TECHNICAL COLLEGE
THOMASVILLE, GEORGIA
NLANAGEMENT REPORT
FOR FISCAL YEAR ENDED
JUNE 30,2011
A Member College of the Technical
College System of Georgia
Georgia Department of Audits and h o u l p t s
Russell W.Hinton
State Auditor
-

SOUTHWEST GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

LETTER OF TRANSMITTAL

SELECTED FlNANClAL lNFORMATION

EXHIBITS

A STATEMENTOFNETASSETS-(GAAPBASIS)

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (GAAP BASIS)

C STATEMENT OF CASH FLOWS - (GAAP BASIS)

D SELECTED FINANCIAL NOTES

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 FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

20

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

22

5 RECONCILIATION OF SALARIES AND TRAVEL

2 5

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

SECTION I FI NANClAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-1 56 Atlanta, Georgia 30334-8400
September 28, 2 0 1 1

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 Craig Wentworth, President Southwest Georgia Technical College
Ladies and Gentlemen:
As part of our audit of the basic financial statements of the State of Georgia presented in the State of Georgia Comprehensive Annual Financial Report and the issuance of a State of Georgia Single Audit Repo/tpursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2011, we have performed certain audit procedures at Southwest Georgia Technical College. Accordingly, the financial statements and compliance activities of Southwest Georgia 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 Southwest Georgia Technical College as of and for the year ended June 30, 2011. Information contained in this report is a by-product of our audit of the basic financial statements of the State of Georgia 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 of management of Southwest Georgia 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.
, Respectfullysubmitted,

~ u s $ l l W. Hinton, CPA, CGFM State Auditor

SELECTED FINANCIAL INFORMATION

SOUTHWEST GEORGIA TECHNICAL COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS)
JUNE 30,2011
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 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 Restricted
Expendable Unrestricted
Total Net Assets

EXHIBIT" A

SOUTHWEST GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS)
YEAR ENDED JUNE 30,2011
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
Salar~es Benefits Travel Scholarships and Fellowships Utilities Suppl~esand Other Services Depreciation
Total Operat~ngExpenses
Operating Income (Loss)
NONOPERATING REVENUES LEXPENSES)
State Appropriations Grants and Contracts
Federal Gifts Interest and Other Investment Income Other Nonoperating Revenues Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Ga~nso, r Losses
Capital Grants and Gifts Federal State Ga~non Disposal of Capital Assets
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXHIBIT " 6

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SOUTHWEST GEORGIA TECHNICAL COLLEGE
STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30,2011
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 OperatingActivities
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 Noncap~taFl inancingActivities
CASH FLOWS FROM CAPITAL AN0 RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchasesof Cawital Assets
Net Cash Provided(Used) by Capital and Related FinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments
Net Increase (Decrease)in Cash
Cash and Cash Equivalents- Beginningof Year
Cash and Cash Equivalents- End of Year
RECONCILIATIONOF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to ReconcileOperating Income to Net Cash
Provided(Used) by OperatingActivities Depreciation Expense Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Salaries Payable Accounts Payable Deferred Revenue Compensated Absences
Net Cash Provided(Used) by OperatingActivities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Southwest Georgia Technical College is one of twenty-six (26) 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 Southwest Georgia 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 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 Southwest Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Southwest Georgia 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 Re~ortingStandards.
NET ASSETS
The Technical College's net assets are classified as follows:
Invested in capital assets, net of related 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.
Restricted net assets - expendable: Restricted expendable net assets include resources in which
the Technical College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties, except for unexpended grant funds of $77.57 due to grantor agencies.
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 $621.95. 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.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

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 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, 2011, the carrying value of deposits was $1,395,919.15 and the bank balance was $2,156,086.64. Of the Technical College's deposits, $1,638,613.65 was uninsured. Of these uninsured deposits, $180,901.81 were collateralized with securities held by the financial institution's trust department or agency, but not in the Technical College's name.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011

EXHIBIT "D"

Accounts receivable at June 30, 2011, consists of the following:
Student Tuition and Fees Federal, State and Private Funds Georgia State Financing and Investment Corn m ission Other
Less: Allowance for Doubtful Accounts
Net Accounts Receivable

NOTE 4: CAPITAL ASSETS

Followingare the changes in capital assets for the year ended June 30, 2011:

Beginning Balance July 1,2010

Additions

Reductions

Ending Balance June 30,2011

Capital Assets, Not Being Depreciated:

Land and Land Improvements

$ 2,624,923.00

Construction Work In Progress

24,000.00 $

Total Capital Assets,

Not Being Depreciated

$ 2,648,923.00 $

$ 5,683.34
5,683.34 $

0.00 $ 2,624,923.00 29,683.34
0.00 $ 2,654,606.34

Capital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Library Collections

$ 24,981,095.83 $ 920,380.00
3,511,771.05 981,351.82

6,442.04

$ 24,987,537.87

920,380.00

543,908.38 $ 37,051.60 4,018,627.83

19,520.83 2,355.66

998,516.99

Total Assets Being Depreciated

$ 30,394,598.70 $ 569,871.25 $ 39,407.26 $ 30,925,062.69

Less: Accumulated Depreciation: Building and Building Improvements $ Facilities and Other Improvements Equipment Library Collections

