SOUTHERN CRESCENT TECHNICAL COLLEGE
GRIFFIN, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Georgia Department of Audits and Accounts Greg S. Griffin State Auditor

SOUTHERN CRESCENT TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
BASIC FINANCIAL STATEMENTS
EXHIBITS
A STATEMENT OF NET POSITION
B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
C STATEMENT OF CASH FLOWS
D NOTES TO THE FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
SCHEDULES
1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(NON-GAAP BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO
BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND
4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND
5 RECONCILIATION OF BUDGET TO GAAP 6 RECONCILIATION OF SALARIES AND TRAVEL

Page
i
2 3 4 6
22 23 24 26 28 29

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

SOUTHERN CRESCENT TECHNICAL COLLEGE - TABLE OF CONTENTS -
SECTION III FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND MANAGEMENT'S CORRECTIVE ACTION PLAN

SECTION I FINANCIAL

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 25, 2013

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and Honorable Randall L. Peters, President Southern Crescent Technical College

INDEPENDENT AUDITOR'S REPORT
Ladies and Gentlemen:
Report on the Financial Statements
We have audited the accompanying basic financial statements (Exhibits A through D) of Southern Crescent Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2013.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to Southern Crescent Technical College's preparation and fair presentation of the financial
13ARL-2TC

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Southern Crescent Technical College 's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of Southern Crescent Technical College as of June 30, 2013, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements of Southern Crescent Technical College are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Southern Crescent Technical College. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2013, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
As described in Note 1 to the financial statements, in 2013, Southern Crescent Technical College adopted new accounting guidance, GASB Statement No. 63, Reporting Deferred Outflows, Deferred Inflows, and Net Position. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages i through vi be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
13ARL-2TC

Other Information
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Southern Crescent Technical College. The accompanying supplementary information (Schedules 1 through 6) is presented for purposes of additional analysis and is not a required part of the basic financial statements.
The accompanying supplementary information (Schedules 1 through 6) is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting or other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 25, 2013, on our consideration of Southern Crescent Technical College's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Southern Crescent Technical College's internal control over financial reporting and compliance.
Respectfully,

GSG:as 13ARL-2TC

Greg S. Griffin State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

SOUTHERN CRESCENT TECHNICAL COLLEGE
Management's Discussion and Analysis
The following is management's discussion and analysis of Southern Crescent Technical College's financial performance for the fiscal year ending June 30, 2013 with comparative data from fiscal year ending June 30, 2012 This discussion has been prepared by and is the responsibility of management.
Overview of the Financial Statements and Financial Analysis
This annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the Governmental Accounting Standards Board.
There are three financial statements presented: the Statement of Net Position; the Statement of Revenues, Expenses and Changes in Net Position; and the Statement of Cash Flows. The Statement of Net Position used in conjunction with the Statement of Revenues, Expenses and Changes in Net Position contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question "Is the Technical College as a whole better or worse off as a result of the year's activities?" These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by corporations and other private sector companies. All revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the goods or service, regardless of when cash is exchanged.
The Statement of Cash Flows is a valuable tool when evaluating the ability of the Technical College to meet financial obligations as they mature. This statement presents information related to cash inflows and outflows summarized by operating, noncapital financing, capital and related financing and investing activities.
This discussion and analysis of the Technical College's financial statements provides an overview of its financial activities for the year.
Statement of Net Position
The purpose of the Statement of Net Position is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities and net position of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources is reported as net position. Over a period of time the increases and decreases reflected in the Statement of Net Position, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating.
Net position are divided into three major categories. The first category, net investment in capital assets, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is restricted net position, expendable. Expendable restricted net position are available for expenditure by the Technical College but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted net position, which is available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College.
i

Statement of Net Position (thousands of dollars)

June 30, 2013

June 30, 2012

Assets Current Assets Capital Assets, Net

$

7,409,173

40,108,350

$

7,798,370

22,935,866

Total Assets

$ 47,517,523

$ 30,734,236

Liabilities Current Liabilities Noncurrent Liabilities

$

3,790,544

725,318

$

2,560,220

710,443

Total Liabilities

$

4,515,862

$

3,270,663

Net Position Net Investment in Capital Assets Restricted Expendable Unrestricted

$ 40,108,350
10,266 2,883,045

$ 22,935,866
1,300 4,526,407

Total Net Position

$ 43,001,661

$ 27,463,573

The total assets of the Technical College increased by approximately $16,783,287 from the prior year. This can be mainly attributed to an increase of approximately $17,172,484 in net capital assets and a decrease of approximately $389,197 in current assets. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the Technical College to better serve the instruction and public service missions of the Technical College.

Total liabilities for the fiscal year increased by approximately $1,245,199. The primary reason for the increase was in current liabilities, predominately from the approximate increase of $924,231 in, unearned revenue and the approximate increase of $222,512 in, accounts payable which contributed to the increase in net investment in capital assets. The combination of the increase in total assets of approximately $16,783,287 and the increase in total liabilities of approximately $1,245,199 yields an increase in total net position of approximately $15,538,088. The increase in total net position is primarily in the category of net investment in capital assets which increased approximately $17,172,484, however, all categories of Net Position did not increase. Unrestricted and restricted net position had a net decrease of approximately $1,634,396 during the year.
Statement of Revenues, Expenses and Changes in Net Position

The purpose of the Statement of Revenues, Expenses and Changes in Net Position is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net position as presented on the Statement of Net Position are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Position.

ii

Operating revenues are received for providing goods and/or services to various customers and constituencies of the Technical College. Operating expenses are those expenses paid to acquire or produce the goods and/or services provided in return for the operating revenues, and to carry out the mission of the Technical College. Therefore, nonoperating revenue is received when no goods or services are provided in exchange for the revenue. With the issuance of Statement No. 35, new guidelines were established by the Governmental Accounting Standards Board (GASB), which changed the classifications of state appropriations and gifts from operating to nonoperating revenue. This change may result in an operating deficit that is offset by a nonoperating surplus.

