Southeastern Technical College, Vidalia, Georgia, management report for fiscal year ended June 30, 2009

SOUTHEASTERN TECHNICAL COLLEGE
VIDALIA, GEORGIA
MANAGEMENT REPORT FOR FISCAL YEAR ENDED JUNE 30, 2009
A Member College of the Technical College System of Georgia
Georgia Department of Audits and Accounts Russell W. Hinton State Auditor

SOUTHEASTERN TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

LETTER OF TRANSMITTAL

SELECTED FINANCIAL INFORMATION

EXHIBITS

A STATEMENT OF NET ASSETS - (GAAP BASIS)

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS -

(GAAP BASIS)

3

C STATEMENT OF CASH FLOWS -(GAAP BASIS)

5

D SELECTED FINANCIAL NOTES

6

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET- (STATUTORY BASIS)- BUDGET FUND

18

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(STATUTORY BASIS) BUDGET FUND

19

3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING

SOURCE COMPARED TO BUDGET

(STATUTORY BASIS) BUDGET FUND

20

4 RECONCILIATION OF SALARIES AND TRAVEL

23

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I FINANCIAL

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
September 14, 2009

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors Honorable Ronald Jackson, Commissioner Technical College System of Georgia
and Honorable Cathryn Mitchell, President Southeastern Technical College
Ladies and Gentlemen:
As part ofour audit ofthe basic financial statements ofthe State ofGeorgia presented in the State of Georgia Comprehensive Annual Financial Report and the issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2009, we have performed certain audit procedures at Southeastern Technical College. Accordingly, the financial statements and compliance activities ofSoutheastern Technical College were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996.
This Management Report contains information pertinent to the financial and compliance activities of Southeastern Technical College as of and for the year ended June 30, 2009. Information contained in this report is a by-product ofour audit ofthe basic financial statements ofthe State ofGeorgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1, is enumerated in the Table of Contents.

This report is intended solely for the information and use ofmanagement of Southeastern Technical College, members of the Local Board of Directors, and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,

,

w.~JS:

Rus 11 W. Hinton, CPA, CGFM State Auditor

RWH:as

SELECTED FINANCIAL INFORMATION - 1-

SOUTHEASTERN TECHNICAL COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS)
JUNE 30, 2009
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Prepaid Items Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Salaries Payable Accounts 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 Unrestricted
Total Net Assets

EXHIBIT "A"

$

143,593.49

83,876.94 431,339.89
3,848.00 143,515.12

$

806,173.44

17,150,083.65 $ 17,956,257.09

$

12,102.82

76,621.11

4,240.36

66,903.21

283,903.18

$

443,770.68

204,903.82

$

648,674.50

$ 17,150,083.65 157,498.94

$ 17,307,582.59

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SOUTHEASTERN TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS- (GAAP BASIS)
YEAR ENDED JUNE 30, 2009

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 Interest Expense Other Nonoperating Revenues Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Local Nongovernmental
Total Capital Grants and Gifts
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

$ 1,999,687.83 -131,473.86
26,714.76 26,170.00 410,404.49 67i707.31
$ 213991210.53

$ 5,397,029.69 1,228,776.43 51,997.01 1,645,654.86 651,685.32 990,877.87 844i759.70
$ 1018101780.88
$ -814111570.35

$ 5,674,432.27
2,247,843.21 292,480.67 2,371.37 -145.92 197,323.67 -4981833.54
$ 719151471.73
$ -4961098.62

$

22,954.95

165,625.00

31261.83

$

191,841.78

$

-304,256.84

1716111839.43

$ 17,307,582.59

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SOUTHEASTERN TECHNICAL COLLEGE STATEMENT OF CASH FLOWS- (GAAP BASIS)
YEAR ENDED JUNE 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments 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 Other Nonoperating Receipts
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of Capital Assets Principal Paid on Capital Debt and Lease Interest Paid on Capital Debt and Lease
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 Net Income (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable Inventories Prepaid Items Accounts Payable Salaries 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 Gifts Received for Other than Capital Purposes
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EXHIBIT "C"

