Flint River Technical College, Thomaston, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2009

FLINT RIVER TECHNICAL COLLEGE
THOMASTON, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009
Georgia Department of Audits and Accounts Russell W. Hinton State Auditor

FLINT RJVER 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 ASSETS

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

3

C STATEMENT OF CASH FLOWS

5

D NOTES TO THE FINANCIAL STATEMENTS

6

SUPPLEMENTARY INFORMATION

SCHEDULES

I BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND

22

2 SUMMARY BUDGET COMPARJSON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

23

3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING

SOURCE COMPARED TO BUDGET

(NON-GAAP BASIS) BUDGET FUND

24

4 RECONCILIATION OF SALARIES AND TRAVEL

27

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

FLINT RJVER TECHNICAL COLLEGE - TABLE OF CONTENTS -
SECTION III FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 10, 2009

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors Honorable Ronald Jackson, Commissioner Technical College System of Georgia
and Honorable Jim Wheeless, Acting President Flint River Technical College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) ofFlint River Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2009. These financial statements are the responsibility of the Technical College's management. 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 ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe College's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1, the financial statements of Flint River Technical College are intended to present the financial position and changes in financial position and cash flows ofonly that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Flint
08ARL-2TC

River Technical College. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Flint River Technical College as of June 30, 2009, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Management's Discussion and Analysis is not a part ofthe basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods of measurement and presentation of this supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Flint River Technical College taken as a whole. The accompanying supplementary information (Schedules 1 through 4) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
w. 4d .:s
Rus II W. Hinton, CPA, CGFM State Auditor
RWH:as 09ARL-2TC

REQUIRED SUPPLEMENTARY INFORMATION

Flint River Technical College Management's Discussion and Analysis
The following is management's discussion and analysis of Flint River Technical College's financial performance for the fiscal year ending June 30, 2009 with comparative data from fiscal year ending June 30, 2008. This discussion has been prepared by and is the responsibility of management.
Overview ofthe 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 Assets; the Statement of Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets 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 ofNet Assets
The purpose of the Statement of Net Assets 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 assets 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 and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, 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 assets are divided into two major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is Unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College.

Statement of Net Assets (thousands of dollars)

June 30, 2009

June 30, 2008

Assets Current Assets Capital Assets, Net

$

1,503

$

5 007

1,756 4 963

Total Assets

$_ _ _6,_51_0

$_ _ _6_._7_1_9

Liabilities Current Liabilities Noncurrent Liabilities

$

397

$

771

151

203

Total Liabilities

$_ _ _54_8

$_ _ _97_4

Net Assets Invested in Capital Assets, Net of Debt Unrestricted

$

5,007

$

955

4,963 782

Total Net Assets

The total assets of the Technical College decreased by approximately $209,000 from the prior year. This can be attributed to a decrease of approximately $253,000 in current assets offset by an increase in Capital Assets, Net, of approximately $44,000. The largest decrease in current assets was caused by a decrease in cash (see Statement of Cash Flows) which 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 decreased by approximately $426,000. The primary reason for the decrease was in current liabilities, predominately from the decrease in accounts payable which also contributed to the decrease in cash referred to immediately above. The combination of the decrease in total assets of approximately $209,000 and the decrease in total liabilities of approximately $426,000 yields an increase in total net assets of approximately $217,000. The increase in total net assets is primarily in the category of Unrestricted Net Assets which increased approximately $173,000.

Statement ofRevenues, Expenses and Changes in Net Assets

The purpose of the Statement of Revenues, Expenses and Changes in Net Assets 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 assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets.

