Review report, state of Georgia, Middle Georgia Technical Institute, Warner Robins, Georgia, year ended June 30, 1994

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

REVIEW REPORT STATE OF GEORGIA MIDDLE GEORGIA TECHNICAL INSTITUTE WARNER ROBINS, GEORGIA
YEAR ENDED JUNE 30, 1994

MIDDLE GEORGIA TECHNICAL INSTITUTE -TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCE {STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

STATEMENTS OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

D

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

7

E

"B" LOTTERY FOR EDUCATION

8

F NOTES TO THE FINANCIAL STATEMENTS

9

SUPPLEMENTARY INFORMATION

G COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

20

H COMBINING STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

BUDGET FUND

21

I COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

22

J COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUNDS

25

SCHEDULES

1 CASH AND CASH EQUIVALENTS

26

2 INVESTMENTS

27

3 SCHEDULE OF FEDERAL REVENUES

28

4 RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL

29

5 RECONCILIATION OF PER DIEM AND FEES

30

MIDDLE GEORGIA TECHNICAL INSTITUTE - TABLE OF CONTENTS -
SECTION IT FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174
TAX RATIO (404) 656-0494

~epa:rtmeut of J\uni5
254 WASHINGTON STREET, SW ROOM 214
c~tfonta, Oienr_gia 30334-8400
December 5, 1994

FINANCIAL AUDITS (404) 656-2180
PROGRAM AUDITS (404) 656-2006

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members ofthe Local Board ofDirectors
and Honorable Billy Edenfield, President Middle Georgia Technical Institute
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through F) ofMiddle Georgia Technical Institute as of and for the year ended June 30, 1994, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management ofMiddle Georgia Technical Institute.
A review consists principally of inquiries of Institute personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Our review was made for the purpose ofexpressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibits G through J and Schedules 1 through 5) is presented only for supplementary analysis purposes. Such information has been

94ARL-4T

subjected to the inquiries and analytical procedures applied in the review of the financial statements, and we are not aware of any material modifications that should be made thereto.

CLV:cm 94ARL-4T

Claude L. Vickers State Auditor

FINANCIAL STATEMENTS - 1-

ASSETS Cash and Cash Equivalents
(See Schedule) Investments
(See Schedule) Accounts Receivable
State Funds Federal Financial Assistance Other
Inventories

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30. 1994

EXHIBIT "A"

ACCOUNT GROUPS

GOVERNMENTAL FUND TYPE

FIDUCIARY FUND TYPE

--G--EN--ER-A-L---------G-E-N-ER-A--L--

TOTALS (Memorandum Only)

----B-U-D-G-E-T--- --A--G-EN--CY----

FIXED ASSETS

LONG-TERM DEBT

J-U-N-E---3-0-, --1-99-4----JU-N-E--3--0-, --1-99-3-

$ 434,290.05$ 16,444.59

$ 109,736.97

$ 4,768.00

32,708.31

29,360.96$

7.75

$ 66,837.27$

7.75

$ 73,071.22

$ 450,734.64 $ 49,406.25

$ 109,736.97 $ 107,956.58

$ 4,768.00$ 86,912.45

32,708.31 107,156.82

29,368.71

58,529.96

$ 66,845.02$ 252,599.23

$ 73,071.22 $ 61,369.66

Fixed Assets Equipment
Amounts to be Provided for Payment of Accrued ~ensated Absences

$1,595,951.07

$1,595,951.07$ 1,443,881.76

$171,507.96$ 171,507.96$ 137,964.31

Total Assets

$ 683,935.51 $ 16,452.34 $1,595,951.07 $171,507.96$ 2,467,846.88$ 2,053,177.79

LIABILITIES AND FUND EQUITY

Liabilities Accounts Payable Deferred Revenue Tuition and Fees Funds Held for Others Canpensated Absences

$ 408,402.83 6,441.50 $ 16,452.34

$ $ 171,507.96

408,402.83$ 6,441.50
16,452.34 171,507.96

126,901.91 39,704.91 16,520.23 137,964.31

Total Liabilities

$ 414,844.33$ 16,452.34

$171,507.96$ 602,804.63 $ 321,091.36

Fund Equity

Investment in General Fixed Assets

Fund Balance

Reserved

Federal Financial Assistance

For Other

$ 48,771.35

Local Match for Federal Grant

189.21

Inventories

55,228.44

Live Work Projects

36,423.69

Prior Year Local Funds

116,450.39

Unreserved

Designated

Surplus

Regular

12,028.10

$1,595,951.07

$1,595,951.07 $1,443,881.76

48,771.35 189.21
55,228.44 36,423.69 116,450.39

73,526.50 55,228.44 34,284.62 116,492.50

12,028.10

8,672.61

Total Fund Equity

$ 269,091.18

$1,595,951.07

$1,865,042.25$ 1,732,086.43

Total Liabilities and Fund Equity

$~=6=8=3=,-9=3=5=.5=1= $==1=6=,4=5=2-.=3=4 $=1=,=5=9=5=,=9=5=1=.=0=7$=1==7=1=,=5=0=7=.=9=6$==2=,4z:6:=7=,=8=4=6=.=8=8$=2==,0=5=3=,=1-=7=7=.7=9=

See Independent Accountant's Coni>ined Report on Review of Financial Statements and Supplementary Information.