$ 1,863,954.45 5,557.05
410,404.49 -2,835, 166.04 -5,356,666.74 -1,645,654.86
1241150.80
$ -7.433.420.85

$ 5,674,432.27 22,711.60
2,200,915.71 -2011207.09
$ 716961852.49

$ -218,122.76 -2,266.08 -145.92
$ -220,534.76

$

2 371.37

$

45,268.25

981325.24

$ ======1=43=15=9=3=4=9

$ -8,411,570.35
844,759.70 4,069.71
60,024.19 826.00
28,646.44 -9,972.13
786.55 49,009.04
$ -7.433,420.85
$ -191 841.78 $ -1001301.78

SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Southeastern Technical College is one of thirty-three (33) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Southeastern Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of seven (7) 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 Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount ofState appropriations to be received by Southeastern Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Southeastern Technical College is considered an organizational unit ofthe Technical College System of Georgia 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 (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
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 of outstanding 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 of related debt.
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) of $5,938.67. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of Treasury and Fiscal Services.
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.

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 2: DEPOSITS
DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) 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, bills, certificates of indebtedness, notes, or other direct obligations of the 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 ofany public authority created by the laws ofthe State ofGeorgia, 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 Horne Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Horne Loan Mortgage Association, and the Federal National Mortgage Association.
6. Guarantee or insurance ofaccounts 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 allows agencies of the State of Georgia (and thus Southeastern Technical College), the option of exempting demand deposits from the collateral requirements.
At June 30, 2009, the carrying value of deposits was $142,543.49 and the bank balance was $497,357.13. Ofthe Technical College's deposits, $222,714.22 were uninsured. Ofthese uninsured deposits, $222,714.22 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the Technical College's name.

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2009, consists of the following:

Student Tuition and Fees Federal, State and Private Funds GSFIC Other

$ 43,947.55 83,876.94
281,874.48 105,517.86

Total Accounts Receivable

$ 515.216.83

NOTE 4: CAPITAL ASSETS

Following are the changes in capital assets for the year ended June 30, 2009:

Balance Jul:r 1, 2008

Additions

Reductions

Balance June 30, 2009

Capital Assets, Not Being Depreciated:

Land and Land Improvements

$ 918,560.00 $ 165,625.00 $

0.00 $ 1,084,185.00

Capital Assets, Being Depreciated: Building and Building Improvements Improvements Other Than Buildings Capital Leases Equipment Library Collections

$20,311,969.89 $ 557,985.00 117,799.72
2,174,998.51 209,057.55

117,799.72 $ 138,749.00 -117,799.72 98,310.94
7,279.60

1.00
36,102.51 3,072.60

$20,429,768.61 696,734.00 0.00
2,237,206.94 213,264.55

$23,371,810.67 $ 244,339.54 $ 39,176.11 $23,576,974.10

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

$ 4,465,238.49 $ 682,265.81

468,177.53

21,044.81

115,835.99

-115,835.99

1,498,000.34

241,451.74 $

158,238.51

15,833.33

36,102.51 3,072.60

$ 5,147,504.30 489,222.34 0.00
1,703,349.57 170,999.24

$ 6,705,490.86 $ 844,759.70 $ 39,175.11 $ 7,511,075.45

Total Capital Assets, Being Depreciated,

Net

$16,666,319.81 $ -600 420.16 $

1.00 $ 16,065,898.65

Capital Assets, Net

$ -434 795 16

$ 17 150 083.65

NOTE 5: DEFERRED REVENUE

Deferred revenue at June 30, 2009, consists of the following:

Prepaid Tuition and Fees Other Deferred Revenue

$

3,773.00

467.36

Totals

$=~4z=.2====40====.3==6

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 6: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2009 was as follows:

Leases Lease Obligations
Other Liabilities Compensated Absences
Total Long-Term Liabilities

