West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2010

WEST GEORGIA TECHNICAL COLLEGE
WACO,GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30,2010

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A

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Georgia Department of

Audits andAccou.nI Itq
R ~ S S ~vIk.I hinti'nu

WEST GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS -
SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENTOFNETASSETS B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS C STATEMENTOFCASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULES
1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND
2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) BUDGET FUND
3 STATEMENT OF PROGRAM REVENUESAND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET (NON-GAAP BASIS) BUDGET FUND
4 RECONCILIATION OF SALARIES AND TRAVEL
SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FI NANClAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1 - 1 56 Atlanta, Georgia 30334-8400
January 2 5 , 2 0 1 1

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 Skip Sullivan, President West Georgia Technical College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of West Georgia Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2010. These financial statements are the responsibility of the Technical College's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Technical College's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 discussed in Note 1,the financial statements of West Georgia Technical College are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of West Georgia Technical College. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of West Georgia Technical College as of June 30,2010, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Management's Discussion and Analysis is not a part of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of West Georgia Technical College taken as a whole. The accompanying supplementary information (Schedules 1through 4) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
~ u d e lWl . Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

West Georgia Technical College
Management's Discussion and Analysis
The following is management's discussion and analysis of West Georgia Technical College's financial performance for the fiscal year ending June 30, 2010, with comparative data from fiscal year ending June 30, 2009. Effective July 1,2010, West Georgia Technical College and West Central Technical College merged under the name West Georgia Technical College. The comparative data from fiscal year ending June 30, 2009, includes data from both West Georgia Technical College and West Central Technical College. This discussion has been prepared by and is the responsibility of management.
Overview of the Financial Shtementsand FinancialAnalysis
This annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the Governmental Accounting Standards Board.
There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question "Is the Technical College as a whole better or worse off as a result of the year's activities?" These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by corporations and other private sector companies. All revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the goods or service, regardless of when cash is exchanged.
The Statement of Cash Flows is a valuable tool when evaluating the ability of the Technical College to meet financial obligations as they mature. This statement presents information related to cash inflows and outflows summarized by operating, noncapital financing, capital and related financing and investing activities.
This discussion and analysis of the Technical College's financial statements provides an overview of its financial activities for the year.
Statement of Net Assefs
The purpose of the Statement of Net Assets is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities and net assets of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating.
Net assets are divided into two major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College.

Statement of Net Assets (thousands of dollars) June 30,2010

Assets Current Assets CapitalAssets, Net

Total Assets

Liabilities Current Liabilities Noncurrent Liabilities

Total Liabilities

Net Assets

Invested in Capital Assets, Net of Debt

$

54,623

Unrestricted

7 0

Total Net Assets

June 30,2009

$

47,487

730

The total assets of the Technical College increased by approximately $6,495,000 from the prior year. This can be mainly attributed to an increase of approximately $7,135,000 in Capital Assets, Net offset by a decrease in Current Assets of approximately $640,000. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the Technical College to better serve the instruction and public service missions of the Technical College.
Total liabilities for the fiscal year increased by approximately $19,000. The primary reason for the increase was in noncurrent liabilities of $43,000 offset by a decrease in current liabilities of $24,000. The combination of the increase in total assets of approximately $6,495,000 and the increase in total liabilities of approximately $19,000 yields an increase in total net assets of approximately $6,476,000. The increase in total net assets is primarily in the category of invested in capital assets, net of debt, which increased approximately $7,136,000 offset by a decrease in unrestricted net assets of $660,000.
Smtement of Revenues, Expensesand Changesin Net Assets
The purpose of the Statement of Revenues, Expenses and Changes in Net Assets is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets.
Operating revenues are received for providing goods and/or services to various customers and constituencies of the Technical College. Operating expenses are those expenses paid to acquire or produce the goods and/or services provided in return for the operating revenues, and to carry out the mission of the Technical College. Therefore, nonoperating revenue is received when no goods or

services are provided in exchange for the revenue. With the issuance of Statement No. 35, new guidelines were established by the Governmental Accounting Standards Board (GASB), which changed the classifications of state appropriations and gifts from operating to nonoperating revenue. This change may result in an operating deficit that is offset by a nonoperatingsurplus.

