Columbus Technical College, Columbus, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended June 30, 2012

COLUMBUS TECHNICAL COLLEGE
COLUMBUS, GEORGIA
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREEDUPON PROCEDURES FOR FISCAL YEAR ENDED JUNE 30, 2012
Georgia Department of Audits and Accounts Greg S. Griffin State Auditor

COLUMBUS TECHNICAL COLLEGE - TABLE OF CONTENTS -

INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES
EXHIBITS
A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
B STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
C STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE

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1 2 4

GREG S. GRIFFIN
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
December 4, 2012

Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and Honorable Robert Jones, President Columbus Technical College
Independent Accountant's Report on Applying Agreed-Upon Procedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the College and the System Office (Oversight Unit) of the Technical College System of Georgia, solely to assist you in assessing the accuracy of the annual financial statement information reported to the System Office by the College for inclusion in the State of Georgia's Comprehensive Annual Financial Report (CAFR) and Single Audit Report; and to assist you in assessing the accuracy of budget basis information provided in the Summary Budget Comparison and Surplus Analysis Report, Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source, and the Statement of Changes To Fund Balance By Program and Funding Source which are attached as Exhibits A, B and C, respectively. Columbus Technical College's management is responsible for the financial information reported to the System Office of the Technical College System of Georgia. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
1. Review selected balance sheet items reported on the annual financial statement worksheets (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger.
No subsidiary detailed listing of accounts payables was provided to support $38,441.75 of the accounts payable balance of $138,662.34 reported on the annual financial statement worksheets.
The subsidiary detailed listing provided by entity personnel to support the student information system accounts receivable balances revealed that $71,023.48 in amounts due from students were not recorded on the general ledger or the financial statements.

2. Obtain the College's GAAP basis worksheets for Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) information that was submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these worksheets properly support activity reported in the College's accounting records.
We did not note any exceptions as a result of our procedures.
3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
Cash flows from Capital and Related Financing Activities were not properly reflected on the Statement of Cash Flows. Purchases of capital assets reported on the Statement of Cash Flows included an adjustment totaling $568,439.20 for Accounts Payable items, which did not relate to the purchase of capital assets.
4. Obtain the College's worksheets for financial statement note disclosure information submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, Long-Term Debt, Lease Obligations and Retirement Plans have been properly reported.
We did not note any exceptions as a result of our procedures.
5. Review the College's year-end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's annual financial statement worksheets.
The year-end GAAP entries related to recording Georgia State Financing and Investment Commission Gifts were not made correctly. Revenue in the amount of $208,165.26 was incorrectly classified as Nonoperating Gifts instead of Capital Grants and Gifts.
The year-end GAAP entry related to recording Noncapital Bond Expenses was not made correctly. Noncapital Bond Expense of $120,410.21 was improperly classified from Operating Expense as Nonoperating Expense.
The year-end GAAP entries to record current year Pell and FSEOG activity were not made correctly. Federal Direct Student Loans were incorrectly recorded as Nonoperating Revenues - Grants and Contracts - Federal, and Operating Revenues Student Tuition and Fees Less Sponsored Scholarships were incorrectly reflected as Operating Expenses Scholarships and Fellowships. This resulted in an overstatement of Nonoperating Revenue of $4,350,727.00, an understatement of Operating Revenues Student Tuition and Fees Less Sponsored Scholarships of $4,414,040.07, and an understatement of Operating Expenses Scholarships and Fellowships of $63,313.07.