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

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MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30. 1994

EXHIBIT "B"

FUND BALANCE - JULY 1 Reserved Unreserved Designated Surplus
ADDITIONS Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures Exhibit "C"
DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education Administrative Central Office Year Ended June 30, 1992 Year Ended June 30, 1993 Adjustments to Prior Year's Accounts Receivable Refunds to Granters Georgia Department of Education Job Training Partnership Act Georgia Department of Technical and Adult Education - Administrative Central Office Federal Financial Assistance Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCE - JUNE 30 (To Exhibit "A")

BUDGET FUND
--------------------------YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$ 279,532.06 $ 228,654.32

8,672.61

5,934.00

------------- -------------

$ 288,204.67 $ 234,588.32
------------- -------------

$

4,243.47 $

2,826.53

219,862.50

248,151.04

------------- -------------

$ 224,105.97 $ 250,977.57
------------- -------------

$ $ 8,672.61
10,243.23

5,934.00 0.00
7,296.94

0.00

1,236.89

0.00

39.86

224,303.62

182,853.53

------------- -------------

$ 243,219.46 $ 197,361.22
------------- -------------

$ 269,091.18$ 288,204.67
============= =============

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement.
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MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "C" Pagel

FUNDS AVAILABLE REVENUES
STATE FUNDS Allotment from Georgia Department of Technical and Adult Education - Administrative Central Office
FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED
Contracts Georgia Department of Administrative Services Distance Learning Program Georgia Department of Human Resources PEACH Project Georgia Institute of Technology Satellite Technology Program
Donations Fees
Application Graduation Registration/Continuing Education Testing Other Interest Earned Reimbursements From Various Sources Rents Sales and Services (Net) Tuition Other Sources
Total Other Revenues Retained Total Revenues CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance Federal Financial Assistance Live Work Projects Prior Year Local Funds Total Carry-Over from Prior Year
Total Funds Available

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$3,039,315.00$ 2,368,042.94 $ 752,900.41 $ 649,564.98

$ 1,893.60 $

0.00

70,143.05

27,574.86

4,500.00 650.00

0.00 275.00

19,167.00 2,929.50 8,317.28 9,728.00 21,154.95 3,799.75

17,419.00 1,900.00 6,768.75 8,563.64 11,388.77 5,894.02

872.19 70.00
146,134.44 526,990.88
-6.74
-------------

0.00 5 944.90 132:707.18 417,504.21
621.00
-------------

$----8-1-6-,3--4-3-.9--0

$ 636,561.33
-------------

$4,608,559.31
-------------

$-3-,-6-5-4-,-1-6-9--.2--5

$ 73,526.50 $ 44,513.46

34,284.62

26,171.52

116,492.50 112,168.55

------------- -------------

$ 224,303.62
-------------

$----1-8-2-,-8-5-3-.5--3

$=4==,8=3=2==,8=6==2=.9=3= $==3=,8=3==7=,0=2==2=.7==8

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "C" Page 2

----------Y-EA-TRO--T-AEN-L-DS-ED----------
JUNE 30, 1994 JUNE 30, 1993

EXPENDITURES PERSONAL SERVICES-INSTITUTIONS
Salaries and Wages Employer's Contributions for:
F. I.C.A. Retirement Health Insurance Liability Insurance Unemplornent Compensation Insurance Workers Compensation Insurance

$ 2,306,097.16 $ 2,006,132.72

46,747.31 237,653.22 242,562.91
8,001.00 0.00
------5-,0--2-8-.0--0

43,302.00 208,261.07 213,870.23
5,130.00 1,865.00
------3-,6--3-9-.0--0

$2,846,089.60$ 2,482,200.02

-O-P-ER-A--T-IN-G---E-X-P-E-N-S-E-S---IN--S-T-IT-U-T--IO-N--S
Other Costs Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Publications and Printing
Travel Equipment
Equipment Purchases Rental of Equipment Computer Charges Other Costs
Repairs and Maintenance Software Equipment
Eiuipment Purchases Real state Rentals Telecommunications Per Diem, Fees and Contracts
Per Diem and Fees
ADULT LITERACY GRANTS

$ 15,352.04 $

2,651.98

239,450.14

164,737.91

38,475.76

60,639.52

147,206.86

131,394.29

1,767.63

1,290.64

5,194.00

4,771.00

124,619.58

165,562.64

17,673.16

19,730.46

27,806.38

15,400.60

47,213.49 25,403.54

66,673.50 15,065.85

3,548.20 6,224.53

0.00 11,266.22

73,004.38 0.00
20,231.53

37,772.02 50.00
14,648.58

-----6-1-,3--4-4-.8--2 -----4-8-,2--2-1-.2--2

$----8-5-4-,5--1-6-.0--4

$ 759,876.43
-------------

Personal Services Salaries and Wages Emfloyer's Contributions for: . I .C.A. Retirement Health Insurance
Other Costs Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities
6 Rents other than Real Estate)
Other ~erating Expenses Publica ions and Printing Travel Equipment Equipment Purchases Rental of Equipment

$ 357,994.64 $ 172,890.64

6,120.69 7,631.99 8,077.86

3,466.30 3,955.69 4,286.88

0.00 40,149.80
441.22 6,361.41
0.00 7,972.69 1,708.50 7,833.35

44.14 24,383.39
2,515.28 320.68
7,704.00 10,721.41
161.90 3,215.60

51,441.02 2,503.75

13,792.15 0.00

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE ANO EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "C" Page 3

EXPENDITURES ADULT LITERACY GRANTS
Computer Charges Other Costs Repairs and Maintenance Software Equipment Eguipment Purchases
Real Estate Rentals Telecommunications Per Diem, Fees and Contracts
Per Diem and Fees
JOB TRAINING PARTNERSHIP ACT Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Travel
EQUIPMENT - STATE SCHOOLS Equipment Equipment Purchases Total Expenditures
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

