Middle Georgia Technical College, Warner Robins, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS

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MIDDLE GEORGIA TECHNICAL COLLEGE ' WARNER ROBINS, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30~ 2001
RECEIVED
DCT ~3 CJ 2U
DOCUrl1ENTS
Russell W9+1~1Es State Auditor

MIDDLE GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS -

INDEPENDENT AUDITOR'S COMBINED REPORT ON 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

STATEMENTSOFFUNDSAVAILABLEANDEXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

D

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

6

E

"B" LOTTERYFOREDUCATION

7

F NOTES TO THE FINANCIAL STATEMENTS

8

SUPPLEMENTARY INFORMATION

G COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

22

H COMBINING STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

BUDGETFUND

23

I COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

24

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
September 19, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the State Board ofTechnical and Adult Education Members of the Local Board of Directors
and Honorable Billy Edenfield, President Middle Georgia Technical College
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through F) ofMiddle Georgia Technical College as of and for the year ended June 30, 2001. These financial statements are the responsibility ofthe Technical College's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on a prescribed basis ofaccounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis ofaccounting other than accounting principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position (statutory basis) ofMiddle Georgia Technical College as ofJune 30, 2001, and the results ofits operations (statutory basis) for the year then ended, on the basis ofaccounting described in Note 1.
0lARL-lT

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibits G through I) is presented for purposes of additional analysis and is not a required part of the financial statements of Middle Georgia Technical College. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,
~~-~ Russell W. Hinton State Auditor
RWH:gp 0lARL-lT

FINANCIAL STATEMENTS - 1-

MIDDLE GEORGIA TECHNICAL COLLEGE COMBINED BALANCE SHEET {STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable Federal Financial Assistance Other
Inventories
Fixed Assets Equipment
Amounts to be Provided for Payment of: Accrued Compensated Absences Capital Lease Commitments

GOVERNMENTAL FUND TYPE BUDGET

FIDUCIARY FUND TYPE
AGENCY

$

1.454,341.37 $ 136,688.90

$

145,000.00

$

54,286.81

2451835.84 $

5,419.86

$

3001122.65 $

5,419.86

:$

2471285.22

Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accounts Payable Payroll Withholdings Deferred Revenue Tuition and Fees Funds Held in Custody for Others Compensated Absences Capital Leases
Total Liabilities
Fund Equity Investment in General Fixed Assets Fund Balances Reserved Federal Financial Assistance For Continuation of Program Inventories Live Work Projects Prior Year Local Funds Unreserved Designated Surplus Regular Lottery for Education
Total Fund Equity
Total Liabilities and Fund Equity
The notes to the financial statements are an integral part of this statement.
-2-

$

2,146,749.24 $ 142,108.76

$

1,845,133.53

991.01

36,792.70 $ 142,108.76

$

1,882,917.24 $ 142,108.76

$

3,277.81

50,452.50

57,063.22

153,038.47

0.00 0.00

$

263,832.00

$

2,146;749.24 $ 142,108.76

EXHIBIT"A"

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS (Memorandum Only)

$ $

$

$ $

$ 7,661,945.14

$

$ 388.402.06 $ 24.286.66
$ 412,688.72 $

1,591.030.27 145,000.00
54,286.81 251,255.70 305,542.51 247,285.22
7,661,945.14
388,402.06 24.286.66
412.688.72

$ 7,6611945.14 $ 412,688.72 $

10,363,491.86

$

$ 388,402.06 24,286.66
$ 412,688.72 $

$ 7,661,945.14

$

1,845, 133.53 991.01
36,792.70 142,108.76 388,402.06 24,286.66
2A37,714.72
7,661,945.14

3,277.81 50,452.50 57,063.22 153,038.47

$ 7,661,945.14

0.00 0.00

$

7,925,777.14

$ 7,661,945.14 $ 412,688.72 $

10,363,491.86

.3.

