STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS MANAGEMENT REPORT ALBANY TECHNICAL COLLEGE ALBANY# GEORGIA AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA YEAR ENDED JUNE 30, 2008 Russell W. Hinton State Auditor ALBANY TECHNICAL COLLEGE - TABLE OF CONTENTS - SECTION I FINANCIAL LETTER OF TRANSMITTAL SELECTED FINANCIAL INFORMATION EXHIBITS A STATEMENT OF NET ASSETS - (GAAP BASIS) 2 B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS) 3 C STATEMENT OF CASH FLOWS - (GAAP BASIS) 4 D SELECTED FINANCIAL NOTES 5 SUPPLEMENTARY INFORMATION SCHEDULES 1 BALANCE SHEET-(STATUTORY BASIS)-BUDGET FUND 16 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS) BUDGET FUND 17 3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET (STATUTORY BASIS) BUDGET FUND 18 4 RECONCILIATION OF SALARIES AND TRAVEL 21 SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SECTION I FINANCIAL Russell W. Hinton STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 November 25, 2008 Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors and Honorable Anthony Parker, President Albany Technical College Ladies and Gentlemen: As part ofour audit ofthe basic financial statements ofthe State ofGeorgia presented in the State of Georgia Comprehensive Annual Financial Report and the issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2008, we have performed certain audit procedures at Albany Technical College. Accordingly, the financial statements and compliance activities of Albany Technical College were examined to the extent considered necessary in order to express an opinion as to the fair presentation ofthe financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996. This Management Report contains information pertinent to the financial and compliance activities of Albany Technical College as of and for the year ended June 30, 2008. Information contained in this report is a by-product ofour audit ofthe basic financial statements ofthe State ofGeorgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1, is enumerated in the Table of Contents. This report is intended solely for the information and use of management of Albany Technical College, members of the Local Board of Directors, and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ,. ~.~J~~~~ Russell W. Hinton, CPA, CGFM State Auditor RWH:gp SELECTED FINANCIAL INFORMATION - 1- ALBANY TECHNICAL COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS) JUNE 30, 2008 ASSETS Current Assets Accounts Receivable Federal Financial Assistance Other Inventories Total Current Assets Noncurrent Assets Capital Assets, Net Total Assets LIABILITIES Current Liabilities Cash Overdraft Accounts Payable Salaries Payable Deferred Revenue Funds Held for Others Compensated Absences Total Current Liabilities Noncurrent Liabilities Compensated Absences Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Unrestricted Total Net Assets EXHIBIT"A" $ 209,890.49 297,727.13 761,349.21 $ 1,268,966.83 18,166,792.87 $ 19,435,759.70 $ 208,438.11 174,939.29 34,509.80 21,597.85 127,301.52 544,352.90 $ 1,111,139.47 410,652.18 $ 1,521,791.65 $ 18,166,792.87 -252,824.82 $ 17,913,968.05 -2- ALBANY TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS) YEAR ENDED JUNE 30, 2008 EXHIBIT"B" OPERATING REVENUES Student Tuition and Fees Less: Scholarship Allowances Grants and Contracts Federal Rents and Royalties Sales and Services Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Salaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES} State Appropriations Grants and Contracts Federal State Gifts Interest and Other Investment Income Other Nonoperating Revenues Other Nonoperating Expenses Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts State Special Item - Transfer of Capital Asset Increase (Decrease) in Net Assets Net Assets - Beginning of Year Net Assets - End of Year $ 4,554,994.56 -438,964.50 4,675,080.82 11,467.00 591,741.44 -2,240.30 $ 9,392,079.02 $ 9,244,316.14 2,922,533.47 144,579.42 4,073,611.19 803,982.38 3,643,794.71 877,781.90 $ 21,710,599.21 $ -12,318,520.19 $ 9,988,611.00 1,413,044.71 284,752.59 -22,674.96 12,778.31 -8,815.61 -14,353.18 $ 11,653,342.86 $ -665, 177.33 $ 10,876.00 $ -2,811,481.14 $ -3,465, 782.47 21,379,750.52 $ 17,913,968.05 -3- ALBANY TECHNICAL COLLEGE STATEMENT OF CASH FLOWS- (GAAP BASIS) YEAR ENDED JUNE 30, 2008 CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Payments to Scholarships and Fellowships Payments to Suppliers Payments to Employees Other Receipts (Payments) Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Negative Cash Balance Implicitly Financed Other Nonoperating Receipts Net Cash Flows Provided (Used) by Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets Net Cash Provided (Used) by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments Net Increase/Decrease in Cash Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents - End of Year RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities Depreciation Expense Change in Assets and Liabilities: Accounts Receivable Inventories Salaries Payable Accounts Payable Deferred Revenue Compensated Absences Net Cash Provided (Used) by Operating Activities NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts Special Item - Transfer of Capital Asset -4- EXHIBIT"C" $ 4,233,938.40 4,746,137.55 482,199.19 -4,073,611.19 -7,454,916.96 -9, 198,119.29 6 538.97 $ -11,257,833.33 $ 10,048,345.18 -40,078.32 1,732,170.00 -714,036.91 158,190.34 $ 11,184,590.29 $ 468,502.72 -408,037.99 $ 60464.73 $ 12 778.31 $ 0.00 0.00 $ = = = = = 0..0...0.. $ -12,318,520.19 877,781.90 69,070.50 50,330.26 -8,700.56 9,642.76 7,664.59 54 897.41 $ -11,257,833.33 $ ===-.1.1.=5=5=0..,00= $ 2,811,481.14 ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY Albany Technical College is one of thirty-three (33) State supported member colleges of postsecondary education in Georgia which comprise the Georgia Department ofTechnical and Adult Education, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Albany Technical College as a separate reporting entity. The Technical College's Local Board of Directors is composed of thirteen (13) members serving staggered three-year terms who are appointed by the State Board ofTechnical 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 appropriations to be received by Albany Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Albany Technical College is considered an organizational unit of the Georgia Department ofTechnical and Adult Education for financial reporting purposes because of the significance ofits legal, operational, and financial relationships as defined in Section 2100 ofthe Governmental Accounting Standards Board (GASB) Codification ofGovernmental Accounting and Financial Reporting Standards. NET ASSETS The Technical College's net assets are classified as follows: Invested in capital assets, net ofrelated debt: This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. Unrestricted net assets: Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $8,229.17. Unexpended state appropriations must be refunded to the Department of Technical and Adult Education for remittance to the Office of Treasury and Fiscal Services. NOTE 2: DEPOSITS DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu ofa surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: -5- ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT "D" NOTE 2: DEPOSITS DEPOSITS 1. Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia. 2. Bonds, bills, certificates of indebtedness, notes, or other obligations of the 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. 4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. 5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation ofthe United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. 6. Guarantee or insurance ofaccounts provided by the Federal Deposit Insurance Corporation. As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies, which allows agencies of the State of Georgia (and thus Albany Technical College), the option of exempting demand deposits from the collateral requirements. At June 30, 2008, the carrying value of deposits was $-208,838.11 and the bank balance was $1,448,885.69. Of the Technical College's deposits, $1,156,363.83 were uninsured. Of these uninsured deposits, $1,156,363.83 were collateralized with securities held by the financial institution's trust department or agent in the Technical College's name. NOTE 3: ACCOUNTS RECEIVABLE Accounts receivable at June 30, 2008, consists of the following: Student Tuition and Fees Federal, State and Private Funds Georgia State Financing and Investment Commission Other $ 70,323.44 209,890.49 93,017.42 134,386.27 Total