STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS I SANDERSVILLE TECHNICAL COLLEGE SANDERSVILLE, GEORGIA INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES FOR THE FISCAL YEAR ENDED JUNE 30, 2006 Russell W. Hinton State Auditor SANDERSVILLE TECHNICAL COLLEGE - TABLE OF CONTENTS - INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBIT A BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 October 23, 2006 Members of the State Board Technical and Adult Education Members of the Local Board of Directors and Honorable Lloyd Horadan, President Sandersville Technical College Independent Accountant's Report on Applying Agreed-Upon Procedures Ladies and Gentlemen: We have performed the procedures enumerated below, which were agreed to by the College and the Administrative Central Office (Oversight Unit) ofthe Department ofTechnical and Adult Education, solely to assist you in assessing the accuracy ofthe annual financial statement information reported to the Administrative Central Office by the College for inclusion in the State's Comprehensive Annual Financial Report (CAFR) and Single Audit Report; and to assist you in assessing the accuracy of budget basis information provided in the Budget Comparison and Surplus Analysis Report, which is attached as Exhibit A. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency ofthese procedures is solely the responsibility ofthe parties specified in this report. Consequently, we make no representation regarding the sufficiency ofthe procedures described below either for the purpose for which this report has been requested or for any other purpose. 1. Review selected balance sheet items reported on the annual financial statement worksheets (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger. Accounts Receivable, Salaries Payable, and Deferred Revenue were not properly reported on the financial statements. Variances of$11.80, $33.18 and $81.53, respectively, were noted between the subsidiary listings and amounts reported on the annual financial statements for these accounts. 2. Obtain the College's GAAP basis worksheets for Statement ofNet Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) information that was submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these worksheets properly support activity reported in the College's accounting records. The College did not properly reconcile Federal Grants and Contracts revenue reported on the financial statements to the Schedule of Expenditures ofFederal Awards (SEFA) resulting in a variance of$126,134.64. This variance consisted of Federal Grants and Contracts of $128,429.37 that were improperly classified as Local Grants and Contracts and $-2,294.73 that was unidentified. Revenue and expense activity was incorrectly reported on the SRECNA. Federal Grants and Contracts revenue, in the amount of $128,429.37, were incorrectly reported on the SRECNA as Local Grants and Contracts. 3. Obtain the College's worksheets for financial statement note disclosure information submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, Long-Term Debt, Lease Obligations and Retirement Plans have been properly reported. Accumulated Depreciation for Buildings and Building Improvements reported on the financial statement worksheets and the capital asset note disclosure information were not properly reconciled to the College's general ledger resulting in a variance of $19,236.44. Invested in Capital Assets, Net of Related Debt was not properly reported on the SRECNA information submitted. An unidentified variance of$481.37 was noted. 4. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's annual financial statement worksheets. The year end GAAP entry to defer the portion of revenues that were recognized in relation to year end encumbrances was not made correctly. The entry was made to Capital Grants and Gifts - State although no revenues were originally recorded in this account resulting in a debit balance of $28,709.21. The entry should have been made to Nonoperating Revenues - Grants and Contracts State. The year end GAAP entry to record current year capital asset deletions was not made correctly. Building and Building Improvement deletions in the amount of $49,912.52 were recorded as Grants and Contracts - State instead of Loss on Sale of Assets as required for correct presentation. 5. Confirm that State Appropriation revenues, receivables and remittances ofprior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements. We did not note any exceptions as a result of our procedures. 6. Obtain listing ofwrite-offrequests for accounts receivable less than $3,000.00 for fiscal year 2006. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements. We did not note any exceptions as a result of our procedures. 7. Verify that the listing ofsalaries, travel, and per diem and fees reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 reconciles to amounts recorded in the College's financial statements. Salaries reported to the Department of Audits were not reconciled with amounts recorded in the financial statements. A variance of $33.20 was noted. 8. Review the year end Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that budget information presented in this Report supports activity reported in the College's accounting records and determine if any budget overexpenditures exist. We did not note any exceptions as a result of our procedures. 9. Obtain documentation for Budget basis reserves reported by the College on the Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate. The College reported a Federal Financial Assistance Reserve of $-68.15. The reserve should have been reported as $419.36 which resulted in a misstatement of $487.51. The College included Tuition and Fees in the Prior Year Local Funds Reserve which resulted in a misstatement of $378.92. The College reported Surplus of$5,889.03. Surplus should have been reported as $5,780.44 which resulted in a misstatement of $108.59. 10. Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records. We did not note any exceptions as a result of our procedures. These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~W.d:Lk Russell W. Hinton, CPA, CGFM State Auditor RWH:gp EXHIBIT SANDERSVILLE TECHNICAL COLLEGE BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT YEAR ENDED JUNE 30, 2006 EXHIBIT"A" REVENUES State Appropriation State General Funds Federal Funds Other Funds Total Revenues EXPENDITURES Adult Literacy Technical Education Total Expenditures Excess of Funds Available over Expenditures FUND BALANCE JULY 1 Unreserved ADJUSTMENTS Prior Year Payables/Expenditures Prior Year Receivables/Revenue Unreserved Fund Balance (Surplus) Returned to Department of Technical and Adult Education Year Ended June 30, 2005 Refunds to Granters Federal Financial Assistance Returned to Georgia Department of Technical and Adult Education FUND BALANCE JUNE 30 SUMMARY OF FUND BALANCE Reserved Federal Financial Assistance Local Grants and Contracts Live Works Projects Sales and Services Technology Fees Uncollectible Accounts Receivable Inventories Total Reserved Unreserved Surplus Total Fund Balance BUDGET ACTUAL VARIANCEFAVORABLE (UNFAVORABLE) $ 3,637,714.00 $ 3,637,714.00 $ 1,181,925.23 914,050.76 1,844,698.25 1,640,123.32 $ 6,664,337.48 $ 6,191,888.08 $ 0.00 -267,874.47 -204 574.93 -472 449.40 $ 575,057.25 $ 542,255.59 $ 6,089,280.23 5,646,233.59 $ 6,664,337.48 $ 6,188,489.18 $ $ 0.00 $ 3,398.90 $ 32,801.66 443 046.64 475 848.30 3 398.90 103,695.43 3,650.44 12,243.72 -972.82 -3 428.39 $ 118,587.28 $ -68.15 1,457.80 10,458.16 378.92 1,317.57 6,229.05 92,924.90 $ 112,698.25 5 889.03 $ ==1=1=8"=5=8=7.=28=