574.00 $

0.00

571.00

35,B99.14

0.00 10,368.00 3,927.52

53,105.15 3,000.00 1.392. 71

4,671.54

5,940.23

------------- -------------

$----5-1-8-,3--4-8-.9--8

$ 346,795.29
-------------

$ 17,096.17 $

0.00

513.67

0.00

961.34

0.00

752.93

0.00

512.70

0.00

------------- -------------

$ 19,836.81 $

0.00

------------- -------------

$ 374,209.00$

0.00

$ 4,613,000.43 $3,588,871.74 219,B62.50 248,151.04

$-4-,-8-3-2--,8--6-2-.-9=3 $=3=,8--3-7=,=0-2=2=.-7=8-

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30. 1994

EXHIBIT "D"

FUNDS AVAILABLE REVENUES
State Funds Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Bal~nce

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 2,665,106.00 $ 2,665,106.00 $

0.00

806,604.00

752,900.41

-53,703.59

917,090.00

816,343.90 -100,746.10

------------- ------------- -------------

$ 4,388,800.00 $ 4,234,350.31 $ -154,449.69

0.00

224,303.62

224,303.62

$4,388,800.00$ 4,458,653.93 $ 69,853.93

EXPEND !TURES
Personal ~ervices-Institutions Operating Expenses-Institutions Adult Literacy Grants Job Training Partnership Act

$ 2,802,666.00 $ 2,846,089.60 $ -43,423.60

1,011,341.00

854,516.04

156,824.96

518,696.00

518,348.98

347.02

56,097.00

19,836.81

36,260.19

------------- ------------- -------------

$ 4,388,800.00 $ 4,238,791.43 $ 150,008.57
============= ------------- -------------

Excess of Funds Available over Expenditures

$ 219,862.50$ 219,862.50
============= ============

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"8" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30. 1994

EXHIBIT "E"

FUNDS AVAILABLE REVENUES
State Funds

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 374,209.00$ 374,209.00$

0.00

=========== ------------- -------------

EXPENDITURES Equipment - State Schools

$ 374,209.00$ 374,209.00$

0.00

============= ------------- -------------

Excess of Funds Available over Expenditures

$

0.00 $

0.00

============= =============

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Middle Georgia Technical Institute is one of twenty-eight (28) State supported member institutes of postsecondary education in Georgia which comprise the Georgia Department of Technical and Adult Education, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations ofMiddle Georgia Technical Institute as a separate reporting entity.
The Institute's Local Board ofDirectors is composed of nine (9) members serving staggered three-year terms who are appointed by the State Board of Technical and Adult Education. Appropriation of State funds is made to the Georgia Department ofTechnical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount of State funds to be received by Middle Georgia Technical Institute. The Institute does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Middle Georgia Technical Institute is considered an organizational unit ofthe 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 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING Middle Georgia Technical Institute uses funds and account groups to report on its financial position and the results of its operations determined in conformity with the accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources.
Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1993-1994. This fund also includes operations from various institutional services provided to students, faculty, and/or staffwhich are funded by fees charged to participants that are directly related to, but not necessarily equal to, the cost of service. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
FIDUCIARY FUND TYPE
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
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:MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND .ACCOUNTING
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at historical cost. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-tenn liabilities, such as claims, judgments, and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues) and decreases (i.e.,expenditures) in net current assets.
GOVERNMENTAL FUND TYPE BUDGETFUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e.,when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include primarily State funds, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Further, the modified accrual basis ofaccounting calls for expenditures, other than accrued interest ofgeneral long-term debt, to be recorded when the related fund liability is incurred.
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based in part on the unexecuted portion of contracts for goods and services. The recognition ofencumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but is not consistent with generally accepted accounting principles, which provide for the recording ofencumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND
Contractual tenns ofcertain Federal grant agreements received by the Institute for vocational training services require that grant funds earned be recorded as Federal revenues rather than as revenues from tuition and fees. Accordingly, it is the Institute's policy to record certain Federal grant funds as Federal revenues and also as other revenues retained with offsetting expenditures for student expenses charged to the other operating expenses expenditure account. This accounting policy results in an overstatement of both revenues and expenditures in the financial statements for such Federal grants. This policy is in conformity with accounting practices prescn"bed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles.
Prior period adjustments are reported as additions to and deductions from fund balance of the Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
FIDUCIARY FUND TYPE AGENCY FUNDS
Agency Funds are custodial in nature in that assets are equally offset by liabilities to other funds, governmental units, or individuals. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.
BUDGET The Georgia Department of Technical and Adult Education - Administrative Central Office receives State appropriated funds and certain Federal funds for the various technical institutes throughout the State. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 1993-1994. The budget allocation and disbursement of these funds is made to the various technical institutes by the Administrative Central Office. In addition, the technical institutes receive certain Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand and demand deposits with banks and other authorized financial institutions.
INVESTMENTS . Investments are defined as those financial instruments with terms of three months or more from the date of purchase and certain other securities held for the production of revenue. Investments are stated at cost.

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:MIDDLE GEORGIA TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTS RECEIVABLE Accounts receivable consist of allotments due from the Administrative Central Office of the Department of Technical and Adult Education, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available.
INVENTORIES Expendable supplies are recorded as expenditures at the time of purchase and are not reflected on the Combined Balance Sheet (Statutory Basis).
Inventories ofgoods for resale are recorded as assets at cost at the time of purchase. The Institute uses the weighted average method in costing-out inventories based on sales.
RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:
FEDERAL FINANCIAL ASSISTANCE OTHER
The residual portion ofFederal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from generally accepted accounting principles in that the unearned portion of Federal financial assistance should be reflected as Deferred Revenue.
LOCAL MATCH FOR FEDERAL GRANT The unexpended balance ofmatching funds required by Federal grant provisions under a U. S. Department ofHealth and Human Services grant for the PEACH project.
INVENTORIES Reported inventories (resale), under the consumption method, are offset by a portion of State funds approximating the average quarterly inventories on hand for the fiscal year. This reservation of fund balance was established to provide working capital for managing a reasonable level of inventories for resale.
LIVE WORK PROJECTS The accumulated balance of unexpended funds derived from student live work projects. This amount is restricted to expenditures for live work projects in subsequent fiscal years.
PRIOR YEAR LOCAL FUNDS Effective July 1, 1987, Middle Georgia Technical Institute became a part of the Georgia Department of Technical and Adult Education. The Official Code of Georgia Annotated Section 20-4-23 provides the Institute may retain for future operations "...any unexpended nonstate funds that have been collected by, appropriated for, or otherwise eannarked for use by said postsecondary technical school operated by a local
- 12 -

MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE
PRIOR YEAR LOCAL FUNDS board ofeducation or an area board...". These unexpended local funds are available for use in subsequent fiscal years.
COMPENSATED ABSENCES Compensated absences represent obligations of the Institute relating to employees' rights to receive compensation for future absences based upon setvices already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the Budget Fund for the current portion ofthis obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the allotment of State funds each year to the Institute to cover the cost of annual leave paid to terminated employees.
The liability for compensated absences at year-end is reported in the General Long-Term Debt Account Group for governmental funds.
MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
COMPARATIVE DATA Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the Institute's financial position and operations. However, comparative data have not been presented in all statements because their inclusion would make certain statements unduly complex and difficult to understand.
Certain reclassifications have been made to the comparative data in order to provide comparability with the current year classifications.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia 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 ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or ofthe State of Georgia.
- 13 -

:MIDDLE GEORGIA TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (2) Bonds, bills, notes, certificates of indebtedness, or other obligations of the counties or municipalities ofthe State ofGeorgia.
(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 ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State o f Georgia.
(5) Bonds, bills, notes, certificates ofindebtedness, 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 and 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 ofGeorgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which include technical institutes) the option of exempting demand deposits from the collateral requirements.
COLLATERALIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consists of all bank balances which include demand deposits and/or interest bearing accounts. These bank balances are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:
Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Institute or by its agent in the Institute's name.
Category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust department or agent in the Institute's name.
Category 3 - Amounts collateralized with securities (at market value) held by the financial institution or by its trust department or agent, but not in the Institute's name, and amounts uncollateralized.

Cash Deposits

Canying Amount

Bank Balances

Risk Categories

2

3

s 552 222 61 s 552,047 57 s 221 113 52 s_ _o~oo~ s 667 873 68

- 14 -

:MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 3: OPERATING LEASES

:Middle Georgia Technical Institute 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 ofthe original term of the lease, the Institute has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as ofJune 30, 1994, are listed below. 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.

Fiscal Year Ending June 30

1995 1996 1997

$ 11,573.20 6,756.20 1,196.80

Total Future Minimum Lease Payments

$ 12 526.2Q

Expenditures for rental of equipment under operating leases for the year ended June 30, 1994, totaled $11,686.40.

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition ofmoveable personal property (Official Code of Georgia Annotated Section 50-16-161), only those items with an acquisition cost of $1,000.00 or greater are reflected in the General Fixed Assets Account Group.

The following is a summary ofchanges ofequipment for the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1993
Additions Deductions
Balance June 30, 1994

$ 1,443,881.76
645,224.76 493,155.45
$ 1,525,25 I 07

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1994, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group:

- 15 -

MIDDLE GEORGIA TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIilBIT "F"

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT

Balance July I, I 993
Additions Annual Leave Earned and Utilized (Net) Salaries and Wages Salary-Related Fringe Benefits (*)
Balance June 30, 1994

$ 137,964.31
29,082.86 4,460.79
$ 171 507.96

(*) Includes salary-related fringe benefits applicable to compensated absences at July 1, 1993.

NOTE 6: DEFERRED COMPENSATION PLAN

The State ofGeorgia offers its employets a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, pennits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiaiy) solely the property or rights ofthe State ofGeorgia subject only to the claims ofthe State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value ofthe deferred account of each participant. Financial information relative to the plan is presented in the financial report of the State Personnel Board Merit System ofPersonnel Administration for the year ended June 30, 1994.

NOTE7: RETIREMENTPLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA TEACHERS RETIREMENT SYSTEM OF GEORGIA
Substantially all employees are members of the Employees' Retirement System of Georgia or the Teachers Retirement System ofGeorgia. The Employees' Retirement System of Georgia is a single-employer, defined benefit pension plan, while the Teachers Retirement System of Georgia is a cost-sharing multiple-employer public employee retirement system.

These Retirement Systems were established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State of Georgia. Both Retirement Systems are funded through a combination of employee and employer contributions. Employees are required to contribute a graduated
percentage ofannual compensation. Employer contributions are for a specified percentage of active member
payroll determined annually by an actuarial valuation. During the year ended June 30, 1994, the Institute contributed $36,968.14 to the Employees' Retirement System of Georgia and $209,278.41 to the Teachers

- 16 -

MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "F"

