Management report, Chattahoochee Technical College, Marietta, Georgia, an organizational unit of the state of Georgia, year ended June 30, 2008

STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
MANAGEMENT REPORT CHATTAHOOCHEE TECHNICAL COLLEGE
MARIETTA, GEORGIA
AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA YEAR ENDED JUNE 30, 2008 Russell W. Hinton State Auditor

CHATTAHOOCHEE TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

LETTER OF TRANSMITTAL

SELECTED FINANCIAL INFORMATION

EXHIBITS

A STATEMENT OF NET ASSETS - (GAAP BASIS)

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS -

(GAAP BASIS)

3

C STATEMENT OF CASH FLOWS - (GAAP BASIS)

4

D SELECTED FINANCIAL NOTES

5

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET- (STATUTORY BASIS)-BUDGET FUND

16

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(STATUTORY BASIS) BUDGET FUND

17

3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING

SOURCE COMPARED TO BUDGET

(STATUTORY BASIS) BUDGET FUND

18

4 RECONCILIATION OF SALARIES AND TRAVEL

20

5 RECONCILIATION OF PROFESSIONAL SERVICES

21

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 6, 2008

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors
and Honorable Kary B. Porter, Acting President Chattahoochee Technical College
Ladies and Gentlemen:
As part of our audit ofthe basic financial statements ofthe State ofGeorgia presented in the State of Georgia Comprehensive Annual Financial Report and the issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2008, we have performed certain audit procedures at Chattahoochee Technical College. Accordingly, the financial statements and compliance activities ofChattahoochee Technical College were examined to the extent considered necessary in order to express an opinion as to the fair presentation ofthe financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996.
This Management Report contains information pertinent to the financial and compliance activities of Chattahoochee Technical College as ofand for the year ended June 30, 2008. Information contained in this report is a by-product ofour audit ofthe basic financial statements ofthe State ofGeorgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1, is enumerated in the Table of Contents.

This report is intended solely for the information and use of management of Chattahoochee Technical College, members of the Local Board of Directors, and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~ Russell W. Hinton, CPA, CGFM State Auditor
RWH:gp

SELECTED FINANCIAL INFORMATION - 1-

CHATTAHOOCHEE TECHNICAL COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS)
JUNE 30, 2008
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Salaries Payable Accounts Payable Deferred Revenue Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences Deferred Revenue
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Un restricted
Total Net Assets

EXHIBIT"A"

$

3,610,241.59

94,672.20 319,945.35

$

4,024,859.14

28,143,024.12
$ 32,167,883.26

$

38,045.68

298,293.96

807,754.91

349,220.51

659,670.12

$

2,152,985.18

$

542,031.18

201,408.18

$

743,439.36

$

2,896,424.54

$ 28,143,024.12
1, 128,434.60

$ 29,271,458.72

-2 -

CHATTAHOOCHEE TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2008

EXHIBIT"B"

OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalties Sales and Services of Educational Departments Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal State Local Nongovernmental Gifts Interest and Other Investment Income Other Nonoperating Revenues
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Gain/Loss on Disposal of Capital Assets
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year, Restated
Net Assets - End of Year

$

8,128,511.53

-941,616.27

3,399,084.80 212,257.77 650,989.16 93,451.16

$

11,542,678.15

$

14,021,008.09

4,211,749.86

184,049.61

2,353,459.73

1,017,169.35

3,759,918.83

1,408,258.86

$

26,955,614.33

$

-15,412,936.18

$

13,093,536.39

1,070,946.70 877,507.36 195,260.47 6,500.00 908,708.07 86,782.06 -908 708.07

$

15,330,532.98

$

-82,403.20

$

1,052,989.06

-11,225.25

$

1,041 763.81

$

959,360.61

28,312,098.11

$ ===29=l'=27=1a!:.4=5=8.=7=2

-3-

CHATTAHOOCHEE TECHNICAL COLLEGE STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of Capital Assets
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable Accounts Payable Salaries Payable Deferred Revenue Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

EXHIBIT"C"

