~ l\'600 .R\ ""C,3 ,qq4;95 STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA. GEORGIA 30334 AUDIT REPORT STATE OF GEORGIA CARROLL TECHNICAL INSTITUTE CARROLLTON,GEORGIA YEAR ENDED JUNE 30, 1995 CARROLL TECHNICAL INSTITUTE -TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON 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" LOTTERY FOR EDUCATION 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 TRAVEL 34 CARROLL 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 February 12, 1996 Honorable Zell Miller, 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 Janet Ayers, President Carroll Technical Institute INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have audited the accompanying financial statements (Exhibits A through F) of Carroll Technical Institute as ofand for the year ended June 30, 1995. These financial statements are the responsibility of the Institute's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 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. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position (statutory basis) of Carroll Technical Institute as of June 30, 1995, and the results of its operations (statutory basis) for the year then ended, on the basis of accounting described in Note 1. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibits G through J and Schedules 1 through 3) is presented for 95ARL-l purposes of additional analysis and is not a required part of the financial statements of Carroll Technical Institute. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, L~ Claude L. Vickers State Auditor CLV:dt 95ARL-l FINANCIAL STATEMENTS - 1- CARROLL TECHNICAL INSTITUTE COMBINED BALANCE SHEET /STATUTORY BASIS) ALL FUND TYPES AND ACCOUNT GROUPS JUNE30 1995 EXHIBIT"A" ASSETS Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Inventories Prepaid Items Fixed Assets Equipment Amounts to be Provided for Payment of: Accrued Compensated Abeences GOVERNMENTAL FUND TYPE BUDGET FIDUCIARY FUND TYPE AGENCY ACCOUNT GROUPS GENERAL GENERAL FIXED LONG-TERM ASSETS DEBT TOTALS {Memorandum On~! JUNE 30, 1995 JUNE 301 1994 $ 1,238,308.35 $ 78,025.73 $ 1,316,334.08 $ 619 670.41 $ 50,101.54 77 260.13 $ 1,050.00 $ 127 361.67 $ 1,050.00 $ 110 395.85 $ 1 722.00 $ 50,101.54 $ 91,936.93 78 310.13 81 508.73 $ 128 411.61 s 173 445.66 $ 110,395.85 $ 82,150.19 $ 1,722.00 $ 164.00 $ 2,322,073.58 $ 2,322,073.58 $ 1,776,725.62 $ 260,002.31 $ 260,002.31 $ 246,072.28 Total Assets $ 1 477 787.87 $ 79 075.73 $ 2,322,073.58 $ 260 002.31 $ 1 4,138,939.49 $ 2,898,228.16 LIABILITIES AND FUND !;QUITY Liabilities Accounts Payable $ Salaries Payable Deferred Revenue Tuition and Fees Funds Held in Custody for others Compensated Absences Total Liabilities $ Fund Equity lnwstment 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 lm,entories Live Work Projects State Grants and Contracts Private Grants For Refund to Grantor Agency For Continuation of Program Unreserved Designated Surplus Regular Lottery for Education Total Fund Equity $ 1,313,746.53 892.50 10,745.45 $ 79,075.73 1325384.48 $ 79,075.73 $ 1,313,746.53 $ 892.50 697,798.63 0.00 $ 260,002.31 10,745.45 79,075.73 260,002.31 4,949.00 49,564.16 246,072.28 $ 260,002.31 $ 1,664,462.52 $ 998 384.07 $ 2,322,073.58 $ 2,322,073.58 $ 1,776,725.62 2,824.64 2,295.76 61,940.88 64,514.06 1,434.66 1,560.78 3,441.35 14,132.52 258.74 152 403.39 $ 2,322,073.58 2,824.64 2,295.76 61,940.88 64,514.06 1,434.66 1,560.78 3,441.35 861.46 1,592.70 61,940.88 51,237.54 73.30 0.00 0.00 14,132.52 258.74 7,374.39 38.20 $ 2,474,476.97 $ 1899844.09 Total Liabilities and Fund Equity $ 1 477 787.87 $ 79 075.73 $ 2,322,073.58 $ 260,002.31 $ 4,138,939.49 $ 2,898,228.16 The notes to the financial statements are an integral part of this statement. -2- CARROLL TECHNICAL INSTITUTE STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS} GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30. 1995 EXHIBIT"B" FUND BALANCE - JULY 1 Reserved Unreserved Designated Surplus ADDITIONS Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures Exhibit"C" Prior Year's Checks Voided DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30, 1993 Year Ended June 30, 1994 Adjustments to Prior Year's Accounts Receivable Refunds to Grantors Georgia Department of Technical and Adult Education - Administrative Central Office Federal Financial Assistance Reserved Fund Balance Carried Over from Prior Year as Funds Available FUND BALANCE - JUNE 30 (To Exhibit "A") BUDGET FUND YEAR ENDED JUNE 30, 1995 JUNE 30, 1994 $ 115,705.88 $ 97,650.81 7,412.59 4,793.53 $ 123,118.47 $ 102,444.34 $ 10,376.90 $ 10,828.56 80,550.41 0.00 51,014.23 1,069.20 $ 90,927.31 $ 62,911.99 $ 0.00 $ 4,793.53 7,412.59 0.00 2,130.80 1,392.56 861.46 636.84 51,237.54 35,414.93 $ 61,642.39 $ 42,237.86 $ 152,403.39 $ 123,118.47 The notes to the financial statements are an integral part of this statement. -3- CARROLL TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAIL.ABLE