Review report, state of Georgia, Sandersville Technical Institute, Sandersville, Georgia, year ended June 30, 1995

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

REVIEW REPORT
STATE OF GEORGIA SANDERSVILLE TECHNICAL INSTITUTE
SANDERSVILLE, GEORGIA YEAR ENDED JUNE 30, 1995

SANDERSVILLE TECHNICAL INSTITUTE - TABLE OF CONTENTS -

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALLFUNDTYPESANDACCOUNTGROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

5

E NOTES TO THE FINANCIAL STATEMENTS

6

SUPPLEMENTARY INFORMATION

F COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUNDS

22

SCHEDULE

1 CASH AND CASH EQUIVALENTS

23

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 20, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe State Board of Technical and Adult Education Members ofthe Local Board ofDirectors
and Honorable Owen W. Pruitt, President Sandersville Technical Institute
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through E) of Sandersville Technical Institute as of and for the year ended June 30, 1995, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of Sandersville Technical Institute.
A review consists principally of inquiries of Institute personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware ofany material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Our review was made for the purpose ofexpressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibit F and Schedule 1) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries
95ARL-4T

and analytical procedures applied in the review of the financial statements, and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
a--..c.---. .
Claude L. Vickers State Auditor
CLV:cm 95ARL-4T

FINANCIAL STATEMENTS - 1-

SANDERSVILLE TECHNICAL INSTITUTE COMBINED BALANCE SHEET {STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS
JUNE 30. 1995

EXHIBIT"A"

~
Cash and Cash Equivalents Accounts Receivable
State Funds Fixed Assets
Equipment Amount to be Provided for Payment d
Accruec:I Compensated Absences
Total Assets

GOVERNMENTAL FUND TYPE BUDGET

FIDUCIARY FUND TYPE
AGENCY

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTAL (Memorandum
On!l}

$

141.00

$

141.00

$

701.00

701.00

$

5,567.13

5,567.13

$

17,828.98

17,828.98

$

701.00 $

141.00 $

5,567.13 $

17,828.98 $

24,238.11

LIABILITIES AND FUND 1:;QUITY

Liabilities

Cash Overdraft

$

Funds Held in Custody for Others

Compensated Absences

Total Liabilities

$

Fund Equity

Investment in General Fixed Assets

Fund Balance

Unreserved

Designated

Surplus

Regular

$

Total Fund Equity

$

Total Liabilities and Fund Equity

$

381.06 $
381.06 $

141.00 141.00
$

$ $
5,567.13

$ 17,828.98 17,828.98 $
$

381.06 141.00 17,828.98
18,351.04
5,567.13

319.94 319.94

$

5,567.13

319.94

$

5,887.07

701.00 $

141.00 $

5,567.13 $

17,828.98 $

24,238.11

See Independent ~ntanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement. -2-

SANDERSVILLE TECHNICAL INSTITUTE STATEMENT OF CHANGES IN FUND BALANCE <STATUTORY BASIS}
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30 1995
FUND BALANCE JULY 1
Reserved
ADDITIONS Excesa of Funds Available over Expenditures
Exhlbit"C"
FUND BALANCE JUNE 30
(To Exhibit "Aj

EXHIBIT"B"

BUDGET FUND

$

0.00

319.94 $ = = = =3= 19.= 94

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an Integral part of this statement.
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SANDERSVILLE TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1995
FUNDS AVAILABLE REVENUES
STATE FUNDS Allotment from Georgia Department of Technical and Adult Education Admini&trative Central Office
OTHER REVENUES RETAINED Application Fees
Tuition
Total Other Revenues Retained
Total Funds Available
EXPENDITURES PERSONAL SERVICES-INSTITUTIONS
Salaries and Wages Employer's Contribution& for:
F.I.C.A. Retirement Health Insurance
QPER6J:ING EXPENSES-INSTITUTIONS OtherCoat& Supplies and Materials Utilities Rents (other than Real Estate) other Operating Expense& Publication& and Printing Travel Equipment Equipment Purchases Real Estate Rentals Per Diem, Fees and Contracts Per Diem and Fees
Total Expenditures Excess of Funds Available over Expenditures
See Independent ACQOUntanrs Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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EXHIBIT"C"

$ _____133.....,_,660a.;.,_._ffl_

$

510.00

13,680.00

s _ _ _1_4._,190_.oo_

$ ====1=4=7,=850===.6=7

$

ss,ns.so

1,059.53 7,080.30 7,339.56

$

74,255.89

$

20,551.18

2,459.83

25.00

11,400.42

94.00

2,803.51

7,484.09 19,500.00

8,956.81

$

73,274.84

$

147,530.73

319.94

$ ====1=4=7=,850==.ffl=

SANDERSVILLE TECHNICAL INSTITUTE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET
BUDGET FUND N DEPARTMENT OF TECHNICAL AND ADULT EDUCATION
YEAR ENDED JUNE 30 1995