Year-end GAAP entries related to capital assets and donated noncapitalized assets were not made correctly.
The year-end entry to capitalize purchases of capital assets was calculated incorrectly. It was noted that construction expenditures totaling $564,396.66 were not capitalized on the financial statements. Also, capital asset purchases totaling $79,261.21 were recorded on the entity's capital asset listing, but were not capitalized on the financial statements.
The entity failed to record the entry to capitalize donations of capital equipment, valued at $40,513.74.
The entity failed to record the entry to recognize the private donation of noncapitalized assets, valued at $70,922.19.
Year-end GAAP entries related to Accounts Receivable were not made correctly.
The entity failed to record an entry to eliminate interfund payables and receivables totaling $1,932,899.13.
The entity recorded an entry to reclassify receivables related to Federal grants at $204,657.69, while the amount should have been $269,778.13.
6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2012. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements.
We did not note any exceptions as a result of our procedures.
8. Verify that the listing of salaries and travel reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 reconciles to amounts recorded in the College's financial statements.
We did not note any exceptions as a result of our procedures.
9. Review the year-end Budgetary Statements including the Summary Budget Comparison and Surplus Analysis Report (Exhibit A), Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source (Exhibit B) and the Statement of Changes To Fund Balance By Program and Funding Source (Exhibit C). Confirm that budget information presented in these statements supports activity reported in the College's accounting records, the legal level of budgetary control (funding source within program) was maintained, and determine if any budget overexpenditures exist.
The College incorrectly reclassified $237,948.63 of expenditures between budgeted and non budgeted funding sources by using accounts payable as the offset instead of cash, which caused Accounts Payable on the Budget Basis Balance Sheet to be understated by $237,948.63 and Cash and Cash Equivalents to be understated by the same amount.

The approved budget of the Columbus Technical College provided for expenditures totaling $21,761,010.36. A comparison of funds available and expenditures by budgetary program and funding source indicated that Federal Funds in the Technical Education program were overspent by $2,613.42.
10. Obtain documentation for Budget basis reserves reported by the College on the Summary Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
We did not note any exceptions as a result of our procedures.
11. Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records.
We did not note any exceptions as a result of our procedures.
12. Review the Schedule of Expenditures of Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records.
We did not note any exceptions as a result of our procedures.
13. Review capital asset records to ensure that (1) subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.
We did not note any exceptions as a result of our procedures.
14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner.
We did not note any exceptions as a result of our procedures.
These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully,

GSG:as

Greg S. Griffin State Auditor

EXHIBITS

COLUMBUS TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
YEAR ENDED JUNE 30, 2012

EXHIBIT "A"

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
From the Technical Colleges Year Ended June 30, 2011
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$

9,760,214.80 $

2,362,768.50

9,638,027.06

$

21,761,010.36 $

9,760,214.80 $ 1,850,835.46 10,424,455.61
22,035,505.87 $

0.00 -511,933.04 786,428.55
274,495.51

0.00

$

21,761,010.36 $

2,611,100.70 24,646,606.57 $

2,611,100.70 2,885,596.21

$

153,167.15 $

21,607,843.21

$

21,761,010.36 $

$

0.00 $

138,327.91 $ 20,948,045.99
21,086,373.90 $
3,560,232.67 $

14,839.24 659,797.22
674,636.46
3,560,232.67

2,620,489.77 13,457.06

127,249.95 -48,218.71

-13,457.06 -2,611,100.70

$

3,648,652.98

SUMMARY OF FUND BALANCE
Reserved Refund to Grantors Sales and Services Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable Bookstore Tuition
Total Reserved
Unreserved Surplus
Total Fund Balance

$

4,279.88

358,141.29

159,786.87

167,088.15

1,546,334.87

9,250.00

391,332.69

949,623.66

$

3,585,837.41

62,815.57

$

3,648,652.98

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COLUMBUS TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
YEAR ENDED JUNE 30, 2012

Economic Development Other Funds
Technical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Technical Education
Totals By Program