Statement of Revenues, Expenses and Changes in Net Position (Thousands of dollars)
June 30, 2013

June 30, 2012

Operating Revenues Operating Expenses

$

8,603,088

41,583,864

$

5,919,563

43,735,515

Operating Gain/Loss

$ -32,980,776

$ -37,815,952

Nonoperating Revenues and Expenses

30,154,526

36,958,380

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

$ -2,826,250

$

-857,572

Other Revenues, Expenses, Gains or Losses

18,364,338

418,273

Increase (Decrease) in Net Position

$ 15,538,088

$

-439,299

Net Position at Beginning of Year

27,463,573

27,902,872

Net Position at End of Year

$ 43,001,661

$ 27,463,573

The Statement of Revenues, Expenses and Changes in Net Position reflects a year with an increase in the net position at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Position are as follows:

iii

Revenue by Source (Thousands of Dollars) For the Years Ended June 30, 2013 and June 30, 2012

June 30, 2013

June 30, 2012

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Rents

Other

6,514,721 85,886
1,941,257 24,000 37,224

$

4,514,899

128,509

1,203,553

24,000

48,602

Total Operating Revenue

$

8,603,088

$

5,919,563

Nonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income Other

$

11,879,613

18,440,541

1,497,909

1,956

3,562

$

13,377,982

23,559,587

1,150,623

2,979

20,664

Total Nonoperating Revenue

$

31,823,581

$

38,111,835

Capital Grants and Gifts State

$

18,364,338

$

418,273

Total Revenues

$

58,791,007

$

44,449,671

Expenses (Thousands of Dollars) For the Years Ended June 30, 2013, and June 30, 2012

June 30, 2013

June 30, 2012

Operating Expenses Instruction

$

41,583,864

$

43,735,515

Nonoperating Expenses Other

1,669,055

1,153,454

Total Expenses

$

43,252,919

$

44,888,969

The sources of operating revenue for the Technical College are tuition and fees, grants and contracts, auxiliary services, and sales and services of educational activities. Operating revenues increased approximately $2,683,525. The change in operating revenue is the result of a combination of factors. Tuition and fees revenue increased by approximately $1,999,822. Grants and Contracts decrease by approximately $42,623. Sales and services reflect an increase of approximately $737,704 for fiscal year 2013.

iv

Operating expense decreased by $2,151,651. This is primarily related to a decrease of $3,877,896 in Scholarships and Fellowships expense. The decrease in Scholarships and Fellowships expense is a result of the Technical College including activity associated with the Federal Direct Student Loan program in fiscal year 2012. Supplies and other services increased by $644,068. Salaries and benefits increased by $589,775. Utilities expense increased $85,269. The increase was generated by the addition of the Medical Building on the Griffin campus. Depreciation expense increased by $364,403, which is due to completion of construction project.
Under nonoperating revenues (expenses) state appropriations decreased by approximately $1,498,369. The decrease in Federal Grants and Contract - Nonoperating of $5,119,045 is mainly due to the revenue from the Federal Direct Student Loan program being recorded in fiscal year 2012.
Statement of Cash Flows
The purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the Technical College during the year. It also provides information concerning the Technical College's ability to generate future cash flows and to meet its obligations as they come due. The statement is divided into five sections. The first section reports on the operating cash flows and shows the net cash used by the operating activities of the Technical College. The second section reflects cash flows from noncapital financing activities. The third section deals with cash flows from capital and related financing activities, which reflects the cash used for the acquisition and construction of capital related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The final section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Position.

Statement of Cash Flows (Thousands of Dollars)

June 30, 2013

June 30, 2012

Cash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities

$

-29,769,171

29,098,903

-653,091

1,956

$

-35,642,791

37,551,201

-1,511,132

2,979

Net Change in Cash

$

-1,321,403

$

400,257

Cash, Beginning of Year

5,228,504

4,828,247

Cash, End of Year

$

3,907,101

$

5,228,504

Capital Assets
The Technical College had a significant capital asset addition for facilities in the fiscal year under review. The Medical Building was completed and placed into service for use during fiscal year 2013. This project was funded by the Georgia State Financing and Investment Commission (GSFIC) at a cost of $17,464,852.

v

Long-Term Debt Southern Crescent Technical College had a total long-term compensated absence liability of $1,611,671.49 of which $886,353.28 was reflected as a current liability at June 30, 2013. For additional information on Long-Term Debt see Notes 1 and 7 in the Notes to the Financial Statements. Economic Outlook The Technical College continues to experience reductions in state allocations due to budget cuts. Unfilled positions are used to meet the challenges. Reserve funds are available to cover short-term revenue reductions. As in prior years, the Technical College's overall financial position is strong. As a result, the Technical College anticipates the next fiscal year will be much like the last and the Technical College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues. Dr. Randall L. Peters, President Southern Crescent Technical College
vi

