Oconee Fall Line Technical College, Sandersville, Georgia report on audit of the financial statements for the fiscal year ended June 30, 2014

OCONEE FALL LINE TECHNICAL COLLEGE
SANDERSVILLE, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014
Georgia Department of Audits and Accounts Greg S. Griffin State Auditor

OCONEE FALL LINE TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S REPORT
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
BASIC FINANCIAL STATEMENTS
EXHIBITS
A STATEMENT OF NET POSITION
B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
C STATEMENT OF CASH 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 FUNDS AVAILABLE AND EXPENDITURES COMPARED TO
BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND
4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND
5 RECONCILIATION OF BUDGET TO GAAP 6 RECONCILIATION OF SALARIES AND TRAVEL

Page
i
2 3 5 6
22 23 24 26 28 29

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

OCONEE FALL LINE TECHNICAL COLLEGE - TABLE OF CONTENTS -
SECTION III FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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
September 17, 2014

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and Honorable Lloyd Horadan, President Oconee Fall Line Technical College
INDEPENDENT AUDITOR'S REPORT
Ladies and Gentlemen:
Report on the Financial Statements
We have audited the accompanying basic financial statements (Exhibits A through D) of Oconee Fall Line Technical College, a member college of the Technical College System of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30, 2014.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether

14ARL-2TC

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to Oconee Fall Line Technical College's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Oconee Fall Line Technical College's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of Oconee Fall Line Technical College as of June 30, 2014, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements of Oconee Fall Line 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 Oconee Fall Line Technical College. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2014, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages i through vi be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Oconee Fall Line Technical College. The accompanying supplementary information (Schedules 1 through 6) is presented for purposes of additional analysis and is not a required part of the basic financial statements.
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Other Information
The accompanying supplementary information (Schedules 1 through 6) is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting or other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Other Reporting Required by Governm ent Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September 17, 2014, on our consideration of Oconee Fall Line Technical College's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Oconee Fall Line Technical College's internal control over financial reporting and compliance.
Respectfully,

GSG:as 14ARL-2TC

Greg S. Griffin State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

Oconee Fall Line Technical College
Management's Discussion and Analysis
The following is management's discussion and analysis of Oconee Fall Line Technical College's financial performance for the fiscal year ending June 30, 2014 with comparative data from fiscal year ending June 30, 2013 This discussion has been prepared by and is the responsibility of management.
Overview of the Financial Statements and Financial Analysis
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 Position; the Statement of Revenues, Expenses and Changes in Net Position; and the Statement of Cash Flows. The Statement of Net Position used in conjunction with the Statement of Revenues, Expenses and Changes in Net Position 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 Position
The purpose of the Statement of Net Position 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 position 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 position. Over a period of time the increases and decreases reflected in the Statement of Net Position, 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 position is divided into three major categories. The first category, net investment in capital assets provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is restricted net position expendable. Expendable restricted net positions are available for expenditure by the Technical College but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets.The final 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.
i

Statement of Net Position (thousands of dollars)

June 30, 2014

June 30, 2013

Assets Current Assets Capital Assets, Net

$

2,397

36,401

$

1,849

39,459

Total Assets

$

38,798

$

41,308

Liabilities Current Liabilities Noncurrent Liabilities

$

1,858

407

$

1,473

445

Total Liabilities

$

2,265

$

1,918

Net Position Net Investment in Capital Assets Restricted - Expendable Unrestricted

$

36,401

132

$

39,459

3

-72

Total Net Position

$

36,533

$

39,390

The total net position of the Technical College decreased by approximately $2.8 million from the prior year. This can be mainly attributed to a decrease in total assets of $2.5 million which is a result of a decrease in capital assets of $3.1 million and an increase in current assets of $548,000.

Total liabilities for the fiscal year increased by approximately $347,000. The primary reason for the increase was an increase in current liabilities of $385,000 and a decrease in noncurrent liabilities of $38,000. The combination of the decrease in total assets of approximately $2.5 million and the increase in total liabilities of approximately $347,000 yields a decrease in total net position of approximately $2.8 million. The decrease in total net position is mostly a result of a decrease of $3.0 million in the category of net investment in capital assets and an increase in the unrestricted category of $204,000.

