Central Georgia Technical College, Macon, Georgia, independent accountant's report on applying agreed-upon procedures for the fiscal year ended June 30, 2007

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
I
CENTRAL GEORGIA TECHNICAL COLLEGE MACON, GEORGIA
INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED-UPON PROCEDURES
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Russell W. Hinton State Auditor

CENTRAL GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS -
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBIT
A BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

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
December 3, 2007

Members ofthe State Board Technical and Adult Education Members of the Local Board of Directors
and Honorable Ron Natale, President Central Georgia Technical College
Independent Accountant's Report on Applying Agreed-Upon Procedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the College and the Administrative Central Office (Oversight Unit) ofthe Department ofTechnical and Adult Education, solely to assist you in assessing the accuracy ofthe annual financial statement information reported to the Administrative Central Office by the College for inclusion in the State of Georgia's Comprehensive Annual Financial Report (CAFR) and Single Audit Report; and to assist you in assessing the accuracy ofbudget basis information provided in the Budget Comparison andSurplus Analysis Report, which is attached as Exhibit A. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute ofCertified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
1. Review selected balance sheet items reported on the annual financial statement worksheets (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger.
Net Asset activity was incorrectly reported on the Statement of Net Assets information submitted. Invested in Capital Assets, Net of Related Debt was understated by $1,093,229.69 and Restricted Net Assets was overstated by $1,093,229.69. This misclassification was corrected and resubmitted to the Georgia Department of Technical and Adult Education.
It appeared that Capital Assets and Invested in Capital Assets, Net of Related Debt were overstated by $50,000.00. The College was unable to provide supporting documentation for a portion of its current year land addition.

2. Obtain the College's GAAP basis worksheets for Statement ofNet Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) information that was submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these worksheets properly support activity reported in the College's accounting records.

Numerous items on the Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) were reported incorrectly on the financial statements provided by the College for review. Listed below are the deficiencies noted:

Financial Statement Category

Overstated/ Uncorrected (Vnderstated) Amounts

Other Operating Revenues

$ 241,796.58

Capital Contributions - Loss on Disposal of Assets $ 14,944.83

Operating Grants and Contracts - Federal

$ -6,588,433.96

Other Nonoperating Revenues

$ -672,415.79

Nonoperating Grants and Contracts - Federal $ -139,866.74

Nonoperating Grants and Contracts - State

$

-991.12

Capital Grants and Gifts - State

$ 50,000.00

Other Nonoperating Expenses

$ -752,916.97

Operating Expenses - Scholarships and

Fellowships

$-11,228,699.11

Nonoperating Grants and Contracts - Expenses $ 4,836,649.88

$ 45,511.85
$ -44,551.85 $ -860.00 $ 50,000.00

Except for the uncorrected amounts identified above, the deficiencies noted related to the SRECNA were corrected by the College and resubmitted to the Georgia Department of Technical and Adult Education.

3. Obtain the College's worksheets for financial statement note disclosure information submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, Long-Term Debt, Lease Obligations and Retirement Plans have been properly reported.

The Capital Assets note disclosure was not properly reported. Ending balance for Capital Assets (Net) was reported as $32,962,245.49 in the note disclosure information; however, ending Capital Assets (Net) were reported on the College's financial statement balance sheet as $33,049,111.45, resulting in an improper variance of $86,865.96 in the financial statement note disclosure.

