Annual financial report, fiscal year 2014 [2015]

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The University System of Georgia Annual Financial Report
FY 2014

TABLE OF CONTENTS
Introductory Section Letter of Transmittal .................................................................................................................................... 1 Members of the Fiscal Year 2014 Board of Regents................................................................................. 2
Financial Section Independent Auditor's Report .................................................................................................................... 5 Management's Discussion and Analysis ................................................................................................... 8 Financial Statements (GAAP Basis) Statement of Net Position............................................................................................................ 21 Statement of Revenues, Expenses and Changes in Net Position ............................................. 23 Statement of Cash Flows ............................................................................................................. 25 Statement of Fiduciary Net Position............................................................................................ 27 Statement of Changes in Fiduciary Net Position ........................................................................ 28 Notes to the Financial Statements Note 1 Summary of Significant Accounting Policies ................................................. 31 Note 2 Deposits and Investments ............................................................................. 39 Note 3 Accounts Receivable ...................................................................................... 45 Note 4 Inventories ...................................................................................................... 45 Note 5 Notes/Loans Receivable................................................................................ 46 Note 6 Capital Assets ................................................................................................. 46 Note 7 Advances (Including Tuition and Fees) ......................................................... 47 Note 8 Long Term Liabilities ...................................................................................... 47 Note 9 Significant Commitments............................................................................... 47 Note 10 Lease Obligations........................................................................................... 48 Note 11 Retirement Plans ........................................................................................... 49 Note 12 Early Retirement Pension Plan...................................................................... 53 Note 13 Risk Management.......................................................................................... 58 Note 14 Contingencies................................................................................................. 60 Note 15 Post-Employment Benefits Other Than Pension Benefits............................ 61 Note 16 Natural Classifications with Functional Classifications ............................... 64 Note 17 Affiliated Organizations.................................................................................. 64
Required Supplementary Information Schedule of Funding Progress for Defined Benefit Pension Plan ............................................................... 67 Schedule of Contributions for Defined Benefit Pension Plan ...................................................................... 68 Schedule of Employers' and Nonemployers' Net Pension Liability ............................................................. 69 Schedule of Changes in Net Pension Liability and Related Ratios ............................................................. 70 Schedule of Investment Returns................................................................................................................... 71 Notes to Required Supplementary Information Methods and Assumptions for Defined Benefit Pension Plan ................................................................ 72 Schedule of Funding Progress for Other Postemployment Benefits ........................................................... 73 Schedule of Employer Contributions............................................................................................................. 73
Supplementary Information Condensed Financial Statements Condensed Statement of Net Position by Institution ................................................................................... 75 Condensed Statement of Revenues, Expenses and Changes in Net Position by Institution ................................................................................................................. 79 Condensed Statement of Net Position by Affiliated Organization (Unaudited)........................................... 83 Condensed Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization (unaudited) ......................................................................... 87 Financial Statements (Statutory Basis) (Unaudited) Balance Sheet (Non-GAAP Basis) ................................................................................................................. 90 Budget Comparison and Surplus Analysis Report (Non-GAAP Basis)......................................................... 91 Statement of Funds Available and Expenditures Compared to Budget (Non-GAAP Basis) ......................................................................................................... . 93 Statement of Changes to Fund Balance by Program and Funding Source (Non-GAAP Basis)............... .................................................................................. 99 Financial Statement Findings..................................................................................... ................................... 105
Acknowledgements..................................................................................................................... ................................... 106

INTRODUCTORY SECTION

LETTER OF TRANSMITTAL
OFFICE OF FISCAL AFFAIRS 270 WASHINGTON STREET, SW ATLANTA, GEORGIA 30334 404-656-2232
February 4, 2015
Chancellor Henry M. "Hank" Huckaby Board of Regents University System of Georgia
Dear Chancellor Huckaby:
We are pleased to present to you the Annual Financial Report of the University System of Georgia for the year ended June 30, 2014. The report provides financial information about the University System of Georgia's operations during the year and describes its financial position at the end of the fiscal year.
Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls established for this purpose, the objective of which is to provide reasonable assurance that the financial statements are free of material misstatements. Further, the officers of the various institutions of the University System of Georgia and its affiliated organizations have assured us that every effort has been made to reflect accurately the information considered important to all concerned parties.
State law, Federal guidelines, bond covenants and the by-laws of the Board of Regents require that the accounting and financial records of the University System of Georgia be audited each year. The Georgia Department of Audits and Accounts has performed the audit for fiscal 2014 and has issued an unmodified opinion, the most favorable outcome of the audit process. The State Auditor's report is located at the beginning of the financial section.
Management's discussion and analysis (MD&A) immediately follows the auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction therewith.
Respectfully submitted,
_________________________ John E. Brown Vice Chancellor for Fiscal Affairs and Treasurer Board of Regents of the University System of Georgia

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Members of the Board of Regents
The Board of Regents of the University System of Georgia was created in 1931 as a part of a reorganization of Georgia's state government. With this act, public higher education in Georgia was unified for the first time under a single governing and management authority. The governor appoints members to the Board, who each serve seven years; regents may be reappointed to subsequent terms by a sitting governor. Regents donate their time and expertise to serve the state through their governance of the University System of Georgia the positions are voluntary ones without financial remuneration. Today the Board of Regents is composed of 19 members, five of whom are appointed from the state-at-large, and one from each of the 14 congressional districts. The Board elects a chancellor who serves as its chief executive officer and the chief administrative officer of the University System.
The Board oversees the 31 colleges and universities that comprise the University System of Georgia, and has oversight of the Georgia Archives and the Georgia Public Library System.
Members of the Board in Fiscal 2014 included the following:
C. Dean Alford W. Paul Bowers Lori Durden Larry R. Ellis Rutledge A. (Rusty) Griffin, Jr. C. Thomas Hopkins, Jr., MD James M. Hull Donald M. Leebern, Jr. Doreen Stiles Poitevint Neil L. Pruitt, Jr. (Vice Chair) Sachin Shailendra E. Scott Smith Kessel Stelling, Jr. Benjamin"Ben" J. Tarbutton, III Richard L. Tucker Thomas Rogers Wade Larry Walker Don L. Waters Philip A. Wilheit, Sr. (Chair)

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University System of Georgia Annual Financial Report FY 2014

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FINANCIAL SECTION

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

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

February 4, 2015

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Henry M. Huckaby, Chancellor

INDEPENDENT AUDITOR'S REPORT
Ladies and Gentlemen:
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities and the aggregate remaining fund information of the University System of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30, 2014 and the related notes to the financial statements, which collectively comprise the University System of Georgia's basic financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the University System of Georgia's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the

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circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University System of Georgia's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and aggregate remaining fund information of the University System of Georgia as of June 30, 2014, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements of the University System of Georgia are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of the University System of Georgia. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2014, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
As described in Note 1 to the financial statements, in 2014, the University System of Georgia adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter.
As discussed in Note 1 to the financial statements, the prior period financial statements have been restated to correct a misstatement. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the University System of Georgia. The accompanying Introductory and Supplementary Information Sections, as listed in the accompanying table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.

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The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information, except for the portion marked "unaudited" on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting or other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully,

GSG:th

Greg S. Griffin State Auditor

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Management's Discussion and Analysis

Introduction

The mission of the University System of Georgia (USG) is achieved through the collective missions of our state's public colleges and universities. The roles of public higher education in Georgia is to drive economic development and produce more educated individuals to contribute to the qualiy of life in the state. USG institutions are responsible for producing graduates with the requisite skills and knowledge to ensure Georgia's strong future in a knowledge-based and global economy. The individual mission and function of each institution within the USG must be aligned with the overall USG mission in order to strategically meet the higher education needs of the State.

This discussion and analysis provides a summary of the financial position of the USG for the fiscal year ending June 30, 2014. It should allow the user to review how the USG utilized its resources in pursuit of its primary goals of instruction, research and public service.

The Board of Regents and Chancellor Henry M. "Hank" Huckaby are charged with the leadership of the thirty-one institutions of the USG. The USG continues to prosper, as is demonstrated by the following information:

FY2014 FY2013 FY2012

STUDENT HEADCOUNT
309,469 314,365 318,027

STUDENT FTE
274,449 278,319 281,559

State Resources
The General Appropriations Act of 2014 (House Bill 106), as amended by House Bill 743, appropriated a total of $1,885,486,702 to the USG.
The following table presents the state appropriations available to the USG from the General Appropriations Act of 2014, as amended:

STATE APPROPRIATIONS AVAILABLE - GENERAL APPROPRIATIONS ACT OF 2014 House Bill 106 General State Funds House Bill 743 General State Funds
Total State Appropriations Per Appropriations Act - University System of Georgia

$ 1,883,128,792
2,357,910 $ 1,885,486,702

The following table presents the FY 2014 allocations by the Board of Regents to the USG institutions:

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ALLOCATIONS BY THE BOARD OF REGENTS

Education and General

Teaching

Non-Teaching

Other Activities

Regents Central Office

$ 8,401,788

Rental Payments - GA Military College

2,288,309

GA Public Telecommunications Commission

14,513,070

GA Public Libraries

31,497,624

Research Consortium

6,104,447

Total Other Activities

Special Initiative Funding

Total Education and General

Net State Appropriations Available to the University System of Georgia

$ 1,677,032,595 118,945,543
62,805,238 26,703,326

$ 1,885,486,702 $ 1,885,486,702

The following chart illustrates the Board of Regents allocations to Teaching, Non-Teaching, Other Activities and Special Funding Initiatives:

Overview of the Financial Statements and Financial Analysis
The USG is proud to present its consolidated financial statements for fiscal year 2014. These statements contain information from the thirty-one institutions of the USG and the University System Office (USO). Each institution has prepared a separate annual financial report that is available upon request.
The emphasis of discussions about these statements will be on current year data. There are three consolidated financial statements presented: the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Net Position, and the Statement of Cash Flows.

Fiduciary fund statements for the Board of Regents Retiree Health Benefit Fund and the Early Retirement Plan Georgia Regents University are also included with the financial statements noted above: the

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Combining Statement of Fiduciary Net Position and the Combining Statement of Changes in Fiduciary Net Position.
The Notes to the Financial Statements immediately follow the consolidated and combined fiduciary fund statements, and contain essential information that serves both to support and clarify the information presented in the financial statements preceding them.
The Required Supplementary Information section contains additional information related to the Board of Regents Retiree Health Benefit Fund and the Early Retirement Plan Georgia Regents University as required by generally accepted accounting principles.
Finally, the Supplemental Information section includes selected information by institution as well as information on affiliated organizations that have been deemed significant to their respective institutions. This section also includes consolidated financial statements presented on a statutory/budget basis.
This discussion and analysis of the USG's consolidated financial statements provides an overview of its financial activities for the fiscal year. Further information is provided by comparative data for fiscal 2013 and 2014.
Statement of Net Position
The Statement of Net Position presents the assets, deferred outflows of resources, liabilities, deferred inflows of resources and net position of the USG as of June 30, 2014. The Statement of Net Position is a point-in-time financial statement that presents a fiscal snapshot of the USG. It presents end-of-year data about assets (current and non-current) plus deferred outflows, and liabilities (current and non-current) plus deferred inflows, as well as net position (assets plus deferred outflows minus liabilities plus deferred inflows). The differences between current and non-current assets are discussed in the Notes to the Financial Statements.
From the data presented, readers of the Statement of Net Position are able to determine the assets available to continue operations as well as the obligations of the USG.
Finally, the Statement of Net Position provides a picture of the net position and its availability for expenditure by the USG. Net position is divided into three major categories.
The first category, net investment in capital assets, provides the USG's equity in property, plant and equipment owned by the institutions. The next category is restricted, which is divided into two categories, non-expendable and expendable. Restricted, non-expendable net position consists solely of the USG's permanent endowment funds, which are available only for investment purposes. The corpus of nonexpendable, restricted resources is available only for investment purposes. Expendable and Expendable Capital Projects are restricted resources available for expenditure, but these restricted resources must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted resources, which are available to the USG for any lawful purpose.
The USG's financial position at June 30, 2014 is very strong, with total assets of $11.506 billion, deferred outflows of $2.8 million, total liabilities of $6.249 billion, deferred inflows of $100.8 million, and net position of $5.159 billion.

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Assets and Deferred Outflows
Total assets and deferred outflows of the USG in fiscal 2014 were approximately $317 million more than those reported for fiscal 2013. A review of the Statement of Net Position will reveal that the increase primarily was due to an increase of $139 million in capital assets, net of accumulated depreciation, and a $149 million increase in cash and investments.
Liabilities and Deferred Inflows
Total liabilities and deferred inflows for fiscal 2014 were approximately $403 million more than those reported for fiscal 2013. The primary components of this increase were $53 million in deposits held for other organization related to affiliated organization investments in the Board of Regents Investment Pool earnings, and $280 million in the net Other Post-Employment Benefit (OPEB) obligation.
Net Position
The combination of the increase in total assets and deferred outflows of $317 million and the increase in total liabilities and deferred inflows of $403 million yielded a net decrease in total net position of $86 million, or -1.6%. The decrease in total net position was primarily associated with the $173 decrease in Unrestricted Net resources, which is largely due to OPEB reporting requirements of the net OPEB obligation. The following chart depicts the level, by category, of net position:

The following table summarizes the USG's assets, deferred outflows, liabilities, deferred inflows and net position as of June 30, 2014 and June 30, 2013.

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CONDENSED STATEMENT OF NET POSITION (in millions)
ASSETS Current Assets Capital Assets, Net Other Assets TOTAL ASSETS

June 30, 2014 June 30, 2013 % Change

$

2,114 $

1,909

9,225

9,086

167

197

$

11,506 $

11,192

10.7% 1.5%
-15.2% 2.8%

DEFERRED OUTFLOWS
LIABILITIES Current Liabilities Non-Current Liabilities TOTAL LIABILITIES
DEFERRED INFLOWS

$

3$

-

$

850 $

792

5,399

5,077

$

6,249 $

5,869

$

101 $

78

7.3% 6.3% 6.5%
29.5%

NET POSITION

Net Investment in Capital Assets

$

5,588 $

5,502

Restricted, Non-Expendable

175

160

Restricted, Expendable

303

319

Restricted, Expendable - Capital Projects

77

75

Unrestricted

(984)

(811)

TOTAL NET POSITION

$

5,159 $

5,245

1.6% 9.4% -5.0% 2.7% 21.3% -1.6%

Statement of Revenues, Expenses and Changes in Net Position

The Statement of Revenues, Expenses and Changes in Net Position presents the revenues received and expenses incurred during the year. Activities are reported as either operating or non-operating. Changes in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the USG institutions, both operating and non-operating, and the expenses paid by the institutions, operating and non-operating, and any other revenues, expenses, gains or losses received or spent by the USG institutions.

Generally, operating revenues are received for providing goods and services to the various customers and constituencies of the institutions. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institutions. Non-operating revenues are revenues received for which goods and services are not provided. For example, state appropriations are non-operating because they are provided by the legislature to the USG without the legislature directly receiving commensurate goods or services for those revenues. State capital grants and gifts and other capital grants and gifts are considered neither operating nor nonoperating revenues and are reported after "Income before other revenues, expenses, gains or losses".

Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Position are as follows:

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CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION (in millions)
Operating Revenue Operating Expense Operating Loss Non-Operating Revenue and Expense Income (Loss) before Other Revenues, Expenses, Gains, or Losses Other Revenues, Expenses, Gains, Losses and Special Items Increase in Net Position Net Position at beginning of year, restated Net Position at End of Year

June 30, 2014 June 30, 2013

$

4,434 $

4,371

7,138

6,894

$ (2,704) $ (2,523)

$

2,454 $

2,348

% Change
1.4% 3.5% -7.2%
5%

$

(250) $

(175)

$

150 $

299

$

(100) $

124

$

5,259 $

5,121

$

5,159 $

5,245

-42.9% -49.8%
-180.6% 2.7%
-1.6%

Revenues
Revenue by source (state appropriations, grants and contracts, tuition and fees, auxiliaries, gifts and other sources) is depicted by the following chart:

State appropriations increased $136 million (7.8%) in fiscal 2014. Grants and contracts revenue decreased $45 million (-2.1%) in fiscal 2014. Tuition and fee revenues, net increased $46 million (2.7%) in fiscal 2014 when compared with fiscal 2013.

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Auxiliary operations increased by $31 million (3.8%) in fiscal 2014 as compared to fiscal 2013. Primary components of this increase included residence halls ($14 million), food services ($10 million), and intercollegiate athletics ($10 million).
The gifts revenue category includes both capital and non-capital gifts. The largest element of gift revenue relates to $115 million received from the Georgia State Financing and Investment Commission (GSFIC). Institutions within the USG receive gift revenue either through reimbursement or capital asset transfer for approved construction, capital additions or maintenance projects.
Expenses
An illustration of total operating expenses by functional classification is provided as follows:

Total operating expenses were $7,138 million in fiscal 2014, an increase of $244 million (4%) when compared with fiscal 2013. These increases are primarily attributable to the following functional classifications: Instruction ($35 million); Research ($54 million); Auxiliaries ($26 million); Academic Support ($32 million); Student Services ($8 million); Institutional Support ($79 million) and Patient Care (GRU) ($47 million). These amounts were partially offset by a decrease in Scholarships and Fellowships ($13 million); Plant Operations ($2 million); and Public Service ($22 million).

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The following depicts the fiscal 2014 operating expenses by natural classification:

As noted above, expenses increased $244 million (3.5%) in fiscal 2014 when compared with fiscal 2013. The increases were substantially attributable to salaries and benefits, including other personal services ($157 million); depreciation ($2 million); supplies and other services ($89 million); utilities ($5 million) and travel ($4 million). These increases were partially offset by decreases to scholarships and fellowships ($13 million).
Statement of Cash Flows
The Statement of Cash Flows presents detailed information about the cash activity of the USG during the year and is divided into five sections. The first section is concerned with operating cash flows and reflects the net cash used by the various operating activities of the USG. The second section is related to cash flows from non-capital financing activities, which reflects the cash received and spent for non-capital financing purposes. The third section summarizes cash flows from capital and related financing activities and contains cash used for the acquisition and construction of capital and related items. The fourth section is comprised of the cash flows from investing activities and includes the purchases, proceeds and interest received from investing activities. The fifth, and final, section reconciles the net cash used to the operating income or loss as reflected on the Statement of Revenues, Expenses and Changes in Net Position.

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A summary of the Statement of Cash Flows is provided below:

CONDENSED STATEMENT OF NET CASH FLOWS (in millions) Cash Provided (Used) by:
Operating Activities Non-Capital Financing Activities Capital and Related Financing Activities Investing Activities NET CHANGE IN CASH Cash, beginning of year (restated) CASH, end of year

June 30, 2014 June 30, 2013

$

(1,918) $

(1,720)

2,635

2,511

(565)

(574)

(3)

36

$

149 $

253

1,302

1,051

$

1,451 $

1,304

Capital Assets Capital assets, net of accumulated depreciation, at June 30, 2014 and June 30, 2013 were as follows:

CAPITAL ASSETS, net of accumulated depreciation (in millions)
Land Construction in Progress Infrastructure, Facilities, and Improvements Building and Improvements Equipment Capital Leases Library and other collections Software Capital Assets, net of accumulated depreciation

Increase

June 30, 2014 June 30, 2013 (Decrease) % Change

$

362 $

351 $

11

3.1%

182

210

(28) -13.3%

457

448

9

2.0%

5,490

5,410

80

1.5%

410

417

(7)

-1.7%

2,079

2,029

50

2.5%

222

216

6

3.0%

22

5

17 340.0%

$

9,224 $

9,086 $

138

1.5%

As shown above, capital assets, net of accumulated depreciation increased $138 million, or 1.5% during fiscal 2014 when compared with fiscal 2013. Major building additions represented $80 million of the capital asset additions.
Long-Term Debt and Liabilities
The University System of Georgia had long-term debt and liabilities of $5.59 billion in fiscal 2014. Longterm liabilities included lease purchase obligations of $3.5 billion, compensated absences of $195 million, net OPEB obligation of $1.843 billion, and other long-term liabilities of $.8 million. Of these amounts, $200.7 million was reflected as current liabilities at June 30, 2014.
For additional information concerning long-term debt and liabilities of the USG, please refer to notes 1, 8 and 10 in the Notes to the Financial Statements.