Statement of Revenues, Expenses and Changes in Net Positions
The purpose of the Statement of Revenues, Expenses and Changes in Net Position 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 position as presented on the Statement of Net Position are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Position.
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 nonoperating surplus.

ii

Statement of Revenues, Expenses and Changes in Net Position (Thousands of dollars)
June 30, 2014

Operating Revenues Operating Expenses

$

3,026

19,413

Operating Loss

$

-16,387

Nonoperating Revenues and Expenses

14,624

Income (Loss) Before Other Revenues,

Expenses, Gains or Losses

$

-1,763

Other Revenues, Expenses, Gains or Losses

-1,094

Increase (Decrease) in Net Position

$

-2,857

Net Position at Beginning of Year

39,390

Net Position at End of Year

$

36,533

June 30, 2013

$

2,693

20,060

$

-17,367

15,676

$

-1,691

12,106

$

10,415

28,975

$

39,390

The Statement of Revenues, Expenses and Changes in Net Position reflects a decrease in the net position at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Position are as follows:

iii

Revenue by Source For the Years Ended June 30, 2014 and June 30, 2013

June 30, 2014

June 30, 2013

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Rents and Royalties

Other

1,998

$

89

771

137

31

1,489 66
975 145
18

Total Operating Revenue

$

3,026

$

2,693

Nonoperating Revenue State Appropriations Federal Grants and Contracts Gifts State Grants and Contracts

$

9,430

$

10,011

5,064

5,625

1,026

1,135

7

87

Total Nonoperating Revenue

$

15,527

$

16,858

Capital Grants and Gifts

State

$

Other

Gain/Loss on Disposal of Capital Assets

492

$

12,133

8

5

-1,594

-33

Total Capital Grants and Gifts

$

-1,094

$

12,105

Total Revenues

$

17,459

$

31,656

Expenses (Thousands of Dollars) For the Years Ended June 30, 2014, and June 30, 2013

June 30, 2014

June 30, 2013

Operating Expenses Instruction

$

19,413

$

20,060

Nonoperating Expenses Other

903

1,181

Total Expenses

$

20,316

$

21,241

iv

The sources of operating revenue for the Technical College are tuition and fees, grants and contracts, auxiliary services, and educational activities. The increase in operating revenue of approximately $333,000 is directly related to an increase in student tuition and fees of approximately $509,000, an increase in grants and contracts of $23,000, a decrease in sales and service of approximately $204,000, a decrease in Rents of approximately $8,000, and increase in other revenue of $13,000. The changes in tuition and fees were a result of a system-wide increase in the tuition rate per credit hour and an increase in fees for the academic year.
Utilities increased by approximately $11,000 during the past year. This increase was generated by a new facility opening on the North Campus.

Personal Services decreased by approximately $882,000. This decrease reflects a reduction in force implemented by the Technical College.

Under nonoperating revenues (expenses), state appropriations decreased by approximately $581,000. This decrease is due to State budget cuts.

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, Expenses and Changes in Net Position.

Statement of Cash Flows (thousands of dollars)
June 30, 2014

June 30, 2013

Cash Provided (Used) By:

Operating Activities

$

Noncapital Financing Activities

Capital and Related Financing Activities

-13,493 14,156
-111

$

-15,455

15,690

-429

Net Change in Cash Cash, Beginning of Year

$

552

$

-194

536

730

Cash, End of Year

$

1,088

$

536

Capital Assets
The Technical College had a decrease in capital assets for facilities in the fiscal year under review. A building and associated land previously owned by the Technical College were retired and moved to another State Agency. There were some additions to the capital assets in the category of building improvements of $330,000 due to renovations to the Stewart Building and Porter Center on South Campus.

v

Long-Term Liabilities Oconee Fall Line Technical College has Long-Term Liabilities of $908,894.88 of which $501,612.81 was reflected as a current liability as of June 30, 2014. For additional information on Long-Term Liabilities, see Notes 1 and 7 in the Notes to the Financial Statements. Economic Outlook The Technical College is aware of several currently known facts, decisions, or conditions that have the potential to affect the financial position or change how the Technical College operates for the next fiscal year. Fiscal year 2014 was overall a successful year for the Technical College. Enrollment did slightly decline; however, this trend occurred throughout the State during the past fiscal year. The percentage of enrollment decline for Oconee Fall Line Technical College was relatively low as compared with state averages. Considering the state budget cuts that occurred during the year and the decline in some operating categories of revenue, Oconee Fall Line Technical College managed to maintain current levels with only minor operational changes. The Technical College anticipates at a minimum, stable enrollment for fiscal year 2015 with the possibility of gradual growth fall and spring semesters. The State of Georgia has offered some increased financial aid assistance in areas of study in which the State is experiencing a shortage of workers. Because of this funding, the Technical College anticipates growth in enrollment in these particular program areas. There is no anticipated state budget cut for fiscal year 2015, which contributes to a positive economic outlook. The Technical College will maintain a close watch over resources to maintain the ability to react to both the known and unknown internal and external issues.
Lloyd D. Horadan, Ed.D President Oconee Fall Line Technical College
vi

BASIC FINANCIAL STATEMENTS - 1 -

OCONEE FALL LINE TECHNICAL COLLEGE STATEMENT OF NET POSITION JUNE 30, 2014
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Unearned Revenue Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences
Total Liabilities
NET POSITION
Net Investment in Capital Assets Unrestricted
Total Net Position