$

7,649,316.28

3,399,084.80

650,989.16

-9,169,503.77

-13,891,163.33

-2,353,459.73

305 708.93

$ -13,409,027.66

$

13,093,536.39

-46,006.11

2,291,470.81

$

15,339,001.09

$

-632 734.99

$

86,782.06

$

1,384,020.50

2,226,221.09

$ ===l3,=61..,0:!:,2=4=1.=59=

$

-15,412,936.18

1,408,258.86
178,062.41 21,191.86 14,454.70
284,358.61 97 582.08

$ ==-1=3'=4=09=,0=2=7=.6=6

$ ===1,..,0=52=,9=8=9=.0=6

-4 -

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Chattahoochee Technical College is one of thirty-three (33) State supported member colleges of postsecondary education in Georgia which comprise the Georgia Department ofTechnical and Adult Education, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Chattahoochee Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of ten (10) members serving staggered three-year terms who are appointed by the State Board ofTechnical and Adult Education. Appropriation of State funds is made to the Georgia Department of Technical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount of State appropriations to be received by Chattahoochee Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Chattahoochee Technical College is considered an organizational unit of the Georgia Department of Technical and Adult Education for financial reporting purposes because ofthe significance of its legal, operational, and financial relationships as defined in Section 2100 ofthe Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
NET ASSETS The Technical College's net assets are classified as follows:
Invested in capital assets, net ofrelated debt: This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
Unrestricted net assets: Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $36,382.14. Unexpended state appropriations must be refunded to the Department ofTechnical and Adult Education 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.
RESTATEMENT OF PRIOR YEAR NET ASSETS For fiscal year 2008, the Technical College restated Capital Assets due to an error in the prior year amounts for equipment and related accumulated depreciation. The Technical College increased

-5 -

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESTATEMENT OF PRIOR YEAR NET ASSETS equipment and related accumulated depreciation by $94,898.59 and $88,014.70, respectively. The result is an increase in Net Assets at July 1, 2007 of $6,883.89.
NOTE 2: DEPOSITS
DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu ofa surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
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 ofthe United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
6. Guarantee or insurance 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 ofthe State of Georgia (and thus Chattahoochee Technical College), the option of exempting demand deposits from the collateral requirements.
At June 30, 2008, the carrying value of deposits was $3,608,806.59 and the bank balance was $4,574,137.53. Of the Technical College's deposits, $4,329,290.59 were uninsured. Of these uninsured deposits, $343,640.71 were collateralized with securities held by the financial institution's
-6 -

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 2: DEPOSITS

DEPOSITS trust department or agent in the Technical College's name, and $3,985,649.88 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the Technical College's name.

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2008, consists of the following:

Student Tuition and Fees Federal, State and Private Funds GSFIC

$ 89,725.25 160,875.31 164,016.99

Total Accounts Receivable

$ 414,617.55

NOTE 4: CAPITAL ASSETS

Following are the changes in capital assets for the year ended June 30, 2008:

Balance July 1, 2007 (Restated}

Additions

Reductions

Balance June 30, 2008

Capital Assets, Not Being Depreciated:

Land and Land Improvements

$ 3,2 I 1,504.50 $

0.00 $

0.00 $ 3,211,504.50

Capital Assets, Being Depreciated: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections

$ 26,143,607.00 2,175,893.23 $ 5,683,691.81 834,809.52

97,000.00 1,526,296.43 $
62,427.62

$ 26,143,607.00

2,272,893.23

821,313.88 6,388,674.36

172,048.53

725,188.61

$ 34,838,001.56 $ 1,685,724.05 $ 993,362.41 $ 35,530,363.20

Less: Accumulated Depreciation:

Building and Building Improvements $ 4,288,259.35 $

Improvements Other Than Buildings

1,300,526.35

Equipment

4,029,291.39

Library Collections

554,644.79

597,788.46 144,404.04 598,282.72 $ 67,783.64

$ 4,886,047.81

1,444,930.39

810,088.63 3,817,485.48

172,048.53

450,379.90

$ 10,172,721.88 $ 1,408,258.86 $ 982,137.16 $ 10,598,843.58

Total Capital Assets, Being Depreciated,

Net

$ 24,665,279.68 $ 277 465.19 $

11,225.25 $ 24,931,519.62

Capital Assets, Net

$ 27,876,784,18 $ 277,465.19 $ 11 225.25 $ 28,143,Q24.12

-7-

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 5: DEFERRED REVENUE

Deferred revenue at June 30, 2008, consists of the following:

Prepaid Tuition and Fees Federal Grants and Contracts

$ 807,754.91 201,408.18

Totals

$ 1,009,163.09

NOTE 6: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2008 was as follows:

Other Liabilities Compensated Absences

Balance July 1, 2007

Additions

Reductions

Balance June 30, 2008

Current Portion

$ 1,104 I 19.22 $ 947 940.87 $ 850,358.79 $ 1,201,701.30 $ 659,670.12

NOTE 7: NET ASSETS

Changes in Net Asset activity for the year ended June 30, 2008 was as follows:

Invested in Capital Assets Net of Related Debt
Restricted Net Assets
Unrestricted Net Assets
Total Net Assets

Balance July 1, 2007 (Restated}

Additions

Reductions

Balance June 30, 2008

$27,876,784.18 $ 277,465.19 $ 11,225.25 $28,143,024.12

0.00

4,470,031.50

4,470,031.50

0.00

435,313.93 23,444,943.44 22,751,822.77

1,128,434.60

$ 28 312,098.11 $28122440.13 $ 27 233 012.52 $ 22 271,458.72

NOTE 8: LEASE OBLIGATIONS

OPERATING LEASES Chattahoochee Technical College has entered into certain a certain agreement to lease equipment which is 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 equipment under operating leases for the year ended June 30, 2008, totaled $49,788.24.

-8-

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT"D"

NOTE 8: LEASE OBLIGATIONS

SUMMARY OF LEASE OBLIGATIONS Future commitments for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2008, were as follows:

Operating Leases

Year Ending June 30: 2009

$ 43,098.00

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Chattahoochee Technical College participates in the Teachers Retirement System ofGeorgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly ofGeorgia for the purpose ofproviding retirement allowances and other benefits for teachers ofthe State ofGeorgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

Funding Policy Employees of Chattahoochee Technical College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Chattahoochee 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 2008, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2008 2007 2006

100% 100% 100%

$ 591,896.52 $ 606,967.75 $ 579,142.95

-9-

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Chattahoochee Technical College participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowances for employees of the State of Georgia.
Retirement benefits paid to members are based upon a formula which considers the monthly average ofthe member's highest twenty-four consecutive calendar months of salary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
In addition, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 ofthe Internal Revenue Code (IRC) as a portion ofERS. The purpose ofSRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Technical College's payroll for the year ended June 30, 2008, for employees covered by ERS was $4,552,065.00. The Technical College's total payroll for all employees was $14,021,008.09.
Under the old plan, member contributions consist of 6.5% of annual compensation. Of these member contributions, the employee pays the first 1.5% and the Technical College pays the remainder on behalf of the employee. Under the new plan, member contributions consist solely of 1.5% of annual compensation paid by employee. The Technical College also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2008, the ERS employer contribution rate for the Technical College amounted to 10.41% ofcovered payroll. Chattahoochee Technical College did not have any employees covered by the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Total contributions to the plan made during fiscal year 2008 amounted to $542,138.47, of which $473,870.49 was made by the Technical College and $68,267.98 was made by employees. These contributions met the requirements of the plan.

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CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Chattahoochee 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 ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
The Employees' Retirement System ofGeorgia issues a financial report each fiscal year which may be obtained through ERS.
Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2008, for employees covered by GDCP was $2,251,567.00. The Technical College's total payroll for all employees was $14,021,008.09.
Total contributions made by employees during fiscal year 2008 amounted to $168,867.51 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 10: POSTEMPLOYMENT BENEFITS
The Technical College participates in the Georgia Retiree Health Benefit Fund ("GRHBF") which is a cost-sharing multiple-employer defined benefit postemployment healthcare plan that covers retired employees ofthe State of Georgia. GRHBF provides health insurance benefits to eligible retirees and their qualified beneficiaries.
Pursuant to Title 45, Chapter 18 of O.C.G.A., the authority to establish and amend the benefit provisions of the plan is assigned to the Board of Community Health ("Board"). Financial