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Retiree Health Benefit Fund
The University System Office is the custodian of the Board of Regents Retiree Health Benefit Fund. This fund was authorized pursuant to the Official Code of Georgia Annotated Section 47-21-21 for the purpose of accumulating funds necessary to meet employer costs of retiree post-employee health insurance benefits.
As noted in the Long-Term Debt and Liabilities section above, the USG carries a net OPEB Obligation liability of $1.843 billion as of June 30, 2014. The Board of Regents continues to evaluate options to reduce this growing liability.
For additional information concerning the Retiree Health Benefit Fund, please refer to note 15 in the Notes to Financial Statements.
Early Retirement Pension Plan Fund Georgia Regents University
Georgia Regents University Early Retirment Penison Plan (ERP) is a single-employer defined benefit pension plan administered by Bryan, Pendleton, Swats and McAlister. The plan was devised by Georgia Regents University as a means of manpower reduction and was approved by the Board of Regents of the USG of Georgia effective January 1, 2000.
For additional information concerning the Early Retirement Pension Fund, please refer to note 12 in the Notes to Financial Statements.
Affiliated Organizations
System-wide, there were twenty affiliated organizations that met one or more criteria for component units of the State of Georgia in compliance with GASB Statement No. 39. These organizations are included in the supplementary information section. Ten of these affiliated organizations are reported in the State Comprehensive Annual Financial Report (CAFR) as discretely presented component units for fiscal 2014 and ten of these affiliated organizations are reported as blended in the CAFR in compliance with GASB Statement No. 61.
Economic Outlook
An enhanced focus on ensuring that students can afford and earn degrees has resulted in an increased emphasis on restructuring public higher education in Georgia to work more efficiently and effectively. The USG is committed to timely and thorough review of programs, services and policies for currency and relevance. Additionally, the USG and its institutions are committed to measuring performance and being accountable for its decisions. Global economic indicators reveal that in the near future, two-thirds of the workforce will require post-secondary credentials to compete for jobs; thus, Georgia's education agencies are collaborating to increase college completion rates from the current level of 42 percent to a targeted 60 percent of the population.
Key areas of consideration include institutional consolidation, a study of how facilities are used and proposed, assessment of degree program effectiveness, expansion of on-line education, a more rigorous approach to K-12 teacher preparation, increased focus on supporting economic development, and enhanced military outreach.

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The consolidation of ten institutions into five new ones has been successfully completed and another consolidation of two institutions is in the preliminary stages. This will allow more funding to be shifted from administration to the classroom following the USG's strategic plan of being committed to pursuing operational efficiencies and being a model steward of resouces.
As a labor-intensive organization, the USG faces competitive pressures related to attracting and retaining quality faculty and staff. As is the case nationally, the USG also faces the rising costs of health-care benefits, but will continue to take proactive measures to mitigate these rising costs.
A key component of the USG's success and future is the strong relationship with Governor Deal and the Georgia General Assembly. Due to their support, and the excellent leadership of the Board of Regents and Chancellor Huckaby, the USG will continue to progress in remaining affordable and maintaining access, while protecting the academic enterprise for the citizens of the State of Georgia.
___________________________________ John E. Brown Vice Chancellor for Fiscal Affairs and Treasurer University System of Georgia

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FINANCIAL STATEMENTS

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UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION June 30, 2014
ASSETS Current Assets Cash and Cash Equivalents Short-term Investments Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables - Other Inventories (Note 4) Prepaid Items Other Assets Total Current Assets Non-Current Assets Non-Current Cash Short-term Investments Investments (Externally Restricted) Other Non-Current Assets Investments Notes Receivable, Net Capital Assets, Net (Note 6) Total Non-Current Assets
TOTAL ASSETS
Deferred Outflows of Resources Debt Refunding
LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Deposits Advances ( Including Tuition and Fees) (Note 7) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences Total Current Liabilities
University System of Georgia Annual Financial Report FY 2014

$ 1,448,179,831 185,555,093

123,999,801 263,539,807
22,257,390 70,485,264
370,925 $ 2,114,388,111

$

3,315,982

1,542,366

68,587,674

6,915,164

41,611,097

44,984,887

9,224,826,502

$ 9,391,783,672

$ 11,506,171,783

$

2,862,046

$

152,389,330

17,831,769

39,846,855

15,310,050

48,194,941

223,744,686

8,748,033

143,800,257

78,787,826

121,710,299

$

850,364,046

Page 21

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION June 30, 2014
Non-Current Liabilities (Note 8) Lease Purchase Obligations Advances Compensated Absences Other Liabilities Net OPEB Obligation Total Non-Current Liabilities
TOTAL LIABILITIES
Deferred Inflows of Resources Deferred Gain on Debt Refundings Other Service Concession Arrangement
TOTAL DEFERRED INFLOWS NET POSITION
Net Investment in Capital Assets Restricted
Non-Expendable Expendable Unrestricted
TOTAL NET POSITION

$ 3,472,479,122 8,432,959
73,979,486 712,595
1,843,077,235 $ 5,398,681,397
$ 6,249,045,443

$

9,046,482

15,563,057

76,162,295

$

100,771,834

$ 5,588,531,688

174,994,517 380,105,488 (984,415,141)

$ 5,159,216,552

University System of Georgia Annual Financial Report FY 2014

Page 22

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2014

OPERATING REVENUES Student Tuition and Fees (Net of Allowance for Doubtful Accounts) Less: Scholarship Allowances Federal Appropriations Gifts and Contributions Grants and Contracts Federal Federal Stimulus State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues Total Operating Revenues

$ 2,282,577,269 (530,970,563) 18,770,294 2,196,892
747,338,179 12,008,072
231,774,820 492,423,943 182,725,700
2,926,002
334,373,217 68,394,701
168,004,883 79,263,843 53,364,490
114,084,641 29,937,242
144,975,233 $ 4,434,168,858

OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss)

$ 1,383,910,777 1,825,610,904 1,195,590,895 11,383,125 71,378,144 318,139,424 183,570,984 1,702,974,606 445,565,188
$ 7,138,124,047 $ (2,703,955,189)

University System of Georgia Annual Financial Report FY 2014

Page 23

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2014

NON-OPERATING REVENUES (EXPENSES)

State Appropriations

$

Grants and Contracts

Federal

Federal Stimulus

State

Other

Gifts

Investment Income

Interest Expense

Other Non-Operating Revenues (Expenses)

Net Non-Operating Revenues

$

Income (Loss) before Other Revenues, Expenses, Gains, or Losses $

Capital Grants and Gifts

Federal

$

State

Other

Special Item - Capital Asset Transfer

Total Other Revenues and Special Items

$

Decrease in Net Position

$

1,880,492,086
561,567,226 2,204,018
12,607,249 58,546,611 77,999,054 35,208,348 (195,204,860) 20,343,955 2,453,763,687 (250,191,502)
11,738,741 115,484,795
22,320,525 206,326
149,750,387 (100,441,115)

Net Position, Beginning of Year, Restated

5,259,657,667

Net Position, End of Year

$ 5,159,216,552

University System of Georgia Annual Financial Report FY 2014

Page 24

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Federal Appropriations Grants and Contracts (Exchange) Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges Other Receipts (Payments) Net Cash Used by Operating Activities
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES State Appropriations Federal Stimulus Funds Agency Fund Transactions Gifts and Grants Received for Other Than Capital Purposes Principal Paid on Installment Debt Interest Paid on Installment Debt Other Non-Operating Receipts Net Cash Flows Provided by Non-Capital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sales of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases Net Cash Used by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Interest on Investments Transfer of Endowment Purchase of Investments Net Cash Provided by Investing Activities Net Increase/Decrease in Cash
Cash and Cash Equivalents - Beginning of Year Early Retirement Plan Cash Method Moved to Fiduciary Fund
Cash and Cash Equivalents - Beginning of Year (Restated)
Cash and Cash Equivalents - End of Year
University System of Georgia Annual Financial Report FY 2014

$ 1,766,325,605 18,659,439
1,472,827,255 185,746,723
(2,815,236,441) (3,203,555,141)
(318,200,025) (10,187,135) 10,381,904 839,435,151 136,269,196
$ (1,917,533,469)

$ 1,880,492,086 (1,034,480) 83,004,678
661,720,453 (117,166) (10,105)
10,722,131 $ 2,634,777,597

$

83,192,535

19,169,911

(382,812,798)

(92,134,678)

(192,258,636)

$

(564,843,666)

$

7,167,332

12,289,007

(76,088)

(22,571,029)

$

(3,190,778)

$

149,209,684

1,304,490,484 (2,204,355)

1,302,286,129 $ 1,451,495,813

Page 25

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2014

RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating Income/(Loss) to Net Cash Provided (Used) by Operating Activities
Depreciation Change in Assets and Liabilities:
Receivables, Net Inventories Other Assets Prepaid items Notes Receivable, Net Investment in Capital Leases Accounts Payable Advances (Including Tuition and Fees) Other Liabilities Compensated Absences Change in Deferred Inflows/Outflows: Deferred Inflows Net OPEB Obligation
Net Cash Used by Operating Activities

$ (2,703,955,189)
445,565,188 30,058,080 (43,919,472) 1,486,033 224,101 (2,081,893) 420,375 124,347 19,379,926 21,036,755 14,859,089 4,367,288
5,967,644 288,934,259
$ (1,917,533,469)

NON-CASH TRANSACTIONS:

Capital Assets Acquired by Incurring Capital Lease Obligations

$

Non-capital Items acquired by incurring Capital Lease Obligations

$

Change in Accounts Receivable Related to GSFIC Gifts

$

Change in Fair Value of Investments Recognized as a Component of Interest Income

$

Special Item - Capital Asset Transfer

$

Change in Accrued Interest Payable Affecting Interest Paid

$

Gifts Other Than Capital Assets Reducing Proceeds of Grants and Gifts for Other Than Capital Assets $

Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

$

Reduction In Capital Lease Obligations

$

133,575,150 701,676
1,170,828 22,052,070
282,414 526,215 31,856,205 63,753,808 411,204

University System of Georgia Annual Financial Report FY 2014

Page 26

UNIVERSITY SYSTEM OF GEORGIA
COMBINED STATEMENT OF FIDUCIARY NET POSITION PENSION AND OTHER POSTEMPLOYMENT BENEFIT TRUST FUNDS June 30, 2014

ASSETS

Pension Trust Board of Regents

Fund - Georgia

Retiree Health

Regents University Benefit Fund

Total

Cash and Cash Equivalents Investments
Debt Securities - Mutual Bond Fund Bond/Equity Mutual Funds Equity Mutual Funds - International Equity Securities - Domestic Equity Securities - International Real Estate Fund Teachers Retirement System of Georgia
Georgia Pooled Fund Receivables
Employer Employee

$

6,348,522

$ 6,356,351 $ 12,704,873

10,018,022 1,360,217 6,174,139
19,940,294 2,031,690 2,573,247

10,018,022 1,360,217 6,174,139
19,940,294 2,031,690 2,573,247

27,747,479

27,747,479

4,308,498 1,909,947

4,308,498 1,909,947

Total Assets

$ 76,193,610

$ 12,574,796 $ 88,768,406

LIABILITIES

Benefits Payable Other

$ 12,119,357 373,920

$ 12,119,357 373,920

Total Liabilities

$ 12,493,277 $ 12,493,277

NET POSITION

Net Assets Held in Trust for Private Purposes Net Assets Held in Trust for Other Postemployment Benefits

$ 76,193,610 $

81,519

$ 76,193,610 81,519

Total Net Position

$ 76,193,610

$

81,519 $ 76,275,129

University System of Georgia Annual Financial Report FY 2014

Page 27

UNIVERSITY SYSTEM OF GEORGIA COMBINED STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION AND OTHER POSTEMPLOYMENT BENEFIT TRUST FUNDS June 30, 2014

ADDITIONS
Contributions Employer Plan member
Investment Earnings Net Increase in Fair Value of Investments Investment Income Less: Investment Expense Other TOTAL ADDITIONS

Pension Trust Fund - Georgia Regents University

Board of Regents Retiree Health Benefit Fund

Total

$

13,084,672

$ 117,503,272 34,218,671

$ 130,587,944 34,218,671

11,096,562

11,096,562

737,421

737,421

(106,232)

(106,232)

4,707,496

4,707,496

$

24,812,423

$ 156,429,439 $ 181,241,862

DEDUCTIONS

Benefits Life Insurance Premium Expense Administrative expense

$

13,054,512

$ 142,703,797 3,423,184
10,437,714

$ 155,758,309 3,423,184
10,437,714

Total Deductions

$

13,054,512

$ 156,564,695 $ 169,619,207

Net Decrease

$

11,757,911

$ (135,256) $ 11,622,655

Beginning Net Position -Restated

64,435,699

216,775

64,652,474

Net Position - End of Year

$

76,193,610

$

81,519 $ 76,275,129

University System of Georgia Annual Financial Report FY 2014

Page 28

University System of Georgia Annual Financial Report FY 2014

Page 29

NOTES TO THE FINANCIAL STATEMENTS

University System of Georgia Annual Financial Report FY 2014

Page 30

UNIVERSITY SYSTEM OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014

Note 1 Summary of Significant Accounting Policies
Nature of Operations The University System of Georgia (USG) serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge, and by disseminating knowledge to the people of Georgia and throughout the country.
Reporting Entity The USG, an organizational unit of the State of Georgia, is comprised of thirty-one (31) State-supported member institutions of higher education in Georgia and the University System Office (USO). The USO also is the custodian of the Board of Regents Retiree Health Benefit Fund.
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. The USG does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, all 31 institutions and the USO are considered organizational units of the Board of Regents of the USG 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.
Legally separate, tax-exempt organizations whose activities primarily support the USG, which are organizational units of the State of Georgia, are considered potential component units of the State. See Note 17, Affiliated Organizations, for additional information.
On November 12, 2013, based on the Chancellor's recommendation, the Board of Regents voted to consolidate two institutions of the USG to enhance and improve educational offerings and student success. The following mergers became effective on January 6, 2015: Southern Polytechnic State University consolidated with Kennesaw State University. The new university is also named Kennesaw State University.
Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the USG's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows.
Basis of Accounting For financial reporting purposes, the USG is considered a special-purpose government engaged only in business-type activities. Accordingly, the USG's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis,

University System of Georgia Annual Financial Report FY 2014

Page 31

revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-University System transactions have been eliminated.
New Accounting Pronouncements In fiscal year 2014, the USG adopted the Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. The provisions of this Statement clarify the use of deferred inflows of resources and deferred outflows of resources. Certain items, including those items that were previously reported as assets and liabilities, now will be reported as outflows of resources or inflows of resources. As a result of this implementation, the USG changed the classification of certain assets to deferred outflows or resources and liabilities to deferred inflows of resources.
In fiscal year 2014, the USG adopted Governmental Accounting Standards Board (GASB) Statement No. 66, Technical Corrections 2012, an amendment to GASB Statements No. 10 and No. 62. The objective of this Statement is to resolve conflicting guidance by amending GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues and GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. GASB Statement No. 10 was amended by removing the provision that limited fund based reporting of an entity's risk and financing activities to certain funds. GASB Statement No. 62 was amended by modifying guidance on (1) operating lease payments that vary from a straight-line basis, (2) purchases of a loan or a group of loans, and (3) recognition of servicing fees on mortgage loans that are sold when the stated service fee rate differs from a current (normal) servicing fee rate.
In fiscal year 2014, the USG adopted Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25. This Statement establishes new financial reporting standards for state and local governmental pension plans that are administered through a trust or similar arrangement. This Statement resulted in changes to the actuarial calculation of total and net pesion liability and the related note disclosures and required supplementary information.
In fiscal year 2014, the USG adopted Governmental Accounting Standards Board (GASB) Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees. This Statement establishes accounting and reporting requirements for state and local governments that extend or receive financial guarantees that are nonexchange transactions.
Future Accounting Pronouncements In fiscal year 2015, the USG will adopt Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this Statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. Implementation of this Statement will require the USG to record a liability for its proportionate share of the Net Pension Liability of pensions plans in which it participates. Acturial estimates are currently being made to determine the USG's liability, the effects of which are believed to be material.
Cash and Cash Equivalents Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool and the Board of Regents Short-Term Investment Pool.

University System of Georgia Annual Financial Report FY 2014

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Short-Term Investments Short-Term Investments consist of investments of 90 days 13 months. These include certificates of deposits or other time-restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal.

Investments Investments include financial instruments with terms in excess of 13 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The USG accounts for its investments at fair value. Changes in unrealized gain (loss) on the carrying value of investments are reported as a component of investment income in the Statement of Revenues, Expenses, and Changes in Net Position. The Board of Regents Legal Fund, the Board of Regents Balanced Income Fund, the Board of Regents Total Return Fund, the Board of Regents Diversified Fund, and the Georgia Extended Asset Pool are included as investments.

Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of whom reside in the State of Georgia. Accounts receivable also includes amounts due from federal, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the USG's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.

Inventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFO") basis. Resale inventories are valued at cost using the average-cost basis.

Non-current Cash and Investments Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position.

Prepaid Items Payments made to vendors and state and local government organizations for services that will benefit periods beyond June 30, 2014 are recorded as prepaid items. At June 30, 2014, the Early Retirement Program Net Pension Asset of $7,178,658 was reported as a prepaid item.

Capital Assets Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the USG's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software, is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.

To fully understand plant additions in the USG, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) an organization that is external to the System. GSFIC

University System of Georgia Annual Financial Report FY 2014

Page 33

issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For projects managed by GSFIC, GSFIC retains construction in progress in its accounting records throughout the construction period and transfers the entire project to the institutional unit of the University System when complete. For projects managed by institutions of the USG, the institutions retain construction in progress on their books and are reimbursed by GSFIC.
Deposits Deposits represent good faith deposits from students to reserve housing assignments in institutional residence halls.
Advances Advances include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Advances also include amounts received from grant and contract sponsors that have not yet been earned.
Compensated Absences Employee vacation pay is accrued at the end of the fiscal year for financial statement purposes. The liability and expense incurred are recorded at the end of the fiscal year as compensated absences in the Statement of Net Position, and as a component of compensation and benefit expense in the Statements of Revenues, Expenses, and Changes in Net Position.
Non-current Liabilities Non-current liabilities include: (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as non-current assets.
Service Concession Agreements Service concession agreements are arrangements between a government (transferor, one of our institutions) and a third party (operator) in which all of the following criteria are met:
a. The institution conveys to the operator the right and obligation to provide public services through the use and operation of a capital asset in exchange for significant consideration. Significant consideration could be in the form of up-front payments, installment payments, a new facility or improvements to existing facility. b. The operator collects and is compensated by fees from third parties. c. The institution has the ability to modify or approve what services the operator is required to provide, to whom services are provided, and prices or rates that can be charged for those services. d. The institution is entitled to significant residual interest in the service utility of the asset at the end of the arrangement.
At June 30, 2014, the USG had service concession agreements totaling $76 million.
At June 30, 2014, Kennesaw State University (KSU) had three Service Concession Agreements:
1. In August 2001, KSU entered into an agreement with Kennesaw State University Foundation, Inc. (KSUF) whereby KSUF will operate and collect revenues for housing operations from students.