MIDDLE GEORGIA TECHNICAL COLLEGE STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30, 2001

EXHIBIT"B"

FUND BALANCE - JULY 1, 2000
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures
Exhibit "C"
DEDUCTIONS Adjustments to Prior Year's Accounts Receivable Refunds to Grantors 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, 2001 (To Exhibit "A")

BUDGET FUND

$

240,622.63

0.00

$

240,622.63

$

395.00

200,341.20

$

200,736.20

$

-12,643.30

1.16

190,168.97

$

177,526.83

$

263,832.00

The notes to the financial statements are an integral part of this statement. -4-

MIDDLE GEORGIA TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 2001

EXHIBIT"C"

FUNDS AVAILABLE REVENUES
STATE APPROPRIATIONS Allotment from Georgia Department of Technical and Adult Education - Administrative Central Office
FEDERAL REVENUES OTHER REVENUES RETAINED
Sales and Services Fines and Forfeits Interest and Other Investment Income Tuition and Fees
Total Other Revenues Retained Total Revenues CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants Capital Outlay Equipment-Technical Institutes
Total Expenditures Excess of Funds Available over Expenditures
The notes to the financial statements are an integral part of this statement. -5-

$ 7,412,437.00 $ 1,488,107.79
$ 1,512,813.85
4,214.83 61,403.41 1,791,943.12
$ 3,370,375.21
$ 12,270.920.00

$

190, 168.97

$ 12,461,088.97

$ 7,229,292.47
3,512,467.52 987,790.78 172,130.00 359.067.00
$ 12,260,747.77
2001341.20
$ 12,461,088.97

MIDDLE GEORGIA TECHNICAL COLLEGE STATEMENT OF FONDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30, 2001

EXHIBIT"D"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 7,053,370.00 $ 7,053,370.00 $

1,626,169.00

.1,488,107.79

3,596,385.00

3,370,375.21

$ 12,275,924.00 $ 11,911,853.00 $

0.00 -138,061.21 -226,009.79
-364,071.00

0.00

1901168.97

1901168.97

$ 12,275,924.00 $ 12,102,021.97 $ _ _-_1--73;.:.,9:;..;0:.;;;2.;..;;.0.:;_3

EXPENDITURES
Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants Capital Outlay

$ 7,396,966.00 $ 3,650,760.00 1,056,068.00 172,130.00

7,229,292.47 $ 3,512,467.52
987,790.78 1721130.00

167,673.53 138,292.48
68,277.22 0.00

$ 12,275,924.00 $ 11,901,680.77 $ _ _ _3_74....:,_2_4_3_._2;.;...3

Excess of Funds Available over Expenditures

$

200,341 ~20 $ ======2_0_0.,.,34.,.;1,.;;;.2,_0

The notes to the financial statements are an integral part of this statement. -6-

MIDDLE GEORGIA TECHNICAL COLLEGE STATEMENT OF FljNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 2001

EXHIBIT"E"

FUNDS AVAILABLE REVENUES
State Appropriations
EXPENDITURES Equipment-Technical Institutes
Excess of Funds Available over Expenditures

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

- - - - - - $ 359,067.00 $ 359,067.00 $

0.00

$ 359,061.00 $ 359,061.00 $_ _ _ _ _o_.o_o

$

o.oo $-======-o==.o==o

The notes to the financial statements are an integral part of this statement. -7-

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Middle Georgia Technical College (fonnerly Middle Georgia Technical Institute) is one ofthirty-two (32) State supported member colleges 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 College as a separate reporting entity.
The College's Local Board of Directors is composed of nine (9) members serving staggered threeyear tenns who are appointed by the State Board ofTechnical and Adult Education. Appropriation ofState funds is made to the Georgia Department ofTechnical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office detennines the amount of State appropriations to be received by Middle Georgia Technical College. The College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Middle Georgia Technical College is considered an organizational unit ofthe Georgia Department of Technical and Adult Education for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board Codification ofGovernmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING Middle Georgia Technical College uses funds and account groups to report on its financial position and the results of its operations detennined in confonnity with accounting practices prescribed or pennitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a self-balancing set ofaccounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with financerelated 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 2000-2001. 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 defined in accounting principles generally accepted in the United States of America in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.