BASIC FINANCIAL STATEMENTS - 1 -

ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items Inventories
Total Current Assets
Noncurrent Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Unearned Revenue Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences
Total Liabilities
NET POSITION
Net Investment in Capital Assets Restricted
Expendable Unrestricted
Total Net Position

SOUTHERN CRESCENT TECHNICAL COLLEGE STATEMENT OF NET POSITION JUNE 30, 2013

EXHIBIT "A"
$ 3,907,101.00 176,484.19
2,279,411.59 109,623.18 936,553.30
$ 7,409,173.26
40,108,350.05 $ 47,517,523.31
$ 532,593.71 60,829.88
2,071,619.48 239,147.29 886,353.28
$ 3,790,543.64
725,318.21 $ 4,515,861.85
$ 40,108,350.05 10,265.83
2,883,045.58
$ 43,001,661.46

The notes to the financial statements are an integral part of this statement. - 2 -

SOUTHERN CRESCENT TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
YEAR ENDED JUNE 30, 2013

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

$

11,681,850.67

-5,167,129.26

85,885.50 24,000.00 1,941,256.47 37,224.20

$

8,603,087.58

$

16,967,875.91

6,115,258.76

180,534.13

11,506,844.04

1,186,570.80

3,781,833.62

1,844,946.52

$

41,583,863.78

$

-32,980,776.20

$

11,879,613.41

18,370,940.88 69,600.00
1,497,909.11 1,956.17 3,561.54
-1,669,055.02

$

30,154,526.09

$

-2,826,250.11

$

18,620,251.98

-255,913.65

$

18,364,338.33

$

15,538,088.22

27,463,573.24

$

43,001,661.46

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

(This page left intentionally blank)

SOUTHERN CRESCENT TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2013
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 Capital Grants and Gifts Received Purchases of Capital Assets
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash
Provided (Used) by Operating Activities Depreciation Expense Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Salaries Payable Accounts Payable Unearned Revenue Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts
The notes to the financial statements are an integral part of this statement.
- 5 -

EXHIBIT "C"

$ 7,564,459.30 47,572.50
1,941,642.70 -11,087,478.58 -16,869,995.01 -11,506,844.04
141,472.27
$ -29,769,170.86

$ 11,879,613.41 -696,139.51
19,580,922.63 -1,665,493.48
$ 29,098,903.05

$

92,400.24

-745,492.05

$

-653,091.81

$

1,956.17

$ -1,321,403.45

5,228,504.45

$ 3,907,101.00

$ -32,980,776.20
1,844,946.52 139,046.89 86,071.29 -90,146.87 3,141.54 241,885.00 953,012.30 33,648.67
$ -29,769,170.86
$ 18,527,851.74

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Southern Crescent Technical College is one of twenty-five (25) 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 Southern Crescent Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of 13 (thirteen) members serving staggered three-year terms who are appointed by the State Board of the Technical College System of Georgia. 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 of State appropriations to be received by Southern Crescent Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Southern Crescent Technical College is considered an organizational unit of the Technical College System of Georgia for financial reporting purposes because of the 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.
Legally separate, tax exempt organizations whose activities primarily support member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia (an organizational unit of the State of Georgia), are considered potential component units of the State. See Note (15) for additional information.
FINANCIAL STATEMENT PRESENTATION
The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the Technical College's assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, expenses, changes in net position, cash flows, and replaces the fund group perspective previously required.
BASIS OF ACCOUNTING
For financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-college transactions have been eliminated.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2013, the Technical College adopted the Governmental Accounting Standards Board (GASB) Statement No. 60 Accounting and Financial Reporting for Service Concession Arrangements. The provisions of this Statement establish accounting and financial reporting standards for governments who enter into Service Concession Arrangements (SCA) with other governmental or nongovernmental entities. As of June 30, 2013, the Technical College has not entered into any arrangements that meet the qualifications to be reported as a SCA in accordance with this standard.
In fiscal year 2013, the Technical College adopted the Governmental Accounting Standards Board (GASB) Statement No. 63 Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. The provisions of this Statement establish financial reporting standards for the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government's net position. The Technical College changed its presentation of net assets to net position for fiscal year 2013. There were no other applicable reporting changes for the Technical College.
- 6 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents include petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool.
ACCOUNTS RECEIVABLE
Accounts receivable consist of tuition and fee charges to students, allotments due from the Technical College System of Georgia - System Office, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available. Accounts receivable are recorded net of estimated uncollectible amounts.
INVENTORIES
Resale inventories are valued at cost using the first-in first-out (FIFO) method.
CAPITAL ASSETS
Capital assets are recorded at cost at date of acquisition, or fair market value at the date of capital contribution. The Technical College capitalizes all land and land improvements. For equipment, the Technical College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Buildings and Building Improvements, Improvements Other Than Buildings, Easements, Rights, Patents, Trademarks, Copyrights and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastructure and software, the Technical College's capitalization threshold is $1,000,000.00. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 10 to 40 years for buildings, 15 to 25 years for infrastructure, 15 years for improvements other than buildings, 10 years for library books, 3 to 10 years for equipment and software, and 10 to 20 years for intangibles.
To fully portray capital assets acquired by the Technical Colleges of the Technical College System of Georgia, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to both the Technical College and the Technical College System of Georgia. The GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For major construction projects, GSFIC records construction in progress on its books throughout the construction period and at project completion transfers the entire project costs to Southern Crescent Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2013, GSFIC transferred capital additions valued at $17,464,852.00.
UNEARNED REVENUES
Unearned revenues include amounts received for tuition and fees and other activities prior to the end of the fiscal year but related to the subsequent accounting period. Unearned revenues also include amounts received from grant and contract sponsors that have not yet been earned.
COMPENSATED ABSENCES
Employee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable in the Statement of Net Position, and as a component of compensation and benefit expense in the Statement of Revenues,
- 7 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

