGENCY FUNPS

YEAR ENDED JUNE 30, 1996

EXHIBIT-J-

.F-U-N-D-
General Scholarship Fund HOPE Scholarship Program Pell Grant Program Student Activities Fund Student Government

ASSETSI LIABILITIES JULY 1,1995

ADDITIONS

DEDUCTIONS

ASSETSI LIABILITIES JUNE 30,1996

$

59,425,81 $

1,816.00 $

2,595.00 $

58,646.81

0.00

1,359,466.89

1,358,926.89

540,00

1,950.30

862,018.00

863,672.88

295,42

55,260.53

98.260.93

50,524.44

102,997.02

28,132,67

15,231,65

22,899,25

20,465,07

$ 144.769.31 $ 2,336.793.47 $ 2,298,618.46 $ 182,944,32

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
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ALBANY TECHNICAL INSTITUTE
.CASH ANp CASH EQUIVALENTS
JUNE 30,1996
NONINTEREST BEARING ACCOUNTS
First State Bank and Trust Company, Albany, Georgia
INTEREST BEARING ACCOUNTS
DOCO School Employees Federal Credit Union, Albany, Georgia
Shares Account
First State Bank and Trust Company, Albany, Georgia
N,O.W. Accounts
SunTrust Bank of South Georgia, N. A., Albany, Georgia
Money Market Account
OTHER
Cash on Hand Petty Cash

SCHEDULE -1-

$

-7,&40.58

21,664.58 537,&40.49 357,525.59
300.00 $ 909,490.08

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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ALBANY TECHNICAL INSTITUTE
SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30. 1996
BUDGET FUND
Agricu~e,U.S.Departmemof
Child and Adult Care Food Program Through Georgia Department of Education
Ed~on,U.S.Departmemof
Vocational Ed~on - Basic Grants to States Through Georgia Departmem of Technical and Adult Ed~on - Administrative Central Office
Vocational Ed~on - Consumer and Homemaking Ed~on Through Georgia Departmem of Technical and Adult Ed~on - Administrative Central Office
Tech-Prep Ed~on Through Randolph County Board of Education
Energy, U. S. Departmem of Energy Conservation for Institutional Buildings Direct
Federal Emergency Managemem Agency Disaster Assistance Through Georgia Oepartmem of Technical and Adult Education - Administrative Central Office
Health and Human Services, U. S. Departmem of Child Care and Developmem Block Gram Through Georgia Departmem of Human Resources
Grants to States to Planning and Developmem of
Dependem Care Programs Through Georgia Departmem of Human Resources Dougherty County Departmem of Family and Children Services
Job Opportunities and Basic Skills Training Through Georgia Department of Human Resources Dougherty County Departmem of Family and Children Services Through Georgia Departmem of Technical and Adult E~on - Administrative Central Office
Pre-K Child Care Assistance Through Georgia Departmem of Human Resources Dougherty County Departmem of Family and Children Services
labor, U. S, Departmem of Job Training Partnership Act Through Georgia Department of Technical and Adult Education - Administrative Central Office Through Southwest Georgia Regional Oevelopmem Cemer
See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
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SCHEDULE "2"

CFDA NUMBER

AMOUNT

10.558

$

21,056.66

84.048 84.049 84.243 81.052

515,568.78 35,016.59 20,741.76 6,835.00

83.516 93.575

542.00 2,167.91

93.673

15,000.04

93.561 93.561

19,850.10 38,473.17

93.0FA

9,355.00

17.250 17.250

38,608.73 205,447.87

$ 928,663.61

ALBANY TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL
YEAR ENDED JUNE 30, 1996

SCHEDULE "3-

Totals per Annual Supplement
Accruals June 30,1996 June 30, 1995
Adjustment Najjar, Joseph
Totals per Report
SUMMARY BY OBJECT CLASS
BUDGET FUND Personal Services-Institutions Operating Expenses-Institutions Quick Start Program Job Training Partnership Act

