West Georgia Technical College, LaGrange, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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STATE OF GEORGIA

DE,PARTMENT OF AUPITS AND ACCOUNTS

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WEST GEORGIA TECHNICAL: COLLEGE

LAGRANGE, GEORGIA

REPORT ON AUDIT ' , ' OF,THE F.INANCIAL STATEMENTS FOR THE FISCAL '(EAR ENDED JUNE 30, 2002 .

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Russell W. Hinton State _Auditor

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WEST GEORGIA TECHNICAL COLLEGE -TABLE OF CONTENTS -

Page

SECTION I

SELECTED FINANCIAL INFORMATION

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

3

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

11

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

12

C STATEMENT OF CASH FLOWS

13

D NOTES TO THE FINANCIAL STATEMENTS

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SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULEOFFUNDSAVAILABLEANDEXPENDITURES

COMPARED TO BUDGET (NON-GAAP BASIS)

BUDGET FUND

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

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2 RECONCILIATION OF SALARIES AND TRAVEL

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WEST GEORGIA TECHNICAL COLLEGE -TABLE OF CONTENTS -

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

SECTION! SELECTED FINANCIAL INFORMATION

RIISSELL W. HINTON
STATE AUDITOR ,,O,S\ b56 2174

0EPARTl\1ENT OF AUDITS AND ACCOUNTS
2"4 \\J,hrngton Street S \V Suite 114 Allanta, Georgia 3tl:<14-X4tK1
October 3. 2002

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 ofDuectors
and Honorable Daryl Gilley, lntenm President West Georgia Technical College
INDEPENDENT AUDITOR'S COMBINED REPORT OJ\' BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen
We have audited the accompanymg basic financial statements (Exh1b11s A through D) of West Georgia Technical College, an organ1zat1onal unit of the State of Georgia. as of and for the year ended June 30. 2002 These financial statements arc the respons1b1hty of the Technical College's management Our respons1b1hty 1s to express an opinion on these financial statements based on our audit
We conducted our audit m accordance with aud1tmg standards generally accepted m the United States of Amenca Those standards require that we plan and perform the audit to obtam reasonable assurance about whether the financial statements are free of matenal misstatement An audit mcludes exammmg, on a test basis. evidence supportmg the amounts and disclosures m the financial statements An audit also mcludes assessmg the accountmg pnnc1ples used and significant estimates made by management, as well as evaluating the overall financial statement presentation We beheve that our audit provides a reasonable basis for our opm1on
As discussed m Note I, the financial statements of West Georgia Technical College arc mtended to present the financial position and changes m financial position (mcludmg cash flows) of only that portion of the busmess-type act1v1t1es of the State of Georgia that 1s attnbutable to the transactions of West Georgia Technical College They do not purport to, and do not, present fairly the financial pos1t1on and changes m financial pos111on (mcludmg cash flows) of the State of Georgia. m conformity with accountmg pnnc1ples generally accepted m the United States of Arnenca

02ARL-IT

In our op1mon, the basic financial statements referred to above present fairly, in all matenal respects, the financial pos1t1on of West Georgia Techrucal College as of June 30, 2002. and its changes in financial pos1t10n (including cash flows) for the year then ended in conformity with accounting pnnc1ples generally accepted in the Umted States of Amenca
As descnbed in Note I. West Georgia Techmcal College adopted the prov1s1ons of Governmental Accounting Standards Board (GASB) Statements No 35, Basic Fznanczal Statements - and Management's Discusswn and Analvszs - for Publzc Colleges and Unzversztzes, as amended by GASB Statement No 37, Baszc Fznanczal Statements-and Management's Discusswn and Analvszs for State and Local Governments, and GASB Statement No 38. Certam Fznanczal Statements Note Dzsclosures, as of July I, 2001, to implement a new financial reporting model
Management's D1scuss10n and Analysis 1s not a reqmred part ofthe basic financial statements but 1s supplementary informauon required by the GASB We have applied certain hmlted procedures, which consisted prmc1pally of inqumes ofmanagement regarding the methods ofmeasurement and presentallon of this supplementary informallon However, we did not audit this informallon and express no opinion on n
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole The accompanying supplementary information (Schedules I and 2) 1s presented for purposes of add1t1onal analysis and 1s not a reqmred part ofthe basic financial statements of West Georgia Techrucal College Such informauon has been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, in our opinion, based on our audit, 1s fairly stated in all matenal respects in relallon to the basic financial statements taken as a whole
--- w. Respectfully submitted,
RWHas 02ARL-IT

REQUIRED SUPPLEMENfARY INFORMATION - I-

West Georgia Technical College 'Management's Discussion and Analysis
The followmg 1s a d1scuss1on and analysis of West Georgia Techrucal College's financial performance for the fiscal year endmg June 30, 2002 Please read 11 m con1unc11on with the College's financial statements, which follow tlus secllon Due to the fact that the State of Georgia, mcludmg West Georgia Techrucal College, implemented the prov1s1ons of Governmental Accountmg Standards Board (GASB) Statements No 34 and 35 for the fiscal year 2002, only hm1ted fiscal year 2001 data will be presented for comparative purposes Tins comparallve mformat1on will be requued m future reports
Overvie,.. ofthe Financial Statements and Financial Analysis
This annual report consists of a senes of financial statements prepared m accordance with the rules and regulalions estabhshed by the Governmental Accountmg Standards Board These financial statements differ, m both form and the accountmg pnnc1ple used, from the presentauon of pnor financial statements
The Statement of Net Assets used m conJunclion with the Statement of Revenues, E:i.penses and Changes m Net Assets conta.ms mformalion concerning the College's finances and ac1Iv11Ies as a whole and assists with prov1dmg an answer to the quesllon "ls the College as a whole better or worse off as a result of the year's act1v111es?" These statements mclude all assets and hab1h11es usmg the accrual basis of accountmg, wluch 1s s1m1lar to the accountmg method used by corporat10ns and other pnvate sector comparues All revenues and assets are recogruzed when the service 1s provided and expenses and hab1hlies are recognized when others provide the goods or sefV!ce, regardless of when cash 1s exchanged
The Statement of Cash Flows 1s a valuable tool when evaluatmg the ab1hty of the College to meet financial obhgalions as they mature Tins statement presents mformalion related to cash mflows and outflows surnmanzed by operating, non-capital financmg, capital and related financmg and mvestmg ac1Iv1t1es
This d1scuss1on and analysis of the College's financial statements provides an overview of its financial ac1Iv11Ies for the year
Statement ofNet Assets
The purpose of the Statement of Net Assets 1s to present to the users of the financial statements a fiscal snapshot of the Techmcal College at a specific pomt m time The statement presents the assets, hab1hlies and net assets of the College as of the end of the fiscal year Assets and hab1ht1es are reported as current and non-current and the difference between assets and hab1ht1es 1s reported as net assets Over a penod of time the mcreases and decreases reflected m the
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Statement of Net Assets, when considered with other non-financial facts such as enrollment levels and the cond1t10n of the fac1hues, can provide a measure to aid in determining whether the Technical College's financial posit10n is improving or detenorating

