WAYCROSS COLLEGE WAYCROSS, GEORGLA MANAGEMENT REPORT FOR FISCAL YEAR ENDED JUNE 30,2011 A Member Institution of the University System of Georgia - Georgia Department of Audits aad Accoamts Russell W.Hinton State Auditor WAYCROSS COLLEGE -TABLE OF CONTENTS - SECTION I FINANCIAL LETTER OF TRANSMllTAL SELECTED FINANCIAL INFORMATION EXHl BITS A STATEMENT OF NET ASSETS - (GAAP BASIS) B STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS (GAAP BASIS) C STATEMENT OF CASH FLOWS - (GAAP BASIS) D SELECTED FINANCIAL NOTES SUPPLEMENTARY INFORMATION SCHEDULES 1 BALANCE SHEET - (STATUTORY BASIS) BUDGET FUND 18 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS) BUDGET FUND 19 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND 20 4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND 2 2 5 RECONCILIATION OF SALARIES AND TRAVEL 2 5 SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SECTION I FINANCIAL Russell W. Hinton STATE AUDITOR (404)6563174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 October 19,2011 Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of Regents of the University System of Georgia and Honorable Mary Ellen Wilson, Interim President Waycross College Ladies and Gentlemen: As part of our audits of the basic financial statements of the University System of Georgia presented in the Annual Financial Reportfor the University System of Georgia, the basic financial statements of the State of Georgia presented in the State of Georgia ComprehensiveAnnual Financial Reportand the issuance of a State of Georgia Single Audit Reportpursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2011, we have performed certain audit procedures at Waycross College. Accordingly, the financial statements and compliance activities of Waycross College were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996. This Management Report contains information pertinent to the financial and compliance activities of Waycross College as of and for the year ended June 30, 2011. Information contained in this report is a by-product of our audits of the basic financial statements of the University System of Georgia and the basic financial statements of the State of Georgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1 is enumerated in the Table of Contents. This report is intended solely for the information and use of the management of Waycross College, members of the Board of Regents of the University System of Georgia and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~ u k s e lWl . Hinton, CPA, CGFM State Auditor SELECTED FINANCIAL INFORMATION WAYCROSS COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS) JUNE 3 0 , 2 0 1 1 ASSETS Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Due from Affiliated Organizations Inventories Prepaid Items Total Current Assets Noncurrent Assets Investments Capital Assets, Net (Note 4) Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deferred Revenue (Note 5) Other Liabilities Deposits Held for Other Organizations Compensated Absences Total Current Liabilities Noncurrent Liabilities Compensated Absences Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for: Nonexpendable Expendable Unrestricted Total Net Assets EXHIBIT "A" WAYCROSS COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS) YEAR ENDED JUNE 30,2011 9PERATING REVENUES Student Tuition and Fees Less: Scholarship Allowances Grants and Contracts Federal Rents and Royalties Auxiliary Enterprises Bookstore Food Services ParkingITransportation Intercollegiate Athletics Other Organizations Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Salaries Faculty Staff Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services De~rec~ation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal Other GI* Investment Income Net NonoperatlngRevenues Income (Loss) Before Other Revenues, Expenses, Galns, or Losses Capital Grants and Gifts State Increase (Decrease) In Net Assets Net Assets - Beglnnlng of Year Net Assets - End of Year EXHIBIT "8" (This page left intentionally blank) WAYCROSS COLLEGE STATEMENT OF CASH FLOWS - (GAAP BASIS) YEAR ENDED JUNE 30,2011 CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Paymentsto Suppliers Payments to Employees Paymentsfor Scholarships and Fellowships Auxiliary Enterprise Charges: Bookstore Food Services Parking/Transportation Intercollegiate Athletics Other Organizations Other Receipts (Payments) Net Cash Provided (Used) by OperatingActivities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transact~ons Gifts and Grants Receivedfor Other than Capital Purposes Net Cash Flows Provided(Used) by Noncap~taFl inanc~ngActivities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchasesof Capital Assets Net Cash Provided(Used) by