EXHIBIT "A"
$ 1,088,729.38 134,474.24 760,210.52 128,743.40 284,884.76
2,397,042.30
36,401,323.01 38,798,365.31
627,359.37 57,027.64
534,287.48 137,929.23 501,612.81 1,858,216.53
407,282.07 2,265,498.60
36,401,323.01 131,543.70
$ 36,532,866.71

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

OCONEE FALL LINE TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
YEAR ENDED JUNE 30, 2014
OPERATING REVENUES
Student Tuition and Fees (Net of Allowance for Doubtful Accounts) Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalties 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 Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal State Gifts Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Nongovernmental Loss on Disposal of Capital Assets
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Position
Net Position - Beginning of Year
Net Position - End of Year

EXHIBIT "B"
$ 3,945,211.72 -1,947,161.75 88,464.84 137,001.63 771,135.40 30,825.96 3,025,477.80
8,841,234.43 3,469,539.59
138,239.27 1,738,520.64
955,403.13 2,194,487.45 2,075,316.21 19,412,740.72 -16,387,262.92
9,430,351.79 5,063,393.86
6,953.20 1,026,269.12
-903,588.53 14,623,379.44 -1,763,883.48
491,843.05 8,335.44
-1,593,729.87 -1,093,551.38 -2,857,434.86 39,390,301.57
$ 36,532,866.71

The notes to the financial statements are an integral part of this statement. - 3 -

(This page left intentionally blank)

OCONEE FALL LINE TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2014
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 Other Nonoperating Receipts
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets
Net Cash Provided (Used) by Capital and Related Financing Activities
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 Operating Income to Net Cash
Provided (Used) by Operating Activities Depreciation Expense Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Salaries Payable Accounts Payable Unearned Revenue Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts
The notes to the financial statements are an integral part of this statement. - 5 -

EXHIBIT "C"

$ 2,074,299.99 532,843.36 775,088.33
-6,345,746.03 -8,945,447.60 -1,738,520.64
154,816.84
$ -13,492,665.75

$ 9,430,351.79 -466,968.58
6,096,616.18 -903,588.53
$ 14,156,410.86

$

393,079.44

-504,348.54

$

-111,269.10

$

552,476.01

536,253.37

$ 1,088,729.38

$ -16,387,262.92
2,075,316.21
467,046.18 99,398.39 -89,511.15 -19,974.68
402,036.17 44,524.54 -84,238.49
$ -13,492,665.75

$

107,099.05

OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Oconee Fall Line Technical College is one of twenty-four (24) 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. The accompanying financial statements reflect the operations of Oconee Fall Line Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of 15 (fifteen) members serving staggered three-year terms who are appointed by the State Board of the Technical College System of Georgia. 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 Oconee Fall Line Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Oconee Fall Line 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 Accounting 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 (13) 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, deferred outflow of resources, liabilities, deferred inflows of resources, net position, revenues, expenses, changes in net position, and cash flows.
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. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-college transactions have been eliminated.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2014, the Technical College adopted the Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. The provisions of this Statement clarify the use of deferred inflows of resources and deferred outflows of resources. Certain items, including those items which were previously reported as assets and liabilities, will now be reported as outflows of resources or inflows of resources. As a result of this implementation, the Technical College changed the classification of certain assets to deferred outflows of resources and liabilities to deferred inflows of resources. As of June 30, 2014, the Technical College did not have any deferred outflows of resources or deferred inflows of resources.
In fiscal year 2014, the Technical College adopted Governmental Accounting Standards Board (GASB) Statement No. 66, Technical Corrections - 2012, an amendment to GASB Statements No. 10 and No. 62. The objective of this Statement is to resolve conflicting guidance by amending GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues
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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

and GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. GASB Statement No. 10 was amended by removing the provision that limited fund based reporting of an entity's risk and financing activities to certain funds. GASB Statement No. 62 was amended by modifying guidance on (1) operating lease payments that vary from a straight-line basis, (2) purchases of a loan or a group of loans, and (3) recognition of servicing fees on mortgage loans that are sold when the stated service fee rate differs from a current (normal) servicing fee rate. The adoption of this statement does not have a significant impact on the Technical College's financial statements.
In fiscal year 2014, the Technical College adopted Governmental Accounting Standards Board (GASB) Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees. This Statement establishes accounting and reporting requirements for state and local governments that extend or receive financial guarantees that are nonexchange transactions. The adoption of this statement does not have a significant impact on the Technical College's financial statements.
CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents include petty cash, demand deposits and time deposits in authorized financial institutions.
ACCOUNTS RECEIVABLE
Accounts receivable consist of tuition and fee charges to students, allotments due from the Technical College System of Georgia - System Office, 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
Resale inventories are valued at cost using the consumption 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 10 to 40 years for buildings, 15 to 25 years for infrastructure, 15 years for improvements other than buildings, 10 years for library books, 3 to 10 years for equipment and software, and 10 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) - an 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.