Net assets are d1v1ded into three maJor categones The first category, invested in capital assets, net of debt, provides information concerning the College's equity in property, plant and equipment owned by the College The next asset category 1s restricted net assets Restricted net assets are available for expenditure by the College but must be spent for purposes as detenruned by donors and/or external entities that have placed lime or purpose restrlctlons on the use of the assets The final category 1s unrestricted net assets, which are available for expenditure by the College for any lawful purpose deemed necessary to operate the College

Statement of Net Assets (thousands of dollars)

Assets Current Assets Capital Assets, Net

S 1,209 7,209

Total Assets

$ 8.418

Liablllties Current Liabihues Non-Current L1ab1hues

$ 568 152

Total Liabilities

$ 720

Net Assets Invested in Capital Assets, Net of Debt Restricted Unrestricted

$ 7,209 18
470

Total Net Assets

$ 7.697

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 College, both operating and nonoperating, and the expenses incurred by the College, operaung and nonoperating, and any other revenues, expenses, gains and losses received or spent by the College dunng the fiscal year Changes in total net assets as presented on the Statement of Net Assets are based on the information presented m the Statement of Revenues, Expenses and Changes in Net Assets
Operattng revenues are received for provuiing goods and/or services to vanous customers and constttuenc1es of the College Operating expenses are those expenses paid to acqmre or produce the goods and/or services provided m return for the operaung revenues, and to carry out the m1ss10n of the College Therefore, nonoperating revenue 1s received when no goods or services are provided in exchange for the revenue State appropnattons and gifts were classified as
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operating revenues in previous reports With the issuance of Statement No 35, new guidelines have been established by the Governmental Accounting Standards Board (GASB) changing the class1ficat10ns of state appropnauons and gifts from operating to nonoperating revenue This change may result in an operating deficit that 1s offset by a nonoperating surplus

Statement of Revenues, Expenses and Changes in Net Assets (thousands of dollars)

Operatmg Revenues Operating Expenses

$ 2,675 8,280

Operatmg GaJn!Loss

$ -5,605

Nonoperating Revenues and Expenses

5,413

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

$ -192

Other Revenues, Expenses, GaJns or Losses

77

Increase m Net Assets

$ -115

Net Assets at Begmrung of Year, as Ongmally Reported

$ 5,222

Cumulallve Effect of Changes m Accountmg Pnnc1ple

2,590

Net Assets at Beginnmg ofYeu Restated

$ 7,812

Net Assets at End of Year

S 7.697

The Statement of Revenues, Expenses, and Changes m Net Assets reflects a negative year with a decrease in the net assets at the end of the year Some h1ghhghts of the mformat1on presented on the Statement of Revenues, Expenses, and Changes m Net Assets are as follows

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Revenue by Source (thousands of dollars)

Operating Revenue Tmtion and Fees Grants and Contracts Sales and Services of Educational Departments Other
Total Operating Revenue

s 1.476
896 239
64
s 2,675

Nonoperating Revenue

State Appropnauons

Federal Grants and Contracts

State Grants and Contracts

Investment Income

Other

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$ 4,586 822 70 15 -80

Total Nonoperatmg Revenue

$ 5,413

Total Revenues

$ 8,Q

Operating Expenses (thousands of dollars)

Operating Expenses Instruction

S 8,280

Total Operating Expenses

$ 8.280

The sources of operating revenue for the College are tmllon and fees, grants and contracts, auxiliary services, and educational ac11v1t1cs The operating loss 1s directly related to the exclusion of the State of Georgia appropnauon in the amount of $4,586,609 from operating revenues per GASB 35

Tmt1on increased by $216,318 Tlus 1s chrectly related to the increased enrollment of IO 6% from fiscal year 200 I

Personal ServJces expense mcreased by approximately $315,035 This increase reflects an annual pay raJse for College employees of approxlillately 4 5% with the associated fimge benefits

The cumulauve effects of changes in accounting pnnc1ple are the result of the College adopting deprec1allon on capital assets and changing from the budgetary basis to the GAAP basis of accounting

Under nonoperating revenues (expenses) state appropnat1ons decreased by approximately $125,909 This includes a increase in regular state appropnat1ons of approximately $104,856 and a decrease in lottery state appropnat10ns of $230,765 The College did not receive any lottery

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state appropnat1ons funds for fiscal year 2002 Vih1lc 1! appears that the College received addltlonal new money from the state, given the mandatory cost mcreases of vanous expense categones, the College actually had a relatively flat fundmg year when all thmgs are considered

Statement of Cash Flows

The purpose of the Statement of Cash Flows 1s to proVJde relevant mfonnallon concemmg the cash receipts and payments of the College dunng the year It also provides mfonnauon concerrung the College's ab1hty to generate future cash flows and to meet its obhgat10ns as they come due The statement 1s d1V1ded mto three sect10ns The first sect10n reports on the operatmg cash flows and shows the net cash used by the operatmg actlVJlles of the College The second sec!Jon shows the cash flows from the nonoperatmg act1v111es of the College The final section reconciles the net cash used to the operating mcome or loss reflected on the Statement of Revenues, Expenses, and Changes m Net Assets

Statement of Cash Flows (thousands of dollars)

Cash Provided (Used) By Operating Acllv1t1es Non-Capital Fmancmg ActlVJtles Investmg Acllv1t1es Capital and Related Fmancmg Act1v1t1es

