Savannah Technical College, Savannah, Georgia, independent accountant's report on applying agreed-upon procedures for the fiscal year ended June 30, 2011

SAVANNAH TECHNICAL COLLEGE
1 SAVANNAH, GEORGIA
I INDEPENDENT ACCOUNTKNT'S
I REPORT ON APPLYING AGREED-
UPON PROCEDURES FOR FISCAL YEAR ENDED JUNE 30,2011
w. Russell Hint021
State Auditor

SAVANNAH TECHNICAL COLLEGE -TABLE OF CONTENTS -

INDEPENDENTACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES

EXH l BITS

A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

1

B STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

2

C STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE

RUSSELLW.HINTON
STATE AUDITOR
(404) 666-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Sb-eet, S. W., Suite 1-156 Atlanta, Georgia 30334-8400
December 7, 2011

Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and Honorable Kathy S. Love, President Savannah Technical College
Independent Accountant's Report on A ~ ~ l v i nMer.eed-Upon Procedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the College and the System Office (Oversight Unit) of the Technical College System of Georgia, solely to assist you in assessing the accuracy of the annual financial statement information reported to the System Office by the College for inclusion in the State of Georgia's Comprehensive Annual Financial Reprt(CAFR) and Single Audt Report; and to assist you in assessing the accuracy of budget basis information provided in the Summary Budget Compan'son and Surplus Anahsis Rep* Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source, and the Statement of Changes To Fund Balance By Program and Funding Source which are attached as Exhibits A, B and C, respectively. Savannah Technical College's management is responsible for the financial information reported to the System Office of the Technical College System of Georgia. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
1. Review selected balance sheet items reported on the annual financial statement worksheets (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger.
Cash and Accounts Payable were overstated by $1,047,354.56 on the financial statements as presented for audit This was due to an inter-fund payable that was not eliminated between the Operating and Payroll bank accounts on the general ledger. The auditor proposed a journal entry to eliminate the Accounts Payable and correct the Cash balance.
2. Obtain the College's GAAP basis worksheets for Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) information that was submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these worksheets properly support activity reported in the College's accounting records.
We did not note any exceptions as a result of our procedures.

3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
We did not note any exceptions as a result of our procedures.
4. 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.
We did not note any exceptions as a result of our procedures.
5. 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.
We did not note any exceptions as a result of our procedures.
6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2011. 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.
8. Verify that the listing of salaries and travel 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.
We did not note any exceptions as a result of our procedures.
9. Review the year end Budgetary Statements including the Summaly Budget Comparison and
Surplus Analysis Report (Exhibit A), Statement of Funds Available and Expenditures Compared to
Budget By Program and Funding Source (Exhibit B) and the Statement of Changes To Fund Balance By Program and Funding Source (Exhibit C). Confirm that budget information presented in these statements supports activity reported in the College's accounting records, the legal level of budgetary control (funding source within program) was maintained, and determine if any budget overexpenditures exist.
W e did not note any exceptions as a result of our procedures.

10. Obtain documentation for Budget basis reserves reported by the College on the Summay Budget Comparison and Surplus Analysis Repott (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
Current year Surplus, Fund Balance Reserved for Bookstore and Fund Balance Reservedfor Tuition were incorrectly reported on the budgetaryfinancial statements.
The Technical College charged bookstore personal service expenditures to Vocational Education State rather than to the Bookstore funding source, causing current year
Surplus to be understated by $5,712.61. The auditor proposed journal entries to
reclassify these expenditures and properly record Surplus and Fund Balance Reservedfor Bookstore.
Additionally, the Technical College moved bookstore operating expenditures to Tuition causing the two reserves to be misstated by $449,297.36. In the Tuition funding source, the excess of revenues over expenditures is only lapsable beyond 15%of its current revenue. The auditor proposed a journal entry to reclassifythese expenditures and properly record the Fund Balance Reserves for Tuition and Bookstore.
11. 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.
12. Review the Schedule of Expendituresof Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records.
We did not note any exceptions as a result of our procedures.
13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.
We did not note any exceptions as a resultof our procedures.
14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner.
There were numerous reconciling items/errors that were not corrected timely on several of the bank reconciliations. The net of these items caused a likely
overstatementof cash at fiscal yearend in the amount of $152,023.79.
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,