ANO EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"C" FUNDS AVAILABLE B~NUES STATE FUNDS Allotment from Georgia Department of Technical and Adult Education Administrative Central Office FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED Contract Georgia Department of Human Resources PEACH Project Georgia Institute of Technology Satellite Technology Program Georgia Slatewide Academic and Medical System Programs lnteractill8 Network FApplication Graduation Registration/Continuing Education Testing Other Interest Earned Sales and Services (Net) Tuition Other Sources Total Other Rewnues Retained Total Rewnues CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance Lille Work-Projects Total Funds Available EXPENDITURES PERSONAL SERVICES-INSTITUTIONS Salaries and Wages Employefs Contributions for: F.1.CA Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance OPERATING EXPENSES-INSTITUTIONS OlherCos1s Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Publications and Printing TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994 $ 5,274,518.71 $ 3,779,537.00 $ \ 105,793.89 $ 1,189,119.56 $ 53,323.54 $ 49,214.28 23,200.00 27,000.00 16,970.00 0.00 26,619.00 2,448.23 138,891.37 10,696.00 6,658.48 6,818.88 94,681.60 796,938.74 3,024.54 22,570.69 0.00 184,397.55 8,565.50 0.00 1,375.10 90,014.12 621,383.33 16,205.54 $ 1 180,270.38 $ 1,020,726.11 $ 7,560,582.98 $ 5,989,382.67 51,237.54 35414.93 $ 7.611.820.52 $ 6.024.797.60 $ 3,380,168.65 $ 2,852,728.90 82,151.75 376,423.94 386,584.22 19,623.00 1,672.00 39,917.00 66,843.79 311,476.11 316,576.68 10,918.00 1,711.00 53390.00 $ 4,286,540.56 $ 3,613,644.48 $ 11,791.28 $ 9,931.23 371,374.94 324,515.21 26,046.07 36,997.27 124,720.22 156,555.69 0.00 615.00 2,831.00 2,190.00 266,738.65 234,334.14 45,531.61 34,835.58 The notes to the financial statements are an integral part of this statement -4- CARROLL TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"C' EXPENDITURES OPERATING EXPENSES-INSTITUTIONS Travel Equipment Equipment Purchases Motor Vehicle Purchase Rental of Equipment Compulllr Charges OtherCosts Contrac1s Supplies and Materials Repairs and Renov.mons Software Real Es1ate Rentals Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts ADULT LITERACY GRANTS Personal Services Salaries and Wages EmployefsContributionsfor. F.I.C.A. Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Other Costs Supplies and Materials Insurance and Bonding Repairs and Maintenance Rents (Other than Real Estate) Other Operating Expenses Travel Equipment Equipment Purchases Motor Vehicle Purchases Computer Charges Software Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contrac1s JOB TRAINING PARTNERSHIP ACT Personal Services Salaries and Wages Emplo~s Contributions for. F. I.C.A. Retirement Health Insurance OtherCosts Supplies and Materials Other Operating Expenses Travel Real Estate Rentals TOTALS YEAR ENDED JUNE 301 1995 JUNE 30 1994 1 $ 54,863.21 $ 48,385.19 407,881.92 39,433.00 730.28 231,846.96 25,488.00 0.00 0.00 31,815.56 9,522.44 104,935.78 14,350.00 37,521.76 74.62 0.00 0.00 1,814.00 14,475.00 31,239.30 28,572.50 12410.01 50,319.55 33,609.64 $ 1,591,070.23 $ 1,237,226.38 s 490,044.86 $ 426,093.89 14,494.05 20,151.66 19,835.80 1,055.00 105.00 2,435.00 12,837.51 15,267.04 13,455.93 254.00 48.00 0.00 106,572.52 30.00 0.00 625.00 35,236.92 10,887.96 146,833.78 0.00 2,532.50 6,270.00 6,266.32 10,861.83 15,567.41 0.00 38,577.74 23,240.20 3,283.50 0.00 0.00 1,600.00 0.00 2 600.00 57.06 0.00 s 722,924.68 $ 704195.80 $ 50,427.32 $ 42,167.63 1,075.73 4,756.21 5,090.46 1,083.55 3,226.80 3,785.96 145.00 8,112.55 1,377.43 5,310.00 342.97 3,485.44 929.56 3,540.00 $ 76,294.70 $ 58,561.91 The notes to the financial statements are an integral part of this statement -5- EXPENDITURES EQUIPMENT-TECHNICAL INSTITUTES Equipment Equipment Purchases Computer Charges Equipment Equipment Purchases REPAIRS AND RENOVATIONS Repairs and Maintenance Total Expenditures Excess of Funds Available Oll9r Expenditures CARROLL TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"C" TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994 $ 835,724.27 $ 360,154.80 8103.96 0.00 $ 843,828.23 $ 360154.80 $ 10611.71 $ 0.00 $ 7,531,270.11 $ 5,973,783.37 80550.41 51 014.23 $ 716111820.52 $ 61024i797.60 The notes to the financial statements are an integral part of this statement -6- CARROLL TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30.1995 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} $ 4.420.065.00 $ 4,420,065.00 $ 1,285,497.00 1,105,793.89 1,658,422.00 1, 180,270.38 $ 7,363,984.00 $ 6,706,129.27 $ 0.00 -179,703.11 -478, 151.62 -657,854.73 0.00 51,237.54 51,237.54 $ 7,363,984.00 $ 6,757,366.81 $ _ _ _-6_06_,6_17_._19_ EXPENDITURES Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants Job Training Partnership Act Excess of Funds Available over Expenditures $ 4,570,153.00 $ 4,286,540.56 $ 1,878,007.00 1,591,070.23 830,478.00 722,924.68 85,346.00 76,294.70 283,612.44 286,936.n 107,553.32 9,051.30 $ 7,363,984.00 $ 6,676,830.17 $ ___68_7-'-,1_53_._83_ $ 80,536.64 $ =====80='=536==.64= The notes to the financial statements are an integral part of this statement. -7- CARROLL TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND "B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30. 