EXHIBITo

FUNDS AVAILABLE
REVENUES
State Funds Other Revenues Retained

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$

138,591.00 $

133,660.67 $

14,370.00

14,190.00

-4,930.33 -180.00

$

152,961.00 $

147,850.67 $ _ _ _-5_,_1_1_0_.33_

EXPENDITURES
Personal Servic:es-lnstitutions Operating Expenses-Institutions

$

79,452.00 $

74,255.89 $

73,509.00

73,274.84

5,196.11 234.16

$

152,961.00 $

147,530.73 s ____s_,430_.21_

Excess of Funds Available over Expenditures

$

319.94 $ =======31=9=.9=4

See Independent Accountanfs Combined Report on Review of Financlal Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement. -5-

SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXfilBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Sandersville Technical Institute, which began holding classes Spring Quarter of 1995, is one oftwenty-nine (29) State supported member institutes of postsecondary education in Georgia which comprise the Georgia Department of Technical and Adult Education, an organizational unit of the State of Georgia. The accompanying financial statements reflect the start-up operations of Sandersville Technical Institute as a separate reporting entity.
The lnstitute's Local Board ofDirectors is composed of nine (9) members serving staggered three-year terms who are appointed by the State Board of Technical and Adult Education. Appropriation of State funds is made to the Georgia Department ofTechnical and Adult Education by the General Assembly of Georgia. The Department's Administrative Central Office determines the amount of State funds to be received by Sandersville Technical Institute. The Institute does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Sandersville Technical Institute is considered an organizational unit of the Georgia Department of Technical and Adult Education for financial reporting purposes because ofthe significance of its legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING Sandersville Technical Institute uses funds and account groups to report on its financial position and the results ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds.
Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1994-1995. This fund also includes operations from various institutional services provided to students, faculty, and/or staff which are funded by fees charged to participants that are directly related to, but not necessarily equal to, the cost of service. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
FIDUCIARY FUND TYPE
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at cost or at estimated historical cost if historical cost is not practically determinable. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets.
The cost of normal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life of the assets are included in the General Fixed Assets Account Group.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments, and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources. , In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund returns its unreserved fund balance (surplus) to the Administrative Central Office ofthe Department of Technical and Adult Education for remittance to the Office of Treasury and Fiscal Services in the subsequent fiscal year.
GOVERNMENTAL FUND TYPE BUDGET FUND
Except as disclosed in the following paragraph, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under
the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they
are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues that are accrued include primarily State funds, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Expenditures are recorded when the related
-7-

SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXIIlBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND
fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources.
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
FIDUCIARY FUND TYPE AGENCY FUNDS
Agency Funds are custodial in nature and do not measure results of operations or have a measurement focus. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.
BUDGET The Georgia Department of Technical and Adult Education - Administrative Central Office receives State appropriation allotments and certain Federal funds for the various technical institutes throughout the State. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 1994-1995. The budget allocation and disbursement ofthese funds is made to the various technical institutes by the Administrative Central Office. In addition, the technical institutes receive certain Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include a bank demand deposit and funds on deposit with the Georgia Department of Technical and Adult Education - Administrative Central Office.
ACCOUNTS RECEIVABLE Accounts receivable consist ofallotments due from the Georgia Department of Technical and Adult Education - Administrative Central Office.
INVENTORIES No inventories ofsupplies are reported in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
UNRESERVED FUND BALANCE In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund's unreserved fund balance is returned to the Georgia Department of Technical and Adult Education - Administrative Central Office for remittance to the Office of Treasury and Fiscal Services in the subsequent fiscal year as surplus, as follows:
REGULAR - An amount of unexpended general appropriations available to the State for reappropriation in subsequent years.
COMPENSATED ABSENCES Compensated absences represent obligations of the Institute relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the Budget Fund for the current portion ofthis obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the allotment of State funds each year to the Institute to cover the cost of annual leave paid to terminated employees.
The liability for compensated absences at year-end is reported in the General Long-Term Debt Account Group for governmental funds.
MEMORANDUM ONLY - TOTAL COLUMN The total column on the Combined Balance Sheet (Statutory Basis) is captioned "Memorandum Only" to indicate that it is presented only to facilitate financial analysis. The column does not present information that reflects financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations of the United States or ofthe State of Georgia.
(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations ofthe counties or municipalities ofthe 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 ofthe bonds for this purpose.
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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Banlc for Cooperatives, the Farm Credit Banlcs, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.

As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which include technical institutes) the option of exempting demand deposits from the collateral requirements.

