STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
I
HEART OF GEORGIA TECHNICAL COLLEGE DUBLIN, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2008
Russell W. Hinton State Auditor

HEART OF GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENTOFNETASSETS

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

3

C STATEMENT OF CASH FLOWS

4

D NOTES TO THE FINANCIAL STATEMENTS

5

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND

20

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

21

3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING

SOURCE COMPARED TO BUDGET

(NON-GAAP BASIS) BUDGET FUND

22

4 RECONCILIATION OF SALARIES AND TRAVEL

25

SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 13,2008

Honorable Sonny Perdue, Governor Members ofthe General Assembly of Georgia Members of the State Board of Technical and Adult Education Members ofthe Local Board ofDirectors
and Honorable Randall Peters, President Heart of Georgia Technical College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of Heart of Georgia Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2008. These financial statements are the responsibility of the Technical College's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Technical College's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1, the financial statements ofHeart ofGeorgia Technical College are intended to present the financial position and changes in financial position and cash flows ofonly that portion ofthe business-type activities ofthe State of Georgia that is attributable to the transactions ofHeart of Georgia Technical College. They do not purport to, and do not, present fairly the financial
08ARL-2TC

position and changes in financial position and cash flows ofthe State ofGeorgia, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Heart of Georgia Technical College as ofJune 30, 2008, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Management's Discussion and Analysis is not a required part ofthe basic financial statements but is supplementary information required by accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods of measurement and presentation of this supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose offorming an opinion on the basic financial statements of Heart of Georgia Technical College taken as a whole. The accompanying supplementary information (Schedules 1 through 4) is presented for purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
~-...;;-~-~~
Russell W. Hinton, CPA, CGFM State Auditor
RWH:gp 08ARL-2TC

REQUIRED SUPPLEMENTARY INFORMATION

Heart of Georgia Technical College Management's Discussion and Analysis
The following is management's discussion and analysis of Heart of Georgia Technical College's financial performance for the fiscal year ending June 30, 2008, with comparative data from fiscal year ending June 30, 2007. 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 several financial statements prepared in accordance with the rules and regulations established by the Governmental Accounting Standards Board.
There are three financial statements presented: the Statement of Net Assets, the Statement of Revenues, Expenses and Changes in Net Assets, and the Statement of Cash Flows. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question "Is the Technical College as a whole better or worse off as a result of the year's activities?" These statements include all assets and liabilities using the accrual basis of accounting, which is 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 Assets
The purpose of the Statement of Net Assets is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities, and net assets of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating.
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Net assets are divided into two major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College.

Statement of Net Assets

June 30, 2008

June 30, 2007

Assets Current Assets Capital Assets, Net

$ 874,580 22,202,553

$ 740,471 9,332,107

Total Assets

$ 23,077,133

$ 10,072,578

Liabilities Current Liabilities Noncurrent Liabilities

$ 936,744 341,274

$ 991,442 333,854

Total Liabilities

$ 1,278,018

$ 1,325,296

Net Assets Invested in Capital Assets, Net ofDebt Unrestricted

$ 22,202,553 -403,438

$ 9,332,107 -584,825

Total Net Assets

$ 21.799.115

$ 8.747.282

The total assets of the Technical College increased $13,004,555 from the prior year. The majority of this increase is related to the addition of the Louie Livingston Hall classroom building. This building and the purchase of additional capital equipment increased the balance of net capital assets $12,870,446. Current Assets also increased by $134, 109 which represents an increase in ending cash balances and accounts receivable.

Total liabilities at the end ofthe fiscal year decreased $47,278 as compared to the previous fiscal year. This can be attributed to a decrease of $54,698 in current liabilities with a simultaneous slight increase of $7,420 in noncurrent liabilities. The combination of the increase in total assets of$13,004,555 and the decrease in total liabilities of$47,278 yield an increase of$13,051,833 in total net assets.

Statement of Revenues, Expenses and Changes in Net Assets

The purpose ofthe Statement of Revenues, Expenses and Changes in Net Assets is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets.

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Operating revenues are received for providing goods and/or services to various customers and constituencies for 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.