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

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 Oconee Fall Line Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2014 GSFIC did not transfer any capital additions to Oconee Fall Line Technical College.
UNEARNED REVENUE
Unearned revenue include amounts received for tuition and fees, grant and contract sponsors and other exchange type activities prior to the end of the fiscal year but related to the subsequent accounting period.
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 Position, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Position.
NONCURRENT LIABILITIES
Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; and (2) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.
NET POSITION
The Technical College's net position is classified as follows:
Net Investm ent in Capital Assets: This represents the Technical College's total investment in capital assets, net of outstanding debt obligations, deferred outflows of resources and deferred inflows of resources related to those capital assets. To the extent debt has been incurred or deferred inflows of resources have been received but not yet expended for capital assets, such amounts are not included as a component of the net investment in capital assets. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section.
Unrestricted net position: Unrestricted net position represents 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 $6,342.98 Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of the State Treasurer.
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
Oconee Fall Line 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 Position classifies the Technical College's fiscal year activity as operating and nonoperating according to the following criteria:
Operating R evenues: 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.
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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

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 Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
Operating Ex penses: Operating expenses include activities that have the characteristics of exchange transactions.
Nonoperating Ex penses: Nonoperating expenses include activities that have the characteristics of nonexchange transactions, 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 Position. 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 non-governmental programs are recorded as either operating or non-operating 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.

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

At June 30, 2014, the carrying value of deposits was $1,085,704.38 and the bank balance was $1,558,498.78. Of the Technical College's deposits, $956,061.19 were uninsured. Of these uninsured deposits, $763,671.22 were collateralized with securities held by the financial institution's trust department or agency, but not in the Technical College's name and $192,389.97 were uncollateralized.

NOTE 3: ACCOUNTS RECEIVABLE
Accounts receivable at June 30, 2014, consists of the following:

Student Tuition and Fees

$

Federal, State and Private Funds

Georgia State Financing and Investment Commission

Other

86,763.89 262,203.44
77,292.00 472,325.43

Less: Allowance for Doubtful Accounts

$ 898,584.76 3,900.00

Net Accounts Receivable

$ 894,684.76

NOTE 4: INVENTORIES

Inventories at June 30, 2014, consist of the following:

Bookstore

$

284,884.76

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

NOTE 5: CAPITAL ASSETS
Following are the changes in capital assets for the year ended June 30, 2014:

Beginning Balance July 1, 2013

Other Adjustments

Additions

Reductions

Ending Balance June 30, 2014

Capital Assets, Not Being Depreciated: Land and Land Improvements

$ 881,592.00 $

0.00 $

0.00 $ 329,120.00 $ 552,472.00

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

$ 46,228,795.54 1,741,319.73 7,630,794.47 $ 635,594.92

$ 49,925.08

330,522.40 $
244,002.37 36,922.82

1,302,500.00 $
138,930.00 8,685.44

45,256,817.94 1,741,319.73 7,785,791.92 663,832.30

Total Assets Being Depreciated

$ 56,236,504.66 $

49,925.08 $ 611,447.59 $ 1,450,115.44 $ 55,447,761.89

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

$ 10,351,247.41 996,135.70
6,039,586.35 $ 272,205.70

$ 49,925.08

1,247,720.41 $ 78,322.96
677,490.58 71,782.26

39,367.50 $
139,189.72 6,948.35

11,559,600.32 1,074,458.66 6,627,812.29 337,039.61

Total Accumulated Depreciation

$ 17,659,175.16 $

49,925.08 $ 2,075,316.21 $ 185,505.57 $ 19,598,910.88

Total Capital Assets, Being Depreciated, Net $ 38,577,329.50 $

0.00 $ -1,463,868.62 $ 1,264,609.87 $ 35,848,851.01

Capital Assets, Net

$ 39,458,921.50 $

0.00 $ -1,463,868.62 $ 1,593,729.87 $ 36,401,323.01

Reductions include a transfer of a building, associated accumulated depreciation, and land to the Georgia Building Authority in the amounts of $1,302,500.00, $39,367.50 and $329,120.00, respectively.

NOTE 6: UNEARNED REVENUE
Unearned revenue at June 30, 2014, consists of the following:

Prepaid Tuition and Fees Other Advances

$

522,862.05

11,425.43

Total Unearned Revenue

$

534,287.48

NOTE 7: LONG-TERM LIABILITIES
Long-Term liability activity for the year ended June 30, 2014 was as follows:

Beginning Balance July 1, 2013

Additions

Reductions

Ending Balance June 30, 2014

Current Portion

Other Liabilities Compensated Absences $

993,133.37 $

650,303.10 $

734,541.59 $

908,894.88 $ 501,612.81

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

NOTE 8: NET POSITION
Changes in Net Position activity for the year ended June 30, 2014 was as follows:

Beginning Balance July 1, 2013

Additions

Reductions

Ending Balance June 30, 2014

Net Investment in Capital Assets $ 39,458,921.50 $ -1,463,868.62 $ 1,593,729.87 $ 36,401,323.01