University System of Georgia Annual Financial Report FY 2014

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KSUF is required to operate the dormitory ("University Place") in accordance with a contractual agreement between the parties. Under the terms of the agreement, KSU received no funds upfront from KSUF, but will take full ownership of the dormitory at the end of the operating agreement (June, 2031). 2. In August 2003, KSU entered into an agreement with Kennesaw State University Foundation, Inc. (KSUF) whereby KSUF will operate and collect revenues for housing operations from students. KSUF is required to operate the dormitory ("University Village") in accordance with a contractual agreement between the parties. Under the terms of the agreement, KSU received no funds upfront from KSUF, but will take full ownership of the dormitory at the end of the operating agreement (June, 2034). 3. In August 2007, KSU entered into an agreement with Kennesaw State University Foundation, Inc. (KSUF) whereby KSUF will operate and collect revenues for housing operations from students. KSUF is required to operate the dormitory ("University Suites") in accordance with a contractual agreement between the parties. Under the terms of the agreement, KSU received no funds upfront from KSUF, but will take full ownership of the dormitory at the end of the operating agreement (June, 2037).

At June 30, 2014, KSU reports the three dormitories as Capital Assets with a net carrying value of $74,302,295. For fiscal year 2014, KSU reported a remaining Deferred Inflow of Resources of $74,302,295 and amortized revenue of $3,582,189. Finally, as part of the contractual agreement, KSUF is responsible for insuring each of the three dormitories and for providing maintenance services. As such, the University has no reportable future obligation for these services.

On May 13, 2014 Georgia Gwinnett College (GGC) entered into an agreement with Aramark Educational Services, LLC (Aramark), whereby Aramark will operate food services operations from service recipients. Aramark is required to operate the food service facilities in accordance with the contractual agreement. Under the terms of the contract Aramark committed to a lump sum upfront payment of $360,000.

Under the terms of the agreement, GGC will receive three yearly installment payments of $500,000 from Aramark with a total value of $1,500,000.

GGC recorded a deferred inflow of resources of $1,860,000 and an accounts receivable of $1,860,000 for this contractual commitment.

In addition to any upfront or installment payments, GGC keeps a portion of meal plan revenues each semester and eighty-eight percent of each semesters' revenue is remitted to Aramark. The agreement is renewable each year for ten years.

Net Position The USG's net position is classified as follows:

Net Investment in capital assets: This represents the USG'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 net investment in capital assets. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 Capital Assets section.

Restricted nonexpendable includes endowments 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

University System of Georgia Annual Financial Report FY 2014

Page 35

may either be expended or added to principal. For Institution-controlled, donor-restricted endowments, the by-laws of the Board of Regents of the University System of Georgia permits each individual Institution to use prudent judgment in the spending of current realized and unrealized endowment appreciation. Donorrestricted endowment appreciation is periodically transferred to restricted expendable accounts for expenditure as specified by the purpose of the endowment. Each University/College maintains pertinent information related to each endowment fund including donor; amount and date of donation; restrictions by the source of limitations; limitations on investments, etc.

Restricted - expendable includes resources in which the USG is legally or contractually obligated to spend resources in accordance with restrictions by external third parties. Expendable, restricted net position at June 30, 2014 included the following:

Restricted - E&G and Other Organized Activities Federal Loans Institutional Loans Term Endowments Quasi-Endowments Health Insurance Reserve
Total Restricted Expendable

$ 137,980,207 42,031,287 25,019,962 3,676,182 16,876,844 77,831,695
$ 303,416,177

Expendable, restricted capital projects represents resources for which the USG is legally or contractually obligated to spend resources for capital projects in accordance with restrictions imposed by external third parties totaled $76,689,311 at June 30, 2014.
Unrestricted represents 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 USG, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus). Unexpended state appropriations must be refunded to the Board of Regents of the USG, USO 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. Unrestricted net position included the following items at June 30, 2014, which are quasirestricted by management:

R & R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted
Total Unrestricted Net Assets

$ 187,986,260 378,100,095 33,781,499
(1,584,282,995)
$ (984,415,141)

When an expense is incurred that can be paid using either restricted or unrestricted resources, the University System's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.

University System of Georgia Annual Financial Report FY 2014

Page 36

Income Taxes The USG, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.

Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Position classifies fiscal year activity as operating and non-operating according to the following criteria:

Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain federal, state and local grants and contracts, and (3) sales and services.

Non-operating revenue includes activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenue by GASB No. 9, Reporting Cash Flows of Proprietary and Non-expendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.

Operating expense includes activities that have the characteristics of exchange transactions.

Non-operating expense includes activities that have the characteristics of non-exchange transactions, such as capital financing costs and costs related to investment activity.

Scholarship Allowances Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses, and Changes in Net Position. Scholarship allowances are the difference between the stated charge for goods and services provided by the USG, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or non-operating revenues in the USG's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University System has recorded contra revenue for scholarship allowances.

Special Items On June 4, 1997, the Atlanta Chapter of the Professional Construction Estimators Association and its successor, the America Society of Professional Estimators, Atlanta Chapter, contributed a gift of cash to create an endowment funded scholarship with the Southern Polytechnic State University. On July 12, 2013, the donor requested that the remaining proceeds in this endowment be transferred to the Southern Polytechnic State University Foundation. On July 23, 2013, the Golden Hammer Scholarship Fund balances of $76,088 was transferred to the Foundation. This transfer is reflected as a Special Item Transfer on the Statement of Revenues, Expense and Changes in Net Position.

The Georgia Division of Archives and History was transferred from the Office of the Secretary of State to the USG effective July 1, 2013. On July 1, 2013, the Georgia Archives building had a reported gross book value of $44,297,978 and accumulated depreciation of $8,305,870, for a net book value of $35,992,108. The building was acquired in 2003 through a 50-year annually renewable lease with the University Financing Foundation. The remaining net lease obligation at the date of transfer was $35,709,693. The net transfer of $282,414 is noted as a Special Item Transfer on the Statement of Revenues, Expenses and Changes in Net Position.

University System of Georgia Annual Financial Report FY 2014

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Restatement of Prior Year Net Position The following institutions had restatements of prior year balances in fiscal year 2014:
In conformity with Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans, the Georgia Regents University Early Retirement Plan previously reported as agency funds was reclassified as a Pension Trust Fund in the amount of $64,435,699. Beginning net position was restated for the amount previously reported as agency funds and the initial plan contributions that were remitted to the Office of the State Treasurer and were invested with other retirement funds held by the state, as well as amounts remitted to the plan administrator for payment to beneficiaries.

Institution Bainbridge State College Clayton State University Georgia Gwinnett College Georgia Highlands College Georgia Perimeter College Georgia Southern University Southern Polytechnic State University University System Office
Total

Effect on Beginning Net

Position

688,503

6,826

6,663,614

(307,801)

25,666

$

3,016,460

(4,230,862)

8,398,592

$

14,260,998

Georgia Southern University had a restatement of prior year net position, increasing beginning net position by $3,016,460, which includes an increase in buildings of $5,207,899 and a decrease in equipment of $2,191,439. These adjustments were made to correct errors in capital assets related to the Herty Advance Material Center, which was merged with Georgia Southern University in fiscal year 2013.
Valdosta State University had a restatement of prior year net position, due to removing the maintenance from certain capital lease obligations. This affected the long-term liabilities by an offsetting amount ($2,974,526); therefore, beginning net position was unchanged.
Clayton State University had a restatement of prior year net assets, increasing beginning net assets by $6,826. This is due to adding capital assets that met the capitalization threshold, but was not originally recorded.
Georgia College & State University had a restatement of prior year capital assets, decreasing beginning capital leased assets by $4,289,687. This decrease in assets was offset by a decrease to beginning capital lease liability of the same amount, $4,289,687, which resulted in no overall effect to beginning net position. This restatement was due to a correction necessitated by a change in accounting principle that required adjustments to bring capital lease liabilities of the University and related asset values in line and consistent with the Georgia College & State University Foundation, Inc.'s asset values in accordance with GASB Statement No. 61.
Southern Polytechnic State University had a restatement of prior year net position, decreasing beginning net position by $4,230,862. This was due to correction of errors that decreased capital assets, net by $3,881,309, and increased capital lease obligations by $349,553.

University System of Georgia Annual Financial Report FY 2014

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Bainbridge State College had a restatement of prior year net position, increasing beginning net position by $688,503. During the course of expanding and renovating an academic building during the year, it was determined that the useful life of the original building asset should have been increased to coincide with the useful life of the expansion/renovations. This subsequently increased the reported amount of capital assets, net and net position.
Georgia Gwinnett College had a restatement of prior year net position, increasing beginning net position by $6,663,614. In fiscal year 2014, the accounting treatment for leased buildings were adjusted to adhere to the capitalization thresholds as set forth in the University System of Georgia's capital assets guidelines.
Georgia Highlands College had a restatement of prior year net position, decreasing beginning net position by $307,801. This was due to the removing of construction work-in-progress for the GSFIC managed Academic Building project that was being retained on GSFIC's books until the completion of the project.
Georgia Perimeter College had a restatement of prior year net position, increasing beginning net position by $25,666. This was primarily due to capitalizing an equipment asset in fiscal year 2014 that was purchased in fiscal year 2013, but also includes equipment asset reinstatements and an asset recategorization.
The University System Office had a restatement of prior year net position, increasing beginning net position by $8,398,532. This was due to an understatement in FY 2013 of the employer contribution for retiree post-employment life insurance benefits.

Note 2 Deposits and Investments
A. Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the USG's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the USG) 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

University System of Georgia Annual Financial Report FY 2014

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6. Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association.
7. 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 USG.
At June 30, 2014, the carrying value of deposits was $569,169,217 and the bank balance was $603,450,985. Of the USG's deposits, $594,221,943 was uninsured. Of these uninsured deposits, $84,777,669 were collateralized with securities held by the financial institution's trust department or agent in the USG's name, $509,254,281 were collateralized with securities held by the financial institutions, by it trust department or agency, but not in the USG's name and $189,993 were uncollateralized.
B. Investments The USG maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility each institution has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy, and applicable federal and state laws.
The USG's investments as of June 30, 2014 are presented below: investments are presented by investment type and debt securities are presented by maturity.

Investment type Debt Securities
U.S. Treasuries U.S. Agencies - Explicitly Guaranteed U.S. Agencies - Implicitly Guaranteed Bond Securities Corporate Bonds Corporate Debt General Obligation Bonds Money Market Mutual Fund Municipal Bonds Mutual Funds - Bonds Repurchase Agreements

Fair Value

$

8,437,116

75,413,624

399,888,612

47,327,138

101,419

214,218

1,078,460

20,733,040

19,624,702 2,508,497
$ 575,326,826

Other Investments Bond/Equity Mutual Funds Bond Exchange - Traded Funds Bond/Equity Mutual Funds - International Cash Surrender Value Common Stock Equity Mutual Funds - Domestic Equity Mutual Funds - International Equity Securities - Domestic Equity Securities - International Real Estate Fund Real Estate Held for Investments Real Estate Investment Trusts Open-end Mutual Fund Miscellaneous Holdings
Investment Pools Office of the State Treasurer
Georgia Fund 1 Georgia Extended Asset Pool Teachers Retirement System of Georgia Georgia Pooled Index Fund

9,712,264 853,466 132,890 322,824 808,597
48,002,766 7,705,371
90,633,697 2,508,817 8,434,654 6,151,982 582,848 14,891 98,500
475,116,471 6,843,092
27,747,479

$ 1,260,997,435

Less Than 3 Months
2,724,591
11,383 20,733,040
6,856 2,508,497 $ 25,984,367

Investment Maturity

4-12 Months

1-5 Years

6-10 Years

$ 1,191,911
5,600,521 -
4,778 19,333 80,610
47,047
$ 6,944,200

$ 2,102,977 13,065,458
111,017,724 4,967,692 55,630 55,143 602,853
8,364,276
$ 140,231,753

$ 5,048,858 62,344,890 60,265,275 37,827,566 41,011 128,359 394,997 8,402,522 -
$ 174,453,478

More Than 10 Years

$

93,370

3,276

220,280,501

4,531,880

-

-

2,804,001 $ 227,713,028

University System of Georgia Annual Financial Report FY 2014

Page 40

The Georgia Fund 1 Investment Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company. This investment is valued at the pool's share price, $1.00 per share. The Georgia Fund 1 Investment Pool is an AAAf rated investment pool by Standard and Poor's; the weighted average maturity of the fund is 62 days.
The Georgia Extended Asset Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company. Net asset value (NAV) is calculated daily to determine current share price, which was $1.99 at June 30, 2014. The Georgia Extended Asset Pool is an AAA+f rated investment pool by Standard and Poor's; the weighted average maturity of the fund is 0.22 years.
The USO serves as fiscal agent for various units of the USG and affiliated organizations. The USO pools the monies of these organizations with the USO's monies for investment purposes. The USO cannot allocate pool investments between the internal (USG) and external (affiliated organizations) investment pool portions. The investment pool is not registered with the SEC as an investment company. The fair value of the investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. The USO maintains investment policy guidelines for each fund within the investment pool that is offered to qualified USG participants. These policies are intended to foster the sound and prudent responsibility each institution has to the citizens of Georgia and which conforms to the Board of Regents investment policy. All investments must be consistent with donor intent, Board of Regents policy, and applicable Federal and state laws.
Units of the USG and their affiliated organizations are eligible to participate in the Pooled Investment Fund program. Although the underlying investment instruments of the Pooled Investment Fund program have been reported for investment disclosure purposes, the overall characteristics of each of the pooled fund portfolios within the Pooled Investment Fund program are described below.
Short Term Fund The Short Term fund provides a current return and stability of principal while affording a means of overnight liquidity for projected cash needs. The investment maturities of the fund will range between daily and two years. The market value of the Short Term Fund at June 30, 2014 was $353,832,444.
Legal Fund The Legal fund provides an opportunity for greater income and modest principal growth to the extent possible with the securities allowed under Georgia Code 50-17-59 and 50-17-63. The average maturity of this fund typically ranges between five and ten years, with a maximum of thirty years for any individual investment. The overall character of the portfolio should be one of treasury and agency quality, possessing virtually no degree of financial risk. The market value of the Legal Fund at June 30, 2014 was $17,548,776.

University System of Georgia Annual Financial Report FY 2014

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Balanced Income Fund The Balanced Income fund is designed to be a vehicle to invest funds that are not subject to the state regulations concerning investing in equities. This fund is comprised of fixed income, equity and cash equivalent instruments.

The equity allocation range shall be between 30% and 40%, with a target of 35% of the total portfolio. The fixed income (bond) portion of the portfolio shall be between 60% and 70%, with a target of 65% of the total portfolio. Reserves for contingencies and stock and bond purchases are expected to comprise the balance of the fund. Reserves and excess income should be invested at all times in practical amounts. Reserves can be invested in high quality institutional money market mutual funds or other high quality, short term instruments. The market value of the Balanced Income Fund at June 30, 2014 was $5,409,197.

Total Return Fund The Total Return fund is another pool designed to be a vehicle to invest funds that are not subject to state regulations concerning investing in equities. This pool offers the greatest percentage of overall equity exposure, with well over half of the funds typically invested in equities.

The equity allocation range shall be between 60% and 70%, with a target of 65% of the total portfolio. The fixed income (bond) portion of the portfolio shall be between 30% and 40%, with a target of 35% of the total portfolio. Reserves for contingencies and stock and bond purchases are expected to comprise the balance of the fund. Reserves and excess income should be invested at all times in practical amounts. Reserves can be invested in high quality institutional money market mutual funds or other high quality, short term instruments. The market value of the Total Return Fund at June 30, 2014 was $12,611,857.

Diversified Fund The Diversified fund is designed to gain further diversification and increase exposures to assets that have lower correlation to equity and bond markets by utilizing alternative asset classes. In addition, this fund is constructed to build an optimal portfolio where return is increased and risk is reduced.

The equity allocation range shall be between 50% and 75% of the portfolio. The fixed income (bond) portion of the portfolio shall be between 20% and 40%. The portfolio may also consist of Hedge Funds, Real Estate and Venture Capital/Private Equity/Post Venture Capital.

Hedge Funds The investment approach to this asset class is to use a multi-strategy, multi-manager fund of hedge funds. The Board of Regents believes that a fund of fund strategy will provide the best access to a highly diversified pool of hedge fund strategies and managers.

Real Estate The investment approach to investing in this asset class is to use real estate investment trusts (REITs). REITs are more liquid than owning commercial real estate and diversification can be achieved by purchasing a mutual fund.

Venture Capital/Private Equity/Post Venture Capital This asset class is the riskiest and most volatile permitted investment opportunity. This asset should be considered as an additional diversification investment strategy due to the low correlation with stock and bonds.

Reserves for contingencies and stock and bond purchases are expected to comprise the balance of the fund. Reserves and excess income should be invested at all times in practical amounts. Reserves can be invested in high quality, institutional money market mutual funds or other high quality, short term instruments. The market value of the Diversified Fund at June 30, 2014 was $157,110,087.

University System of Georgia Annual Financial Report FY 2014

Page 42

Condensed financial information for the investment pool is as follows:

Regents Investment Pool Statement of Net Position June 30, 2014

Regents Investment Pool Statement of Changes in Net Position For the Fiscal Year Ended June 30, 2014

Investments Accrued Interest

Assets

Net Assets

$ 545,959,998 552,363
$ 546,512,361

Additions Pool Participant Deposits Investment Income
Fair Value Decreases Less: Investment Expense

$ 92,445,941 15,446,010 12,277,563 (192,847)

Distribution of Net Assets External Participant Account Balance Internal Participant Account Balance
Total Distribution

$ 30,358,254 516,154,107
$ 546,512,361

Total Additions
Deductions Pool Participant Withdrawals
Net Increase (Decrease)

$ 119,976,667 (35,418,274)
$ 84,558,393

Net Assets July 1, 2013

461,953,968

June 30, 2014

$ 546,512,361

Investment Risks: Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The Board of Regents policy for managing interest rate risk is contained in the investment policy guidelines for the various pooled funds:

1. In the Short Term fund, the average maturity of the fixed income portfolio shall not exceed three years.

2. In all the other pooled funds, the average maturity of the fixed income portfolio shall not exceed ten years.

3. Fixed income investments, except in the Diversified Fund, shall be limited to U.S. government agency and corporate debt instruments that meet investment eligibility under Georgia Code 50-17-63.

4. The fixed income target allocation is defined in the investment policy guidelines for each pooled investment fund. These targets may be modified upon recommendation of the fund's investment manager and approval by the Board of Regents.

University System of Georgia Annual Financial Report FY 2014

Page 43

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the USG will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The USG's policy for managing custodial credit risk for investments is:
1. The USG has appointed a Federally regulated banking institution as custodian. The custodian performs its duties to the standards of a professional custodian and is liable to the USG for claims, losses, liabilities and expenses arising from its failure to exercise ordinary care, its willful misconduct, or its failure to otherwise act in accordance with the contract.

2. All securities transactions are to be settled on a delivery vs. payment basis through an approved depository institution such as the Depository Trust Company or the Federal Reserve.

3. Repurchase agreements are to be collateralized by United States Treasury securities at 102% of the market value of the investment at all times.

At June 30, 2014, $670,663,237 of the USG's applicable investments was uninsured and held by the investment's counterparty in the USG's name.

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The USG's policy for managing credit quality risk is contained in the investment policy guidelines for the various pooled investment funds:

In all pooled funds except the Diversified Fund, all debt issues must be eligible investments under Georgia Code 50-17-63. Portfolios of debt security funds also must meet the eligible investment criteria under the same code section.
1. The Diversified Fund is permitted to invest in non-investment grade debt issues up to a limit of 15% of the entire portfolio.