$ -5,003 5,501 15 -33

Net Change m Cash Cash, Begmnmg of Year
Cash, End of Year

$ 480 418
s 898

Capital Assets
The College had no s1gruficant capital asset additions for fac1ht1es m the fiscal year 2002 ProJects funded by the Georgia State Fmancmg and Investment Comm1ss1on (GSFJC) were approximately $204,191. ProJected fundmg by the GSFJC for fiscal year 2003 will be approxlillately the same
Economic Outlook
The College 1s unaware of any currently known fact, dec1S1on, or condition that 1s expected to have a s1gruficant effect on the financial pos1tJon or change how the College operates for the next fiscal year As m pnor years, the College's overall financial pos1tJon 1s strong Enrollment has mcreased by 11 22% annually for the past 5 years and this trend 1s expected to contmue mto the next fiscal year As a result, the College anticipates the next fiscal year will be much hke the last and the College will mamtam a close watch over resources to mamtam the ab1hty to react to uriknown mtemal and external issues

Mr Daryl Gilley, Intenm President West Georgia Techmcal College
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BASIC FINANCIAL STATEMENTS
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WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30. 2002
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net State Appropnat1ons Federal Financial Assistance Other
Total Current Assets
Non-Current Assets Capital Assets, Net
Total Assets
LIABILITIES
Current Llab1ht1es Salanes Payable Payroll Wrthholdmgs Accounts Payable Deferred Revenue Funds Held for Others Compensated Absences Other L1ab1lrtJes
Total Current Llab1lrt1es
Non-Current L1ab1ht1es Compensated Absences
Total Ltab1hhes
NET ASSETS
Invested in Caprtal Assets, Net of Related Debt Restncted Unrestncted
Total Net Assets

EXHIBIT "A"

$

898,119 22

861 14 149,116 56 160,839 11

$ 1,208,936 03

$ 7,209,138 04 $ 841807407

$

8,675 98

9,860 80

219,095 21

129,470 62

20,903 56

179,691 47

863 37

$ 568 561 01

$ 151,897 35
s 720,458 36

$ 7,209,138 04 17,873 63
470 604 04

$ 769761571

The notes to the financial statements are an integral part of this statement - 11 -

WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30 2002

EXHIBIT 'B'

OPERATING REVENUES

Student Turtion and Fees

Less Scholarship Allowances

Grants and Contracts

Federal

Rents and Royalbes

Sales and Services



Other Operating Revenues

Total Operating Revenues

OPERATING EXPENSES

Salanes Benefits Travel Scholarships and Fellowships Uttlrt1es Supplies and Other Services Depr9Clatron

Total Operabng Expenses

Operating Income (Loss)

NONOPERATING REVENUES {EXPENSES}

State Appropnattons Grants and Contracts
Federal State Interest and Other Investment Income Other Nonoperabng Revenues

Net Nonoperabng Revenues

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

Caprtal Grants and Gifts State
Increase (Decrease) 1n Net Assets

Net Assets Net Assets - Beginning of Year as Ong,nally Reported Cumulabve Effect of Changes ,n Accounbng Pnnc,ple

Net Assets - Beginning of Year, Restated

Net Assets - End of Year
The notes to the financ,al statements are an integral part of this statement - 12 -

$ 1565957 08 -90,085 99
896,25563 63 565 24
239498 92 2500
s 2 675,215 88

$ 4,186,807 89 1,053,614 38 41,19910 806 169 64 295,175 08 1,480,41414 41731128
$ 8 280 691 51
$ -5 605 475 63

$ 4,586608 72
82211387 69,78023 15,107 53 -80 079 85
$ 5.413,530 50
$ -19194513

$

76 722 35

$ -115 222 78

$ 5,222,399 93 2 590 438 56
$ 7 812 638 49

$ 769761571

WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30 2002
CASH FLOWS FROM OPERATING ACTIVITIES Turt1on and Fees Grants and Contracts Rents and Royalbes Sales and Services Payments to Suppliers
Payments to Employees
Payments for Scholarship and Fellowships Other Receipts (Payments)
Net Cash Provided (Used) by OperaMg Aclivilles
CASH FLOWS FROM NONCAPITAL FINANCING ACTMTIES State Appropnabona Agency Funds Transacbons Gifts and Grants Rece,ved for Other than Capital Purposes Other Nonoperabng Receipts
Net Cash Flows ProvKied by Noncap1tal F1nancmg Act1vrties
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Csp1tal Grants and Gifts RecelVed Purchases of Csprtal Assets
Net Cash Used by Csp1tal and Related Finanang Aclivilles
CASH FLOWS FROM INVESTING ACTMTIES Interest on Investments
Net Increase m Cash
Cash and Gash Equivalents - Begmmng of Year
Cssh and Cash Equivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTMTIES
Operabng Income (Loss) AdJustrnents to Reconc,le Operabng Income to Net Cash
Provided (Used) by Operabng Ac1IvI1Jes Oepreoat10n Expense Change m Assets and Lrab1lrt1es Receivables, Net
Salanes Payable
Payroll Withholdings and Employer Benefits Accounts Payable Deferred Revenue Compensated Absences
Net Cssh Provided (Used) by Operating Ac1IvI1Jes
The notes to the financial statements are an integral part of this statement - 13 -

EXHIBIT "C"

$ 1,480,101 25 895,103 83 63,565 24 203,382 28
-2,729,612 82 -4 182,056 95
-806 169 64 71 929 86
$ -5 003 756 95

$ 4,585 881 47 72,006 94
844,160 70 -406 46
$ 5,501,642 65

s

36 246 50

-69 692 50

$

-33 446 00

$

15107 53

$

479 547 23

41857199

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$ -5 605,475 63
417 311 28 -33,257 62
-6,525 91 8,211 57 91,379 21 72,124 20 52 475 95
$ -51003 756 95