-8-

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
FIDUCIARY FUND TYPE
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
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 ifhistorical 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 costs of normal maintenance and repairs that do not add to the value ofassets or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life ofassets 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 GOVERNMENTAL FUND TYPE BUDGET FUND
The Technical College maintains its Budget Fund on a modified cash basis of accounting. Under this basis of accounting, receivables and revenues are recorded as follows:
1) State revenues are recorded when State appropriations are allotted to the Technical College by the Georgia Department ofTechnical and Adult Education.
2) For expenditure-driven funding arrangements (grants, charges for services), receivables and revenues are recorded when qualifying expenditures are recorded or when services have been provided.
3) All other revenues are recorded when received in cash.

-9-

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND
Liabilities and Expenditures are recorded as follows:
1) When purchase orders or other contractual obligations to procure goods or services have been executed by the Technical College.
2) Expenditures for travel, utilities and other items not requiring purchase orders are recorded when incurred.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of the Budget Fund in the accompanying financial statements.
The modified cash basis ofaccounting is a comprehensive basis ofaccounting otherthan accounting principles generally accepted in the United States of America. To conform to generally accepted accounting principles, all revenues should be recorded when measurable and available and all expenditures should be recorded when the related fund liability is incurred, except for certain compensated absences which are recognized when the obligations are expected to be liquidated with expendable and available financial resources. Additionally, to conform to generally accepted accounting principles immaterial prior period adjustments should be reported as revenues and expenditures, as appropriate.
FIDUCIARY FUND TYPE AGENCY FUNDS
Agency Funds are custodial in nature and do not measure results of operations or have a measurement focus. The modified cash basis of accounting is utilized for recognizing assets and liabilities.
BUDGET The Georgia Department ofTechnical and Adult Education - Administrative Central Office receives State appropriation allotments and certain Federal funds for the various technical colleges throughout the State. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 2000-2001. The budget allocation and disbursement ofthese funds is made to the various technical colleges by the Administrative Central Office. In addition, the technical colleges 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.
-10-

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS Investments are defined as those financial instruments with terms in excess ofthree months from the date of purchase and certain other securities held for the production of revenue. Investments are stated at fair value.
ACCOUNTS RECEIVABLE Accounts receivable consist ofreimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available.
Accounts receivable (Other) arising from operations are reported at gross value. Based on management's evaluation that amounts uncollectible are not material, no provision has been made for such amounts.
INVENTORIES Expendable supplies are recorded as expenditures at the time ofpurchase 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 College 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 briefdescription ofthe reserves reflected in the accompanying financial statements:
FEDERAL FINANCIAL ASSISTANCE CONTINUATION OF PROGRAM
The residual portion of Federal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from accounting principles generally accepted in the United States of America in that the unearned portion ofFederal financial assistance should be reflected as deferred revenue.
INVENTORIES Reported inventories (resale), under the consumption method, are offset by a portion of State funds reserved to provide working capital for managing a reasonable level of inventories for resale.
LIVE WORK PROJECTS In accordance with the Official Code ofGeorgia Annotated Section 20-4-14(c), the accumulated balance ofunexpended funds derived from student live work projects. This amount is restricted to expenditures for live work projects or for the benefit of instructional programs at the technical college in subsequent fiscal years.
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MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE
PRIOR YEAR LOCAL FUNDS Effective July 1, 1987, Middle Georgia Technical College became a part of the Georgia Department ofTechnical and Adult Education. The Official Code ofGeorgia Annotated Section 20-4-23 provides the College 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 of education 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 ofGeorgia, 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 ofunexpended regular appropriations designated forreappropriation by the State in subsequent years.
LOTTERY FOR EDUCATION -An amount ofunexpended lottery appropriations designated for future reappropriation by the State for Lottery for Education.
COMPENSATED ABSENCES Compensated absences represent obligations of the College relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual and compensatory leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the Budget Fund for the current portion of this 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 College 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" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position in conformity with accounting principles generally accepted in the United States ofAmerica. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
- 12 -

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2001

EXHIBIT"F"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
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, certificates ofindebtedness, notes, or other direct obligations ofthe United States or of the State of Georgia.
(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
{3) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe State of Georgia.
{5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
{6) Guarantee or insurance 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 colleges) the option of exempting demand deposits from the collateral requirements.
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 balances as ofJune 30, 2001, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:
Category I - Amounts covered by depository insurance or collateralized with securities {at fair value) held by the College or by its agent in the College's name.

