MOULTRIE TECHNICAL COLLEGE MOULTRIE, GEORGIA REPORT ON AUDIT OF THE FINANClAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2011 Georgia Departmeat of Xndits and Accounts Russell Wh.H,inten A~tiitoe MOULTRIE TECHNICAL COLLEGE - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY l NFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENTOFNETASSETS B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS C STATEMENT OF CASH FLOWS D NOTES TO THE FINANCIALSTATEMENTS 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 FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND 4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND 5 RECONCILIATION OF SALARIES AND TRAVEL SECTION II AUDITEE'S RESPONSETO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS MOULTRIE TECHNICAL COLLEGE -TABLE OF CONTENTS - SECTION Ill FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FI NANClAL Russell W. Hinton STATE AUDITOR (404)656-2174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 October 13, 2 0 1 1 Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors and Honorable Tina K. Anderson, President Moultrie Technical College INDEPENDENTAUDITOR'S COMBINED REPORT ON BASIC FINANCIALSTATEMENTS 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, 2011. 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 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, 2011, 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 5) 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. Res~ectfullvsubmitted. usd dell W. Hinton, CPA, CGFM 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, 2 0 1 1 with comparative data from fiscal year ending June 30, 2010. This discussion has been prepared by and is the responsibility of management. O v e ~ i e wof the FinancialStatementsand FinancialAnalysis This annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the Governmental Accounting 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 Assets 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 3 0 , 2 0 1 1 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 $ 30,342 Restricted- Expendable 1 Unrestricted 1,672 Total Net Assets $ 29,058 1 2,242 The total assets of the Technical College increased by approximately $396,000 from the prior year. This can be mainly attributed to an increase of approximately $1,285,000 in capital assets, as the Technical College constructed a small classroom building on the Tifton Campus from current 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 decreased by approximately $318,000. The primary reason for the decrease was in current liabilities, predominately from the approximate decrease of $321,000 in accounts payable. The accounts payable decrease was a result of a large computer replacement project in fiscal year 2010. The combination of the increase in total assets of approximately $396,000 and the decrease in total liabilities of approximately $318,000 yields an increase in total net assets of approximately $714,000. The increase in total net assets primarily consists of an increase of $1,285,000 in the category of invested in capital assets, net of debt and a decrease of $570,000 in unrestricted net assets, which were converted to capital assets. Statement of Revenues, Expenses and Changes in 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 nonoperatingsurplus. Statement of Revenues, Expenses and Changes in Net Assets (Thousands of dollars) June 3 0 , 2 0 1 1 June 30,2010 Operating Revenues Operating Expenses Operating Loss $ -16,013 $ -13,248 Nonoperating Revenues and Expenses 16,192 14,008 Income (Loss) Before Other Revenues, Expenses, Gains or Losses $ 179 $ 760 Other Revenues, Expenses, Gains or Losses 535 271 Increase in Net Assets $ 714 $ 1,031 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, Expenses and Changes in Net Assets are as follows: Revenue by Source (Thousandsof Dollars) Forthe Years Ended June 30,2011, and June 30,2010 June 3 0 , 2 0 1 1 June 30,2010 Operating Revenue Tuition and Fees $ Grants and Contracts Sales and Services of Educat~onaDl epartments Rents Other 4,918 89 1,960 2 55 $ 4,372 94 761 59 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) Forthe Years Ended June 30,2011, and June 30,2010 June 3 0 , 2 0 1 1 Operating Expenses Instruction Nonoperating Expenses Other Total Expenses June 3 0 , 2 0 1 0 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 $1,738,000 is directly related to an increase in enrollment for fiscal year 2011. Tuition and Fees increased by $546,000. This is directly related to the increased enrollment from fiscal year 2010 and a small tuition rate increase effective July 1,2010. Under nonoperating revenues, state appropriations increased by approximately $1,502,000 to fund increased health benefit costs and to replace Federal stimulus funds of $1,184,000 utilized in the prior fiscal year. Grants and contracts increased by approximately $713,000. The increase includes Federal scholarships and fellowships, which increased due to increased