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY West Georgia Techrucal College 1s one of tlurty-three (33) State supported member colleges of postsecondary education m Georgia which compnse the Georgia Department ofTechrucal and Adult Education. an organ1zat1onal urut of the State of Georgia The accompanymg financial statements reflect the operations of West Georgia Techrucal College as a separate reportmg entity
The Techrucal College's Local Board of Directors 1s composed of eight (8) members servmg staggered three-year terms who are appomted by the State Board ofTechrucal and Adult Education Appropnation of State funds 1s made to the Georgia Department ofTechrucal and Adult Education by the General Assembly of Georgia The Department's Adm1rustrat1ve Central Office determmes the amount of State appropnauons to be received by West Georgia Techmcal College The Techmcal College does not have authonty to retam unexpended State appropnalions (surplus) for any given fiscal year. Accordmgly, West Georgia Techmcal College 1s considered an orgaruzat10nal unit of the Georgia Department ofTechmcal and Adult Education for financial reportmg purposes because ofthe s1gmficance of1ts legal, operational, and financial relationships as defined m Section 2100 of the Governmental Accountmg Standards Board (GASB) Codification of Governmental Accountmg and Fmancial Reporting Standards
FINANCIAL STATEMENT PRESENTATION In June 1999. the GASB issued Statement No 34, Basic Financial Statements and Management Dzscusswn and Ana(vszsfor State and Local Governments This was followed m November 1999 by GASB Statement No 35, Basic Financial Statements and Management's D1scusswn and Analvs1s for Public Colleges and Umversllles The State of Georgia 1s required to implement GASB No 34 as of and for the year ended June 30, 2002 As an organ1zat1onal urut of the State of Georgia, the Techrucal College 1s also reqmred to adopt GASB Statements No 34 and No 35 as amended by GASB Statements No 37 and No 38 The financial statement presentation required by these standards provide a comprehensive, entity-Wide perspective of the Techrucal College's assets, hab1ht1es, net assets, revenues, expenses, changes m net assets, cash flows, and replaces the fund group perspective previously reqmred.
The Techmcal College has elected to not restate its 2001 financial statements to conform with the new financial statement presentallon, therefore comparative financial mformatlon will not be presented for fiscal year 2002 S1gruficant accountmg changes made m order to comply with the new requirements mclude (I) adopllon of deprec1at1on on capital assets, and (2) recogrutlon of compensated absences Also, generally accepted accountmg pnnc1ples (GAAP) reqmres that the reportmg of summer school revenues and expenses be spht between fiscal years rather than m one fiscal year However, because the effect ofth1s change 1s not matenal, the Techmcal Colleges ofthe Georgia Department ofTechrucal and Adult Education will continue to report summer revenues and expenses m the year m which the predommate acttv1ty takes place

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WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE l SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING For financial reportmg purposes, the Techmcal College 1s considered a special-purpose government engaged only m busmess-type actlVJtles Accordmgly, the Techmcal College's financial statements have been presented usmg the economic resources measurement focus and the accrual basis of accountmg, except as noted m the precedmg paragraph Under the accrual basis, revenues are recogmzed when earned, and expenses are recorded when an obligation has been mcurrcd All s1gmficant mtra-college transactions have been elimmated
The Techmcal College has the option to apply all Fmancial Accountmg Standards Board (FASB) pronouncements issued after November 30, J989, unless FASB conflicts with GASB The Techmcal College has elected to not apply FASB pronouncements issued after the applicable date
RESTATEMENT OF NET ASSETS - BEGINNING OF YEAR As a result of the adoption ofGASB Statement No 34, the Techmcal College was also required to make certam changes m accountmg pnnc1ples, specifically (1) adoption of deprec1a11on on capital assets, and (2) recordmg of compensated absences GASB Statement No 34 reqwres certam summer quarter revenues be recogmzed between fiscal years rather than the fiscal year m which the quarter was predommantly conducted The Techmcal College has chosen to continue to record summer revenue m the year m which the quarter was predommantly conducted Effective July 1, 2001, the Techmcal College's cap1talizat10n policy for equipment was mcreased from $1,000 00 to $5,000 00 Net assets at July 1, 2001 were mcreased by $2,590,438 56 for the cumulative effect of these changes
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents mclude currency on hand and demand deposits with banks and other authonzed financial mst1tut1ons
ACCOUNTS RECEIVABLE Accounts receivable consist of allotments due from the Georgia Department ofTechmcal and Adult Education - Adm1mstra!ive Central Office, reimbursements due from Federal, State, local, and pnvate grants and contracts, and other receivables disclosed from mforrnauon available
CAPITAL ASSETS Capital assets are recorded at cost at date of acquis1t1on, or fair market value at the date of capital contnbutlon The Techmcal College cap1tahzes all land and land 1mprovements For eqmpment. the Technical College's cap1tahzat1on policy mcludes all Items with a umt cost of$5,000 00 or more, and

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WEST GEORGIA TECHJ\'lCAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS an estimated useful hfe of greater than one year Bmldmgs and Bu1ldmg Improvements, Improvements Other Than Bmldmgs and Library Collections that exceed $100,000 00 or s1gmficantly mcrease the value or extend the useful hfe of the asset are capnahzed For mfrastructure, the Techmcal College's cap1tahzat1on threshold 1s S1,000,000 00 Routine repairs and mamtenance are charged to operatmg expense m the year m which the expense was mcurred Depreciation 1s computed usmg the stra1ght-hne method over the estimated useful hves ofthe assets, generally IO to 40 years for bmldmgs, 15 to 25 years for mfrastructure, 15 years for improvements other than bu1ldmgs, IO years for hbrary books, and 3 to IO years for eqmpment
To obtain full disclosure of capital assets acqmred by the Techmcal Colleges of the Georgia Department ofTechmcal and Adult Educat10n, 1t 1s necessary to look at the act1v1t1es of the Georgia State Fmancmg and Investment Comm1ss1on (GSFIC) - an organ1zat10n that 1s external to both the Technical College and the Georgia Department of Techmcal and Adult Education The GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to 1t m the Constitution of the State of Georgia and the Act creating the GSFIC The bonds are issued for the purpose of acqumng capital assets and this debt constitutes direct and general obhganons ofthe State of Georgia, to the payment ofwh1ch the full faith, credit and tax.mg power of the State are pledged
DEFERRED REVENUES Deferred revenues mclude ainounts received for tuition and fees and other act1v1t1es pnor to the end of the fiscal year but related to the subsequent accountmg penod Deferred revenues also mclude amounts received from grant and contract sponsors that have not yet been earned
COMPENSATED ABSENCES Employee vacation pay 1s accrued for financial statement purposes when vested The hab1hty and expense mcurred are recorded at year-end as accrued vacation payable m the Statement of Net Assets, and as a component of compensation and benefit expense m the Statements of Revenues, Expenses, and Changes m Net Assets West Georgia Technical College had an accrued hab1hty for compensated absences m the amount of $279,112 87 as of July I, 2001 For fiscal year 2002, $257,458 25 was earned m compensated absences and employees were paid $204,982 30, for a net mcrease of$52,475 95 The endmg balance as of June 30, 2002 rn accrued hab1hty for compensated absences 1s $331,588 82
NON-CURRENT LIABILITIES Non-current hab1ht1es mclude hab1l1t1es that will not be paid withm the next fiscal year