Accounts Receivable $ 5072617.62 -6- ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT "D" NOTE4: CAPITALASSETS Following are the changes in capital assets for the year ended June 30, 2008: Balance July 1, 2007 Additions Reductions Balance June 30, 2008 Capital Assets, Not Being Depreciated: Land and Land Improvements $ 1,619,536.07 Construction in Progress 0.00 $ $ 162,531.10 $ 1,457,004.97 11,550.00 11,550.00 $ 1,619,536.07 $ 11,550.00 $ 162,531.10 $ 1,468,554.97 Capital Assets, Being Depreciated: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections $ 23,295,468.55 1,844,159.37 $ 3,012,639.43 298,875.09 $ 186,567.62 202,956.76 18,513.61 3,704,000.00 $ 19,591,468.55 2,030,726.99 242,097.60 2,973,498.59 317,388.70 $ 28,451,142.44 $ 408,037.99 $ 3,946,097.60 $ 24,913,082.83 Less: Accumulated Depreciation: Building and Building Improvements $ 4,544,437.21 $ Improvements Other Than Buildings 1,462,888.28 Equipment 2,320,935.75 Library Collections 134,432.52 565,162.00 $ 53,970.27 226,910.76 31,738.87 892,518.86 $ 233,111.87 4,217,080.35 1,516,858.55 2,314,734.64 166,171.39 $ 8,462,693.76 $ 877,781.90 $ 1,125,630.73 $ 8,214,844.93 Total Capital Assets, Being Depreciated, Net $ 19,988,448.68 $ -469,743.91 $ 2,820,466.87 $ 16,698,237.90 Capital Assets, Net $ 21 607 984 75 $ -458.193.91 $ 2.982.997 97 $ 18.166.792,87 NOTE 5: DEFERRED REVENUE Deferred revenue at June 30, 2008, consists of the following: Prepaid Tuition and Fees Federal Grants and Contracts $ 9,674.00 11,923.85 Totals $ 21,597.85 NOTE 6: LONG-TERM LIABILITIES Long-Term liability activity for the year ended June 30, 2008 was as follows: Other Liabilities Compensated Absences Balance July 1, 2007 Additions Reductions Balance June 30, 2008 Current Portion $ 900.107,67 $ 594.064 05 $ 539 ]66 64 $ 955 005 08 $ 544,352.90 -7- ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT "D" NOTE 7: NET ASSETS Changes in Net Asset activity for the year ended June 30, 2008 was as follows: Invested in Capital Assets Net of Related Debt Unrestricted Net Assets Total Net Assets Balance Julx l, 2007 Additions Reductions Balance June 30, 2008 $21,607,984.75 $ -458,193.91 $ 2,982,997.97 $ 18,166,792.87 -228,234.23 21,713,194.46 21,737,785.05 -252,824.82 $ 21 312,150.52 $ 21 255 000.55 $ 24,120 183 02 $ 11213 268 05 NOTE 8: LEASE OBLIGATIONS OPERATING LEASES Albany Technical College has entered into certain agreements to lease copiers which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the Technical College has the option ofrenewing the lease on a year-to-year basis. Amounts are included only for multiyear leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised. Expenses for rental of copiers under operating leases for the year ended June 30, 2008, totaled $376,091.14. NOTE 9: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Albany Technical College participates in the Teachers Retirement System ofGeorgia (TRS), a costsharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State ofGeorgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. Funding Policy Employees ofAlbany Technical College who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. Albany Technical College makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2008, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows: -8- ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT"D" NOTE 9: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Funding Policy Fiscal Year Percentage Contributed Required Contribution 2008 2007 2006 100% 100% 100% $ 498,643.13 $ 506,493.57 $ 528,111.18 EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description Albany Technical College participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowances for employees of the State of Georgia. Retirement benefits paid to members are based upon a formula which considers the monthly average ofthe member's highest twenty-four consecutive calendar months ofsalary, 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 ofthe 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. In addition, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion ofERS. The purpose ofSRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415. Funding Policy As established by State statute, all full-time employees of the State of Georgia 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. The