Moultrie Technical College, Moultrie, Georgia, report on audit of the financial statements of the fiscal year ended June 30, 2010

1 MOULTRIE TECHNICAL
4' COLLEGE MOULTRIE, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30,2010

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MOULTRIE TECHNICAL COLLEGE - TABLE OF CONTENTS -
SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS C STATEMENT OF CASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULES
1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND
2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) BUDGET FUND
3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET (NON-GAAP BASIS) BUDGET FUND
4 RECONCILIATION OF SALARIES AND TRAVEL
SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-1 56 Atlanta, Georgia 30334-8400
January 1 0 , 2 0 1 1

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors
and Honorable Tina K. Anderson, President Moultrie Technical College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of Moultrie Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30,2010. These financial statements are the responsibility of the 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 of America. 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 consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Technical College's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 discussed in Note 1, the financial statements of Moultrie Technical College are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Moultrie Technical College. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Moultrie Technical College as of June 30, 2010, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Management's Discussion and Analysis is not a part of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Moultrie Technical College taken as a whole. The accompanying supplementary information (Schedules 1through 4) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

Moultrie Technical College
Management's Discussion and Analysis
The following is management's discussion and analysis of Moultrie Technical College's financial performance for the fiscal year ending June 30, 2010, with comparative data from fiscal year ending June 30,2009. This discussion has been prepared by and is the responsibility of management.
Overview of theFinancial Statementsand Financial Analysis
This annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the GovernmentalAccounting Standards Board.
There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question "Is the Technical College as a whole better or worse off as a result of the year's activities?" These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by corporations and other private sector companies. All revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the goods or service, regardless of when cash is exchanged.
The Statement of Cash Flows is a valuable tool when evaluating the ability of the Technical College to meet financial obligations as they mature. This statement presents information related to cash inflows and outflows summarized by operating, noncapital financing, capital and related financing and investing activities.
This discussion and analysis of the Technical College's financial statements provides an overview of its financial activities for the year.
Statement of Net Asseb
The purpose of the Statement of Net Assets is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities and net assets of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating.
Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is restricted net assets, expendable. Expendable restricted net assets are available for expenditure by the Technical College but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College.

Statement of Net Assets (Thousands of Dollars)

June 30,2010

Assets Current Assets Capital Assets, Net

Total Assets

Liabilities Current Liabilities Noncurrent Liabilities

Total Liabilities

Net Assets

Invested in Capital Assets, Net of Debt

$

Restricted - Expendable

Unrestricted

29,058
1 2,242

Total Net Assets

June 30,2009

$

28,209

2,061

The total assets of the Technical College increased by approximately $1,376,000 from the prior year. This increase consists of an increase of approximately $528,000 in current assets and an increase of approximately $848,000 in capital assets. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the Technical College to better serve the instruction and public service missions of the Technical College.
Total liabilities for the fiscal year increased by approximately $345,000. The primary reason for the increase was in current liabilities, predominately from the approximate increase of $313,000 in accounts payable. The accounts payable increase was a result of a large computer replacement project in June. The combination of the increase in total assets of approximately $1,376,000 and the increase in total liabilities of approximately $345,000 yields an increase in total net assets of approximately $1,031,000. The increase in total net assets primarily consists of an increase of $849,000 in the category of invested in capital assets, net of debt and an increase of $181,000 in unrestricted net assets.
Statement of Revenues, Expenses and Changesin Net Assets
The purpose of the Statement of Revenues, Expenses and Changes in Net Assets is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets.

Operating revenues are received for providing goods and/or services to various customers and constituencies of the Technical College. Operating expenses are those expenses paid to acquire or produce the goods and/or services provided in return for the operating revenues, and to carry out the mission of the Technical College. Therefore, nonoperating revenue is received when no goods or services are provided in exchange for the revenue. With the issuance of Statement No. 35, new guidelines were established by the Governmental Accounting Standards Board (GASB), which changed the classifications of state appropriations and gifts from operating to nonoperating revenue. This change may result in an operating deficit that is offset by a nonoperating surplus.