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all banlc balances which include demand deposits and/or interest bearing accounts. The banlc balances as of June 30, 1995, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:

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

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

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

Carrying Amount

Bank Balances

Risk Categories

2

3

Cash Deposits

21 00 S 51000 S 51000 S

O00 $.===0=00=

Certain deposits of Sandersville Technical Institute are disclosed by custodial credit risk categories in the review report of the Georgia Department of Technical and Adult Education - Administrative Central Office.

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTE 3: OPERATING LEASES

Sandersville Technical Institute has entered into certain agreements to lease classroom space and equipment which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the Institute has the option ofrenewing the lease on a year-to-year basis. Future minimum lease payments for operating leases as ofJune 30, 1995, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1996

$ 12 000.00

Expenditures for rental ofclassroom space and equipment under operating leases for the year ended June 30, 1995, totaled $19,500.00.

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in Official Code of Georgia Annotated Section 50-16-161, only those items with an acquisition cost of $1,000.00 or greater are reflected in the General Fixed Assets Account Group.

The following is a summary ofchanges ofequipment for the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1994
Additions Deductions
Balance June 30, 1995

$

0.00

5,567.13 0.00

$ 5,567.13

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1995, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group:

Balance July 1, 1994
Additions Annual Leave Earned and Utilized (Net)(*) Salaries and Wages Salary-Related Fringe Benefits
Balance June 30, 1995
(*) Includes amounts earned at July 1, 1994.

$

0.00

17,535.92 293.06
$ 17,828.98

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXl-llBIT "E"

NOTE 6: RISK MANAGEMENT
Public Entity Risk Pool The State Personnel Board - Merit System ofPersonnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units ofgovernment ofthe State of Georgia and 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 State Personnel Board - Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board.
Other Risk Management The Department ofAdministrative 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 services 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 ofcommercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Institute, 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 state agencies by DOAS to provide claims servicing and claims payment.
NOTE 7: DEFERRED COMPENSATION PLAN
The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account of each participant. Financial information relative to the plan is presented in the financial report ofthe State Personnel Board - Merit System of Personnel Administration for the year ended June 30, 1995.

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTES: RETIREMENTPLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Sandersville Technical Institute participates in the Teachers Retirement System of Georgia (TRS), a costsharing multiple-employer public employee retirement system (PERS) established by the General Assembly ofGeorgia for the purpose of providing retirement allowances and other benefits for teachers ofthe State of Georgia. The Institute's payroll for the year ended June 30, 1995, for employees covered by TRS was $54,908.50. The Institute's total payroll for all employees was $58,776.50.
Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member ( 1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless of age, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number of years of creditable service up to 40 years. Any member who has between 25 and 30 years of creditable service and is at least 55 years
ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by '1/o for each year or fraction thereofby which the member has less than 30 years of service. The
normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date of death or up to the time of disability.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
Contributions Required and Contributions Made Employees of the Institute who are covered by TRS are required to pay 5% of their gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1995, the employer contribution rate was 11.81% for covered employees. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions to the plan made during fiscal year 1995 amounted to $9,230.19, of which $6,484.69 was made by the Institute and $2,745.50 was made by employees. These contributions represented 11.81% (Institute) and 5% (employees) of covered payroll.

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXIIlBIT "E"

NOTE 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation
The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 of the Governmental Accounting Standards Board (GASB) that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of the PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among similar PERS.

The total unfunded pension benefit obligation ofTRS as of June 30, 1994, which was the latest information available, was as follows:

Total pension benefit obligation

$ 15,313,743,000.00

Net assets available for benefits, at cost

14,254,785,000.00

Unfunded pension benefit obligation

$ 1.058,958,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1995, were $565,117,811.00. The Institute's contribution for the year ended June 30, 1995, of $6,484.69 was actuarially determined and represented .0011% of total contributions made by all participating employers.

Trend Information Historical trend information is presented in the financial report ofTRS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTES: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Sandersville Technical Institute participates in the Employees' Retirement System ofGeorgia (ERS), a singleemployer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State ofGeorgia. The Institute's payroll for the year ended June 30, 1995, for employees covered by ERS was $3,808.00. The Institute's total payroll for all employees was $58,776.50.
Benefits The benefit structure of ERS 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.
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. Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, the number of years 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 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. 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 30 years of service regardless ofage.
Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofannual compensation and 4.75% of annual compensation paid by the Institute on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% ofannual compensation paid by employee. The Institute also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. Contributions are also made on amounts paid for accumulated leave of retiring employees.
Total contributions to the plan made during fiscal year 1995 amounted to $614.61, of which $567.01 was made by the Institute and $47.60 was made by employees. These contributions represented 14.89% (Institute) and 1.25% (employees) of covered payroll.