Technical College's payroll for the year ended June 30, 2008, for employees covered by ERS was $2,282,105.46. The Technical College's total payroll for all employees was $9,244,316.14. Under the old plan, member contributions consist of 6.5% of annual compensation. Of these member contributions, the employee pays the first 1.5% and the Technical College pays the remainder on behalfof the employee. Under the new plan, member contributions consist solely of 1.5% of annual compensation paid by employee. The Technical College also is required to -9- ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT "D" NOTE 9: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Policy contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2008, the ERS employer contribution rate for the Technical College amounted to 10.16% of covered payroll. Albany Technical College did not have any employees covered by the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees. Total contributions to the plan made during fiscal year 2008 amounted to $260,375.20, of which $231,848.81 was made by the Technical College and $28,526.39 was made by employees. These contributions met the requirements of the plan. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description Albany Technical College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose 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 of the Employees' Retirement System of Georgia. 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. Ifa member has less than $3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. The Employees' Retirement System ofGeorgia issues a financial report each fiscal year which may be obtained through ERS. Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2008, for employees covered by GDCP was $545,805.07. The Technical College's total payroll for all employees was $9,244,316.14. - 10 - ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT"D" NOTE 9: RETIREMENT PLANS GEORGIA DEFINED CONTRIBUTION PLAN Contributions and Vesting Total contributions made by employees during fiscal year 2008 amounted to $40,935.75 which represents 7.51 % of covered payroll. These contributions met the requirements of the plan. NOTE 10: POSTEMPLOYMENT BENEFITS The Technical College participates in the Georgia Retiree Health Benefit Fund ("GRHBF") which is a cost-sharing multiple-employer defined benefit postemployment healthcare plan that covers retired employees of the State of Georgia. GRHBF provides health insurance benefits to eligible retirees and their qualified beneficiaries. Pursuant to Title 45, Chapter 18 of O.C.G.A., the authority to establish and amend the benefit provisions of the plan is assigned to the Board of Community Health ("Board"). Financial statements and required supplementary information for GRHBF are included in the publicly available financial report of the Department of Community Health. The Technical College contributes to the fund based upon amounts recommended by the Board and set forth in the Appropriations Act. This contribution rate is established to fund both the active and retired employee components of the health insurance plan based on projected pay-as-you-go financing requirements. The combined rate for the active and retiree components of the plan (payas-you-go basis) for the fiscal year ended June 30, 2008, was 18.534% of covered payroll. An additional contribution of4.309% ofcovered payroll was required by the Board for fiscal year 2008; eleven months ofthis additional contribution will be deposited into the OPEB fund to prefund retiree benefits (such additional contribution amounts are determined annually). The Technical College's contribution to the health insurance plan for the fiscal year ended June 30, 2008, was $1,807,138.39, which equaled the required contribution. The Technical College also participates in a program of group term life insurance for retired and vested inactive eligible members of various retirement systems. The State Employees' Assurance Department ("SEAD-OPEB") is a single-employer defined benefit postemployment plan. Pursuant to Title 47 ofthe Official Code ofGeorgia Annotated, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems. Financial statements and required supplementary information for SEAD-OPEB are included in the publicly available financial