The USG investments subject to credit quality risk follow:

Fair Value

AAAm

AAA

AA+

A

BBB

Not Rated

Related Debt Investments
U.S. Treasuries U.S. Agencies Bond Securities Corporate Bonds Corporate Debt General Obligation Bonds Money Market Mutual Fund Mutual Bond Fund Repurchase Agreements

$8,437,116 399,888,612
47,327,138 101,419 214,218
1,078,460 20,733,040 19,624,702
2,508,497
$499,913,202

$4,568,061 2,168,019

$3,715,148 3,152,882

21,258 27,560

2,603,139

51,277

1,195,924 2,508,497

$2,603,139

$6,787,357 $10,621,269

40,056 57,037
50,550
$147,643

40,105 16,821
589,605

$153,907 394,567,711
47,327,138
112,800 1,078,460 18,129,901 17,737,346

$646,531

$479,107,263

University System of Georgia Annual Financial Report FY 2014

Page 44

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The USG's policy for managing concentration of credit risk is to diversify investments to the extent that any single issuer shall be limited to 5% of the market value in a particular investment fund. The following U.S. agency investments exceeded 5% of the total reported investment amount as of June 30, 2014:

Investment Federal National Mortgage Association Federal Home Loan Mortgage Corporation

Amount $ 300,066,539 $ 97,935,179

% of Total 23.8% 7.8%

Note 3 Accounts Receivable
Accounts receivable consisted of the following at June 30, 2014:
Student Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal Financial Assistance Georgia State Financing and Investment Commission Due from Affiliated Organizations Other
Less: Allowance for Doubtful Accounts Net Accounts Receivable

$ 58,147,897 25,188,087
123,999,801 13,927,807
137,234,074 57,506,281
416,003,947 28,464,339
$ 387,539,608

Note 4 Inventories
Inventories consisted of the following at June 30, 2014:

Bookstore Food Services Physical Plant Other
Total

$ 16,204,803 1,571,547 3,601,121 879,919
$ 22,257,390

University System of Georgia Annual Financial Report FY 2014

Page 45

Note 5 Notes/Loans Receivable

The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2014. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to a maximum of 100% if the participant complies with certain provisions. The Federal government reimburses the University System for amounts cancelled under these provisions. As the University System determines that loans are uncollectible and not eligible for reimbursement by the federal government, the loans are written off and assigned to the U.S. Department of Education. The University System has provided an allowance for uncollectible loans, which, in management's opinion, is sufficient to absorb loans that will ultimately be written off. At June 30, 2014, the allowance for uncollectible loans was $1,907,839.

Note 6 Capital Assets

Changes in capital assets for the year ended June 30, 2014 are shown below:

Capital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-in-Progress
Total Capital Assets Not Being Depreciated
Capital Assets, Being Depreciated: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections Software Total Assets Being Depreciated
Less: Accumulated Depreciation Infrastructure Buildings and Building Improvements Facilities and Other improvements Equipment Capital Leases Library Collections Capitalized Collections Software Total Accumulated Depreciation
Total Capital Assets, Being Depreciated, Net
Capital Assets, net

B e gi nni ng Balance 7/1/2013

A d j ustme nts

Restated B e gi nni ng Balance 7/1/2013

Sp e ci a l Transfer

$ 351,051,644 $ 354,448 $

351,406,092 $

44,393,191

-

44,393,191

-

209,687,181

(3,991,879)

205,695,302

-

$ 605,132,016 $ (3,637,431) $

601,494,585 $

A d d i ti o ns
$ 11,155,830 641,191
158,873,664 $ 170,670,685

R e d ucti o ns
966,051 8,500
182,815,740 183,790,291

Ending Balance 6/30/2014
361,595,871 45,025,882
181,753,226 588,374,979

$ 308,495,096 $ 3,262,973 $

311,758,069 $

7,749,252,970

12,394,183

7,761,647,153

-

367,084,251

(1,022,116)

366,062,135

-

1,405,982,646

(30,719,509)

1,375,263,137

-

2,408,800,762

13,468,597

2,422,269,359

44,297,978

804,303,714

100,683

804,404,397

-

7,594,594

(90,003)

7,504,591

-

20,361,211

-

20,361,211

-

$ 13,071,875,244

(2,605,192) $ 13,069,270,052 $ 44,297,978

19,962,254 265,195,909
13,748,514 127,470,475 105,610,228
34,136,368 13,778
18,524,941 584,662,467

18,650 3,664,852 1,147,831 47,460,766 18,968,700 1,748,508
73,009,307

331,701,673 8,023,178,210
378,662,818 1,455,272,846 2,553,208,865
836,792,257 7,518,369
38,886,152 13,625,221,190

$ 98,957,480 $ 443,145 $

99,400,625 $

2,339,831,253

1,765,218

2,341,596,471

128,501,291

187,469

128,688,760

988,837,359

(10,873,065)

977,964,294

379,511,395

5,609,448

385,120,843

638,983,951

(2,320,786)

636,663,165

1,004,047

(1,798)

1,002,249

15,260,529

-

15,260,529

$ 4,590,887,305 $ (5,190,369) $ 4,585,696,936 $

8,305,870 8,305,870

13,369,584 194,863,806
12,120,025 111,279,626
80,798,017 31,276,264
142,666 1,715,200 445,565,188

$ 8,480,987,939 $ 2,585,177 $ 8,483,573,116 $ 35,992,108

139,097,279

$ 9,086,119,955 $ (1,052,254) $ 9,085,067,701 $ 35,992,108 $ 309,767,964

3,026,058
680,596 44,649,170
681,813 1,760,690
50,798,327
22,210,980
206,001,271

112,770,209 2,533,434,219
140,128,189 1,044,594,750
473,542,917 666,178,739
1,144,915 16,975,729 4,988,769,667
8,636,451,523
9,224,826,502

University System of Georgia Annual Financial Report FY 2014

Page 46

Note 7 Advances (Including Tuition and Fees)
Advances, including tuition and fees (current portion) consisted of the following at June 30, 2014:

Prepaid Tuition and Fees Research Other Advances
Total

$ 133,215,880 40,408,725 50,120,081
$ 223,744,686

Note 8 Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2014 was as follows:

Restated Beginning

Balance July 1, 2013

Additions

Reductions

Ending Balance June 30, 2014

Current Portion

Leases Lease Obligations

$ 3,490,926,928 $ 169,523,840 $ 109,183,820 $ 3,551,266,948 $ 78,787,826

Other Liabilities Compensated Absences Net OPEB Obligation Other Long Term Liabilities Total

$ 190,978,502 1,554,142,976 955,515
$ 1,746,076,993

$ 136,289,102 288,934,259 46,605
$ 425,269,966

$ 131,577,819 -
119,335 $ 131,697,154

$ 195,689,785 1,843,077,235 882,785
$ 2,039,649,805

$ 121,710,299 -
170,190 $ 121,880,489

Total Long-Term Obligations

$ 5,237,003,921 $ 594,793,806 $ 240,880,974 $ 5,590,916,753 $ 200,668,315

Note 9 Significant Commitments
The USG had significant unearned, outstanding construction or renovation contracts executed in the amount of $164,751,464 as of June 30, 2014, which are not reflected in the accompanying basic financial statements.

University System of Georgia Annual Financial Report FY 2014

Page 47

Institution

Commitment Amount

Abraham Baldwin Agricultural College $

279,927

Bainbridge College

19,800

Clayton State University

213,632

East Georgia College

152,214

Fort Valley State University

5,234,826

Georgia College & State University

3,200,055

Georgia Institute of Technology

41,228,807

Georgia Perimeter College

5,571,991

Georgia Regents University

3,543,044

Georgia Southern University

5,593,433

Georgia State University

43,793,863

Gordon State College

12,830,000

Kennesaw State University

12,693,707

Savannah State University

37,777

South Georgia State College

187,057

Southern Polytechnic State University

640,242

University of Georgia

13,439,529

University of West Georgia

11,707,004

Valdosta State University

4,384,556

Project Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts/Student Center Lease Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts Construction and renovation contracts

$ 164,751,464

Note 10 Lease Obligations

The USG is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment, and also is obligated under capital leases and installment purchase agreements for the acquisition of real property.

Capital Leases The USG is obligated under approximately $3.5 billion in capital lease liability as of June 30, 2014. Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between fiscal 2015 and 2052. Payments for fiscal year 2014 were $284,393,314, of which $192,258,636 represented interest and $92,134,678 represented principle. Interest rates range from 0.75 percent to 31.08 percent.

The following is a summary of the carrying values of assets held under capital lease at June 30, 2014:

Land Infrastruture Buildings Facilities and Other Improvements Equipment Total Assets Held Under Capital Lease at June 30, 2014

Gross Amount

$

50,163,847

51,592,099

3,715,131,252

44,788,584

26,957,431

Accumulated

Depreciation

$

-

(12,118,782)

(662,565,294)

(6,219,279)

(18,700,213)

Assets Held Under Capital Lease, Net at June 30, 2014 $ 50,163,847
39,473,317 3,052,565,958
38,569,305 8,257,218

$ 3,888,633,213 $ (699,603,568) $ 3,189,029,645

University System of Georgia Annual Financial Report FY 2014

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Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms.

Operating Leases

The USG's non-cancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2015 through 2049. Certain operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis; examples of property under operating leases are real property, copiers and other small business equipment. System-wide real property and equipment operating lease expense for fiscal 2014 was $38,378,201.
Future commitments for capital leases, which here and on the Statement of Net Position include other installment purchase agreements, and for non-cancellable operating leases having remaining terms in excess of one year as of June 30, 2014, are as follows:

Year Ending June 30:

Year

2015

1

2016

2

2017

3

2018

4

2019

5

2020 through 2024

6-10

2025 through 2029

11-15

2030 through 2034

16-20

2035 through 2039

21-25

2040 through 2044

26-30

2045 through 2049

31-35

2050 through 2052

36-38

Total minimum lease payments

Less: Interest

Less: Executory costs (if paid)

Principal Outstanding

Capital Leases

Operating Leases

$ 275,655,762 277,206,749 279,335,741 281,726,218 283,738,609
1,426,882,046 1,443,981,587 1,255,049,689
840,086,860 120,811,502
212,962 107,950 $ 6,484,795,675 2,779,299,737 154,228,990
$ 3,551,266,948

$ 35,898,227 10,144,146 7,992,235 6,299,852 4,922,658 20,683,516 20,399,845 8,182,198 927,387 663,580 1,327,161
$ 117,440,805

Note 11 Retirement Plans

The USG 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 the USG 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.

University System of Georgia Annual Financial Report FY 2014

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Employees' Retirement System of Georgia

The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing, multiple-employer, defined-benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires, but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.

On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified, governmental-excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.

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 completing 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. There also are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.

Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Postretirement 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, the University System of Georgia pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these USG 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.

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Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The USG 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 USG contributions are not at any time refundable to the member or the member's beneficiary.

Employer contributions required for fiscal year 2014 were based on the June 30, 2011 actuarial valuation as follows:

Old Plan* New Plan GSEPS

18.46% 18.46% 15.18%

*13.71% exclusive of contributions paid by the employer on behalf of old plan members

Members become vested after ten 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 30 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 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. 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 also are available.

TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 years of

University System of Georgia Annual Financial Report FY 2014

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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, 2014 were 6% of annual salary. Employer contributions required for fiscal year 2014 were 12.28% of annual salary as required by the June 30, 2011 actuarial valuation.
The following table summarizes the USG contributions by defined benefit plan for the years ending June 30, 2014, June 30, 2013, and June 30, 2012:

Fiscal Year 2014 2013 2012
Regents Retirement Plan

ERS

Required Contribution $ 1,604,331 $ 1,238,577 $ 896,604

Percent Contributed
100% 100% 100%

TRS

Required Contribution $ 181,383,954 $ 164,293,969 $ 148,193,749

Percent Contributed
100% 100% 100%

Plan Description The Regents Retirement Plan (Plan) is a single-employer, defined-contribution plan. This optional retirement Plan was authorized pursuant to OCGA Section 47-21-1 and administered by the Board of Regents of the USG. O.C.G.A. 47-3-68(a) defines who may participate in the 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 Plan, a Plan participant may purchase annuity contracts from four approved vendors (VALIC, 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 The USG makes monthly employer contributions for the 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 2014, the employer contribution was 9.24% for the participating employee's earned compensation. Employees contribute 6% of their earned compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.

The USG and the covered employees made the required contributions of $110,586,186 (9.24%) and $71,402,283 (6%), respectively.

VALIC, Fidelity, and TIAA-CREF have separately issued financial reports that may be obtained through their respective corporate offices.

Georgia Defined Contribution Plan

Plan Description The USG of Georgia 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, or 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.

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Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payments will be based upon mortality tables and interest assumptions 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 death of a member, a lump sum distribution equaling the amount credited to the member's account will be paid to the member's designated beneficiary(ies). Benefit provisions are established by State statute.
Contributions Member contributions are 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 2014 were $7,660,647, 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 12. Early Retirement Pension Plan

Plan Description Georgia Regents University Early Retirement Pension Plan (ERP) is a single-employer defined benefit pension plan administered by Bryan, Pendleton, Swats, and McAlister. The plan was derived by the Georgia Regents University as a means of manpower reduction and was approved by the Board of Regents of the University System of Georgia (BOR) effective January 1, 2000.
The plan was intended to provide eligible participants additional benefits above the amounts payable through Teachers Retirement System of Georgia (TRS). The plan was designed to allow vested employees aged 55 or employees of any age with 25 years of creditable service to retire without penalties as applied by the Teachers Retirement System of Georgia (TRS) for early retirement. The plan would allow for all participants to retire as if they were vested and aged 60 or had attained 30 years of creditable service. Any member who opted into the Optional Retirement Plan aged 55 with 10 years of service by June 30, 2000 was also eligible to participate in the plan.
The plan is closed to new entrants. There were no active plan participants. As of January 1, 2014, plan participants consisted of the following:

Inactive Plan Participants:

Retirees and Beneficiaries Currently Receiving Benefits

656

Terminated Employees Entitled to Deferred Benefits

0

Disabled Employees Entitled to Deferred Benefits

0

Total

656

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TRS provides a benefit equal to 2% of the participant's average annual compensation during the two consecutive years of creditable service which produce the highest such average, multiplied by the number of years of creditable service, limited to 40 years. If the participant has less than 30 years of creditable service and has not attained age 60 at the time of retirement, the benefit will be reduced by the lesser of 1/12 of 7% for each month that retirement precedes age 60 or 7% for each year or fraction of a year by which the participant has less than 30 years of creditable service at the time of retirement.
The ERP provides the additional benefits that would have been payable under TRS based on the following adjustments:
Age of the participant was increased five years Participant's creditable service was increased five years Participant's annual rate of earnings as of August 1, 1999 was projected five years into the future with 3% increases each year
ERP benefits will be increased 3% a year as a cost-of-living adjustment (COLA): 1-1/2% on each January 1 and July 1. The ERP provided COLA's for both the ERP and TRS benefits until actual eligibility for a COLA through TRS occurred. Since that time, the ERP has provided COLA's only on the portion of the benefit paid by the ERP, and TRS has provided COLA's under the terms of the TRS plan. The ERP does not issue a standalone report.
Funding Policy The fund sources that provided for an employee's salary, as of December 31, 1999, would be responsible for funding the plan to provide for retiree benefits. There is no additional cost to the employee/retiree, Board of Regents, or State of Georgia for this plan. Contributions are made by the University based on the actuarial valuation for the plan. For fiscal year 2014, affiliated organizations contributed $5,886,802 to the plan on-behalf of the University.
Since this plan was not pre-funded, Georgia Regents University approach is to deposit as much into the ERP fund in the earlier years as is possible, thereby, realizing a greater return on investment. Effective January 1, 2009, the period to amortize the unfunded accrued liability was extended 4 years to 14 years. The funding policy is reasonable and in compliance with minimum funding requirements set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. With this change, the plan should be fully funded by June 30, 2023.

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Annual Pension Cost and Net Pension Asset The ERP's annual pension cost and net pension asset for the current year were as follows:

Annual Required Contribution

Total $ 13,045,051

Interest on Net Pension Obligation

(576,154)

Adjustments on Annual Required Contribution

1,119,167

Annual Pension Cost

$ 13,588,064

Contributions Made

(13,084,672)

Increase (Decrease) in Net Pension Obligation

503,392

Net Pension Obligation, beginning of year

(7,682,050)

Net Pension Obligation, end of year

$ (7,178,658)

Three-Year Trend Information

Fiscal Year Ending

Annual Pension
Cost

Actual Contribution

Percentage Contributed

Net Pension
Asset

6/30/2012 $ 13,300,187 $ 13,225,850 6/30/2013 $ 13,549,860 $ 13,225,850 6/30/2014 $ 13,588,064 $ 13,084,672

99.4% $ 97.6% $ 96.3% $

8,006,060 7,682,050 7,178,658

Funded Status and Funding Progress As of January 1, 2014, the most recent actuarial valuation date, the plan was 43.5% funded. The actuarial accrued liability for benefits was $146,615,477, and the actuarial value of assets was $63,711,746, resulting in an unfunded actuarial accrued liability (UAAL) of $82,903,731.

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Schedule of Funding Progress

The schedule of funding progress which follows, presents multi-year trend information about whether the

actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits:

UAAL as a

Actuarial

Actuarial

Percentage

Actuarial

Value of

Accrued

Unfunded AAL Funded

Annual

of Covered

Valuation

Assets

Liability

(UAAL)

Ratio

Covered Payroll

Payroll

Date

(a)

(b)

(b-a)

(a/b)

(c)

((b-a)/c)

1/1/2005 $ 41,322,743 $ 147,352,588 $ 106,029,845

28.0%

N/A

N/A

1/1/2006 $ 43,203,598 $ 148,323,853 $ 105,120,255

29.1%

N/A

N/A

1/1/2007 $ 47,722,236 $ 148,253,721 $ 100,531,485

32.2%

N/A

N/A

1/1/2008 $ 52,044,359 $ 148,797,058 $ 96,752,699 35.0%

N/A

N/A

1/1/2009 $ 37,818,696 $ 148,605,625 $ 110,786,929

25.4%

N/A

N/A

1/1/2010 $ 42,540,252 $ 147,961,323 $ 105,421,071

28.8%

N/A

N/A

1/1/2011 $ 47,778,455 $ 147,266,514 $ 99,488,059 32.4%

N/A

N/A

1/1/2012 $ 52,241,174 $ 147,750,673 $ 95,509,499 35.4%

N/A

N/A

1/1/2013 $ 57,220,244 $ 146,762,529 $ 89,542,285 39.0%

N/A

N/A

1/1/2014 $ 63,711,746 $ 146,615,477 $ 82,903,731 43.5%

N/A

N/A

Investments The pension plan does not have a policy in regard to the allocation of invested assets. However, the Georgia Regents University maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility of the institution to the citizens of Georgia and which conforms to the Board of Regents investment policy. All investments are consistent with Board of Regents policy and applicable Federal and state laws.

Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price. The University's Investment Policy and Guidelines for managing concentration of credit risk requires that stocks and debt issues be diversified. The University also relies upon the concentration of credit risk policy of the individual investment vehicles related to plan assets. More than 5% of the plan's investments are in iShares Core Total U. S. Aggregate Exchange-traded Fund (ETF), iShares Russell 1000 Growth ETF, iShares Russell 1000 Value ETF, iShares Russell Midcap Growth ETF, iShares iBoxx Investment Grade Corporate Bond ETF, T Rowe Price Real Estate Fund, Oppenheimer Developing Markets Fund and iShares Russell 2000 Growth ETF. These investments are 17.7%, 16.2%, 10.8%, 7.4%, 6.1%, 6.1%, 5.9% and 5.7% of the plan's investments.

For the fiscal year ended June 30, 2014, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 18.35%.

