Review report, state of Georgia, Middle Georgia Technical Institute, Warner Robins, Georgia, year ended June 30, 1995

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

REVIEWREPORT STATE OF GEORGIA MIDDLE GEORGIA TECHNICAL INSTITUTE WARNER ROBINS, GEORGIA YEAR ENDED JUNE 30, 1995

MIDDLE GEORGIA TECHNICAL INSTITUTE - TABLE OF CONTENTS -

SECTION!

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

4

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

5

STATEMENTS OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

D

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

9

E

"B" LOTTERY FOR EDUCATION

10

F NOTES TO THE FINANCIAL STATEMENTS

II

SUPPLEMENTARY INFORMATION

G COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

30

H COMBINING STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

BUDGET FUND

31

COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

32

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE -AGENCY FUNDS

36

SCHEDULES

I CASH AND CASH EQUIVALENTS

37

2 INVESTMENTS

38

3 SCHEDULE OF FEDERAL REVENUES

39

4 RECONCILIATION OF SALARIES AND WAGES, AND IRAVEL

40

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

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 17, 1995

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) of Middle GeorgiaTechnical Institute as of and for the year ended June 30, 1995, 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 of Middle Georgia Technical Institute.
A review consists principally of inquiries oflnstitute 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 of expressing 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 4) is presented only for supplementary analysis purposes. Such information has been
95ARL-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.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 95ARL-4T

FINANCIAL STATEMENTS - 1-

MPQI Ii GEORGIA TECHNICA:I INSTJIUie CXM\NEP BAlANQf MEl;T lSTATIJTORY WIS)
ALI FUND TYPES ANP AG9Q' INJ GROUPS
JUNE 30 1995

EXHIBIT"A"

-~
Caah and Cash Equivalent&
AocotNn Receivable Stale Funds Federal Financial Assistance
---0lhar Equipment
Amounts to be Provided for Payment of: Accrued Compensated Absences Capital Lease Commitments

GOVERNIENTAL FUND TYPE BUDGET

RDUCIARY FUND TYPE
AGENCY

301,929.70 $ ~ 111,568.07
0.00 13,686.29 38,978.51 $ ~ 52,664 80 $ ~ 41,493.61

ACCOUNT GROUPS

GENERAL

GENERAL

AXED

LONG-TERM

ASSETS

DEBT

TOTALS
(Memorandum Q!:!!Y2
JUNE 30, 1995 JUNE 30, 1994

1,971,959.26

335,477.95 $ 111,568.07 $

450,734.64 109,136.97

0.00 $ 13,686.29 39,697.01
53,383.30 $
41,493.61 $

4,768.00 32,708.31 29,368.71
116,845.02
73,071.22

1,971,959.26 $ 1,595.951.07

176,7116.64 $ 17,216.61
193,983.25 $

176,7116.64 $ 17,216.61
193,983.25 $

171,507.96 0.00
171,507.96

Total Assets

507,65618 $ 34,266.75 $ 1,971,959.26 $

193,983.25 $ 2,707,865.44 $ 2,467,646.88

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
2.

Mll:ml, !;; g~GIA TECHN~ l~STITIJTE
QOMBINl;Q e&,~QE ~t:IEfa (STAI~D:QBY BASI~
Al. I FU~Q !Ye!;~ AND A~tfi gBQi.J~ JUNE30 1995

EXHIBIT"A"

GOVERNMENTAL FUND TYPE BUDGET

FIDUCIARY FUND TYPE
AGENCY

LYbITIESANQ E!JNQ &QUITY

Liabilities Accounts Payable Deferred Rewnue Tuition and Faes Funds Held tn Custody for Others Compensated Absences Capital Leases

282,516.62 $ 21,969.41

1,"432.82 32,833.93

Total Liabilities

304,486.03 $ 34,266.75

Fund Equity Investment in General Fixed Assets Fund Balance Reserved Federal Ftnancial Assistance For Refund to Georgia Department of Technical and Adult Educatton Administrative Central C)ff',ce
For Other Local Match for Federal Grant Inventories Live Work Projects Prior Year Local Funds Unreserved Designated
Surplus Regular Lottery for Education

1,277.38 13,590.09
192.03 50,452.50
1,544.34 123,475.71
12,071.68 566.42

Total Fund Equity

203,170.15

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS (Memorandum On~ JUNE 30, 1995 JUNE 30, 1994

1,971.~.26

176,766.64 17,216.61
193,983.25 $

283,949.44 $
21,969.41 32,833.93 176,766.64 17,216.61
532,736.03 $

<408,<402.83
6,441.50 16,452.34 171,507.96
0.00
602,804.63

1,971,959.26 $ 1,595,951.07

1,971,959.26

1,277.38 13,590.09
192.03 50,452.50
1,544.34 123,475.71

0.00 48,771.35
189.21 55,228.44 36,423.69 116,450.39

12,071.68 566.42
2,175,129.41 $

12,028.10 0.00
1,865,042.25

Total Liabilities and Fund Equity

507,656.18 $ ~ $ 1,971,959.26 $

193,983.25 $ 2,707,865.44 $ 2,467,846.88

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.
. 3.

MIPPLE GEORGIA TECHNICAi INSTITUTE STATEMENT OF CHANGES IN FUND BALANCE ISTATUTORY BASIS)
GOVfRNMENTAI FUND TYPE
YEAR ENDED JUNE 30 1995

EXHIBIT"B"

FUND BAJANCE JULY 1
Reserved UMl88Mld
Designated Surplus
Adjustments lo Prior Yea(s Accounts Payable Excess of Funds Available over Elcpendttures
Exhibit"C"
DEDUCTIONS
Unreseived Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education Administrative Central Office Year Ended June 30, 1993 Year Ended June 30, 1994
Adjustments to Prior Yea(s Accounts Receivable Reserved Fund Balance Carried Over from
Prior Year as Funds Available
FUND BAI ANCE JUNE 30
(To Exhibit "A")

BUDGET FUND

YEAR ENDED

JUNE 30, 1995

JUNE30 1994

$

257,063.08 $

279,532.06

12,028.10

8,672.61

$

269,091.18 $

288,204.67

$

5,296.59 $

4,243.47

146,200.14

219,862.50

$

151,496.73 $

224,105.97

$

0.00 $

8,672.61

12,028.10

0.00

3,555.02

10,243.23

201,834.64

224,303.62

$

217,417.76 $

243219.46

$

203170.15 $

269 091.18

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes lo the financial statements are an integral part of this statement. . 4.