Balance Julx 1, 2008

Additions

Reductions

Balance June 30, 2009

Current Portion

$

2,266.08

$ 2,266.08 $

0.00

439,797.96 $ 382,446.73

333,437.69

488,807.00 $ 283,903.18

$ 442 064 04

$ 335 703 77 $ 488 807.00 $ 283.903.18

NOTE 7: NET ASSETS

Changes in Net Asset activity for the year ended June 30, 2009 was as follows:

Invested in Capital Assets Net of Related Debt
Unrestricted Net Assets Total Net Assets
NOTE 8: LEASE OBLIGATIONS

Balance Julx I, 2008

Additions

Reductions

Balance June 30, 2009

$ 17,582,613.73 $ -432,529.08 $

1.00 $ 17,150,083.65

29,225.70 10,813,661.72 10,685,388.48

157,498.94

$ l7i6l l 1839,43 $ 10 38] 132 64 $ 10,685 382.48 $ 17. 307,582,59

OPERATING LEASES Southeastern Technical College has entered into certain agreements to lease 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 of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised.

Expenses for rental of equipment under operating leases for the year ended June 30, 2009, totaled $30,115.08.

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 8: LEASE OBLIGATIONS

SUMMARY OF LEASE OBLIGATIONS Future commitments for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2009, were as follows:

Year Ending June 30 2010 2011 2012

Operating Leases
$ 38,423.05 35,826.84 11,942.28

Total Minimum Lease Payments

$ 86,192.17

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Southeastern 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 of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

Funding Policy Employees ofSoutheastern Technical College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Southeastern 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 2009, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2009 2008 2007

100% 100% 100%

$ 334,436.17 $ 333,544.57 $ 318,032.83

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Southeastern 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 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 ofthe 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.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects 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. Members hired on or after July 1, 1982 but prior to January 1, 2009 are "new plan" members subject to the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board ofTrustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. 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.
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, 2009, for employees covered by ERS was $1,026,396.86. The Technical College's total payroll for all employees was $5,397,029.69.
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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Policy Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, the Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Technical College contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2009 2008 2007

100% 100% 100%

$ 106,849.22 $ 108,480.17 $ 98,401.12

Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2009 financial report, which may be obtained through ERS.

GEORGIA DEFINED CONTRIBUTION PLAN

Plan Description Southeastern 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 of providing 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.

Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. Ifa member has less than $3,500.00 credited to his/her account, the Board ofTrustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments.

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits Upon the death of a 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 of Georgia 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 of the member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2009, for employees covered by GDCP was $490,444.10. The Technical College's total payroll for all employees was $5,397,029.69.
Total contributions made by employees during fiscal year 2009 amounted to $36,783.31 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 10: CONTINGENCIES
Amounts received or receivable from granter agencies are subject to audit and adjustment by granter 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 Southeastern Technical College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Southeastern Technical College (an organizational unit of the Technical College System of Georgia), 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, 2009.
NOTE 11: POSTEMPLOYMENT BENEFITS
The Technical College participates in two State of Georgia postemployment benefit plans, the Georgia Retiree Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department- OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices.
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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 11: POSTEMPLOYMENT BENEFITS

Georgia Retiree Health Benefit Fund The Georgia Retiree Health Benefit Fund (GRHBF) is a cost-sharing multiple-employer defined benefit postemployment healthcare plan that covers retired employees of the State including all departments, agencies and local school systems. GRHBF provides health insurance benefits to eligible retirees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code ofGeorgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions ofthe employees' health insurance plan (including benefits for retirees) to the Board of Community Health (Board).

The contribution requirements of the plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.

Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rate is established to fund both the active and retired employee health insurance plans based on projected "pay-as-you-go" financing requirements. The combined rates for the active and retiree plans for the fiscal year ended June 30, 2009, were as follows:

July 2008 - January 2009 February 2009 March 2009 - June 2009

22.165% of covered payroll for August - February Coverage 1.926% of covered payroll for March Coverage 0.000% of covered payroll for April - July Coverage

No additional contribution was required by the Board for fiscal year 2009 nor contributed to GRHBF to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other postemployment benefits and are subject to appropriation.