Restricted Net Position

3,761.76

5,151,858.70

5,155,620.46

0.00

Unrestricted Net Position

-72,381.69

13,770,904.31

13,566,978.92

131,543.70

Total Net Position

$ 39,390,301.57 $ 17,458,894.39 $ 20,316,329.25 $ 36,532,866.71

NOTE 9: RETIREMENT PLANS
Oconee Fall Line Technical College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Oconee Fall Line Technical College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
The System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the plans within the System, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan of ERS (SRBPERS). SRBP-ERS 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 the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 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

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). Members of the GSEPS plan may also participate in the GSEPS 401(k) defined contribution component described below. ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 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 24 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.
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, Oconee Fall Line Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Oconee Fall Line 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. Oconee Fall Line 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 Oconee Fall Line Technical College contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2014 were based on the June 30, 2011 actuarial valuation as follows:

Old Plan* New Plan GSEPS

18.46% 18.46% 15.18%

* 13.71% exclusive of contributions paid by the employer on behalf of old plan members

Members become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.
TEACHERS RETIREMENT SYSTEM OF GEORGIA
The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.
TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2014 were 6.00% of annual salary. Employer contributions required for fiscal year 2014 were 12.28% of annual salary as required by the June 30, 2011 actuarial valuation.
The following table summarizes the Oconee Fall Line Technical College contributions by defined benefit plan for the years ending June 30, 2014, June 30, 2013, and June 30, 2012 (dollars in thousands):

Fiscal Year

ERS

Required

Percentage

Contribution

Contributed

TRS

Required

Percentage

Contribution

Contributed

2014 2013 2012

$ 273,229.45 $ 262,541.08 $ 264,826.00

100% 100% 100%

$ 640,115.80 $ 635,281.11 $ 580,971.21

100% 100% 100%

GSEPS 401(K) DEFINED CONTRIBUTION COMPONENT OF ERS
In addition to the ERS defined benefit pension described above, GSEPS members may also participate in the Peach State Reserves 401(k) defined contribution plan and receive an employer matching contribution. The 401(k) plan is administered by the System and was established by the Georgia Employee Benefit Plan Council in accordance with State law and Section 401(k) of the IRC. The GSEPS segment of the 401(k) plan was established by State law effective January 1, 2009. Plan provisions and contribution requirements specific to GSEPS can be amended by State law. Other general 401(k) plan provisions can be amended by the ERS Board of Trustees as required by changes in federal tax law or for administrative purposes. The State was not required to make significant contributions to the 401(k) plan prior to GSEPS because most members under other segments of the plan either were not State employees or were not eligible to receive an employer match on their contributions.
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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

The GSEPS plan includes automatic enrollment in the 401(k) plan at a contribution rate of 1% of salary, along with a matching contribution from the State. The State will match 100% of the employee's initial 1% contribution. Employees can elect to contribute up to an additional 4% and the State will match 50% of the additional 4% of salary. Therefore, the State will match 3% against the employee's 5% total savings. Contributions greater than 5% do not receive any matching funds. GSEPS employer contributions are subject to a vesting schedule, which determines eligibility to receive all or a portion of the employer contribution balance at the time of any distribution from the account after separation from all State service. Vesting is determined based on the following schedule:
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 or more years 100%
Employee contributions and earnings thereon are 100% vested at all times. The 401(k) plan also allows participants to roll over amounts from other qualified plans to their respective account in the 401(k) plan on approval of the 401(k) plan administrator. Such rollovers are 100% vested at the time of transfer. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth.
The participants may receive the value of their vested accounts upon attaining age 59.5, qualifying financial hardship, or retirement or other termination of service (employer contribution balances are only eligible for distribution upon separation from service). Upon the death of a participant, his or her beneficiary shall be entitled to the vested value of his or her accounts. Distributions are made in installments or in a lump sum.
In 2014, the Technical College employer and employee GSEPS contributions were $33,388.14 and $5,753.31, respectively.
DEFINED CONTRIBUTION PLAN
Oconee Fall Line 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.
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 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.

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

Contributions 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, 2014, for employees covered by GDCP was $1,159,307.10. The Technical College's total payroll for all employees was $8,841,234.43.
Total contributions made by employees during fiscal year 2014 amounted to $86,948.05 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices.
NOTE 10: RISK MANAGEMENT
PUBLIC ENTITY RISK 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 RISK 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. 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 11: POST-EMPLOYMENT BENEFITS
Oconee Fall Line 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/Active plans (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
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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

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 (including technical colleges) 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 plan is currently funded on a pay-as-you go basis. That is, annual costs of providing benefits will be financed in the same year as claims occur, with no significant assets accumulating as would occur in an advance funding strategy.
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. As of January 1, 2012, for members with fewer than five years of service, contributions also vary based on years of service. As of January 1, 2012, on average, members with five years or more of service pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy.
Participating employers, including but not limited to State organizations, 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 30 years.
The combined required contribution rates established by the Board for the active and retiree plans for the fiscal year ended June 30, 2014, were as follows:

July 2013 July 2013 - June 2014

25.366% of covered payroll for July 2013 coverage 30.781% of covered payroll for august 2013 - July 2014 coverage

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OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

No additional contribution was required by the Board for fiscal year 2014 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 OPEB and are subject to appropriation.