Statement of Revenues, Expenses and Changes in Net Assets (Thousands of dollars)
June 30,2010

June 30,2009

Operating Revenues Operating Expenses

Operating Loss

$

-30,584

$

-23,028

Nonoperating Revenues and Expenses

28,632

22,047

Income (Loss) Before Other Revenues,

Expenses, Gains or Losses

$

-1,952

$

-981

Other Revenues, Expenses, Gains or Losses

8,428

2,358

Increase (Decrease) in Net Assets

$

6,476

$

1,377

Net Assets at Beginningof Year

Net Assets at End of Year

The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with a n increase in the net assets a t the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

Revenue by Source (Thousands of Dollars) For the Years Ended June 30,2010, and June 30,2009

June 30,2010

June 30,2009

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Rents

Other

10,591 180
1,550 264 3

$

8,666

2,213

2,028

236

6

Total Operating Revenue

Nonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income

Total Nonoperating Revenue

Capital Grants and Gifts State Other

Total Capital Grants and Gifts

Total Revenues

Expenses (Thousands of Dollars) For the Years Ended June 30,2010, and June 30,2009
June 30,2010
Operating Expenses Instruction
Nonoperating Expenses Other
Total Expenses

June 30,2009

The sources of operating revenue for the Technical College are tuition and fees, grants and contracts, rents, and sales and services activities. The decrease in operating revenue of approximately $561,000 is related to increases in Student Tuition and Fees of $1,925,000 and Rents of $28,000 and decreases in Grants and Contracts of $2,033,000, Sales and Services of $478,000 and Other Revenue of $3,000 for fiscal year 2010.
Tuition and Fees increased by $1,925,000. This is directly related to an increase in enrollment of 14.75% from fiscal year 2009, the addition of a facilities fee and an increase to the graduation fee.
Nongovernmental grants and contracts decreased by $2,033,000. This is a result of a misclassification, prior to the merger, of PELL and SEOG grant funds as operating grants and contracts that should have been classified as nonoperating grants and contracts in fiscal year 2009.
Utilities increased by approximately $571,000 during the past year. This increase was generated by the building of a new facility (52,000 square feet) on the Douglasville Campus which houses a welding program that uses significant utility resources. Also, lighting improvements were installed at various locations which increased consumption.
Personal Services expenses increased by approximately $2,700,000. This increase was due to the large increase in enrollment for the Technical College, the necessary increase in adjunct faculty and the added staff and faculty to handle the newly merged Technical College.
Depreciation expense increased by $421,000 due to the building of the new CCI building in Douglasvilleand the renovation/expansion of the Murphy Campus Student Center in Waco.
Under nonoperating revenues (expenses) state appropriations decreased by approximately $2,654,000. This is due to the mandated budget cuts received by Technical College System of Georgia to West Georgia Technical College in the form of austerity or budget reductions based on a mandate from the Governor's Office of Planning and Budget.
Statement of Cash Flows
The purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the Technical College during the year. It also provides information concerning the Technical College's ability to generate future cash flows and to meet its obligations as they come due. The statement is divided into five sections. The first section reports on the operating cash flows and shows the net cash used by the operating activities of the Technical College. The second section reflects cash flows from noncapital financing activities. The third section deals with cash flows from capital and related financing activities, which reflects the cash used for the acquisition and construction of capital related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The final section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expensesand Changes in Net Assets.

Statement of Cash Flows (thousands of dollars) June 30,2010

June 30.2009

Cash Provided (Used) By:

Operating Activities

$

-28,082

Noncapital FinancingActivities

28,598

Capital and Related FinancingActivities

-1,204

InvestingActivities

2 3

Net Change in Cash Cash, Beginning of Year

Cash, End of Year

Capital Assets
The Technical College had additions to capital assets of approximately $10,484,000 with approximately $8,221,000 being a new building on the Douglasville Campus.
1ong-Term Liabilities
West Georgia Technical College had total Long-Term Liabilities of $1,562,928.25 of which $871,491.64 was reflected as current liability at June 30, 2010.
For additional information on Long-Term Liabilities, see Notes 1and 7 in the Notes to the Financial Statements.
Economic Out/ook
The Technical College is unaware of any currently known fact, decision, or condition that is expected to have a significant effect on the financial position or change how the Technical College operates for the next fiscal year. As in prior years, the Technical College's overall financial position is strong. Enrollment has increased by 10%on average annually for the past 4 years and this trend is expected to continue into the next fiscal year. As a result, the Technical College anticipates the next fiscal year will be much like the last and the Technical College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues.