The following table summarizes the Technical College's contributions to the health insurance plans for the years ending June 30, 2009 and June 30, 2008, (dollars in thousands):

Required Contribution

Percent Contributed

2009 2008

$ 613,907.32 $ 1,078,848.87

100% 100%

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SOUTHEASTERN TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2009

EXHIBIT "D"

NOTE 11: POSTEMPLOYMENT BENEFITS
State Employees' Assurance Department - OPEB State Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit postemployment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of the Employees' Retirement System.
Contributions by plan members are established by the Board of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Board of Trustees of the Employees' Retirement System establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. For the fiscal year ended June 30, 2009, contributions of ERS "old plan" members were 0.45% of earnable compensation, 0.22% ofwhich was paid by the employer. Contributions ofERS "new plan" members were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30, 2009 and June 30, 2008.
NOTE12: SUBSEOUENTEVENTS
During September 2008, the State Board of Technical and Adult Education voted to merge Southeastern Technical College with Swainsboro Technical College effective July 1, 2009.
NOTE 13: AFFILIATED ORGANIZATIONS
The Southeastern Technical College Foundation, Inc., is a legally separate, tax exempt organization whose activities primarily support Southeastern Technical College. This affiliated organization is considered a potential component unit ofthe State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements ofthis affiliated organization is not included in these financial statements. Copies ofthe financial statements for the affiliated organization may be obtained from Southeastern Technical College.

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SUPPLEMENTARY INFORMATION - 17 -

SOUTHEASTERN TECHNICAL COLLEGE BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30, 2009
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Salaries Payable Accounts Payable Encumbrances Payable Deferred Revenue Funds Held for Others
Total Liabilities
Fund Balances Reserved Continuing Education Federal Financial Assistance Live Work Projects Sales and Services Technology Fees Inventories Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

360,199.47

92,461.27 127,285.29
3,848.00 143,515.12

$

12,102.82

56,008.78

187,188.63

4,240.36

75.75

$

259,616.34

$

59,150.33

1,197.37

76,102.29

63,966.15

180,027.25

81,310.75

5,938.67

$

467,692.81

$ ===7=2=7=,3=09==15=

Statutory Basis financial information was 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.

SOUTHEASTERN TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2009

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Adult Literacy Economic Development Technical Education
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Unreserved Fund Balance (Surplus) Returned
to Technical College System of Georgia Year Ended June 30, 2008
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE}

$ 5,677,764.00 $ 522,465.00
2,526,988.19
$ 8,727,217.19 $

5,677, 764,00 $ 521,108.87
2,598,673.76
8,797,546.63 $

0.00 -1,356.13 71 685.57
70,329.44

0.00 $ 8 727 217.19 $

239,954.09 9,037,500.72 $

239,954.09 310,283.53

$

498,529.00 $

241,062.00

7,987,626.19

$ 8,727,217.19 $

$

497,871.80 $ 197,380.24 7 962 438.71
8,657,690.75 $
379,809.97 $

657.20 43,681.76 25,187.48
69,526.44
379 809.97

321,264.84 3,331.73

6,572.09
-3,331.73 -239,954.09

SUMMARY OF FUND BALANCE
Reserved Continuing Education Federal Financial Assistance Live Work Projects Sales and Services Technology Fees Inventories
Total Reserved
Unreserved Surplus

$

59,150.33

1,197.37

76,102.29

63,966.15

180,027.25

81 310.75

$

461,754.14

5 938.67

Total Fund Balance
Statutory Basis financial information was 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.
19

$ ===46=7=,6=9=2'=8=1

SOUTHEASTERN TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2009

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

Original Appropriation

Final Budget

Current Year Revenues

Funds Available Comeared to Bud9et

Prior Year Carry-Over

Total Funds Available

Variance Positive (Negative)