NOTE 7 : RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA TEACHERS RETIREMENT SYSTEM OF GEORGIA Retirement System of Georgia. Participation in either Retirement System is not segregated by employee groups of individual governmental units and the Institute has no further liability under either Retirement System other than future employer contributions as established for each fiscal year. Information relative to each plan's description, funding status, and historical trends is presented in the financial reports of the Employees' Retirement System ofGeorgia and the Teachers Retirement System of Georgia for the year ended June 30, 1994.
GEORGIA DEFINED CONTRIBUTION PLAN The State ofGeorgia provides retirement coverage for temporary, seasonal, and part-time employees who are not eligible for membership in the Retirement Systems referred to above through a single-employer defined contribution plan. The Georgia Defined Contribution Plan was established by the General Assembly of Georgia and is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Covered employees are required to contribute 7.5% oftheir gross salary, with no matching contribution by the employer. A member who terminates employment may apply for a refund of contributions and interest. Benefits are based solely on the amount contributed by the employee plus investment earnings. Upon discretion ofthe Board ofTrustees, members who leave employment with less than $3,500.00 credited to their account may be required to make a lump-sum withdrawal. Members are eligible to retire at the age of65 with the option ofreceiving a periodic payment based on mortality tables and interest accumulation as adopted by the Board of Trustees of the Employees' Retirement System of Georgia. Information relative to the plan description and funding status is presented in the financial report of the Employees' Retirement System of Georgia for the year ended June 30, 1994.
NOTE 8: LEAVE POLICIES
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination ofemployment. See Note 1 - Compensated Absences
Employees earn one and one-quarter days of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination ofemployment.
NOTE 9: NONMONETARY TRANSACTIONS
The Administrative Central Office ofthe Georgia Department ofTechnical and Adult Education used lottery proceeds to purchase $207,245.34 ofequipment for Middle Georgia Technical Institute during the fiscal year ended June 30, 1994. Those items with an acquisition cost of $1,000.00 or greater will be reflected as received in the General Fixed Assets Account Group in the accompanying financial statements. However, revenues and expenditures for these lottery proceeds are not reflected in these financial statements.
- 17 -

MIDDLE GEORGIA TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "F"

NOTE 9: NONMONETARY TRANSACTIONS
The Georgia State Fimncing and Investment Commission (GSFIC), a unit ofState government, is responsible for the issuance of state debt and for the investment and accounting for proceeds derived from the issuance of state debt. In addition, GSFIC is authorized to acquire and construct projects for the benefit of units of State government or to contract with units of State government for the construction or acquisition of capital outlay projects. During the fiscal year ended June 30, 1994, the Georgia State Financing and Investment Commission paid $942,634.00 to various vendors for approved projects related to Middle Georgia Technical Institute.
NOTEl0: 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 expenditures which are disallowed under grant tenns. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institute expects such amounts, ifany, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Middle Georgia Technical Institute (as a unit ofthe Department ofTechnical and Adult Education), ifany, are generally considered to be actions against the State ofGeorgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self-insurance which provides coverage for such litigation, claims and assessments. 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, 1994.
NOTE 11: BONDING INFORMATION
The President and all employees ofMiddle Georgia Technical Institute are bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No.1450-00-110723, on which the premium was paid to October 1, 1994. Under this agreement, the public employee dishonesty coverage insures :Middle Georgia Technical Institute to a maximum of $1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance of duty coverage insures the Institute to a maximum ofSl00,000.00 against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment.
All employees ofMiddle Georgia Technical Institute are also bonded under a Commercial Crime Policy written by the United States Fire Insurance Company, their Policy No. 626 011675 2, on which the premium was paid to October l, 1994. Under this additional public employee dishonesty coverage, the policy insures the Institute to a maximum of$4,000,000.00 against loss sustained through :fraudulent or dishonest acts by its employees.

- 18 -

SUPPLEMENTARYINFORMATION - 19 -

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30 1 1994

EXHIBIT "G"

"A" DEPARTMENT OF
TECHNICAL ANO ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

ASSETS

Cash and Cash Equivalents Investments Accounts Receivable
State Funds Federal Financial Assistance Other
Inventories

$ 171,426.08 $ 262,863:97 $ 434,290.05
------------- ------------- -------------

$ 109,736.97
-------------

$ 109,736.97
-------------

$ 4,768.00 $ 4,768.00

$ 32,708.31

32,708.31

29,360.96

29,360.96

------------- ------------- -------------

$ 62,069.27 $ 4,768.00 $ 66,837.27
------------- ------------- -------------

$ 73,071.22
-------------

$ 73,071.22
-------------

Total Assets

$ 416,303.54 $ 267,631.97 $ 683,935.51
============= ============= =============

LIABILITIES AND FUND EQUITY

Liabilities Accounts Payable Deferred Revenue Tuition and Fees

$ 140,770.86$ 267,631.97 $ 408,402.83

6,441.50

6,441.50

Total Liabilities

$ 147,212.36$ 267,631.97$ 414,844.33

Fund Equity Fund Balance
Reserved Federal Financial Assistance For Other Local Match for Federal Grant
Inventories Live Work Projects
Prior Year Local Funds Unreserved
Designated Surplus Regular Lottery for Education

$ 48,771.35 189.21
55,228.44 36,423.69 116,450.39
12,028.10
$

$ 48,771.35 189.21
55,228.44 36,423.69 116,450.39

12,028.10

0.00

0.00

Total Fund Equity Total Liabilities and Fund Equity

$ 269,091.18 $

0.00 $ 269,091.18

------------- ------------- -------------

$==-4-1=6-,3--0-3-.-5-4-

$ 267,631.97
=============

$ 683,935.51
=============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 20 -

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30 1 1994

EXHIBIT "H"

FUND BALANCE - JULY 1
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable
Excess of Funds Available over Expenditures Exhibit "I"
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30, 1993
Adjustments to Prior Year's Accounts Receivable
Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCE - JUNE 30
(To Exhibit "G")

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR EDUCATION

TOTAL

$ 279,532.06

$ 279,532.06

8,672.61 $

o.oo

8,672.61

------------- ------------- -------------

$ 288,204.67 $

0.00 $ 288,204.67

------------- -------- ---- -------------

$ 4,243.47 $

0.00 $ 4,243.47

219,862.50

219,862.50

------------- ------------- -------------

$ 224,105.97 $

0.00 $ 224,105.97

------------- ------------- -------------

$ 8,672.61 $

0.00 $ 8,672.61

10,243.23

10,243.23

224,303.62

224,303.62

------------- ------------- -------------

$ 243,219.46 $

0.00 $ 243,219.46

------------- ------------- -------------

$ 269,091.18 $

0.00 $ 269,091.18

============= ============= =============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 21 -