report of the Employees' Retirement System. The Technical College is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters ofGASB Statement 45. The ARC for the year ended June 30, 2008, was zero (0). - 11 - ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT "D" NOTE 11: RISK MANAGEMENT Public Entity Risk Pool The Department of Community Health (DCH) administers for the State of Georgia a program of health benefits for the employees of units of government 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 ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. DCH contracted with United Healthcare to process medical claims. For prescription drug claims, DCH contracted with Express Scripts, Incorporated through December 31, 2007 and contracted with Medco, Incorporated beginning January 1, 2008. All claims are to be processed in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health. Other Risk Management 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 Technical College, 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 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 expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although Albany Technical College expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against Albany Technical College (an organizational unit of the Department of Technical and Adult Education), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2008. - 12 - ALBANY TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008 EXHIBIT"D" NOTE 13: SPECIAL ITEM In the fiscal year 2008, the Albany Technical College transferred the Early County Campus to Bainbridge College. The carrying value of the buildings of $2,811,481.14 was properly removed from the capital asset records of the Technical College. A net loss of $2,811,481.14 from the transfer is reported as a special item on the Statement of Revenues, Expenses and Changes in Net Assets. NOTE 14: AFFILIATED ORGANIZATIONS The Albany Tech Foundation, Inc., is a legally separate, tax exempt organization whose activities primarily support Albany Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of this affiliated organization is not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from Albany Technical College. - 13 - (This page left intentionally blank) SUPPLEMENTARY INFORMATION - 15 - ALBANY TECHNICAL COLLEGE BALANCE SHEET- (STATUTORY BASIS) BUDGET FUND JUNE 30, 2008 ASSETS Accounts Receivable Federal Financial Assistance Other Inventories Other Assets Total Assets LIABILITIES AND FUND EQUITY Liabilities Cash Overdraft Salaries Payable Accounts Payable Benefits Payable Encumbrances Payable Deferred Revenue Total Liabilities Fund Balances Reserved Federal Financial Assistance Live Works Projects Prior Year Local Funds Sales and Services Technology Fees Inventories Unreserved Surplus Total Fund Balances Total Liabilities and Fund Balances SCHEDULE "1" $ 283,030.94 203,199.96 761,349.21 2.93 $ ====1,=24=7=,5=83=.0=4= $ 268,078.78 34,509.80 146,196.68 3,308.65 420,141.53 9,214.00 $ 881,449.44 $ 5,102.46 95,590.75 90,123.98 1,932.35 61,311.36 103,843.53 8,229.17 $ 366,133.60 $ ===1,=24=7=,5=8=3.=04= Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. - 16 - ALBANY TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2008 SCHEDULE "2" REVENUES State Appropriation State General Funds Federal Funds Other Funds Total Revenues CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance Total Funds Available EXPENDITURES Adult Literacy Economic Development Technical Education Total Expenditures Excess of Funds Available over Expenditures FUND BALANCE JULY 1 Reserved Unreserved ADJUSTMENTS Prior Year Payables/Expenditures Prior Year Receivables/Revenues Refunds to Grantors Federal Financial Assistance Returned to Georgia Department of Adult and Technical Education Year Ended June 30, 2008 Prior Year Reserved Fund Balance Included in Funds Available FUND BALANCE JUNE 30 BUDGET ACTUAL VARIANCEFAVORABLE (UNFAVORABLE) $ 9,988,611.00 $ 9,988,611.00 $ 0.00 1,547,237.00 1,478,920.37 -68,316.63 6,590,878.18 5,266,359.16 -1,324,519.02 $ 18,126,726.18 $ 16,733,890.53 $ -1,392,835.65 0.00 328,276.00 328,276.00 $ 18,126,726.18 $ 17,062,166.53 $ -1,064,559.65 $ 793,126.50 $ 753,826.92 $ 381,670.00 210,602.32 16,951,929.68 15,863,199.77 $ 18,126,726.18 $ 16,827,629.01 $ $ 0.00 $ 234,537.52 $ 