Statement of Revenues, Expenses and Changes in Net Assets (Thousandsof dollars)

June 30,2010

June 30,2009

Operating Revenues Operating Expenses

Operating Gain/Loss

$

-13,248

$

-12,053

Nonoperating Revenues and Expenses

14,008

12,725

Income (Loss) Before Other Revenues,

Expenses, Gains or Losses

$

760

$

-328

Other Revenues, Expenses, Gains or Losses

271

164

Increase (Decrease)in Net Assets

$

1,031

$

-164

Net Assets at Beginningof Year

Net Assets at End of Year

The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with an increase in the net assets at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expensesand Changes in Net Assets are as follows:

Revenue by Source (Thousands of Dollars) For the Years Ended June 30,2010, and June 30,2009

June 30,2010

June 30,2009

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Other

4,372 94
761 59

$

3,624

8 1

757

38

Total Operating Revenue

Nonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income

Total Nonoperating Revenue

Capital Grants and Gifts

Total Revenues

Expenses (Thousands of Dollars) For the Years Ended June 30,2010, and June 30,2009
June 30,2010
Operating Expenses Instruction
Nonoperating Expenses Other
Total Expenses

June 30,2009

The sources of operating revenue for the Technical College are tuition and fees, grants and contracts, auxiliary services, and educational activities. The increase in operating revenue of approximately $786,000 is directly related t o an increase in enrollment for fiscal year 2010.
Tuition and Fees increased by $748,000. This is directly related to the increased enrollment from fiscal year 2 0 0 9 and a small tuition rate increase effective July 1,2009.

Under nonoperating revenues, state appropriations decreased by approximately $1,410,000 as a result of budget cuts of approximately 9%. Grants and contracts increased by approximately $3,702,000. The increase includes Federal scholarships and fellowships, which increased by approximately $1,323,000 as a result of increased enrollment. Also, Federal stimulus funds of approximately $1,184,000 replaced a portion of the budget cuts. Additionally, several Federal competitive grants were secured to enhance the programs of instruction.
Total revenues increased by approximately $3,767,000. Increased enrollment, a tuition rate increase and grant funding compensated for the reduction in state appropriations.
Operating expenses increased by approximately $1,981,000. The increase was primarily a combination of increased scholarships and fellowships and increased salary and benefit costs. Personal services expenses increased by approximately $325,000. This increase reflects additional grant funded positions. The fiscal year 2009 benefit costs were unusually low as health insurance reserves were utilized in budget cuts.
Statement of Cash Flows
The purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the Technical College during the year. It also provides information concerning the Technical College's ability to generate future cash flows and to meet its obligations as they come due. The statement is divided into five sections. The first section reports on the operating cash flows and shows the net cash used by the operating activities of the Technical College. The second section reflects cash flows from noncapital financing activities. The third section deals with cash flows from capital and related financing activities, which reflects the cash used for the acquisition and construction of capital related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The final section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets.
Statement of Cash Flows (thousands of dollars)

June 30,2010

June 30,2009

Cash Provided (Used) By:

Operating Activities

$

-12,153

Noncapital Financing Activities

13,344

Capital and Related Financing Activities

-1.840

InvestingActivities

2,605

$

-10,936

12,057

-432

-744

Net Change in Cash Cash, Beginningof Year

Cash, End of Year

The cash balance at the end of the year includes the Georgia Fund One investment account.