MIDDLE GEORGIA TECHNICAL INSTITUTf STATEMENT OF FUNDS A\IAILABLE ANP EXPENPmJRES
BUOOETEUNP YEAR ENPEP JUNE 30 1995

EXHIBIT"C"

FUNDS AVAILABLE
~
STATE FUNDS Allolmenl from Georgia Department or Technical and Adult Education - Administrative Central Office
FEDERAL REVENUES (See Schedule)
OTHER REVENUES RETAINED Contract Georgia Building Authorny Americans with Disabilities Act Georgia Department of Administrative Services Distance Leaming Program Georgia Department of Education Lottery - Postsecondary Options Georgia Department of Human Resources PEACH Project Georgia Institute or Technology Satellite Technology Program Donations Fees Application Graduation Registration/Continuing Educaticn Testing Other Interest Earned Reimbursements from Various Sou:-ces 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 A&&istance
Live Work Projects
Local Match for Federal Grant Prior Year Local Fund&
Total carry-Over from Prior Year
Total Funds Available

TOTALS

YEAR ENDED

JUNE 30, 1995

JUNE 30, 1994

$

3,091,210.30 $

3,039,315.00

$

955,401.71 $ ---'-7"'52:,,900='--'4-'-1

15,000.00 $
0.00
6,888.00
61,967.70
5,800.00 0.00
17,970.10 6,475.00
114,150.07 18,235.48 3,840.00 4,3TT.49 0.00 0.00
174,161.87 555,789.65
7,888.65
992,524.01 $
$--=5=,03=9,1=36=.02- $

0.00
1,893.60
0.00
70,143.05
4,500.00 650.00
19,167.00 2,929.50 8,317.28 9,ns.oo
21,154.95 3,799.75 sn.19 70.00
146,134.44 526,990.88
-6.74
816,343.90
4,608,559.31

$

48,771.35 $

73,526.50

36,423.69

34,284.62

189.21

0.00

116,450.39

116,492.50

201,834.64 $

224,303.62

5,240,970.66 $

4,832,862.93

See Independent Accountant's Combined Report on Review of Financial Slatements and Supplementary lnfonnalion.
The notes to the financial statements are an integral part of this statement. . 5.

MIDDLE GEOBG1AIECHN1CAI INSTITl,JTE STATEMENT QF FUNDS AVAILABLE ANP EXPENPffiJRES
BUQGETEUND YEAR ENDED JUNE 30 1995

EXHIBIT"C"

EXPENDITURES
PERSONAL SERVICES-INSTJTUTIONS
Salaries and Wages Emplc>yer'a Contributions for:
F.I.C.A. Retirement Health Insurance liability Insurance Unemployment Compenaation ln8'Jrance Workers' Compensation Insurance
OPERATING EXPENSES-INSTITUTIONS
Other Coots Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Boncf1ng Other Operating Expenses Publications and Printing
Travel
Equipment Equipment Purchases Lease/Purchase of Equipment Rental of Equipment
Computer Charges Other Costs Supplies and Materials Repairs and Maintenance Other Operating Expenses Software Equipment Equipment Purchases
Telecommunlcations Per Diem, Fees and Contracts
Per Diem and Fees
QUICK START PROGRAM
Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Health Insurance
Other Costs Repairs and Maintenance Utilities
Travel
See Independent Accountant' Combined Report on Review of Financial Statements and Supplementary Information.
1he notes to the financial statements are an integral part of this statement.
. 6.

TOTALS

YEAR ENDED

JUNE 301 1995

JUNE 30, 1994

2,685,683.56 $
55,598.64 253,744.12 259,151.59
13,237.00 2,185.00 5,805.00
3,275,404.91 $

2,306,097.16
46,747.31 237,653.22 242,562.91
8,001.00 0.00
5,028.00
2,846,099.60

7,131.35 $ 251,187.52
40,941.09 145,109.04
407.00 3,224.00 252,842.96 39,497.50 23,226.87
139,086.42 1,010.25
21,400.29
1,221.06 8,959.77 1,311.45 10,010.60
12,621.69 26,574.26
42,889.19
1,028,652.31 $

15,352.04 239,450.14
38.475.76 147.206.86
1.767.63
s,,94.oo
124,619.58 17,673.16 27,806.38
47,213.49 0.00
25,403.54
0.00 3,548.20
0.00 6,224.53
73,004.38 20,231.53
61,344.82
854,516.04

12,703.71 $

0.00

115.16

0.00

56.17

0.00

79.00

0.00

358.96

0.00

1,299.83

0.00

14,613.83 $

0.00

MIPPLE GEORGIA TECHNICAL INSTITUTE
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND
YEAR ENDED JUNE 30 1995

EXHIBIT"C"

EXPENPm.JBES
ADULT LITERACY GRANTS
Perlonal Services Salaries and Wages Employer's Conbibutions for: F.I.C.A. Retirement Health Insurance
other Cools Supplies and Materials Repairs and Maintenance utilRen1$ (Other tt,an Real Estate) Other Operating Expenses Publications and Printing
Travel Equipment
Equipment Purchases Lease/Purchase of Equipment 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
Personal Services Salaries and Wages Employer Contributions for: F.I.C.A. Retirement Heatth Insurance
Other Costs Supplies and Materials other Operating Expenses
Travel
COMPUTER LABORATORIES AND SATELLITE DISHESADULT LITERACY
Equipment Equipment Purchases
EQUIPMENT-TECHNICAL INSTITUTES
Equipment Equipment Purchases
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.
-7-