5,230,044.01 $ 857,226.21
2,513,058.63 776,068.03

777,022.46

$

5,945.00

362,148.52 $ 37,051.60

55,402.92 2,355.66

6,007,066.47 863,171.21
2,838,155.55 829,115.29

Total Accumulated Depreciation
Total Capital Assets, Being Depreciated, Net
Capital Assets, Net

$ 9,376,396.88 $ 1,200,518.90 $ 39,407.26 $ 10,537,508.52

$ 21,018,201.82 $ -630,647.65 $

0.00 $ 20,387,554.17

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

NOTE 5: DEFERRED REVENUE
Deferred revenue at June 30, 2011, consists of the following:
Prepaid Tuition and Fees

$ 26,653.35

NOTE 6: LONG-TERM LIABILITIES Long-Term liability activity for the year ended June 30, 2 0 1 1was as follows:

Beginning

Ending

Balance

Balance

July 1, 2010 Additions

Reductions June 30,2011

Current

Other Liabilities

Compensated Absences $ 504,629.15 $ 549,832.85 $ 520,330.00 $ 534,132.00 $ 268,272.04

NOTE 7: NET ASSETS Changes in Net Asset activity for the year ended June 30, 2 0 1 1 was as follows:

Invested in Capital Assets Net of Related Debt $

Beginning Balance July 1,2010
23,667,124.82 $

Additions -624,964.31

Reductions

Ending Balance June 30,2011

$ 23,042,160.51

Restricted Net Assets

1,939.97

806,877.72 $

808,740.12

77.57

Unrestricted Net Assets

1,166,238.81

15,134,272.23

14,787,432.71

1,513,078.33

Total Net Assets

$ 24,835,303.60 $ 15,316,185.64 $ 15,596,172.83 $ 24,555,316.41

NOTE 8: LEASE OBLIGATIONS
OPERATING LEASES
Southwest Georgia Technical College has entered into certain agreements to lease office space and copiers 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 office space and copiers under operating leases for the year ended June 30, 2011, totaled $74,027.52.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

SUMMARY OF LEASE OBLIGATIONS
Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows:
Operating Leases
Year EndingJune 30:

Total Minimum Lease Payments
NOTE 9: RETIREMENT PLANS
Southwest Georgia 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 Southwest Georgia 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.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

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 1 0 years of creditable service and attainment of age 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 2 5 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 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, Southwest Georgia Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Southwest Georgia 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. Southwest Georgia 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 Southwest Georgia Technical College contributions are not at any time refundable to the member or his/her beneficiary.
Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows:

Old Plan*

10.41%

New Plan

10.41%

GSEPS

6.54%

* 5.66% exclusive of contributions paid by t h e employer on behalf

of old plan members

Members become vested after 1 0 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 folfeits all rights to retirement benefits.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011

EXHIBIT "D"

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 3 0 years of creditable service, regardless of age, or after 1 0 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 of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 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. 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 1 0 years of service. If a member terminates with less than 1 0 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, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2008 actuarial valuation.
The following table summarizes Southwest Georgia Technical College contributions by defined benefit plan for the years ending June 30, 2011, June 30,2010, and June 30,2009:

ERS Required Contribution

Percent Contributed

TRS

Required

Percent

Contribution

Contributed

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Southwest Georgia 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, 2011, for employees covered by GDCP was $552,721.85. The Technical College'stotal payroll for all employees was $6,463,737.98.
Total contributions made by employees during fiscal year 2 0 1 1 amounted to $41,454.61 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 10: POST-EMPLOYMENT BENEFITS
Southwest Georgia Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment 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.
Retiree health benefits were previously funded through the Georgia Retiree Health Benefit Fund (GRHBF). In 2009, the General Assembly revisited the GRHBF and enacted legislation that, effective August 31, 2009, separated the GRHBF into two new funds: the Georgia School Personnel Postemployment Health Benefit Fund and the Georgia State Employees Post-employment Health Benefit Fund. The purpose of this change was to assure employers responsible for planning and funding future retiree health costs that their contributions will be dedicated to their respective retiree populations. Funds in the GRHBF were transferred to the Georgia State Employees Post-employment Health Benefit Fund or the Georgia School Personnel Post-employment Health Benefit Fund as described in the plan financial statements. The statute that created the GRHBF is repealed effective September 1,2010.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

Georgia State Employees Post-employment Health Benefit Fund The Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund) is a costsharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations (including technical colleges) and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. 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).

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. 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 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 thirty years.