SALARIES AND WAGES
$ 4,967,803.49 $

TRAVEL 46,676.24

56,366,91 -15,928,50

1,449,86

520.00

$ 5,008,761,90 $ =====4=8,,,,,,,,126=:=.1=0

$ 4,912,131.74
$ 59,805.84 36,824,32

47,341,04 785.06

$ 5,008.761,90 $ =====4=8,,,,,,,,12=:6=,1=0

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information,
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SECTIONll FINDINGS AND IMPROPER OR QUESTIONED COSTS

ALBANY TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30, 1996

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR OUESTIONED COSTS

The status offindings disclosed in the review report for the year ended June 30, 1995, is summarized below:

Audit Control Numbers

Status ofFindings

820-94-07 820-95-01 820-95-02 820-95-03 820-95-04 820-95-05 820-95-06 820-95-07 820-95-08 820-95-09

No Corrective Action Implemented Corrective Action Implemented See Audit Control Number 820-96-01 Corrective Action Implemented See Audit Control Number 820-96-02 See Audit Control Number 820-96-03 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

INVENTORIES Inadequate Resale Inventory Records Financial Statements Audit Control Number 820-96-01

The review report for the year ended June 30, 1995, disclosed that the Institute's internal accounting procedures relating to the costing of resale inventories were deficient. For the year under review, some improvements were noted; however, tests revealed that inventory was not properly updated for new costs when items were purchased.

This condition occurred because management failed to adequately monitor activity for the resale inventory records. The Institute should implement appropriate procedures to ensure that the resale inventory system is updated for new costs when items are purchased.

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - ~Federal Financial Assistance Inadequate Equipment Inventory Records Vocational Education - Basic Grants to States (CFDA 84.048) Audit Control Number 820-96-02

The review report for the year ended June 30, 1995, disclosed that the equipment inventory records for Albany Technical Institute's general fixed assets were deficient. For the year under review, tests revealed that the equipment inventory records continued to be materially deficient as follows:

(1) Equipment inventory records were not updated for all current year additions.

-I-

ALBANY TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30. 1996

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADJ\.1INISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Equipment Inventory Records Vocational Education - Basic Grants to States (CFDA 84.048) Audit Control Number 820-96-02

(2) A sample oftwenty equipment items selected from the subsidiary equipment inventory records for physical examination disclosed two missing items.

(3) Capital leases of equipment were not properly recorded in the equipment inventory records.

These deficienciesoccurred due to management's failure to ensure that equipment inventory records were properly updated. The Institute should establish the necessary controls to ensure that equipment inventories are maintained in accordance with provisions ofFederal Regulations and the State Property System Manual.

FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 820-96-03

The review reports for the years ended June 30, 1994, and June 30, 1995, disclosed that the Federal Cash Transaction Report - Status of Federal Cash submitted by the Albany Technical Institute to the
U. S. Department ofEducation reflected differences of$11,348.82 and $203.20 respectively, between reported
"cash on hand end of period" and ending cash per the Institute's accounting records.

For the year under review, "cash on hand end of period" reported on the Institute's final monthly fiscal year
1996 Federal Cash Transaction Report - Status of Federal Cash to the U. S. Department of Education again
could not be reconciled to the accounting records as indicated below:

Report Date

Cash on Hand End ofPeriod Reported on FormPMS 272

Ending Cash per Accounting
Records

Difference

June 30, 1996

$

-962.00 $ -13 056.58 $ 12,09458

This difference occurred due to failure to reconcile records maintained by the Financial Aid Office used to prepare the Federal Cash Transaction Report with those of the formal accounting records maintained in the Business Office.

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ALBANY TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30. 1996 PRIOR YEAR/CURRENT YEAR FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 820-96-03 Procedures should be established to ensure that all Federal Cash Transactions Reports are reconciled to the Institute's formal accounting records, and documentation should be maintained reflecting this reconciliation. The Institute should contact its grantor agency regarding these unreconciled differences.
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