"; ,\: ~) / ,Lo , ~l 'h 'v,'" I c '" I 1. "! { ,\/r,' ,~ .~';S /', , 'j_} i\\ \ I "_" " ,.. , ;. \.I. i ,y , ........- (,V,,- '~ > I~~~" ~ , . . \.' '. 'i , I. . "(, ~ ~ ;~ t',-\, I ., ) " ( ./ '. I' '/ ,..~ ,. 7' rI J ./.f .. ~' . '7 ' \", ' '/:~/2-. ) cf ( ~. " r .. \ , ,J. j \ [....:5.. ., V'... ',' i ...J" .....! .\. L t.L .\.. I I j j.."-r'f:''"..' it ":,, '\ ) .. ' .\ ( i" (-'- ,y \,\., ,~ '-- ,J . 7 '1: ,) ~I ~ "( ')1/ /l 1-"0 I' (.- ~r'': ~r' II t . \ . .J'- j' ... ~ 7J IL. "/ . J ',.'\ '\.) . 1 fI J ')l) .~,; I V I' .1 \, . ;' )'- '" .~. ;- J - i'~ } .. ' Excess of Restricted Receipts over Transfers to Revenues Refunded to Grantors Transfers for Renewals and Replacements Transfers for Capital Projects Prior Period Adjustments (Net) Remittances to the Board of Regents of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus) Total Other Transfers and AdditionsJ(Deductions) UNRESTRICTED RESTRICTED TOTAL (Memorandum Only) $ 39,624,989.00 $ 39,624,989,00 19,473,816.45 19,473,816.45 102,840.67 $ 19,767,944.10 19,870,784.77 9,049,422.17 9,049,422.17 28,318.42 28,318.42 1,038,587.15 1,038,587.15 123,837.18 123,837,18 11,324,366.38 11,324,366.38 2,179,741.92 2,179,741.92 $ 72,857,910.02 $ 29,855,953,42 $ 102,713,863.44 $. 29,423,541.66 $ 1,306,776.34 $ 213,913.25 738,020.31 301,053.58 114,485.75 10,998,720,83 4,392,46 4,124,476.98 34,650.02 7,079,574,03 298,329.98 5,907,037.19 2,035,317.28 27,359,298.56 30,730,318.00 951,933.56 415,539.33 11,003,113.29 4,159,127.00 7,377,904.01 5,907,037.19 29,394,615.84 4,453,207.10 2,158,334.59 614,601.21 1,847,610.22 1,313,700,68 4,453,207.10 2,158,334.59 614,601.21 1,847,610.22 1,313,700.68 $ 70,471,088.60 $ 29,855,953,42 $ 100,327,042.02 $ 136,850.47 $ 136,850.47 -12,146.00 -12,146.00 $ -664,057.81 -664,057.81 -707,187.66 -707,187.66 20,671.41 20,671.41 -39,614.74 $ -1,390,188.80 $ -39,614.74 124,704.47 $ -1,265,484.33 Net Inaeasel(Deaease) in Fund Balances $ 996,632.62 $ See Independent Accountanfs Combined Report on Review of Finandal Statements and Supplementary Information. The notes to the finandal statements are an integral part of this statement. -6- 124,704.47 $ 1,121,337,09 STATE UNIVERSITY OF WEST GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY State University of West Georgia is one of thirty-four (34) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State ofGeorgia. The accompanying financial statements reflect the operations of State University of West Georgia 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 administrativ~ policies for member institutions. State University of West Georgia does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, State University of West Georgia is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for fmancial 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 Codification of Governmental Accounting and Financial Reporting Standards. FUND ACCOUNTING In order to ensure observance of limitations and restrictions placed on the use of the resources available to the University, the accounts of the University are maintained in accordance with the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group. Within each fund group, the University's fund balance allocations and designations represent those portions ofthe fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies. Fund groups ~d funds presented in the accompanying fmancial statements are as follows: CURRENT FUNDS UNRESTRICTED - The fund used to account for those economic resources over which the University retains full control to use for purposes of performing the primary functions of the University, e.g., instruction, research, public service, etc. RESTRICTED - The fund used to record externally restricted funds which may only be utilized in accordance with the purposes established by their source. Restricted current funds are recorded as revenues and expenditures when expended for current operating purposes. -7- STATE UNIVERSITY OF WEST GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FUND ACCOUNTING LOAN FUNDS The fund used to account for resources which have been made available for financial loans to students. PLANT FUNDS UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes. RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement of institutional properties. INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the University. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the University less the amount of any indebtedness to others. AGENCY FUNDS The fund used to account for resources held by the University as custodian or fiscal agent for individual students, faculty, staff members, and organizations. BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis of accounting, which is materially the same as the accrual basis of accounting applicable to. colleges and universities prescribed in the American Institute of Certified Public Accountants' audit guide reporting model. The modified accrual basis ofaccounting is defined as that method ofaccounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues' are recorded when available and measurable to [mance expenditures of the fiscal period. Contractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with accounting principles .generally accepted in the United States ofAmerica, which provide for the recording ofencumbrances -8- STATE UNIVERSITY OF WEST GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with accounting principles generally accepted in the United States ofAmerica. Compensated absences represent obligations ofthe University relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of$1,854,643.00 and a related net current year expenditure of $229,653.79 have not been reported in the current funds as required by accounting principles generally accepted in the United States of America. Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but differs from accounting principles generally accepted in the United States ofAmerica in that immaterial adjustments should be reported as current period revenues and expenditures. The effect ofthis departure is deemed to be immaterial to the fair presentation ofthe financial statements. To the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalfofthe University. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment. It is the policy of State University ofWest Georgia to record assets acquired through capital leases as additions to. Investment in Plant as payments are made by the University. The liability for such leases at fiscal year-end is not recorded on the Combined Balance Sheet. This presentation differs from accounting principles generally accepted in the United States ofAmerica in that the assets.and the related liability resulting from capital leases should be recorded in Investment in Plant at the inception of the agreement at the net present value of the future minimum lease payments, not to exceed the fair value ofthe leased property. The effect ofthis departure is deemed to be immaterial to the fair presentation of the financial statements. The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of . income or a statement ofrevenues and expenses. -9- STATE UNNERSITY OF WEST GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUDGET The Board ofRegents ofthe University System ofGeorgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of 2000-200 1. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation ofthe appropriated budget is made to the University by the Administrative Central Office. In addition, the University receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office. A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below: Resident Instruction Operating Expenses: .Sponsored Operations Special Funding Initiative $ 263,818,06 $ 0.75 These overexpenditures of budget constitute a violation of Board of Regents policy, but do not constitute statutory violations of budget authority. Statutory violations of budget authority are reported at the Board object class level. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits, certificates of deposit and temporary investments in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. ACCOUNTS RECEIVABLE Accounts receivable consist ofreimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information .available. No provision has been made for an allowance for doubtful accounts within the accompanying financial statements. INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average method. Inventories of goods for resale are valued at cost using the first-in, first-out method. PREPAID ITEMS . .Prepaid items are payments made to vendors in advance ofthe receipt ofgoods and services that will benefit periods subsequent to the balance sheet date. - 10- STATE UNNERSITY OF WEST GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIDIT"D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEMORANDUM ONLY - TOTAL COLUMNS The total columns on the financial statements are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia 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 anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: (1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the Unite