- 11 -

CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 10: POSTEMPLOYMENT BENEFITS
statements and required supplementary information for GRHBF are included in the publicly available financial report of the Department of Community Health.
The Technical College contributes to the fund based upon amounts recommended by the Board and set forth in the Appropriations Act. This contribution rate is established to fund both the active and retired employee health insurance plans based on projected pay-as-you-go financing requirements. The combined rate for the active and retiree plans (pay-as-you-go basis) for the fiscal year ended June 30, 2008, was 18.534% of covered payroll. An additional contribution of 4.309% of covered payroll was required by the Board for fiscal year 2008; eleven months ofthis additional contribution will be deposited into the OPEB fund to prefund retiree benefits (such additional contribution amounts are determined annually). The Technical College's contribution to the health insurance plan for the fiscal year ended June 30, 2008, was $2,532,251.69, which equaled the required contribution.
The Technical College also participates in a program of group term life insurance for retired and vested inactive eligible members of various retirement systems. The State Employees' Assurance Department ("SEAD-OPEB") is a single-employer defined benefit postemployment plan.
Pursuant to Title 47 ofthe Official Code of Georgia Annotated, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems. Financial statements and required supplementary information for SEAD-OPEB are included in the publicly available financial report of the Employees' Retirement System.
The Technical College is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters ofGASB Statement 45. The ARC for the year ended June 30, 2008, was zero (0).
NOTE 11: RISK MANAGEMENT
Public Entity Risk Pool The Department of Community Health (DCH) administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. DCH contracted with United Healthcare to process medical claims. For prescription drug claims, DCH contracted with Express Scripts, Incorporated through December 31, 2007 and contracted with Medco, Incorporated beginning January 1, 2008. All claims are to be processed in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.

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CHATTAHOOCHEE TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2008

EXHIBIT "D"

NOTE 11: RISK MANAGEMENT
Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Technical College, as an organizational unit of the Georgia Department of Technical and Adult Education, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE 12: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although Chattahoochee Technical College expects such amounts, ifany, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Chattahoochee Technical College (an organizational unit of the Department of Technical and Adult Education), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2008.
NOTE13: SUBSEOUENTEVENT
During October 2008, the State Board of Technical and Adult Education voted to merge Chattahoochee Technical College with North Metro Technical College and Appalachian Technical College effective July 1, 2009.
NOTE 14: AFFILIATED ORGANIZATIONS
The Chattahoochee Technical College Foundation, Inc., is a legally separate, tax exempt organization whose activities primarily support Chattahoochee Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of these affiliated organizations are not included in these financial statements. Copies of the financial statements for the affiliated organizations may be obtained from Chattahoochee Technical College.
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SUPPLEMENTARY INFORMATION - 15 -

CHATTAHOOCHEE TECHNICAL COLLEGE BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 30, 2008
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Salaries Payable Accounts Payable Encumbrances Payable Deferred Revenue
Total Liabilities
Fund Balances Reserved Federal Financial Assistance Local Grants and Contracts Live Works Projects Prior Year Local Funds Sales and Services Technology Fees Continuing Education Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

3,546,191.37

128,438.45 154,550.36

$ ====3,=82=9=,1=80=.1=8=

$

38,397.68

441,814.64

1,270,271.58

781,139.39

$

2,531,623.29

$

2,074.80

130,895.03

121,584.04

71,205.80

36,881.55

530,421.18

368,112.35

36,382.14

$

1,297,556.89

$ ====3,=82=9=,1=80=.1=8=

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 16 -

CHATTAHOOCHEE TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2008

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Economic Development Technical Education
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Georgia Department of Technical and Adult Education Year Ended June 30, 2007
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance Local Grants and Contracts Live Works Projects Prior Year Local Funds Sales and Services Technology Fees Continuing Education
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$

13,103,558.00 $

13,103,558.00 $

0.00

1,178,780.11

1,111,138.06

-67,642.05

11 865 011.33

9,804,397.29

-2 060 614.04

$

26,147,349.44 $

24,019,093.35 $

-2, 128,256.09

0.00

1 291 675.58

$

26 147 349.44 $

25,310,768.93 $

1 291 675.58 -836 580.51

$

73,669.00 $

35,215.00 $

26 073 680.44

23,963,245.80

$

26 147 349.44 $

23,998,460.80 $

$

0.00 $

1,312,308.13 $

38,454.00 2 110434.64
2,148,888.64
1,312,308.13

1,291,675.58 10,021.61

7,614.72 -22,365.96

-10,021.61 -1 291 675.58

$

1 297 556.89

$

2,074.80

130,895.03

121,584.04

71,205.80

36,881.55

530,421.18

368 112.35

$

1,261,174.75

36 382.14

$

1 297 556.89

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 17 -

CHATTAHOOCHEE TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2008

Economic Development Other Funds

Original Appropriation

$

30 200.00 $

Final Budget

Current Year Revenues

Funds Available Comeared to Budget

Prior Year Carry~Over

Total Funds Available

Variance Positive (Negative)

