E-,A A8oo RI v~ C-K' ;zoo 1-;;l uo;:).. ; ' STATE OF--GEORGIA" _ DEPARTMENT OF'AUDITS AND ACCQ,UNTS r I I v I I' ,, ' ' \ C " I' 'l , ,, ,, ,.,_ , I- ;, : ' 1 ( ' ' ., J I ' ' r , CHATTAHOOCHEE TECHNICAL COLLEGE' \ MARIETTA, GEORGIA .- I ; OF THEREFPINOARNT COINALRSETVAIETWEME''NTS FOR THE FISc_AL YEAR ENDED JUNE 30, 2002' I f i ... " ' I -- ' ' r ' r ,; '. ~a J ; ' i J ' '. I r: l ' ' ) RusselLW. Hinton ,, State Auditor ' ; ' I I ) ' - ,, .~ ' I I' , ' - ';' ' ' I CHATTAHOOCHEE TECHNICAL COLLEGE -TABLE OF CONTENTS- SECTION I FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS 2 BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS 11 B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 12 C STATEMENT OF CASH FLOWS I 3 D NOTES TO THE FINANCIAL STATEMENTS 14 SUPPLEMENTARY INFORMATION SCHEDULES SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET- (NON-GAAP BASIS) BUDGET FUND "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION 29 2 RECONCILIATION OF SALARIES AND TRAVEL 30 3 RECONCILIATION OF PER DIEM AND FEES 31 SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION! FINANCIAL Rt1,,1-11 \\'. Hlf'l,,TOJ'lr, STATE AUDITOFl ic.a 56 217~ DEPARTMENT OF AUDITS AND ACCOUNTS 2"4 \V..1.,hin!!ton Str{'ct ~ \\' ~UILL '214 Atl ..rnta Georgia 10134-1-:400 November 25, 2002 Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Techrucal and Adult Educat10n Members of the Local Board ofDuectors and Honorable Harlon Cnmm, President Chattahoochee Technical College INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen We have reviewed the accompanymg basic financial statements (Exh1b1ts A through D) of Chattahoochee Technical College, an organizational umt of the State of Georgia, as of and for the year ended June 30, 2002, m accordance with Statements on Standards for Accounting and Review Services issued by the Amencan Institute of Certified Pubhc Accountants All mformatlon mcluded m these financial statements 1s the representation of the management of Chattahoochee Technical College. A review consists pnnc1pally ofmqumes ofTechrucal College personnel and analytical procedures applied to financial data It 1s substantially less m scope than an audit m accordance with aud1tmg standards generally accepted m the Umted States of Amenca, the obJect1ve of which 1s the express10n of an opm1on regarding the financial statements taken as a whole Accordingly, we do not express such an op1mon Based on our reVIew, we are not aware of any matenal mod1ficat10ns that should be made to the accompanymg financial statements in order for them to be in conformity with accounting pnnc1ples generally accepted m the Umted States of Amenca As descnbed in Note I, Chattahoochee Technical College adopted the prov1s10ns of Governmental Accountmg Standards Board (GASB) Statement No 35, Basic Financial Statements - and Management's Discusszon and Ana(vs1s - for Public Colleges and Universllles, as amended by GASB Statement No 37, Basic Financial Statements - and Management's Discusszon and Analvs1s for State and Local Go1emments, and GASB Statement No 38, Certain Fmanczal Statements Note Disclosures, as of July I, 2001, to implement a new financial reporting model 02ARL-6T Management's D1scuss1on and Analysis 1s not a reqmred part ofthe basic financial statements but 1s supplementary mformat1on required by the GASB We have applied certam limited procedures, which consisted pnnc1pally ofmqumes of management regardmg the methods of measurement and presentation ofth1s supplementary mformat1on, and we arc not aware of any matenal mod1ficat10ns that should be made thereto Our review was made for the purpose of expressmg hm1ted assurance that there are no matenal modifications that should be made to the financial statements m order for them to be m conformity with accountmg pnnc1ples generally accepted m the Umted States of Amenca The accompanying supplementary mformauon (Schedules I through 3) 1s presented for additional analysis purposes Such mformatJon has been subJected to