University System of Georgia Annual Financial Report FY 2014

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The following table summarizes the adopted asset allocation policy at June 30, 2014:

Asset Class Domestic Equities International Equities Fixed Income Real Estate Cash

60% - 65% 10% - 15% 10% - 15%
3% - 5% 5% - 10%

Total

100%

Net Pension Liability (NPL) The components of the net pension liability at June 30, 2014 were as follows:

Total Pension Liability Plan Fiduciary Net Position

2014 $ 145,384,819
(76,193,610)

Net Pension Liability

$

69,191,209

Plan Fiduciary Net Position as a percentage of total pension liability is 52.41%.

Actuarial Methods and Assumptions The annual required contribution for the current year was determined as part of the January, 2013 actuarial valuation using the Entry Age Normal method. The remaining amortization period is 10 years using the Level Dollar amortization method. The actuarial assumptions include (a) rate of return of 7.5% per annum, compounded annually, (b) inflation of 3% per annum, compounded annually, and (c) annual cost of living increase of 3.00% per annum, compounded annually. Plan assumptions and methods are reviewed annually for reasonableness by the actuary.

Mortality rates were based on the RP-2000 Mortality Table for Healthy Annuitants with projected improvement from year 2000 to year 2021 under Projection Scale AA.

Mortality Rates (per 1,000 lives)

AGE

60

65

70

75

Male Female

5.84 5.58

9.98 9.33

16.17 15.07

28.14 23.74

The projection of cash flows used to determine the discount rate of 7.5% per annum, compounded annually assumes that employer contributions will be made at rates equal to the actuarially determined contribution rates. Based on that assumption, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the longterm expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation are summarized in the following table:

Asset Class

Target Allocation

Long-Term Expected Real Rate of Return

Domestic Equity International Equity Fixed Income Real Estate Cash

62.58% 10.71% 14.93%
3.38% 8.40%

6.50% 7.25% 1.25% 5.75% 0.50%

The following represents the net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:

1% Decrease Current Rate

6.50%

7.50%

1% Increase 8.50%

Net Pension Liability
Note 13 Risk Management

$ 81,395,268 $ 69,191,209 $ 58,570,968

The USG (USG) offers its employees and retirees access to four healthcare plan options. For the USG's Plan Year 2014, the following self-insured health care options were available: Blue Choice HMO, (Blue Cross Blue Shield) Health Savings Account (HAS) Open Access Point of Service (POS), and (Blue Cross Blue Shield) Open Access POS. The USG institutions and participating employees pay premiums to these plans to access benefits coverage and share the risk of loss for claims associated with these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare plans, a fully insured HMO healthcare plan option also is offered to USG employees through Kaiser Permanente.

The prescription drug plan was administered through Express Scripts. Pharmacy drug claims are processed in accordance with guidelines established for the Board of Regents' Prescription Drug Benefit Program. Generally, claims are submitted to the plan administrator for verification, processing and payment. The plan administrator maintains an eligibility file based on information furnished by Blue Cross Blue Shield on behalf of the various organizational units of the USG.

A reconciliation of total estimated claim liabilities for employees and retirees for the fiscal years ended June 30, 2014 and June 30, 2013 is provided below:

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Page 58

Employees: Unpaid Claims and Claim Adjustments (Prior Year IBNR)

June 30, 2014 $ 32,737,154

June 30, 2013 $ 26,269,302

Incurred Claims and Claim Adjustments Expenses Provisions for Insured Events of the Current Year

360,327,990

325,395,148

Payments - Claims and Claim Adjustments Attributable To Insured Events of the Current Year and Prior Years

353,976,121

318,927,296

Unpaid Claims and Claim Adjustments (Current Year IBNR)

$ 39,089,023 $ 32,737,154

Retirees: Unpaid Claims and Claim Adjustments (Prior Year IBNR)

$ 9,326,592 $ 9,714,307

Incurred Claims and Claim Adjustments Expenses Provisions for Insured Events of the Current Year

140,920,834

113,908,368

Payments - Claims and Claim Adjustments Attributable To Insured Events of the Current Year and Prior Years

138,128,069

114,296,083

Unpaid Claims and Claim Adjustments (Current Year IBNR)

$ 12,119,357 $ 9,326,592

The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets.

The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The USG is part of the State of Georgia reporting entity and, as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

A self-insured program of professional liability for its employees was established by the Board of Regents of the USG under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.

As of June 30, 2014, three USG institutions had projects or events that met one of the five obligating events related to recognition of pollution remediation.

Georgia Institute of Technology (Institute) is responsible for pollution monitoring and remediation in all Institute facilities, including asbestos abatement. Monitoring and remediation activities are performed during renovation/construction projects when deemed necessary by Institute management.

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As of June 30, 2014, the Institute recorded a liability and expense in the amount of $143,458 for pollution monitoring and remediation projects in various Institute structures. The liability is reflected on the Statement of Net Position in Accounts Payable and on the Statement of Revenues, Expenses, and Changes in Net Position in Supplies and Other Services. The liability was determined using the Expected Cash Flow Measurement Technique, which measures the liability as the sum of probability-weighted amounts in a range of possible estimated amounts. The Institute does not anticipate any significant changes to the expected remediation outlay. There are no expected recoveries that have reduced the liability. Pollution remediation liability activity in fiscal year 2014 was as follows:

Balance July 1, 2013

Additions

Reductions

Balance June 30, 2014

Current Portion

$ 504,440 $ 143,458 $ 504,440 $ 143,458 $ 143,458

The University of Georgia is responsible for pollution remediation at the Milledge Avenue landfill site. The University of Georgia has recorded a liability and expense related to this pollution remediation in the amount of $882,785. The liability is reflected on the Statement of Net Assets in Accounts Payable and on the Statement of Revenues, Expenses and Changes in Net Assets in Supplies and Other Services. The liability was determined using a 5-year budget estimate provided by Brown and Caldwell. The University of Georgia does not anticipate any significant changes to the expected remediation outlay. There are no expected recoveries that have reduced the liability. Pollution remediation liability activity in fiscal year 2014 was as follows:

Balance July 1, 2013

Additions

Reductions

Balance June 30, 2014

Current Portion

$ 955,515 $ 46,605 $ 119,335 $ 882,785 $ 170,190
Georgia Regents University is responsible for asbestos abatement as a small part of the project costs for various projects. The University has recorded a liability and expense related to this pollution remediation in the amount of $1,234. The liability is reflected on the Statement of Net Position in Accounts Payable and on the Statement of Revenues, Expenses, and Changes in Net Position in Supplies and Other Services. The liability is the remaining amount of project abatement costs at June 30, 2014. The University does not anticipate any significant changes to the expected remediation outlay. Pollution remediation liability activity in fiscal year 2014 was as follows:

Balance July 1, 2013

Additions

Reductions

Balance June 30, 2014

Current Portion

$ 26,023 $ 63,395 $ 88,184 $
Note 14 Contingencies

1,234 $

1,234

Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures that are disallowed under grant terms. The amount of expenditures that may be disallowed by the grantor cannot be determined at this time, although the USG expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against the USG, if any, generally are considered to be actions against the State of Georgia.

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Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2014.

Note 15 Post-Employment Benefits Other Than Pension Benefits

Plan Description and Funding Policy
The Board of Regents Retiree Health Benefit Plan (Plan) is a single-employer, defined-benefit, healthcare plan administered by the USO. The Plan was authorized pursuant to OCGA Section 47-21-21 for the purpose of accumulating funds necessary to meet employer costs of retiree post-employment health insurance benefits.

Pursuant to the general powers conferred by the OCGA Section 20-3-31, the USG has established group health and life insurance programs for regular employees of the USG. It is the policy of the USG to permit employees of the USG eligible for retirement or who become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the USG define and delineate who is eligible for these post-employment health and life insurance benefits.

Membership of the Plan consisted of the following at June 30, 2014:

Retirees and beneficiaries receiving benefits

20,583

Terminated plan members entitled to but not yet receiving benefits

-

Active employee plan contracts Total

38,092 58,675

The contribution requirements of Plan members and the employer are established and may be amended by the BOR. The Plan is substantially funded on a "pay-as-you-go" basis; however, amounts above the payas-you-go basis may be contributed annually, either by specific appropriation or by BOR designation.

Organizational units of the USG pay the employer portion for group insurance for eligible retirees. The employer portion of health insurance for its eligible retirees is based on rates that are established annually by the USO for the upcoming Plan year. For the 2014 Plan year, the employer rate was approximately 7580% of the total health insurance cost for eligible retirees and the retiree rate was approximately 20-25%. 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 retiree.

For fiscal year 2014, the USG contributed $126,617,581 to the plan for current premiums or claims. Plan members receiving benefits contributed $34,218,671 for current premiums or claims.

Summary of Significant Accounting Policies

The financial statements of the Plan are prepared using the accrual basis of accounting. Employer contributions are recognized in the period in which they are due. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan.

University System of Georgia Annual Financial Report FY 2014

Page 61

Annual OPEB Cost and Net OPEB Obligation
The annual OPEB cost (expense) (AOC) for the Plan is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years.

The following table presents the components of the AOC, the amount actually contributed, and changes in the net OPEB obligation (NOO) for the Plan for FY 2014, 2013, and 2012 (dollars in millions):

Annual Required Contribution Interest on Net OPEB Obligation (NOO) Amortization of NOO
Total Expense or Annual OPEB Cost (AOC) Actual Contribution Toward OPEB Cost
Increase in NOO Net OPEB Obligation, beginning of year Prior Year Adjustment - Life Insurance Net OPEB Obligation, end of year

Fiscal Year Ending June 30

2014

2013

2012

$ 403.3 $ 362.4 $ 345.3

69.9

57.5

45.8

(63.4)

(52.1)

(41.5)

$ 409.8 $ 367.8 $ 349.6

(120.9)

(83.4)

(88.8)

$ 288.9 $ 284.4 $ 260.8

1,562.6

1,278.2

1,017.4

(8.4)

$ 1,843.1 $ 1,562.6 $ 1,278.2

The Plan's historical OPEB cost, the percentage of annual OPEB cost contributed to the Plan and the net OPEB obligation for the Retiree Health Benefit Plan were as follows (dollars in millions):

Fiscal Year Ended
2012 2013 2014

Annnual OPEB Cost
$ 349.6 $ 367.8 $ 409.8

Contribution

$

88.8

$

91.8

$

120.9

Percentage of Annual OPEB
Cost Contributed
25.4% 25.0% 29.5%

Net OPEB Obligation $1,278.2 $1,562.6 $1,843.1

Funded Status, Funding Progress, and Actuarial Methods and Assumptions

Actuarial Valuation
Date 7/1/2011 7/1/2012 7/1/2013

Actuarial Value of Assets
(a) $ 123,230 $ 165,684 $ 216,775

Actuarial Accrued Liability (AAL) -
Projected Unit Credit (b)
$ 3,494,501,238 $ 3,758,969,936 $ 4,095,304,172

Unfunded AAL (UAAL) (b-a)
$ 3,494,378,008 $ 3,758,804,252 $ 4,095,087,397

Funded Ratio (a/b) 0.0% 0.0% 0.0%

Annual Covered Payroll (c)
$ 2,526,211,986 $ 2,466,313,700 $ 2,594,800,486

UAAL as a Percentage of Covered
Payroll ((b-a)/c) 138.3% 152.4% 157.8%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress with multi-year trend information is presented as required supplementary information following the notes to the financial statements.

University System of Georgia Annual Financial Report FY 2014

Page 62

The multi-year trend schedules indicate whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan as understood by the employer and the Plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and Plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

Additional information as of the latest actuarial valuation is as follows:

Valuation date Actuarial cost method Amortization method Asset valuation method Amortization period Actuarial assumptions:
Interest rate Inflation rate Salary growth Salary scale Initial healthcare cost trend
Pre-Medicare eligible Medicare eligible Ultimate trend rate Pre-Medicare eligible Medicare eligible Year ultimate trend is reached

July 1, 2013 Projected Unit Credit Level Percent of Payroll, Closed Market Value 30 years
4.5% 2.5% 3.0% 4.0%
8.0% 7.5%
4.5% 4.5% 2030

Please note that the investment rate of return percentage can change.

University System of Georgia Annual Financial Report FY 2014

Page 63

Note 16 Natural Classifications with Functional Classifications

The University's operating expenses by functional classification for fiscal 2014 are shown below:

Natural Classificatio n Faculty Staff B enefits Other P erso nal Services Travel Scho larships and Fello wships Utilities Supplies and Other Services Depreciatio n

Functio nal Classificatio n

P ublic

A cademic

Student

Institutio nal

Instructio n

Research

Service

Suppo rt

Services

Suppo rt

$ 874,149,835 $ 340,588,846 $ 34,169,199 $ 43,557,468 $

2,427,651 $

13,171,268

309,392,744

285,630,201

132,888,874

225,089,830

152,288,747

274,747,031

424,348,981

191,082,268

68,422,481

103,593,321

57,114,246

153,265,634

1,005,080

93,518

594,821

553,740

186,546

8,189,579

19,055,229

27,636,551

6,258,655

5,780,028

3,781,541

5,265,516

7,068,259

4,233,738

1,679,935

738,819

6,125,068

1,910,914

5,292,079

4,175,343

3,149,450

3,265,496

2,674,467

5,539,404

76,601,753

240,104,770

111,744,389

102,956,174

63,273,886

513,721,657

70,650,546

75,727,536

11,624,631

47,224,648

18,392,672

32,938,135

To tal Expenses

$ 1,787,564,506 $ 1,169,272,771 $ 370,532,435 $ 532,759,524 $ 306,264,824 $ 1,008,749,138

Natural Classificatio n Faculty Staff B enefits Other P erso nal Services Travel Scho larships and Fello wships Utilities Supplies and Other Services Depreciatio n
To tal Expenses

P lant

Operatio ns

& M aintenance

$

(1,199,279)

178,355,942

78,971,825

(7,580,152)

560,399

-

122,406,599

190,947,743

76,043,846

Scho larships

& Fello wships

$

-

221,847

333,697

610,243

1,070

272,441,374

1,250

76,380

7,492

$ 638,506,923 $ 273,693,353

Functio nal Classificatio n

P atient

A uxiliary

Care

Enterprises

(GRU Only)

$ 2,632,437 $ 74,413,352

170,785,914

96,209,774

61,649,913

56,808,529

7,729,742

8

2,671,910

367,245

23,941,317

-

36,678,784

388,112

318,839,976

84,707,878

112,955,682

-

$ 737,885,675 $ 312,894,898

To tal Expenses $ 1,383,910,777
1,825,610,904 1,195,590,895
11,383,125 71,378,144 318,139,424 183,570,984 1,702,974,606 445,565,188
$ 7,138,124,047

Note 17 Affiliated Organizations
Under Board of Regents policy, each individual institution may establish a separate foundation, or affiliated organization, to provide valuable assistance in fundraising, public outreach and other support for the missions of the respective campuses and the USG. Although independent boards govern these foundations, their assets are dedicated for the benefit of the related institution and the USG.
Because the University System of Georgia which was consitutionally created as an organizational unit of the State of Georgia these affiliated organizations are considered potential component units of the State of Georgia in accordance with GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34, and GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organizations are not included in these financial statements. For the organizations reporting under the FASB basis, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features.
The following affiliated organizations have been determined to be significant to the State of Georgia for the year ended June 30, 2014 and, as such, are reported as blended or discretely presented component units in the Comprehensive Annual Financial Report of the State of Georgia (CAFR).
Information for obtaining complete financial statements for these organizations can be found within the respective institution's annual financial reports.

University System of Georgia Annual Financial Report FY 2014

Page 64

Component Units of the State of Georgia Georgia Tech Foundation, Inc. Georgia Tech Athletic Association Georgia Tech Research Corporation Georgia Tech Facilities, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. MCG Health System, Inc. d/b/a Georgia Regents Health System Medical College of Georgia Foundation, Inc. University of Georgia Foundation University of Georgia Athletic Association, Inc. University of Georgia Research Foundation, Inc. Georgia Southern University Housing Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Armstrong Atlantic State University Educational Properties, Inc. Kennesaw State University Foundation, Inc. Georgia College and State University Foundation, Inc. University System of Georgia Foundation, Inc. University of North Georgia Real Estate Foundation, Inc. and Subsidiaries Middle Georgia State College Real Estate Foundation Inc. University of West Georgia Real Estate Foundation

Fiscal Year Ending June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014
December 31, 2013 December 31, 2013
June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014 June 30, 2014

Reporting Basis FASB GASB GASB FASB FASB GASB GASB FASB FASB GASB GASB FASB FASB GASB FASB FASB FASB FASB FASB FASB

Summarized financial statements for these affiliated organizations are included in the Supplementary Information.

University System of Georgia Annual Financial Report FY 2014

Page 65

University System of Georgia Annual Financial Report FY 2014

Page 66

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS EARLY RETIREMENT PLAN - GEORGIA REGENTS UNIVERSITY DEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014

Actuarial Valuation
Date

Actuarial Value of Assets
(a)

Actuarial Accrued Liability
(b)

Unfunded AAL (UAAL) (b-a)

Funded Ratio (a/b)

Annual Covered Payroll
(c)

1/1/2005 $ 41,322,743 $ 147,352,588 $ 106,029,845 28.0%

N/A

1/1/2006 $ 43,203,598 $ 148,323,853 $ 105,120,255 29.1%

N/A

1/1/2007 $ 47,722,236 $ 148,253,721 $ 100,531,485 32.2%

N/A

1/1/2008 $ 52,044,359 $ 148,797,058 $ 96,752,699 35.0%

N/A

1/1/2009 $ 37,818,696 $ 148,605,625 $ 110,786,929 25.4%

N/A

1/1/2010 $ 42,540,252 $ 147,961,323 $ 105,421,071 28.8%

N/A

1/1/2011 $ 47,778,455 $ 147,266,514 $

99,488,059 32.4%

N/A

1/1/2012 $ 52,241,174 $ 147,750,673 $

95,509,499 35.4%

N/A

1/1/2013 $ 57,220,244 $ 146,762,529 $

89,542,285 39.0%

N/A

1/1/2014 $ 63,711,746 $ 146,615,477 $

82,903,731 43.5%

N/A

UAAL as a Percentage of Covered
Payroll ((b-a)/c)
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

University System of Georgia Annual Financial Report FY 2014

Page 67

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS EARLY RETIREMENT PLAN - GEORGIA REGENTS UNIVERSITY DEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014

Fiscal Year Ending

Actuarially Determined Contribution

Actual Contribution

Contribution Excess
(Deficiency)

Percentage Contributed

6/30/2005 $ 6/30/2006 6/30/2007 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014

12,948,607 $ 12,874,094 13,363,491 13,510,767 13,778,696 13,410,238 13,368,807 13,300,187 13,549,860 13,588,064

12,591,344 $ 12,905,079 12,936,540 12,996,492 13,225,850 13,225,850 13,225,850 13,225,850 13,225,850 13,084,672

(357,263) 30,985
(426,951) (514,275) (552,846) (184,388) (142,957)
(74,337) (324,010) (503,392)

97.2% $ 100.2%
96.8% 96.2% 96.0% 98.6% 98.9% 99.4% 97.6% 96.3%

Net Pension
Asset
9,870,829 9,901,814 9,474,863 8,960,588 8,407,742 8,223,354 8,080,397 8,006,060 7,682,050 7,178,658

Covered Employee
Payroll
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Contributions as a % of Covered
Employee Payroll
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

University System of Georgia Annual Financial Report FY 2014

Page 68

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYERS' AND NONEMPLOYERS' NET PENSION LIABILITY EARLY RETIREMENT PLAN - GEORGIA REGENTS UNIVERSITY DEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014

Total Pension Liability Plan Fiduciary Net Position

2014 $ 145,384,819
(76,193,610)

Net Pension Liability

$

69,191,209

Plan Fiduciary Net Position as a Percentage of the Total Pension Liab5i2lit.y41%

Covered Employee Payroll

0.0

Employers' and Nonemployers' Net Pension Liability as a Percentage of

Covered Employee Payroll

N/A

University System of Georgia Annual Financial Report FY 2014

Page 69

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS EARLY RETIREMENT PLAN - GEORGIA REGENTS UNIVERSITY DEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014
Total Pension Liability Service Cost Interest Change of Benefit Terms Differences Between Expected and Actual Experience Change of Assumptions Benefit Payments/Refunds Net Change in Total Pension Liability Total Pension Liability - Beginning
Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - Employer Contributions - Employee Net Investment Income Benefit Payments/Refunds Administrative Expenses Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - Beginning
Plan Fiduciary Net Position - Ending (b)
Net Pension Liability - Ending (a-b)
University System of Georgia Annual Financial Report FY 2014

DOLLAR AMOUNT IN MILLIONS 2014

$

0.0

10.6

0.0

-0.1

0.0

-13.1

-2.6 148.0

$

145.4

$

13.1

0.0

11.8

-13.1

0.0

0.0

$

11.8

64.4

$

76.2

$

69.2

Page 70

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS EARLY RETIREMENT PLAN - GEORGIA REGENTS UNIVERSITY DEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014
Annual Money-Weighted Rate of Return, Net of Investment Expense

2014 18.35%

University System of Georgia Annual Financial Report FY 2014

Page 71

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION METHODS AND ASSUMPTIONS EARLY RETIREMENT PLAN - GEORGIA REGENTS UNIVERSITY DEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014

This note provides information about changes of benefit terms, changes of assumptions, and methods and assumptions used in

Actuarially determined contribution rate are determined as of January 1, 2013.