Dr. Skip Sullivan, President West Georgia Technical College

BASIC FINANCIAL STATEMENTS

WEST GEORGIA TECH NlCAL COLLEGE STATEMENT OF NET ASSETS JUNE 30,2010
ASSETS
Current Assets Cash and Cash Equivalents Accounts Rece~vable,Net Federal F~nanciaAl ssistance Other Prepa~dItems Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities 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

The notes to the financial statements are an integral part of this statement. -2-

WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30.2010
OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalt~es 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 lncome (Loss)
NONOPERATING REVENUES (EXPENSES1
State Appropriations Grants and Contracts
Federal State Gifts Interest and Other Investment lncome Other Nonoperating Expenses
Net Nonoperating Revenues
lncome (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Loss on Disposalof Capital Assets
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginningof Year
Net Assets - End of Year
The notes to the financial statements are an integral pan of this statement.
-3-

EXHIBIT "B"

WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30.2010
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarsh~psand Fellowsh~ps Other Rece~pts(Payments)
Net Cash Provlded (Used) by Operatmg Actlvltles
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropr~ations Agency Funds Transactions G~ftsand Grants Received for Other than Cap~taPl urposes Negative Cash Balance Implicitly Financed In Prior Year Other NonoperatingRece~pts
Net Cash Flows Provlded (Used) by Noncapital F~nanclngACt~vities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Cap~taGl rants and G~ftsRecelved Purchases of Capltal Assets
Net Cash Prov~ded(Used) by Capltal and Related FinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Earnlngs on Investments
Net Increase (Decrease) In Cash
Cash and Cash Equ~valents- Beg~nnlngoYf ear
Cash and Cash Equ~valents- End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) AdjuStJnentS to Reconc~leOperating lncorne to Net Cash
Prov~ded(Used) by Operating Actlvltles Deprec~at~oEnxpense Change in Assets and L i a b ~ l ~ t ~ e s Accounts Receivable, Net lnventorles Prepa~dItems Salar~esPayable Accounts Payable Deferred Revenue Compensated Absences
Net Cash Prov~ded(Used) by Operating Actlvlties
NONCASH ACTIVITY Loss on Disposal of Cap~taAl ssets Reduclng Proceeds from Sale of Capltal Assets G ~ fotf Capital Assets Reduclng Proceeds of Capltal Grants and Gifts
The notes to the financial statements are an integral part of this statement.
A

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY West Georgia Technical College is one of twenty-seven (27) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. Effective July 1,2010, West Georgia Technical College and West Central Technical College merged under the name West Georgia Technical College. The accompanying financial statements reflect the operations of West Georgia Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of eleven (11) members serving staggered three-year terms who are appointed by the State Board of the Department of Technical and Adult Education. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount of State appropriations to be received by West Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, West Georgia Technical College is considered an organizational unit of the Technical College System of Georgia 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 (GASB) Codification of Governmental AccountinP and Financial Reporting;Standards.
Legally separate, tax exempt organizations whose activities primarily support member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia (an organizational unit of the State of Georgia), are considered potential component units of the State. See Note 16 for additional information.
FINANCIAL STATEMENT PRESENTATION The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the Technical College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required.
GAAP requires that the reporting of summer school revenues and expenses be split between fiscal years rather than in one fiscal year. Due to lack of materiality, the Technical Colleges of the Technical College System of Georgia will continue to report summer revenues and expenses in the year in which the predominate activity takes place.
BASIS OF ACCOUNTING For financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-collegetransactions have been eliminated.
The Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include petty cash and demand deposits in authorized financial institutions.
ACCOUNTS RECEIVABLE Accounts receivable consist of tuition and fee charges to students, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available. Accounts receivable are recorded net of estimated uncollectible amounts.
INVENTORIES Consumable supplies are recorded on the consumption method and are valued at cost using the first-in, first-out (FIFO)weighted-average method.
CAPITAL ASSETS Capital assets are recorded at cost at date of acquisition, or fair market value at the date of capital contribution. The Technical College capitalizes all land and land improvements. For equipment, the Technical College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Buildings and Building Improvements, Improvements Other Than Buildings, Easements, Rights, Patents, Trademarks, Copyrights and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastructure and software, the Technical College's capitalization threshold is $1,000,000.00. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 1 0 to 4 0 years for buildings, 15 to 25 years for infrastructure, 1 5 years for improvements other than buildings, 1 0 years for library books, 3 to 1 0 years for equipment and software, and 1 0 to 20 years for intangibles.
To fully portray capital assets acquired by the Technical Colleges of the Technical College System of Georgia, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - a n organization that is external to both the Technical College and the Technical College System of Georgia. The GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For major construction projects, GSFIC records construction in progress on its books throughout the construction period and at project completion transfers the entire project costs to West Georgia Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2010, GSFIC transferred capital additions valued at $8,735,021.40 to West Georgia Technical College.
DEFERRED REVENUES Deferred revenues include amounts received for tuition and fees and other activities prior to the end of the fiscal year but related to the subsequent accounting period.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "DM