The following table summarizes Oconee Fall Line Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30, 2014, June 30, 2013 and June 30, 2012:

Fiscal Year

Percentage Contributed

Required Contribution

2014 2013 2012

100%

$

100%

$

100%

$

2,175,528.93 2,319,008.00 2,386,952.30

STATE EMPLOYEES' ASSURANCE DEPARTMENT
State Employees' Assurance Department-OPEB (SEAD-OPEB) and State Employees' Assurance Department-Active (SEAD-Active) are cost-sharing multiple-employer defined benefit postemployment plans that were created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to eligible members of Employees' (ERS), Judicial (JRS), and Legislative (LRS) Retirement Systems. SEAD-OPEB provides benefits for retired and vested inactive members, and SEAD-Active provides benefits for active members. Effective July 1, 2009, no newly hired members of any State public retirement system are eligible for term life insurance under SEAD. Pursuant to Title 47 of the OCGA, benefit provisions of the plan were established and can be amended by State statute.
Contributions by plan members are established by the ERS Board of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The ERS Board of Trustees establishes employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. Contributions for fiscal year 2014 were based on June 30, 2011, actuarial valuations as follows:

Member Rates ERS Old Plan Less: Offset Paid by Employer Net ERS Old Plan ERS New Plan, JRS, and LRS

SEADOPEB
0.45% -0.22% 0.23% 0.23%

SEADActive
0.05% -0.03% 0.02% 0.02%

Total SEAD
0.50% -0.25% 0.25% 0.25%

Employer Rates

0.00%

0.00%

0.00%

The ERS Board of Trustees voted and approved that the SEAD-OPEB contribution would be paid from existing assets of the Survivors Benefit Fund (SBF) instead of requiring payment by the employers. The contributions by SBF made on-behalf of Oconee Fall Line Technical College for fiscal years 2013 and 2012 were estimated to be $4,757.71 and $13,732.18, respectively. There were no required employer contributions for the fiscal year ended June 30, 2014.
According to the policy terms covering the lives of members, insurance coverage is provided on a monthly, renewable term basis, and no return premiums or cash value are earned. The net assets represent the excess accumulation of investment income and premiums over benefit payments and expenses and are held as a reserve for payment of death benefits under existing policies.

- 18 -

OCONEE FALL LINE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2014

EXHIBIT "D"

For SEAD-Active the amount of insurance coverage is equal to 18 times monthly earnable compensation frozen at age 60. For members with no creditable service prior to April 1, 1964, the amount decreases from age 60 by a half of 1% per month until age 65 at which point the member will be covered for 70% of the age 60 coverage. Life insurance proceeds are paid in lump sum to the beneficiary upon death of the member.
For SEAD-OPEB the amount of insurance for a retiree with creditable service prior to April 1, 1964, is the full amount of insurance under SEAD-Active in effect on the date of retirement. The amount of insurance for a service retiree with no creditable service prior to April 1, 1964, is 70% of the amount of insurance under SEAD-Active at age 60 or at termination, if earlier. Life insurance proceeds are paid in lump sum to the beneficiary upon death of the retiree.
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 Oconee Fall Line Technical College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Oconee Fall Line Technical College (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, 2014.
NOTE 13: AFFILIATED ORGANIZATIONS
The OFTC Foundation North and OFTC Foundation South are legally separate, tax exempt organizations whose activities primarily support Oconee Fall Line Technical College. These affiliated organizations are considered potential component units of the State of Georgia in accordance with GASB Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, and GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organizations are not included in these financial statements. Copies of the financial statements for the affiliated organizations may be obtained from Oconee Fall Line Technical College.

- 19 -

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SUPPLEMENTARY INFORMATION - 21 -

OCONEE FALL LINE TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND JUNE 30, 2014
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Salaries Payable Accounts Payable Encumbrance Payable Unearned Revenue Funds Held for Others
Total Liabilities
Fund Balances Reserved Sales and Services Live Work Projects Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

1,493,174.39

160,848.32 207,071.04 172,191.35 284,884.76

$

2,318,169.86

$

59,214.62

607,424.85

98,689.70

534,287.48

2,138.54

1,301,755.19

58,058.17 79,227.40 399,459.25
3,900.00 284,832.16
41,512.39 143,082.32
6,342.98
1,016,414.67