73 669.00 $

40 626.73 $

31 469.82 $

72 096.55 $

-1 572.45

Technical Education State Appropriation State General Funds Federal Funds Other Funds
Total Technical Education

$

12,963,559.00

966,926.00

10 243 621.00

13,103,558.00 $ 1,178,780.11 11 791 342.33

13,103,558.00 $ 1,111,138.06 9 763 770.56

$

24 174106.00 $

26,073,680.44 $

23,978,466.62 $

0.00 $ 0.00 1260205.76
1260205.76 $

13,103,558.00 $ 1,111,138.06
11 023 976.32

0.00 -67,642.05 -767 366.01

25 238 672.38 $ -835 008.06

Grand Totals All Programs

$

24,204,306.00 $

26,147,349.44 $

24,019,093.35 $

1,291,675.58 $

25,310,768.93 $ -836,580.51

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
-18-

SCHEDULE "3"

Exeenditures Comeared to Budget

Variance

Positive

Actual

{Negative)

Actual Funds Available
Over/(Under) Expenditures

Prior Period Adjustments

Other Adiustments

Total Program
Fund Balances

Transfers

Program Fund Balances

Reserve

Surplus

Total

$

35 215.00 $

38 454.00 $

36 881.55 $

0.00 $

0.00 $

36 881.55 $

0.00 $

36 881.55 $

0.00 $ 36 881.55

$ 13,079,168.96 $

24,389.04 $

24,389.04 $

0.00

1,111,138.06

67,642.05

0.00

0.00

9 772 938.78

2,018,403.55

1 251,037.54

-14 751.24

$ 23,963,245.80 $ 2110 434.64 $ 1,275,426.58 $ -14 751.24 $

$ 23,998,460.80 $ 2,148,888.64 $ 1,312,308.13 $ -14,751.24 $

0.00 $ 0.00 0.00

24,389.04 $

0.00 $

0.00

0.00

1 236,286.30 __Q,QQ_

0.00 $ 0.00 1 224,293.20

24,389.04 $ 24,389.04

0.00

0.00

11 993.10

1,236,286.30

0.00 $ 1,260,675.34 $

0.00 $ 1,224,293.20 $ 36,382.14 $ 1,260,675.34

0.00 $ 1,297,556.89 $

0.00 $ 1,261,174.75 $ 36,382.14 $ 1,297,556.89

-19-

CHATTAHOOCHEE TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2008

SCHEDULE "4"

SALARIES

Totals per Annual Supplement

$ 14,088,873.54 $

Accruals June 30, 2008 June 30, 2007

38,045.68 -23,590.98

Compensated Absences June 30, 2008 June 30, 2007

966,829.42 -934,403.50

Agency Funds

-65,814.00

Adjustments

Shared Services on Jointly Staffed Personnel

Appalachian Technical College

Reddick,

Mark

Cobb Education Consortium Through Kennesaw State University

Cheshier,

Steve

Southwest Georgia Technical College

O'Rear,

Mike

West Central Georgia Technical College

Patel,

Rita

-1,056.49 -42,000.00
-1,864.38 6,238.80

Paid By Chattahoochee Technical College Foundation

Grimm,

Harl on

Taylor,

Raymond

-10,000.00 -250.00

TRAVEL 184,049.61

$ 14,021,008.09 $ ===18=4,0=49=.61=

- 20 -

CHATTAHOOCHEE TECHNICAL COLLEGE RECONCILIATION OF PROFESSIONAL SERVICES
YEAR ENDED JUNE 30, 2008

SCHEDULE "5"

Totals per Annual Supplement
Reconciling Items: Prior Year Expense

FEES

EXPENDITURES

$

372,478.21 $

30,168.20

-1,254.72

$

371,223.49 $ =======3=0,=16=8.=20=

- 21 -

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

CHATTAHOOCHEE TECHNICAL COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2008
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. OTHER ITEMS {NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.