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WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS The Techrucal College's net assets are classified as follows
Invested m capital assets, net ofrelated debt Tins amount represents the Techmcal College's total mvestrnent m capital assets, net ofoutstandmg debt obligations related to those capital assets To the extent debt has been mcurred but not yet expended for capital assets, such amounts are not mcluded as a component of mvested m capital assets, net ofrelated debt. (The term "debt obligations" as used m this defimtlon does not mclude debt of the GSFIC as discussed above)
Restricted net assets Restncted net assets mclude resources m which the Techmcal College 1s legally or contractually obligated to spend resources m accordance with restnclions imposed by external th1rd parties, except for unexpended grant funds of $8,174 18 due to grantor agencies
Unrestricted net assets Unrestncted net assets represent available resources denved from student tuition and fees, state appropnatlons, and sales and services of educalional departments These resources will be used for transaclions relatmg to the educational and general operations of the Techmcal College, and may be used at the d1scret10n of the governmg board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropnanons lsurplus) of $19,751.34 Unexpended state appropnat1ons must be refunded to the Department ofTechmcal and Adult Education for remittance to the Office of Treasury and Fiscal Services These resources also mcludc auxiliary enterpnses, which are substantially self-supportmg act1v1t1es that provide services for students, faculty and staff
When an expense 1s mcurred that can be paid usmg either restncted or unrestncted resources, the Techmcal College's policy 1s to first apply the expense towards unrestncted resources, and then towards restncted resources
INCOME TAXES West Georgia Techrucal College, as a poht1cal subd1v1s1on ofthe State of Georgia, 1s excluded from Federal mcome taxes under Section I 15(1) of the Internal Revenue Code, as amended
CLASSIFICATION OF REVENUES The Techrucal College has classified its revenues as either operatmg ornonoperatmg revenues m the Statement of Revenues, Expenses, and Changes m Net Assets accordmg to the followmg cntena
Operating revenues Operatmg revenues mclude act1villes that have the charactenstlcs ofexchange transactions, such as (I) student tuition and fees, net of scholarslup allowances, (2) certain Federal, state and local grants and contracts, and (3) sales and services

- 17 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOU1'.'TING POLICIES
CLASSIFICATION OF REVENUES Nonoperating revenues Nonoperating revenues include act1v1t1es that have the charactensucs of non-exchange transactions, such as gifts and contnbuuons, and other revenue sources that are defined as nonoperatmg revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental En1111es That Use Propnetary Fund Accounting, and GASB No. 34, such as state appropnauons and investment income
Scholarship Allowances Student tu1t10n and fee revenues, and certam other revenues from students, are reported at gross with a contra revenue account of scholarslup allowances in the Statement of Revenues, Expenses, and Changes in Net Assets. 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 tmt10n and fees and other student charges, the Techmcal College has recorded contra revenue for scholarslup allowances
NOTE 2 CASH AND CASH EOUNALENTS AND OTHER DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATOTES AND POLICIES Funds belonging to West Georgia Technical College (and thus the State ofGeorgia) cannot be placed ma depository paying interest longer than ten days without the depos1toryprov1ding a surety bond to the State In heu of a surety bond, the depository may pledge as collateral any one or more of the following secunues as enumerated in the Official Code of Georgia Annotated Section 50-17-59
I Bonds, bill, certificates ofindebtedness, notes, or other direct obhgatlons ofthe Uruted States or of the State of Georgia
2 Bonds, bills, certificates of indebtedness, notes, or other obhgauons of the counties or mumc1paht1es of the State of Georgia
3 Bonds of any pubhc authonty created by the laws ofthe State ofGeorgia, providing that the statute that created the authonty authonzed the use of the bonds for this purpose
4 Industnal revenue bonds and bonds of development authontles created by the laws of the State of Georgia
5 Bonds. bills, certificates of indebtedness, notes, or other obhgat1ons of a subsidiary corporation ofthe Umted States government, which are fully guaranteed by the Uruted States government both as to pnnc1pal and interest, or debt obhgat1ons 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 Assoc1atlon, and the Federal National Mortgage Association
- 18 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXrIIBIT "D"

NOTE 2 CASH AND CASH EOUNALENTS AND OTHER DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES 6 Guarantee or msurance ofaccounts provided by the Federal Deposll Insurance Corporation

As authonzed m the Offic1al Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted pohc1es, which allow agencies of the State of Georgia (and thus West Georgia Technical College), the option of exernptmg demand deposits from the collateral reqmrements

CATEGORIZATION OF DEPOSITS The Techrucal College's cash deposits are categonzed by nsk as follows

Category I - Amounts covered by depository msurance or collaterahzed with secuntles (at frur value) held by the Technical College or by its agent m the Techrucal College's name

Category 2 - Amounts collaterahzed with secunhes (at fair value) held by the pledging financial mshtut10n's trust department or agent m the Technical College's name

Category 3 - Amounts collaterahzed with secunhes (at frur value) held by the pledgmg financial mslltullon, or by its trust department or agent but not m the Techrucal College's name, and amounts uncollateral1zed

At June 30, 2002, the Techrucal College's cash deposits were as follows

Cash Deposits

CaJT)'lng
Amount

Bank Balances

Risk Categories
3

s 82724422 s 1012s2Rzs s 20000000 s_ __,o..,o.,.o s s12s2w

NOTE 3 CAPITAL ASSETS

The balance of capital assets at July I, 2001, was adJusted for accountmg changes reqmred m 1mplementmg GASB Statements 34 and 35 as disclosed m Note I Followmg are the changes m capital assets for the year ended June 30, 2002.

