Management report, Okefenokee Technical College, Waycross, Georgia, an organizational unit of the state of Georgia, year ended June 30, 2004

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
I
OKEFENOKEE TECHNICAL COLLEGE WAYCROSS, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Russell W. Hinton State Auditor

OKEFENOKEE 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

3

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

4

C STATEMENT OF CASH FLOWS

5

D NOTES TO THE FINANCIAL STATEMENTS

7

SUPPLEMENTARY INFORMATION

SCHEDULES

1 SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET - (NON-GAAP BASIS)

BUDGET FUND

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

23

2 RECONCILIATION OF SALARIES AND TRAVEL

25

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 28, 2004

Honorable Sonny Perdue, Governor Members ofthe General Assembly of Georgia Members of the State Board of Technical and Adult Education Members ofthe Local Board of Directors
and Honorable John Pike, President Okefenokee 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 ofOkefenokee Technical College, an organizational unit ofthe State ofGeorgia, and its' aggregate discretely presented component unit as ofand for the year ended June 30, 2004, as listed in the table ofcontents. These financial statements are the responsibility of the Okefenokee Technical College's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements ofOkefenokee Technical College's discretely presented component unit. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for Okefenokee Technical College Foundation, Inc. is based on the report of the other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinions.
As discussed in Note 1, the financial statements of Okefenokee Technical College are intended to present the financial position and changes in financial position (including cash flows) of only that portion ofthe business-type activities ofthe State ofGeorgia that is attributable to the transactions of Okefenokee Technical College. They do not purport to, and do not, present fairly the financial
04ARL-1TC

position and changes in financial position (including cash flows) of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Okefenokee Technical College and of its aggregate discretely presented component unit as of June 30, 2004, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States ofAmerica.
As discussed in Note 1, the Okefenokee Technical College adopted the provisions of the Governmental Accounting Standards Board, Statement Number 39, Determining Whether Certain Organizations are Component Units during the year ended June 30, 2004.
Management's Discussion and Analysis is not a required part ofthe basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We and the other auditors have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Okefenokee Technical College's basic financial statements. The accompanying supplementary information (Schedules 1 and 2) is presented for purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to the auditing procedures applied by us in the audit ofthe basic financial statements and, in our opinion, based on our audit, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,

RWH:gp 04ARL-1TC

State Auditor

It).~

REQUIRED SUPPLEMENTARY INFORMATION

Okefenokee Technical College Management's Discussion and Analysis
The following is management's discussion and analysis of Okefenokee Technical College's financial performance for the fiscal year ending June 30, 2004 with comparative data from fiscal year ending June 30, 2003. This discussion has been prepared by and is the responsibility of management.
Overview ofthe Financial Statements and Financial Analysis
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 College's finances and activities as a whole and assists with providing an answer to the question "Is the 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 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 College's financial statements provides an overview of its financial activities for the year.
Statement ofNet 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 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.
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Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides information concerning the College's equity in property, plant and equipment owned by the College. The second category is restricted net assets. Expendable restricted net assets are available for expenditure by the 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 College for any lawful purpose deemed necessary to operate the College.

Statement ofNet Assets (thousands of dollars)

June 30, 2004

June 30, 2003

Assets Current Assets Capital Assets, Net

$

862

$

753

5 947

5,485

Total Assets

$_ _~6,~80~9

$_ _"""'6,=23'---"-8

Liabilities Current Liabilities Noncurrent Liabilities

$

462

$

381

192

174

Total Liabilities

$_ _-----"-'65'--'-4

$_ _---=--:55;.::.5

Net Assets Invested in Capital Assets, Net of Debt Restricted - Expendable Unrestricted

$

5,947

208

$

5,485

3

195

Total Net Assets

$==~6,-15==5

$=="""5.==68..3..

The total assets of the College increased by approximately $571,000 from the prior year. This can be mainly attributed to an increase of approximately $462,000 in capital assets. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the College to better serve the instruction and public service missions of the College.

Total liabilities for the fiscal year increased by approximately $99,000, primarily due to an increase of approximately $81,000 in current liabilities. Due to budget cuts incurred earlier in the year, orders for needed goods and services were delayed until near the end of the year resulting in the increase in current liabilities. The combination of the increase in total assets of approximately $571,000 and the increase in total liabilities of approximately $99,000 yields an increase in total net assets of approximately $472,000. The increase in total net assets is primarily in the category of invested in capital assets, net of debt which increased approximately $462,000.