Statement of Revenues, Expenses and Changes in Net Assets, Condensed

June 30, 2008

June 30, 2007

Operating Revenues Operating Expenses

$ 4,901,557 13,865,385

$ 3,365,543 12,329,474

Operating Loss

$ -8,963,828

$ -8,963,931

Nonoperating Revenues and Expenses

8,682,034

8,259,095

Income (Loss) Before Other Revenues, Expenses, Gains or Losses

$ -281,794

$ -704,836

Other Revenues, Expenses, Gains or Losses

13,333,627

-1 154

Increase (Decrease) in Net Assets

$ 13,051,833

$ -705,990

Net Assets at Beginning of Year

8,747,282

9,453,272

Net Assets at End of Year

$ 21,799,115

$ 8)47282

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

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Revenue By Source For The Years Ended June 30, 2008 and June 30, 2007

June 30, 2008

June 30, 2007

Operating Revenue Tuition and Fees Grants and Contracts Sales and Services Rents and Royalties Other

$ 1,760,509 1,301,530 1,532,015 300,822 6,681

$ 1,544,402 1,232,798 210,197 328,897 49 249

Total Operating Revenue

$ 4,901,557

$ 3,365,543

Nonoperating Revenue State Appropriations Grants and Contracts Federal State Gifts Other

$ 7,438,438
959,932 249,937 298,665
14 410

$ 6,686,081
1,020,477 1,089,190
139,879 104,399

Total Nonoperating Revenue

$ 8,961,382

$ 9,040,026

Capital Grants and Gifts State Gain/Loss on Disposal of Capital Assets

$ 13,335,044 -1 417

$

-1 154

Total Capital Grants and Gifts

$ 13,333,627

$

-1 154

Total Revenues

$ 27.196.566

$ 12.404.415

Expenses For The Years Ended June 30, 2008 and June 30, 2007

June 30, 2008

June 30, 2007

Operating Expenses Instruction

$ 13,865,385

$ 12,329,474

Nonoperating Expenses

279,348

780,931

Total Expenses

$ 14!144!733

$ 131 110A05

Operating revenue for the Technical College increased $1,536,014 from the previous fiscal year. Factors that influenced this significant increase are discussed below:

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Tuition and fees revenue increased by $216,107. This is mainly the result of an increase of $5 per credit hour that affected Winter and Spring quarters. The Technical College also implemented more rigorous collection policies that resulted in fewer bad debts at the end of the fiscal year. Grants and Contracts revenue increased by $68,732. The majority of this increase ($64,318) is related to the school acquiring two new Work Ready grants from the Governor's Office of Workforce Development. Facility Rental Revenue decreased by $28,075. This is attributed to a slight decline in public use of the Dubose Porter Conference Center and an increase in internal use of the building by the Technical College. Internal use by the Technical College was necessary due to renovation/ construction of new building and having no other space available to teach credit courses. Other Operating Revenue also decreased by $42,568. The decline reflects a decrease m miscellaneous revenue. Total expense increased by $1,034,328. Factors that affected this increase are discussed as follows: Personal Services expense increased by $1,041,776 as compared to fiscal year 2007. This increase includes a pay raise for employees of 3% and also a 6.13% increase in the employer required contribution to the State Health Benefit Plan. Additional positions were also filled to staff expanding programs. Travel expense increased by $10,435. A portion ofthis increase can be attributed to the national increase in fuel prices. Scholarships and Fellowships expense increased by $58,594. This is a reflection of the increase in tuition fees of$5 per credit hour for the last 2 quarters of the fiscal year. Utilities expense decreased by $55,717 due to the Technical College's efforts to conserve resources.
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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 Assets.

Statement of Cash Flows

June 30, 2008

Cash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities

$ -8,592,409 8,689,196 -60,552 14 195

Net Change in Cash Cash, Beginning of Year

$

50,430

59,983

Cash, End of Year

$==='1~1~0.4~1~3

Comparative data related to the Statement of Cash Flows information was not available. The fiscal year 2007 Statement of Cash Flows was completed statewide for the Comprehensive Annual Financial Report of Georgia and not at the individual technical college level.

Capital Assets

The Technical College's total Capital Contributions increased $13,332,473. This is mainly due to the addition of the Louie Livingston Hall building ($12,985,046) which was purchased with bonds issued by GSFIC. GSFIC bonds also purchased approximately $347,427 of additional capital equipment.

Long-Term Liabilities

Heart of Georgia Technical College had total Long-Term Liabilities of $742,947.61 as of June 30,2008, ofwhich $401,673.95 was reflected as a current liability.

For additional information on Long-Term Liabilities see Notes I and 7 in the Notes to the Financial Statements.