11

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 Assets (Thousands of dollars)

June 30, 2009

June 30, 2008

Operating Revenues Operating Expenses

$

2,307

$

3,307

8 789

9,273

Operating Gain/Loss

$

-6,482

$

-5,966

Nonoperating Revenues and Expenses

6,670

6,386

Income (Loss) Before Other Revenues,

Expenses, Gains or Losses

$

188

$

420

Other Revenues, Expenses, Gains or Losses

29

-19

Increase (Decrease) in Net Assets

$

217

$

401

Net Assets at Beginning of Year

5 745

5 344

Net Assets at End of Year

$

5.962

$

5 745

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

111

Revenue By Source (thousands of dollars) For The Years Ended June 30, 2009 and June 30, 2008

June 30, 2009

June 30, 2008

Operating Revenue Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Rents Other

$

1,509

$

1,374

36

1,260

753

666

7

4

2

3

Total Operating Revenue

$

2,307

$

3,307

Nonoperating Revenue State Appropriations Federal Grants and Contracts Nonoperating Gifts Investment Income Other

$

3,928

$

4,672

2,691 132 3

1,102 569 5 38

Total Nonoperating Revenue

$

6 754

$

6,386

Capital Grants and Gifts State N ongovemmental Loss on Disposal of Capital Assets

$

28

$

1

1

13

-33

Total Other Revenues, Expenses,

Gains or Losses

$

29

$

-19

Total Revenues

$

9 090

$

9 674

Expenses (thousands of dollars) For The Years Ended June 30, 2009 and June 30, 2008

June 30, 2009

June 30, 2008

Operating Expenses Instruction

$

8,789

$

9,273

Nonoperating Expenses

Other

84

Total Expenses

$

8 873

$

9,273

iv

The major sources of operating revenue for the Technical College are tuition and fees and educational activities. The decrease in operating revenue of approximately $1,000,000 is directly related to a change in how revenues from Federal grants and contracts primarily Pell were classified. In 2008 these revenues were classified as operating revenues whereas in 2009 were classified as nonoperating revenues.
Tuition and Fees increased by approximately $135,000. This increase is directly related to the increased enrollment of 8 percent from fiscal year 2008, as well as an approved increase in tuition and fees implemented Winter Quarter, 2009.
Nonoperating revenue increased by approximately $368,000 with an increase in nonoperating Federal grants and contracts of approximately $1,589,000 offset by a decrease in state appropriations of approximately $744,000. The increase in nonoperating Federal grants was primarily due to the change in how revenues from Federal grants and contracts were classified as nonoperating rather than operating as described above. The decrease in state appropriations was due to the overall generally poor condition of the state economy experienced beginning late summer, 2008.
The category of operating expenses decreased by approximately $484,000. All items of expense decreased from the previous year due to the budget reductions required, except Depreciation which remained stable, and except for Scholarships and Allowances which increased due to the increase in enrollment and increase in Tuition and Fees.
Under nonoperating expenses the increase of approximately $84,000 was primarily due to payments for noncapital items required to furnish the new welding and joining building mentioned under the Capital Assets section below.
Statement ofCash 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 Assets.
V

Statement of Cash Flows (thousands of dollars)

June 30, 2009

June 30, 2008

Cash Provided (Used) By:

Operating Activities

$

-6,581

$

-5,486

Noncapital Financing Activities

6,724

6,778

Capital and Related Financing Activities

-340

-187

Investing Activities

3

5

Net Change in Cash Cash, Beginning of Year

$

-194

$

1,110

1,228

118

Cash, End of Year

$

1.034

$

1,228

Capital Assets

As mentioned in previous audit reports, the Technical College received approval in 2008 for the design, bidding and construction of a planned Industrial Training Facility with a stated cost limitation of slightly over $5.5 million, to be funded by the Georgia State Financing and Investment Commission (GSFIC). The Technical College is hopeful construction can be completed in Spring 2010. In conjunction with the funding for this building, the Technical College additionally received approval of approximately $775,000 funded by GSFIC to finish the interior of the Welding and Joining Building which was completed in fiscal year 2009.

Long-Term Liabilities

Flint River Technical College had a total Long-Term Liabilities of $337,772.87 of which $187,104.83 was reflected as a current liability at June 30, 2009.

For additional information on Long-Term Liabilities, see Notes 1 and 7 in the Notes to the Financial Statements.