1995 EXHIBIT"E" FUNDS AVAILABLE REVENUES State Funds EXPENDITURES Equipment-Technical Institutes Repairs and Renovations BUDGET ACTUAL VARIANCEFAVORABLE {UNFAVORABLE) $ 1,193.842.00 $ - - - - - - 854,453.71 $ -339,388.29 $ 843.842.00 $ 843.828.23 $ 13.77 350.000.00 10,611.71 339,388.29 $ 1.193.842.00 $ 854,439.94 $ _ _ _33__9_,4_02_.06_ Excess of Funds Available over Expenditures $ 13.77 $ ====1=3=.77= The notes to the financial statements are an integral part of this statement. -8- CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY Carroll 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 of the State of Georgia. The accompanying financial statements reflect the operations of Carroll Technical Institute as a separate reporting entity. The Institute's Local Board of Directors is composed of eleven (11) 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 of Technical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount ofState funds to be received by Carroll Technical Institute. The Institute does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Carroll Technical Institute is considered an organizational unit of the Georgia Department of Technical and Adult Education for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards. FUND ACCOUNTING Carroll 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 of Georgia. 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 1994-1995. This fund also includes operations from various institutional services provided to students, faculty, and/or staff which 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 identified 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- CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "F" NOTE I: 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 historical cost. 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 of the 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 of the 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 governmental long-term 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 fund balance (surplus) to the Administrative Central Office of the Department ofTechnical and Adult Education for remittance to the Office of Treasury 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 (i.e., when they are "measurable and available"). "Measurable" means the amount of the 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- CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but is not consistent with generally accepted accounting principles, which provide for the recording ofencumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. 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 1994-1995. 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. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand and demand deposits with banks and other authorized financial institutions. Cash and Cash Equivalents also include short-term, highly liquid investments with maturity dates of three months or less from the date of acquisition. ACCOUNTS RECEIVABLE Accounts receivable consist of allotments due from reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. - 11 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVENTORIES Expendable supplies are recorded as expenditures at the time of purchase and are not reflected on the Combined Balance Sheet (Statutory Basis). Inventories ofgoods 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 REFUND TO GEORGIA DEPARTMENT OF TECHNICAL AND ADULT EDUCATION ADMINISTRATIVE CENTRAL OFFICE Carroll Technical Institute receives Federal funds for the Adult Education Act, the Carl D. Perkins Vocational and Applied Technology Education Act, and the Job Training Partnership Act through the Georgia Department ofTechnical and Adult Education - Administrative Central Office. As provided by the respective budget allocation to the Institute, these funds were required to be expended by June 30, 1995. At June 30, 1995, the following programs had unexpended Federal funds which should be refunded to the Administrative Central Office: Adult Education Act Adult Education Carl D. Perkins Vocational and Applied Technology Education Act Vocational Education - Basic Grants to States Job Training Partnership Act $ 642.06 2,182.09 0.49 $ 2,824 64 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 of the Federal program/project. This amount is refundable to the applicable grantor. - 12 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RESERVED FUND BALANCE INVENTORIES Reported inventories (resale), under the consumption method, are offset by a portion