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AHO EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "I" Page 1

"A"
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

"8" LOTTERY FOR
EDUCATION

TOTAL

FUNDS AVAILABLE

REVENUES

STATE FUNDS Allotment from Georgia Department of Technical and Adult Education - Administrative Central Office

$2,665,106.00$ 374,209.00$ 3,039,315.00

FEDERAL REVENUES

$ 752,900.41

$ 752,900.41

OTHER REVENUES RETAINED Contracts Georgia Department of Administrative Services Distance Learning Program Georgia Department of Human Resources PEACH Project Georgia Institute of Technology Satellite Technology Program Donations Fees Application Graduation Registration/Continuing Education Testing Other Interest Earned Reimbursements From Various Sources Rents Sales and Services (Net) Tuition Other Sources
Total Other Revenues Retained
Total Revenues

$

1,893.60

70,143.05

4,500.00 650.00

19,167.00 2,929.50
8,317.28 9,728.00 21,154.95 3,799.75

872.19 70.00
146,134.44 526,990.88
-6.74
-------------
$ 816,343.90
-------------
$4,234,350.31$

$ 1,893.60
70,143.05
4,500.00 650.00
19,167.00 . 2,929.50
8,317.28 9,728.00 21,154.95 3,799.75
872.19 70.00
146,134.44 526,990.88
-6.74
-------------
$ 816,343.90
-------------
374,209.00$ 4,608,559.31

CARRY-OVER FROM PRIOR YEAR

Transfer from Reserved Fund Balance Federal Financial Assistance Live Work Projects Prior Year Local Funds
Total Carry-Over from Prior Year

$ 73,526.50 34,284.62 116,492.50
-------------
$ 224,303.62
-------------

$ 73,526.50 34,284.62 116,492.50
-------------
$ 224,303.62
-------------

Total Funds Available

$4,458,653.93$ 374,209.00$ 4,832,862.93
==---------- ------- -------------

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 22 -

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "I" Page 2

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR EDUCATION

TOTAL

EXPENDITURES

PERSONAL SERVICES-INSTITUTIONS

Salaries and Wages Employer's Contributions for:
F. LC.A. Retirement Health Insurance Liability Insurance Workers' Compensation Insurance

$ 2,306,097.16
46,747.31 237,653.22 242,562.91
8,001.00 5,028.00

$ 2,306,097.16
46,747.31 237,653.22 242,562.91
8,001.00 5,028.00

$ 2,846,089.60

$ 2,846,089.60

OPERATING EXPENSES-INSTITUTIONS
-------------------------------
Other Costs Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Publications and Printing
Travel Equipment
Equipment Purchases Rental of Equipment Computer Charges Other Costs
Repairs and Maintenance Software Equipment
Equipment Purchases Telecommunications Per Diem, Fees and Contracts
Per Diem and Fees
ADULT LITERACY GRANTS

$ 15,352.04 239,450.14 38,475.76 147,206.86 1,767.63 5,194.00 124,619.58 17,673.16 27,806.38
47,213.49 25,403.54
3,548.20 6,224.53
73,004.38 20,231.53
61,344.82
-------------
$ 854,516.04
-------------

$ 15,352.04 239,450.14 38,475.76 147,206.86 1,767.63 5,194.00 124,619.58 17,673.16 27,806.38
47,213.49 25,403.54
3,548.20 6,224.53
73,004.38 20,231.53
61,344.82
-------------
$ 854,516.04
-------------

Personal Services Salaries and Wages Employer's Contributions for:
F. I.C.A. Retirement Health Insurance Other Costs Supplies and Materials Repairs and Maintenance
Utilities Other Operating Expenses
Publications and Printing

$ 357,994.64
6,120.69 7,631.99 8,077.86
40,149.80 441.22
6,361.41 7,972.69 1,708.50

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.

- 23 -

$ 357,994.64
6,120.69 7,631.99 8,077.86
40,149.80 441.22
6,361.41 7,972.69 1,708.50

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "I" Page 3

"A"
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

EXPENDITURES

ADULT LITERACY GRANTS

Travel Equipment
Equipment Purchases Rental of Equipment Computer Charges Other Costs
Repairs and Maintenance Software Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Per Diem and Fees JOB TRAINING PARTNERSHIP ACT

$

7,833.35

51,441.02 2,503.75

574.00 571.00 10,368.00 3,927.52
4,671.54
-------------
$ 518,348.98
-------------

$ 7,833.35
51,441.02 2,503.75
574.00 571.00 10,368.00 3,927.52
4,671.54
-------------
$ 518,348.98
-------------

Personal Services Salaries and Wages Employer's Contributions for: F. I.C.A. Retirement Health Insurance
Travel EQUIPMENT - STATE SCHOOLS

$ 17,096.17
513.67 961.34 752.93 512.70
-------------
$ 19,836.81
-------------

$ 17,096.17
513.67 961.34 752.93 512.70
-------------
$ 19,836.81
-------------

Equipment Equipment Purchases

$ 374,209.00$ 374,209.00

Total Expenditures Excess of Funds Available over Expenditures

$4,238,791.43$ 374,209.00$ 4,613,000.43

219,862.50

0.00

219,862.50

$4,458,653.93$ 374,209.00$ 4,832,862.93
============= ============= =============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 24 -

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1994

EXHIBIT "J"

FUND
D. T. A. E. Activities Fund G. 0. A. L. Chamber of Commerce HOPE Program National Honor Society Pell Grant Program Scholarship Funds
(List on File) Student Activities Fund Student Incentive Grant Student Insurance Sunshine Fund Vocational Industrial Clubs
of America