- 19 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE3 CAPITAL ASSETS

Capnal Assets, Not Bemg Dcprcctatcd. Land and Land Improvements

AdJusted Balance lYIY 1,2001
$ 546 697 00

Addn1ans

B~ldri;UOD~

Balance J!,!ne 30, 2002

s ~46,697 00

Capital Assets, Bcmg Depreciated

Buildmg and Bu1ldmg Improvements $ 7,635,626 00

Improvements Other Than Bu1ldmgs Equipment

405,480 00
s 2,753,551 10

Library Collecllons

41~.;140 50

S II ~OG89Z60 $

146,414 85 s 146 414 85 s

Less Accumulated Deprec1at1on Buildings and Bulidmg Improvements S Improvements Other Than Bu1ldmgs
Equipment Library Collecttons

1,343,14035 $ 260,183 00
2,425,260 73
16H26 20

s 412H80~8 $

173,772 59 40,548 00
161,76664 s
4122405
~IZ Jll 28 $

Total Capital Assets, Bemg Depreciated,

Net

$ 7.0)3 4)7 ,2 S -270 826 43 s

Capital Assets. Net

$ 7560 114 32 5 -270 826 43 $

s 7,635,626 00 405,480 (10 247,308 48 2,652,657 47
412,240 50
2~7,3Q8 48 $ 11,106,00, 2Z

s
167,228 63

1.516,912 94 300,731 00
2419,798 74
206,120 25

16122861 $ 4 443 SG~ 23

80 079 85 s 666244104
80 072 85 $ 7 209 118 04

NOTE4 DEFERRED REVENUE

Deferred revenue at June 30, 2002, consists of the following
Prepaid Tuition and Fees Federal Grants and Contracts State Grants and Contracts Gifts - GSFIC
Totals
NOTE 5 LONG-TERM LIABILITIES

s 7,558 16
978 90 66,915 14 54.018 42
S I29,470.fil

Long-term hab1hty acllvity for the year ended June 30, 2002 was as follows

Other L1ab1lines Compensated Absences

Balance July I, 2001

Addnmns

Reductions

Balance June JO 2002

Current
Poman

~ss s jJ? 11 ~ 87 $ 2~Z =~~ ~~ $ 2!!= 28~ JO $ J1 1 ~ s 1Z9,6!/U1

- 20 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 6 LEASE OBLIGATIONS

OPERATING LEASES West Georgia Techmcal College has entered mto certam agreements to lease equipment which are classified as operatmg leases (leases on assets not recorded on the balance sheet) These leases generally contam proV1s1ons that, at the expiration date of the ongmal term of the lease, the Techmcal College has the option of renewmg the lease on a year-to-year basis Amounts are mcluded only for multi-year leases and for cancellable leases for which an opt10n to renew for the subsequent fiscal year has been exercised

Expenses for rental of eqmpment under operating leases for the year ended June 30, 2002, totaled $25,118.40

SUMMARY OF LEASE OBLIGATIONS Future commitments for noncancellable operating leases were as follows

Operatmg Leases

Year Endmg June 30, 2003 NOTE 7 RETIREMENT PLANS

$ 19,780.00

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description West Georgia Techmcal College part1c1pates m the Teachers Retirement System ofGeorgia (TRS), a cost-shanng multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of prov1dmg retirement allowances and other benefits for teachers of the State of Georgia. TRS provides service relirernent, d1sab1hty retirement, and survivor"s benefits for !ls members m accordance with State statute The Teachers Reurement System ofGeorgia issues a separate stand alone financial audit report and a copy can be obtamed from the Georgia Department of Audits and Accounts

Funding Policy Employees ofWest Georgia Techmcal College who are covered by TRS are reqmred by State statute to contnbute 5% oftheJT gross eammgs to TRS West Georgia Techmcal College makes monthly employer contnbut1ons to TRS at rates adopted by the TRS Board of Trustees m accordance with State statute and as adV1sed by theJT mdependent actuary For fiscal year 2002, the employer contnbuuon rate was 9.24% for covered employees Employer contnbutlons for the current fiscal year and the precedmg two fiscal years are as follows

- 21 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 7 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy Fiscal Year

Percentage Contnbuted

Reqmred Contnbut10n

2002 2001 2000

100% 100% 100%

$ 212,021 32 $ 262,471 87 $ 269,952 21

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description West Georgia Techmcal College part1c1pates m the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan estabhshed by the General Assembly of Georgia for the purpose ofprovidmg retuement allowances for employees of the State of Georgia

The benefit structure of ERS 1s defined by State statute and was s1gmficantly modified on July 1, 1982 Unless elected otherwise, an employee who currently mamtams membership v.,1th ERS based upon State employment tbat started pnor to July I, 1982, 1s an "old plan" member subject to the plan prov1s1ons m effect pnor to July I, 1982 All other members are "new plan" members subject to the modified plan prov1s1ons

Under both the old plan and new plan, members become vested after IO years of creditable service A member may retire and receive normal retirement benefits after completion of IO years of creditable service and attamment of age 65 If JO years of service 1s completed and age 60 1s reached, the member may retJre with a reduced benefit Add1t1onally, there are certam prov1s1ons allowmg for retJrement after 25 years of service regardless of age

Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest twenty-four consecutive calendar months of salary. the number of years of creditable service, and the member's age at retirement. Postreurement cost-of-hving adjustments are also made to member's benefits The normal retirement pens10n 1s payable monthly for hfe, however, options are available for d1stnbutJon ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death Death and d1sab1hty benefits are also avmlable through ERS

In add1t10n, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January I, 1998 The SRBP was established as a quahfied governmental excess benefit plan m accordance with Section 415 of the Internal Revenue Code (IRC) as a portion ofERS The purpose ofSRBP 1s to provide retJrement benefits to employees covered by ERS whose benefits are otherwise hm1ted by IRC 415