TOTALS

YEAR ENDED

JUNE 30, 1995

JUNE 30, 1994

414,569.81 $
6,340.44 14,231.32 15,610.54
50,863.40 1,598.26 5,118.14
20,an.oo 12,508.67 2,168.55 6,043.35
1,445.68 1,133.51 4,497.00
0.00 1,044.98
0.00 2,862.79
283.50
561,191.94 $

357,994.64
6,120.69 7,631.99 8,0TT.86
40,149.80 441.22
6,361.41 0.00
7,9n.69 1,708.50 7,833.35
51,441.02 0.00
2,503.75
574.00 571.00 10,368.00 3,927.52
4,671.54
518,348.98

43,503.10 $
1,351.72 2,049.10 1,637.70
7.75 54.60 1,549.44
50,153.41 $

17,096.17
513.67 961.34 752.93
0.00 0.00 512.70
19,836.81

1,012.so s ----~o~.oo~ 138,034.82 s ---'3"-74-",209='-'oo~

MIDDLE GEORGJA TECHNICAJ INSTITUTE
STATEMENT OE FUNM A\/AU ABLE ANP EXPENPITTJRES BUDGET FUNP
YEAR ENDED JUNE 30 1995

EXHIBIT"C"

EXPENPITYBES REAA.IRS ANO RENOVATIONS
other Coot Repairs and Maintenance
Total Expenditures
Exceu of Funds Available over Expenditures

TOTALS

YEAR ENDED

JUNE 30, 1995

JUNE 30, 1994

$

25,646.80 $ ----~0"".00~

$

5,094,770.52 $

4,613,000.43

146,200.14

219,862.50

5,240,970.66 S _ _4..6.3--2,.,862.._.93_

See Independent Accountanrs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financlal statements are an integral part of this statement.
-8-

MIDDLE GEORGIA TECHNICAL INSTITUTE STATEMENT OF FUNDS Al/AIL.ABLE ANp EXPENQITURES
COMPARED IO BUQGET BUQGETfUNP
"A" DEPARTMENT OF TECHNICAL AND AQULT EDUCATION
VEAR ENPEP JUNE :30 1995

EXHIBIT"D"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$

2,926,442.00 $

2,926,442.00 $

946,518.00

955,401.71

1,141,120.00

992,524.01

$

5,014,080.00 $

4,874,367.72 $

0.00 8,883.71 -148,595.99
-139, 712.28

5,000.00

201,834.64

196,834.64

$

5,019 080.00 $

5,076,202.36 $

57,122.36

EXPENDITURES
Personal Services-Institutions Operating Expenses-Institutions Quick Start Program Adult Literacy Grants Job Training Partnership Act

$

3,314,837.00 $

3,275,404.91 $

1,076,843.00

1,028,652.31

14,614.00

14,613.83

550,952.00

561,191.94

61,834.00

50,153.41

39,432.09 48,190.69
0.17 -10,239.94 11,680.59

$

5019080.00 $

4,930,016.40 $

B9,063.60

Excess of Funds Available over Expenditures

$

148185.96 $

146185.96

See Independent Accountant's Combined Report on Review of Financial Statements and Supplemenlary Information.
The notes to the financial statements are an integral part of this statement . 9.

MIDDLE GEORGIA TECHNICAi INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET
BUDGET FUND "B" LOTTERY FOR EDUCATION
YEAR ENDED JUNE 30 1995

EXHIBIT"E"

FUNDS AYAH ABLE
REYEfil!E State Funds

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE\

164769.00 $

164,768.30 $ ------'-0"-.7-'-0

EXPENDITURES
Computer Laboratories and Satelllte Dishes - Adult Literacy Equipment-Technical lnst~utes Repairs and Renovations

1,073.00 $ 138,049.00
25,647.00

1,072.50 $ 138,034.82 25,646.80

0.50 14.18 0.20

164 769.00 $

164,754.12 $

14.88

Excess of Funds Available over Expencfitures

$

14.18 $

14.18

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.
10 -

MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Middle Georgia Technical Institute is one of twenty-nine (29) 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 of Middle 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 of the 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 ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a selfbalancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number offunds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds.
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 1994-1995. This fund also includes operations from various institutional services provided to students, faculty, and/or staff which 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.
- 11 -

MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

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 cost or at estimated historical cost if historical cost is not practically determinable. 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.
The cost of normal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life of the assets are included in the General Fixed Assets Account Group.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term 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 flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources. In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, the Budget Fund returns its unreserved fund balance (surplus) to the Administrative Central Office ofthe Department of Technical and Adult Education for remittance to the Office of Treasury and Fiscal Services in the subsequent fiscal year.
GOVERNMENTAL FUND TYPE BUDGET FUND
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 are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter 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. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

- 12 -

MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND
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 of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
Contractual terms 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 prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles.
Prior period adjustments and certain other items 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 of the 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 and do not measure results ofoperations or have a measurement focus. 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 appropriation allotments 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 1994-1995. 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.
- 13 -

MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO TIIE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object class was overspent by the amount identified below:

Adult Literacy Grants

$ 1023994

This overexpenditure of budget constitutes a violation of Georgia Department of Technical and Adult Education policy, but does not constitute a statutory violation of budget authority. Statutory violations of budget authority are reported at the departmental level.

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 ofthree months or more from the date of purchase and certain other securities held for the production of revenue. Investments are stated at cost.