COMPENSATED ABSENCES Employee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. West Georgia Technical College had an accrued liability for compensated absences in the amount of $1,466,287.64 as of July 1, 2009. For fiscal year 2010, $1,153,616.76 was earned in compensated absences and employees were paid $1,056,976.15, for a net increase of $96,640.61. The ending balance as of June 30, 2010 in accrued liability for compensated absences was $1,562,928.25.
NONCURRENT LIABILITIES Noncurrent liabilities include liabilities that will not be paid within the next fiscal year.
N ET ASSETS The Technical College's net assets are classified as follows:
Invested in capital assets, net of related 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 $20,973.63. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of Treasury and Fiscal Services.
When an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.
INCOME TAXES West Georgia Technical College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1)of the Internal Revenue Code, as amended.
CLASSIFICATION OF REVENUES AND EXPENSES The Statement of Revenues, Expenses and Changes in Net Assets classify the Technical College's fiscal year activity as operating and nonoperating according to the following criteria:
Operating Revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1)student tuition and fees, net of scholarship allowances, (2) certain Federal, state and local grants and contracts, and (3)sales and services.
Nonoperating Revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable TrustFunds and GovernmentalEntities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

Operating Expenses: Operating expenses include activities that have the characteristics of exchange transactions.
Nonoperating Expenses: Nonoperating expenses include activities that have the characteristics of nonexchangetransactions, such as capital financing costs related to investment activity.
SCHOLARSHIP ALLOWANCES Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the Technical College, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances.
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 of a 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:
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 of any public authority created by the laws of the 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 the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. 6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies, which allows agencies of the State of Georgia (and thus West Georgia Technical College), the option of exempting demand deposits from the collateral requirements.
At June 30, 2010, the carrying value of deposits was $1,067,904.53 and the bank balance was $3,349,672.40. Of the Technical College's deposits, $3,099,672.40 were uninsured. Of these uninsured deposits, $3,099,672.40 were collateralized with securities held by the financial institution's trust department or agency in the Technical College's name.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 3 0 , 2 0 1 0 , consists of the following:

Student Tuition and Fees

$

Federal, State and Private Funds

Georgia State Financing and Investment Commission

Other

360,889.56 268,138.95 182,093.48 384,109.16

Less: Allowance for Doubtful Accounts Total Accounts Receivable

NOTE 4: INVENTORIES

Inventories a t June 30, 2010, consist of the following:

Bookstore

$ 804,233.00

EXHIBIT "D"

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

NOTE 5: CAPITAL ASSITS Followingare the changes in capital assets for the year ended June 30,2010:

Beginning Balance
July 1.2009

Additions

Reductions

Capital Assets, Not Being Depreciated: Land and Land lmprovements Construction Work-In-Progress

Total Capital Assets, Not Being Depreciated

Ending Balance June 30,2010

Capital Assets. Being Depreciated: Buildingand Build~nglmprovements ImprovementsOther Than Buildings Equipment Library Collections
Total Assets Being Depreciated

Less: Accumulated Depreciation: Building and Building lmprovements lmprovements Other Than Buildings Equipment Library Collections

Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Capital Assets. Net

NOTE 6: DEFERRED REVENUE

Deferred revenue at June 30, 2010, consists of the following:

PrepaidTuition and Fees

$ 261,292.83

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "Dm

NOTE 7: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2010 was as follows:

Beg~nning Balance July 1,2009

Additions

Reductions

Ending Balance June 30,2010

Current Portion

Other Liabilities Compensated Absences

NOTE 8: NET ASSETS

Changes in Net Asset activity for the year ended June 30, 2010 was as follows:

Beginning

Balance

July 1,2009

Additions

Reductions

Ending Balance June 30, 2010

Invested in Capital Assets Net of Related Debt

Restricted Net Assets

Unrestricted Net Assets

Total Net Assets

NOTE 9: LEASE OBLIGATIONS
OPERATING LEASES West Georgia Technical College has entered into certain agreements to lease land, copiers, and postage meters, 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 of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised.
Expenses for rental of land, copiers, and postage meters under operating leases for the year ended June 30, 2010, totaled $73,381.06.
NOTE 10: SIGNIFICANT COMMITMENTS
West Georgia Technical College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $866,760.00 as of June 30, 2010. This amount is not reflected in the accompanyingfinancial statements.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBTT "D"

NOTE 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Descripfion West Georgia Technical College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing 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 of Georgia. 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 of West Georgia Technical College who are covered by TRS are required by State statute to contribute 5.25% of their gross earnings to TRS. West Georgia Technical College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2010, the employer contribution rate was 9.74% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description West Georgia 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 of providing retirement allowances for employees of the State of Georgia.
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 of ERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects 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. Members hired on or after July 1,1982 but prior to January 1,2009 are "new plan" members subject to the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1,2009 also have the option to change their membership to the GSEPS plan.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "Dl'

Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 6 0 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 2 5 years of creditable service for members under age 60.

Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. 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.

Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members of other 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 June30, 2010, for employees covered by ERS was $6,434,355.49. The Technical College's total payroll for all employees was $19,739,559.24.

Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, the Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Technical College contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required
Contribution

ACTUARIAL AND TREND INFORMATION Actuarial and historical trend information is presented in the ERS June 30, 2010 financial report, which may be obtained through ERS.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description West Georgia 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.
BeMts 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 of making 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 of Georgia issues a financial report each fiscal year which may be obtained through ERS.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross 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, 2010, for employees covered by GDCP was $3,129,503.28. The Technical College's total payroll for all employees was $19,739,559.24.
Total contributions made by employees during fiscal year 2010 amounted to $234,327.36 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 12: RISK MANAGEMENT
PUBLIC ENTITY RlSK POOL The Department of Community Health 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 of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with United Healthcare to process medical claims and Medco to process prescription drug claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.
OTHER RlSK MANAGEMENT The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

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 Technical College System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE 13: POSTEMPLOYMENT BENEFITS
West Georgia Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department - OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices.
Retiree health benefits were previously funded through the Georgia Retiree Health Benefit Fund (GRHBF). In 2009, the General Assembly revisited the GRHBF and enacted legislation that, effective August 31, 2009, separated the GRHBF into two new funds: the Georgia School Personnel Postemployment Health Benefit Fund and the Georgia State Employees Post-employment Health Benefit Fund. The purpose of this change was to assure employers responsible for planning and funding future retiree health costs that their contributions will be dedicated to their respective retiree populations. Funds in the GRHBF were transferred to the Georgia State Employees Post-employment Health Benefit Fund or the Georgia School Personnel Post-employment Health Benefit Fund as described in the plan financial statements. The statute that created the GRHBF is repealed effective September 1,2010.
GEORGIA STATE EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND The Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund) is a costsharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).
The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

The combined active and retiree contribution rates established by the Board for employers participating in the State OPEB Fund were as follows for the fiscal year ended June 30, 2010:

July 2 0 0 9 August 2 0 0 9 - October 2 0 0 9 November 2009 -June 2 0 1 0

22.165% of covered payroll for August coverage 16.581% of covered payroll for September - November coverage 22.165% of covered payroll for December - July coverage

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.

The following table summarizes the West Georgia Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30, 2010, June 30, 2009 and June 30,2008:

Fiscal Year

Percentage Contributed

Required Contribution

STATE EMPLOYEES' ASSURANCE DEPARTMENT - OPEB State Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit post-employment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees', Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1,2009. Pursuant to Title 47 of the OCGA, 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.
Contributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1%of earnable compensation. For the fiscal year ended June 30, 2010, contributions of ERS "old plan" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS "new plan" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30,2010, June 30,2009 and June 30,2008.
NOTE 14: 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 expects such amounts, if any, to be immaterial to its overall financial position.