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Statement ofRevenues, 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 College, both operating and nonoperating, and the expenses incurred by the College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the 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 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 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 (Thousands of dollars)

June 30, 2004

June 30, 2003

Operating Revenues Operating Expenses

$

4,895

11,236

$

4,245

10,487

Operating Gain/Loss

$

-6,341

$

-6,242

Nonoperating Revenues and Expenses

6,307

6,186

Income (Loss) Before Other Revenues, Expenses, Gains or Losses

$

-34

$

-56

Other Revenues, Expenses, Gains or Losses

528

54

Increase (Decrease) in Net Assets
Net Assets at Beginning of Year, as Originally Reported

$_ _----'-'49:.._:.4

$

5,683

$- - - -2

$

5,685

Prior Period Adjustment

-22

Net Assets at Beginning of Year Restated

$_ _~5,~66~1

$_ _~5,~68~5

Net Assets at End of Year

$====6-,1=5==5

$==="5==.6==8==3

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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 (thousands of dollars)

June 30, 2004

June 30, 2003

Operating Revenue Tuition and Fees Grants and Contracts Rents and Royalties Sales and Services of Educational Departments Other

$

2,913

$

2,378

1,500

1,241

10

13

457

609

15

4

Total Operating Revenue

$

4 895

$

4,245

Nonoperating Revenue State Appropriations Federal Grants and Contracts Nonoperating Gifts Investment Income Other

$

5,001

1,161 207 5 -8

$

4,772

1,278 234 9 -107

Total Nonoperating Revenue

$

6,366

$

6,186

Capital Gifts and Grants State Other

$

517

$

54

11

Total Capital Gifts and Grants

$

528

$

54

Total Revenues

$

11,789

$

10A85

Operating Expenses (thousands of dollars)
Operating Expenses Instruction
Nonoperating Expenses Other Total Expenses

June 30, 2004

$

11,236

59 $==1=1,==29===5

- IV -

June 30, 2003

$

10,487

$==1='0,==48==7

Tuition and Fees increased by approximately $535,000. This is directly related to the increased enrollment of 4% in credit programs from fiscal year 2003, 3.85% tuition increase, and an increased enrollment in non-credit programs. Additionally, our Childcare Center fees were reclassified from Sales and Services of Educational Departments to Tuition and Fees, which accounts for approximately $198,000 of this increase.
Grants and Contracts increased by approximately $259,000 as a result of increases in student financial aid and the reclassification of approximately $80,000 of Federal Work Study as operating revenue from nonoperating revenue.
Under nonoperating revenues, State appropriations increased by approximately $229,000. While it appears that the College received additional new money from the state, given the mandatory cost increases of various expense categories as well as the decrease in Federal nonoperating grants and contract revenues of approximately $117,000, the College actually had a relatively flat funding year when all things are considered.
Personal Services expenses increased by approximately $371,000 because additional positions were filled due to enrollment increases.
Repairs/Maintenance and Improvements increased by approximately $101,000 during the past year due to several renovations projects that were completed in fiscal year 2004.
Supplies increased by approximately $156,000 as a result of increased enrollment and release of long delayed purchases due to earlier budget shortfalls.
Another direct result of increased enrollment was an approximate $108,000 increase in financial aid disbursed directly to the students due to increased total Pell and SEOG awards.
Statement ofCash Flows
The purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the College during the year. It also provides information concerning the 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 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.
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Statement of Cash Flows (thousands of dollars)
Cash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities
Net Change in Cash Cash, Beginning of Year
Cash, End of Year

June 30, 2004

$

-5,888

6,109

-250

6

$

-23

223

$

200

June 30, 2003

$

-6,145

6,399

-120

9

$

143

80

$

223

Capital Assets
Okefenokee Technical College had no significant capital asset additions for facilities in the fiscal year under review except the addition of land purchased at a value of $411,170. This land was purchased because of the College's urgent need for additional space. Architect fees of $73,373 have been paid to date on an Allied Health Building which is projected to be completed by the end of fiscal year 2007.

Long-Term Debt
Okefenokee Technical College had a total Long-Term Debt of $421,837.05 of which $230,219.04 was reflected as a current liability at June 30, 2004.
For additional information on Long-Term Debt see Notes 1 and 7 in the Notes to the Financial Statements.

Component Units
In compliance with GASB Statement No. 39, Okefenokee Technical College has included the financial statements and notes for all required component units for fiscal year 2004. For additional information see Notes 2 and 13 in the Notes to the Financial Statements.
Economic Outlook
The 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 College operates for the next fiscal year. As in prior years, the College's overall financial position is strong. Enrollment for fiscal year 2000 was 1,680 and fiscal year 2004 enrollment is 3,601, which is a 114% increase.