Expenses and Changes in Net Position. Southern Crescent Technical College had an accrued liability for compensated absences in the amount of $1,578,022.82 as of July 1, 2012. For fiscal year 2013, $1,023,439.67 was earned in compensated absences and employees were paid $989,791.00, for a net increase of $33,648.67. The ending balance as of June 30, 2013 in accrued liability for compensated absences was $1,611,671.49.
NONCURRENT LIABILITIES
Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; and (2) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.
NET POSITION
The Technical College's net position is classified as follows:
Net investment in capital assets This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations, deferred outflows of resources, and deferred inflows of resources related to those capital assets. To the extent debt has been incurred or deferred inflows of resources have been received but not yet expended for capital assets, such amounts are not included as a component of the net investment in capital assets.
Restricted net position - expendable: Restricted expendable net position include resources in which the Technical College is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties, except for unexpended grant funds of $10,265.83 due to grantor agencies.
Unrestricted net position: Unrestricted net position represents 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 $22,635.72. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of the State Treasurer.
When an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.
INCOME TAXES
Southern Crescent Technical College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.
CLASSIFICATION OF REVENUES AND EXPENSES
The Statement of Revenues, Expenses and Changes in Net Position classifies the College's fiscal year activity as operating and nonoperating according to the following criteria: Operating Revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain Federal, state and local grants and contracts, and (3) sales and services. Nonoperating Revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
- 8 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

Operating Expenses: Operating expenses include activities that have the characteristics of exchange transactions.
Nonoperating Expenses: Nonoperating expenses include activities that have the characteristics of nonexchange transactions, such as capital financing costs related to investment activity.
SCHOLARSHIP ALLOWANCES
Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Position. Scholarship allowances are the difference between the stated charge for goods and services provided by the Technical College, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances.
NOTE 2: 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 of any public authority created by the laws of the State of Georgia, providing that the
statute that created the authority authorized the use of the bonds for this purpose.
4. Industrial revenue bonds and bonds of development authorities created by the laws of the
State of Georgia.
5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary
corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
At June 30, 2013, the carrying value of deposits was $3,903,726.00 and the bank balance was $5,127,629.74. Of the Technical College's deposits, $4,625,386.83 were uninsured. Of these uninsured deposits, $4,625,386.83 were collateralized with securities held by the financial institution's trust department or agency, but not in the Technical College's name.

- 9 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2013, consists of the following:

Student Tuition and Fees

$

Federal , State and Private Funds

Georgia State Financing and Investm ent Com m ission

Other

3 8 3 ,5 7 6 .0 4 1 7 6 ,4 8 4 .1 9 2 7 7 ,2 4 6 .5 5 1 ,6 5 0 ,4 4 7 .1 1

Less Allowance for Doubtful Accounts

$

2 ,4 8 7 ,7 5 3 .8 9

3 1 ,8 5 8 .11

Net Accounts Receivable

$

2 ,4 5 5 ,8 9 5 .7 8

NOTE 4: INVENTORIES

Inventories at June 30, 2013, consist of the following:

B o o k sto re

$

9 3 6 ,5 5 3 .3 0

NOTE 5: CAPITAL ASSETS

Following are the changes in capital assets for the year ended June 30, 2013:

B e gi n n i n g Balance July 1, 2012

A d d i ti o n s

R e d u cti o n s

Ending Balance June 30, 2013

Capital Assets, Not Being Depreciated: Land and Land Improvements Construction Work-In-Progress

$

628,505.00 $

3,850.00

0.00 $

0.00 $

628,505.00 3,850.00

Total Capital Assets, Not Being Depreciated
Capital Assets, Being Depreciated: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections
Total Assets Being Depreciated
Less: Accumulated Depreciation: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections
Total Accumulated Depreciation
Total Capital Assets, Being Depreciated, Net

$

632,355.00 $

0.00 $

0.00 $

632,355.00

$ 25,615,627.35 $ 17,480,752.00 $

2,766,739.25

5,310.00

9,799,466.01

1,722,881.00

1,351,934.15

64,400.79

$ 39,533,766.76 $ 19,273,343.79 $

15,900.00 $ 10,632.85 336,920.34 23,488.32

43,080,479.35 2,761,416.40
11,185,426.67 1,392,846.62

386,941.51 $ 58,420,169.04

$ 6,175,069.31 $ 2,011,369.26 8,171,601.87 872,214.89

944,243.53 94,269.18 $
719,756.17 86,677.64

$ 17,230,255.33 $ 1,844,946.52 $

$ 22,303,511.43 $ 17,428,397.27 $

$ 5,966.22 101,573.32 23,488.32

7,119,312.84 2,099,672.22 8,789,784.72
935,404.21

131,027.86 $ 18,944,173.99

255,913.65 $ 39,475,995.05

Capital Assets, Net

$ 22,935,866.43 $ 17,428,397.27 $

255,913.65 $ 40,108,350.05

- 10 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

NOTE 6: UNEARNED REVENUE

Unearned Revenue at June 30, 2013, consists of the following:

Prepaid Tuition and Fees Other Unearned Revenue

$

2 ,0 6 8 ,1 1 7 .2 5

3 ,5 0 2 .2 3

Total Unearned Revenue

$

2 ,0 7 1 ,6 1 9 .4 8

NOTE 7: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2013 was as follows:

B e gi n n i n g

Ending

Balance

Balance

July 1, 2012

A d d i ti o n s

R e d u cti o n s

June 30, 2013

Current P o r ti o n

Other Liabilities Compensated Absences

$ 1,578,022.82 $ 1,023,439.67 $

989,791.00 $ 1,611,671.49 $

886,353.28

NOTE 8: NET POSITION

Changes in Net Position activity for the year ended June 30, 2013 was as follows:

B e gi n n i n g Balance July 1, 2012

A d d i ti o n s

R e d u cti o n s

Ending Balance June 30, 2013

Net Investment in Capital Assets

$ 22,935,866.43 $ 17,428,397.27 $

255,913.65 $ 40,108,350.05

Restricted Net Position

1,299.78

18,456,826.38

18,447,860.33

10,265.83

Unrestricted Net Position

4,526,407.03

22,905,783.37

24,549,144.82

2,883,045.58

Total Net Position

$ 27,463,573.24 $ 58,791,007.02 $ 43,252,918.80 $ 43,001,661.46

NOTE 9: LEASE OBLIGATIONS OPERATING LEASES
Southern Crescent Technical College has entered into certain agreements to lease copiers and office/classroom space 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-toyear 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 copiers and office/classroom space under operating leases for the year ended June 30, 2013, totaled $177,812.82.
SUMMARY OF LEASE OBLIGATIONS
Future commitments for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2013, were as follows:
Operating Leases

Year Ending June 30: 2014

$

1 5 5 ,0 3 0 .1 6

- 11 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS
Southern Crescent Technical College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Southern Crescent Technical College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 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). Members of the GSEPS plan may also participate in the GSEPS 401(k) defined contribution component described below. 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 of Trustees 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
- 12 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

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.

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, Southern Crescent Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Southern Crescent 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. Southern Crescent 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 Southern Crescent Technical College contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2013 were based on the June 30, 2010 actuarial valuation as follows:

Old Plan* New Plan GSEPS

14.90% 14.90% 11.54%

* 10.15% exclusive of contributions paid by the employer on behalf of old plan members

Members become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions, the member forfeits all rights to retirement benefits.
TEACHERS RETIREMENT SYSTEM OF GEORGIA
The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.
On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth

- 13 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Options are available for distribution of the member's monthly pension, at a reduced rate, to a designated beneficiary on the member's death. Death, disability and spousal benefits are also available.

TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation.

Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2013 were 6% of annual salary. Employer contributions required for fiscal year 2013 were 11.41% of annual salary as required by the June 30, 2010 actuarial valuation.

The following table summarizes Southern Crescent Technical College contributions by defined benefit plan for the years ending June 30, 2013, June 30, 2012, and June 30, 2011:

Fiscal Year

ERS Required Contribution

Percentage Contributed

TRS Required Contribution

Percentage Contributed

2013 2012 2011

$

512,617.23

$

343,647.38

$

318,801.02

100% $ 1,051,036.98

100% $

945,770.79

100% $

891,913.34

100% 100% 100%

GSEPS 401(K) DEFINED CONTRIBUTION COMPONENT OF ERS
In addition to the ERS defined benefit pension described above, GSEPS members may also participate in the Peach State Reserves 401(k) defined contribution plan and receive an employer matching contribution. The 401(k) plan is administered by the System and was established by the Georgia Employee Benefit Plan Council in accordance with State law and Section 401(k) of the IRC. The GSEPS segment of the 401(k) plan was established by State law effective January 1, 2009. Plan provisions and contribution requirements specific to GSEPS can be amended by State law. Other general 401(k) plan provisions can be amended by the ERS Board of Trustees as required by changes in Federal tax law or for administrative purposes. The State was not required to make significant contributions to the 401(k) plan prior to GSEPS because most members under other segments of the plan either were not State employees or were not eligible to receive an employer match on their contributions.
The GSEPS plan includes automatic enrollment in the 401(k) plan at a contribution rate of 1% of salary, along with a matching contribution from the State. The State will match 100% of the employee's initial 1% contribution. Employees can elect to contribute up to an additional 4% and the State will match 50% of the additional 4% of salary. Therefore, the State will match 3% against the employee's 5% total savings. Contributions greater than 5% do not receive any matching funds.
GSEPS employer contributions are subject to a vesting schedule, which determines eligibility to receive all or a portion of the employer contribution balance at the time of any distribution from the account after separation from all State service. Vesting is determined based on the following schedule:

- 14 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

Less than 1 year 1 year 2 years 3 years 4 years 5 or more years

0% 20% 40% 60% 80% 100%

Employee contributions and earnings thereon are 100% vested at all times. The 401(k) plan also allows participants to roll over amounts from other qualified plans to their respective account in the 401(k) plan on approval of the 401(k) plan administrator. Such rollovers are 100% vested at the time of transfer. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth.
The participants may receive the value of their vested accounts upon attaining age 59.5, qualifying financial hardship, or retirement or other termination of service (employer contribution balances are only eligible for distribution upon separation from service). Upon the death of a participant, his or her beneficiary shall be entitled to the vested value of his or her accounts. Distributions are made in installments or in a lump sum.
In 2013, the Southern Crescent Technical College employer and employee GSEPS contributions were $16,626.23 and $50,429.89, respectively.
DEFINED CONTRIBUTION PLAN
Plan Description Southern Crescent 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. If a member has less than $3,500.00 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. 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-half percent (7.5%) of gross 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, 2013, for employees covered by GDCP was $2,728,945.15. The Technical College's total payroll for all employees was $16,967,875.91.
Total contributions made by employees during fiscal year 2013 amounted to $204,671.96 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.