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

Litigation, claims and assessments filed against (an organizational unit of the Technical College System of Georgia), 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 30,2010.
NOTE 15: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS
The Technical College's operating expenses shown at the natural classification on the "Statement of Revenues, Expenses and Changes in Net Assets" are all classified as Instruction at the functional classification.
NOTE 16: AFFILIATED ORGANIZATIONS
The West Georgia Technical College Foundation, Inc., is a legally separate, tax exempt organization whose activities primarily support West Georgia Technical College. This affiliate organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organ~zationsare Component Units. Therefore, the financial statement of the affiliate organization is not included in these financial statements. A copy of the financial statement for the affiliated organizations may be obtained from West Georgia Technical College Foundation.

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SUPPLEMENTARY INFORMATION

WEST GEORGIA TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND JUNE 30,2010
ASSETS Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures l nventories
Total Assets
LIABILITIES AND FUND EOUITY Liabilities
Salaries Payable Accounts Payable Encumbrances Payable Deferred Revenue
Total Liabilities Fund Balances
Reserved Federal Financial Assistance Sales and Services Live Work Projects Cont~nuingEducation Technology Fees UncollectibleAccounts Receivable Inventories Bookstore
Unreserved Surplus Total Fund Balances
Total Liabilities and Fund Balances
Actual amounts were preparedon a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georg~aw, hich is a comprehensive basis of accounting other than generally accepted accounting principles.

SCHEDULE "1"

WEST GEORGIA TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GA4P BASIS)
BUDGET FUND YEAR ENDEDJUNE 30.2010

REVENUES
State Approprlahon State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Totai Funds Available
EXPENDITURES
Adult Llteracy Econom~cDevelopment Technical Educatlon
Total Cxpendltures
Excessof Funds Available over Exaenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prlor Year Payables/Expendltures Pnor Year Receivabies/Revenues Unreserved Fund Balance [Surplus) Returned
to Technlcai CollegeSystem of Georgia Year Ended June 30.2009
Refunds to Grantors Federal FlnanClalAssistance Returned to Technical College System of Georgia Year Ended June 30,2009 Federal Financial Assistance Returned to Department of Education Year Ended June 30,2009
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BAUNCE
Reserved Federal F~nanciaAl ssistance Saies and Serv~ces Uve Work Prqects Conunulng Educatlon TechnologV Fees Uncollectlble Accounts Receivable Inventories Bookstore
Total Reserved
Unreserved Surplus
Total Fund Balance
Actual amounfs were prepared on a prescribed basis of accountlng that demonstrates compl~ancew ~ t hbudgetary statutes and regulations of the State of Georgia. which is a comprehensive basls of accountlng other than generally accepted accountlng principles.

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND MPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(NON~GMPBASIS) BUDGET FUND YE4R ENDED JUNE 30.2010

Adult Lneracy State Appropriation State General Funds Federal Funds Other Funds
Total Adult Literacy

Orlglnal Approprlatlon

Fhnsl Budget

Current Year Revenues

Funds Available Compared t o Budget

~ r l oyrear Carry-Over

Total FundsAva~lable

varoance ~osltlve (Negatove)

Ewnamlc Development Other Funds

Technical EdUCauOn State Approprlatlon State General Funds Federal Funds American Remvely and Reinvestment Act of 2009 Federal Stabilization Funds Other Federal Stimulus Other Federal Funds Other Funds
Total Technical Education

Grand Totals - All Programs

Actual amount, were prepared on a prescribed basls of accountlng that demonstrates cornpllance w ~ t hbudgetary statutes and regulalons of the State of Georga, wh~ch1s a comprehensive bastoof accountlng other than generally accepted accountlng pr~nclples

Expenditures Compared to Budget

Variance

Pmitive

Actual

(Negative)

Actual Funds nvallaole
Over/(Under) Expenditures

Prlor Period

Other

Ad~ustments Adjustments

Total Program
Fund Balances

Transfers

Program Fund Balances

Reserve

Surplus

Total Fund Balance

Unexpendabie Reserves Un~liectlbleAccounts Receivable Inventories

11,277 75 297,145.32

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Totals per Annual Supplement
Accruals June 30.2010 June 30,2009
Compensated Absences June 30,2010 June 30.2009
Agency Funds
Unidentified Variance

WEST GEORGIA TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.2010

SCHEDULE "4"

SALARIES

TRAVEL

SECTION II FINDINGS AND QUESTIONED COSTS

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

COMMUNICATION OF INTERNAL CONTROL DEFICIENCIES

The auditor is required to communicate to management and those charged with governance control deficiencies identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weakness.