the mqumes and analytical procedures applied m the review of the financial statements, and we are not aware ofany matenaJ modifications that should be made to such data RWH.as 02ARL-6T Ja i ~ Respectfully subm:w.tted,--" State Auditor REQUIRED SUPPLEMENTARY INFORMATION -I- Chattahoochee Technical College Management's Discussion and Analysis The followmg 1s a discussion and analysis of Chattahoochee Techmcal College's financial performance for the fiscal year endmg June 30, 2002 Please read 1t m conJuncuon with the College's financial statements, which follow this section Due to the fact that the State of Georgia, mcludmg Chattahoochee Techmcal College, implemented the prov1s1ons of Governmental Accountmg Standards Board (GASB) Statements No 34 and 35 for the fiscal year 2002 only lumted fiscal year 2001 data will be presented for comparauve purposes llus comparalive mformalion will be reqwred m future reports Overview ofthe Financial Statements and Financial Analysis This annual report consists of a senes of financial statements prepared m accordance with the rules and regulalions established by the Governmental Accountmg Standards Board These financial statements differ, m both form and the accountmg pnnc1ple used, from the presentalion of pnor financial statements The Statement of Net Assets used m conJunclion with the Statement of Revenues, Expenses and Changes m Net Assets contains mformalion concenung the College's finances and acliv11ies as a whole and assists with proV1ding an answer to the queslion "Is the College as a whole better or worse off as a result of the year's act1V11ies?" These statements mclude all assets and hab1hlies usmg the accrual basis of accountmg, which 1s slJilllar to the accountmg method used by corporalions and other pnvate sector companies All revenues and assets are recogmzed when the service 1s provided and expenses and hab1hlies are recogmzed when others provide the goods or service, regardless of when cash 1s exchanged The Statement of Cash Flows 1s a valuable tool when evaluatmg the ab1hty of the College to meet financial obhgalions as they mature. This statement presents mformat1on related to cash mflows and outflows surnmanzed by operaling, non-capital financmg, capital and related financmg and mvestmg acliVllies This d1scuss10n and analysts of the College's financial statements provides an overview of Its finaJ1c1al acliV1lies for the year Statement ofNet Assets The purpose of the Statement of Net Assets 1s to present to the users of the financial statements a fiscal snapshot of the Techmcal College at a specific pomt m lime. The statement presents the assets, hab1hlies aJ1d net assets of the College as of the end of the fiscal year Assets and hab1hties are reported as current and non-current and the difference between assets and hab1ht1es 1s reported as net assets Over a penod of lime the mcreases and decreases reflected m the -2- Statement of Net Assets, when considered w11h other non-financial facts such as enrollment levels and the cond1t10n of the fac1hlles, can provide a measure to aid m determmmg whether the Technical College's financial pos1llon 1s 1mprovmg or detenoratmg Net assets are d1v1ded mto three maJor categones The first category, mvested m capllal assets, net of debt, provides mformallon concemmg the College's eqmty m property, plant and eqmpment owned by the College The next asset category 1s restncted net assets Expendable restncted net assets are available for expenchture by the College but must be spent for purposes as determmed by donors and/or external ent1t1es that have placed time or purpose restnct10ns on the use of the assets. The final category 1s unrestncted net assets, wluch are available for expenditure by the College for any lawful purpose deemed necessary to operate the College Statement of Net Assets (thousands of dollars) Assets Current Assets Capttal Assets, Net $ 2, I I 9 13.790 Total Assets $ 15.909 Liabilities Current L1ab1hlles Non-Current L1ab1hlles $ 1.506 324 Total