Economic Outlook and Merger Status

The Technical College, as a unit of the Technical College System of Georgia (TCSG) was affected by the State of Georgia's economic downturn and was instructed to reduce budget expenditures approximately nine (9) percent in fiscal year 2009.

In conjunction with the budget reductions, on July 1, 2009, nine of Georgia's technical colleges merged to become four new colleges; however, Flint River Technical College and Griffin Technical College are still to be merged. Griffin Technical College and Flint River Technical College are expected to become Southern Crescent Technical College in early 2010. The two colleges have already merged administrative functions but maintain separate identities until accreditation is approved for the newly merged college.

vi

Mr. Jim Wheeless was named Acting President for Flint River Technical College effective January 1, 2009 and will remain as Acting President until the merger is finalized, expected in early 2010. At that time Mr. Wheeless will assume the title of Provost for the Flint River Campus of Southern Crescent Technical College and Dr. Robert "Bobby" Arnold, current President of Griffin Technical College, will become President of the newly formed Southern Crescent Technical College. All technical colleges in the TCSG system will again experience budget reduction in fiscal 2010 of between 8 and 10 percent as the difficult economy in Georgia is expected to continue and impact the state's revenues unfavorably once again. We remain confident the merger of Flint River Technical College and Griffin Technical College will continue to provide the best in technical education, adult education and workforce training to all students and to the businesses and industries served by the Technical Colleges in 2010 and beyond. Jim Wheeless, Acting President Flint River Technical College
Vll

BASIC FINANCIAL STATEMENTS - 1-

FLINT RIVER TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30, 2009
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 Unrestricted
Total Net Assets

EXHIBIT"A"
$ 1,034,431.56
186,466.55 103,328.44
7,153.48 171,905.35
$ 1,503,285.38
5,007,324.23
$ 6,510,609.61
$ 115,604.04
62,030.99 21,451.33 11,264.20 187,104.83
$ 397,455.39
150,668.04 $ 548,123.43
$ 5,007,324.23 955,161.95
$ 5,962,486.18

The notes to the financial statements are an integral part of this statement.
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FLINT RIVER TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2009

EXHIBIT"B"

OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Rents and Royalties Sales and Services Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Gifts Interest and Other Investment Income Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Nongovernmental
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

$ 1,964,005.86 -455,556.51
35,905.70 7,485.00
752,697.79 2,335.00
$ 2,3061872.84

$ 4,239,401.54 978,458.82 29,768.03
1,325,970.60 296,941.95
1,594, 128.80 324,063.99
$ 8,788,733.73
$ -6,481,860.89

$ 3,928,428.63

2,690,545.07 132,314.92 3,549.60 -84,033.12

$ 6,670,805.10

$

188,944.21

$

27,689.44

1,270.00

$

28,959.44

$

217,903.65

5,744,582.53

$ 5,962,486.18

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

(This page left intentionally blank)

FLINT RIVER TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Expenses
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 Flows 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 Deferred Revenue Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts Gifts and Grants Received for Other Than Capital Purposes
The notes to the financial statements are an integral part of this statement.
-5-

EXHIBIT"C"

$ 1,519,057.83 28,489.15
769,414.19 -3,266,464.85 -4,315,987.88 -1,325,970.60
9 993.86
$ -6,581,468.30

$ 3,928,428.63 11,264.20
2,793,900.10 -9 416.55
$ 6,724,176.38

$

27,689.44

-367,137.20

$ -339,447.76

$

3 549.60

$ -193,190.08

1,227,621.64

$ -6,481,860.89
324,063.99 -62,570.94 58,635.81 18,059.33 42,361.70 -379,153.09 17,943.83 -118,948.04
$ -6,581,468.30
$ ====1==2==1==0==o.=o
$ ===74=6=1=6=.5=7