enrollment. It also includes direct grants from the United States Department of Labor for employment training. Additionally, several Federal competitive grants were secured to enhance the programs of instruction. Total revenues increased by approximately $3,825,000. Increased enrollment, a tuition rate increase and grant funding accounted for the increase. Operating expenses increased by approximately $4,503,000. The increase was primarily a combination of increased scholarships and fellowships and increased salary and benefit costs. Personal services expenses increased by approximately $1,199,000. This increase reflects additional grant funded positions and increased benefit costs. Supplies and other services increased for grant expenditures and includes cost of goods sold for the bookstore operations. 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 3 0 , 2 0 1 1 June 30,2010 Cash Provided (Used) By: Operating Activities Noncapital FinancingActivities Capital and Related FinancingActivities InvestingActivities $ -15,165 16,511 -1,944 2 $ -12,153 13,344 -1,840 2,605 Net Change in Cash Cash, Beginningof Year Cash, End of Year The cash balances at the end of the year include the Georgia Fund One investment account. The reduction in ending cash balance reflects the construction of a small classroom building on the Tifton Campus during the fiscal year. 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 $1,462,569.22 and placed into service late in fiscal year 2011. Long- Term Liabilities Moultrie Technical College had total Long-Term Liabilities of $592,273.40 of which $340,384.35 was reflected as a current liability at June 30, 2011. 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 Outlook 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. As in prior years, the Technical College's overall financial position is strong. Enrollment has increased for each of the past ten years. In anticipation of possible revenue reductions due to the change, reserves have been established by the Technical College. Reserve funds are available to cover any short-term revenue reductions. A tuition rate increase of $5 per credit hour was implemented July 1, 2011. 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. Dr. Tina K. Anderson, President Moultrie Technical College BASIC FINANCIAL STATEMENTS MOULTRIE TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 3 0 , 2 0 1 1 ASSETS Current Assets Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Inventories Total Current Assets Noncurrent Assets Capital Assets, Net Total Assets LIABILITIES Current Liabilities Accounts Payable Salaries Payable Contracts 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 TECHNICALCOLLEGE STATEMENTOF REVENUES, EXPENSESAND CHANGES IN NET ASSETS YEAR ENDEDJUNE 30.2011 OPERATING REVENUES Student Tuition and Fees Less: Scholanhlp Allowances Grants and Contracts Federal Rents and Royalties Sales and Services Other Operating Revenues Totai Operating Revenues OPERATING EXPENSES Salaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services De~reciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) State Appropriatlons Grants and Contracts Federal State Gifts Interest and Other Investment Income Other Nonoperating Expenses Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Ga~nso, r Losses Capital Grants and Gifts Federal State Nongovernmental Loss on Disposal of Capltal Assets Total Other Revenues, Expenses. Gains, or Losses Increase(Decrease) in Net Assets Net Assets - Beginningof Year Net Assets - End of Year EXHIBIT "B" The notes to the financial statements are an integral part of this statement. - 3 (This page left intentionally blank) MOULTRIE TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2011. CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Sewices of Educational Departments Paymentsto Suppliers Paymentsto Employees Paymentsfor Scholarships and Fellowships Other Receipts (Payments) Net Cash Provided(Used) by OperatingActivities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Receipts Net Cash Flows Provided(Used) by Noncapital FinancingActivities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Cap~taGI rants and G~ftsReceived Purchases of Capital Assets Net Cash Provided(Used) by Capital and Related FinancingActivities CASH FLOWS FROM INVESTING ACTIVITIES Earningson Investments Net Increase (Decrease) In Cash Cash and Cash Equivalents- Beg~nningof Year Cash and Cash Equivalents- End of Year RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating Income (Loss) Adjustments to Reconcile Operating Incometo Net Cash Provided(Used) by OperatingActivities Depreciation Expense Change in Assets and Liabll~ties: Accounts Receivable Inventories Salaries Payable Accounts Payable Compensated Absences Net Cash Provided(Used) by OperatingActivities NONCASH ACTIVITY Gift of Capital Assets ReduclngProceeds of Capital Grants and Gifts The notes to the financial statements are an integral part of this statement. - 5 - MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 EXHIBIT "D" REPORTING ENTITY Moultrie Technical College is one of twenty-six (26) 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 Technical College System of Georgia. 