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2001

EXHIBIT"F"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the College's name.

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

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 1,13s souo $ 2,ss3 049.32 $ 330 000.00 $ 2 223,049.32 $====o""".o""'o

NOTE 3: CAPITAL LEASES

Middle Georgia Technical College 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. If renewal 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 of June 30, 2001, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30

2002 2003

$ 16,381.68 9,556.72

Total Future Minimum Lease Payments

$ 25,938.40

Less: Amounts Representing Interest

1,651.74

Present Value of Future Minimum Lease Payments

$ 24,286.66

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition ofmoveable 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.

- 14-

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "F"

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

The following is a summary of changes of equipment for the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 2000

$ 7,166,255.11

Additions Deductions

772,867.03 277,177.00

Balance June 30, 2001

$ 7,661,945.14

NOTE 5: 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, 2001, follows:

Compensated Absences

Capital Leases

Total

Balance July 1, 2000

$ 321,132.04 $ 38,312.17 $ 359,444.21

Additions Annual Leave Earned and Utilized (Net) Salaries and Wages Salary-Related Fringe Benefits
Deductions

65,159.35 2,110.67

14,025.51

65,159.35 2,110.67 14,025.51

Balance June 30, 2001

$ 388,402.06 $ 24,286.66 $ 412,688.72

NOTE 6: RISK MANAGEMENT

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

- 15 -

MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2001

EXHIBIT"F"

NOTE 6: RISK MANAGEMENT

Other Risk Management The Department of Administrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The College, 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 various state organizations by DOAS to provide claims servicing and claims payment.

NOTE7: RETIREMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

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

Funding Policy Employees ofthe College who are covered by TRS are required to pay 5% oftheir gross earnings to TRS. The College makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees as advised by their independent actuary. For fiscal year 2001, the employer contribution rate was 11.29% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 504,055.77 $ 446,578.80 $ 415,160.93

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MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "F"

NOTE7: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Middle Georgia Technical College participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowances for employees ofthe State ofGeorgia.
The benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership 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 plan provisions.
Under both the old plan and new plan, members become vested after 10 years ofcreditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average ofthe member's highest twenty-four consecutive calendar months ofsalary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
In addition, the ERS Board ofTrustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 ofthe Internal Revenue Code (IRC) as a portion ofERS. The purpose ofSRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
The ERS issues a financial report each fiscal year which may be obtained through ERS.
Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The College's payroll for the year ended June 30, 2001, for employees covered by ERS was $966,752.73. The College's total payroll for all employees was $6,509,209.68.
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MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "F"

NOTE?: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Funding Policy Under the old plan, member contributions consist of 6.5% of annual compensation. Of these member contributions, the employee pays the first 1.5% and the College pays the remainder on behalfofthe employee. Under the new plan, member contributions consist solely of 1.5% ofannual compensation paid by employee. The College also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2001, the ERS employer contribution rate for the College amounted to 14.57% of covered payroll and included the amounts contributed on behalfofthe employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Total contributions to the plan made during fiscal year 2001 amounted to $153,030.54, of which $140,868.61 was made by the College and $12,161.93 was made by employees. These contributions met the requirements of the plan.
Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2001, financial report which may be obtained through ERS.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Middle Georgia Technical College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than$ 3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death ofa member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
The Employees' Retirement System ofGeorgia issues a financial report each fiscal year which may be obtained through ERS.

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MIDDLE GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"F"

NOTE7: RETIREMENTPLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The College's payroll for the year ended June 30, 2001, for employees covered by GDCP was $864,605.68. The College's total payroll for all employees was $6,-509,209.68.
Total contributions made by employees during fiscal year 2001 amounted to $65,212.05 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
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 of continuous 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 offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 9: 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 ofexpenditures which may be disallowed by the grantor cannot be determined at this time although the College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Middle Georgia Technical College (an organizational unit of the Department of Technical and Adult Education), if any, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2001.