of State funds equal to the average quarterly inventories on hand for the fiscal year. This reservation of fund balance was established to provide working capital for managing a reasonable level of inventories for resale. LIVE WORK PROJECTS The accumulated balance of unexpended funds derived from student live work projects. This amount is restricted to expenditures for live work projects in subsequent fiscal years. STATE GRANTS AND CONTRACTS The unexpended balance ofstate grants and contracts, other than through the Administrative Central Office, remaining after the expiration ofthe program/contract. This amount is refundable to the applicable grantors. PRIVATE GRANTS The unexpended balance of private grants which is refundable to the applicable grantors or 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 of Technical and Adult Education - Administrative Central Office for remittance to the Office of Treasury and Fiscal Services in the subsequent fiscal year as surplus, as follows: REGULAR - An amount of unexpended general appropriations available to the State for reappropriation in subsequent years. LOTTERY FOR EDUCATION - An amount of unexpended lottery appropriations available for future reappropriation for Lottery for Education. 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 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 of annual 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. - 13 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" to indicate that they 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 of this 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 of the Institute's financial position and operations or would cause the statements to be unduly complex and difficult to understand. ~so, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. 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 any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: (1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations of the United States or of the 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. (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 of asthe United States government, which are fully guaranteed by the United States government both to principal and interest and 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. - 14 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which 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 of June 30, 1995, 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 Canying Amount Bank Balances Risk Categories 2 3 $ 1 315 334,08 $ 1 885285 99 $ 200 000 00 $===0...,00..,, $ 1 685285 99 NOTE 3: 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$1,000.00 or greater are reflected in the General Fixed Assets Account Group. The following is a summary ofchanges ofequipment for the General Fixed Assets Account Group during the fiscal year: Balance July I, 1994 Additions Deductions Balance June 30, 1995 $1,776,725.62 726,979.22 181,631.26 $ 2,322,073 58 - 15 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "F" NOTE 4: GENERAL LONG-TERM DEBT CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1995, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group: Balance July 1, 1994 Additions Annual Leave Earned and Utilized (Net) Salaries and Wages Salary-Related Fringe Benefits $ 246,072.28 13,195.66 734.37 Balance June 30, 1995 $ 260,002.31 NOTE 5: RISK MANAGEMENT Public Entity Risk Pool The State Personnel Board - Merit System ofPersonnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units of government ofthe State of Georgia and 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 services 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 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 state agencies by DOAS to provide claims servicing and claims payment. - 16 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 6: DEFERRED COMPENSATION PLAN The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the 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 is presented in the financial report ofthe State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1995. NOTE7: RETIREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Carroll 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 lnstitute's payroll for the year ended June 30, 1995, for employees covered by TRS was $2,644,252.70. The Institute's total payroll for all employees was $3,920,640.83. Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless of age, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number 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 ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by 7/o for each year or fraction thereofby which the member has less than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. 