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 AccountinR and Financial Re~orting Standards. 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-college transactions 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 EXHIBIT "D" 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 lnvestment Pool. 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 using the 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 1 0 to 4 0 years for buildings, 15 to 25 years for infrastructure, 15 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 lnvestment 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, 2 0 1 1 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 EXHIBIT "D" 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 $595,002.71 as of July 1,2010. For fiscal year 2011, $548,575.14 was earned in compensated absences and employees were paid $551,304.45, for a net decrease of $2,729.31. The ending balance as of June 30, 2 0 1 1 in accrued liability for compensated absences was $592,273.40. NONCURRENT LIABILITIES Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; and (2) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets. 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 $801.81 due to grantor agencies. Unrestricted 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) of $1,346.27. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of the State Treasurer. 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 EXHIBIT "D" CLASSIFICATION OF REVENUES AND EXPENSES The Statement of Revenues, Expenses and Changes in Net Assets classifies 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 G3sh Flows of Proprietav and Nonexpendable TrustFunds and GovernmentalEntities That Use Proprietary Fund Accounting, 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. 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 EXHIBIT "D" 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 Mortgage Association. 6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. At June 30, 2011, the carrying value of deposits was $528,101.44 and the bank balance was $864,979.86. Of the Technical College's deposits, $590,867.84 were uninsured. Of these uninsured deposits, $590,867.84, were collateralized with securities held by the financial institution's trust department or agency, in the Technical College's name. INVESTMENTS At June 30, 2011, the carrying value of the Moultrie Technical College's investment was $961,831.60, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Office of the State Treasurer investment pools as follows: Office of State Treasurer Georgia Fund 1 $ 961,831.60 The Georgia Fund 1lnvestment Pool, managed by the Office of the State Treasurer, 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 the State Treasurer, 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 the State Treasurer 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 the State Treasurer for the purpose of pooled investment (OCGA 50-17-63). Interest 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 Quality 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 EXHIBIT "D" NOTE 3: ACCOUNTS RECEIVABLE Accounts receivable at June 30,2011, consists of the following: Student Tuition and Fees $ Federal, State and Private Funds Georgia State Financingand Investment Commission Other 131,158.77 1,122,387.07 11,054.68 26,970.81 Total Accounts Receivable NOTE 4: INVENTORIES Inventories at June 30, 2011, consist of the following: Bookstore NOTE 5: CAPITAL ASSETS Followingare the changes in capital assets for the year ended June 30,2011: Beginning Balance July 1, 2010 Transfers to Other Technical Colleges Additions Reductions Ending Balance June 30, 2011 Capital Assets, Not Being Depreciated: Land and Land Improvements $ 1,752,073.00 $ 0.00 $ 0.00 $ 0.00 $ 1,752,073.00 Capital Assets, Being Depreciated: Buildingand Building Improvements Improvements Other Than Buildings Equipment Library Collections $ 31,895,561.50 548,610.80 4,609,341.28 $ 191,999.72 $ 1,616,204.22 $ 33,511,765.72 548,610.80 114.235.00 1,211,742.98 $ 304,069.39 5,631,249.87 97,428.64 3,840.42 285,587.94 Total Cap~taAl ssets Being Depreciated $ 37,245,513.30 $ 114.235.00 $ 2,925,375.84 $ 307,909.81 $ 39,977,214.33 Less: Accumulated Deprec~ation: Buildingand Building Improvements Improvements Other Than Buildings Equipment Library Collect~ons $ 6,318,284.38 466,960.00 3,069,329.83 $ 85,492.12 $ 114,235.00 723,463.81 5,443.39 497,661.20 $ 28,942.84 $ -80,324.94 3,070.54 7,041,748.19 472,403.39 3,761,550.97 111,364.42 Total Accumulated Depreciation $ 9,940,066.33 $ 114,235.00 $ 1,255,511.24 $ -77,254.40 $ 11,387,066.97 Total Capital Assets, Being Depreciated, Net $ 27,305,446.97 $ 0.00 $ 1,669,864.60 $ 385,164.21 $ 28,590,147.36 Capital Assets, Net MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 