Methods and assumptions used to determine contribution rates: Actuarial valuation method: Entry Age Normal

Amortization method: Level Dollar

Remaining amortization period: 10 years

Asset valuation method: Method recognizes a portion of the difference between the market value of assets and expected

Inflation: 3.0% per annum, compounded annually

Cost of living adjustments: 3.0% per annum, compounded annually

Investment rate of return: 7.5% per annum, compounded annually

Mortality Rates (per 1,000 lives):

RP-2000 Mortality Table for Healthy Annuitants with projected improvement from year 2000 to year 2021

under Projection Scale AA

AGE

60

65

70

75

Male Female

5.84 5.58

9.98 9.33

16.17 15.07

28.14 23.74

Changes of benefit terms: None Changes of assumptions: None

University System of Georgia Annual Financial Report FY 2014

Page 72

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION BOARD OF REGENTS RETIREE HEALTH BENEFIT FUND SCHEDULE OF FUNDING PROGRESS FOR OTHER POSTEMPLOYMENT BENEFITS YEAR ENDED JUNE 30, 2014

Actuarial Valuation
Date 7/1/2011 7/1/2012 7/1/2013

Actuarial Value of Assets
(a) $ 123,230 $ 165,684 $ 216,775

Actuarial Accrued Liability (AAL) -
Projected Unit Credit (b)
$ 3,494,501,238 $ 3,758,969,936 $ 4,095,304,172

Unfunded AAL (UAAL) (b-a)
$ 3,494,378,008 $ 3,758,804,252 $ 4,095,087,397

Funded Ratio (a/b) 0.0% 0.0% 0.0%

Annual Covered Payroll (c)
$ 2,526,211,986 $ 2,466,313,700 $ 2,594,800,486

UUAAAALLaassaa Percentage of Covered
Payroll ((b-a)/c) 138.3% 152.4% 157.8%

UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION BOARD OF REGENTS RETIREE HEALTH BENEFIT FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS YEAR ENDED JUNE 30, 2014

Fiscal Year Ended 2012 2013 2014

Required Contribution $ 345,297,650.0 $ 362,426,199.0 $ 403,314,315.0

Percentage Contributed
25.7% 23.0% 30.0%

University System of Georgia Annual Financial Report FY 2014

Page 73

SUPPLEMENTARY INFORMATION

University System of Georgia Annual Financial Report FY 2014

Page 74

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF NET POSITION BY INSTITUTION JUNE 30, 2014

Institution Georgia Institute of Technology Georgia State University Georgia Regents University University of Georgia Georgia Southern University Valdosta State University Albany State University Armstrong Atlantic State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State Univ. Kennesaw State University University of North Georgia Savannah State University Southern Polytechnic State Univ. University of West Georgia Abraham Baldwin Agricultural Col. College of Coastal Georgia Dalton State College Georgia Gwinnett College Gordon State College Middle Georgia State College Atlanta Metropolitan State College Bainbridge State College Darton State College East Georgia State College Georgia Highlands College Georgia Perimeter College South Georgia State College University System Office Elimination/Consolidation Entries Totals

Assets

Noncurrent Cash/ Current Assets Investments

$348,964,700

$75,041,440

250,214,019

2,170,586

138,092,112

68,816,645

414,075,792

85,760,221

49,784,531

11,686,860

27,489,673

15,471,312

11,889,979

507,324

24,709,774

3,913,823

10,725,844

2,007,488

24,578,598

5,090,513

9,936,299

704,547

25,238,026

11,149,370

9,909,784

1,012,811

68,858,155

2,220,648

38,694,017

3,669,490

14,387,338

6,961,306

14,088,061

3,958,540

54,398,160

1,756,348

8,086,961

338,250

3,738,365

299,334

8,630,103

49,131

22,235,374

1,507,117

18,189,138

355,149

23,176,433

3,728,202

3,888,630

69,628

3,930,805

1,874,431

7,921,007

307,038

4,464,695

53,190

7,201,113

151,874

28,633,250

548,768

6,320,226

743,105

716,759,624

9,788,559

(284,822,475) (202,196,529)

$2,114,388,111 $119,516,519

Capital Assets $1,726,133,331
810,457,161 470,856,169 1,690,097,604 536,509,911 352,875,505 152,010,159 158,497,355 120,953,623 120,195,756 152,632,764 175,141,372 90,976,416 466,965,485 283,240,568 153,148,227 162,995,718 301,447,649 80,561,143 85,957,501 44,181,271 235,936,817 76,167,652 239,860,467 34,302,330 53,074,315 76,487,113 30,911,392 54,316,907 154,369,336 56,921,959 76,643,526
$9,224,826,502

Other Assets Total Assets

$12,405,889 $2,162,545,360

6,577,589 1,069,419,355

2,927,002 680,691,928

9,308,522 2,199,242,139

2,532,527 600,513,829

37,130 395,873,620

402,298 164,809,760

4,182 187,125,134

77,000 133,763,955

1,052,277 150,917,144

1,280,080 164,553,690

2,331,397 213,860,165

837,532 102,736,543

437,916 538,482,204

1,294,787 326,898,862

900,118 175,396,989

160,707 181,203,026

2,082,307 359,684,464

286,354

89,272,708

89,995,200

52,860,505

259,679,308

94,711,939

266,765,102

38,260,588

58,879,551

84,715,158

35,429,277

61,669,894

183,551,354

49,273

64,034,563

1,621,305 804,813,014

834,459 (486,184,545)

$47,440,651 $11,506,171,783

Deferred Outflows of Resources
2,862,046
$2,862,046

University System of Georgia Annual Financial Report FY 2014

Page 75

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF NET POSITION BY INSTITUTION JUNE 30, 2014

Institution Georgia Institute of Technology Georgia State University Georgia Regents University University of Georgia Georgia Southern University Valdosta State University Albany State University Armstrong Atlantic State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State Univ. Kennesaw State University University of North Georgia Savannah State University Southern Polytechnic State Univ. University of West Georgia Abraham Baldwin Agricultural Col. College of Coastal Georgia Dalton State College Georgia Gwinnett College Gordon State College Middle Georgia State College Atlanta Metropolitan State College Bainbridge State College Darton State College East Georgia State College Georgia Highlands College Georgia Perimeter College South Georgia State College University System Office Elimination/Consolidation Entries Totals

Liabilities

Current Liabilities $171,370,502 69,601,080 104,904,735 152,037,816 28,153,389 18,399,480 5,844,563 7,922,804 4,640,400 11,616,272 7,909,376 12,405,540 4,938,944 32,352,512 12,860,242 7,354,442 10,748,369 14,642,859 3,899,163 2,687,869 2,306,501 9,431,004 10,367,564 7,420,243 2,043,143 2,577,916 4,578,557 1,642,117 2,784,632 15,341,292 2,403,727 589,857,979 (484,680,986) $850,364,046

Noncurrent Liabilities $483,782,755 367,336,063
69,334,953 287,467,289 218,412,934 197,542,419
75,112,748 97,718,775 77,044,628 58,509,914 82,461,978 128,952,086 38,017,358 197,387,115 145,866,859 107,095,748 86,963,151 184,188,874 42,998,581 26,735,670
7,222,812 182,483,600
32,581,376 97,065,816 10,601,177 20,080,873 45,132,370
8,346,624 17,188,351 78,982,929 36,491,879 48,000,016 1,841,573,676 $5,398,681,397

Total Liabilities $655,153,257
436,937,143 174,239,688 439,505,105 246,566,323 215,941,899
80,957,311 105,641,579
81,685,028 70,126,186 90,371,354 141,357,626 42,956,302 229,739,627 158,727,101 114,450,190 97,711,520 198,831,733 46,897,744 29,423,539
9,529,313 191,914,604
42,948,940 104,486,059
12,644,320 22,658,789 49,710,927
9,988,741 19,972,983 94,324,221 38,895,606 637,857,995 1,356,892,690 $6,249,045,443

Deferred Inflows of Resources 15,787,349 4,097,246 4,714,546 74,302,295
1,870,398
$100,771,834

University System of Georgia Annual Financial Report FY 2014

Page 76

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF NET POSITION BY INSTITUTION JUNE 30, 2014

Institution Georgia Institute of Technology Georgia State University Georgia Regents University University of Georgia Georgia Southern University Valdosta State University Albany State University Armstrong Atlantic State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State Univ. Kennesaw State University University of North Georgia Savannah State University Southern Polytechnic State Univ. University of West Georgia Abraham Baldwin Agricultural Col. College of Coastal Georgia Dalton State College Georgia Gwinnett College Gordon State College Middle Georgia State College Atlanta Metropolitan State College Bainbridge State College Darton State College East Georgia State College Georgia Highlands College Georgia Perimeter College South Georgia State College University System Office Elimination/Consolidation Entries Totals

Net Position

Net Investment in Restricted Capital Assets Unexpendable

$1,245,844,977 $63,073,867

429,900,254

65,255

415,713,919 2,133,850

1,411,848,296 75,806,989

313,675,376 2,465,814

148,954,238 3,690,472

76,320,278

59,588,828 2,919,503

44,108,535 1,434,732

60,761,674 1,813,559

70,030,258

48,165,631 3,843,361

52,783,908

432,717

192,906,560

561,914

136,655,536 2,652,092

45,273,738 5,902,322

77,016,159 1,750,685

114,970,596

36,311,587

59,197,126

68,879

37,071,606

52,323,419

44,315,602

142,235,262

23,958,730

32,988,080 1,600,228

31,775,630

22,656,982

37,100

37,129,989

36,371

75,112,561

31,338

20,170,522

291,490

28,765,831 4,381,979

$5,588,531,688 $174,994,517

Restricted Expendable $60,720,091
17,977,070 84,871,707 86,436,729 10,105,690
3,733,190 399,790 330,202 (26,269)
3,759,613 4,568,103 5,370,170 1,120,565
614,842 2,183,894 1,202,737 1,754,563 2,706,050
660,346 85,371 1,961 38,195 15,054
3,121,037 48,251
172,944
14,870 35,638 205,931 321,497 87,555,656
$380,105,488

Unrestricted $137,753,168
168,752,284 3,732,764
185,645,020 27,700,626 19,456,575 7,132,381 18,645,022 6,561,929 14,456,112 (416,025) 10,408,831 5,443,051 40,356,966 26,680,239 8,568,002 5,832,145 43,176,085 5,403,031 1,220,285 6,257,625 13,532,692 7,432,343 16,922,744 1,609,287 1,459,510 3,228,601 2,731,584 4,494,913 13,877,303 4,355,448 46,251,553
(1,843,077,235) ($984,415,141)

Total Net Position $1,507,392,103
616,694,863 506,452,240 1,759,737,034 353,947,506 175,834,475
83,852,449 81,483,555 52,078,927 80,790,958 74,182,336 67,787,993 59,780,241 234,440,282 168,171,761 60,946,799 86,353,552 160,852,731 42,374,964 60,571,661 43,331,192 65,894,306 51,762,999 162,279,043 25,616,268 36,220,762 35,004,231 25,440,536 41,696,911 89,227,133 25,138,957 166,955,019 ($1,843,077,235) $5,159,216,552

University System of Georgia Annual Financial Report FY 2014

Page 77

University System of Georgia Annual Financial Report FY 2014

Page 78

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR YEAR ENDED JUNE 30, 2014

Institution Georgia Institute of Technology Georgia State University Georgia Regents University University of Georgia Georgia Southern University Valdosta State University Albany State University Armstrong Atlantic State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State University Kennesaw State University University of North Georgia Savannah State University Southern Polytechnic State University University of West Georgia Abraham Baldwin Agricultural College College of Coastal Georgia Dalton State College Georgia Gwinnett College Gordon State College Middle Georgia State College Atlanta Metropolitan State College Bainbridge State College Darton State College East Georgia State College Georgia Highlands College Georgia Perimeter College South Georgia State College University System Office Elimination/Consolidation Entries Total

Revenue

Federal Approp.,

Tuition & Fees, Net Grants & Contracts

287,203,042

695,110,524

225,837,006

77,109,511

77,795,381

454,251,359

364,533,204

198,663,812

107,971,597

16,084,037

57,741,225

4,687,045

14,659,462

9,421,772

30,415,037

6,524,291

27,639,047

1,682,079

42,174,768

2,075,048

9,830,191

6,959,101

50,812,722

531,735

11,233,557

2,539,720

128,408,766

3,161,677

55,267,062

249,806

12,705,861

9,492,562

34,101,361

324,873

56,501,671

3,558,265

6,374,999

133,468

5,406,889

25,226

8,603,624

2,207,023

29,918,628

581,419

7,075,084

133,077

19,145,393

281,443

3,336,515

2,260,521

5,929,608

1,882,482

11,522,836

2,776,316

3,420,024

23,232

9,913,740

270,460

43,309,285

2,748,413

2,819,121

24,639

7,740,909

(9,003,645)

$1,751,606,706 $1,504,512,200

Operating

Auxiliaries
99,081,204 70,651,231 16,700,182 169,958,352 82,600,488 39,100,277 14,452,252 17,839,510 14,758,657 12,106,202 14,263,383 27,154,958 9,083,833 53,884,958 32,767,682 31,270,375 16,842,941 39,594,393 13,099,795 5,986,851 3,548,955 13,474,684 10,608,429 13,908,341 1,205,077
375,482 5,774,064 2,570,904 1,314,248 8,877,450 4,659,400
(91,541) $847,423,017

Other Operating Expenses

42,056,703

(1,332,066,331)

23,830,969

(615,502,290)

10,074,340

(758,413,070)

73,013,973

(1,253,332,393)

6,579,395

(326,585,167)

1,579,517

(172,383,139)

913,820

(72,398,127)

303,180

(93,969,457)

2,024,570

(88,269,837)

3,487,947

(114,267,563)

188,522

(70,573,778)

2,150,905

(115,345,402)

879,519

(42,021,409)

11,362,153

(319,069,164)

2,796,890

(160,034,039)

843,597

(89,572,601)

1,455,810

(82,947,586)

7,205,125

(170,104,799)

381,567

(43,264,149)

115,413

(35,055,812)

116,055

(42,093,642)

255,522

(97,873,990)

274,563

(38,897,804)

1,242,045

(93,568,662)

266,057

(27,735,669)

175,273

(29,324,452)

410,363

(51,779,283)

51,922

(23,199,247)

426,358

(38,025,484)

911,787

(145,004,010)

131,656

(25,753,737)

397,668,578

(549,425,514)

(262,547,159)

(20,266,440)

$330,626,935 ($7,138,124,047)

Operating Loss
(208,614,858) (218,073,573) (199,591,808) (447,163,052) (113,349,650) (69,275,075) (32,950,821) (38,887,439) (42,165,484) (54,423,598) (39,332,581) (34,695,082) (18,284,780) (122,251,610) (68,952,599) (35,260,206) (30,222,601) (63,245,345) (23,274,320) (23,521,433) (27,617,985) (53,643,737) (20,806,651) (58,991,440) (20,667,499) (20,961,607) (31,295,704) (17,133,165) (26,100,678) (89,157,075) (18,118,921) (144,016,027) (291,908,785) ($2,703,955,189)

University System of Georgia Annual Financial Report FY 2014

Page 79

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR YEAR ENDED JUNE 30, 2014

Non-Operating

Institution Georgia Institute of Technology Georgia State University Georgia Regents University University of Georgia Georgia Southern University Valdosta State University Albany State University Armstrong Atlantic State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State University Kennesaw State University University of North Georgia Savannah State University Southern Polytechnic State University University of West Georgia Abraham Baldwin Agricultural College College of Coastal Georgia Dalton State College Georgia Gwinnett College Gordon State College Middle Georgia State College Atlanta Metropolitan State College Bainbridge State College Darton State College East Georgia State College Georgia Highlands College Georgia Perimeter College South Georgia State College University System Office Elimination/Consolidation Entries Total

State Appropriations Other Revenue/ (Expenses)

222,083,429

76,543,754

187,399,846

77,069,728

173,404,460

22,781,483

387,087,925

153,057,145

81,442,638

41,795,368

48,465,236

61,642,547

18,539,883

13,557,878

28,838,670

14,433,077

23,401,932

19,027,352

33,008,566

21,310,357

24,002,876

21,514,513

29,005,791

21,481,521

11,867,701

6,672,898

82,371,326

52,049,225

44,963,866

34,383,119

18,655,084

19,513,699

21,228,613

12,067,827

44,262,247

28,484,647

13,421,366

11,324,003

13,958,549

9,444,858

14,038,522

30,291,873

39,791,420

26,294,765

11,236,106

10,992,263

34,102,741

24,232,715

8,847,878

11,097,469

9,989,108

10,447,796

14,948,189

16,040,711

7,616,913

9,273,737

14,477,661

12,251,712

56,871,319

44,998,972

11,135,308

8,718,377

150,052,543

(3,395,254)

(25,626)

(1,379,613)

$1,880,492,086

$918,020,522

Special Item Transfer

Interest Expense

-

(25,544,549)

-

(20,788,112)

-

(2,966,531)

-

(18,120,788)

-

(12,081,933)

-

(7,753,570)

-

(3,741,453)

-

(4,588,520)

-

(4,365,626)

-

(2,737,685)

-

(4,557,700)

-

(7,825,511)

-

(2,009,517)

-

(11,859,160)

-

(9,745,744)

-

(5,645,714)

(76,088) (4,916,860)

-

(9,049,399)

-

(2,045,330)

-

(1,404,786)

(463,200)

-

(11,313,188)

-

(1,490,864)

-

(3,796,594)

-

(610,116)

-

(1,119,779)

-

(2,881,135)

-

(449,552)

-

(1,015,928)

-

(3,628,109)

-

(1,756,008)

282,414

(1,943,489)

(2,988,410)

$206,326 ($195,204,860)

University System of Georgia Annual Financial Report FY 2014

Page 80

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR YEAR ENDED JUNE 30, 2014
Net Position