- 22 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 7 RETIREMENT PLANS
EMPLOYEES' RETIREME:NT SYSTEM OF GEORGIA
Plan Description The ERS issues a financial report each fiscal year which may be obtained through ERS
Funding Policy As estabhshed by State statute, all full-time employees of the State of Georgia and its poht1cal subd1V1s1ons, who are not members of other state retirement systems, are eligible to participate m the ERS. Both employer and employee contr1but10ns are estabhshed by State statute The Techrucal College's payroll for the year ended June 30, 2002, for employees covered by ERS was $1,305,713 71 The Techrucal College's total payroll for all employees was $4,186,807 89
Under the old plan, member contributions consist of 6.25% of annual compensation Of these member contrlbuuons, the employee pays the first I 5% and the Techrucal College pays the remamder on behalfof the employee Under the new plan, member contr1but1ons consist solely of 1.5% of armual compensat10n paid by employee The Techrucal College also 1s reqmred to contribute at a specified percentage of actJve member payroll determmed armually by actuanal valuation For the year ended June 30, 2002, the ERS employer contr1but1on rate for the Techmcal College amounted to 11 04% of covered payroll and mcluded the amounts contributed on behalf of the employee under the old plan referred to above Employer contnbutJons are also made on amounts paid for accumulated leave to retmng employees
Total contributions to the plan made dunng fiscal year 2002 amounted to $164,689 82, of which $144,189 39 was made by the Techmcal College and $20,500 43 was made by employees These contributions met the reqmrements of the plan
Actuarial and Trend Information Actuanal and hlstoncal trend mformauon 1s presented m the ERS June 30, 2002, financial report which may be obtamed through ERS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description West Georgia Techrucal College paruc1pates m the Georgia Defined Contrlbuuon Plan (GDCP) which 1s a single-employer defined contnbutlon plan established by the General Assembly of Georgia for the purpose of prov1dmg retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a pubhc retirement or pension system. GDCP 1s admuustered by the Board of Trustees of the Employees' Retirement System of Georgia
Benefits A member may retire and elect to receive penod1c payments after attainment ofage 65 The payment will be based upon mortahty tables and mterest assumptions to be adopted by the Board ofTrustees
- 23 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 7 RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits If a member has less than S 3,500 00 credited to Ins/her account, the Board ofTrustees has the option ofrequmng a lump sum d1stnbut1on to the member m lieu ofmakmg penod1c payments Upon the death of a member, a lump sum d1stnbut1on equalmg the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit prov1S1ons are established by State statute
The Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtamed through ERS
Contribntions and Vesting Member contnbut10ns are seven and one-halfpercent (7 5%) of gross salary There are no employer contnbuuons Contnbut1on rates are established by State statute Earnmgs are credited to each member's account m a marmer established by the Board of Trustees Upon termmauon of employment, the amount of the member's account 1s refundable upon request by the member The Techmcal College's payroll for the year ended June 30, 2002, for employees covered by GDCP was $201,287 75 The Techmcal College's total payroll for all employees was $4,186,807 89
Total contnbutlons made by employees dunng fiscal year 2002 amounted to $15,096 84 which represents 7.5% of covered payroll These contnbuuons met the reqmrements of the plan
NOTE 8 RISK MANAGEMEl'IT
Public Entity Risk Pool The Department of Commumty Health adm1msters for the State of Georgia a program of health benefits for the employees of umts of government of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia This plan 1s funded by part1c1pants covered m the plan, by employers' contnbuhons prud by the vanous umts ofgovernment part1c1patmg m the plan. and appropnauons made by the General Assembly of Georgia The Department ofCommumty Health has contracted with Blue Cross Blue Shield ofGeorgia to process medical clrums and Express Scnpts, Incorporated to process prescnpuon drug claims m accordance with the State Employees' Health Benefit Plan as established by the Department of Commumty Health
Other Risk Management The Department of Adm1mstrauve Services (DOAS) has the respons1b1hty for the State of Georgia ofmakmg and carrymg out dec1s10ns that will m1mm1ze the adverse effects of accidental losses that mvolve State government assets The State believes 1t 1s more econom1cal to manage its nsks mtemally and set aside assets for clrum settlement Accordmgly, DOAS processes clrums fornsk of loss to which the State 1s exposed, mcludmg general llab1hty, property and casualty, workers'
-- 24 -

WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXrUBIT"D"

NOTE 8 RISK MANAGEMENT
Other Risk Management compensation, unemployment compensation, and law enforcement officers' mdemmficatlon Lmuted amounts of commercrnl msurance are purchased apphcable to property, employee and automob1le hab1hty, fidehty and certam other nsks The Techrucal College, as an orgaruzat10nal urut of the Georgia Department of Techmcal and Adult Education, 1s part of the State of Georgia reporting entity, and as such, 1s covered by the State of Georgia nsk management program adrn1mstered by DOAS Premiums for the nsk management program are charged to the vanous state orgaruzatlons by DOAS to provide clrums seTVIcmg and clrums payment
NOTE 9 CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies Tius could result m 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 detemnned at tins time although West Georgia Techrucal College expects such amounts, 1fany, to be 1rnrnatenal to its overall financial position
L1t1gat1on, clrums and assessments filed agrunst West Georgia Techmcal College (an organ1zat1onal unit of the Department of Techmcal and Adult Education), 1f any, are generally considered to be actions agrunst the State of Georgia Accorchngly, s1gruficant htigatlon, claJIIlS and assessments pendmg agrunst the State of Georgia are disclosed m the State of Georgia Comprehensive Annual Fmanc1al Report for the fiscal year ended June 30, 2002
NOTE IO NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS
The Techrucal College's operatmg expenses shown at the natural class1ficat1on on the "Statement of Revenues, Expenses and Changes m Net Assets" are all classified as Instruction at the functional class1ficat1on

- 25 -

SUPPLEMENTARY INFORMATION - 27 -

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND CNON-GAAP BASIS) "A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDS AVAILABLE REVENUES
State Appropnat1on Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$ 4.601.044 00 $ 4,601,044 00 $

1,387,204 44

894,444 97

1,898,666 00 1 891 451 60

$ 7,886,914 44 $ 7,386,940 57 $

o oo
-492,759 47 -7 214 40
-499,973 87

000

18 417 85

18 417 85

$ 718861914 44 $ 7,405 358 42 $ _ _ _-4..:;8::..1c:;,5:::56:=....:0=.2

EXPENDITURES
Personal SeMces - lnsbtutIons Operabng Expenses - lnst1tut1ons Capital Outlay Adult Lrteracy Grants