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SANDERSVILLE TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "E"

NOTES: RETIREMENTPLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation
The amount shown as the "pension benefit obligation" is a standardized disclosure measure of the present value ofpension benefits, adjusted for the effects ofprojected salary increases and step-rate benefits, estimated to be payable in the future as a result ofemployee service to date. The measure is intended to help users assess the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value ofcredited projected benefits, and is independent of the funding method used to determine contributions to the plan.

The pension benefit obligation was computed as part ofan actuarial valuation performed as ofJune 30, 1994. Significant actuarial assumptions used in the valuation include the following:

(1) The present value offuture pension benefits paid was computed using a discounted rate of7.5%. This rate is also the same rate assumed to be earned on investments in the plan in future years.

(2) Future pension payments reflect the following assumed salary increases as a result ofinflation and merit increases:

~
20
25 30 35 40 to 65

Percentage
9.5%
8.5%
6.5% 6.0% 5.7%

(3) ERS has the authority to grant cost-of-living adjustments by State statute. As ofJune 30, 1994, cost-of-living adjustments have been included in the pension benefit obligation.

The total unfunded pension benefit obligation ofERS as ofJune 30, 1994, which was the latest information available, was as follows:

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SANDERSVILLE TECHNICAL INSTITUTE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995

EXJilBIT "E"

NOTES: RETIREMENTPLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation:

Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving benefits

$ 2,227,653,000.00

Current employees:

Accumulated contributions

648,516,000.00

Employer financed - vested

1,085,190,000.00

Employer financed - nonvested

1,206,805,000.00

Total pension benefit obligation

$5,168,164,000.00

Net assets available for benefits, at cost

4,858,015,000.00

Unfunded pension benefit obligation

$ 310.149.000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers.

Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages ofannual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date.

Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Institute's contribution for the year ended June 30, 1995, of $567.01 was actuarially determined and represented .0002% oftotal contributions made by all participating employers.

Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation.

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SANDERSVIl..LE TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30, 1995

EXIIlBIT "E"

NOTES: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Trend Information Historical trend infonnation is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.
NOTE 9: LEAVE POLICIES
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences
Employees earn one and one-quarter days of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 10: NONMONETARY TRANSACTIONS
The Georgia State Financing and Investment Commission (GSFIC), a unit of State government, is responsible for the issuance of state debt and for the investment and accounting for proceeds derived from the issuance of state debt. In addition, GSFIC is authorized to acquire and construct projects for the benefit of units of State government or to contract with units of State government for the construction or acquisition of capital outlay projects. During the fiscal year ended June 30, 1995, the Georgia State Financing and Investment Commission paid $2,759,968.85 to various vendors for approved proJects related to Sandersville Technical Institute.
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 expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institute expects such amounts, ifany, to be immaterial to its overall financial position.

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SANDERSVILLE TECHNICAL INSTITUTE
NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30. 1995

EXl-llBIT "E"

NOTE 11: CONTINGENCIES
Litigation, claims and assessments filed against Sandersville Technical Institute (as an organizational unit of the Department of Technical and Adult Education), if any, are generally considered to be actions against the
State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self-insurance which provides coverage for such
litigation, claims and assessments. 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, 1995.
NOTE 12: BONDING INFORMATION
The President and all employees of Sandersville Technical Institute are bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1995. Under this agreement, the public employee dishonesty coverage insures Sandersville Technical Institute to a maximum of $1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance ofduty coverage insures the Institute to a maximum of $1,000,000.00 against loss sustained from failure of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.
All employees of Sandersville Technical Institute are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 011675 2 and 626 012294 4, on which the premiums were paid to October 1, 1995. Under these additional public employee dishonesty coverages, the policies insure the Institute to a maximum of$9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

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QZ
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SUPPLEMENTARY INFORMATION - 21 -

SANDERSVILLE TECHNICAL INSTITUTE COMBINING STATEMENT OF CHANGES IN ASSETS AND LlABILlTlES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30.1995

EXHIBITP

fU.NQ HOPE Scholarship Program Student Activities FWld student Insurance

ASSETS/ LIABILITIES JULY1 I 1994

$

0.00 $

0.00

0.00

ADDITIONS 15,060.00 $

DEDUCTIONS 15,060.00 $

ASSETS/ LIABILITIES JUNE 3011995
0.00

120.00

120.00

60.00

39.00

21.00

$

0.00 $

151240.00 $

151099.oo s ==========14=1=.oo=

See accompanying notes and Independent Accountant's Combined Report on
Review of Financial statements and Supplementary Information.
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SANDERSVILLE TECHNICAL INSTITUTE CASH AND CASH EQUIVALENTS JUNE30 1995
NQNINTEREST BEARING ACCOUNTS
The Geo. 0. Warthen Banlc, Sandersville, Georgia Funds Held on Deposit with the Georgia Department of
Technical and Adult Education Administrative Central Office

SCHEDULE 1

$

21.00

-261.06

$ ====2=40=.=06=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
.23.