ACCOUNTSRECENABLE Accounts receivable consist ofallotments due from 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 of goods 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 REFUND TO GEORGIA DEPARTMENT OF TECHNICAL AND ADULT EDUCATION ADMINISTRATIVE CENTRAL OFFICE
Middle Georgia Technical Institute receives Federal funds for the Adult Education Act and the Carl D. Perkins Vocational and Applied Technology Education Act through the Georgia Department ofTechnical

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RESERVED FUND BALANCE

FEDERAL FINANCIAL ASSISTANCE REFUND TO GEORGIA DEPARTMENT OF TECHNICAL AND ADULT EDUCATION ADMINISTRATIVE CENTRAL OFFICE
and Adult Education - Administrative Central Office. As provided by the respective budget allocation to the Institute, these funds were required to be expended by June 30, 1995. At June 30, 1995, the following programs had unexpended Federal funds which should be refunded to the Administrative Central Office:

Adult Education Act Adult Education
Carl D. Perkins Vocational and Applied Technology Education Act Vocational Education - Basic Grants to States Vocational Education - Community Based Organizations

$ 676.96
77.98 522.44

$ 1 277 38

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 of matching 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 equal to 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.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE
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 earmarked for use by said postsecondary technical school operated by a local board ofeducation or an area board... ". These unexpended local funds are available for use in subsequent fiscal years.
UNRESERVED FUND BALANCE In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund's unreserved fund balance is returned to the Georgia Department of Technical and Adult Education - Administrative Central Office for remittance to the Office of Treasury and Fiscal Services in the subsequent fiscal year as surplus, as follows:
REGULAR - An amount of unexpended general appropriations available to the State for reappropriation in subsequent years.
LOTTERY FOR EDUCATION - An amount ofunexpended lottery appropriations available for future reappropriation for Lottery for Education.
COMPENSATED ABSENCES Compensated absences represent obligations of the Institute relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated 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. The columns do not present information that reflects 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.

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MIDDLE GEORGIA TECHNICAL INSTIWTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPARATIVE DATA Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding ofthe changes in the Institute's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Institute's financial position and operations or would cause the statements to be unduly complex and difficult to understand. JoJso, certain amounts presented in the prior year data have been reclassified in order to be consistent with th= current year's presentation.
NOTE 2: CUSTODIAL CREDIT RISKS OF C_ASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State of Georgia 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:
(I) 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 ofthe 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 indeotedness, notes, or other obligations of a subsidiary corporation of the United States governmem, 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 Inte;mediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Heme Loan Mortgage Association, and the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts 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 allow agencies of the State of Georgia (which include technical institutes) the option of exempting demand deposits from the collateral requirements.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIIlBIT "F"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank na1ances as of June 30, 1995, are categorized below in order to provide infonnation about the extent to which such deposits are exposed to custodial credit risk:

Category 1 - Amounts covered by depository insunmce or collateralized with secunties (at market
value) held by the Institute or by its agent ::1 the Institute's name.

Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Institute's name.

Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution, or by its trust department or agent bat not in the Institute's name, and amounts uncollateralized.

Carrying Amount

Bank Balances

Cash Deposits

$ 44649]02 S SOJJ669R

NOTE 3: OPERATING LEASES

Risk Categories 0 3i 762 92 $,--.,,10i..OO/l,1 S 569 404 06

Middle Georgia Technical Institute has entered into certain agreements to lease buildings and 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 Institute has the option of renewing the lease on a year-to-year basis. Future minimum lease payments for operating leases as of June 30, 1995, 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

1996 1997 1998 1999

$ 29,030.40 17,348.40 8,681.80 5 778.00

Total Future Minimum Lease Payments

$ 60 838 60

Expenditures for rental of buildings and equipment under operating leases for the year ended June 30, 1995, totaled $27,554.60.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE4: CAPITALLEASES

Middle Georgia Technical Institute acquires certain equipment through multi-year capital leases with varying terms and options. These agreements contain fiscal funding clauses in accordance with Official Code of Georgia Annotated Section 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. Ifrenewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

As ofJune 30, 1995, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30
1996 1997 1998 1999
Total Future Minimum Lease Payments
Less: Amounts Representing Interest
Present Value ofFuture Minimum Lease Payments

$ 6,225.60 6,225.60 5,140.80 2 867.48
$ 20,459.48
3 242.87
$ 17 216 61

NOTE 5: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in 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 of equipment for the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1994
Additions Deductions
Balance June 30, 1995

$ 1,595,951.07
492,063.99 116 055.80
$ 1 971 959 26

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO TIIB FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 6: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1995, follows:

Compensated Absences

Capital Leases

Total

Balance July I, 1994

$ 171,507.96 $

0.00 $ 171,507.96

Additions Annual Leave Earned and Utilized (Net)
Salaries and W?ies Salary-Related ringe Benefits Current Year Leases Deductions

5,059.92 198.76

18,782.71 -1 566.10

5,059.92 198.76
18,782.71 -1 566.10

Balance June 30, 1995

$ 176 766 64 $ 17 216 61 $ 193 983 25

NOTE 7: RISK MANAGEMENT

Public Entity Risk Pool The State Personnel Board - Merit System of Personnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia and units of county governments and local education agencies located with the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel Board - Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board.

Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS services 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 Institute, as an organizational unit of the Georgia Department of Technical and Adult Education, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the state agencies by DOAS to provide claims servicing and claims payment.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 8: DEFERRED COMPENSATION PLAN
The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State ofGeorgia 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 of compensation 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 beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the 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 of the deferred account of each participant. Financial information relative to the plan is presented in the financial report of the State Personnel Board - Merit System of Personnel Administration for the year ended June 30, 1995.
NOTE 9: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Middle Georgia Technical Institute participates in the Teachers Retirement System of Georgia (TRS), a costsharing multiple-employer public employee retirement system (PERS) established by the General Assembly ofGeorgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. The Institute's payroll for the year ended June 30, 1995, for employees covered by TRS was $1,888,330.20. The Institute's total payroll for all employees was $3,156,460.18.
Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless ofage, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number ofyears of creditable service up to 40 years. Any member who has between 25 and 30 years of creditable service and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by 7% for each year or fraction thereofby which the member has less than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of IO years of service) and compensation up to the date of death or up to the time of disability.
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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE30 1995

EXHIBIT"F"

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Benefits Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.

Contributions Required and Contributions Made Employees ofthe Institute who are covered by TRS are required to pay 5% oftheir gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees
as advised by their independent actuary. For fiscal year 1995, the employer contribution rate was 11.81% for
covered employees. The interest rate assumption (rate ofretum on investments) was 7.50%.

Total contributions to the plan made during fiscal year 1995 amounted to $317,428.08, ofwhich $223,011.55 was made by the Institute and $94,416.53 was made by employees. These contributions represented I 1.8 I% (Institute) and 5% (employees) of covered payroll.