- 15 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

NOTE 11: RISK MANAGEMENT
PUBLIC ENTITY RISK POOL
The Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with United Healthcare to process medical claims and Medco to process prescription drug claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.
OTHER RISK MANAGEMENT
The Department of Administrative 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 processes 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 of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Technical College, as an organizational unit of the Technical College System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE 12: POST-EMPLOYMENT BENEFITS
Southern Crescent Technical College participates in the following State of Georgia other postemployment benefit (OPEB) plans:
Administered by Department of Community Health (DCH) Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund)
Administered by the ERS System State Employees' Assurance Department (SEAD) For retired and vested inactive (SEAD-OPEB) For active employees (SEAD-Active)
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 offices that administer the plans.
GEORGIA STATE EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
The State OPEB Fund is a cost-sharing multiple-employer defined benefit postemployment healthcare plan and is reported as an employee benefit trust fund.
The State OPEB Fund provides postemployment health benefits (including benefits to qualified beneficiaries of eligible former employees) due under the group health plan for employees of State organizations (including technical colleges) and other entities authorized by law to contract with DCH for inclusion in the plan. It also pays administrative expenses of the fund. By law, no other use of the assets of the State OPEB Fund is permitted.
The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).
- 16 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

The plan is currently funded on a pay-as-you go basis. That is, annual costs of providing benefits will be financed in the same year as claims occur, with no significant assets accumulating as would occur in an advance funding strategy.

The contribution requirements of 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 receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. As of January 1, 2012, for members with fewer than five years of service, contributions also vary based on years of service. As of January 1, 2012, on average, members with five years or more of service pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy.
Participating employers, including but not limited to State organizations, are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected pay-as-you-go financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.

The combined required contribution rates established by the Board for the active and retiree plans for the fiscal year ended June 30, 2013, were as follows:

June 2012 July - December 2012 January 2013 - February 2013 March - June 2013

27.523% of covered payroll for July 2012 coverage 35.000% of covered payroll for August 2012 - January 2013 coverage 24.454% of covered payroll for February - March 2013 coverage 25.366% of covered payroll for April - July 2013 coverage

No additional contribution was required by the Board for fiscal year 2013 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for OPEB and are subject to appropriation.

The following table summarizes Southern Crescent Technical College's combined active and retiree

contributions to the health insurance plans for the years ending June 30, 2013, June 30, 2012, and June 30, 2011:

Percentage

Required

Fiscal Year

Contributed

Contribution

2013 2012 2011

100% 100% 100%

$

3,884,630.18

$

3,789,538.93

$

3,092,768.89

- 17 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

STATE EMPLOYEES' ASSURANCE DEPARTMENT
SEAD-OPEB and SEAD-Active are cost-sharing multiple-employer defined benefit postemployment plans that were created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to eligible members of the ERS, Georgia Judicial Retirement System (JRS), and Legislative Retirement System (LRS). SEAD-OPEB provides benefits for retired and vested inactive members, and SEAD-Active provides benefits for active members. Effective July 1, 2009, no newly hired members of any State public retirement system are eligible for term life insurance under SEAD. Pursuant to Title 47 of the OCGA, benefit provisions of the plans were established and can be amended by State statute.
Contributions by plan members are established by the ERS Board of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The ERS Board of Trustees establishes employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. Contributions for fiscal year 2013 were based on June 30, 2010, actuarial valuations as follows:

SEAD OPEB

SEAD Active

Total SEAD

Member Rates:

ERS Old Plan Less: Offset Paid by Employer Net ERS Old Plan ERS New Plan, JRS, and LRS

0.45% (0.22%) 0.23% 0.23%

0.05% (0.03%) 0.02% 0.02%

0.50% (0.25%) 0.25% 0.25%

Employer Rates

0.27%

0.00%

0.27%

The ERS Board of Trustees voted and approved that the SEAD-OPEB contribution would be paid from existing assets of the Survivors Benefit Fund (SBF) instead of requiring payment by the employers. The contribution by SBF made on-behalf of Southern Crescent Technical College for fiscal years 2013 and 2012 were estimated to be $6,378.81 and $15,298.94, respectively. There were no required employer contributions for the fiscal year ended June 30, 2011.
According to the policy terms covering the lives of members, insurance coverage is provided on a monthly, renewable term basis, and no return premiums or cash value are earned. The net assets represent the excess accumulation of investment income and premiums over benefit payments and expenses and are held as a reserve for payment of death benefits under existing policies.
NOTE 13: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although Southern Crescent Technical College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Southern Crescent 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, 2013.

- 18 -

SOUTHERN CRESCENT TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2013

EXHIBIT "D"

NOTE 14: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS
The Technical College's operating expenses shown at the natural classification on the "Statement of Revenues, Expenses and Changes in Net Position" are all classified as Instruction at the functional classification.
NOTE 15: AFFILIATED ORGANIZATIONS
The Southern Crescent Technical College Foundation is a legally separate, tax exempt organization whose activities primarily support Southern Crescent Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, and GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from Southern Crescent Technical College.