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Flint River Technical College is one of thirty-three (33) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Flint River Technical College as a separate reporting entity.
The Technical College's Local Board of Directors is composed of eight (8) members serving staggered three-year terms who are appointed by the State Board ofTechnical and Adult Education. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office ofthe Technical College determines the amount of State appropriations to be received by Flint River Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Flint River Technical College is considered an organizational unit of the Technical College System of Georgia for financial reporting purposes because ofthe significance of its legal, operational, and financial relationships as defined in Section 2100 ofthe 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 16 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, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required.
GAAP requires that the reporting of summer school revenues and expenses be split between fiscal years rather than in one fiscal year. Due to lack of materiality, the Technical Colleges of the Technical College System of Georgia will continue to report summer revenues and expenses in the year in which the predominate activity takes place.
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, except as noted in the preceding paragraph. 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.
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FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING The Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include petty cash, demand deposits and time deposits in authorized financial institutions.
ACCOUNTS RECEIVABLE Accounts receivable consist oftuition 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 weighted average 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 and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastrncture, 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 ofthe 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, and 3 to 10 years for equipment.
To fully portray capital assets acquired by the Technical Colleges ofthe 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 the 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 Flint River
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FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2009, GSFIC did not transfer any capital additions to Flint River Technical College.
DEFERRED REVENUES Deferred 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.
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 Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Flint River Technical College had an accrued liability for compensated absences in the amount of $456,720.91 as of July 1, 2008. For fiscal year 2009, $245,199.61 was earned in compensated absences and employees were paid $364,147.65, for a net decrease of $118,948.04. The ending balance as of June 30, 2009, in accrued liability for compensated absences was $337,772.87.
NONCURRENT LIABILITIES Noncurrent liabilities include liabilities that will not be paid within the next fiscal year.
NET ASSETS The Technical College's net assets are classified as follows:
Invested in capital assets, net ofrelated debt: This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. (The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed above.)
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 $3,934.09. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of Treasury and Fiscal Services.
When an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.

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FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INCOME TAXES Flint River 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 The Technical College has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria:
Operating revenues: Operating revenues include activities that have the characteristics ofexchange 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 FundAccounting, and GASB No. 34, such as state appropriations and investment income.
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 Assets. 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.

-9-

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 2: DEPOSITS

DEPOSITS 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 ofthe State ofGeorgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.

4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.

5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation ofthe United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

6. Guarantee or insurance ofaccounts provided by the Federal Deposit Insurance Corporation.

As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies, which allows agencies of the State of Georgia (and thus Flint River Technical College), the option of exempting demand deposits from the collateral requirements.

At June 30, 2009, the carrying value of the deposits was $1,034,301.56 and the bank balance was $1,257,134.75. Of the Technical College's deposits, $852,580.13 were uninsured. Of this balance $852,580.13 were collateralized with securities held by the financial institution's trust department or agent in the Technical College's name and zero ($0) were uncollateralized.

NOTE 3: ACCOUNTS RECEIVABLE

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

Student Tuition and Fees Federal, State and Private Funds GSFIC

$ 17,911.44 262,908.15 41,966.82

$ 322,786.41

Less: Allowance for Doubtful Accounts

32,991.42

Net Accounts Receivable

$ 289!794.99

- 10 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 4: INVENTORIES

Inventories at June 30, 2009, consists of the following:

Bookstore

$ 171,905.35

NOTE 5: CAPITAL ASSETS

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

Beginning Balance July 1, 2008

Additions

Reductions

Ending Balance June 30, 2009

Capital Assets, Not Being Depreciated:

Land and Land Improvements

$ 171,745.00 $

0.00 $

0.00 $ 171,745.00

Capital Assets, Being Depreciated:

Buildings and Building Improvements $ 6,117,775.74 $

Improvements Other Than Buildings

674,001.85

Equipment

1,416,803.22

Library Collections

251,024.14

131,641.35
108,823.95 $ 127,941.90

11,037.85 546.24

$ 6,249,417.09 674,001.85
1,514,589.32 378,419.80

Total Assets Being Depreciated

$ 8,459,604.95 $ 368,407.20 $ 11,584.09 $ 8,816,428.06

Less: Accumulated Depreciation:

Buildings and Building Improvements $ 1,702,387.44 $

Improvements Other Than Buildings

666,741.87

Equipment

1,184,419.35

Library Collections

I 14,820.27

183,389.55 -15,765.90 124,009.52 $ 32,430.82

11,037.85 546.24

$ 1,885,776.99 650,975.97
1,297,391.02 146,704.85

Total Accumulated Depreciation

$ 3,668,368.93 $ 324,063.99 $ 11,584.09 $ 3,980,848.83

Total Capital Assets, Being Depreciated,

Net

$ 4,791,236.02 $

44,343.21 $

0.00 $ 4,835,579.23

Capital Assets, Net

$ 4,962,981.02 $ 44,343.21 $

0.00 $ 5.007,324 23

NOTE 6: DEFERRED REVENUE

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

Prepaid Tuition and Fees Federal Grants and Contracts

$

6,359.00

15,092.33

Totals NOTE 7: LONG-TERM LIABILITIES

$=====2====1~.4====51==3. ~3

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

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FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 7: LONG-TERM LIABILITIES

Other Liabilities Compensated Absences

Balance July 1. 2008

Additions

NOTE 8: NET ASSETS

Reductions

Balance June 30, 2009

Current Portion

$ 187.104 83

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

Invested in Capital Assets Net of Related Debt
Unrestricted Net Assets
Total Net Assets

Balance July 1. 2008

Additions

Reductions

Balance June 30, 2009

$ 4,962,981.02 $ 44,343.21 $

0.00 $ 5,007,324.23

781,601.51

8,977,677.94

8,804,117.50

955.161.95

$ 51744,582.53 $ 2,Q22!Q21.15 $ 8!804! 117.5Q $ 5 262 486.18

NOTE 9: LEASE OBLIGATIONS

OPERATING LEASES Flint River Technical College has entered into certain agreements to lease buildings and equipment which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Expenses for rental of buildings and equipment under operating leases for the year ended June 30, 2009, totaled $99,843.40.

SUMMARY OF LEASE OBLIGATIONS Future commitments for capital leases (which here and on the Statement ofNet Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2009, were as follows:

Year Ending June 30
2010 2011
Total Minimum Lease Payments

Operating Leases
$ 87,347.20 2,244.00
$ 89,591.20

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FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Flint River Technical College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

Funding Policy Employees ofFlint River Technical College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Flint River Technical College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2009, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2009 2008 2007

100% 100% 100%

$ 186,831.99 $ 181,025.20 $ 194,437.24

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description Flint River Technical College participates in the Employees' Retirement System ofGeorgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia.

The ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 ofthe Internal Revenue Code (IRC) as a portion ofERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.

The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS

- 13 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description 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 I, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board ofTrustees for such purpose. The formula considers the monthly average ofthe member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Technical College's payroll for the year ended June 30, 2009, for employees covered by ERS was $1,467,936.15. The Technical College's total payroll for all employees was $4,239,401.54.
Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% ofannual compensation in excess of $4,200. Under the old plan, the Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' eamable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees

- 14 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Policy determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Technical College contributions are not at any time refundable to the member or his/her beneficiary.

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

Fiscal Year

Percentage Contributed

Required Contribution

2009 2008 2007

100% 100% 100%

$ 176,518.58 $ 189,069.47 $ 167,682.10

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

GEORGIA DEFINED CONTRIBUTION PLAN

Plan Description Flint River 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 ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.

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

- 15 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The Technical College's payroll for the year ended June 30, 2009, for employees covered by GDCP was $454,795.30. The Technical College's total payroll for all employees was $4,239,401.54.
Total contributions made by employees during fiscal year 2009 amounted to $34,109.89 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
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~eorgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. The Department ofCommunity 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 ofAdministrative Services (DOAS) has the responsibility for the State of Georgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental 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 ofthe Technical College System of Georgia, is part ofthe State ofGeorgia 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.

- 16 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 12: POSTEMPLOYMENT BENEFITS

The Technical College participates in two State of Georgia postemployment benefit plans, the Georgia Retiree Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department- OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices.