$

2,318,169.86

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 22 -

OCONEE FALL LINE TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2014

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Adult Literacy 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, 2013
Refunds to Grantors Federal Financial Assistance Returned to Technical College System of Georgia Year Ended June 30, 2013 Early Return of Federal Financial Assistance in the Current Fiscal Year
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Sales and Services Live Work Projects Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition
Total Reserved
Unreserved Surplus
Total Fund Balance
Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 23 -

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 9,430,523.00 $ 1,498,545.17 6,791,102.56
17,720,170.73
0.00

9,430,523.00 $ 1,413,529.19 5,658,329.81
16,502,382.00
0.00

0.00 -85,015.98 -1,132,772.75
-1,217,788.73
0.00

0.00 17,720,170.73

505,025.42 17,007,407.42

505,025.42 -712,763.31

1,231,000.00 199,457.32
16,289,713.41

17,720,170.73

$

0.00

1,186,067.43 159,577.22
14,901,376.17
16,247,020.82
760,386.60 $

44,932.57 39,880.10 1,388,337.24
1,473,149.91
760,386.60

836,446.62 171.21

28,130.72 -97,489.10
-171.21

-444.09 -5,590.66 -505,025.42

$

1,016,414.67

$

58,058.17

79,227.40

399,459.25

3,900.00

284,832.16

41,512.39

143,082.32

1,010,071.69

6,342.98

$

1,016,414.67

OCONEE FALL LINE TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2014

Adult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Adult Literacy
Economic Development Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Economic Development
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

$

634,000.00 $

634,000.00 $

634,000.00 $

634,000.00

532,000.00 118,000.00

480,769.00 118,000.00

447,000.00 150,000.00

446,984.06 105,648.93

1,284,000.00

1,232,769.00

1,231,000.00

1,186,632.99

200,000.00 38,000.00
238,000.00

110,883.00 60,000.00
170,883.00

109,457.32 90,000.00
199,457.32

109,457.32 76,671.29
186,128.61

8,470,790.00
1,649,000.00 6,120,000.00
16,239,790.00

8,470,790.00
1,649,000.00 6,700,000.00
16,819,790.00

8,796,523.00
942,087.85 6,551,102.56
16,289,713.41

8,796,523.00
857,087.81 5,476,009.59
15,129,620.40

$ 17,761,790.00 $ 18,223,442.00 $ 17,720,170.73 $ 16,502,382.00

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 24 -

SCHEDULE "3"

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

$

0.00 $

0.00 0.00

0.00

0.00 $

634,000.00 $

0.00 0.00

446,984.06 105,648.93

0.00

1,186,632.99

0.00 $

633,927.59 $

-15.94 -44,351.07

446,984.06 105,155.78

-44,367.01

1,186,067.43

72.41 $
15.94 44,844.22
44,932.57

72.41
0.00 493.15
565.56

0.00 10,571.63
10,571.63

0.00 0.00

109,457.32 87,242.92
196,700.24

0.00 -2,757.08
-2,757.08

109,457.32 50,119.90
159,577.22

0.00 39,880.10
39,880.10

0.00 37,123.02
37,123.02

0.00
3,317.67 491,136.12
494,453.79

0.00
0.00 0.00
0.00

8,796,523.00
860,405.48 5,967,145.71
15,624,074.19

0.00
-81,682.37 -583,956.85
-665,639.22

8,796,517.99
857,087.81 5,247,770.37
14,901,376.17

5.01
85,000.04 1,303,332.19
1,388,337.24

5.01
3,317.67 719,375.34
722,698.02

$ 505,025.42 $

0.00 $ 17,007,407.42 $

-712,763.31 $ 16,247,020.82 $

1,473,149.91 $

760,386.60

- 25 -

OCONEE FALL LINE TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2014

Adult Literacy State General Funds
Other Funds
Total Adult Literacy
Economic Development Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Economic Development
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 Inventories Refunds to Grantors Other Reserves

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2013
Surplus

Prior Period Adjustments

$

128.61 $

42.50

171.11

0.00 $ 0.00
0.00

-128.61 $ -42.50
-171.11

488.39 -426.26
62.13

0.00 10,571.63
10,571.63

0.00 -10,571.63
-10,571.63

0.00 0.00
0.00

0.00 -820.00
-820.00

0.10 3,317.67 491,136.12 494,453.89 505,196.63

0.00 -3,317.67 -491,136.12 -494,453.79 -505,025.42

-0.10 0.00 0.00 -0.10 -171.21

4,784.95 2,272.99 -75,658.45 -68,600.51 -69,358.38

327,077.11 444.09
3,900.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

Budget Unit Totals

$

836,617.83 $

-505,025.42 $

-171.21 $ -69,358.38

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 26 -

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2014
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