n

\ *\

~ u & l l W. Hinton, CPA, CGFM State Auditor

EXHIBITS

SAVANNAH TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
YEAR ENDEDJUNE 30.2011

REVENUES
State Appropr~at~on State General Funds
Federal Funds Other Funds
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS
CARRY-OVER FROM P W R YEARS
Transfers from Reserved Fund Balance
Total Funds Available
EXPENDITURES
~ d u lLt~teracy Economic Development Technical Educat~on
Total Excendltures
Excess of Funds Available over Expend~tures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prlor Year Payables/Expenditures Prlor Year Receivables/Revenues Unreserved Fund Balance (Surplus)Returned
From the TechnicalCollege Year EndedJune 30.2010
Refunds to Grantors Federal FinancialAssistance Returnedto Technical College System of Georg~a Year EndedJune 30.2010
Prior Year ReservedFund Balance Includedin Funds Available
FUND BALANCEJUNE30
SUMMARY OF FUND BALANCE
Reserved Inventories Federal Financ~aAl ssistance Sales and Services Lave Work Projects Prior Year Local Funds Technology Fees Bookstore Tuition
Total Reserved
unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

EXHIBIT "A"
VARIANCE FAVORABLE (UNFAVORABLE)

SAVANNAH TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
YEAR ENDED JUNE 3 0 . 2 0 1 1

Adult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Adult Literacy
Economic Development Other Funds
Technical Education State Approprlat~on State General Funds Federal Funds Federal Funds Not Specifically ldenttffed Arnerlcan Recovery and Reinvestment Act Federal Funds - Chlld Care Block Grant Federal Funds Not Speclflcally Identifled Other Funds
Total Technical Education
Total Operating Activity

Origlnal Appropriation

Amended Appropriation

F~nal Budget

Current Year Revenues

Funds Available Compared to Budget

Prior Year Carryaver

Adjustments and Program Transfers

Total Funds Available

Variance Posltive (Negat~ve)

Expend~turesCompared to Budget

Actual

Variance Posltlve (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expend~tures

SAVANNAH TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
YEAR ENDEDJUNE 30,2011

M u l t Liiracy State Appropr~at~on State General Funds Federal Funds Federal Funds Not Specifically ldentified Other Funds
Total Adult Literacy
Economic Development Other Funds
Technical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically ldentified Amerlcan Recovery and Reinvestment Act Federal Funds -Child Care Block Grant Federal Funds Not Specifically ldent~f~ed Other Funds
Total Techn~caEl ducation
Total Operating Actlvlty
Prior Year Reserves Not Available for Expenditure Inventories Refunds to Grantors

Beginning Fund Balance/(Oeficit)
July 1

Fund Balance Carr~edOver from
Prior Period as FundsAvailable

Return of Fiscal Year 2010
Surplus

Prior Period Adjustments

Budget Unit Totals

Other Adjustments

Early Return FiscalYear 2011
Surplus

Excess (Defic~ency) of Funds Available
Over/(Under) Expenditures

End~ngFund Balance/(Def~cit)
June 3 0

Analysis of Ending Fund Balance

Resewed

Surplus/(Deficit)

Total

Summary of End~ngFund Balance Resewed
lnventor~es Federal Financial Ass~stance Sales and Services Live Work Projects Prior Year Local Funds Technology Fees Bookstore Tuition Unreserved Surplus
Total EndlngFund Balance June 3 0

--- $ 4.033.144.80 $

13,808.25 $ 4,046,953.05