Funding Status and Progress Pension Benefit Obligation
The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 of the Governmental Accounting Standards Board (GASB) that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of the PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among similar PERS.

The total unfunded pension benefit obligation ofTRS as ofJune 30, 1994, which was the latest information available, was as follows:

Total pension benefit obligation

$ 15,313,743,000.00

Net assets available for benefits, at cost

14 254 785 000.00

Unfunded pension benefit obligation

$ l 058 958 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, I994. Net assets available for benefits were valued as ofthe same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 9: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Funding Status and Progress Retirement System Contnbutions
Total contributions from all employers to TRS for the year ended June 30, 1995, were $565,117,811.00. The lnstitute's contribution for the year ended June 30, 1995, of $223,011.55 was actuarially determined and represented .0395% oftotal contributions made by all participating employers.
Trend Information Historical trend information is presented in the financial report ofTRS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Middle Georgia Technical Institute 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 of providing retirement allowances for employees ofthe State of Georgia. The Institute's payroll for the year ended June 30, 1995, for employees covered by ERS was $301,074.16. The Institute's total payroll for all employees was $3,156,460.18.
Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plii provisions.
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. Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, 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 of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. 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 30 years of service regardless of age.

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MIDDLE GEORGIA TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 9: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Contributions Required and Contributions Made Under the old plan, member contributions consist ofemployee contributions paid by the employee of 1.25% ofannual compensation and 4.75% ofannual compensation paid by the Institute on behalfofthe employee. Under the new plan, member contributions consist solely of 1.25% ofannual compensation paid by employee. The Institute also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. Contributions are also made on amounts paid for accumulated leave of retiring employees.

Total contributions to the plan made during fiscal year 1995 amounted to $48,594.15, ofwhich $44,830.38 was made by the Institute and $3,763.77 was made by employees. These contributions represented 14.89"/o (Institute) and 1.25% (employees) of covered payroll.

Funding Status and Progress Pension Benefit Obligation
The amount shown as the "pension benefit obligation" is a standardized disclosure measure of the present value ofpension benefits, adjusted for the effects ofprojected salary increases and step-rate benefits, estimated to be payable in the future as a result ofemployee service to date. The measure is intended to help users assess the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value ofcredited projected benefits, and is independent of the funding method used to detennine contributions to the plan.

The pension benefit obligation was computed as part ofan actuarial valuation performed as ofJune 30, 1994. Significant actuarial assumptions used in the valuation include the following:

(1) The present value of future pension benefits paid was computed using a discounted rate of7.5%. This rate is also the same rate assumed to be earned on investments in the plan in future years.

(2) Future pension payments reflect the following assumed salary increases as a result of inflation and merit increases:

~ 20 25 30 35 40 to 65

Percentage
9.5% 8.5% 6.5% 6.0% 5.7%

(3) ERS has the authority to grant cost-of-living adjustments by State statute. As ofJune 30, 1994, cost-of-living adjustments have been included in the pension benefit obligation.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 9: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation
The total unfunded pension benefit obligation ofERS as of June 30, 1994, which was the latest information available, was as follows:

Pension Benefit Obligation:

Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving benefits

$ 2,227,653,000.00

Current employees:

Accumulated contributions

648,516,000.00

Employer financed - vested

1,085,190,000.00

Employer financed - nonvested

1 206 805 000.00

Total pension benefit obligation

$5,168,164,000.00

Net assets available for benefits, at cost

4 858 015 000.00

Unfunded pension benefit obligation

$ 310 149 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers.

Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages ofannual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIIlBIT "F"

NOTE9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Funding Status and Progress Funding Policy
Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Institute's contribution for the year ended June 30, 1995, of $44,830.38 was actuarially detennined and represented .0174% oftotal contributions made by all participating employers.
Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation.
Trend Information Historical trend information is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Middle Georgia Technical Institute participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia in July 1993 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. The Institute's payroll for the year ended June 30, 1995, for employees covered by GDCP was $860,005.23. The Institute's total payroll for all employees was $3,156,460.18.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. If a member has less than$ 3,500.00 credited to his/her account, the Board of Trustees has the option of requiring 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.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon tennination ofemployment, the amount ofthe member's account is refundable upon request by the member.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIIlBIT "F"

NOTE9: RETIREMENTPLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Contributions and Vesting Total contributions made by employees during fiscal year 1995 amounted to $64,500.88 which represents 7.5% ofoovered payroll. These contributions met the requirements ofthe plan.
NOTE 10: 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 of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. 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 of employment.
Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 11: NONMONETARY TRANSACTIONS
The Georgia State Financing and Investment Commission (GSFIC), a unit of State 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, 1995, the Georgia State Financing and Investment Commission paid $1, 184, 187.73 to various vendors for approved projects related to Middle Georgia Technical Institute.
NOTE 12: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institute expects such amounts, if any, to be immaterial to its overall financial position.

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MIDDLE GEORGIA TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIDBIT "F"

NOTE 12: CONTINGENCIES
Litigation, claims and assessments filed against Middle Georgia Technical Institute (as an organizational unit of the Department of Technical and Adult Education), if any, 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, 1995.
NOTE 13: BONDING INFORMATION
The President and all employees ofMiddle Georgia Technical institute are bonded under a Public Employees Blanket Bond written by the Employers Insurance of7Wausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1995. 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 of$1,000,000.00 against loss sustained from failure of its 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 Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 011675 2 and 626 012294 4, on which the premiums were paid to October 1, 1995. Under these additional public employee dishonesty coverages, the policies insure the Institute to a maximum of$9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

-28 -

SUPPLEMENTARY INFORMATION - 29 -

MltltlLE !aEQB!alil I~s,HNl!,/11 !Nfil:ITUTE t;QMi!INING !!ALANt;E !iit!"ET !!iiIIII!JTQRY ~ASIS)
BUtlGET FUNtl
JUNE30 1995

EXHIBIT"G"