Institution Georgia Institute of Technology Georgia State University Georgia Regents University University of Georgia Georgia Southern University Valdosta State University Albany State University Armstrong Atlantic State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State University Kennesaw State University University of North Georgia Savannah State University Southern Polytechnic State University University of West Georgia Abraham Baldwin Agricultural College College of Coastal Georgia Dalton State College Georgia Gwinnett College Gordon State College Middle Georgia State College Atlanta Metropolitan State College Bainbridge State College Darton State College East Georgia State College Georgia Highlands College Georgia Perimeter College South Georgia State College University System Office Elimination/Consolidation Entries Total

Increase/Decrease) in Net Net Position -Beginning

Position

of Year

64,467,776

1,442,924,327

25,607,889

591,086,974

(6,372,396)

512,824,636

74,861,230

1,674,958,617

(2,193,577)

353,124,623

33,079,138

145,729,863

(4,594,513)

88,446,962

(204,212)

81,687,767

(4,101,826)

56,173,927

(2,842,360)

83,633,318

1,627,108

72,555,228

7,966,719

59,821,274

(1,753,698)

61,533,939

309,781

234,130,501

648,642

167,523,119

(2,737,137)

63,683,936

(1,919,109)

86,356,052

452,150

160,400,581

(574,281)

42,949,245

(1,522,812)

62,094,473

16,249,210

27,081,982

1,129,260

58,101,432

(69,146)

51,832,145

(4,452,578)

166,731,621

(1,332,268)

26,948,536

(1,644,482)

37,176,741

(3,187,939)

38,192,170

(692,067)

26,132,603

(387,233)

42,391,945

9,085,107

80,116,360

(21,244)

25,160,201

980,187

165,974,832

(296,302,434) (1,552,000,448)

($100,441,115) $5,235,479,482

Prior Year Adjustments

Net Position - Beginning of Year Restated Net Position - End of Year

1,442,924,327

1,507,392,103

591,086,974

616,694,863

512,824,636

506,452,240

9,917,187

1,684,875,804

1,759,737,034

3,016,460

356,141,083

353,947,506

(2,974,526)

142,755,337

175,834,475

-

88,446,962

83,852,449

-

81,687,767

81,483,555

6,826

56,180,753

52,078,927

-

83,633,318

80,790,958

72,555,228

74,182,336

-

59,821,274

67,787,993

-

61,533,939

59,780,241

-

234,130,501

234,440,282

-

167,523,119

168,171,761

-

63,683,936

60,946,799

1,916,609

88,272,661

86,353,552

-

160,400,581

160,852,731

-

42,949,245

42,374,964

-

62,094,473

60,571,661

-

27,081,982

43,331,192

6,663,614

64,765,046

65,894,306

-

51,832,145

51,762,999

166,731,621

162,279,043

-

26,948,536

25,616,268

688,503

37,865,244

36,220,762

38,192,170

35,004,231

-

26,132,603

25,440,536

(307,801)

42,084,144

41,696,911

25,666

80,142,026

89,227,133

-

25,160,201

25,138,957

-

165,974,832

166,955,019

5,225,647

(1,546,774,801)

(1,843,077,235)

$24,178,185

$5,259,657,667

$5,159,216,552

University System of Georgia Annual Financial Report FY 2014

Page 81

University System of Georgia Annual Financial Report FY 2014

Page 82

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (UNAUDITED) June 30, 2014

Affiliated Organizations Abraham Baldwin Agricultural College Foundation, Inc. and Subsidiaries Albany State University Foundation, Inc. Armstrong Atlantic State Educational Properties Foundation, Inc. and Subsidiaries Armstrong Atlantic State University Foundation, Inc. Atlanta Metropolitan College Foundation, Inc. Augusta State University Foundation Clayton State University Foundation, Inc. College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Dalton State College Athletic Club Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton College Foundation, Inc. East Georgia College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. (Columbus State University) Georgia Advanced Technology Ventures, Inc. (Georgia Institue of Technology) Georgia College & State University Alumni Assoc, Inc.

Current Assets

Noncurrent Cash/ Investments

Assets

Capital Assets

Other Assets

$4,195,897 1,738,703

$25,712,832 15,339,066

$3,292,949 467,055

$38,216,529 66,097,333

3,286,624 809,798 238,899
4,176,758 4,400,424 1,423,621
161,905 78,918
4,451,990 1,438,897 1,798,506 1,764,706 3,266,126
225,286 5,888,973 5,507,749

9,412,841 8,885,796
30,280,162 5,725,903
13,105,115 6,914
2,121,697 52,754,541
25,458,648 1,217,785 1,230,337 947,501
12,402,245 1,952,836

2,784,948
942,223 62,400,188
1,604,559
40,099
1,265,486 6,525,182 20,652,603
403,432 23,833
1,726,547 85,159,120

98,020,229
42,515,613 5,785,076 173,877 202,953
5,282,047 3,330,852
572,494 409,821
55,254,834 2,794,237

4,058,815 163,830

788,403 7,167,205

119,623,442 23,976

2,031,409 4,500

Total Assets

Deferred Outflows of Resources

$71,418,207 83,642,157

113,504,642 9,695,594 238,899
77,914,756 78,311,591 16,307,172
371,772 2,240,714 62,488,578 6,035,235 34,354,830 24,044,915 4,899,895 1,196,620 75,272,599 95,413,942

126,502,069 7,359,511

15,000

Georgia College & State University Foundation, Inc.

4,692,554

42,064,995

3,356,110

90,806,502

140,920,161

Georgia Gwinnett College Foundation Inc. Georgia Highlands College Foundation, Inc. Georgia Perimeter College Foundation, Inc. Georgia Regents University Research Institute, Inc. Georgia Regents University, College of Dental Medicine Faculty Practice Group d/b/a GRU Dental Faculty Practice Group Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc.

13,309,198 3,959,875 2,589,530
12,333,842
2,356,029 6,269,920 59,087,509

20,619,415
4,189,904 402,771
9,933,670 5,998,378
145,500

10,939,408 11,811
3,000,000

338,553,125 17,681,144 76,949,881

383,421,146 21,652,830 86,729,315 12,736,613

22,272,101 408,083

2,759,423 877,964

12,289,699 37,299,822 60,519,056

Georgia Southern University Housing Foundation, Inc. Georgia Southern University Research and Service Foundation, Inc. Georgia Southwestern Foundation, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. and Affiliate Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Gordon College Foundation, Inc. and Subsidiaries Kennesaw State University Foundation, Inc.

10,941,036
6,789,037 1,842,916 86,437,647
36,295,858 305,458
8,106,156 12,529,392 32,861,643 178,709,961
587,948 17,459,904

33,243,195
33,241,541 142,844,105
5,195,960
1,226,733 1,572,227,000
4,084 11,757,596 101,015,125

254,767
682 357,417 10,626,301
8,704,576 144,379
171,494,676 3,598,560
35,906,000 1,571,286 -
143,373,696

219,145,445

263,584,443

38,809,551 265,156,505

6,789,719 74,251,425 505,064,558

80,940,822
120,469,746 268,301,212 241,792,357
200,000 32,200,706 198,842,550

131,137,216 449,837
300,070,578 285,655,897 1,882,787,000 180,485,331
44,546,250 460,691,275

1,679,532
23,934,618 31,722,603

Middle Georgia State College Foundation, Inc. MCG Health, Inc./MCG Health System, Inc. (d/b/a Georgia Regents Health System) (blended) Medical College of Georgia Foundation, Inc. Middle Georgia State College Real Estate Foundation, Inc. and Subsidiaries

510,778
205,167,872 2,640,352
1,434,303

10,446,522
148,226,368 221,347,907
14,060,578

233,995,093 4,212,623

104,411
2,811,309 358,040
96,557,080

11,061,711
590,200,642 228,558,922
112,051,961

Savannah State University Foundation, Inc. South Georgia College Foundation, Inc. Southern Polytechnic State University Foundation, Inc. The Medical College of Georgia Physicians Practice Group Foundation (d/b/a Georgia Regents Medical Associates and Subsidiaries) University of Georgia Athletic Assoc., Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia College Real Estate Foundation Inc. University of North Georgia Foundation - Dahlonega, Inc. University of West Georgia Foundation, Inc. University of West Georgia Real Estate Foundation, Inc.

3,350,509 1,083,365 1,832,906
57,568,547 65,349,698 106,925,840 79,112,074
4,789,163 184,207
6,319,520 7,524,366

3,533,247 6,320,906 9,531,858

7,590 330,395 1,196,556

91,112,873 32,590,607 24,400,258

98,004,219 40,325,273 36,961,578

26,804,179
834,825,321 56,150,116
20,578,184 37,368,414 34,874,159
3,982,332

7,462,069 224,398,241
22,321,247 42,990,447
1,193,686 193,942 73,578

45,678,268 44,947,793 52,499,321 273,433,842

137,513,063 334,695,732 1,016,571,729 451,686,479

142,206,889 1,256,700
50,932,548 128,790,916

168,767,922 39,003,263 92,199,805
140,297,614

10,228,633 1,842,358 6,331,998
1,424,987

University System of Georgia Foundation, Inc. and Affiliates Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation (Clayton State University) James M. Dye Foundation (South Georgia State College) Total

7,325,177 3,733,074 15,425,641
7,024,882 116,569
$1,123,960,681

19,834,426 28,089,424

8,128,428 227,338

264,283,722 798,466
192,479,246

291,443,325 40,749,392
208,132,225

2,003,945 $3,676,597,685

$1,269,686,728

$3,759,421,026

7,024,882 2,120,514 $9,829,666,120

7,993,840 $85,173,569

University System of Georgia Annual Financial Report FY 2014

Page 83

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (UNAUDITED) June 30, 2014

Affiliated Organizations Abraham Baldwin Agricultural College Foundation, Inc. and Subsidiaries Albany State University Foundation, Inc. Armstrong Atlantic State Educational Properties Foundation, Inc. and Subsidiaries Armstrong Atlantic State University Foundation, Inc. Atlanta Metropolitan College Foundation, Inc. Augusta State University Foundation Clayton State University Foundation, Inc. College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Dalton State College Athletic Club Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton College Foundation, Inc. East Georgia College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. (Columbus State University) Georgia Advanced Technology Ventures, Inc. (Georgia Institue of Technology) Georgia College & State University Alumni Assoc, Inc.

Current Liabilities

Liabilities

Noncurrent Liabilities

Total Liabilities

Deferred Inflows of Resources

$2,135,880 3,404,987

$39,721,458 75,600,282

$41,857,338 79,005,269

2,828,122 145,838 120
2,751,089 1,676,216
218,099 7,834
142,814 898,947 221,905 2,163,656 390,000

89,243,897
41,940,113 69,933,580
23,179
2,804,695 192,741 117,735
22,209,044

92,072,019 145,838 120
44,691,202 71,609,796
241,278 7,834
142,814 3,703,642
414,646 2,281,391 22,599,044

1,563 2,869,374 18,798,818

62,233,138 61,158,898

1,563 65,102,512 79,957,716

12,126,010 147

112,276,976

124,402,986 147

Georgia College & State University Foundation, Inc.

18,793,753

104,591,895

123,385,648

2,610,746

Georgia Gwinnett College Foundation Inc. Georgia Highlands College Foundation, Inc. Georgia Perimeter College Foundation, Inc. Georgia Regents University Research Institute, Inc. Georgia Regents University, College of Dental Medicine Faculty Practice Group d/b/a GRU Dental Faculty Practice Group Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc.

20,848,409 11,666
10,078,466 5,733,899
11,095,436 3,498,207 1,490,564

364,174,664 18,515,000 71,655,000
23,895,464

385,023,073 18,526,666 81,733,466 5,733,899
11,095,436 27,393,671
1,490,564

Georgia Southern University Housing Foundation, Inc. Georgia Southern University Research and Service Foundation, Inc. Georgia Southwestern Foundation, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. and Affiliate Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Gordon College Foundation, Inc. and Subsidiaries Kennesaw State University Foundation, Inc.

11,360,674
4,741,276 608,871
15,394,060
21,982,114 524,142
14,278,357 12,345,108 111,651,780 131,986,611
1,067,236 23,987,716

226,888,936
42,450,027 267,014,458
84,630,845
232,660,704 287,828,404 366,759,220
32,382,902 401,758,974

238,249,610
4,741,276 43,058,898 282,408,518
106,612,959 524,142
246,939,061 300,173,512 478,411,000 131,986,611
33,450,138 425,746,690

Middle Georgia State College Foundation, Inc. MCG Health, Inc./MCG Health System, Inc. (d/b/a Georgia Regents Health System) (blended) Medical College of Georgia Foundation, Inc. Middle Georgia State College Real Estate Foundation, Inc. and Subsidiaries

285,786
88,725,346 2,213,206
4,273,033

217,343,525 885,315
97,273,888

285,786
306,068,871 3,098,521
101,546,921

Savannah State University Foundation, Inc. South Georgia College Foundation, Inc. Southern Polytechnic State University Foundation, Inc. The Medical College of Georgia Physicians Practice Group Foundation (d/b/a Georgia Regents Medical Associates and Subsidiaries) University of Georgia Athletic Assoc., Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia College Real Estate Foundation Inc. University of North Georgia Foundation - Dahlonega, Inc. University of West Georgia Foundation, Inc. University of West Georgia Real Estate Foundation, Inc.

11,848,577 203,881
1,800,420
15,329,801 33,010,741 11,125,569 64,146,228
7,537,409 1,055,435 2,909,072 3,558,919

82,235,075 34,800,341 27,706,263
47,297,802 114,965,284
62,214,581 308,849,454
154,365,974 10,221
50,174,044 134,875,160

94,083,652 35,004,222 29,506,683
62,627,603 147,976,025
73,340,150 372,995,682
161,903,383 1,065,656
53,083,116 138,434,079

University System of Georgia Foundation, Inc. and Affiliates Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation (Clayton State University) James M. Dye Foundation (South Georgia State College) Total

6,524,747 1,372,601 4,752,086
4,010 $732,936,631

274,102,073 6,055,423
180,048,339
$4,895,864,991

280,626,820 7,428,024
184,800,425
4,010 $5,628,801,622

$2,610,746

University System of Georgia Annual Financial Report FY 2014

Page 84

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (UNAUDITED) June 30, 2014

Affiliated Organizations Abraham Baldwin Agricultural College Foundation, Inc. and Subsidiaries Albany State University Foundation, Inc. Armstrong Atlantic State Educational Properties Foundation, Inc. and Subsidiaries Armstrong Atlantic State University Foundation, Inc. Atlanta Metropolitan College Foundation, Inc. Augusta State University Foundation Clayton State University Foundation, Inc. College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Dalton State College Athletic Club Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton College Foundation, Inc. East Georgia College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. (Columbus State University) Georgia Advanced Technology Ventures, Inc. (Georgia Institue of Technology)

Net Investment in Capital Assets
$1,216,233 467,055
2,784,948
942,223
1,604,559
40,099
880,004 4,500,056 1,423,037
403,432 23,833
1,726,547 24,995,229
522,982

Nonexpendable
$8,200,611
1,269,585 5,089,213
17,407,863 6,646,639 6,384,361 82,161 1,351,883
32,471,569
9,807,843
546,000 155,335 3,812,846

Net Position
Expendable
$5,809,020 4,144,905
2,486,256 4,049,334
8,910,408
6,211,707
643,145 22,191,206
4,943,101 6,334,414
984,185 1,012,914 4,786,366
10,720,497

Georgia College & State University Alumni Association, Inc. Georgia College & State University Foundation, Inc. and Subsidiaries

23,976 1,876,163

4,817,563 15,273,948

2,114,469 6,915,895

Georgia Gwinnett College Foundation Inc. and Subsidiaries Georgia Highlands College Foundation, Inc. Georgia Perimeter College Foundation, Inc. Georgia Regents University Research Institute, Inc. Georgia Regents University, College of Dental Medicine Faculty Practice Group d/b/a GRU Dental Faculty Practice Group Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern University Housing Foundation, Inc. and Subsidiaries Georgia Southern University Research and Service Foundation, Inc. Georgia Southwestern Foundation, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. and Affiliate Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Gordon College Foundation, Inc. and Subsidiaries Kennesaw State University Foundation, Inc. Middle Georgia State College Foundation, Inc. and Subsidiaries MCG Health, Inc./MCG Health System, Inc. (d/b/a Georgia Regents Health System) (blended) Medical College of Georgia Foundation, Inc. Middle Georgia State College Real Estate Foundation, Inc. and Subsidiaries

10,939,408 11,811
3,000,000
4,738,451 408,083
254,767
682 357,417 7,000,986
8,703,014 144,379
(36,035,965) 3,598,560
35,906,000 1,571,286 -
127,200,218
41,410,936

702,659 788,207 1,153,537
33,753,544
11,904,652 106,407,329
2,000,000 28,421,969 588,380,000
2,491,333 25,618,006
8,127,614
133,686,143

792,078 1,926,558 3,354,211
77,525
7,481,530 19,752,133
23,642,949
9,598,672 69,536,144
6,635,058 (218,684)
81,439,028 8,925,941
715,583,000
7,841,107 12,594,670
2,313,380
70,877,702

Savannah State University Foundation, Inc. and Subsidiaries South Georgia College Foundation, Inc. and Subsidiaries Southern Polytechnic State University Foundation, Inc. The Medical College of Georgia Physicians Practice Group Foundation (d/b/a Georgia Regents Medical Associates and Subsidiaries) University of Georgia Athletic Assoc., Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia College Real Estate Foundation Inc. and Subsidiaries University of North Georgia Foundtion - Dahlonega, Inc. University of West Georgia Foundation, Inc. University of West Georgia Real Estate Foundation, Inc.