The Compensated Absences note disclosure was not properly reported. The current portion of the Compensated Absences Liability was reported as $483,349.14 in the note disclosure information; however, the current portion of the Compensated Absences Liability was reported on the College's financial statement balance sheet as $483,652.65, resulting in an improper variance of $303.51 in the financial statement note disclosure.
All note disclosure exceptions noted above were corrected by the College and resubmitted to the Georgia Department of Technical and Adult Education.
4. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's annual financial statement worksheets.
The year end GAAP entries related to the recording of on behalf (GSFIC) payments for noncapitalizable items, the reclassification of current year Pell, FSEOG, FCWS activity, and the removal of Agency activity were not done correctly, resulting in an understatement of $7,144,966.20 in both revenues and expenses.
The year end GAAP entry related to the deferring of the portion of revenues that were recognized in relation to June 30, 2007 encumbrances was not done correctly. The amount adjusted against Other Nonoperating Revenues, $95,446.01, should have been posted to Nonoperating Grants and Contracts Federal.
The year end GAAP entry related to the elimination of the fund balance adjustment against the appropriate revenue category for the return of surplus was not done correctly. The amount of $131.12 was recorded as Nonoperating Grants and Contracts - State, but should have been recorded as Nonoperating State Appropriations.
The year end GAAP entry related to recording current year capital asset deletions was not done correctly. The Loss on Disposal of Capital Assets of $14,944.83 was recorded as Other Nonoperating Revenues on the SRECNA, instead of Capital Contributions - Loss on Disposal of Capital Assets.
All of the GAAP entry exceptions noted above were corrected by the College and resubmitted to the Georgia Department ofTechnical and Adult Education.
5. Confirm that State Appropriation revenues, receivables and remittances ofprior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.

6. Obtain listing ofwrite-offrequests for accounts receivable less than $3,000.00 for fiscal year 2007. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements.
We did not note any exceptions as a result of our procedures.
7. Verify that the listing ofsalaries, travel, and per diem and fees reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 reconciles to amounts recorded in the College's financial statements.
We did not note any exceptions as a result of our procedures.
8. Review the year end Budgetary Statements including the Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist.
Beginning Fund Balance on the Budget Comparison and Surplus Analysis Report (Exhibit A) did not agree to the prior year Ending Fund Balance by $109,166.09. An adjusting entry was made to correct this variance. In addition, State Appropriations did not agree to the Supplemental Information received from the Department of Technical and Adult Education by $8,332.00 because of an incorrect entry made by the Technical College. An adjustment was made to correct this reporting error.
9. Obtain documentation for Budget basis reserves reported by the College on the Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
We did not note any exceptions as a result of our procedures.
10. Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records.
We did not note any exceptions as a result of our procedures.

11. Review the Schedule of Expenditures of Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records.

The College's Schedule ofExpenditures of Federal Awards information did not agree with the Federal expenditure activity reflected on the College's accounting records as follows.

CFDA

Originally Reported Amount

Actual Amount

Variance

93.558 84.002 84.048

$ 99,540.11 $552,956.37 $732,126.95

$ 100,680.11 $ 562,837.54 $1,109,827.12

$ -1,140.00 $ -9,881.17 $-377,700.17

All of the Schedule of Expenditures of Federal Awards exceptions noted above were corrected.

These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective ofwhich is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,

.

\ D ~ ~ - - -"-"'1'-GA.--
Rus 11 W. Hinton, CPA, CGFM State Auditor

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EXHIBIT

CENTRAL GEORGIA TECHNICAL COLLEGE BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
YEAR ENDED JUNE 30, 2007

EXHIBIT"A"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Adult Literacy Quick Start and Customized Services Technical Education
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenue Unreserved Fund Balance (Surplus) Returned
to Georgia Department of Technical and Adult Education - Administrative Central Office
Year Ended June 30, 2006 Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 14,240,050.88 $ 14,240,050.88 $

3,045,683.77

2,773,070.59

8,679,788.98

7,646,274.55

$ 25,965,523.63 $ 24,659,396.02 $

0.00 -272,613.18 -1,033,514.43
-1,306, 127.61

0.00

760,263.87

$ 25,965,523.63 $ 25,419,659.89 $

760,263.87 -545 863.74

$ 1,679,609.88 $ 1,537,787.60 $

106,003.00

82,453.50

24,179,910.75

22,934,454.76

$ 25,965,523.63 $ 24,554,695.86 $

$

0.00 $

864,964.03 $

141,822.28 23,549.50
1,245,455.99
1 410 827.77
864 964.03

760,263.87 131.12

10,300.83 8,332.00

-131.12 -760,263.87

$

883,596.86

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

$

14,553.93

329,530.70

109,067.54

85,549.53

343,726.53

$

882,428.23

1 168.63

Total Fund Balance

$ =====88.,.3,..,5.9.6...,.8.,.6.,,