$ 5,008,141 18 $ 4 836,048 13 $

2,330,613 26 2,030,908 60

90,643 00

90,643 00

457,517 00

385,221 73

172,093 05 299,704 66
000 72 295 27

Excess of Funds Available over Expendrtures

$ 7 886 914 44 $ 7,342,821 46 $ _ _.....::,544.:....:.c,0:::9:.:2:..:9:.::c.8

s_ _ $ 62,536 96

===6=2._5.3.6__96_

(1) Actual amounts were prepared on a prescnbed basis of accounting that demonstrates compliance with budgetary staMes and regulations of the State of Georgia, which Is a comprehensive basis of accounbng other than generally accepted accounbng pnncaples

- 29 -

WEST GEORGIA TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30 2002

SCHEDULE "2"

Totals per Annual Supplement
Accruals June 30, 2001 June 30, 2002
Compensated Absences June 30, 2001 June 30, 2002
Agency Funds

SALARIES

$

4,143,336 55 s

TRAVEL 43,063 77

-15,201 89 8,675 98

-269,722 59 319,719 84

-1 86467

$

4 186 807 89 $ ~ -....4.-1.1.9_9_1.0.=>

- 31 -

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

WEST GEORGIA TECHNICAL COLLEGE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIOl\'ED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-8 I 9-00-0 I FS-819-00-02 FS-819-01-01 FS-819-01-02

Further Act10n Not Warranted Further Action Not Warranted Part1ally Resolved - See Corrective Action/Responses Prev10usly Reported Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Accountmg Procedures Fmdmg Control Number FS-819-01-01

West Georgia Techmcal College will implement appropnale procedures and controls to ensure that all bank statements are reconciled lo the general ledger on a umely basis and that all reconc1hng items are 1denufied and corrected The Accountmg Manager will manage this process Adjustments necessary for reconc1hauons will be adequately identified and detaJled Wntten procedures on performmg bank reconc1hat1on are bemg implemented and have been added to procedures manual for AdmlillstratJve ServJ.ces The Vice President of Adnnrustratlve ServJ.ces will approve aU bank reconc1hat1ons

SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
FINA.NCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number FS-819-02-01
Accounting procedures of West Georgia Techmcal College were insufficient to provide adequate internal controls over the Cash and Cash Eqmvalents as noted below
(1) Book errors disclosed through the bank reconc1halion process were earned as reconc1lmg items for e;,.tended penods ofume
(2) Numerous reconc1hng Items reflected on the bank reconc1hat10n for the general and payroll accounts were not properly documented
(3) The College failed to record disbursements of numerous checks to the general ledger
(4) Numerous electromc banking acliv1t1es were not recorded to the general ledger
(5) Numerous errors were made when recording receipts and disbursements to the general ledger bank accounts, transactions were posted to the wrong accounts
These defic1enc1es occurred because ofmanagement's failure to establish procedures to analyLe and reconcile cash balances on the general ledger with supporting records The College should establish appropnate procedures to ensure that cash transactions are posted, balanced and reviewed on a monthly basis and that detailed records supporting the general ledger are complete
REVENUES/RECEIVABLES/RECEIPTS Defic1enc1es in Accounts Receivable Records Finding Control Number FS-819-02-02
Our examination included a review of the internal accounting controls and accounting procedures utilized by West Georgia Techmcal College in processing and mamtauung accounts receivable and related revenue act1v1ty The accounts receivable records as presented for audit revealed the following defic1enc1es
(1) Extensive audit procedures were requued to compile an accurate detail of accounts receivable at June 30, 2002
(2) Twelve Journal vouchers affecting accounts receivable on the general ledger were 1denlified that were not properly posted to the accounts receivable subs1d1ary ledger
- 1-

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS Dcfic1enc1es in Accounts Receivable Records Finding Control Number FS-819-02-02
(3) Testing revealed instances where accounts receivable and related revenues were either not requested and or were improperly posted to the general ledger AudIt adJustrnents in the amount of$! 54,117 73 (net) were necessary to correct the financial statements at June 30, 2002 In add111on, our testing revealed Federal accounts receivable reflected in the financial statements in the amount of $22,585 82 at June 30, 2002, for which no supporting documental!on was available These Federal accounts receivable have been reported in the financial statements, but they are being reVJewed by the College to determine vahd1ty
These defic1enc1es are a result of management's failure to have adequate pohc1es and procedures to ensure accounts receivable are properly mamtained Management should estabhsh necessary changes to provide for an adequate system of internal controls to provide rehable accounting records and ensure all accounts receivable are vaJ1d and accurate
EMPLOYEE COMPENSATION Inadequate Payroll Procedures Finding Control Number FS-819-02-03
Our examinal!on included a review of internal accounting controls and accountmg procedures ul!hzed by West Georgia Techmcal College in processing employee compensation As part of our review, we examined employee compensal!on records for twenty-five employees which revealed the following defic1enc1es
I) A review of the vacauon and sick leave records revealed that
a) Three employees had leave shps m their personnel files but the leave was not posted to the leave report
b) Six employees were charged for leave taken, however, no documentauon was ava!lable to indicate leave taken
c) Seven employees were charged for leave taken, however, the documentauon indicated leave taken at a different amount
These defic1enc1es were the result of the management's failure to adhere to estabhshed pohc1es and procedures concerning accounting for employee compensation The Techmcal College should follow estabhshed internal controls to ensure the above defic1enc1es arc corrected
-2 -

WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED Jill/E 30, 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Unsupported Agency Fund Balances Fmding Control Number. FS-819-02-04 The College's accounting procedures were insufficient to provide for adequate internal control over Agency Funds At June 30, 2002, the Techmcal College had numerous agency funds that had deficit balances totaling $96,822 83 ofwh1ch $59,208 35 were in HOPE accounts In add!uon, both the Pell and H O.P E programs had agency fund acuv1ty account balances dating back to 1993 These deficit balances were attnbutable to the poor cond!tJ.on ofthe College's accounting records and ac11v1t1es that occurred in pnor penods that were never recorded, were recorded incorrectly on the general ledger, or were overpayments to students by the College The College should establish appropnate internal controls to ensure that Agency accounts are reconciled monthly and necessary adJustments are recorded m a timely manner In add!t10n, these accounts should be analyzed to determine amounts to be refunded to grantor agencies and amounts to be funded through student refunds or local funds Appropnate action should be taken by the College to ensure that payments are not made pnor to collecuons for Agency Funds
-3-