Original Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

$

464,000.00 $

248,365.65 $

153,167.15 $

198,309.89

$ 10,193,087.00 $ 10,260,215.00 $

9,760,214.80 $ 9,760,214.80

2,900,000.00 9,000,000.00

2,058,986.44 8,500,000.00

2,362,768.50 9,484,859.91

1,850,835.46 10,226,145.72

$ 22,093,087.00 $ 20,819,201.44 $ 21,607,843.21 $ 21,837,195.98

$ 22,557,087.00 $ 21,067,567.09 $ 21,761,010.36 $ 22,035,505.87

- 2 -

EXHIBIT "B"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

$ 287,164.65 $

0.00 $

485,474.54 $

332,307.39 $

138,327.91 $

14,839.24 $

347,146.63

$

0.00 $

45.98 2,323,890.07

$ 2,323,936.05 $

0.00 $ 9,760,214.80 $

0.00 0.00

1,850,881.44 12,550,035.79

0.00 $ 24,161,132.03 $

0.00 $ 9,760,214.80 $

-511,887.06 3,065,175.88

1,853,494.86 9,334,336.33

2,553,288.82 $ 20,948,045.99 $

0.00 $
509,273.64 150,523.58
659,797.22 $

0.00
-2,613.42 3,215,699.46
3,213,086.04

$ 2,611,100.70 $

0.00 $ 24,646,606.57 $

2,885,596.21 $ 21,086,373.90 $

674,636.46 $

3,560,232.67

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COLUMBUS TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
YEAR ENDED JUNE 30, 2012

Economic Development Other Funds
Technical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Technical Education
Total Operating Activity
Prior Year Reserves Not Available for Expenditure Refunds to Grantors Uncollectible Accounts Receivable

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2011
Surplus

Prior Period Adjustments

$

287,164.65 $

-287,164.65 $

0.00 $

392.16

$

3,667.20 $

45.98 2,333,679.93

$ 2,337,393.11 $

$ 2,624,557.76 $

0.00 $ -45.98 -2,323,890.07 -2,323,936.05 $ -2,611,100.70 $

-3,667.20 $ 62,815.57

0.00 -9,789.86

2,613.42 9,069.28

-13,457.06 $ 74,498.27

-13,457.06 $ 74,890.43

$

139.07 $

9,250.00

0.00 $ 0.00

0.00 $ 0.00

4,140.81 0.00

Budget Unit Totals

$ 2,633,946.83 $

-2,611,100.70 $

-13,457.06 $ 79,031.24

- 4 -

EXHIBIT "C"

Other Adjustments

Early Return Fiscal Year 2012
Surplus

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

$

0.00 $

0.00 $

347,146.63 $

347,538.79 $ 347,538.79 $

0.00 $ 347,538.79

$

0.00 $

0.00 0.00

$

0.00 $

$

0.00 $

0.00 $ 0.00 0.00 0.00 $ 0.00 $

0.00 $ -2,613.42 3,215,699.46 3,213,086.04 $ 3,560,232.67 $

62,815.57 $

0.00 $

0.00 3,224,768.74

0.00 3,224,768.74

3,287,584.31 $ 3,224,768.74 $

3,635,123.10 $ 3,572,307.53 $

62,815.57 $

62,815.57

0.00 0.00

0.00 3,224,768.74

62,815.57 $ 3,287,584.31

62,815.57 $ 3,635,123.10

$

0.00 $

0.00

0.00 $ 0.00

0.00 $ 0.00

4,279.88 $ 9,250.00

4,279.88 $ 9,250.00

0.00 $ 0.00

4,279.88 9,250.00

$

0.00 $

0.00 $

3,560,232.67 $ 3,648,652.98 $ 3,585,837.41 $

62,815.57 $ 3,648,652.98

Summary of Ending Fund Balance Reserved
Refund to Grantors Sales and Services Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable Bookstore Tuition Unreserved Surplus
Total Ending Fund Balance - June 30

$

4,279.88

358,141.29

159,786.87

167,088.15

1,546,334.87

9,250.00

391,332.69

949,623.66

$

$ 3,585,837.41 $

$

4,279.88

358,141.29

159,786.87

167,088.15

1,546,334.87

9,250.00

391,332.69

949,623.66

62,815.57

62,815.57

62,815.57 $ 3,648,652.98

- 5 -