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Economic Outlook Heart of Georgia Technical College, as all state agencies, has received a directive by the Governor of Georgia to reduce our base State funding for fiscal year 2009 by 6%. To date, the school has accommodated this budget reduction by re-focusing current resources, eliminating unnecessary travel, and reducing our personnel force. In addition, plans have been developed for an additional 2% and 4% (above the 6%) reduction in funding. The plan includes an outline of the various areas in which funding would be reduced. Despite budget cuts, the services and the delivery of instruction that the school offers have not been impacted. Education is the primary focus of the school. The Technical College will maintain a close watch over resources to maintain the ability to offer a means of higher education to the community that it serves. Dr. Randall L. Peters President Beth Crumpton Executive Vice President
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BASIC FINANCIAL STATEMENTS - 1-

HEART OF GEORGIA TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30, 2008
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Prepaid Items Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Deferred Revenue Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Unrestricted (Deficit)
Total Net Assets

EXHIBIT"A"

$

110,412.98

62,176.16 329,847.25
6,475.86 365,668.14

$

874,580.39

22,202,553.40 $ 23,077,133.79

$

512,323.79

2,020.88

20,725.93

401,673.95

$

936,744.55

341,273.66 $ 1,278,018.21

$ 22,202,553.40 -403,437.82

$ 21,799,115.58

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

HEART OF GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2008

EXHIBIT"B"

OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalties Sales and Services 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 Interest and Other Investment Income Other Nonoperating Revenues Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Gain/Loss on Disposal of Capital Assets
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets- Beginning of Year
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.
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$ 2,189,302.60 -428,793.27
1,301,529.50 300,822.16
1,532,015.35 6,680.73
$ 4,901,557.07
$ 7,302,154.05 2,149,607.34 198,920.76 822,736.23 376,712.12 2,491,522.13 523,732.20
$ 13,865,384.83
$ -8,963,827.76
$ 7,438,438.00
959,931.63 249,936.71 298,664.93
14,194.67 215.00
-279,346.47
$ 8,682,034.47
$ ---=-2::..:8c..:..J1,"-79::..::3:..:.:.2:..=..9
$ 13,335,044.05 -1,416.69
$ 13,333,627.36
$ 13,051,834.07
8, 747,281.51
$ 21,799,115.58

HEART OF GEORGIA TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services 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
CASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Accounts Payable 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.
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EXHIBIT"C"

$ 1'760,509.33 1,274,477.23 1,332,029.38 -5,232,555.29 -7,286,258.95 -822,736.23 382,125.84
$ -8,592,408.69

$ 7,438,438.00 9,787.70
1,403,771.86 -162,801.56
$ 8,689,196.00

$

195,271.90

-255,823.54

$

-60,551.64

$

14 194.67

$

50,430.34

59,982.64

$

110,412.98

$ -8,963,827.76
523,732.20 -152,415.29
-31,016.83 2,166.76 13,057.13 15,895.10
$ -8,592,408.69
$ 13,139,772.15

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Heart of Georgia Technical College is one of thirty-three (33) State supported member colleges of postsecondary education in Georgia which comprise the Georgia Department ofTechnical and Adult Education, an organizational unit ofthe State of Georgia. The accompanying financial statements reflect the operations ofHeart of Georgia Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of ten (10) members serving staggered three-year terms who are appointed by the State Board ofTechnical and Adult Education. Appropriation of State funds is made to the Georgia Department of Technical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount of State appropriations to be received by Heart of Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Heart of Georgia Technical College is considered an organizational unit of the Georgia Department of Technical and Adult Education for financial reporting purposes because ofthe significance ofits legal, operational, and financial relationships as defined in Section 2100 ofthe 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 Georgia Department ofTechnical and Adult Education (an organizational unit ofthe State ofGeorgia), are considered potential component units of the State. See Note 15 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 ofthe Technical College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required.
GAAP requires that the reporting of summer school revenues and expenses be split between fiscal years rather than in one fiscal year. Due to lack of materiality, the Technical Colleges of the Georgia Department ofTechnical and Adult Education will continue to report summer revenues and expenses in the year in which the predominate activity takes place.
BASIS OF ACCOUNTING For financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-college transactions have been eliminated.
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HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING The Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include petty cash and demand deposits in authorized financial institutions.
ACCOUNTS RECEIVABLE Accounts receivable consist ofallotments due from the Georgia Department ofTechnical and Adult Education- Administrative Central 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 first-in, first-out 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 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, 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 ofthe 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, and 3 to 10 years for equipment.
To fully portray capital assets acquired by the Technical Colleges of the Georgia Department of Technical and Adult Education, 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 Georgia Department of Technical and Adult Education. 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 the 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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HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS 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 Heart of Georgia Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2008, GSFIC transferred capital additions valued at $12,985,046.15 to Heart of Georgia Technical College.
DEFERRED REVENUES Deferred revenues include amounts received from grant and contract sponsors that have not yet been earned.
COMPENSATED ABSENCES Employee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Heart of Georgia Technical College had an accrued liability for compensated absences in the amount of $727,052.51 as of July 1, 2007. For fiscal year 2008, $453,350.61 was earned in compensated absences and employees were paid $437,455.51, for a net increase of$15,895.10. The ending balance as ofJune 30,2008 in accrued liability for compensated absences was $742,947.61.
NONCURRENT LIABILITIES Noncurrent liabilities include liabilities that will not be paid within the next fiscal year.
NET ASSETS The Technical College's net assets are classified as follows:
Invested in capital assets, net ofrelated debt: This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. (The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed above.)
Unrestricted net assets: Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $5,209.74. Unexpended state appropriations must be refunded to the Department ofTechnical and Adult Education for remittance to the Office of Treasury and Fiscal Services.