- 19 -

(This page left intentionally blank)

SUPPLEMENTARY INFORMATION - 21 -

SOUTHERN CRESCENT TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND JUNE 30, 2013
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 Encumbrance Payable Unearned Revenue Funds Held for Others
Total Liabilities
Fund Balances Reserved Federal Financial Assistance Live Work Projects Prior Year Local Funds Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$ 3,811,167.80 242,444.99
1,286,264.32 96,445.01
936,553.30
$ 6,372,875.42

$

59,843.37

404,679.82

545,220.04

1,300,809.75

2,647.44

$ 2,313,200.42

$

10,265.83

156,852.05

24,562.12

350,430.93

976,488.79

31,684.11

228,664.19

2,081,494.24

176,597.02

22,635.72

$ 4,059,675.00

$ 6,372,875.42

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 22 -

SOUTHERN CRESCENT TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2013

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS
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 Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to the Technical College System of Georgia Year Ended June 30, 2012
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance Live Work Projects Prior Year Local Funds Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 11,900,125.21 $ 11,900,125.21 $

2,511,147.13

1,723,385.46

21,738,292.34

16,917,451.69

0.00 -787,761.67 -4,820,840.65

$ 36,149,564.68 $ 30,540,962.36 $ -5,608,602.32

0.00

0.00

0.00

0.00

4,827,799.33

$ 36,149,564.68 $ 35,368,761.69 $

4,827,799.33 -780,802.99

$ 1,460,843.34 $ 1,416,745.14 $

391,670.00

334,093.85

34,297,051.34

29,520,213.06

$ 36,149,564.68 $ 31,271,052.05 $

$

0.00 $ 4,097,709.64 $

44,098.20 57,576.15 4,776,838.28
4,878,512.63
4,097,709.64

5,056,463.52 20,511.80

219,707.03 -486,405.86
-20,511.80 -4,827,799.33 $ 4,059,675.00

$

10,265.83

156,852.05

24,562.12

350,430.93

976,488.79

31,684.11

228,664.19

2,081,494.24

176,597.02

$ 4,037,039.28

22,635.72

$ 4,059,675.00

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 23 -

SOUTHERN CRESCENT TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2013

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 Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Technical Education
Totals By Program

Original Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

$

613,000.00 $

613,000.00 $

613,000.00 $

613,000.00

694,000.00 107,000.00

694,000.00 107,000.00

732,500.00 115,343.34

726,460.10 77,285.04

$ 1,414,000.00 $ 1,414,000.00 $ 1,460,843.34 $ 1,416,745.14

$

498,000.00 $

498,000.00 $

391,670.00 $

237,383.75

$ 12,418,752.00 $ 11,287,125.21 $ 11,287,125.21 $ 11,287,125.21

1,130,000.00 11,450,000.00

1,130,000.00 11,450,000.00

1,778,647.13 21,231,279.00

996,925.36 16,602,782.90

$ 24,998,752.00 $ 23,867,125.21 $ 34,297,051.34 $ 28,886,833.47

$ 26,910,752.00 $ 25,779,125.21 $ 36,149,564.68 $ 30,540,962.36

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.

- 24 -

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

$

0.00 $

1,299.78 0.00

$

1,299.78 $

$ 359,712.05 $

0.00 $

613,000.00 $

0.00 0.00

727,759.88 77,285.04

0.00 $ 1,418,044.92 $

0.00 $

597,095.80 $

0.00 $ -4,740.12 -38,058.30 -42,798.42 $
205,425.80 $

613,000.00 $ 726,460.10
77,285.04 1,416,745.14 $
334,093.85 $

0.00 $ 6,039.90 38,058.30 44,098.20 $
57,576.15 $

0.00 1,299.78
0.00 1,299.78
263,001.95

$

0.00 $

0.00 4,466,787.50

$ 4,466,787.50 $

0.00 $ 11,287,125.21 $

0.00 0.00

996,925.36 21,069,570.40

0.00 $ 33,353,620.97 $

0.00 $
-781,721.77 -161,708.60
-943,430.37 $

11,287,125.21 $
988,008.73 17,245,079.12
29,520,213.06 $

0.00 $
790,638.40 3,986,199.88
4,776,838.28 $

0.00
8,916.63 3,824,491.28
3,833,407.91

$ 4,827,799.33 $

0.00 $ 35,368,761.69 $

-780,802.99 $

31,271,052.05 $

4,878,512.63 $

4,097,709.64

- 25 -

SOUTHERN CRESCENT TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2013

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 Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Technical Education
Total Operating Activity
Prior Year Reserves Not Available for Expenditure Inventories Uncollectible Accounts Receivable