ASSETS/
LIABILITIES
JULY 1, 1993
------------

ADDITIONS
---------

DELETIONS
---------

ASSETS/
LIABILITIES
JUNE 30, 1994
-------------

$

0.00 $

1,897.25 $

1,547.69 $

0.00

1,150.00

1,150.00

0.00

102,043.31

102,043.31

212.00

960.00

1,045.32

5,243.10

579,348.10

584,354.06

349.56 0.00 0.00
126.68 237.14

2,402.14 1,903.90
0.00 6,691.70
152. 71

5,590.55 2,895.56 12,250.00 9,039.25
0.00

3,416.63 2,439.50 12,250.00 6,992.25
152. 71

4,576.06 2,359.96
0.00 8,738.70
0.00

-85.32

3,313.61

3,164.05

64.24

------------- ------------- ------------- -------------

$ 16,520.23$ 718,487.63 $ 718,555.52 $ 16,452.34
============= ============= ============= =============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 25 -

MIDDLE GEORGIA TECHNICAL INSTITUTE CASH AND CASH EQUIVALENTS JUNE 30 1 1994

SCHEDULE "l"

NONINTEREST BEARING ACCOUNTS
NationsBank of Georgia, Warner Robins, Georgia Wachovia Bank of Georgia, Warner Robins, Georgia
OTHER
Petty Cash

$ 11,655.77 438,529.87$ 450,185.64
549.00 $ 450,734.64
=============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 26 -

MIDDLE GEORGIA TECHNICAL INSTITUTE INVESTMENTS
JUNE 30 1 1994

SCHEDULE "2

BUDGET FUND
-----------
NationsBank of Georgia, Warner Robins, Georgia
Certificates of Deposit No. 000043398-0001 No. 000043398-0002 No. 000043398-0003 No. 000043398-0004

PURCHASE DATE
-------------
October 15, 1993 October 15, 1993 October 15, 1993 October 30, 1993

Trust Canpany Bank of Middle Georgia,

Macon, Georgia

Certificates of Deposit

No. 92422

Deceni>er 12, 1993

No. 92423

Deceni>er 12, 1993

No. 92427

Deceni>er 17, 1993

No. 92428

Deceni>er 17, 1993

Wachovia Bank of Georgia, Warner Robins, Georgia
Certificate of Deposit No. 5607152

August 19, 1993

INTEREST RATE MATURITY DATE
------------- -------------

AMOUNT

3.3%

October 15, 1994 $ 16,406.40

3.3%

October 15, 1994

10,937.61

3.3%

October 15, 1994

10,937.61

3.3%

October 30, 1994

16,455.35$ 54,736.97

------------

3.3%

Decenber 12, 1994 $ 10,000.00

3.3%

Decenber 12, 1994

10,000.00

3.3%

Decenber 17, 1994

10,000.00

3.3%

Decenber 17, 1994

10,000.00 40,000.00

------------

3.35% August 19, 1994

15,000.00

$ 109,736.97
========

See accanpanying notes and Independent Accountant's Canbined Report on Review of Financial Statenents and Supplenentary Infonnation.
- 27 -

MIDDLE GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30 1 1994

SCHEDULE "3"

BUDGET FUND
Education, U. S. Department of Adult Education - State Administered Basic Grant Program Through Georgia Department of Technical and Adult Education - Administrative Central Office
Vocational Education - Basic Grants to States Through Georgia Department of Technical and Adult Education - Administrative Central Office
Vocational Education - Community Based Organizations Through Georgia Department of Technical and Adult Education - Administrative Central Office
Energy, U.S. Department of State Energy Conservation Stripper Well Oil Violation Funds Through Georgia Department of Technical and Adult Education - Administrative Central Office
Health and Human Services, U.S. Department of Job Opportunities and Basic Skills Training Through Georgia Department or Human Resources Various Offices of Department of Family and Children Services
Housing and Urban Development, U.S. Department of Public and Indian Housing Drug Elimination Program Through Warner Robins Housing Authority
Labor, U.S. Department of Apprenticeship Training Direct Job Training Partnership Act Through Georgia Department of Technical and Adult Education Administrative Central Office Through Heart of Georgia Regional Development Center Through Middle Flint Regional Development Center Through Middle Georgia Consortium

CFDA NUMBER

AMOUNT

84.002 84.048 84.174

$ 129,423.75 322,559.00 8,000.00

81.041

18,312.55

93.561
14.854
17.201
17.250 17.250 17.250 17.250

88,665.63
6,875.00
95,312.41 19,891.91 37,199.66 8,758.95 17,901.55
$ 752,900.41
=====r====-====

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 28 -

MIDDLE GEORGIA TECHNICAL RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL
YEAR ENDED JUNE 30. 1994

SCHEDULE "4"

Totals per Annual Supplement

Accruals June 30, 1994

Adjustments Doncaster, Johnson, Logan, Nelson, Smith,

Lisa Susan
William Charles D. Elizabeth

Totals per Report

SUMMARY BY OBJECT CLASS
BUDGET FUND Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants Job Training Partnership Act

SALARIES AND WAGES
---------
$ 2,681,187.97 $

TRAVEL 33,883.59

1,203.38

-------------

315.90 -3.59
968.00
-91.35 -123.50
-------------

$ 2,681,187.97 $ 36,152.43
=--=-----=--- --=--=---=---

$ 2,306,097.16
$ 357,994.64
17,096.17

27,806.38 7,833.35 512.70

$2,681,187.97$ 36,152.43
=----------z- -----=~==----

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 29 -

MIDDLE GEORGIA TECHNICAL INSTITUTE RECONCILIATION OF PER DIEM AND FEES
YEAR ENDED JUNE 30 1 1994

SCHEDULE "5"