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HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS 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 Heart of Georgia Technical College, as a political subdivision ofthe State of Georgia, is excluded from Federal income taxes under Section 115(1) ofthe Internal Revenue Code, as amended.
CLASSIFICATION OF REVENUES The Technical College has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria:
Operating revenues: Operating revenues include activities that have the characteristics ofexchange transactions, such as (1) student tuition and fees, net ofscholarship allowances, (2) certain Federal, state and local grants and contracts, and (3) sales and services.
Nonoperating revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary FundAccounting, and GASB No. 34, such as state appropriations and investment income.
SCHOLARSHIP ALLOWANCES Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the Technical College, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs, are recorded as either operating or nonoperating revenues in the Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances.
NOTE 2: DEPOSITS
DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu ofa surety bond, the depository may pledge
-8-

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 2: DEPOSITS

DEPOSITS 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 ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.

4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.

5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation ofthe United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

6. Guarantee or insurance ofaccounts provided by the Federal Deposit Insurance Corporation.

As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies, which allows agencies of the State of Georgia (and thus Heart of Georgia Technical College), the option of exempting demand deposits from the collateral requirements.

At June 30, 2008, the carrying value of the deposits was $107,382.98 and the bank balance was $435,575.08. Ofthe Technical College's deposits, $325,284.91 were uninsured.

NOTE 3: ACCOUNTS RECEIVABLE

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

Federal, State and Private Funds Other

$ 62,176.16 329,847.25

Total Accounts Receivable

$ 392.023.41

- 9-

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT"D"

NOTE 4: INVENTORIES

Inventories at June 30, 2008, consists of the following:

Bookstore

$ 365.668.14

NOTE 5: CAPITAL ASSETS

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

Balance July I, 2007

Additions

Reductions

Balance June 30, 2008

Capital Assets, Not Being Depreciated:

Land and Land Improvements

$ 333,822.00 $

0.00 $

0.00 $ 333,822.00

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

$ 12,084,764.00 $ 12,985,046.15

639,843.22

3,146,651.84

410,549.54 $

$ 25,069,810.15 639,843.22
60,391.82 3,496,809.56

$ 15,871,259.06 $ 13,395,595.69 $ 60,391.82 $ 29,206,462.93

Less: Accumulated Depreciation:

Building and Building Improvements $ 3,538,662.89 $

Improvements Other Than Buildings

556,319.84

Equipment

2, 777,991.73

332,971.93 21,084.32 169,675.95 $

$ 3,871,634.82 577,404.16
58,975.13 2,888,692.55

$ 6,872,974.46 $ 523,732.20 $ 58,975.13 $ 7,337,731.53

Total Capital Assets, Being Depreciated,

Net

$ 8,998,284.60 $ 12,871,863.49 $

1,416.69 $ 21,868,731.40

Capital Assets, Net

$ 9.332.106.60 $ 12.871.863.49 $

1.416.69 $ 22.202.553.40

NOTE 6: DEFERRED REVENUE

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

Federal Grants and Contracts

$.====2~~02o9!!0~.8~8

NOTE 7: LONG-TERM LIABILITIES

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

Other Liabilities Compensated Absences

Balance July I, 2007

Additions

Reductions

Balance June 30, 2008

Current Portion

$ 121,052 51 $ ~53 350,61 $ ~31,~55 51 $ 1~2.2~1.61 $ 401,613.25

- 10-

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 8: NET ASSETS

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

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

Balance Jul:x: I, 2007

Additions

Reductions

Balance June 30, 2008

$ 9,332, I06.60 $ 12,871 ,863.49 $

1,416.69 $ 22,202,553.40

-584,825.09 13,862,932.84 13,681,545.57

-403,437.82

$ 8,747,281.51 $ 26,734 796.33 $ 13 682 962.26 $ 21,792,115.58

NOTE 9: LEASE OBLIGATIONS

OPERATING LEASES Heart of Georgia Technical College has entered into certain agreements to lease equipment which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Expenses for rental of equipment under operating leases for the year ended June 30, 2008, totaled $1,776.00.

SUMMARY OF LEASE OBLIGATIONS Future commitments for capital leases (which here and on the Statement ofNet Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2008, were as follows:

Operating Leases

Year Ending June 30: 2009 2010 2011 2012

$ 1,776.00 1,776.00 1,776.00 1,776.00

Total Minimum Lease Payments

$ 7.104.00

- 11 -

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

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

Funding Policy Employees ofHeart of Georgia Technical College who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. Heart of Georgia Technical College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2008, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2008 2007 2006

100% 100% 100%

$ 362,842.26 $ 366,631.27 $ 344,970.65

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description Heart of Georgia Technical College participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowances for employees of the State of Georgia.

The benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership withERS 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. All other members are "new plan" members subject to the modified plan provisions.

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HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Under both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average ofthe member's highest twenty-four consecutive calendar months ofsalary, the number of years of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
In addition, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 ofthe Internal Revenue Code (IRC) as a portion ofERS. The purpose ofSRBP is to provide retirement benefits to employees covered byERS whose benefits are otherwise limited by IRC 415.
The ERS issues a financial report each fiscal year which may be obtained through ERS.
Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Technical College's payroll for the year ended June 30, 2008, for employees covered by ERS was $1,760,461.38. The Technical College's total payroll for all employees was $7,302,154.05.
Under the old plan, member contributions consist of 6.5% of annual compensation. Of these member contributions, the employee pays the first 1.5% and the Technical College pays the remainder on behalf of the employee. Under the new plan, member contributions consist solely of 1.5% of annual compensation paid by employee. The Technical College also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2008, the ERS employer contribution rate for the Technical College amounted to 10.41% ofcovered payroll and included the amounts contributed on behalfof the employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.

- 13 -

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Funding Policy Total contributions to the plan made during fiscal year 2008 amounted to $209,673.74, of which $183,265.89 was made by the Technical College and $26,407.85 was made by employees. These contributions met the requirements ofthe plan.
Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2008, financial report which may be obtained through ERS.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Heart ofGeorgia Technical College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees ofthe 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. Ifa member has less than $3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
The Employees' Retirement System ofGeorgia issues a financial report each fiscal year which may be obtained through ERS.
Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2008, for employees covered by GDCP was $957,761.45. The Technical College's total payroll for all employees was $7,302,154.05.
Total contributions made by employees during fiscal year 2008 amounted to $71,832.49 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
- 14-

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 11: RISK MANAGEMENT
Public Entity Risk Pool The Department of Community Health (DCH) administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county governments, and local education agencies located with the State ofGeorgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. DCH contracted with United Healthcare to process medical claims. For prescription drug claims, DCH contracted with Express Scripts, Incorporated through December 31, 2007 and contracted with Medco, Incorporated beginning January 1, 2008. All claims are to be processed in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.
Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia ofmaking 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 ofthe Georgia Department of Technical and Adult Education, is part ofthe State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE 12: POSTEMPLOYMENT BENEFITS
The Technical College participates in the Georgia Retiree Health Benefit Fund ("GRHBF") which is a cost-sharing multiple-employer defined benefit postemployment healthcare plan that covers retired employees of the State of Georgia. GRHBF provides health insurance benefits to eligible retirees and their qualified beneficiaries.
Pursuant to Title 45, Chapter 18 of O.C.G.A., the authority to establish and amend the benefit provisions of the plan is assigned to the Board of Community Health ("Board"). Financial statements and required supplementary information for GRHBF are included in the publicly available financial report of the Department of Community Health.
The Technical College contributes to the fund based upon amounts recommended by the Board and set forth in the Appropriations Act. This contribution rate is established to fund both the active and retired employee components of the health insurance plan based on projected pay-as-you-go financing requirements. The combined rate for the active and retiree components ofthe plan (payas-you-go basis) for the fiscal year ended June 30, 2008, was 18.534% of covered payroll. An
- 15 -