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

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

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

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

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

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

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

- 17 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 12: POSTEMPLOYMENT BENEFITS

Georgia Retiree Health Benefit Fund

Required Contribution

Percent Contributed

2009 2008

$ 484,199.49 $ 818,717.25

100% 100%

State Employees' Assurance Department - OPEB State Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit postemployment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of the Employees' Retirement System.

Contributions by plan members are established by the Board of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of eamable compensation). The Board of Trustees of the Employees' Retirement System establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% ofearnable compensation. For the fiscal year ended June 30, 2009, contributions of ERS "old plan" members were 0.45% of earnable compensation, 0.22% ofwhich was paid by the employer. Contributions ofERS "new plan" members were 0.23% of eamable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30, 2009 and June 30, 2008.

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 Flint River Technical College expects such amounts, if any, to be immaterial to its overall financial position.

Litigation, claims and assessments filed against Flint River 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 ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009.

NOTE 14: SUBSEQUENT EVENTS

Effective July 1, 2009, Flint River Technical College and Griffin Technical College merged administrative functions.

- 18 -

FLINT RIVER TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 15: 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 Assets" are all classified as Instruction at the functional classification.
NOTE 16: AFFILIATED ORGANIZATIONS
In accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an amendment of GASB Statement No. 14, The Reporting Entity, Flint River Technical College Foundation has been determined to be a legally separate, tax exempt organization whose activities primarily support Flint River Technical College, a member college ofpostsecondary education in Georgia whose units comprise the Technical College System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office has determined Component Units of the State of Georgia, as required by GASB Statement No. 39, should be assessed in relation to their significance to the State ofGeorgia. Accordingly, Flint River Technical College has not included financial activity for Flint River Technical College Foundation in these financial statements.

- 19 -

(This page left intentionally blank)

SUPPLEMENTARY INFORMATION

FLINT RIVER TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND JUNE 30, 2009
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Salaries Payable Accounts Payable Encumbrances Payable Deferred Revenue
Total Liabilities
Fund Balances Reserved Departmental Sales and Services Federal Financial Assistance Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

1,121,663.85

255,320.48 78,623.44 7,153.48
171,905.35

$ _ _=-1,_63-4..,6..-66---60....

$

62,030.99

165,231.60

628,907.96

6 099.00

$

862,269.55

$

78,935.90

15,476.48

67,004.01

106,322.88

405,920.14

32,991.42

61,812.13

3,934.09

$

772,397.05

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 comprehensive basis of accounting other than generally accepted accounting principles.
22

FLINT RIVER TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2009

SCHEDULE ''2"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$

3,931,575.00 $

3,931,575.00 $

1,157,066.04

1,071,391.92

2 941 846.57

2,663,919.83

$

8,030,487.61 $

7,666,886.75 $

0.00 -85,674.12 -277,926.74
-363,600.86

0.00

661 674.26

$

8 030 487.61 $

8,328,561.01 $

661 674.26 298 073.40

$

400,775.52 $

10,970.57

7,618,741.52

$

8,030,487.61 $

$

0.00 $

387,084.69 $ 4,916.44
7,260,771.00
7,652 772.13 $
675,788.88

13,690.83 6,054.13 357,970.52
377 715.48

756,691.11 3,146.37

10,358.17 -8,553.55
-3,146.37

-213.30 -661,674.26

$

772,397.05

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

$

78,935.90

15,476.48

67,004.01

106,322.88

405,920.14

32,991.42

61 812.13

$

768,462.96

3 934.09

Total Fund Balance
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 comprehensive basis of accounting other than generally accepted accounting principles.
23-

$ ===77=2=,3=9=7.=05=

FLINT RIVER TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(NON-GMP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2009

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

Original Appropriation

Final Bud9et

Current Year Revenues

Funds Available Comeared to Bud9et

Prior Year Carry-Over

Total Funds Available

Variance Positive (Negative)