Capital Assets
The Technical College had one significant capital asset addition for facilities in the fiscal year under review. Construction of a small classroom building on the Tifton Campus was completed at a cost of $1,126,157.86 and placed into service late in fiscal year 2010.
Long- Term Liabilities
Moultrie Technical College had total Long-Term Liabilities of $595,002.71 of which $341,162.94 was reflected as a current liability at June 30, 2010. This liability is for compensated absences which is unfunded by the State of Georgia.
For additional information on Long-Term Liabilities, see Notes 1and 7 in the Notes to the Financial Statements.
Economic Out/ook
The Technical College is unaware of any currently known fact, decision, or condition that is expected to have a significant effect on the financial position or change how the Technical College operates for the next fiscal year. As in prior years, the Technical College's overall financial position is strong. Enrollment has increased for each of the past ten years and this trend is expected to continue into the next fiscal year. As a result, the Technical College anticipates the next fiscal year will be much like the last and the Technical College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues.
The Technical College will change to the semester system as part of the system-wide change in July 2 0 1 1 for fiscal year 2012. In anticipation of possible revenue reductions due to the change, a tuition reserve has been established by the Technical College. Funds of $80,907.89 were put into the reserve in fiscal year 2010 and additional funds of $655,160 are budgeted in fiscal year 2011. A tuition rate increase of $5 per credit hour was implemented July 1, 2010, and will also be implemented July 1,2011.
Dr. Tina K. Anderson, President Moultrie Technical College

BASIC FINANCIAL STATEMENTS

MOULTRIE TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30,2010
Current Assets Cash and Cash Equivalents Accounts Rece~vable Federal Financial Assistance Other Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Deferred Revenue Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted
Expendable Unrestricted
Total Net Assets

EXHIBIT "A"

The notes to the financial statements are an integral part of this statement. -2-

MOULTRIE TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30,2010
OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Sales and Services Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating lncome (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal State Gifts Interest and Other Investment lncome Other Nonoperating Expenses
Net Nonoperating Revenues
lncome (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and GiRs Federal State Nongovernmental Loss on Disposal of Capital Assets
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease)in Net Assets
Net Assets - Beginningof Year
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.
-3-

EXHIBIT "6"

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MOULTRIE TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30.2010
CASH FLOWS FROM OPERATING ACTIVITIES Tuit~onand Fees Grants and Contracts Sales and S e ~ l c e sof Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Receipts (Payments)
Net Cash Prov~ded(Used) by Operat~ngAct~v~ties
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Approprlatlons Agency Funds Transact~ons G~ftsand Grants Rece~vedfor Other than Cap~taPl urposes Other Nonoperatlng Rece~pts
Net Cash Flows Prov~ded(Used) by Noncap~taFl ~nanclngActlvltles
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets
Net Cash Provided (Used) by Capltal and Related F~nancingActiv~tles
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Earnings on Investments
Net Cash Prov~ded(Used) by lnvest~ngActlv~t~es
Net Increase (Decrease) In Cash
Cash and Cash Equivalents - Beginn~ngoYf ear
Cash and Cash Equ~valents- End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATINGACTIVITIES:
Operatlng Income (Loss) Adjustments to Reconcile Operatlng Income t o Net Cash
Prov~ded(Used) by Operatlng Actlv~t~es Deprec~at~oEnxpense Change In Assets and Llablllt~es, Accounts Rece~vable lnventorles Salar~esPayable Accounts Payable Compensated Absences
Net Cash Prov~ded(Used) by Operatlng Actlvlties
NONCASH ACTIVITY G ~ f t oCf ap~taAl ssets Reduclng Proceeds of Capltal Grants and Gifts
The notes to the flnanclal statements are an Integral part of thls statement.
- 5

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Moultrie Technical College is one of twenty-seven (27) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Moultrie Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of nine (9) members serving staggered three-year terms who are appointed by the State Board of the Department of Technical and Adult Education. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount of State appropriations to be received by Moultrie Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Moultrie Technical College is considered an organizational unit of the Technical College System of Georgia 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 (GASB) Codification of Governmental Accountinp and Financial Re~ortinRStandards.
Legally separate, tax exempt organizations whose activities primarily support member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia (an organizational unit of the State of Georgia), are considered potential component units of the State. See Note (15)for additional information.
FINANCIAL STATEMENT PRESENTATION The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the Technical College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required.
GAAP requires that the reporting of summer school revenues and expenses be split between fiscal years rather than in one fiscal year. Due to lack of materiality, the Technical Colleges of the Technical College System of Georgia will continue to report summer revenues and expenses in the year in which the predominate activity takes place.
BASIS OF ACCOUNTING For financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-collegetransactions have been eliminated.
The Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