0.00

0.00 $ 0.00
0.00

72.41 $ 493.15
565.56

560.80 $ 66.89
627.69

0.00 $ 0.00
0.00

560.80 $ 66.89
627.69

560.80 66.89
627.69

0.00 0.00
0.00

0.00 0.00
0.00

0.00 37,123.02
37,123.02

0.00 36,303.02
36,303.02

0.00 36,303.02
36,303.02

0.00 0.00
0.00

0.00 36,303.02
36,303.02

0.00 -5,590.66 42,244.95 36,654.29 36,654.29

0.00 0.00 0.00 0.00 0.00

5.01 3,317.67 719,375.34 722,698.02 760,386.60

4,789.96 0.00
685,961.84 690,751.80 727,682.51

0.00 0.00 685,036.51 685,036.51 721,339.53

4,789.96 0.00
925.33 5,715.29 6,342.98

4,789.96 0.00
685,961.84 690,751.80 727,682.51

-42,244.95 -444.09 0.00

0.00 0.00 0.00

0.00 0.00 0.00

284,832.16 0.00
3,900.00

284,832.16 0.00
3,900.00

0.00 0.00 0.00

284,832.16 0.00
3,900.00

$ -6,034.75 $

0.00 $

760,386.60 $

1,016,414.67 $ 1,010,071.69 $

6,342.98 $ 1,016,414.67

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

$

58,058.17

79,227.40

399,459.25

3,900.00

284,832.16

41,512.39

143,082.32

$

$ 1,010,071.69 $

$ 6,342.98

58,058.17 79,227.40 399,459.25
3,900.00 284,832.16
41,512.39 143,082.32
6,342.98

6,342.98 $ 1,016,414.67

- 27 -

OCONEE TECHNICAL COLLEGE RECONCILIATION OF BUDGET TO GAAP
YEAR ENDED JUNE 30, 2014
Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "1")
Amounts reported for Business-Type Activities in the Statement of Net Assets are different because:
Capital Assets used in Business-Type Activities are not reported in the Budget Fund.
Uncollectible accounts receivable are reported as an asset and reserved fund balance in the Budget Fund and as a contra-asset account on the Statement of Net Assets.
Georgia State Financing and Investment Commission (GSFIC) projects are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of GSFIC Activity
Agency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity
The budgetary basis of accounting implemented by the State of Georgia recognizes expenditures when encumbered. The following adjustments were made to eliminate this activity for reporting on the Statement of Net Assets. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Prepaid items reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Reimbursement from grantors reported as revenues in the Budget Fund that are for expenditures based on encumbrances are deferred for GAAP reporting. Total Net Effect of Encumbrance Activity
Certain Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund. Accounts Payable Compensated Absences Payable Total Liabilities
Net Assets of Business-Type Activities (Net Assets / Net Position per GAAP Financials)

SCHEDULE "5"

$ 1,016,414.67

36,401,323.01 -3,900.00

$

513,549.45

-513,284.21

$

150,444.47

-150,433.47

265.24 11.00

$

98,689.70

-43,447.95

-26,374.08

28,867.67

$

-1,220.00

-908,894.88

-910,114.88

$ 36,532,866.71

The supplementary information presented on Schedules 1, 2, 3 and 4 was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. The information was derived from, and relates directly to, the same information used to prepare the financial statements. However, the budgetary statutes and regulations of the State of Georgia require reporting of certain information that is not in accordance with generally accepted accounting principles. Presented on this schedule is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
- 28 -

OCONEE FALL LINE TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2014

SCHEDULE "6"

Totals per Annual Supplement
Accruals June 30, 2014 June 30, 2013
Compensated Absences June 30, 2014 June 30, 2013
Adjustments Shared Services on Jointly Staffed Personnel Atlanta Technical College Eason, Robert Ogeechee Technical College Eason, Robert Yarbrough, Angela Southern Crescent Technical College Scott, Paul
Agency Funds
Unidentified Variance
Cancellation of previous period travel

SALARIES $ 8,930,364.96 $

TRAVEL 141,738.77

57,027.64 -77,002.32

689,057.86 -751,059.41

-3,043.50 -2,404.37 -2,557.01 2,082.64
-1,232.06

-2,604.50 -895.00

$ 8,841,234.43 $ 138,239.27

- 29 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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
September 17, 2014

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and Honorable Lloyd Horadan, President Oconee Fall Line Technical College
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of Oconee Fall Line Technical College as of and for the year ended June 30, 2014, and have issued our report thereon dated September 17, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Oconee Fall Line Technical College's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Oconee Fall Line Technical College's internal control. Accordingly, we do not express an opinion on the effectiveness of Oconee Fall Line Technical College's internal control.
A deficiency in internal control 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 entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a 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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material
2014YB-10

weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Oconee Fall Line Technical College's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted a certain matter that we have reported to management of Oconee Fall Line Technical College in a separate letter dated September 17, 2014.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,

GSG:as 2014YB-10

Greg S. Griffin State Auditor

SECTION III FINDINGS AND QUESTIONED COSTS

OCONEE FALL LINE TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2014
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.