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. - 17 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 7: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Benefits 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% of their 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 1995, 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 1995 amounted to $444,502.23, ofwhich $312,286.24 was made by the Institute and $132,215.99 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 of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers ofthe PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among similar PERS. The total unfunded pension benefit obligation ofTRS as ofJune 30, 1994, which was the latest information available, was as follows: Total pension benefit obligation $ 15,313,743,000.00 Net assets available for benefits, at cost 14,254,785,000.00 Unfunded pension benefit obligation $ 1.058.958.000,00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers. - 18 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 7: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1995, were $565,117,811.00. The lnstitute's contribution for the year ended June 30, 1995, of $312,286.24 was actuarially determined and represented .0553% of total contributions made by all participating employers. Trend Information Historical trend information is presented in the financial report of TRS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description Carroll 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 of the State of Georgia. The Institute's payroll for the year ended June 30, 1995, for employees covered by ERS was $569,646.19. The lnstitute's total payroll for all employees was $3,920,640.83. 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 1, 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. Members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. 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 of years 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. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless of age. Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% of annual compensation and 4. 75% of annual compensation paid by the Institute on behalf of the employee. - 19 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXI-IlBIT "F" NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Contributions Required and Contributions Made Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Institute also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. Contributions are also made on amounts paid for accumulated leave of retiring employees. Total contributions to the plan made during fiscal year 1995 amounted to $91,856.90, ofwhich $84,736.32 was made by the Institute and $7,120.58 was made by employees. These contributions represented 14.89% (Institute) and 1.25% (employees) of covered payroll. Funding Status and Progress Pension Benefit Obligation The amount shown as the "pension benefit obligation" is a standardized disclosure measure of the present value ofpension benefits, adjusted for the effects ofprojected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value ofcredited projected benefits, and is independent of the funding method used to determine contributions to the plan. The pension benefit obligation was computed as part of an actuarial valuation performed as of June 30, 1994. Significant actuarial assumptions used in the valuation include the following: (1) The present value of future pension benefits paid was computed using a discounted rate of7.5%. This rate is also the same rate assumed to be earned on investments in the plan in future years. (2) Future pension payments reflect the following assumed salary increases as a result of inflation and merit increases: Age 20 25 30 35 40 to 65 Percentage 9.5% 8.5% 6.5% 6.0% 5.7% (3) ERS has the authority to grant cost-of-living adjustments by State statute. As of June 30, 1994, cost-of-living adjustments have been included in the pension benefit obligation. - 20- CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation The total unfunded pension benefit obligation ofERS as of June 30, 1994, which was the latest information available, was as follows: Pension Benefit Obligation Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving benefits $ 2,227,653,000.00 Current employees: Accumulated contributions 648,516,000.00 Employer financed - vested 1,085,190,000.00 Employer financed - nonvested 1,206,805,000.00 Total pension benefit obligation $5,168,164,000.00 Net assets available for benefits, at cost 4,858,015,000.00 Unfunded pension benefit obligation $ 310.149.000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers. Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages ofannual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date. Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Institute's contribution for the year ended June 30, 1995, of $84,736.32 was actuarially determined and represented 0.033% oftotal contributions made by all participating employers. - 21 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE7: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Funding Policy Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation. Trend Information Historical trend information is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description Carroll Technical Institute participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia in July 1993 for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees ofthe Employees' Retirement System of Georgia. The Institute's payroll for the year ended June 30, 1995, for employees covered by GDCP was $412,762.18. The Institute's total payroll for all employees was $3,920,640.83. Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than$ 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 of a 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 ofemployment, the amount of the member's account is refundable upon request by the member. Total contributions made by employees during fiscal year 1995 amounted to $30,958.03 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. - 22- CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "F" NOTE 8: LEAVE POLICIES Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with a maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences 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 of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. NOTE 9: NONMONETARY TRANSACTIONS The Georgia Department of Technical and Adult Education - Administrative Central Office used lottery proceeds to purchase $2,003,215.00 of equipment for Carroll Technical Institute during the fiscal year ended June 30, 1995. Those items with an acquisition cost of $1,000.00 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 of capital outlay projects. During the fiscal year ended June 30, 1995, the Georgia State Financing and Investment Commission paid $4,907,140.50 to various vendors for approved projects related to Carroll Technical Institute. NOTE 10: 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, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against Carroll Technical Institute (as an organizational unit of the Department ofTechnical and Adult Education), ifany, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self-insurance which provides coverage for such litigation, claims and assessments. 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, 1995. - 23 - CARROLL TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "F" NOTE 11: BONDING INFORMATION The President and all employees ofCarroll Technical Institute were bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1995. Under this agreement, the public employee dishonesty coverage insured Carroll 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 insured 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 of Carroll Technical Institute were also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 011675 2 and 626 012294 4, on which the premiums were paid to October 1, 1995. Under these additional public employee dishonesty coverages, the policies insured the Institute to a maximum of $9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. - 24- SUPPLEMENTARY INFORMATION - 25 - CARROLL TECHNICAL INSTITUTE COMBINING BALANCE SHEET (STATUTORY BASIS} BUOOETFUND JUNE 30, 1995 EXHIBIT"G" ASSETS C8sh and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Inventories Prepaid Items Total Assets 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 Refund to Georgia Department of Technical and Adult Education - Administrative Central Office For Expired Grant Balances Inventories Live Work Projects State Grants and Contracts Private Grants For Refund to Grantor Agency For Continuation of Program Unreserved Designated Surplus Regular Lottery for Education Total Fund Equity Total Liabilities and Fund Equity "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION "B" LOTTERY FOR EDUCATION TOTAL $ 458,981.82 $ n9,326.53 $ 1,238,308.35 $ 50,101.54 n,260.13 $ 127,361.67 $ 110,395.85 $ 1,722.00 $ 50,101.54 n,260.13 $ 127,361.67 $ 110,395.85 $ 1,722.00 $ 698,461.34 $ n9,326.53 $ 1,4n,1s1.s1 $ 534,678.74 $ n9,067.79 $ 1,313,746.53 892.50 892.50 10,745.45 10,745.45 $ 546,316.69 $ n9,067.79 $ 1,325,384.48 $ 2,824.64 2,295.76 61,940.88 64,514.06 1,434.66 1,560.78 3,441.35 $ 2,824.64 2,295.76 61,940.88 64,514.06 1,434.66 1,560.78 3,441.35 14,132.52 $ $ 152,144.65 $ 258.74 258.74 $ 14,132.52 258.74 152,403.39 $ 698,461.34 $ n9,326.53 $ 1.4n.1s1.s1 See notes to the Financial Statements. - 26 - CARROLL TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30. 