~
Cash and Cash Equivalents
Investments
Accounts Receivable Federal Financial Assistance other
Inventories
Total Assets
LIABILITIES AND FUND EQUIIY
Liabillties Accounts Payable Deferred Revenue Tuition and Fees
Total Liabillties
Fund Equity Fund Balance Reserved Federal Financial Assistance For Refund to Georgia Department of Technical and Adell Education - Administrative Central Office For other Local Match for Federal Grant Inventories Live Work Projects Prior Year Local Funds Unreserved Designated Surplus Regular Lottery for Education
Total Fund Equity
Total Liabillties and Fund Equity

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

s
LOTTERY FOR
EDUCATION

TOTAL

$

198,732.38 $

103,197.32 $

301,929.70

$

111,568.07

$

111,568.07

$

13,686.29

38,978.51

$

52,664.80

$

41,493.61

$

13,686.29

38,978.51

52,664.80

$

41,493.61

$

404,458.86 $

103,197.32 $

507656.18

$

179,885.72 $

102,630.90 $

282,516.62

21,969.41

21,969.41

$

201,855.13 $

102,630.90 $

304,486.03

$

1,277.38

13,590.09

192.03

50,452.50

1,544.34

123,475.71

1,277.38 13,590.09
192.03 50,452.50
1,544.34 123,475.71

12,071.68 $

$

202,603.73 $

566.42 566.42 $

12,071.68 566.42
203,170.15

404,458.86 $

103,197.32 $

507,656.18

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 30 -

MIDp! E GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN FUND BALANCE /STATUTORY BASIS}
BUDGET FUND YEAR ENDED JUNE 30 1995

EXHIBIT"H"

FUND BALANCE JULY 1
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Yea(s Accounts Payable Excess of Funds Available over Expenditures
Exhibil"I"
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30, 1994
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

257,063.08
12,028.10 $ 269,091.18 $

0.00 0.00 $

257,063.08
12,028.10 269,091.18

4,744.35 $ 146,185.96 150,930.31 $

552.24 $ 14.18
566.42 $

5,296.59 146,200.14 151,496.73

$

12,028.10 $

3,555.02

201,834.64

$

217,417.76 $

$

202,603.73 $

0.00 $ 0.00 $

12,028.10 3,555.02
201,834.64
217,417.76

566.42 $

203,170.15

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
31

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND fXPENDITURFS
BUDGET FUND YEAR ENPEP JUNE 30 1995

EXHIBIT"!"

~

FUNDS AVAILABLE

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

FEDERAL REVENUES

OTHER REVENUES RETAINED
Contracts Georgia Building Authority Americans with Disabilities Act Georgia Department of Education Lottery Postsecondary Options Georgia Department of Human Resources PEACH Project Georgia Institute ofTechnology Satelllte Technology Program
Fees Application Graduation Registration/Continuing Education Testing other
Interest Eamed 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 Asslstance Live Work Projects Local Match for Federal Grant Prior Year Local Funds

Total Carry-Over from Prior Year

Total FLflds Available

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

2,926,442.00 $ $ _ _ _955=,40=1-~71~

164,768.30 $ _ _3~,09=1-~21~0~.30~ 955401.71

15,000.00

6,888.00

61,967.70

5,800.00

17,970.10 6,475.00 114,150.07 18,235.48 3,840.00 4,3TT.49 174,161.87 555,789.65 7,868.65

$ _ _ _992=,5~2~4_.0_1

$

4,874,367.72 $

15,000.00
6,888.00
61,967.70
5,800.00
17,970.10 6,475.00 114,150.07 18,235.48 3,840.00 4,377.49 174,161.87 555,789.65 7,868.65
$ --~992=,5~2~4-~01~
164,768.30 $ ---'5~,0""39""'-"136=.02=-

48,771.35 36,423.69
189.21 116,450.39

$

201,834.64

48,771.35 36,423.69
189.21 116,450.39

$

201,834.64

$

5,076,202.36 $

164,768.30 $

5,240,970.66

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
32

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30 1995

EXHIBIT"!"

EXPENDITURES
eERSONAL SERVlCE-INSTITUTIONS
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance
OPERATIN!, E)!PENSES::INTITUTIONS
OlherCosls Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Util~ies Rents (Other than Real Estate) Insurance and Bonding other Operating Expenses Publications and Printing
Travel Equipment
Equipment Purchases Lease/Purchase of Equipment Rental of Equipment Computer Charges Other Costs
Supplies and Materials Repairs and Maintenance Other Operating Expenses Software Equipment Equipment Purchases Telecommunications Per Diem, Fees and Contracts Per Diem and Fees
QUICK START PROGRAM
Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Health Insurance

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

2,685,683.56

55,598.64 253,744.12 259,151.59
13,237.00 2,185.00 5,605.00

$

3,275,404.91

$

7,131.35

251,187.52

40,941.09

145,109.04

407.00

3,224.00

252,842.96

39,497.50

23,226.87

139,086.42 1,010.25
21,400.29

1,221.06
s,959.n
1,311.45 10,010.60

12,621.69 26,574.26

42,889.19

$

1,028,652.31

$

12,703.71

116.16 56.17

$

2,685,683.56

55,598.64 253,744.12 259,151.59
13,237.00 2,185.00 5,605.00

3,275,404.91

$

7,131.35

251,187.52

40,941.09

145,109.04

407.00

3,224.00

252,842.96

39,497.50

23,226.87

139,086.42 1,010.25
21,400.29

1,221.06
s,959.n
1,311.45 10,010.60

12,621.69 26,574.26

42,889.19

$

1,028,652.31

$

12,703.71

116.16 56.17

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 33 -

MIDDLE GEORGIA TECHNICAi INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABI E AND EXPENPfTURES
BUDGET FUND
YEAR ENDED JUNE 30 1995

EXHIBIT"!"