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2008

EXHIBIT "D"

NOTE 12: POSTEMPLOYMENT BENEFITS
additional contribution of4.309% ofcovered payroll was required by the Board for fiscal year 2008; eleven months ofthis additional contribution will be deposited into the OPEB fund to prefund retiree benefits (such additional contribution amounts are determined annually). The Technical College's contribution to the health insurance plan for the fiscal year ended June 30,2008, was $1,317,601.12 which equaled the required contribution.
The Technical College also participates in a program of group term life insurance for retired and vested inactive eligible members of various retirement systems. The State Employees' Assurance Department ("SEAD-OPEB") is a single-employer defined benefit postemployment plan.
Pursuant to Title 47 ofthe Official Code ofGeorgia Annotated, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems. Financial statements and required supplementary information for SEAD-OPEB are included in the publicly available financial report of the Employees' Retirement System.
The Technical College is required to contribute the annual required contribution ofthe employer (ARC), an amount actuarially determined in accordance with the parameters ofGASB Statement 45. The ARC for the year ended June 30, 2008, was zero (0).
NOTE 13: 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 Heart of Georgia Technical College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Heart of Georgia Technical College (an organizational unit of the Department of Technical and Adult Education), if any, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2008.
NOTE 14: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS
The Technical College's operating expenses shown at the natural classification on the "Statement of Revenues, Expenses and Changes in Net Assets" are all classified as Instruction at the functional classification.

- 16-

HEART OF GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2008

EXHIBIT "D"

NOTE 15: AFFILIATED ORGANIZATIONS
In accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an amendment ofGASB Statement No. 14, The Reporting Entity, which became effective for the year ended June 30, 2004, Heart ofGeorgia Technical College Foundation has been determined to be a legally separate, tax exempt organization whose activities primarily support Heart of Georgia Technical College, a member college ofpostsecondary education in Georgia whose units comprise the Department of Technical and Adult Education (an organizational unit ofthe State of Georgia). The State Accounting Office has determined Component Units ofthe State ofGeorgia, as required by GASB Statement No. 39, should be assessed in relation to their significance to the State ofGeorgia. Accordingly, Heart ofGeorgia Technical College has not included financial activity for Heart of Georgia Technical College Foundation in these financial statements.

- 17-

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SUPPLEMENTARY INFORMATION - 19-

HEART OF GEORGIA TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND JUNE 30, 2008
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accounts Payable Encumbrance Payable Other Liabilities
Total Liabilities
Fund Balances Reserved Federal Financial Assistance Live Works Projects Sales and Services Technology Fees Prior Year Local Funds Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

193,488.24

73,147.25 188,144.33
10,306.86 365,668.14

$ ===83=0=,7=54==82=

$

478,547.52

154,003.89

42,136.87

$

674,688.28

$

542.38

4,339.43

109,759.92

15,167.58

21,047.49

5,209.74

$

156,066.54

$ ===83=0=,7=54==82=

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 comprehensive basis of accounting other than generally accepted accounting principles.
- 20-

HEART OF GEORGIA TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND JUNE 30, 2008

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Adult Literacy Economic Development Technical Education
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved
ADJUSTMENTS
Prior Year Payables/Expenditures Refunds to Grantors
Federal Financial Assistance and Other Funds Returned to Georgia Department of Technical and Adult Education June 30, 2007
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$

7,438,438.00 $

7,438,438.00 $

1,471 '156.96

912,424.46

4,594,382.19

4 129 357.78

0.00 -558,732.50 -465 024.41

$

13,503,977.15 $

12,480,220.24 $

-1,023,756.91

0.00

65918.19

$

13,503,977.15 $

12,546,138.43 $

65 918.19 -957,838.72

$

750,579.00 $

735,893.99 $

276,025.00

268,650.12

12477373.15

11,390,007.00

$

13 503 977.15 $

12 394 551.11 $

$

0.00 $

151,587.32 $

14,685.01 7,374.88 1,087,366.15
1 109 426.04
151 587.32

65,918.19

6,848.50

-2,369.28 -65 918.19

$

156 066.54

SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance Live Works Projects Sales and Services Technology Fees Prior Year Local Funds
Total Reserved
Unreserved Surplus

