Georgia Northwestern Technical College, Rome, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended June 30, 2010

1GEORGIA NORTHWESTERN TECHNICAL COLLEGE ROME, GEORGIA
INDEPENDENT ACCOUNTANT'S
REPORT ON APPLYING AGREED-
UPON PROCEDURES
FOR FISCAL YEAR ENDED
JUNE 30,2010
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GEORGIA NORTHWESTERN TECHNICAL COLLEGE - TABLE OF CONTENTS -
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXH l BITS
A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT B STATEMENT OF PROGRAM REVENUESAND EXPENDITURES BY FUNDING
SOURCE COMPARED TO BUDGET

RUSSELLW. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMEONFTAUDITASND ACCOUNTS
270 Washington Street, S.W., Suite 1-1 56 Atlanta, Georgia 30334-8400
November 19,2010

Members of the State Board of Technical and Adult Education Members of the Local Board of Directors
and Honorable Craig McDaniel, President Georgia Northwestern Technical College
lnde~endenAt ccountant's ReD0rt on ApDl~inRAgreed-Upon Procedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the Technical College and the System Office (Oversight Unit) of the Technical College System of Georgia, solely to assist you in assessing the accuracy of the annual financial statement information reported to the System Office by the Technical College for inclusion in the State of Georgia's ComprehensiveAnnual Financial Report(CAFR)and SingleAudit Report; and to assist you in assessing the accuracy of budget basis information provided in the Summary Budget Comparison and Surplus Analysis Report and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget, which is attached as ExhibitsA and 6, respectively. Georgia Northwestern Technical College's management is responsible for the financial information reported to the System Office of the Technical College System of Georgia. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
1. Review selected balance sheet items reported on the annual financial statement worksheets (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the Technical College's general ledger.
We did not note any exceptions as a result of our procedures.
2. Obtain the Technical College's GAAP basis worksheets for Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) information that was submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these worksheets properly support activity reported in the Technical College's accounting records.
We did not note any exceptions as a result of our procedures.

3. Obtain the Technical College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
Cash flows from Capital and Related Financing Activities were not properly reflected on the Statement of Cash Flows. Equipment purchases of $259,713.02 were not included in the Purchase of Capital Assets on the Statement of Cash Flows. In addition, Non-Cash activity was not properly reflected on the Statement of Cash Flows. Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts of $1,073,106.65 was not recorded on the Statement of Cash Flows.
4. Obtain the Technical College's worksheets for financial statement note disclosure information submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, Long-Term Debt, Lease Obligations and Retirement Plans have been properly reported.
We did not note any exceptions as a result of our procedures.
5. Review the Technical College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the Technical College's annual financial statement worksheets.
We did not note any exceptions as a result of our procedures.
6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the Technical College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2010. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the Technical College's financial statements.
We did not note any exceptions as a result of our procedures.
8. Verify that the listing of salaries, travel, and professional services reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 reconciles to amounts recorded in the Technical College's financial statements.
We did not note any exceptions as a result of our procedures.
9. Review the year end Budgetary Statements including the Summary Budget Comparison and Surplus Anaksis Report (Exhibit A) and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget(Exhibit B ) . Confirm that budget information presented in these statements supports activity reported in the Technical College's accounting records, the legal level of budgetary control (funding source within program) was maintained, and determine if any budget overexpenditures exist.
We did not note any exceptions as a result of our procedures.

10. Obtain documentation for Budget basis reserves reported by the Technical College on the Summary Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
We did not note any exceptions as a result of our procedures.
11.Review the H.O.P.E. Scholarship Program reconciliation between the Technical College and
the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the Technical College's financial records.
We did not note any exceptions as a result of our procedures.
12. Review the Schedule of Expenditures of Federal Awards information submitted by the Technical College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the Technical College's accounting records.
The Technical College's Schedule of Expenditures of Federal Awards (SEFA) information did not agree with the Federal expenditure activity reflected on the Technical College's accounting records. Expenditures were understated for CFDA #84.002 in the amount of $21,448.12 and CFDA #84.048 in the amount of $1,766.79. Additionally, the amount for CFDA #84.063 was overstated by $10,681.50. Adjustments were made by the auditors to correct these errors.
13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.
We did not note any exceptions as a result of our procedures.
14. Review bank reconciliations during the year under review to ensure that management is preparingthem timely and that reconciling items are being addressed by management timely and in an appropriate manner.
Proper completion and approval of bank reconciliations were not done in a timely manner. Three bank accounts were not reconciled to the correct General Ledger balance at June 30, 2010. The review of bank reconciliationsof Bank of LaFayette accounts revealed that reconciling items identified were not addressed in a timely manner. Also, proper evidence of preparer and reviewer of reconciliations was not documented.
These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~u&selWl . Hinton, CPA, CGFM State Auditor

EXHIBITS

GEORGIA NORTHWESTERN TECHNICAL COLLEGE SUMMARY BUDGET COMPARISONAN0 SURPLUSANALYSIS REPORT
YEAR ENDEDJUNE 30,2010

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Adult Literacy Econorn~cDevelopment Technical Education
Total Expendltures
Excess of Funds Available over ExDenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prlor Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Technical College System of Georgia Year EndedJune 30.2009
Refunds to Grantors Federal FinancialAssistance Returnedto TechnicalCollege System of Georgia Year Ended June 30.2009 Other
Prior Year ReseNed Fund Balance Included in Funds Available
FUND B A L A N W W E 3 0
SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance Sales and Serv~ces Llve Work Projects Continuing Educat~on Technology Fees Inventories
Total Reserved

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

Total Fund Balance

GEORGIA NORTHWESTERN TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND MPENDITURES BY FUNDING SOURCE COMPARED TO BUDGEl
YEAR ENDEDJUNE 30.2010

Adult Literacy State Appropriation Siate General Funds Federal Funds Other Funds
Total Adult Literacy

Original Aoorooriation

Flnal Budget

Current Year Revenues

Funds Available Compared t o Budget

Prlor Year Carryover

Total Funds Available

varcance Positive (Negative)

Economic Ddvelopment otner Funds

Technlml EducntlOn State Appropriation State General Funds Federal Funds Amerncan Remvery and Reinvestment Act of 2009 Federal Stablllzatlon Funds Otner Feaeral Funds Other Funds
Total Technical Education
- Grand ~ o t a ~AsIIPrograms

ExpendituresCompared to Budget

Varlance

POSLIV~

Actual

(Negative)

Actual Funds Available Over/(unaer) Ekpendiiures

Prlor Period

Other

- Adjustments - Adjustments

Program Fund
Balances

Transfers

Program Fund Balances

Reserve

Surplus

Total Fund Balance

UnexpendableReseNeS Inventories