Capital and RelatedFinancingActivities CASH FLOWS FROM INVESTING ACTIVITIES interest on Investments Net Increase (Decrease) in Cash Cash and Cash Equivalents - Beginningof Year Cash and Cash Equivalents - End of Year RECONCILIATIONOF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating Income (Loss) Adjustments to ReconcileOperating Income (Loss)to Net Cash Provided(Used) by OperatingActivities Depreciation Change in Assets and Liabilities: Accounts Receivable. Net Inventories Prepaid Items Accounts Payable Deferred Revenue Other Liab~l~ties Compensated Absences Net Cash Provided (Used) by OperatingActiv~tles NONCASH ACTlVlN Change in Fair Value of lnvestrnents Recognizedas a Component of Interest Income EXHIBIT "C" WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY Waycross College is one of thirty-five (35)State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Waycross College as a separate reporting entity. The Board of Regents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Waycross College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Waycross College is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards. NET ASSETS The College's net assets are classified as follows: Investedin capitalasseb, net of related debt: This represents the 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. Restridd net assets nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The College may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia. Restricted net assets - expendable: Restricted expendable net assets include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties. Unrestricted net asseb: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $793.64. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "D" NOTE 2: DEPOSITS AND INVESTMENTS DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the 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, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia. 2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia. 3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. 4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. 5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association. 6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia. At June 30, 2011, the carrying value of deposits was $910,796 and the bank balance was $1,120,618. Of the College's deposits, $1,120,618 were uninsured. Of these uninsured deposits, $1,120,618 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the College's name. INVESTMENTS At June 30, 2011, the carrying value of the College's investment was $323,367, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Board of Regents investment pools as follows: WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "D" NOTE 2: DEPOSITS AND INVESTMENTS INVESTMENTS Board of Regents lnvestment Pool Short-Term Fund Legal Fund Diversified Fund Total Investments The Board of Regents lnvestment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment a t fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents lnvestment Pool is voluntary. The Board of Regents Short-Term Fund is reported as Cash and Cash Equivalents on Exhibit "A" of this report. NOTE 3: ACCOUNTS RECEIVABLE Accounts receivable consisted of the following at June 30, 2011. Student Tuition and Fees Auxiliary Enterprises and Other OperatingActivities Federal Financial Assistance Due from Affiliated Organizations Other $ 156,947 21,105 351,471 9,715 139,084 Less Allowance for Doubtful Accounts Net Accounts Receivable WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "DM NOTE 4: CAPITAL ASSETS Following are the changes in the College's capital assets for the year ended June 30,2011: Beginning Balance July 1,2010 Add~tions Reductions Ending Balance June 30, 2011 Capltal Assets. Not Being Depreciated: Land Construction Work-In-Progress $ 358,790 $ 1,341,137 $ 695,109 0 $ 358,790 2,036,246 Total Cap~taAl ssets, Not Being Depreciated $ 1,699,927 $ 695,109 $ 0 $ 2,395,036 Capital Assets, Being Depreciated: Infrastructure Buildingand Building Improvements Fac~lit~eansd Other Improvements Equipment Library Collections $ 1,343,722 11,822,775 1,193,893 1,182,859 $ 1,177,193 129,973 5,768 $ $ 8,010 1,343,722 11,822.775 1,193,893 1,312,832 1,174,951 Total Assets Being Depreciated $ 16,720,442 $ 335,741 $ 8.010 $ 16,848,173 Less: Accumulated Depreciation: Infrastructure Buildingand Building Improvements Facilities and Other Improvements Equipment Library Collections $ 936,888 $ 5,642.043 866,187 885,534 22,549 293,659 21,981 53.617 Total Accumulated Depreciation $ 9,408,848 $ 415,051 $ 8,010 $ 9,815,889 Total Capital Assets, Belng Depreciated, Net $ 7,311.594 $ -279,310 $ 0 $ 7,032,284 Capital Assets, Net NOTE 5: DEFERRED