ACCOUNTS RECEIVABLE Accounts receivable consist of tuition and fee charges to students, allotments due from the Technical College System of Georgia -System Office, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available. Accounts receivable are recorded net of estimated uncollectible amounts.
INVENTORIES Resale inventories are valued at cost usingthe first-in, first-out method.
CAPITAL ASSETS Capital assets are recorded at cost at date of acquisition, or fair market value at the date of capital contribution. The Technical College capitalizes all land and land improvements. For equipment, the Technical College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Buildings and Building Improvements, Improvements Other Than Buildings, Easements, Rights, Patents, Trademarks, Copyrights and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastructure and software, the Technical College's capitalization threshold is $1,000,000.00. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 10 to 4 0 years for buildings, 1 5 to 25 years for infrastructure, 1 5 years for improvements other than buildings, 1 0 years for library books, 3 to 1 0 years for equipment and software, and 1 0 to 20 years for intangibles.
To fully portray capital assets acquired by the Technical Colleges of the Technical College System of Georgia, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - a n organization that is external to both the Technical College and the Technical College System of Georgia. The GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For major construction projects, GSFIC records construction in progress on its books throughout the construction period and at project completion transfers the entire project costs to Moultrie Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2010, GSFIC did not transfer any capital additions to Moultrie Technical College.
DEFERRED REVENUES Deferred revenues include amounts received for tuition and fees and other activities prior to the end of the fiscal year but related to the subsequent accounting period. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned.
COMPENSATED ABSENCES Employee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Moultrie Technical College had an accrued liability for compensated absences in the amount of $578,900.23 as of July 1,2009. For fiscal year 2010, $516,178.92 was earned in compensated absences and employees were paid $500,076.44, for a net increase of $16,102.48. The ending balance as of June 30, 2010, in accrued liability for compensated absences was $595,002.71.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

NET ASSETS The Technical College's net assets are classified as follows:
Invested in capital assets, net of related debt This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
Restricted net assets - expendable Restricted expendable net assets include resources in which the Technical College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties, except for unexpended grant funds of $1,435.06 due to grantor agencies.
Unrestriicted net assets Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus). At June 30,2010, there was no surplus balance to be refunded.
When an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.
INCOME TAXES Moultrie Technical College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.
CLASSIFICATION OF REVENUES AND EXPENSES The Statement of Revenues, Expenses and Changes in Net Assets classify the Technical College's fiscal year activity as operating and nonoperating according to the following criteria:
Operating Revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain Federal, state and local grants and contracts, and (3) sales and services.
Nonoperating Revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietaty and Nunexpendable Trust Funds and GovernmentalEntities That Use Proprietay FundAccounting, and GASB No. 34, such as state appropriations and investment income.
Operating Expenses: Operating expenses include activities that have the characteristics of exchange transactions.
Nonoperating Expenses: Nonoperating expenses include activities that have the characteristics of nonexchange transactions, such as capital financing costs related to investment activity.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

SCHOLARSHIP ALLOWANCES Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the Technical College, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances.
NOTE 2: DEPOSITS AND INVESTMENTS
DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) 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 of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
1. 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 of the State of Georgia.
3. Bonds of any public authority created by the laws of the State of Georgia, providing that the
statute that created the authority authorized the use 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 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 MortgageAssociation.
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 allows agencies of the State of Georgia (and thus Moultrie Technical College), the option of exempting demand deposits from the collateral requirements.
At June 30, 2010, the carrying value of deposits was $60,739.83 and the bank balance was $499,073.14. Of the Technical College's deposits, $222,327.83 were uninsured. Of these uninsured deposits, $222,327.83 were collateralized with securities held by the financial institution's trust department or agency in the Technical College's name.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBlT "D"

