STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS I CENTRAL GEORGIA TECHNICAL COLLEGE MACON, GEORGIA INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES FOR THE FISCAL YEAR ENDED JUNE 30, 2008 Russell W. Hinton State Auditor CENTRAL GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS - INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBITS A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT 1 B STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET 2 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 19, 2008 Members of the 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 of budget basis information provided in the Summary Budget Comparison and Surplus Analysis Report and Statement ofProgram Revenues and Expenditures by Funding Source Compared to Budget, which is attached as Exhibits A and B, respectively. Central Georgia Technical College's management is responsible for the financial information reported to the Administrative Central Office of the Department of Technical and Adult Education. This agreedupon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency ofthese 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. We did not note any exceptions as a result of our procedures. 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. We did not note any exceptions as a result of our procedures. 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. We did not note any exceptions as a result of our procedures. 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 entry related to Depreciation Expense was not made correctly. The entry included depreciation on items that were not Capital Assets. The depreciation expense reported on the SCRENA was overstated by $989.12. 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 2008. 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 of salaries, travel, and professional services 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 Summary Budget Comparison and Surplus Analysis Report (Exhibit A) and Statement ofProgram Revenues and Expenditures by Funding Source Compared to Budget (Exhibit B). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist. We did not note any exceptions as a result of our procedures. 9. Obtain documentation for Budget basis reserves reported by the College on the Summary Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate. We did not note any exceptions as a result of our procedures. 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. We did not note any exceptions as a result of our procedures. 12. Review capital asset records to ensure that (1) subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management. The capital asset subsidiary ledger did not agree with the amounts reported on the Statement of Net Assets and the Capital Asset note disclosure information as follows: Statement of Net Assets/ Note Disclosure Information Listing Variance Capital Asset Buildings Equipment $32,117,533.17 $ 8,421,917.21 $31,726,033.17 $ 8,435,019.82 $ 391,500.00 $ -13,102.61 Accumulated Depreciation Buildings $ 6,474,237.24 Improvements Other than Buildings $ 1,536,190.85 Equipment $ 6,250,462.07 $ 6,629,172.86 $-154,935.62 $ 1,539,453.35 $ 6,303,740.50 $ -3,262.50 $ -53,278.43 Additionally, it was noted that 3 items were capitalized that did not meet the capitalization threshold per the State Capital Asset Policy. Two of these items related to Buildings and Building Improvements and one related to Improvements Other Than Buildings. 13. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner. We did not note any exceptions as a result of our procedures. These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective 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, ~;~H~t~~~ State Auditor RWH:as EXHIBITS CENTRAL GEORGIA TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT YEAR ENDED JUNE 30, 2008 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 Economic Development Technical Education Total Expenditures Excess of Funds Available over Expenditures FUND BALANCE JULY 1 Reserved Unreserved ADJUSTMENTS Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education Year Ended June 30, 2007 Prior Year Reserved Fund Balance Included in Funds Available FUND BALANCE JUNE 30 BUDGET ACTUAL VARIANCEFAVORABLE (UNFAVORABLE) $ 16,161,263.00 $ 16,161,263.00 $ 3,030,745.29 2,628, 199.84 8,524,144.81 81147,248.33 $ 27,716,153.10 $ 26,936,711.17 $ 0.00 -402,545.45 -376,896.48 -779,441.93 0.00 882,428.23 $ 27,716,153.10 $ 27,819,139.40 $ 882,428.23 102,986.30 $ 1,664,890.43 $ 1,503,442.70 $ 117,000.00 33,335.48 25,934,262.67 24,973,889.21 $ 27,716,153.10 $ 26,510,667.39 $ $ 0.00 $ 1,308,472.01 $ 161,447.73 83,664.52 960,373.46 1,205,485.71 1,308,472.01 882,428.23 1,168.63 1,882.30 121,839.06 -1, 168.63 -882,428.23 $ 1,432,193.37 SUMMARY OF FUND BALANCE Reserved Federal Financial Assistance Local Grants and Contracts Live Works Projects Sales and Services Prior Year Local Funds Technology Fees $ 79.15 1,457.67 357,571.85 138,357.17 109,067.54 825,659.99 Total Fund Balance $ ==.,;,1~,4~32:;,g,,1;,;:9_3_.3..,7 -1- CENTRAL GEORGIA TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET YEAR ENDED JUNE 30, 2008 Adult Literacy State Appropriation State General Funds Federal Funds Other Funds Total Adult Literacy Original Appropriation Final Budget Current Year Revenues Funds Available Compared to Budget Prior Year Carry-Over Total Funds Available Variance Positive (Negative) $ 0.00 $ 478,716.00 $ 478,716.00 $ 0.00 $ 478,716.00 $ 0.00 0.00 645,930.04 584,675.91 0.00 584,675.91 -61,254.13 0.00 540 244.39 464 823.42 14 553.93 479 377.35 -60 867.04 $ 0.00 $ 1,664,890.43 $ 1,528,215.33 $ 14,553.93 $ 1,542,769.26 $ 122,121.17 Economic Development Other Funds $ 87 000.00 $ 117 000.00 $ 78 662.92 $ 56 001.31 $ 134 664.23 $ 17,664.23 Technical Education State Appropriation State General Funds Federal Funds Other Funds Total Technical Education $ 16,027,434.00 $ 15,682,547.00 $ 15,682,547.00 $ 0,00 2,384,815.25 2,043,523.93 7177 431.00 7 866 900.42 7,603 761.99 $ 23 204 865.00 $ 25,934 262.67 $ 25,329 832,92 $ 0.00 $ 0.00 811 872.99 15,682,547.00 $ 2,043,523.93 8,415 634.98 0.00 -341,291.32 548,734.56 811 872.99 $ 26141,705.91 $ 207 443.24 Grand Totals All Programs $ 23,291,885.00 $ 27,716,153.10 $ 26,936,711.17 $ 882,428.23 $ 27,819,139.40 $ 102,988.30 2 EXHIBIT"B" Ex!!!!!ditures Compered to Bu!!sat Variance Positive Actual (Negative) Actual Funds Available Ovar/(Under) Expenditures Prior Period Adjustments Other Adjustments Program Fund Balances Transfers Program Fund Balances Reserve ~ Total Fund Balance $ 478,716.00 $ 564,675.91 440,050.79 $ 1,503,442.70 $ 0.00 $ 61,254.13 100,193.60 161,447.73 $ 0.00 $ 0.00 39 326.56 39,326.56 $ 0.00 $ 2.35 -1969.10 -1,966.75 $ 0.00 $ 0.00 0.00 0.00 $ 0.00 $ 2.35 37 357.46 37 359.81 $ 0.00 $ 0.00 0.00 0.00 $ 0.00 $ 0.00 $ 2.35 0.00 37,357.46 ___Q,2Q_ 37,359.81 $ 0.00 $ 0.00 2.35 37,357.46 37,359.81 $ 33,335.48 $ 63664.52 $ 101,328.75 $ 0.00 $ 0.00 $ 101,328.75 $ 0.00 $ 101328.75 $ ~ $ 101 328.75 $ 15,682,547.00 $ 2, 166,013.09 7 125,329.12 $ 24,973 889.21 $ 0.00 $ 218,802.16 741,571.30 960373.46 $ 0.00 $ 0.00 $ -122,489.16 122,565.96 1290305.86 3,122.15 1,167,816.70 $ 125,688.11 $ $ 26,510,667.39 $ 1,205,485.71 $ 1,308,472.01 $ 123,721.36 $ 0.00 $ 0.00 $ 0.00 76.80 0.00 1293428.01 0.00 $ 1293504.81 $ 0.00 $ 1,432,193.37 $ 0.00 $ 0.00 0.00 0.00 $ 0.00 $ 76.80 0.00 1,293,428.01 ~ 0.00 76.80 1 293428.01 0.00 $ 1293,504.81 S---l!.!l2.S 1 293504.81 0.00 $ 1,432,193.37 $ 0.00 $ 1,432,193.37 -3-