REVENUE Deferred revenue consisted of the following at June 30, 2011: Prepaid Tuition and Fees WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "Dm NOTE 6: LONG-TERM LIABILITIES The College's Long-Term liability activity for the year ended June 30, 2 0 1 1 was as follows: Beginning Balance July 1,2010 Additions Reductions Endl ng Balance June 30,2011 Current Portion Other L~abilities Compensated Absences $ 230,199 $ 155,507 $ 148,050 $ 237.656 $ 131.586 NOTE 7: NET ASSETS Changes in Net Asset activity for the year ended June 30, 2 0 1 1 are as follows: Beginn~ng Balance July 1,2010 Add~t~ons Reductions Invested in Capital Assets Net of Related Debt Restricted Net Assets 207,048 1484,014 $ 1,456,197 Unrestricted Net Assets 1,439.519 6,559,351 6,941054 Total Net Assets Ending Balance June 30,2011 234.865 1057,816 NOTE 8: RETIREMENT PLANS Waycross College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Waycross College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law. Employees' Retirement System of Georgia The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "D" NOTE 8: RETIREMENT PLANS Employees' Retirement System of Georgia directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract. On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS)of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC)as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1,1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415. The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1,1982. Members hired on or after July 1,1982 but prior to January 1,2009 are "new plan" members subject to the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). 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 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 2 5 years of creditable service for members under age 60. Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, Waycross College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Waycross College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. Waycross College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Waycross College contributions are not at any time refundable to the member or his/her beneficiary. WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "D" NOTE 8: RETIREMENT PLANS Employees' Retirement System of Georgia Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows: Old Plan* New Plan GSEPS 10.41% 10.41% 6.54% * 5.66% exclusive of contributions paid by the employer on behalf of old plan members Members become vested after 1 0 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits. Teachers Retirement System of Georgia The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" NOTE 8: RETIREMENT PLANS Teachers Retirement System of Georgia TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2009 actuarial valuation. The following table summarizes the Waycross College contributions by defined benefit plan for the years ending June 30,2011, June 2010, and June 2009 (dollars in thousands): Fiscal Year ERS Required Percentage Contribution Contributed TRS Required Percentage Contribution Contributed Regents Retirement Plan Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et-seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. Funding Policy Waycross College makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2011, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable t o all plan contributions are fully vested and nonforfeitable at all times. Waycross College and the covered employees made the required contributions of $117,619 (9.24%) and $63,647 (5%),respectively. AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" NOTE 8: RETIREMENT PLANS Georgia Defined Contribution Plan Plan Description Waycross College participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. Contributions Member contributions are seven and one-half percent (7.5%)of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. Total contributions made by employees during fiscal year 2 0 1 1 amounted to $5,876 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices. NOTE 9: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee. WAYCROSS COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" NOTE 9: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The College pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2009, 2010 and 2 0 1 1 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%. As of June 30, 2011, there were 24 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2011, Waycross College recognized as incurred $111,239 of expenditures, which was net of $28,333 of participant contributions. NOTE 10: AFFILIATED ORGANIZATIONS The Waycross College Foundation, Inc. is a legally separate, tax