EXPENDITURES
QUICK START PROGRAM
other Costs Repairs and Maintenance
utilities Travel
ADULT LITERACY GRANTS
Personal Services Salaries and Wages Employer's Contributions for: F.1.C.A. Retirement Health Insurance
Other Costs Supplies and Materials Repairs and Maintenance utiilties Rents Other Operating Expenses Publications and Printing
Travel Equipment
Equipment Purchases Lease/Purchase of Equipment Rental of Equipment Computer Charges Software 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
Other Costs Supplies and Materials other Operating Expenses
Travel

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

79.00

358.96 1,299.83

$

14,613.83

$

414,569.81

6,340.44 14,231.32 15,610.54

50,863.40 1,598.26 5,118.14
20,872.00 12,508.67 2,168.55 6,043.35

1,445.68 1,133.51 4,-497.00

1,044.98 2,862.79

283.50

$

561,191.94

$

43,503.10

1,351.72 2,049.10 1,637.70

7.75 54.60 1,549.44

$

50,153.41

$

79.00

358.96 1,299.83

$

14.613.83

$

414,569.81

6,340.44 14,231.32 15,610.54

50,863.40 1,598.26 5,118.14
20,872.00 12,508.67
2,168.55 6,043.35

1,445.68 1,133.51 4,-497.00

1,044.98 2,862.79

283.50

$

561,191.94

$

43,503.10

1,351.72 2,049.10 1,637.70

7.75 54.60 1,549.44

$

50.153.41

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 34 -

MIDDLE GEORGIA TECHNICAL INSTITUTE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30 1995

EXHIBIT"!"

EXPENDITURES
COMPUTER LABORATORIES AND SATE!! ITE DISHESADULT LITERACY
Equipment Equipment Purchases
EQUIPMENT-TECHNICAL INSTITUTES
Equipment Equipment Purchases
REPAIRS AND RENOVATIONS
other Cost Repairs and Maintenance
Total Expend~ures
Excess of Funds Availabk! over Expenditures

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

1,072.50 $

1,072.50

$

138,034.82 $

138,034.82

$

$

4,930,016.40 $

146,185.96

25,646.80 $ 164,754.12 $
14.18

25,646.80 5,094,770.52
146,200.14

5 076 202.36 $

164 768.30 $

5240 970.66

see accompanying notes and Independent Accountant's Combined Report on RevieW of Financial Statements and Supplementary Information.
- 35 -

MIDDLE GEORGIA TECHNICAL INSTIT\JTF COMBINING STATEMENT OF CHANGES JN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE AGENCY FUNDS .
YEAR ENDED JUNE 30 1995

EXHIBIT"J"

.El.!t:IQ D.T.A.E. Activities Fund Delta Epsilon Chi G.O.A.L. Chamber of Commerce HOPE Scholarship Program Nallonal Honor Society Pell Grant Program Scholarship Funds (List on File) Sllldent Activities Fund Student Incentive Grant Student Insurance Sunshine Fund Vocational Industrial Clubs of America

ASSETS/ LIABILITIES JULY 1, 1994

$

349.56 $

0.00

0.00

0.00

126.68

237.14

ADDITIONS

DEDUCTIONS

ASSETS/ LIABILITIES JUNE 30, 1995

768.00 $

330.23 $

787.33

65.00

12.00

53.00

2,585.03

2,585.03

0.00

564,891.06

564,891.06

0.00

780.00

795.00

111.68

564,566.15

563,592.72

1,210.57

4,576.06 2,359.96
0.00 8,738.70
0.00

1,250.00 12,106.88 17,700.00 13,320.52
497.95

2,416.60 3,052.54 17,700.00 5,281.25
123.75

3,409.46 11,414.30
0.00 1e,m.97
374.20

64.24

210.00

146.00

128.24

$

16,452.34 $

1,178740.59 $

1 160,926.18 $

34266.75

See aceornpanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-36-

MIDDLE GEORGIA TECHNICAL INSTITUTE CASH AND CASH FQ\/IYALENTS JUNE30 1995
NONINTEREST REARING ACCOUNTS
NationsBank of Georgia, Warner Robins, Georgia
Wachovia Bank of Georgia, Warner Robins, Georgia
INTEREST BEARING ACCOUNTS
Wachovia Bank of Georgia, Warner Robins, Georgia
N.O.W. Account (1.50%)
~ Cashon Hand Petty Cash

SCHEDULE "1"
7,o13.70 327,196.21
53.04 555.00
$ ===335==477=.95=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
.37.

BllDGFTFUND
NationsBank of Georgia, Warner Robins, Georgia
Certificates of Deposit No. 000043398-0001 No. 000043398-0002 No. 000043398-0003 No. 000043398 0004
Trust Company Bank of Georgia, Macon, Georgia
Certificates of Deposit No. 92422 No.92423 No.92427 No.92428
Wachovia Bank of Georgia, Warner Robins, Georgia
CertifJCate of Deposit No.5607152

MIDDLE GEORGIA TECHNICAi INSTITUTE INVESTMENTS JUNE30 1995

SCHEDULE"2"

PURCHASE DATE

INTEREST RATE

MATURITY DATE

AMOUNT

October 15, 1994 October 15, 1994 October 15, 1994 October 30, 1995

5.1% 5.1% 5.1% 5.25%

October 15, 1995 $ October 15, 1995 October 15, 1995 October 30, 1995

16,955.23 11,303.51 11,303.51 17,005.82

December 12, 1994 December 12, 1994 December 17, 1994 December 17, 1995

5,6'!!, 5.6% 5.~ 5.6%

December 12, 1995 December 12, 1995 December 17, 1994 December 17, 1994

10,000.00 10,000.00 10,000.00 10,000.00

August 21, 1994

4.1%

August 21, 1995

15,000.00

$

111 568.07

See accompanying notes and Independent ACCOUllant's Combined Report on Review of Financial statements and Supplementary Information.
-38-

MIDDLE GEORGIA TECHNICAi INSTITUTE SCHEDULE OF FEDERAL REVENUES VEAR ENDED JUNE 30 1995

SCHEDULE"3"

BUPGETFUND
Education, U. S. Department of Adult Education - State Administered Basie Grant Program Through Georgia Department of Technical and Adult Education -Admilistrative Central Office
Vocational Education - Basie Grants to States Through Georgia Department of Technical and Adult Education - Administrative Central Office
Vocational Education - Consumer and Homemaking Education 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
Health and Human Services, U. S. Department of Job Opportunities and Basie Skills Training Through Georgia Department of Human Resources
Labor, U. S. Department of Apprenticeship Training Direct Job Training Partnership Act Through Georgia Department of Technical and Adult Education Administrative Central Offtee Through Heart of Georgia Regional Development Center Through Middle Flint Regional Development Center Through Middle Georgia Consortium