INVESTMENTS At June 30, 2010, the carrying value of the Moultrie Technical College's investment was $2,024,872.14, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Office of Treasury and Fiscal Services investment pools as follows:
lnvestment Pool Office of Treasury and Fiscal Services Georgia Fund 1

The Georgia Fund 1lnvestment Pool, managed by the Office of Treasury and Fiscal Services, is not registered with the Securities and Exchange Commission as an investment company, but does operate in a manner consistent with the SEC's Rule 2a7 of the lnvestment Company Act of 1940. This investment is valued at the pool's share price, $1.00 per share.

The State Depository Board, which has oversight over the Office of Treasury and Fiscal Services, may permit any department, board, bureau or other agency to invest funds collected directly by such organization in short-term time deposit agreements, provided that the interest income of those funds is remitted to the Director of the Office of Treasury and Fiscal Services as revenues of the State of Georgia. As a matter of general practice, however, demand funds of any department, board, bureau or other agency in excess of current operating expenses, are required to be deposited with the Director of the Office of Treasury and Fiscal Services for the purpose of pooled investment (OCGA 5017-63).

lnterest Rate Risk lnterest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. Due to the nature of the investments, the Technical College is not exposed to interest rate risk. Therefore, the Technical College does not have a formal policy for managing interest rate risk.

Credit Oualitv Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Due to the nature of the investments, the Technical College is not exposed to credit quality risk. Therefore, the Technical College does not have a formal policy for managing credit quality risk.
NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 30,2010, consists of the following:

Student Tuition and Fees Federal, State and Private Funds
Georgia State Financing and Investment Corn rn ission
Other

$ 63,401.58 774,786.25 501,959.24 8,498.52

Total Accounts Receivable

NOTE 4: INVENTORIES Inventories at June 30,2010, consist of the following:
Bookstore

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

NOTE 5: CAPITAL ASSETS

Followingare the changes in capital assets for the year ended June 30,2010:

Beginning Balance July 1, 2009

Additions

Reductions

Ending Balance June 30, 2010

Capital Assets, Not Being Depreciated: Land and Land Improvements

Capital Assets. Being Depreciated: Bullding and Building Improvements Improvements Other Than Buildings Equipment Library Collections

$ 30,769,403.64 $ 1,126,157.86

466.960.00

81,650.80

4,141,740.98

784,789.20 $

174,734.94

22,695.48

$
317.188.90 5,430.70

31,895.561.50 548.610.80
4,609.341.28 191.999.72

Total Assets Being Depreciated

Less: Accumulated Depreciation: Buildingand Buildinglmprovements Improvements Other Than Buildings Equipment Library Collections

$ 5,625,643.76 $ 466,960.00
2,932,251.26 70,516.30

692,640.62
437,748.68 $ 19,743.04

$
300.670.11 4.767.22

6,318,284.38 466,960.00
3,069,329.83 85,492.12

Total Accumulated Depreciation

Total Capital Assets, Being Depreciated, Net

$ 26,457,463.24 $ 865,161.00 $ 17,182.27 $ 27,305,446.97

Capital Assets, Net
NOTE 6: DEFERRED REVENUE

$ 28,209,541.24 $ 865,161.00 $

Deferred revenue at June 30, 2010, consists of the following:

17,182.27 $ 29,057,519.97

Federal Grants and Contracts Other Deferred Revenue

Total Deferred Revenue

NOTE 7: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2010, was as follows:

Beginning Balance July 1, 2009

Add~tions

Reductions

Ending Balance June 30, 2010

Current Portron

Other Liabilities

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

NOTE 8: NET ASSETS Changes in Net Asset activity for the year ended June 30, 2010, was as follows:

Beginning Balance July 1,2009

Additions

Reductions

Ending Balance June 30.2010

l nvested in Capital Assets Net of Related Debt

Restricted Net Assets

0.00

1,435.06

1,435.06

Unrestricted Net Assets

2,060,689.88

L9,310,236.70

19,128,836.10

2,242,090.48

Total Net Assets

NOTE 9: SIGNIFICANT COMMITMENTS

Moultrie Technical College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $1,491,645.00 as of June 30, 2010. This amount is not reflected in the accompanying financial statements.
NOTE 10: Rl3IREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

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

Funding Policy Employees of Moultrie Technical College who are covered by TRS are required by State statute to contribute 5.25% of their gross earnings to TRS. Moultrie Technical College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2010, the employer
contribution rate was 9.74% 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

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Moultrie 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 of providing retirement allowances for employees of the State of Georgia.
The ERS Board of Trustees 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 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects 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. Members hired on or after July 1,1982, but prior to January 1, 2009, are "new plan" members subject to the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1,2009, also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. 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.
Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members of other state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Technical College's payroll for the year ended June 30, 2010, for employees covered by ERS was $1,814,759.65. The Technical College's total payroll for all employees was $7,904,160.99.
Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200.00 plus 6% of annual compensation in excess of $4,200.00. Under the old plan, the Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Technical College contributions are not at any time refundable to the member or his/her beneficiary.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

Employer contributions for the current fiscal year and the precedingtwo fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2010, financial report, which may be obtained through ERS.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Moultrie Technical College participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer 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.
BenefiB 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 of Trustees. 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 of making 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. Benefit provisions are established by State statute.
The Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtained through ERS.
Contrjbutions and Vesting Member contributions are seven and one-half percent (7.5%)of gross 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 Technical College's payroll for the year ended June 30, 2010, for employees covered by GDCP was $998,025.07. The Technical College's total payroll for all employees was $7,904,160.99.
Total contributions made by employees during fiscal year 2010 amounted to $74,851.88 which represents 7.5%of covered payroll. These contributions met the requirements of the plan.
NOTE 11: RlSK MANAGEMENT
PUBLIC ENTITY RlSK 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 of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with United Healthcare to process medical claims and Medco to process prescription drug claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.
OTHER RISK MANAGEMENT The Department of Administrative 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 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 Technical College, as an organizational unit of the Technical College System of Georgia, 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.
NOTE 12: POST-EMPLOYMENTBENEFITS
The Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department - OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices.
Retiree health benefits were previously funded through the Georgia Retiree Health Benefit Fund (GRHBF). In 2009, the General Assembly revisited the GRHBF and enacted legislation that, effective August 31, 2009, separated the GRHBF into two new funds: the Georgia School Personnel Postemployment Health Benefit Fund and the Georgia State Employees Post-employment Health Benefit Fund. The purpose of this change was to assure employers responsible for planning and funding future retiree health costs that their contributions will be dedicated to their respective retiree populations. Funds in the GRHBF were transferred to the Georgia State Employees Post-employment Health Benefit Fund or the Georgia School Personnel Post-employment Health Benefit Fund as described in the plan financial statements. The statute that created the GRHBF is repealed effective September 1,2010.
GEORGIA STATE EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND The Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund) is a costsharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).
The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The combined active and retiree contribution rates established by the Board for employers participating in the State OPEB Fund were as follows for the fiscal year ended June 30, 2010:

July 2 0 0 9 August 2 0 0 9 -October 2 0 0 9 November 2 0 0 9 -June 2 0 1 0

22.165% of covered payroll for August coverage 16.581% of covered payroll for September - November coverage 22.165% of covered payroll for December - July coverage

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.
The following table summarizes the Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30,2010, June 30,2009 and June 30,2008:

Fiscal Year

Percentage Contributed

Required Contribution

STATE EMPLOYEES' ASSURANCE DEPARTMENT - OPEB State Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit post-employment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees', Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1,2009. Pursuant to Title 4 7 of the OCGA, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees'and Judicial Retirement Systems.
Contributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. For the fiscal year ended June 30, 2010, contributions of ERS "old plan" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS "new plan" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30,2010, June 30,2009 and June 30,2008.

MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

NOTE 13: 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 expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although Moultrie Technical College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Moultrie Technical College (an organizational unit of the Technical College System of Georgia), if any, are generally considered to be actions against the State of Georgia. 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 30,2010.
NOTE 14: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS
The Technical College's operating expenses shown at the natural classification on the "Statement of Revenues, Expenses and Changes in Net Assets" are all classified as Instruction at the functional classification.
NOTE 15: AFFILIATED ORGANIZATIONS
The Moultrie Technical College Foundation is a legally separate, tax exempt organization whose activities primarily support Moultrie Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from Moultrie Technical College.

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SUPPLEMENTARY INFORMATION

MOULTRIE TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND JUNE 30,2010
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other lnventories
Total Assets
LIABILITIESAND FUND EOUITY
Liabilities Salaries Payable Accounts Payable Encumbrance Payable
Total Liabilities
Fund Balances Reserved Federal Financial Assistance Prior Year Local Funds Continuing Education Technology Fees lnventories Bookstore Tuition
Total Fund Balances
Total Liab~litiesand Fund Balances

SCHEDULE "1"

Actual amounts were preparedon a prescribed basis of accounting that demonstrates compliance with budgetarystatutes and regulations of the State of Georgia, which is a comprehensivebasis of accounting other than generally accepted accounting principles.

MOULTRIE TECHNICAL COLLEGE SUMMARY BUDGETCOMPARISONAND SURPLUSANALYSIS REPORT (NON~GMPBASIS)
BUDGET FUND YEAR ENDED JUNE 30,2010

REVENUES
State Approprlatlon State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Ava~lable
EXPENDITURES
Adult Literacy Economic Development Technical Education
Total Expend~tures
Excess of Funds Available over ExDendltures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Rece~vables/Revenues unreserved Fund Balance (surplus) Returned
to Techn~caCl ollege System of Georg~a Year Ended June 30,2009
Refundsto Grantors Federal Financial Asslstance Returnedto TechnicalCollege System ofGeorgla Year Ended June 30.2009
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCEJUNE3Q
SUMMARY OF FUND BALANCE
Reserved Federal Financial Asslstance Prlor Year Local Funds Contlnu~ngEducation Technology Fees Inventories Bookstore Tu~t~on
Total Fund Balance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

Actual amounts were preparedon a prescribed bass of accountingthat demonstrates compliance with budgetarystatutes and regulations of the State of Georgia, which is a comprehensive basis of accountlng other than generally accepted accountlng prlnclples.

A O U L~otoracy State Appropnatan State General Funds Federal Funds
Total Adult Llteracv

MOULTRETECHNICALCOLLEGE STATEMENTOF PROGRAM REVENUESAND EXPENDITURES BY FUNDINGSOURCECOMPAREDTO BUDGEl
(NONGAAP W I S ) B U f f i C l FUND YFAR ENDEDJUNE 3 0 2010

Ongnal propr rat con

Fmal Budget

Current Year Revenues

Funds AvallableCornpared to Budget

Prior Year Carryover

Total F~ndsAva~lable

Varcance Posltlve (Negailve)

Technlcsl Educstlon State Approprlatlon StateGenerill Funds Federal Funds Amencan Recoueryand RemvestmentAct of 2009 Federal Slab#l~zat~Founnds mher Federalstlmulus Other Federal Funds Other Funds
Grand ~ o t a l e .AI Programs

Aaual amounts were prepared on a prexrlbed basisof accountlngtnat aemonsaates compl8ancewrth budgetarystatutes and regulatlonsof thestate of George which 8sa oomprshenslve basls of accountngothor than generally accepted accaumngprtnc8ples