EXHIBIT "D" NOTE 6: DEFERRED REVENUE Deferred revenue at June 30, 2011, consists of the following: Prepaid Tuition and Fees $ 6,664.00 Gifts - Georgia State Financingand Investment Commission 9,423.00 Federal Grants and Contracts 27,107.71 Total Deferred Revenue NOTE 7: LONG-TERM LIABILITIES Long-Term liability activity for the year ended June 30, 2 0 1 1was as follows: Beginning Balance July 1.2010 Additions Reductions Ending Balance June 30,2011 Current Portion Compensated Absences $ 595.002.71 $ 548.575.14 $ 551,304.45 $ 592,273.40 $ 340.384.35 NOTE 8: NET ASSETS Changes in Net Asset activity for the year ended June 30, 2 0 1 1was as follows: Invested In Capital Assets Net of Related Debt Beginning Balance July 1, 2010 Additions Reductions Ending Balance June 30,2011 $ 29,057,519.97 $ 1,784,099.60 $ 499,399.21 $ 30,342,220.36 Restricted Net Assets 1,435.06 8,482,564.82 8,483,198.07 801.83 Unrestricted Net Assets 2,242,090.48 13,756,731.70 14,327,270.48 1,671,551.70 Total Net Assets NOTE 9: SIGNIFICANT COMMITMENTS Moultrie Technical College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $146,529.00 as of June 30, 2011. This amount is not reflected in the accompanyingfinancial statements. NOTE 10: RETIREMENT PLANS Moultrie Technical College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 EXHIBIT "D" supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Moultrie Technical College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law. EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract. On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS 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 the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1,1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 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 60 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 EXHIBIT "D" Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, Moultrie Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Moultrie 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. Moultrie 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 Moultrie Technical College contributions are not at any time refundable to the member or his/her beneficiary. Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows: Old Plan* New Plan GSEPS * 5.66%exclusive of contributions paid by the employer on behalf of old plan members Members become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions, the member forfeits all rights to retirement benefits. TEACHERS RETIREMENT SYSTEM OF GEORGIA The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 2 5 years of creditable service. Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 EXHIBll "D" of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2008 actuarial valuation. The following table summarizes Moultrie Technical College contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30,2009: ERS Required Percent Contribution Contributed TRS Required Percent Contribution Contributed GEORGIA DEFINED CONTRIBUTION PLAN Plan Description Moultrie 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 of age 65. The payment will be based upon mortality tables and interest assumptions t o 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 Contributions 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, 2011, for employees covered by GDCP was $1,116,255.07. The Technical College'stotal payroll for all employees was $8,537,342.96. Total contributions made by employees during fiscal year 2 0 1 1 amounted to $83,719.13 which represents 7.5%of covered payroll. These contributions met the requirements of the plan. NOTE 11: 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 of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The 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. Moultrie 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 Post- MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 EXHIBIT "D" employment 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 (including technical colleges) 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. 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, 2011: June 2010 July 2010 -April 2011 May 2011- June 2011 22.165% of covered payroll for July coverage 25.586% of covered payroll for August - May coverage 22.667% of covered payroll for June -July coverage No additional contribution was required by the Board for fiscal year 2 0 1 1 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 Moultrie Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30, 2011, June 30, 2010 and June 30, 2009: Fiscal Year MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011 Percentage Contributed Required Contribution EXHIBrr "D" - 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 47 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, 2011, 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 30,2011, June 30,2010 and June 30,2009. 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 30,2011. 