1995 EXHIBIT"H" FUND BALANCE JULY 1 Reserved Unreserved Designated Surplus ADDITIONS Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures Exhibit 1 DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30, 1994 Adjustments to Prior Year's Accounts Receivable Refunds to Grantors Georgia Department of Technical and Adult Education - Administrative Central Office Federal Financial Assistance Reserved Fund Balance Carried Over from Prior Year as Funds Available FUND BALANCE JUNE 30 (To Exhibit "G") "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION "B" LOTTERY FOR EDUCATION TOTAL $ 115,705.88 7,374.39 $ $ 123,080.27 $ $ 38.20 38.20 $ 115,705.88 7.412.59 123,118.47 $ 10,131.93 $ 80,536.64 $ 90,668.57 $ 244.97 $ 13.n 258.74 $ 10,376.90 80,550.41 90,927.31 $ 7,374.39 $ 2,130.80 861.46 51,237.54 $ 61,604.19 $ $ 152,144.65 $ 38.20 $ 7,412.59 2,130.80 38.20 $ 861.46 51,237.54 61,642.39 258.74 $ 152,403.39 See notes to the Financial Statements. - 27 - CARROLL TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30, 1995 EXHIBIT"!" FUNDS AVAILABLE Bl;:ilENUES STATE FUNDS Allotment from Georgia Department of Technical and Adult Education Administrative Central Office FEDERAL REVENUES OTHER REVENUES RETAINED Contract Georgia Department of Human Resources PEACH Project Georgia Institute of Technology Satellite Technology Program Georgia Statewide Academic and Medical System Programs Interactive Network Fees Application Graduation Registration/Continuing Education Testing Other Interest Eamed SalesandServices(Net) Tuition Other Sources Total Other Revenues Retained Total Revenues CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance Live Work Projects "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION "B" LOTTERY FOR EDUCATION TOTAL $ 4,420,065.00 $ 854,453.71 $ 5,274,518.71 $ 1,105,793.89 $ 1,105,793.89 $ 53,323.54 $ 53,323.54 23,200.00 23,200.00 16,970.00 16,970.00 26,619.00 2,448.23 138,891.37 10,696.00 6,658.48 6,818.88 94,681.60 796,938.74 3,024.54 26,619.00 2,448.23 138,891.37 10,696.00 6,658.48 6,818.88 94,681.60 796,938.74 3,024.54 $ 1,180,270.38 $ 1, 180,270.38 $ 6,706,129.27 $ 854,453.71 $ 7,560,582.98 51,237.54 51,237.54 Total Funds Available $ 6,757,366.81 $ 854,453.71 $ 7,611,820.52 EXPENDITURES PERSONAL SERVICES-INSTITUTIONS Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance $ 3,380,168.65 82,151.75 376,423.94 386,584.22 19,623.00 1,672.00 39,917.00 $ 4,286,540.56 $ 3,380, 168.65 82,151.75 376,423.94 386,584.22 19,623.00 1,672.00 39,917.00 $ 4,286,540.56 See notes to the Financial Statements. 28 CARROLL TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30, 1995 EXHIBIT"!" EXPENDITURES OPEBATING l;;XPENl;;S-INSIITUTIQN Other Costs Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Insurance and Bonding Other Operating Expenses Publications and Printing Travel Equipment Equipment Purchases Motor Vehicle Purchases Rental of Equipment Computer Charges Other Costs Supplies and Materials Repairs and Maintenance Software Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts ADULT LITERACY GRANTS Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Other Costs Supplies and Materials Insurance and Bonding Rents (Other than Real Estate) Other Operating Expenses Travel Equipment Equipment Purchases Computer Charges Software Per Diem, Fees and Contracts Contracts "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION "B" LOTTERY FOR EDUCATION TOTAL $ 11,791.28 371,374.94 26,046.07 124,720.22 2,831.00 266,738.65 45,531.61 54,863.21 407,881.92 39,433.00 730.28 31,815.56 9,522.44 104,935.78 14,350.00 37,521.76 28,572.50 12,410.01 $ 1,591,070.23 $ 490,044.86 14,494.05 20,151.66 19,835.80 1,055.00 105.00 2,435.00 106,572.52 30.00 625.00 35,236.92 10,887.96 15,567.41 3,283.50 2,600.00 $ 722,924.68 $ 11,791.28 371,374.94 26,046.07 124,720.22 2,831.00 266,738.65 45,531.61 54,863.21 407,881.92 39,433.00 730.28 31,815.56 9,522.44 104,935.78 14,350.00 37,521.76 28,572.50 12,410.01 $ 1,591,070.23 $ 490,044.86 14,494.05 20,151.66 19,835.80 1,055.00 105.00 2,435.00 106,572.52 30.00 625.00 35,236.92 10,887.96 15,567.41 3,283.50 2,600.00 $ 722,924.68 See notes to the Financial Statements. 29 - CARROLL TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30, 1995 EXHIBIT"!" EXPENDITURES ,!QI;! IBAININ~ eABT~i;;BSHIP AC.T Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance OtherCosts Supplies and Materials Other Operating Expenses Travel Real Estate Rentals EQUIPMENT-TECHNICAL INSTITUTES Equipment Equipment Purchases Computer Charges Equipment Equipment Purchases REPAIRS AND RENOVATIONS Repairs and Maintenance Total Expenditures Excess of Funds Available over Expenditures "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION "B" LOTTERY FOR EDUCATION TOTAL $ 50,427.32 1,075.73 4,756.21 5,090.46 145.00 8,112.55 1,3TT.43 5,310.00 $ 76,294.70 $ 50,427.32 1,075.73 4,756.21 5,090.46 145.00 8,112.55 1,3TT.43 5,310.00 $ 76,294.70 $ 835,724.27 $ 835,724.27 8,103.96 8,103.96 $ 843,828.23 $ 843,828.23 $ 10,611.71 $ 10,611.71 $ 6,676,830.17 $ 854,439.94 $ 7,531,270.11 80,536.64 13.n 80,550.41 $ 6,757,366.81 $ 854,453.71 $ 7,611,820.52 See notes to the Financial Statements. - 30 - CARROLL TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1995 EXHIBIT"J" FUND ASSETS/ LIABILITIES JULY 1, 1994 Flex Insurance $ -25.00 $ General Scholarship Fund 5,629.50 HOPE Scholarship Program 19.154.00 Pell Grant Program 293.00 Student Activities Fund 24,512.66 Student Insurance 0.00 Supplemental Educational Opportunity Grant Program 0.00 ADDITIONS DEDUCTIONS ASSETS/ LIABILITIES JUNE 30, 1995 54,103.46 $ 54,078.46 $ 0.00 5,553.70 4,999.24 6,183.96 865,742.00 884,170.00 726.00 449,486.95 404,465.00 45,314.95 32,344.63 30,006.47 26,850.82 1,828.00 1,828.00 0.00 26,448.00 26,448.00 0.00 $ 49,564.16 $ 1,435,506.74 $ 1,405,995.17 $ ===7=9':::::07==5==.7=3 See notes to the Financial Statements. -31 - CARROLL TECHNICAL INSTITUTE CASH AND CASH EQUIVALENTS JUNE 30, 1995 NONINTEREST BEARING ACCOUNTS NationsBank of Georgia, N. A., Carrollton, Georgia INTEREST BEARING ACCOUNTS NationsBank of Georgia, N. A., Carrollton, Georgia OTHER Cashon Hand Petty Cash SCHEDULE 1 $ 58,801.91 1,256,532.17 1,000.00 $ ==1=,3=1=6'=334=.08= See notes to the Financial Statements. -32- CARROLL TECHNICAL INSTITUTE SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30. 1995 BUDGET FUND Education. U. S. Department of Adult Education - State Administered Basic Grant Program Through Georgia Department ofTechnical and Adult Education - Administrative Central Office Federal Work-Study Program Direct Vocational Education - Basic Grants to States Through Georgia Department of Technical and Adult Education - Administrative Central Office Tech-Prep Education Through Carroll County Board of Education Through Coweta County Board of Education Through Douglas County Board of Education Through City of Carrollton Board of Education Health and Human Services, U. S. Department of Job Opportunities and Basic Skills Training Through Georgia Department of Human Resources Various Offices of Department of Family and Children Services Labor, U. S. Department of Job Training Partnership Act Through Atlanta Regional Commission Through Coosa Valley Regional Development Center Through Georgia Department of Technical and Adult Education - Administrative Central Office Through Griffin Regional Educational Service Agency SCHEDULE "'Z' CFDA NUMBER AMOUNT 84.002 $ 84.033 249,862.00 11,610.00 84.048 84.243 84.243 84.243 84.243 368,906.00 1,800.00 800.00 800.00 800.00 93.561 17.250 17.250 17.250 17.250 87,650.92 148,166.99 84,785.69 76,294.70 74,317.59 $ ==1=,1=05='=79=3=.8=9 See notes to the Financial Statements. - 33 - CARROLL TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND WAGES. AND TRAVEL YEAR ENDED JUNE 30. 1995 SCHEDULE 3" Totals per Annual Supplement Accruals June 30. 1995 June 30, 1994 Totals per Report SUMMARY BY OBJECT CLASS BUDGET FUND Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants Job Training Partnership Act SALARIES AND WAGES TRAVEL $ 3,919,748.33 $ 68,964.81 892.50 -1,836.21 $ 3,920,640.83 $ ======6==7'!:::::12=8==.60= $ 3,380,168.65 $ 54,863.21 490,044.86 10,887.96 50,427.32 1,3n.43 $ 3,920,640.83 $ ======6==7=12=8==.60= See notes to the Financial Statements. -34- SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS CARROLL TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS The status ofthe finding disclosed in the review report for the year ended June 30, 1994, is indicated below: Audit Control Number Status of Finding 826-94-01 See Audit Control Number 826-95-01 PRIOR YEAR/CURRENT YEAR CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 826-95-01 The review report for the year ended June 30, 1994, disclosed that Carroll Technical Institute's accounting procedures did not provide for adequate internal control over the bank reconciliation process. For the year under review, this deficiency continued to exist. Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time. The Institute should implement appropriate procedures and controls to ensure that all reconciling items are identified and corrected promptly. CURRENT YEAR GENERAL LEDGER Inadequate Internal Controls Financial Statements Audit Control Number 826-95-02 For the year under review, Carroll Technical Institute's internal controls did not provide for adequate safeguards over the accounting process. The following deficiencies were noted: (1) Excessive journal entries were required to correct numerous errors. (2) The journal entries did not contain proper authorization and/or adequate supporting documentation. The Institute should implement procedures to ensure that accounting records are correct without the need for numerous journal entries. Controls should also be established to ensure that journal entries are properly approved and documented prior to entry into the accounting system. CARROLL TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 CURRENT YEAR ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Financial Statements Audit Control Number 826-95-03 For the year under review, Carroll Technical Institute did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures over Cash and Cash Equivalents. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.