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The College anticipates the next fiscal year will be much like the last and the College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues. John Pike, President Okefenokee Technical College
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BASIC FINANCIAL STATEMENTS - 1-

OKEFENOKEE TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30, 2004

EXHIBIT"A"

ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable State Appropriations Federal Financial Assistance Other Prepaid Items 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

PRIMARY GOVERNMENT

COMPONENT UNIT
OKEFENOKEE TECHNICAL COLLEGE
FOUNDATION, INC.

$

200,261.78 $

6,877.00 125,274.05 230,715.85 26,294.54 272,141.06

$

861,564.28 $

191,425.00 191,425.00

5,947,394.47 $ 6,808,958.75 $

92,365.00 283,790.00

$

184,075.50

21,246.42

18,925.07

8,059.35

230,219.04

$

462,525.38

191,618.01

$

654,143.39

$ 5,947,394.47 $ 207,420.89

92,365.00
26,244.00 165,181.00

Total Net Assets

$ 6,154,815.36 $ ====2=s.3..,._79=o=.o=o

The notes to the financial statements are an integral part of this statement. -3-

OKEFENOKEE TECHNICAL COLLEGE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30. 2004

EXHIBIT"B"

OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalties 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 Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Gifts Interest and Other Investment Income Other Nonoperating Revenues Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Loss
Capital Grants and Gifts State Nongovernmental
Total Other Revenues
Increase (Decrease) in Net Assets
Net Assets Net Assets - Beginning of Year, as Originally Reported Prior Period Adjustment to Correct Improper Recording of Capital Assets (Net)
Net Assets - Beginning of Year, Restated
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement. -4 -

PRIMARY GOVERNMENT

COMPONENT UNIT
OKEFENOKEE TECHNICAL COLLEGE
FOUNDATION, INC.

$ 3,213,277.71 -300,290.38

1,499,743.02 10,280.02
456,937.01 15,026.25 $

73,023.00

$ 4,894,973.63 $

73,023.00

$ 5,710,539.21 1,187,720.82 103,763.55 $ 1,119,452.64 233,334.08 2,596,199.56 284,801.81
$ 11,235,811.67 $
$ -6,340,838.04 $

183.00 46,638.00
15,790.00 9,743.00
72,354.00
669.00

$ 5,000,669.11

1,161,033.19 207,067.92 5,728.65 -8,153.21 -59,261.72

$ 6,307,083.94

$

-33,754.10

$

516,663.04

11,033.36

$

527,696.40

$

493,942.30

$ 5,682,661.06 $ -21,788.00
$ 5,660,873.06 $

296,357.00 -13,236.00
283,121.00

$ 6,154,815.36 $ ====2=8=3,-=7=90=.o==o

OKEFENOKEE TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30. 2004
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of 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 Income to Net Cash
Provided (Used) by Operating Activities Depreciation Expense Change in Assets and Liabilities: Receivables Prepaid Items Inventories Salaries Payable Accounts Payable Deferred Revenue Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts
The notes to the financial statements are an integral part of this statement.
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EXHIBIT"C"

$ 2,879,477.12
1,499,743.02 456,937.01
-3,963,289.58 -5,666,667.48 -1, 119,452.64
25,306.27
$ -5,887,946.28

$ 5,004,235.11 -72,068.01
1,176,665.20
$ 6,108,832.30

$

17,720.00

-267 ,288.64

$ -249,568.64

$ _ _ _5~,7_2_8._65_

$

-22,953.97

223,215.75

$

200,261.78

$ -6,340,838.04
284,801.81 -46,375.96
1,078.48 -1,385.39 3,277.26 158,035.34 12,865.75 40 594.47
$ -5,887,946.28
$ -509,976.40

OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Okefenokee Technical College is one of thirty-three (33) State supported member colleges of postsecondary education in Georgia which comprise the Georgia Department ofTechnical and Adult Education, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Okefenokee Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of eight (8) members serving staggered three-year terms who are appointed by the State Board ofTechnical and Adult Education. Appropriation of State funds is made to the Georgia Department of Technical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount ofState appropriations to be received by Okefenokee Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Okefenokee Technical College is considered an organizational unit ofthe Georgia Department of Technical and Adult Education for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 ofthe Governmental Accounting Standards Board (GASB) Codification ofGovernmental Accounting and Financial Reporting Standards.
The Department of Technical and Adult Education (and thus Okefenokee Technical College) is required to implement the Governmental Accounting Standards Board (GASB) Statement No. 39 Determining Whether Certain Organizations are Component Units - an amendment of Statement No. 14, for fiscal year 2004. This statement requires the inclusion of the financial statements for foundations and affiliated organizations that qualify as component units of the Technical College. These statements (Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets) are reported discretely in the Technical College's financial statements. For fiscal year 2004, Okefenokee Technical College is reporting the activity for the Okefenokee Technical College Foundation, Inc.
See Note 13, for additional component unit disclosures.
FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management Discussion andAnalysisfor State and Local Governments. This was followed in November 1999 by GASB Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities. The State ofGeorgia implemented GASB No. 34 as ofand for the year ended June 30, 2002. As an organizational unit of the State of Georgia, the Technical College also adopted GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38. 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.
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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION 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 ofmateriality, the Technical Colleges ofthe Georgia Department ofTechnical and Adult Education 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.
RESTATEMENT OF PRIOR YEAR NET ASSETS - BEGINNING OF YEAR In the prior fiscal year, the College failed to properly record all of its depreciable capital assets and associated depreciation in accordance with the College's asset capitalization policies. As a result of adjustments made to depreciable capital assets, net assets at July 1, 2003 were reduced by $21,788.00.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include petty cash and demand deposits in authorized financial institutions.
ACCOUNTS RECEIVABLE Accounts receivable consist oftuition and fee charges to students, allotments due from the Georgia Department ofTechnical and Adult Education - Administrative Central Office, reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available.
INVENTORIES Resale inventories are valued at cost using the consumption 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,
-8-

OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS Improvements Other Than Buildings 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, 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 ofthe assets, generally 10 to 40 years for buildings, 15 to 25 years for infrastructure, 15 years for improvements other than buildings, 10 years for library books, and 3 to 10 years for equipment.
To fully portray capital assets acquired by the Technical Colleges of the Georgia Department of Technical and Adult Education, it is necessary to look at the activities ofthe Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to both the Technical College and the Georgia Department ofTechnical and Adult Education. 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 the GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes direct and general obligations ofthe 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 Okefenokee Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2004, GSFIC did not transfer any capital additions to Okefenokee 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. Okefenokee Technical College had an accrued liability for compensated absences in the amount of $381,242.58 as of July 1, 2003. For fiscal year 2004, $378,756.47 was earned in compensated absences and employees were paid $338,162.00, for a net increase of$40,594.47. The ending balance as ofJune 30, 2004 in accrued liability for compensated absences was $421,837.05.
NONCURRENT LIABILITIES Noncurrent liabilities include liabilities that will not be paid within the next fiscal year.

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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS The Technical College's net assets are classified as follows:
Invested in capital assets, net ofrelated debt: This amount represents the Technical College's total investment in capital assets, net ofoutstanding 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 ofrelated debt. (The term "debt obligations" as used in this definition does not include debt ofthe GSFIC as discussed above.)
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.
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) which must be refunded to the Department ofTechnical and Adult Education forremittance to the Office of Treasury and Fiscal Services. At June 30, 2004, 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 Okefenokee Technical College, as a political subdivision ofthe State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.
CLASSIFICATION OF REVENUES The Technical College has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria:
Operating revenues: Operating revenues include activities that have the characteristics ofexchange 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 ofProprietary andNonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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: CASH AND CASH EQUIVALENTS AND OTHER DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to Okefenokee Technical College (and thus the State of Georgia) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
1. Bonds, bill, certificates ofindebtedness, notes, or other direct obligations ofthe United States or of the State of Georgia.
2. Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
3. Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation ofthe 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.

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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 2: CASH AND CASH EQUIVALENTS AND OTHER DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies, which allow agencies of the State of Georgia (and thus Okefenokee Technical College), the option of exempting demand deposits from the collateral requirements.

CATEGORIZATION OF DEPOSITS Cash deposits are categorized by risk as follows:

Category 1 - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the entity or by its agent in the entity's name.