362,062.00 120,000.00 58 750.00

$

540,812.00

316,150.00 $ 123,629.00 58,750.00
498,529.00

316,150.00 $ 123,470.64 58 380.80
498,001.44

0.00 $ 0.00 0.00
0.00 $

316,150.00 $ 123,470.64 58 380.80
498,001.44

0.00 -158.36 -369.20
-527.56

Economic Development Other Funds

205,062.00 $

241,062.00 $

220,175.36 $

36,355.21 $ 256,530.57 $ ===1=5,..,4=6=8..5..7=

Technical Education State Appropriation State General Funds Federal Funds American Recovery and Reinvestment Act of 2009 Federal Funds Other Funds
Total Technical Education

$

6,262,658.00 $ 5,361,614.00 $ 5,361,614.00

394,508.00

374,205.00

373,007.23

0.00 $ 5,361,614.00 $

0.00

373,007.23

0.00 -1,197.77

0.00 1990578.36

$

8,647,744.36

24,631.00 2 227 176.19
7 987 626.19 $

24,631.00 2320117.60
8 079 369.83 $

0.00 203 598.88

24,631.00 2 523 716.48

203 598.88 $ 8 282 968.71 $

0.00 296,540.29
295 342.52

Grand Totals - All Programs

$

9,393 618.36 $ 8,727,217.19 $ 8,797,546.63 $

239,954.09 $ 9,037,500.72 $

310,283.53

Statutory Basis financial information was 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.
-20-

SCHEDULE "3"

Exeenditures Comeared to Budget

Variance

Positive

Actual

(Negative)

Actual Funds Available
Over/(Under) Expenditures

Prior Period Adjustments

Other Adjustments

Program Fund
Balances

~

Total Fund Balance

$

316,078.86

123,412.14

58 380.80

$

497,871.80 $

71.14 $ 216.86 369.20
657.20

71.14 $ 58.50 0.00
129.64 $

0.00 35.24 0.00
35.24

0.00

71.14

0.00 $

0.00

71.14 $

71.14

0.00

93.74

0.00

93.74

0.00

93.74

000

0.00 ____Q,_QQ_

0.00 _MQ_

0.00

0.00

164.88 $ ~ $

93.74 $ ~ $

164.88

$

197,380.24 $ 43,681.76 $

59,150.33 $

0.00 $

0.00 $ 59,150.33 $ ~ $ 59,150.33 $ ~ $ 59,150.33

$ 5,361,614.00 $ 372,834.23

0.00 $ 1,370.77

0.00 $ 173.00

148.60 930.63

24,631.00 2 203 359.48
$ 7 962 438.71 $

0.00 23 816.71
25 187.48

0.00 320 357.00
320 530.00 $

0.00 5,457.62
6 536.85 $

0.00

14860 $

0.00 $

0.00 $ 148.60

148.60

0.00

1,103.63

0.00

1,103.63

0.00

1,103.63

000

0.00

0.00

0.00

0.00

000

325 814.62 ____Q,_QQ_ 320 095.69

5 718.93

0.00 325 814.62

0.00

327 066.85 $ ~ $ 321199.32 $ 5 867.53 $ 327 066.85

$ 8,657,690.75 $ 69,526.44 $

379,809.97 $ 6,572.09 $

0.00 $ 386,382.06 $ ~ $ 380,443.39 $ ~ $ 386,382.06

Unexpendable Reserves Inventories

81 310.75 $ 467 692.81

21

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SOUTHEASTERN TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2009

SCHEDULE "4"

Totals per Annual Supplement
Accruals June 30, 2009 June 30, 2008
Compensated Absences June 30, 2009 June 30, 2008

SALARIES $ 5,365,414.57 $

TRAVEL 51,997.01

12,102.82 -22,074.95

395,426.93 -353,839.68

$ 5,397,029.69 $ ====51=,9==9=7.==01=

- 23 -

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SOUTHEASTERN TECHNICAL COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2009
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.