Liabilities $ 1.830 Net Assets Invested m Capital Assets, Net of Debt Restncted - Expendable Unrestncted Total Net Assets s 13,790 1 288 s 14,Q72 Statement ofRevenues, Expenses and Changes in Net Assets The purpose of the Statement of Revenues, Expenses and Changes m Net Assets 1s to present the revenues received by the College, both operatmg and nonoperatmg, and the expenses mcurred by the College, operatmg and nonoperatmg, and any other revenues, expenses, gains and losses received or spent by the College durmg the fiscal year. Changes m total net assets as presented on the Statement of Net Assets are based on the mformallon presented m the Statement of Revenues, Expenses and Changes m Net Assets Operatmg revenues are received for providing goods and/or services to vanous customers and conslltuenc1es of the College Operallng expenses arc those expenses paid to acqwre or produce the goods and/or services provided m return for the operallng revenues, and to carry out the m1ss10n of the College Therefore, nonoperatmg revenue 1s received when no goods or services -3- are provided m exchange for the revenue State appropnal!ons and gifts were classified as operatmg revenues m previous reports With the issuance of Statement No 35, new gmdelmes have been estabhshed by the Governmental Accountmg Standards Board (GASB) changmg the class1ficat10ns of state appropnal!ons and gifts from operatmg to nonoperatmg re\'enue This change may result m an operatmg deficit that 1s offset by a nonoperatmg surplus Statement of Revenues, Expenses and Changes m Net Assets (thousands of dollars) Operaung Revenues Operatmg Expenses s 5,130 16,344 Operatmg Gain/Loss S -11,214 Nonoperaung Revenues and Expenses 10,053 Income (Loss) Before Other Revenues, Expenses, Gains or Losses $ -1,161 Other Revenues, Expenses, Gains or Losses Increase (Decrease) m Net Assets 60 s -1 101 Net Assets at Beginnmg of Year, as Ongmally Reported $ 8,199 CumulaUve Effect of Changes m Accountmg Pnnc1ple 6,981 Net Assets at Begmrung of Year Restated $ 15,180 Net Assets at End of Year S 14,079 The Statement of Revenues, Expenses, and Changes m Net Assets reflects a negative year with a decrease m the net assets at the end of the year Some lughhghts of the mformal!on presented on the Statement of Revenues, Expenses, and Changes m Net Assets are as follows -4- Revenue by Source (thousands of dollars) Operatmg Revenue Twtion and Fees Grants and Contracts Rents and Royalties Sales and Services of Educational Departments Other $ 3,754 1,110 21 232 13 Total Operatmg Revenue $ 5,130 Nonoperatmg Revenue State Appropnat1ons Grants and Contracts Investment Income Other Total Nonoperatmg Revenue $ 9,232 1,000 50 -229 s 10,053 Total Revenues Operatmg Expenses (thousands of dollars) $ l~.l~J Operatmg Expenses Instruction $ 16,344 Total Operating Expenses $ 16,344 The sources of operating revenue for the College are tmtion and fees, grants and contracts, aux1hary services, and educational act1v1hes. The operatmg loss 1s directly related to the exclusion of the State of Georgia appropnat1on m the amount of $9,231,401 from operatmg revenues per GASB 35 Tu1t1on mcreased by $1,022,850. Tlus 1s directly related to the mcreased enrollment of 45 4% from fiscal year 2001 The enrollment mcrease 1s partially due to the high school dual enrollment program implemented at Chattahoochee Techmcal College Personal Services expenses increased by approxlillately $1,267,317 Tlus increase reflects an annual pay raise for College employees of approximately 4 5% with the associated fringe benefits. It also reflects an increased cost to the College for additional adJunct and full time faculty positions reqmred due to the increased enrollment m fiscal year 2002 This also 1s d!fectly related to the personal services reqmrements at the Mountam V1ew Campus, which was open for three quarters in fiscal year 200 I and for all four quarters m fiscal year 2002 The cumulative effects of changes m account.mg pnnc1ple are the result of the College