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

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

Okefenokee Technical College At June 30, 2004, the Technical College's cash deposits were as follows:

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 199,146.78 $ 522 207 83 $ 100 000 00 $====0"='0'=0 $ 422 207,83

Component Unit At June 30, 2004, Okefenokee Technical College Foundation, Inc.'s cash deposits were as follows:

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 191 425 00 $ 191,425 00 $ )68 695 00 $====0"'=0""'0 $ 22 730 00

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2004, consists of the following:
Student Tuition and Fees State Appropriation Gifts - GSFIC Federal, State and Private Funds Other
Total Accounts Receivable

$ 23,234.01 6,877.00
122,502.70 125,274.05 84,979.14
$ 362,866.90

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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 4: INVENTORIES

Inventories at June 30, 2004, consists of the following:

Bookstore Other
Total

$ 271,514.04 627.02
$ 272,141.06

NOTE 5: CAPITAL ASSETS

Following are the changes in the College's capital assets for the year ended June 30, 2004:

Balance July I, 2003 (Restated)

Additions

Reductions

Balance June 30, 2004

Capital Assets, Not Being Depreciated:

Land and Land Improvements

$

Construction Work-In-Progress

372,830.00 $ 0.00

411,169.84 73,373.20

$ 783,999.84 73,373.20

Total Capital Assets Not Being Depreciated

$ 372,830.00 $ 484,543.04

$ 857,373.04

Capital Assets, Being Depreciated:

Building and Building Improvements $ 5,008,553.00

Improvements Other Than Buildings

144,920.00

Equipment

1,258,217.47 $

Library Collections

73,099.69

267,821.88 $ 29,900.12

$
57,787.96 1,911.84

5,008,553.00 144,920.00
1,468,251.39 101,087.97

$ 6,484,790.16 $ 297,722.00 $ 59,699.80 $ 6,722,812.36

Less: Accumulated Depreciation: Buildings and Building Improvements $ Improvements Other Than Buildings Equipment Library Collections

1,076,045.51 $ 144,920.00 155,325.19 18,245.01

113,705.82
160,796.01 $ 10,299.98

$
45,017.12 1,529.47

1,189,751.33 144,920.00 271,104.08 27,015.52

$ 1,394,535.71 $ 284,801.81 $ 46,546.59 $ 1,632,790.93

Total Capital Assets, Being Depreciated,

Net

$ 5,090,254.45 $

12,920.19 $

13,153.21 $ 5,090,021.43

Capital Assets, Net

$ 5.463.084.45 $ 497.463 23 $ 13.153 21 $ 5,947,394.47

NOTE 6: DEFERRED REVENUE

Deferred revenue at June 30, 2004, consists of the following:

Prepaid Tuition and Fees Other Deferred Revenue

$ 17,720.25 1,204.82

Totals

$ 18,925.07

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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 7: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2004, was as follows:

Other Liabilities Compensated Absences

Balance July I, 2003

Additions

Reductions

Balance June 30, 2004

Current Portion

$ 381 242.58 $ 378,756.47 $ 338,162.00 $ 421 837 05 $ 230 219 04

NOTE 8: NET ASSETS

Changes in Net Asset activity for the year ended June 30, 2004 was as follows:

Invested in Capital Assets Net of Related Debt
Restricted Expendable
Unrestricted Net Assets
Total Net Assets

Balance July 1, 2003 {Restated)
$ 5,463,084.45

Additions $ 497,463.23

Reductions $ 13,153.21

Balance June 30, 2004
$ 5,947,394.47

2,714.30

2,660,776.21

2,663,490.51

0.00

195,074.31

8,608,696.29

8,596,349.71

207,420.89

$ 5 660 873 06 $ II 766 935 73 $ II 272 993 43 $ 6 154.815.36

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Okefenokee Technical College participates in the Teachers Retirement System ofGeorgia (TRS), a cost-sharing 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 ofGeorgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System ofGeorgia issues a separate stand alone financial audit report and a copy can be obtained from the TRS offices or from the Georgia Department of Audits and Accounts.

Funding Policy Employees ofOkefenokee Technical College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Okefenokee 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 2004, the employer contribution rate was 9.24% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy Fiscal Year

Percentage Contributed

Required Contribution

2004 2003 2002

100% 100% 100%

$ 370,584.92 $ 370,082.71 $ 354,157.54

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description Okefenokee Technical College participates in the Employees' Retirement System ofGeorgia (ERS), a single-employer defined benefit pension plan established by the General Assembly ofGeorgia for the purpose of providing retirement allowances for employees of the State of Georgia.

The benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.

Under both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.

Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest twenty-four consecutive calendar months of salary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.

In addition, the ERS Board 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 ofERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.