$

542.38

4,339.43

109,759.92

15,167.58

21 047.49

$

150,856.80

5 209.74

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 comprehensive basis of accounting other than generally accepted accounting principles.
-21 -

$ =====15=6;!,;,0=6=6.=54=

HEART OF GEORGIA TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(NON-GMP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2008

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

Original Appropriation

Final Budget

Funds Available ComE:ared to Budget

Current Year Revenues

Prior Year Carry-Over

Total Funds Available

Variance Positive (Negative)

436,186.00 240,293.00
70 000.00
746,479.00

436,186.00 $ 240,293.00
74100.00
750,579.00

436,186.00 $ 238,713.53
62,629.42
737,528.95 $

0.00 $ 0.00 0.00
0.00 $

436,186.00 238,713.53
62,629.42
737,528.95

0.00 -1,579.47 -11 470.58
-13,050.05

Economic Development Other Funds

0.00 $

276 025.00 $

298,317.32

0.00 $

298 317.32 $ 22 292.32

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

7,002,252.00 $ 1,273,351.51 4 045 769.64

7,002,252.00 $ 1,230,863.96 4 244 257.19

7,002,252.00 $ 673,710.93
3768411.04

0.00 $ 0.00 65,918.19

12,321,373.15

12477 373.15 $ 11 444 373.97 $ 65918.19 $

7,002,252.00 $ 673,710.93
3,834,329.23

0.00 -557,153.03 -409 927.96

11,510,292.16 $ -967,080.99

Grand Totals- All Programs

13,067,852.15 $ 13,503,977.15 $ 12,480,220.24 $ 65,918.19 $ 12,546,138.43 $ -957,838.72

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 comprehensive basis of accounting other than generally accepted accounting principles.
-22-

SCHEDULE "3"

Ex[!!ndHures Comi!!!red to Budset

Variance

Positive

Actual

(Negative)

Actual Funds Available
Over/(Under) Expenditures

Prior Period Adjustments

Other Adjustments

Program Fund
Balances

Transfers

P~ram Fund Balances

Reserve

Surplus

Total Fund Balance

436,186.00 $ 238,713.53 60,994.46
735,893.99 $

0.00 $ 1,579.47 13105.54
14,685.01 $

0.00 $ 0.00 1634.96
1634.96 $

71.05 930.30 -33.89
967.46 $

0.00 $ -41.52
0.00
-41.52

71.05 $ 888.78 1601.07
2,560.90

0.00 $ 0.00 0.00
0.00 $

0.00 $ 888.78 1 599.94
2,488.72 $

71.05 $ 0.00 1.13
72.18 $

71.05 888.78 1601.07
2 560.90

268,650.12 $

7 374.88 $

29 667.20 $

0.00 $

0.00 $ 29 667.20 $

0.00 $

29667.20 $

0.00 $ 29 667.20

$ 7,002,252.00 $ 672,675.95
3,715 079.05
$ 11390007.00 $

0.00 $ 558,188.01 529178.14
1,087,366.15 $

0.00 $ 1,034.98 119250.18
120 285.16 $

936.50 $ 1,377.36 3 567.18
5 881.04 $

0.00 $

936.50 $

-1,723.92

688.42

-603.84 122,213.52

-2,327.76 123,838.44 $

$ 12,394,551.11 $ 1,109,426.04 $

151,587.32 $

6,848.50 $ -2,369.28 $ 156,066.54 $

0.00 $ 0.00 0.00
0.00 $

0.00 $ -346.40 119,047.28
118,100.88 $

936.50 $ 1,034.82 3166.24
5137.56 $

936.50 688.42 122 213.52
123838.44

0.00 $ 150,856.80 $ 5,209.74 $ 156,066.54

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

SCHEDULE "4"

Totals per Annual Supplement
Lag Salaries June 30, 2008 June 30, 2007
Compensated Absences June 30, 2008 June 30, 2007
Agency Funds

SALARIES

TRAVEL

$

7,323,923.65 $ 210,628.48

-28,878.18 58,726.44

563,678.39 -615,296.25

-11,707.72

$

7,302,154.05 $ 198,920.76

-25-

SECTION II FINDINGS AND QUESTIONED COSTS

HEART OF GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2008
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.