228,449.00 162,038.00
29 841,00

199,278.00 166,656.52
34 841.00

$

420,328.00 $

400,775.52

199,278.00 166,598.60
23 571.48
389,448.08

0.00 0.00 0.00
000 $

199,278.00 166,598.60
23 571.48
389,448.08 $

0.00 -57.92 -11 269.52
-11 327.44

Economic Development Other Funds

2,320.57 $

10,970.57 $

6,080.44 $

0.00 $

6,080.44 $ ===-4=,8=9=0=.1=3

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

$

4,582,992.00 $

3,732,297.00

578,623.16

966,299.52

0,00 2136434.00

$

7,298049.16

24,110.00 2 896 035,00
7 618 741.52

3,732,297.00 $ 880,683.32

0.00 7,227.86

3,732,297.00 887,911.18

0.00 -78,388.34

24,110.00 2,634,267.91
7 271 358.23

0.00 654 446.40
661 674.26

24,110.00 3,288 714.31
7 933.032.49 $

0.00 392 679.31
314 290.97

$

7,720,697.73 $

8,030,487,61 $

7,666,886.75 $

661,674.26 $ 8,328,561.01 $

298,073.40

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 comprehensive basis of accounting other than generally accepted accounting principles.

SCHEDULE "3"

Exeenditures Comeared to Bud9et

Variance

Po5itive

Actual

(Negative)

Actual Funds Available
Over/(Under) Expenditures

Prior Period Adjustments

Other Adjustments

Program Fund
Balances

Transfers

Pro9ram Fund Balances

Reserve

Surplus

Total Fund Balance

$

196,926.65

166,586.56

23 571.48

$ 387,084.69

2,351.35 69.96
11 269.52
13,690.83 $

2,351.35 $ 12.04 0.00
2,363.39 $

0.00 -23.18
0.00
-23.18

0.00 0.00 0.00
0.00 $

2,351.35 -11.14 0.00
2,340.21

0.00 11.14 0.00
11.14 $

000 $ 000 0.00
0.00 $

2,351.35 0.00 0.00
2,351.35

2,351.35
o.oo
0.00
2,351.35

4,916.44 $

6,054.13 $

1,164.00 $

0.00 $

0.00 $

1,164.00 $

0.00 $

1,164.00 $

0.00 $ ==1;;,,,1;,,6,,,4;,;..0;,.0

$ 3,732,297.00 $ 871,747.76

0.00 $ 94,551.76

0.00 $ 16,163.42

1,582.74 $ -686.94

24,110.00 2 632 616.24
7 260 771.00

000 263,418.76
357 970.52 $

0.00 656,098.07
672 261.49 $

0.00 932.00
1 827.80 $

000

1,582.74

0.00

15,476.48

0.00 0.00
0.00 $

0.00 657 030.07
674,089.29

0.00 $

0.00

0.00

15,476.48

1,582.74 0.00

1,582.74 15,476.48

0.00 -11.14
-11.14

0.00

0.00

657 018.93

0.00

672 495.41 $ 1 582.74

0.00 657,018.93
674 078.15

7,652,772.13 $

377,715.48 $

675,788.88 $ 1,804.62 $

0.00 $ 677,593.50 $

0.00 $ 673,659.41 $ 3 934.09 $ 677,593.50

Unexpendable Reserves Uncollectible Accounts Receivable Inventories

32,991.42 61 812.13
772 397 05

25-

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

SCHEDULE "4"

Totals per Annual Supplement
Accruals June 30, 2009 June 30, 2008
Compensated Absences June 30, 2009 June 30, 2008
Agency Funds
Unidentified Variance

SALARIES
$ 4,304,279.86 $

TRAVEL 29,768.03

62,030.99 -19,669.29

273,245.86 -367,455.05
-15,888.76
21857.93

$ 4,239,401.54 $===29=,7=6=8=.0=3

- 27 -

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

FLINT RIVER TECHNICAL COLLEGE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2009

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-847-08-01

Previously Reported Corrective Action Implemented

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

SECTION III FINDINGS AND QUESTIONED COSTS

FLINT RIVER TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2009
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.