- 15 -

OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description The ERS issues a financial report each fiscal year which may be obtained through ERS.
Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Technical College's payroll for the year ended June 30, 2004, for employees covered by ERS was $554,481.48. The Technical College's total payroll for all employees was $5,710,539.21.
Under the old plan, member contributions consist of 7.16% of annual compensation. Of these member contributions, the employee pays the first 1.5% and the Technical College pays the remainder on behalf ofthe employee. Under the new plan, member contributions consist solely of 1.5% of annual compensation paid by employee. The Technical College also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2004, the ERS employer contribution rate for the Technical College amounted to 10.41% of covered payroll and included the amounts contributed on behalf of the employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Total contributions to the plan made during fiscal year 2004 amounted to $64,674.08, of which $57,722.49 was made by the Technical College and $6,951.59 was made by employees. These contributions met the requirements of the plan.
Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2004, financial report which may be obtained through ERS.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Okefenokee 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 ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.

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OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT"D"

NOTE 9: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than$ 3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death ofa member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
The Employees' Retirement System ofGeorgia issues a financial report each fiscal year which may be obtained through ERS.
Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount ofthe member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2004, for employees covered by GDCP was $487,462.90. The Technical College's total payroll for all employees was $5,710,539.21.
Total contributions made by employees during fiscal year 2004 amounted to $36,560.07 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 10: 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 ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. The Department ofCommunity Health has contracted with Blue Cross Blue Shield ofGeorgia to process medical claims and Express Scripts, Incorporated 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 ofAdministrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of
- 17 -

OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 10: RISK MANAGEMENT
Other Risk Management 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 Georgia Department of Technical and Adult Education, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE 11: 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 Okefenokee Technical College expects such amounts, ifany, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Okefenokee Technical College (an organizational unit of the Department of Technical and Adult Education), 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, 2004.
NOTE 12: 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 13: COMPONENT UNIT NOTES
Okefenokee Technical College Foundation, Inc. (foundation) is a legally separate, tax-exempt component unit ofOkefenokee Technical College (college). The foundation acts primarily as a fundraising corporation to supplement the resources that are available to the college in support of its programs. The fourteen member board of the foundation is self-perpetuating and consists of graduates and friends ofthe college. Although the college does not control the timing or amount of receipts from the foundation, the majority of resources or income thereon that the foundation holds and invests are restricted to the activities of the college by the donors. Because these restricted resources held by the foundation can only be used by, or for the benefit of, the college, the foundation is considered a component unit ofthe college and is discretely presented in the college's financial statements.
- 18 -

OKEFENOKEE TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2004

EXHIBIT "D"

NOTE 13: COMPONENT UNIT NOTES
The foundation is a chartered nonprofit corporation that reports under FASB standards, including FASB Statement No. 117, Financial Reportingfor Not-for-Profit Organizations. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports have been reclassified to the GASB presentation for external financial reporting purposes. The foundation's fiscal year is January 1 through December 31.
During the year ended June 30, 2004, the foundation distributed $3,109.75 to the college for restricted purposes. Complete financial statements for the foundation can be obtained from the foundation.

- 19 -

SUPPLEMENTARY INFORMATION - 21 -

OKEFENOKEE TECHNICAL COLLEGE SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET - (NON-GAAP BASIS) BUDGET FUND
"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30, 2004

SCHEDULE "1"

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

BUDGET

ACTUAL(1)

VARIANCEFAVORABLE (UNFAVORABLE)

$

5,043,930.00 $ 5,043,926.71 $

1,283,725.52

1,234,523.99

3,752,303.84

3,706,549.14

$ 10,079,959.36 $ 9,984,999.84 $

-3.29 -49,201.53 -45 754.70
-94,959.52

0.00

123,456.67

123,456.67

$ 10,079,959.36 $ 10,108,456.51 $ _ _ _2::.;8:..:.,4.c...:9c;.7.:...;.1..:...5

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

$

6,312,978.06 $ 6,289,600.62 $

3,040,723.95

2,972,713.29

726,257.35

714,075.54

23,377.44 68,010.66 12,181.81

$ 10,079,959.36 $ 9,976,389.45 $ _ _ _1_03--',_56_9_.9_1

Excess of Funds Available over Expenditures

$

132,067.06 $=====13=2-,0=6=7.=06;;;.

(1) 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 principles.

- 23-

OKEFENOKEE TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2004

SCHEDULE "2"

Totals per Annual Supplement
Accruals June 30, 2003 June 30, 2004
Compensated Absences June 30, 2003 June 30, 2004

SALARIES

TRAVEL

$

5,684,070.18 $ 103,763.55

-17,969.16 21,246.42

-373,553.90 396,745.67

$

5,710,539.21 $ 103,763.55

- 25-

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS

OKEFENOKEE TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.