Totals per Annual Supplement
Adjustments Adninistrative Services, Department of Canbs, Brian Gray, William G., Jr. HIIIIPhrey, Jackie J. B. 's Nursery Mike Houston's Auto Care Miller, Chrystina Miller Electrical Co. Morgan, Ned Robinson-Bedford, Maxine Small, Angelina ZanmH, Kathy
Totals per Report
Sll4MARY BY OBJECT CLASS
BUDGET FUND Operating Expenses-Institutions Adult Literacy Grants

TYPE PAYMENT

FEE OOUNT

EXPENSE AMOUNT

TOTAL

$ 67,437.91 $

190.05 $ 67,627.96

Other Fees Other Fees Reimbursable Expenses Reimbursable Expenses Other Fees Other Fees Consultant Other Fees Consultant Reimbursable Expenses Other Fees Other Fees

-160.05

-160.05

200.00

200.00

290.00

290.00

214.00

214.00

-75.00

-75.00

-333.05

-333.05

276.00

276.00

-3,342.00

-3,342.00

450.00

450.00

82.50

82.50

514.50

514.50

271.50

271.50

------------- ------------- -------------

-------== $ 65,239.81 $
====--==--

776.55 $ 66,016.36 :..===-====-

$ 60,568.27$ 4,671.54

776.55 $ 61,344.82 4,671.54

$ 65,239.81 $

776.55 $ 66,016.36

See accanpanying notes and Independent Accountant's Canbined Report on Review of Financial Statements and Supplementary Infonnation.
- 30 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

MIDDLE GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offindings disclosed in the review report for the year ended June 30, 1993, is summarized below:

Audit Control Number

Status ofFindings

836-93-01 836-93-02 836-93-03 836-93-04

Corrective Action Implemented Corrective Action Implemented See Audit Control Number 836-94-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) ADMINISTRATIVE REQUIRE1v1ENTS -Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 836-94-01

The review report for the year ended June 30, 1993, reported that Middle Georgia Technical Institute had several deficiencies in their accounting records. For the year under review, the accounting records were again deficient, as listed below:

(1) Numerous journal entries lacked adequate documentation and evidence of proper authorization. Also, six journal entries reflected on the accounting records had no documentation to support the entry.

(2) The bank reconciliation at June 30, 1994, disclosed numerous reconciling items which had not been posted to the general ledger.

(3) The amount of investments held at June 30, 1994, did not agree with amounts recorded in the General Ledger.

(4) The "Credit Card" bank account was not reconciled during the year under review. As a result numerous items that should have been posted to the accounting records were not recorded during the year under review.

The Institute should establish appropriate procedures to ensure that the general ledger is posted, balanced and reviewed on a monthly basis and that subsidiary records supporting the general ledger are complete, accurate and reliable. Bank reconciliations should be perfonned for all accounts and necessary adjusting entries posted to the general ledger in a timely manner.

MIDDLE GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 836-94-01
Memorandum Only Federal Grantor Agencies Affected:
U.S. Department ofEducation U.S. Department ofEnergy U.S. Department ofHealth and Human Services U.S. Department of Housing and Urban Development U. S. Department of Labor
CURRENT YEAR
GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Federal Grant Accounting Records Apprenticeship Program (CFDA 17.201) Audit Control Number 836-94-02
For the year under review, Middle Georgia Technical Institute did not provide complete individual fund source trial balances for the Middle Georgia Youth Apprenticeship Program (CFDA 17.201) as required by the Accounting Procedures and Instructions Manual issued by the State Auditor. Recipients ofFederal financial assistance are required by O:MB Circular A-110, to identify adequately the source and application of such funds. Middle Georgia Technical Institute acts as Fiscal Agent for the Program, but did not record all the revenues and expenditures incurred by the Institute. As a result of this deficiency, extensive audit procedures were necessary to identify all revenues and expenditures associated with the program.
The Institute should implement procedures and controls to ensure that fund source trial balances are maintained for each Federal grant/contract in accordance with the Accounting Procedures and Instructions Manual to ensure compliance with applicable Federal Regulations.

MIDDLE GEORGIA TECHNICAL INSTITIITE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, I994

CURRENT YEAR

CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 836-94-03

A review of cash management procedures for the Pell Grant Program disclosed that cash draws were made
in advance ofimmediate needs. Middle Georgia Technical Institute uses the ACH/EFT method to draw down
funds. Federal cash draw downs must be limited by the recipient to the minimum amounts needed. For institutes using the ACH/EFT method; this means need for three days.

Action should be taken by the Institute to ensure that request for cash advances do not exceed the immediate
need.

SPECIAL REPORTING REQUIREMENTS Reports not Supported by the Accounting Records Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 836-94-04

For the year under review, an examination ofthe Institutional Payment Summary (JPS) reports submitted by Middle Georgia Technical Institute to the U. S. Department of Education disclosed that the reported expenditures did not reconcile with the accounting records as shown below:

Expenditures Per IPS Report

Expenditures Per General Ledger

Difference

June 1994

S 578,999.00

$ 580,267.14

$ 1,268.14

Federal Regulation (34 CFR 690.83) requires the Institute to ensure that the information reported is accurate and reconciled to the accounting. records. The difference was the result of the Institute's Financial Aid personnel preparing the Institutional Payment Summary Report from records maintained in the Financial Aid Office, which were not reconciled to the formal accounting records maintained by the Business Office.

Procedures should be established to ensure that all Federal reports are reconciled to the Institute's formal accounting records, and documentation should be maintained reflecting this reconciliation. The Institute should contact the grantor agency regarding the unreconciled difference.