A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the West Georgia Technical College's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Any identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within a separate management letter dated January 25, 2011. Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below:

REVENUES/RECEIVABLES/RECEIPTS Inadequate Internal Controls over Cash Receipts Subsidiary System Significant Deficiency Finding Control Number: FS-826-10-01

Condition:

The accounting procedures of the Technical College were insufficient to
ensure that all Continuing Education revenue was being properly reflected in the financial statements.

Criteria:

The Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that revenue activity is properly documented, processed and reported.

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that management should design policies and procedures to reduce the risk that financial reporting objectives are not being met. A key element to the objective of reliable financial statement reporting is the completeness of financial data.

Questioned Cost:

N/A

Information:

The Technical College utilizes ACEware Student Registration software (ACEware) for the initialization, authorization, and collection of Continuing Education revenue. However, the Technical College does not reconcile activity recorded in ACEware to their financial account software (PeopleSoft) used for the preparation of the financial statements. Procedures performed reveal instances where activity recorded in ACEware was not properly reflected in the Technical College's financial statements.

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIALSTATEMENT FINDINGSAND QUESTIONED COSTS

REVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Cash Receipts Subsidiary System Significant Deficiency Finding Control Number: FS-826-10-01

Cause:

The Technical College did not adequately design procedures to ensure that all activity recorded in ACEware is properly recorded in Peoplesoft.

Effect:

Without satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls and procedures could impact reporting of its financial position and results of operations.

Recommendation:

The Technical College should establish policies and procedures to reconcile activity recorded within ACEware to the general ledger to ensure that all activity recorded within ACEware is properly reflected in the financial statements.

REVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Significant Deficiency Finding Control Number: FS-826-10-02

Condition:

The accounting procedures of the Technical College are insufficient to ensure that bookstore sales are properly reflected in the financial statements.

Criteria:

The Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that revenue activity is properly documented, processed and reported.

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that separate and ongoing evaluations through methods such as the identification and monitoring of key control indicators enable management to determine whether the other components of internal control over financial reporting continue to function over time.

Questioned Cost:

N/A

Information:

Testing revealed significant unexplained differences between expected bookstore mark-up percentages and calculated mark-up percentages using financial data reported in the financial statements. It appears that the Technical College did not adequately monitor bookstore sales revenue.

Cause:

The Technical College has not implemented adequate monitoring procedures over bookstore sales. In addition, other control deficiencies exist such as not reconciling bookstore inventory balances, which increases the importance of strong monitoring controls.

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

REVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Significant Deficiency Finding Control Number: FS-826-10-02

Effect:

Without satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where the potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The Technical College should design and implement monitoring procedures over bookstore sales. These monitoring procedures should include but not be limited to the identification and ongoing monitoring of key control indicators such as inventory mark-up percentages.

REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LlABlLlTlES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER lnadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-10-03

Condition:

The accounting procedures of the Technical College were insufficient to provide adequate separation of duties.

Criteria:

AlCPA Professional Standards, AU 319.04, states that internal control is a process - affected by an entity's board of directors, management and other personnel - designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations.

Separation of duties involving key accounting functions, both manual and automated, is the basis for achieving an adequate system of internal control.

Questioned Cost:

N/A

Information:

Revenues/Receiva bles/Recei pts Deposit preparation was not separated from the record keeping and cash receipts subsidiary reconciliation functions. Additionally, the Technical College did not have procedures in place for a supervisory review of the cash drawer close-out process.

Expenditures/Liabilities/Disbursements Accounting procedures were designed to allow certain employees the ability to create and post express vouchers within Peoplesoft and process check runs. Potential compensating controls could not be tested due to a lack of documentation.

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30.2010

FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER lnadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-10-03

Employee Compensation Accounting procedures were designed to allow certain employees the ability to add new employees and make payroll changes within PeopleSoft. Potential compensating controls could not be tested due to a lack of documentation.

General Ledger Accounting procedures were designed to allow certain employees the ability to enter and post journal entries within PeopleSoft. Although, a second level approval occurs manually outside of PeopleSoft, the compensating control was not designed to prevent or detect unapproved journal entries from being posted. In addition, employees with the ability to enter and post journal entries within PeopleSoft have other job duties, such as bank reconciliation, that reduces the effectiveness of potential compensating controls.

Cause:

The Technical College did not adequately design procedures to ensure different employees were responsible for initiating transactions, authorizing transactions, recording transactions, reconciling information, and maintaining custody of assets. In addition, potential compensating controls were either not adequately designed or not formally documented.