adopting depreciation on capital assets and changing from the budgetary basis to the GAAP basis of accounting -5- Under nonoperaung revenues (expenses) state appropnal!ons mcreased by approximately $720,640 While 1t appears that the College received add!t10nal new money from the state, given the mandatory cost mcreases of vanous expense categones, the College actually had a relal!vely flat fundmg year when all tlungs are considered Statement ofCash Flows The purpose of the Statement of Cash Flows 1s to proVJde relevant mformat1on concernmg the cash receipts and payments of the College dunng the year It also provides mformallon concemmg the College's ab1hty to generate future cash flows and to meet its obhga!ions as they come due The statement 1s ciJVJded mto three secuons The first secl!on reports on the operatmg cash flows and shows the net cash used by the operatmg act1v1t1es of the College The second sect10n shows the cash flows from the nonoperatmg ac11v11Ies of the College The final secl!on reconciles the net cash used to the operatmg mcome or loss reflected on the Statement of Revenues, Expenses, and Changes m Net Assets. Statement of Cash Flows (thousands of dollars) Cash ProVJded (Used) By. Operating Acl!VJlles Non-Capital Fmancmg Acl!v1t1es Invesung Act1v1!ies Capital and Related Fmancmg Acl!VJ!ies $ -9,279 10,744 50 -1,855 Net Change m Cash Cash, Beginnmg of Year S -340 2,013 Cash, End of Year $ 1,673 Capital Assets The College had no s1gmficant capital asset additions for fac1h11es m the fiscal year 2002 Projects funded by the Georgia State Fmancmg and Investment Comm1ss10n (GSFIC) was approximately $431,274 Projected fundmg by the GSFIC for fiscal year 2003 will be about half of this amount Economic Outlook The College 1s unaware of any currently known fact, dec1s1on. or cond!t10n that 1s expected to have a s1gmficant effect on the financial position or change how the College operates for the next fiscal year As m pnor years, the College's overall financial pos1t1on 1s strong Enrollment has -6- increased by an average of 28% annually for the past 3 years and this trend 1s expected to continue into the next fiscal year As a result, the College anticipates the next fiscal year will be much hke the last and the College will maintain a close watch over resources to maintain the ab1hty to react to unknown internal and external issues Harlon Cnrnrn, President Chattahoochee Techrucal College - 7- BASIC FINANCIAL STATEMENTS -9 - CHATTAHOOCHEE TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30 2002 ASSETS Current Assets Cash and Cash Equivalents Accounts Receivable, Net Federal Frnanc:oal Assistance Other Total Current Assets Noncurrent Assets Capital Assets, Net Total Assets LIABILITIES Current L1ab1ht1es Salanes Payable Payroll Wrthholdrngs Accounts Payable Deferred Revenue Funds Held for Others Compensated Absences Total Current L1eb1lrt1es Noncurrenl Lleblht1es Compensated Absences Total L1ablhbes NET ASSETS Invested rn Caprtel Assets, Net of Related Debt Restncted Unrestncted Total Net Assets EXHIBIT"A" $ 1,673,347 99 331,319 01 114 925 84 $ 2119,59284 s 13,790,378 90 $ 15 909 971 74 $ 122,81115 27,511 82 471,727 85 246,303 24 226,543 85 411,035 85 $ 1,505,933 76 $ 324 137 09 $ 1,830,070 85 $ 13,790,378 90 1,531 53 287,99046 S 14,079,900 89 See Independent Accountant's Combined Report on Review of Basic F1nanc:oal Statements and Supplementary Information The notes to the financial statements are an integral part of this statement - 11 - CHATTAHOOCHEE TECHNICAL COLLEGE STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET ASSETS YEAR ENDED JUNE 30 2002 EXHIBIT "B" OPERATING REVENUES Student Tuition and Fees Less Scholarship Allowances Grants and Contracts Federal Rents and Royalbes Sales and SeMCeS Other Operabng Revenues Total Operabng Revenues OPERATING EXPENSES Salanes Benefits Travel Scholarships and Fellowships Llbh!Jes Suppl18S and Other Serv,ces Depreaallon Total Operabng Expenses Operabng Income (Loss) NONOPERATING REVENUES