CFDA NUMBER

AMOUNT

84.002

$

121,335.00

84.048

374,616.81

84.049

23,919.41

84.174

9,500.00

93.561

102,073.79

17.201
17.250 17.250 17.250 17.250

163,210.92
50,104.81 68,371.08 24,176.14 18,093.75

$

955401.71

See accompanying noles and lndlependlent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 39 -

MIDDLE GEORGIA TECHNICAL INSTIJUTE
RECONCILIATION OF SALARIES AND WAGES AND TRA\IEL
YEAR ENDED JUNE 30 1995

SCHEDULE 4

Totals per Annual Supplement

Accruals June 30, 1994

Adjustments Coates, Edenflelcl, Higgins, Ivey, Kmiecik, Love, Middlebrooks, Payne, Reehall,

Donald R. BillyG. Janice Patrickl. Pamela Kathy Shelia JackC. AmrikS.

Totals per Report

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

SALARIES AND WAGES
3,157,468.18 $

TRAVEL 31,936.04

-1,203.38

-1,064.10 56.10

266.49 35.'16
404.63
277.91 8.00
386.34 8.00

3156460.18 $ =====32=1'=1=9=.49=

$

2,685,683.56

$

12,703.71

414,569.81

43,503.10

23,226.87 1,299.83 6,043.35 1,549.44

$

3156 460.18 $

32119.49

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary lnfonmalion.
-40-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

MIDDLE GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1995

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offindings disclosed in the review report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFinding

836-94-01 836-94-02 836-94-03 836-94-04

See Audit Control Number 836-95-01 Corrective Action Implemented Corrective Action Implemented No Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 836-95-01

The review report for the year ended June 30, 1994, 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 evidence of proper authorization prior to recording in the accounting records.

(2) The monthly bank reconciliations were not performed in a timely manner to enable the posting of adjustments in the proper accounting period.

(3) The bank reconciliations at June 30, 1995, disclosed numerous book errors which had not been posted to the general ledger in the year under review. Some ofthese items were noted in prior fiscal years.

(4) The bank account for the Youth Apprenticeship Aerospace program for June 1995, was not reconciled to the accounting records.

These conditions occurred because management did not establish appropriate procedures to ensure that the general ledger is posted, balanced and reviewed on a monthly basis, and that subsidiary records supporting the accounting records are complete, accurate and reliable. The Institute should implement the proper procedures and controls to ensure that bank statements are reconciled to the accounting records monthly and that needed adjustments are recorded on a timely basis. All journal entries should be reviewed, approved and properly documented prior to posting to the general ledger.

MIDDLE GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1995
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 836-95-01
Memorandum Only Federal Grantor Agencies Affected:
U. S. Department of Education U. S. Department of Health and Human Services U. S. Department of Labor
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Sales and Use Tax Reporting Financial Statements Audit Control Number 836-95-02
For the year under review, an examination of the Institute's Sales and Use Tax Report filed with the Georgia Department ofRevenue revealed that the Institute submitted an improper Sales and Use Tax Report for the period ofJanuary through March, 1995. The report filed by the Institute indicated gross sales of $15,713.90 and a tax liability of$491.88. A review of the accounting records disclosed that the Institute had actual sales of approximately $92,000.00 and had collected sales taxes of $4,077.41. The Official Code of Georgia Annotated Section 48-8-8 provides, in part, as follows:
"It shall be unlawful for any dealer required by this article to make, render, sign, or verify any return to make a false or fraudulent return with intent to evade the tax levied by this article".
This finding occurred because management disregarded the applicable laws and regulations. The Institute intentionally understated the sales revenue and related liability for the period to cover an unidentified deficit
that had accumulated over several years in the holding account used to pay the sales tax liability. The Institute
had been given appropriate adjustments by the Georgia Department of Audits and had agreed to fund the deficit with local funds in prior years. Middle Georgia Technical Institute should implement procedures to ensure that all sales and related liabilities are properly reported as required. The Institute should contact the Georgia Department of Revenue concerning the resolution of this finding. Any payments due, including penalties and interest, should be funded from local reserves.

MIDDLE GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1995
CURRENT YEAR
GENERAL FIXED ASSETS Improper Recording of Capital Leases Financial Statements Audit Control Number 836-95-03
For the year under review, our examination ofthe Institute's capital leases revealed that the leases were not recorded at the cash purchase price in the Institute's subsidiary equipment records as required by State of Georgia Accounting Procedures and Instruction Manual. The Institute failed to add the leases to the records during the fiscal year, even though the liability had been incurred and payments had already been made on the leases. In the subsequent fiscal period, the Institute recorded the leased equipment as an addition to the equipment records at the total acquisition cost of the equipment, including interest.
This condition occurred because management disregarded the provisions of the State regulations regarding capital leases. The Institute should implement procedures to ensure that all leases are properly recorded at the required values. Subsequent to the review, the Institute corrected the values recorded for the capital leases in the subsidiary records.
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Federal Financial Assistance Job Training Partnership Act (CFDA 17.250) Vocational Education-Basic Grants to States (CFDA 84.048) Questioned Cost: $13,951.40 Audit Control Number 836-95-04
A review ofthe salaries charged to the Federal programs revealed that expenditures for personal services were not supported by time and attendance records as required by Office ofManagement and Budget Circular A-87. Salary and related benefit charges should be based on actual time worked by employees and documented with appropriate time distribution records. The Institute incurred charges of $7,936.68 for the Job Training Partnership Act program (CFDA 17.250) and $6,014.72 for the Vocational Education-Basic Grants to States program (CFDA 84.048) that could not be properly documented.
This condition occurred because management used program budgets and not actual time worked by the employees to determine the program charges. Appropriate internal controls should be established by the Institute to ensure that all salary charges of employees involved in Federal and/or State projects be based on actual hours worked and that this time be properly documented. The Institute should contact the grantor agencies concerning the resolution ofthis finding.