39,299.58 171,067.68 1,088,729.91 1,299,097.17 234,537.52 448,949.65 36,605.57 -24,694.06 -989.08 -328,276.00 $ - ~ - - - 3. .6.6..._1,.3..3....,60_ SUMMARY OF FUND BALANCE Reserved Federal Financial Assistance Live Works Projects Prior Year Local Funds Sales and Services Technology Fees Inventories Total Reserved Unreserved Surplus $ 5,102.46 95,590.75 90,123.98 1,932.35 61,311.36 103,843.53 $ 357,904.43 8 229.17 Total Fund Balance $ 366,133.60 Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. -17- ALBANY TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2008 Adult Literacy State Appropriation State General Funds Federal Funds other Funds Total Adult Literacy Original AE!12ro12riation Final Budget Current Year Revenues Funds Available Comeared to Budget Prior Year Ca!!]l-Over Total Funds Available Variance Positive {Negative) $ 377,189.00 $ 377,189.00 $ 377,189.00 $ 205,321.00 263,715.50 252,547.07 101970.00 152 222.00 133132.43 $ 684,480.00 $ 793,126.50 $ 762,868.50 $ 0.00 $ 0.00 0.00 0.00 $ 377,189.00 $ 252,547.07 133132.43 762,868.50 $ 0.00 -11,168.43 -19 089.57 -30,258.00 Economic Development Federal Funds other Funds Total Economic Development $ 0.00 $ 35,000.00 $ 8,920.70 $ 179 470.00 346670.00 189 713.58 0.00 $ 14 438.43 8,920.70 $ 204152.01 -26,079.30 -142 517.99 $ 179 470.00 $ 381,670.00 $ 198,634.28 $ 14438.43 $ 213 072.71 $ -168,597 .29 Technical Education State Appropriation State General Funds Federal Funds other Funds Total Technical Education $ 9,532,136.00 $ 9,611,422.00 $ 9,611,422.00 $ 1,170,499.09 1,248,521.50 1,217,452.60 4 005 784.00 6 091 986.18 4 943 513.15 $ 14 708 419.09 $ 16 951 929.68 $ 15 772 387.75 $ 0.00 $ 0.00 313 837.57 313 837.57 $ 9,611,422.00 $ 1,217,452.60 5,257,350.72 18 086 225.32 $ 0.00 -31,068.90 -834 635.46 -865704.36 Grand Totals - All Programs $ 1515721369.09 $ 181125i726.18 $ 16,133,890.53 $ 328,276.00 $ 17,062,166.53 $ -1,064,559.65 Statutory Basis financial information was prepared on a prescribed basis of accountinR that demonslrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. -18- SCHEDULE "3" Exeenditures Comeared to Bud9et Variance Positive Actual (Negative) Actual Funds Available Over/(Under) Expenditures Prior Period Adjustments Other Adjustments Program Fund Balances Transfers Program Fund Balances Reserve ~ Total Fund Balance $ 368,828.55 $ 8,360.45 $ 251,604.78 12,110.72 133 393.59 18 828.41 $ 753,826.92 $ 39,299.58 $ 8,360.45 $ 942.29 -261.16 9,041.58 $ 1,905.32 $ 0.00 261.16 2,166.48 $ 0.00 $ 0.00 0.00 0.00 $ 10,265.77 $ -8,832.72 $ 942.29 0.00 0.00 0.00 11,208.06 $ -8,832.72 $ 0.00 $ 1,433.05 $ 942.29 0.00 0.00 ____QJ)Q_ 942.29 $ 1,433.05 $ 1,433.05 942.29 0.00 2,375.34 $ 8,920.70 $ 26,079.30 $ 201 681.62 144 988.38 $ 210,602.32 $ 171,067.68 $ 0.00 $ 2 470.39 2,470.39 $ 0.00 $ 165.90 165.90 $ 0.00 $ 0.00 0.00 $ 0.00 $ 2,636.29 2,636.29 $ 0.00 $ 0.00 0.00 $ 0.00 $ 0.00 $ 2,636.29 ____QJ)Q_ 2,636.29 $ ~ $ 0.00 2 636.29 2,636.29 $ 9,607,516.32 $ 3,905.68 $ 1,217,346.13 31,175.37 5,038,337.32 1053648.86 $ 15 863 199.77 $ 1088729.91 $ 3,905.68 $ 106.47 219 013.40 223,025.55 $ 2,890.44 $ 4,053.70 2 634.99 9 579.13 $ 0.00 $ 0.00 15 841.04 6,796.12 $ 4,160.17 237,489.43 0.00 $ 0.00 8,832.72 0.00 $ 6,796.12 $ 4,160.17 0.00 246,322.15 ____QJ)Q_ 15 841.04 $ 248 445.72 $ 8,832.72 $ 250,482.32 $ 6796.12 $ 6,796.12 4,160.17 246 322.15 257 278.44 $ 16,827,629.01 $ 1,299,097.17 $ 234,537.52 $ 11,911.51 $ 15,841.04 $ 262,290.07 $ 0.00 $ 254,060.90 $ ~ $ 262,290.07 Unexpendable Reserves Inventories 103 843.53 $ 366 133.60 -19- {This page left intentionally blank) ALBANY TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2008 SCHEDULE "4" Totals per Annual Supplement Accruals June 30, 2008 June 30, 2007 Compensated Absences June 30, 2008 June 30, 2007 Adjustments Shared Services on Jointly Staffed Personnel South Georgia Technical College Seay, Michelle Southwest Georgia Technical College Patterson, Sylvester Agency Funds Unidentified Variance SALARIES TRAVEL $ 9,256,779.42 $ 156,869.47 34,509.80 -43,210.36 768,349.85 -761,750.86 1,923.01 -2,347.85 -9,938.36 1.49 -12,290.05 $ 9,244,316.14 $ ===1=4=4,=57=9=.4=2 - 21 - SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS ALBANY TECHNICAL COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS YEAR ENDED JUNE 30, 2008 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.