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. MOULTRIE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011 EXHIBIT "D" 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 Organizationsare 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. (This page left intentionally blank) SUPPLEMENTARY INFORMATION MOULTRIE TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND JUNE 30,2011 Cash and Cash Equivalents Investments Accounts Receivable Federal F~nanciaAl ssistance Other lnventories Total Assets LIABILITIES AND FUND EOUITY Liab~l~ties Salaries Payable Payroll Wlthholdings Beneflts Payable Accounts Payable Contracts Payable Encumbrance Payable Deferred Revenue Total Liabilities Fund Balances Resewed Refundsto Grantors Prior Year Local Funds Continuing Education Technology Fees Inventories Bookstore Tuitlon Unreserved Surplus Total Fund Balances Total L~abllitiesand Fund Balances SCHEDULE "1" Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance w ~ t hbudgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting prlnclples -22- MOULTRiE TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30,2011 REVENUES State Appropriation State General Funds Federal Funds Other Funds Total Revenues ADJUSTMENTSAND PROGRAM TRANSFERS CARRY-OVER FROM PRIOR YEAR Transfer from ReseNed Fund Balance Total Funds Available EXPENDITURES Adult Literacy Economic Development Technical Education Total ExDenditures Excess of Funds Available over Expenditures FUND BALANCE JULY 1 ADJUSTMENTS Prior Year Payables/Expenditures Prior Year Receivables/Revenues Refunds to Grantors Federal Financ~aAl ssstance Returned to Techn~caCl ollege System of Georgia Year Ended June 30.2010 Prior Year Reserved Fund Balance Included In Funds Available FUND BALANCEJUNE 30 SUMMARY OF FUND BALANCE Reserved Refunds to Grantors Pr~oYr ear Local Funds Continuing Education Technology Fees Inventories Bookstore Tuition Totai Resewed Unreserved Surolus Totai Fund Balance BUDGET ACTUAL VARIANCE FAVORABLE (UNFAVORABLE) Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetaly statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles MOULTRIE TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAPBASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011 Adult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically identified Other Funds Total Adult Literacy Economic Development Other Funds Technical Education State Approprlation State General Funds Federal Funds Federal Funds Not Specifically Identified American Recovery and Reinvestment Act of 2009 Federal Funds Not Speclflcally ldentlfied Other Funds Total Techn~calEducation Totals By Program Original Appropriat~on Amended Appropr~ation Final Budget current year Revenues Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting princ~ples SCHEDULE 3" Funds Available Compared to Budget Prior Year Adiustments and Total carw-Over Program Transfers Funds Available Variance Positive (Negat~ve) Expenditures Compared to Budget Variance Actual Positlve (Negative) Excess (Deficiency) of Funds Available Over/(Under) Expend~tures MOULTRIE TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON~GAAPBASIS) BUDGET FUND YEAR ENDED JUNE 30,2011 Adult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds Total Adult Literacy Economic Development Other Funds Technical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically identified American Recovery and Reinvestment Act of 2009 Federal Funds NotSpecifically dentifled Other Funds Total Technical Education Total Operating Activity Prior Year Reserves Not Availabie for Expenditure Inventories Refunds to Grantors Beginning Fund Baiance/(Deficit) July 1 Fund Balance Carried Over from Prior Period as Funds Available Return of Fiscal Year 2010 Surplus Prior Period Adjustments Budget Unit Totals Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting pr~nciples. SCHEDULE '4" Other ~djustments Excess (Deficiency) of Funds Available Over/(Under) Expenditures Ending Fund Balance/(Def~cit) June 30 Analysis of Ending Fund Balance Reserved Surplus/(Deficit) Total Summary of Ending Fund Balance Rese~ed Refunds to Grantors Prior Year Local Funds Continuing Educat~on Technology Fees lnventorles Bookstore Tuition Unreserved Surplus Total Ending Fund Balance - June 30 (This page left intentionally blank) Totals per Annual Supplement Accruals June 3 0 , 2 0 1 1 June 3 0 , 2 0 1 0 Compensated Absences June 3 0 , 2 0 1 1 June 3 0 , 2 0 1 0 Lag Salaries June 3 0 , 2 0 1 1 June 30.2010 Agency Funds Unidentified Variance MOULTRIETECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 3 0 , 2 0 1 1 SALARIES SCHEDULE "5" TRAVEL SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS MOULTRIE TECHNICAL COLLEGE AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 3 0 , 2 0 1 1 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported. SECTION Ill FINDINGS AND QUESTIONED COSTS MOULTRIE TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30.2011 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.