ExpendlturerComparedto Budget

Varlance

Posntlve

Acrual

(Negarlvsi

Actual Funds Available
Over/(Underi Exoendlrures

Prlor Perlod Adjbstments

Other Mjuctments

Program Fund
Balances

Transfers

Program Fund Balancer

Reserve

Surplus

Total Fund Balance

Unexpendable Reserves lnvenmrles

(This page let3 intentionally blank)

Totals per Annual Supplement
Accruals June 30,2010 June 30,2009
Compensated Absences June 30,2010 June 30,2009
Lag Salaries June 30,2010 June 30,2009
Agency Funds

MOULTRIE TECHNICAL COLLEGE RECONCILIATIONOF SALARIES AND TRAVEL
YEAR ENDED JUNE 30,2010

SCHEDULE "4"

SALARIES

$

7,905,987.64 $

TRAVEL 72,219.15

SECTION II FINDINGS AND QUESTIONED COSTS

MOULTRIE TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

COMMUNICATION OF INTERNAL CONTROL DEFICIENCIES

The auditor is required to communicate to management and those charged with governance control deficiencies identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weakness.

A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the Moultrie Technical College's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Any identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within a separate management letter dated January 10, 2011. Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below:

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Significant Deficiency Finding Control Number: FS-837-10-01

Condition:

The accounting procedures of the Technical College were insufficient to provide for adequate controls over the Cash and Cash Equivalents.

Criteria:

An adequate system of internal controls dictates that bank reconciliations be performed on a monthly basis, and include the following: 1)adequate supporting documentation, 2) reconciling items correctly identified by description, 3) adjustments identified and made in a timely manner, and 4) evidence of an effective supervisory review and approval function.

Questioned Cost:

N/A

Information:

During our gaining an understanding of internal controls over the cash reconciliation process for the months of October and June, it was noted that the Technical College did not always reconcile the bank statements in a timely manner and failed to post all receipts and disbursements to the financial records in a timely manner for items that cleared the bank. Reconciling items were carried on the bank reconciliation for an extended period of time.

Reconciling items were posted by the Technical College to the financial statements prior to audit presentation, however, an unidentified variance of $295.00 still existed.

MOULTRIE TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30.2010

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Significant Deficiency Finding Control Number: FS-837-10-01

Cause:

Technical College's management failed to implement satisfactory controls to ensure that bank reconciliations were properly performed on a monthly basis and reconciling items were properly identified and corrected within a reasonable amount of time.

Effect:

Without satisfactory accounting policies and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operation.

Recommendation:

Management should monitor accounting controls and procedures currently in place, identify weaknesses and implement procedures to strengthen the internal controls over the bank reconciliation process.

INVENTORIES Inadequate Access Controls Significant Deficiency Finding Control Number: FS-837-10-02

Condition:

The accounting procedures of the Technical College were insufficient to provide for adequate controls over the Resale Inventories.

Criteria:

AlCPA Professional Standards provides that internal control is a process placed into operations to achieve management's objectives related to "(a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations."

Questioned Cost:

N/A

Information:

We noted the following weaknesses/deficiencies relating to bookstore resale inventories:

1) Entity personnel appeared to have access rights to bookstore inventory system that exceeded their need based on job duties.
2) There were no inventory count sheets maintained to validate that a complete and thorough inventory was conducted at or near the year ended June 30, 2010. The taking of a complete and thorough inventory is necessary as the Technical College does not maintain well-kept perpetual inventory records.

Cause:

Management failed to implement satisfactory controls to ensure the accuracy of resale inventories.

MOULTRIE TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010

FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

INVENTORIES Inadequate Access Controls Significant Deficiency Finding Control Number: FS-837-10-02

Effect:

Without satisfactory accounting policies and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operation.

Recommendation:

The Technical College should review its internal control policies. Management should enhance policies and procedures to ensure that user rights and roles complement established separation of duties structure. In addition, when physical counts are made, management should maintain inventory count documentation to support adjustments made to bookstore inventory system and the financial statements.

FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.