Effect:

Misstatements due to error or fraud may occur and not be detected in a timely manner.

Recommendation:

The Technical College should revise and implement internal controls to ensure that proper separation of duties is established. In the case when management determines segregation of duties is not cost beneficial, management should implement compensating controls that utilize system generated reports and data.

EMPLOYEE COMPENSATION lnadequate Internal Controls Significant Deficiency Finding Control Number: FS-826-10-04

Condition:

The accounting procedures of the Technical College were insufficient to provide for adequate internal controls over employee compensation.

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EMPLOYEE COMPENSATION lnadequate Internal Controls Significant Deficiency Finding Control Number: FS-826-10-04

Criteria:

The Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that employees are properly compensated and that supporting documentation related to employee compensation is maintained, processed and reported within the accounting records.

Questioned Cost:

N/A

Information:

Our testing revealed instances where salary changes made during the year were not properly approved in accordance with established procedures.

Cause:

The Technical College's management failed to ensure that normal business procedures established for the approval of salaries were consistently applied.

Effect:

Without proper accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The Technical College should implement policies and procedures to ensure that normal business procedures are followed for all salary changes, which includes ensuring that adequate documentation is maintained to support the salary payments.

CAPITAL ASSETS lnadequate Internal Controls over Capital Assets Material Weakness Finding Control Number: FS-826-10-05

Condition:

The accounting procedures of the Technical College were insufficient to provide for adequate internal controls over Capital Assets.

Criteria:

The State Accounting Office's Accounting Procedures Manual for the State of Georgia states that, "asset purchased, constructed, or donated that meet or exceed the State's established capitalization thresholds or minimum reporting requirements must be uniformly classified in conformity with the Accounting Procedures Manual".

Questioned Cost:

N/A

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CAPITAL ASSETS lnadequate Internal Controls over Capital Assets Material Weakness Finding Control Number: FS-826-10-05

Information:

The Technical College did not adequately conduct a physical inventory of capital assets. Procedures performed in the audit revealed numerous instances of missing, obsolete, or scrapped items that were included in the financial statements. Significant adjustments were made to the financial statements to remove these items.

In addition, the Technical College did not adequately reconcile the capital asset subsidiary system to the financial statements. Unknown variance were identified and adjusted through current year activity.

Cause:

The Technical College's management failed to implement appropriate internal controls and procedures necessary to properly record, maintain and track capital assets.

Effect:

Failure to properly record and reconcile capital assets could result in the Technical College placing itself in a position where misrepresentation of its financial position and results of operations could occur.

Recommendation:

The Technical College should design and implement controls over capital assets to ensure that inventory records are properly maintained to prevent reporting errors in the future. In addition, the Technical College should make appropriate correcting entries to the capital assets records to properly reflect capital asset balances.

INVENTORIES lnadequate Internal Controls over Bookstore Inventories Significant Deficiency Finding Control Number: FS-826-10-06

Condition:

The accounting procedures of the Technical College were insufficient to provide adequate controls over resale inventories.

Criiteria:

AlCPA Professional Standards provide that internal control is a process placed into operations to achieve management's objectives related to "(a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations." The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that management should design policies and procedures to reduce the risk that financial reporting objectives are not being met. A key element to the objective of reliable financial statement reporting is ensuring the completeness of financial data and that transactions are reported in the proper period.

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

l NVENTORI ES Inadequate Internal Controls over Bookstore Inventories Significant Deficiency Finding Control Number: FS-826-10-06

Questioned Cost:

N/A

Information:

The Technical College did not reconcile the bookstore inventory subsidiary system to the financial statements. Unexplained variances existed between the inventory listing and the inventory balance reported on the financial statements. In addition, a review of subsequent period inventory purchases revealed several transactions reported in the wrong period.

Cause:

The Technical College did not have procedures in place to perform a reconciliation between the bookstore inventory listing and the bookstore inventory balance reported in the general ledger. In addition, the Technical College did not properly design procedures to ensure that inventory transactions are reported in the proper period.

Effect:

Without satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact the reporting of its financial position and results of operations.

Recommendation:

The Technical College should establish policies and procedures to reconcile bookstore inventory listings to the general ledger to ensure that all activity is properly reflected in the financial statements. In addition, the Technical College should evaluate and modify existing procedures to ensure that all transactions are reported in the proper accounting period.

FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.