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2012
Surplus

Prior Period Adjustments

$

0.00 $

1,299.78 0.00

$

1,299.78 $

$

359,712.05 $

0.00 $ -1,299.78
0.00 -1,299.78 $
-359,712.05 $

0.00 $
0.00 0.00
0.00 $

66.94
49.42 2,476.64
2,593.00

0.00 $

54,873.39

$

3,385.00 $

0.00 4,483,914.30

$

4,487,299.30 $

$

4,848,311.13 $

0.00 $ 0.00 -4,466,787.50 -4,466,787.50 $ -4,827,799.33 $

-3,385.00 $ 0.00
-17,126.80 -20,511.80 $ -20,511.80 $

952.75 0.00
-325,117.97 -324,165.22 -266,698.83

228,664.19 0.00

0.00 0.00

0.00 0.00

0.00 0.00

Budget Unit Totals

$

5,076,975.32 $

-4,827,799.33 $

-20,511.80 $

-266,698.83

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 26 -

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2013
Surplus

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

$

0.00 $

0.00 0.00

$

0.00 $

$

0.00 $

0.00 $ 0.00 0.00 0.00 $
0.00 $

0.00 $
1,299.78 0.00
1,299.78 $

66.94 $
1,349.20 2,476.64
3,892.78 $

0.00 $
1,349.20 0.00
1,349.20 $

263,001.95 $

317,875.34 $

317,875.34 $

66.94 $
0.00 2,476.64
2,543.58 $

66.94
1,349.20 2,476.64
3,892.78

0.00 $

317,875.34

$

0.00 $

0.00 -31,684.11

$ -31,684.11 $

$ -31,684.11 $

0.00 $ 0.00 0.00 0.00 $ 0.00 $

0.00 $ 8,916.63 3,824,491.28 3,833,407.91 $ 4,097,709.64 $

952.75 $

0.00 $

8,916.63 3,467,689.20

8,916.63 3,448,549.81

3,477,558.58 $ 3,457,466.44 $

3,799,326.70 $ 3,776,690.98 $

952.75 $

952.75

0.00 19,139.39

8,916.63 3,467,689.20

20,092.14 $ 3,477,558.58

22,635.72 $ 3,799,326.70

0.00 31,684.11

0.00 0.00

0.00 0.00

228,664.19 31,684.11

228,664.19 31,684.11

0.00 0.00

228,664.19 31,684.11

$

0.00 $

0.00 $

4,097,709.64 $

4,059,675.00 $ 4,037,039.28 $

22,635.72 $ 4,059,675.00

Summary of Ending Fund Balance Reserved
Federal Financial Assistance Live Work Projects Prior Year Local Funds Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition Unreserved Surplus
Total Ending Fund Balance - June 30

$

10,265.83

156,852.05

24,562.12

350,430.93

976,488.79

31,684.11

228,664.19

2,081,494.24

176,597.02

$

$ 4,037,039.28 $

$

10,265.83

156,852.05

24,562.12

350,430.93

976,488.79

31,684.11

228,664.19

2,081,494.24

176,597.02

22,635.72

22,635.72

22,635.72 $ 4,059,675.00

- 27 -

SOUTHERN CRESCENT TECHNICAL COLLEGE RECONCILIATION OF BUDGET TO GAAP JUNE 30, 2013

SCHEDULE "5"

Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "1")
Amounts reported for Business-Type Activities in the Statement of Net Position are different because:
Capital Assets used in Business-Type Activities are not reported in the Budget Fund.
Uncollectible accounts receivable are reported as an asset and reserved fund balance in the Budget Fund and as a contra-asset account on the Statement of Net Position.
Georgia State Financing and Investment Commission (GSFIC) projects are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of GSFIC Activity
Agency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity
The budgetary basis of accounting implemented by the State of Georgia recognizes expenditures when encumbered. The following adjustments were made to eliminate this activity for reporting on the Statement of Net Position. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Reimbursement from grantors reported as revenues in the Budget Fund that are for expenditures based on encumbrances are deferred for GAAP reporting. Total Net Effect of Encumbrance Activity
Compensated Absences are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund.

$ 4,059,675.00

40,108,350.05 -31,684.11

$ 673,239.81 -673,239.81
$ 1,027,904.95 -1,025,040.95

0.00 2,864.00

$ 545,220.04 -71,092.03

474,128.01

-1,611,671.49

Net Position of Business-Type Activities (Exhibit "A")

$ 43,001,661.46

The supplementary information presented on Schedules 1, 2, 3 and 4 was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. The information was derived from, and relates directly to, the same information used to prepare the financial statements. However, the budgetary statutes and regulations of the State of Georgia require reporting of certain information that is not in accordance with generally accepted accounting principles. Presented on this schedule is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
- 28 -

SOUTHERN CRESCENT TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2013

SCHEDULE "6"

Totals per Annual Supplement
Accruals June 30, 2013 June 30, 2012
Compensated Absences June 30, 2013 June 30, 2012
Agency Funds
Adjustments Shared Services on Jointly Staffed Personnel Central Georgia Technical College Struby, Hazel Oconee Fall Line Technical College Scott, Paul Technical College System of Georgia Brown, Stephen Bullington, Victor

SALARIES $ 16,975,541.26 $

TRAVEL 212,154.70

60,829.88 -57,688.34

1,218,830.30 -1,202,477.17
-66,058.41

-31,620.57

17,333.52
4,707.50
4,225.78 12,631.59

$ 16,967,875.91 $

180,534.13

- 29 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 25, 2013

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors
and Honorable Randall L. Peters, President Southern Crescent Technical College
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of Southern Crescent Technical College as of and for the year ended June 30, 2013, and have issued our report thereon dated November 25, 2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Southern Crescent Technical College's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Southern Crescent Technical College's internal control. Accordingly, we do not express an opinion on the effectiveness of Southern Crescent Technical College's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

2013YB-10

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Southern Crescent Technical College's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of Southern Crescent Technical College in a separate letter dated November 25, 2013.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,

GSG:as 2013YB-10

Greg S. Griffin State Auditor

SECTION III FINDINGS AND QUESTIONED COSTS

SOUTHERN CRESCENT TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND MANAGEMENT'S CORRECTIVE ACTION PLAN
YEAR ENDED JUNE 30, 2013
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.