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SUPPLEMENTARY INFORMATION - 21 -

MIDDLE GEORGIA TECHNICAL COLLEGE COMBINING BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30, 2001

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other
Inventories
Total Assets

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

114271781.12 $

26,560.25 $ 1,4541341.37

$

1451000.00

$ 1451000.00

$

54,286.81

$ 54,286.81

2431027.75 $.

21808.09

245,835.84

$

2971314.56 $

21808.09 $ 300,122.65

$

2471285.22

$ 2471285.22

$

21117,380.90 $

29,368.34 $ 2,146,749.24

LIABILITIES AND FUND EQUITY

Liabilities

Accounts Payable

$

Payroll Withholdings

Deferred Revenue

Tuition and Fees

Total Liabilities

$

Fund Equity

Fund Balances

Reserved

Federal Financial Assistance

For Continuation of Program

$

Inventories

Live Work Projects

Prior Year Local Funds

Unreserved

Designated

Surplus

Regular

Lottery for Education

Total Fund Equity

$

1,815,765.19 $ 991.01
36z792.70
1,8531548.90 $

29,368.34 $ 1,845,133.53 991.01
36z792.70
29,368.34 $ 11882,917.24

3,277.81 50,452.50 57,063.22 153,038.47
0.00 $
263.832.00 $

$

3,277.81

50,452.50

57,063.22

153,038.47

0.00 0.00 $

0.00 0.00
2631832.00

Total Liabilities and Fund Equity

$

21117,380.90 $

See notes to the financial statements.

- 22-

29,368.34 $ 2,146,749.24

MIDDLE GEORGIA TECHNICAL COLLEGE COMBINING STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "H"

FUND BALANCE - JULY 11 2000 Reserved Unreserved Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures
Exhibit "I"
DEDUCTIONS
Adjustments to Prior Year's Accounts Receivable Refunds to Grantors
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, 2001 (To Exhibit "G")

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

240,622.63

0.00 $

$

240,622.63 $

$ 240,622.63

0.00

0.00

0.00 $ 240,622.63

$

395.00

200,341.20 $

$

200,736.20 $

$

395.00

0.00

200,341.20

0.00 $ 200,736.20

$

-12,643.30 $

0.00 $ -12,643.30

1.16

190,168.97

$

177,526.83 $

1.16 190,168.97 0.00 $ 177,526.83

$

263,832.00 $

0.00 $ 263,832.00

See notes to the financial statements.

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MIDDLE GEORGIA TECHNICAL COLLEGE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 2001

EXHIBIT"!"

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

FUNDS AVAILABLE

REVENUES

STATE APPROPRIATIONS

Allotment from Georgia Department of Technical and

Adult Education - Administrative Central Office

$

7,053,370.00 $

359,067.00 $ 7,412,437.00

FEDERAL REVENUES

$

1,488,107.79

$ 1,488,107.79

OTHER REVENUES RETAINED Sales and Services

$

1,512,813.85

$ 1,512,813.85

Fines and Forfeits

4,214.83

4,214.83

Interest and Other Investment Income

61,403.41

61,403.41

Tuition and Fees

1,791,943.12

1,791,943.12

Total Other Revenues Retained

$

3,370,375.21

$ 3,370,375.21

Total Revenues

$

11,911,853.00 $

359,067.00 $ 12,270,920.00

CARRY-OVER FROM PRIOR YEAR

Transfer from Reserved Fund Balance

$

190,168.97

$ 190,168.97

Total Funds Available

$

12.102.021.97 $

359,067.00 $ 12,461,088.97

EXPENDITURES
Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants Capital Outlay Equipment-Technical Institutes
Total Expenditures
Excess of Funds Available over Expenditures

$

7,229,292.47

$ 7,229,292.47

3,512,467.52

3,512,467.52

987,790.78

987,790.78

172,130.00

172,130.00

$

359,067.00

359,067.00

$

11,901,680.77 $

359,067.00 $ 12,260,747.77

200,341.20

0.00

200,341.20

See notes to the financial statements.

$

12,102.021.97 $

359.067.00 $ 12,461,088.97

-24-