The combined active and retiree contribution rates established by the Board for employers participating in the State OPEB Fund were as follows for the fiscal year ended June 30, 2011:

June 2 0 1 0 July 2 0 1 0 - April 2 0 1 1 May 2011- June 2 0 1 1

22.165% of covered payroll for July coverage 25.586% of covered payroll for August - May coverage 22.667% of covered payroll for June - July coverage

No additional contribution was required by the Board for fiscal year 2 0 1 1 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 other post-employment benefits and are subject to appropriation.

The following table summarizes Southwest Georgia Technical College combined active and retiree

contributions to the health insurance plans for the years ending June 30, 2011, June 30, 2010 and

June 30,2009:

Percentage

Required

Fiscal Year

Contributed

Contribution

State Employees'Assurance Department - OPEB
State Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit post-employment 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 Employees',

SOUTHWEST GEORGIA TECHNICAL COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011

EXHIBIT "D"

Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1, 2009. Pursuant to Title 47 of the OCGA, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems.
Contributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems 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, 2011, contributions of ERS "old plan" members were 0.45%of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS "new plan" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30,2011, June 30,2010 and June 30,2009.
NOTE 11: AFFILIATED ORGANIZATIONS
The Southwest Georgia Technical College Foundation is a legally separate, tax exempt organization whose activities primarily support Southwest Georgia Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement
No. 39, Determining Whether Certain Organizations are Component Units. Theref0re, the f inancial
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 Southwest Georgia Technical College.

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SUPPLEMENTARY INFORMATION

SOUTHWEST GEORGIA TECHNICAL COLLEGE BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 3 0 , 2 0 1 1
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EOUITY
Liabilities Accrued Payroll Accounts Payable Encumbrance Payable Deferred Revenue
Total Liabilities
Fund Balances Resewed Refunds to Grantors Sales and Sewices Live Work Projects Technology Fees UncollectibleAccounts Receivable Inventories Bookstore Tuition Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

Statutory Basis financial informat~onwas prepared on a prescr~bedbasis of accounting that demonstrates compliance with budgetarystatutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.

SOUTHWEST GEORGIA TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDEDJUNE 30,2011

REVENUES
State Appropr~ation 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 Avallabie

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Pr~oYr ear Payables/Expendltures Prlor Year Rece~vables/Revenues Unreserved Fund Balance (Surplus)Returned
to Technical College System of Georgia Year Ended lune 30,2010
Refunds to Grantors Federal FinancialAssistance Returnedto Technical College System of Georg~a Year Ended June 30,2010
Prlor Year Reserved Fund Balance Included In Funds Ava~lable
FUND BALANCE JUNE 3Q
SUMMARY OF FUND BALANCE
Reserved Refundsto Grantors Sales and Services Llve Work Projects Technology Fees UncollectlbleAccounts Rece~vable lnventorles Bookstore Tu~tlon
Total Reserved
Unreserved Surplus
Total Fund Balance
Statutory Baslsf~nanc~lanflormatlon was prepared on a prescribed bas~sof accountlng that demonstrates compl~ancewith budgetary statutes and regulat~onsof the State of Georgla, wh~chIS a comprehenslvebaSlS of accountlng other than generallyaccepted accountlng prlnclples

SOUTHWEST GEORGIA TECHNICAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 3 0 , 2 0 1 1

Adult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically ldentified Other Funds
Total Adult Literacy
Technical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically ldentified Other Funds
Total Technical Education
Totals By Program

Or~ginal Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

Statutory Basisfinancial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetaly statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles

SCHEDULE " 3

Funds Available Compared to Budget

Prior Year Carryaver

Adjustments and Program Transfen

Total Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Var~ance

Actual

Positive (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expend ltures

SOUTHWEST GEORGIA TECHNICAL COLLEGE STATEMENT OFCHANGESTO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Adult Literacy State Appropriation
Total Adult Literacy
Technical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds
Total Technical Educat~on
Total Operating Activity
Prior Year Reserves Not Available for Expenditure l nventories Refunds to Grantors
Budget Unit Totals

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of FiscalYear 2010
Surplus

Prior Period Adjustments

Statutory Basisfinancial 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.

Other Adjustments

Early Return Fiscal Year 2011
Surplus

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

Ending Fund Balance/(Deficit)
June 3 0

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

Summary of Ending Fund Balance Resewed
Refunds to Grantors Sales and Services Live Work Projects Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition Unreserved Surolus
Total Ending Fund Balance - June 3 0

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Totals per Annual Supplement
Accruals June 3 0 , 2 0 1 1 June 30,2010
Compensated Absences June 30,2011 June 30,2010
Lag Salaries June 3 0 , 2 0 1 1 June 30.2010
Agency Funds

SOUTHWEST GEORGIA TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30,2011

SCHEDULE "5"

SALARIES

TRAVEL

$

6,471,879.05 $

69,419.85

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SOUTHWEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30,2011
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.