exempt organization whose activities primarily support Waycross College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units Therefore, the financial statements of this affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from Waycross College. (This page left intentionally blank) SUPPLEMENTARY INFORMATION WAYCROSS COLLEGE BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 30.2011 ASSETS Cash and Cash Equivalents ~nvestments Accounts Receivable Federal Financial Assistance Other Prepaid Expenditures Inventories Total Assets LIABILITIES AND FUND EOUITY Liabilities Salaries Payable Encumbrance Payable Accounts Payable Deferred Revenue Other Liabilities Total Liabilities Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Inventories Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Unreserved Surplus Total Fund Balances Total Liabilities and Fund Balances SCHEDULE "1" Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. -18- WAYCROSS COLLEGE SUMMARY BUDGEl COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011 State Appropriation State General Funds Other Funds Total Revenues CARRY-OVER FROM PRIOR YEARS Transfers from Reserved Fund Balance Total Funds Available Teaching Excess of Funds Available over Expenditures FUND BALANCE JULY 1 Resewed Unreserved ADJUSTMENTS Prior Year Payables/Expenditures Unreserved Fund Balance (Surplus) Returned to Board of Regents - UniversitySystem Office Year Ended June 30,2010 Early Return of Surplus in FiscalYear 2011 Prior Year Reserved Fund Balance Included In Funds Available FUND BALANCE JUNE 3Q SUMMARY OF FUND BALANCE Resewed Department Sales and Services Indirect Cost Recoveries Inventories Technology Fees Restricted/Sponsored Funds UncollectibleAccounts Receivable Tuition Carry-Over Total Reserved Unrese~ed Surplus Total Fund Balance BUDGET ACTUAL SCHEDULE "2" VARIANCE FAVORABLE (UNFAVORABLE) Statutory Basisfinanclal Information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulationsof the State of Georgia. which is a comprehensivebasis of accounting other than generally accepted accounting principles. WAYCROSS COLLEGE STATEMENT OF FUNDS AVAllABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011 Teaching State Appropriation State General Funds Federal Funds American Recovery and Reinvestment Act Federal Stabilization Funds Other Funds Total Teaching Total Operating Activity Original AD~ro~riation Amended A~oro~riation Final Budaet Current Year Revenues Statutoly Basisfinanclal informationwas prepared on a prescribedbasis of accountingthat demonstratescompliance with budgetary statutes and regulationsof the State of Georgia, which is a comprehensivebasis of accountingother than generally accepted accounting principles. SCHEDULE "3" Funds Available Compared to Budget Prior Year Total Carry-Over Funds Available Variance Pos~tive(Negat~ve) Expenditures Compared to Budget Variance Actual Positive (Negat~ve) Excess (Deficiency) of Funds Available Over/(Under) Expenditures WAYCROSSCOLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011 Teaching State Appropriation State General Funds Federal Funds American Recoveryand Reinvestment Act Federal Stabilization Funds Other Funds Total Teaching Total Operating Activity Pr~oYr ear R ~ s ~ N ~ s Not Available for Expenditure Inventories Uncoliectible Accounts Receivable Beginning Fund Balance/(Defic~t) July 1 Fund Balance Carried Over from Prior Period as Funds Available Return of Fiscal Year 2010 Surplus Prior Period Adjustments Budget Unit Totals Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georg~a, which is a comprehensive basis of accounting other than generally accepted accounting principles. SCHEDULE "4" Other Adjustments Early Return Fiscal Year 2011 Surplus Excess (Deficiency) of Funds Available Over/(Under) Expenditures Ending Fund Balance/(Deficit) June 3 0 Analysis of Ending Fund Balance Resewed Surplus/(Defic~t) Total Summary of Ending Fund Balance Reserved Department Sales and Services Indirect Cost Recover~es Inventories Technology Fees Restrlcted/Sponsored Funds Uncollectible Accounts Receivabie Tuition Carry-Over UnreSe~ed Surdus Total Ending Fund Balance - June 30 5 271,765.56 $ 793.64 5 272,559.20 (This page left intentionally blank) Totals per Annual Supplement Accruals June 3 0 , 2 0 1 1 June 3 0 , 2 0 1 0 Compensated Absences June 3 0 , 2 0 1 1 June 3 0 , 2 0 1 0 Unidentified Variance WAYCROSS COLLEGE RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 3 0 , 2 0 1 1 SCHEDULE "5" SALARIES $ 3,655,217 $ TRAVEL 34,146 SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS WAYCROSS COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS YEAR ENDED JUNE 30,2011 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) No matters were reported.