7,590 330,395 1,196,556
7,462,069 115,662,174
11,090,667 11,608,494
1,193,686 193,942 73,578

110,000 2,891,383 3,294,523
421,826,483
20,521,459 18,325,330

92,297 229,327 2,082,215
430,372,477 1,291,745
18,774,080 11,713,225

University System of Georgia Foundation, Inc. and Affiliates Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation (Clayton State University) James M. Dye Foundation (South Georgia State College) Total

93,791 2,109,042
227,338
$403,889,731

1,570,275 26,684,409
7,024,882 1,868,358 $1,560,869,515

3,365,295 4,398,128
127,946 $1,606,857,559

Unrestricted
$14,335,005 24,928
14,891,834 411,209 238,779
5,963,060 55,156
1,865,267 281,777 62,773
4,122,161 (202,516)
11,431,126 22,834
2,966,278 2,975
(155,672) (9,539,003)
(9,129,396)
403,356
(9,142,239)
(14,036,072) 399,588
(2,511,899) 6,925,189

Total Net Position
$29,560,869 4,636,888
21,432,623 9,549,756 238,779
33,223,554 6,701,795
16,065,894 363,938
2,097,900 58,784,936
5,620,589 32,073,439
1,445,871 4,899,895 1,195,057 10,170,087 15,456,226
2,114,083
7,359,364
14,923,767
(1,601,927) 3,126,164 4,995,849 7,002,714

1,194,263 (2,313,830)
5,114,732
3,116,649
2,047,761 9,331,786 39,711,581
7,186,185
3,241,103 4,680,487 64,507,000 46,927,434
763,672 (130,468,309)
334,931
242,720,835 20,896,556
10,505,040
3,710,680 1,869,946
881,601

1,194,263 9,906,151 59,028,492
27,014,365
2,048,443 31,192,527 222,656,040
24,524,257 (74,305)
77,066,135 17,204,988 1,404,376,000 48,498,720 11,096,112 34,944,585
10,775,925
284,131,771 225,460,401
10,505,040
3,920,567 5,321,051 7,454,895

67,423,391 81,286,166 81,784,310 72,122,556
5,670,853 (1,551,874)
9,004,556 3,288,522
5,787,144 129,789
31,098,302
120,200 $711,810,516

74,885,460 196,948,340 945,073,937
85,022,795
6,864,539 37,937,607 39,116,689
3,288,522
10,816,505 33,321,368 31,325,640
7,024,882 2,116,504 $4,283,427,321

University System of Georgia Annual Financial Report FY 2014

Page 85

University System of Georgia Annual Financial Report FY 2014

Page 86

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (UNAUDITED) FOR THE YEAR ENDED JUNE 30, 2014

Revenues

Operating

Affiliated Organization Abraham Baldwin Agricultural College Foundation, Inc. and Subsidiaries Albany State University Foundation, Inc. Armstrong Atlantic State Educational Properties Foundation, Inc. and Subsidiaries Armstrong Atlantic State University Foundation, Inc. Atlanta Metropolitan College Foundation Augusta State University Foundation, Inc. Clayton State University Foundation, Inc. College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Dalton State College Athletic Club Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton College Foundation, Inc. East Georgia College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. (Columbus State University) Georgia Advanced Technology Ventures, Inc. Georgia College & State University Alumni Association, Inc. Georgia College and State University Foundation, Inc. and Subsidiaries Georgia Gwinnett College Foundation, Inc. and Subsidiaries Georgia Highlands College Foundation, Inc. Georgia Perimeter College Foundation, Inc. Georgia Regents University Research Institute, Inc. (f/k/a Georgia Health Sciences Research Institute)
Georgia Regents University, College of Dental Medicine Faculty Practice Group d/b/a GRU Dental Faculty Practice Group Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern University Housing Foundation, Inc. and Subsidiaries Georgia Southern University Research and Service Foundation, Inc. Georgia Southwestern Foundation, Inc. Georgia State University Foundation, Inc. and Affiliate Georgia State University Research Foundation, Inc. and Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Gordon College Foundation, Inc. and Subsidiaries Kennesaw State University Foundation, Inc. Middle Georgia State College Foundation, Inc. and Subsidiaries MCG Health, Inc./MCG Health Systems, Inc. d/b/a Georgia Regents Health System Medical College of Georgia Foundation, Inc. Middle Georgia College Foundation, Inc. and Subsidiaries Savannah State University Foundation, Inc. and Subsidiaries South Georgia College Foundation, Inc. and Subsidiaries Southern Polytechnic State University Foundation, Inc.
The Medical College of Georgia Physicians Practice Group Foundation (d/b/a Physicians Practice Group and Subsidiaries) University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia - Dahlonega, Inc. University of North Georgia Real Estate Foundation, Inc. and Subsidiaries University of West Georgia Foundation, Inc. University of West Georgia Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. and Affiliates Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation (Clayton State University) James Dye Foundation, Inc. (South Georgia State College) Total

Gifts, Contributions, Grants & Contracts
$1,112,858 686,891
1,008,546 170,538
1,251,936 774,557 919,816 52,971 151,838
7,357,627 2,182,822
754,968
381,914 246,487 902,853 1,192,346 940,046 145,470
1,626,825 612,672 583,872 628,423
59,192,037
166,980 3,115,732 2,489,782
6,430,678 263,035
14,993,727 57,231,460
4,932,240 4,544,650
55,590,000 603,742,261
129,784 2,781,528
613,236
4,899,555 355,106 78,065 238,339
1,120,858
38,233,655 139,674,036
1,198,726
155,631 11,395,832
1,089,652 2,868,272
824,231
50,238 $1,042,085,602

Sales, Services, Rents & Royalties

Clinical Patient Fees/Net Patient
Revenue

$2,910,378 18,563

1,514,315

1,490,231 808,256 1,200 17,363 291,119 903,840
321,096 1,976,438
24,000
3,364,199 6,525,728 16,439,517

5,848,730 11,880,233
1,028,474 3,947,497
203,575
189,570 128,987
71,155
4,332,684 1,807,394
48,973 864,589 1,640,294 55,150,249 4,402,614 14,247,000 10,028,143 1,323,061 39,350,629

9,999,104

9,893,900 612,787

509,921,136

5,146,478 2,132,796 1,347,357

1,764,423 148,443,789
8,618,926 29,095,784
724,525
828,445 3,580,549
426,020 1,482,012 1,558,912

$260,313,008 $668,364,029

Other
$1,996,500 801,611
4,622,241
497 918,940 2,589,742 704,626
8,061 4,936 5,478,671
6,336
2,455,963 1,072,789
904,701
2,807,571 42,991
523,509 394,811
13,270,259
13,393 109,116 33,849,049 3,400,927
9,922
10,951,697
1,119,539 131,910
25,472,061 4,099,143 34,221
158,159
97,966,750 114,177,585
100,000 14,584,441
7,553,600 126,993
4,734,483 17,218,163
737,393 10,722,462
974,685 23,508
$386,873,955

Expenses

Operating Profit/ (Loss)

($2,081,104) (1,448,251)

$3,938,632 58,814

(1,520,680) (1,575,393)
(101,490) (1,656,566)
(634,082) (1,539,711)
(66,776) (617,234) (9,807,206) (1,394,169) (2,560,866) (1,913,730) (739,157) (239,316) (1,729,819) (4,120,016) (12,101,856) (450,283)

4,615,876 (566,847) 69,545
2,004,541 3,538,473
85,931 11,619 (169,341) 3,932,932 788,653 (1,484,802) 62,708 (333,243) 13,507 2,537,233 6,054,021 6,350,496 599,888

(3,629,490) (1,851,850)
(709,426) (902,329)

6,653,636 10,684,046
902,920 3,673,591

(59,211,905)

183,707

(10,752,613) (2,544,812) (3,780,039)
(651,092)
(9,947,337) (1,641,473) (25,963,964) (59,016,604) (6,560,677) (59,545,687) (3,156,323) (90,631,000) (611,075,893)
(284,588) (24,612,127)
(1,257,786)
(548,575,077) (9,350,225) (355,728) (2,722,603) (592,998) (2,062,924)

(586,529) 1,283,999
(766,459)
12,690,322
829,418 538,072 22,927,785 2,480,372
21,779 149,212 12,197,988 (20,794,000) 2,694,511 1,168,257 18,639,569 (512,640)
(28,760,041) 21,634,178
4,098,521 2,536,161 1,778,137
563,450

(159,506,242) (89,438,499) (51,403,347)
(150,161,193) (5,086,551)
(712,938) (3,906,651)
(233,452) (2,846,248) (4,015,143)
(773,195) (265,888)
(54,940) ($2,056,088,562)

(9,298,030) 8,528,251 109,626,819 18,708,627 11,421,141
7,824,738 11,196,723
4,927,051 16,943,579
1,149,434 10,773,498
708,797 18,806
$301,548,032

University System of Georgia Annual Financial Report FY 2014

Page 87

UNIVERSITY SYSTEM OF GEORGIA C ONDENSED STATEM ENT OF REVENUES, EXPENSES AND C HANGES IN NET POSITION BY AFFILIATED ORGANIZATION (UNAUDITED) FOR THE YEAR ENDED JUNE 30, 2014
Non-Operating

Affiliated Organization Abraham Baldwin Agricultural College Foundation, Inc. and Subsidiaries Albany State University Foundation, Inc. Armstrong Atlantic State Educational Properties Foundation, Inc. and Subsidiaries Armstrong Atlantic State University Foundation, Inc. Atlanta Metropolitan College Foundation Augusta State University Foundation, Inc. Clayton State University Foundation, Inc. College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Dalton State College Athletic Club Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton College Foundation, Inc. East Georgia College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. (Columbus State University) Georgia Advanced Technology Ventures, Inc. Georgia College & State University Alumni Association, Inc. Georgia College and State University Foundation, Inc. and Subsidiaries Georgia Gwinnett College Foundation, Inc. and Subsidiaries Georgia Highlands College Foundation, Inc. Georgia Perimeter College Foundation, Inc. Georgia Regents University Research Institute, Inc. (f/k/a Georgia Health Sciences Research Institute)
Georgia Regents University, College of Dental Medicine Faculty Practice Group d/b/a GRU Dental Faculty Practice Group Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern University Housing Foundation, Inc. and Subsidiaries Georgia Southern University Research and Service Foundation, Inc. Georgia Southwestern Foundation, Inc. Georgia State University Foundation, Inc. and Affiliate Georgia State University Research Foundation, Inc. and Affiliates Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Gordon College Foundation, Inc. and Subsidiaries Kennesaw State University Foundation, Inc. Middle Georgia State College Foundation, Inc. and Subsidiaries MCG Health, Inc./MCG Health Systems, Inc. d/b/a Georgia Regents Health System Medical College of Georgia Foundation, Inc. Middle Georgia College Foundation, Inc. and Subsidiaries Savannah State University Foundation, Inc. and Subsidiaries South Georgia College Foundation, Inc. and Subsidiaries Southern Polytechnic State University Foundation, Inc.
The Medical College of Georgia Physicians Practice Group Foundation (d/b/a Physicians Practice Group and Subsidiaries) University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia - Dahlonega, Inc. University of North Georgia Real Estate Foundation, Inc. and Subsidiaries University of West Georgia Foundation, Inc. University of West Georgia Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. and Affiliates Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation (Clayton State University) James Dye Foundation, Inc. (South Georgia State College) Total

Revenues
$651,836 3,872,648
334,144 1,492,339
3,123,727 1,161,933
829,622 23,344
589,582 866,047
95,166 2,254,914
124 499,397 110,252 1,239,180 163,986 277,768 164,074
2,059,638 738,496 263,943
3,320,159
42,013
913,848 38,887
9,126,029
632,554
3,287 4,485,067 14,427,472 1,730,349
21,191,181 171,570
239,173,000 73,790
1,171,261 4,279,885 1,585,470
46,610,222 49,328,897
18,040 226,194 1,317,050
6,641,173 5,104,390 24,772,235 4,338,588
366,076
1,863,423 2,477,422
304,123 823,306 2,474,471 174,816
165,919 $470,184,327

Expenses

Increase/(Decrease) in Net Position

($1,818,275) (3,523,430)

$2,772,193 408,032

(4,433,844) (1,159,214) (4,235,584)
(130,481)
(2,822,184) (2,402,296) (7,212,712)

516,176 925,492
69,545 3,969,054
464,822 915,553
34,963 420,241 4,798,979 883,819 639,631
62,832 166,154 123,759 954,229 3,815,711 (584,448) 763,962

(4,350,402) (9,851,074)
(790,636)

4,362,872 1,571,468
376,227 6,993,750

225,720

(13,858) (9,687)
(9,828,628)
(2,041,175) (10,456,373)
(4,246,328)
(12,756,754) (8,842,309)
(11,070,000)
(1,448,249) (17,561,598)
(11,347,269)
(3,715,400) (4,293,521) (1,184,871)
(820,193)

313,461 1,313,199 8,359,570
3,494,248
832,705 2,981,964 26,898,884
(35,607) 21,779 8,583,639 3,527,249 207,309,000 2,768,301 891,269 5,357,856 1,072,830
6,502,912 70,963,075
383,121 (1,739,320)
819,460 1,060,307

(1,268,136) (4,373,010)
(336,102) (16,857,671)
(8,727,689)
(7,743,168) (4,600,858) (5,147,350) (14,713,226)
(134,276) (11,856,815)
($218,124,646)

(3,924,993) 9,259,631 134,062,952 6,189,544 3,059,528
1,944,993 9,073,287
83,824 3,053,659 3,489,629
(908,501) 708,797 184,725 $553,607,713

University System of Georgia Annual Financial Report FY 2014

Page 88

UNIVERSITY SYSTEM OF GEORGIA CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (UNAUDITED) FOR THE YEAR ENDED JUNE 30, 2014
Net Position

Affiliated Organization Abraham Baldwin Agricultural College Foundation, Inc. and Subsidiaries Albany State University Foundation, Inc. Armstrong Atlantic State Educational Properties Foundation, Inc. and Subsidiaries Armstrong Atlantic State University Foundation, Inc. Atlanta Metropolitan College Foundation Augusta State University Foundation, Inc. Clayton State University Foundation, Inc. College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Dalton State Athletic Club Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton College Foundation, Inc. East Georgia College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. (Columbus State University) Georgia Advanced Technology Ventures, Inc. Georgia College & State University Alumni Association, Inc. Georgia College and State University Foundation, Inc. and Subsidiaries Georgia Gwinnett College Foundation, Inc. and Subsidiaries Georgia Highlands College Foundation, Inc. Georgia Perimeter College Foundation, Inc. Georgia Regents University Research Institute, Inc. (f/k/a Georgia Health Sciences Research Institute)

Net Position Beginning of Year
$28,373,601 4,228,856
23,381,674 8,624,264 169,234
29,254,500 6,236,973
15,150,341
4,736,770 31,433,808
1,383,039 4,733,741 1,071,298 9,215,858
2,698,531 6,595,402
12,391,475 (3,173,395) 2,134,125 12,621,264
6,776,994

Georgia Regents University, College of Dental Medicine Faculty Practice Group d/b/a GRU Dental Faculty Practice Group Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern University Housing Foundation, Inc. and Subsidiaries Georgia Southern University Research and Service Foundation, Inc. Georgia Southwestern Foundation, Inc. Georgia State University Foundation, Inc. and Affiliate Georgia State University Research Foundation, Inc. and Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Gordon College Foundation, Inc. and Subsidiaries Kennesaw State University Foundation, Inc. Middle Georgia State College Foundation, Inc. and Subsidiaries MCG Health, Inc./MCG Health Systems, Inc. d/b/a Georgia Regents Health System Medical College of Georgia Foundation, Inc. Middle Georgia College Foundation, Inc. and Subsidiaries Savannah State University Foundation, Inc. and Subsidiaries South Georgia College Foundation, Inc. and Subsidiaries Southern Polytechnic State University Foundation, Inc.

8,887,344 50,668,922
9,376,357
1,215,738 28,210,563 195,757,156 25,557,127
(96,084) 68,482,496 (26,510,776) 1,197,067,000 45,730,419 10,204,843 29,586,729 11,988,719
278,675,266 154,497,326
10,121,919 5,659,887 4,501,591 6,394,588

The Medical College of Georgia Physicians Practice Group Foundation (d/b/a Physicians Practice Group and Subsidiaries) University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia - Dahlonega, Inc. North Georgia College & State University Real Estate Foundation, Inc. and Subsidiaries University of West Georgia Foundation, Inc. University of West Georgia Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. and Affiliates Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation (Clayton State University) James Dye Foundation, Inc. (South Georgia State College) Total

78,810,453 188,957,066 808,242,429
85,514,725 34,878,079
4,919,546 36,613,855
3,204,698 12,184,811 29,831,739 35,208,667
6,316,085 1,931,779 $3,650,629,415

Prior Year Adjustments

Net Position Beginning of Year
Restated

Net Position - End of Year

($1,584,925)

$26,788,676 4,228,856

$29,560,869 4,636,888

(2,465,227)
328,975 1,677,659 53,985,957
11,640,515

20,916,447 8,624,264 169,234
29,254,500 6,236,973
15,150,341 328,975
1,677,659 53,985,957
4,736,770 31,433,808
1,383,039 4,733,741 1,071,298 9,215,858 11,640,515 2,698,531 6,595,402

21,432,623 9,549,756 238,779
33,223,554 6,701,795
16,065,894 363,938
2,097,900 58,784,936
5,620,589 32,073,439
1,445,871 4,899,895 1,195,057 10,170,087 15,456,226 2,114,083 7,359,364

(1,830,580)
615,812 (14,619,165)

10,560,895 (3,173,395) 2,749,937 (1,997,901)

14,923,767 (1,601,927) 3,126,164 4,995,849

6,776,994

7,002,714

880,802 (294,392) 14,143,760
(997,263) 40,188,515
(2,285,624) (1,046,407)

880,802 8,592,952 50,668,922
23,520,117
1,215,738 28,210,563 195,757,156 24,559,864
(96,084) 68,482,496 13,677,739 1,197,067,000 45,730,419 10,204,843 29,586,729
9,703,095
277,628,859 154,497,326
10,121,919 5,659,887 4,501,591 6,394,588

1,194,263 9,906,151 59,028,492
27,014,365
2,048,443 31,192,527 222,656,040 24,524,257
(74,305) 77,066,135 17,204,988 1,404,376,000 48,498,720 11,096,112 34,944,585 10,775,925
284,131,771 225,460,401
10,505,040 3,920,567 5,321,051 7,454,895

(1,268,357) 2,768,556 (6,681,474)

78,810,453 187,688,709 811,010,985
78,833,251 34,878,079

(6,570,453) (4,421,965) (2,974,526)
$79,190,193

4,919,546 30,043,402
3,204,698 7,762,846 29,831,739 32,234,141 6,316,085 1,931,779 $3,729,819,608

74,885,460 196,948,340 945,073,937
85,022,795 37,937,607
6,864,539 39,116,689
3,288,522 10,816,505 33,321,368 31,325,640
7,024,882 2,116,504 $4,283,427,321

University System of Georgia Annual Financial Report FY 2014

Page 89

BALANCE SHEET (NON-GAAP BASIS) BUDGET FUNDS June 30, 2014 U N A U DITED
ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other Margin Allocation Prepaid Expenditures Inventories Other Assets
Total Assets
LIABILITIES AND FUND BALANCES Liabilities
Contracts Payable Accrued Payroll Encumbrance Payable Accounts Payable Deferred Revenue Funds Held for Others Other Liabilities
Total Liabilities
FUND BALANCES Fund Balances
Reserved: Capital Outlay Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Inventories Tuition Carry - Forward Carry-Over "Per Office of Planning and Budget" Early Retirement Program
Unreserved: Surplus
Total Fund Balances
Total Liabilities and Fund Balances

$ 626,025,700.25 75,421,249.37
122,397,001.63 209,508,401.31
4,396,995.00 23,829,396.36
4,382,069.75 40,291.03
$ 1,066,001,104.70

$

23,691.62

8,952,768.95

276,789,861.47

145,378,569.94

218,458,444.06

76,100.26

4,782,693.30

$ 654,462,129.60

$

9,528,132.82

81,525,332.93

112,470,322.55

13,933,451.66

117,030,310.21

20,718,210.79

2,890,060.99

35,439,012.46

8,259,873.34

7,787,077.08

1,957,190.27

$ 411,538,975.10

$ 1,066,001,104.70

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which a comprehensive basis of accounting other than generally accepted accounting principles.

University System of Georgia Annual Financial Report FY 2014

Page 90

UNIVERSITY SYSTEM OF GEORGIA

Budget Comparison and Surplus Analysis Report (Non-GAAP Basis) - Budget Fund

Year Ended June 30, 2014

ORIGINAL BUDGET

FINAL BUDGET

ACTUAL

VARIANCE

REVENUES

State Appropriations

State General Funds

$ 1,883,128,792.00 $ 1,885,486,702.00 $ 1,885,486,702.00 $

-

Non-State Funds

4,521,194,857.00 5,126,948,916.00 4,647,386,900.53 (479,562,015.47)

Total Revenue

$ 6,404,323,649.00 $ 7,012,435,618.00 $ 6,532,873,602.53 $ (479,562,015.47)

Mandatory and Non-Mandatory Transfers

7,650,128.69

7,650,128.69

Prior Year Reserves Available for Expenditure

-

-

326,862,418.53 326,862,418.53

Total Funds Available

$ 6,404,323,649.00 $ 7,012,435,618.00 $ 6,867,386,149.75 $ (145,049,468.25)

EXPENDITURES UGA - Forestry Research UGA - Agricultural Experiment Station UGA - Athens Tifton Vet Labs UGA - Cooperative Extension Service UGA - Forestry Cooperative Extension UGA - Marine Institute UGA - Marine Resources Extension Center UGA - Skidaway Institute of Oceanography-B UGA - Veterinary Medicine Experiment Station UGA - Veterinary Medicine Teaching Hospital GT - Enterprise Innovation Institute (EII) GT - Georgia Tech Research Institute USO - Archives USO - Public Libraries USO - Regents Central Office USO - MCG Hospitals and Clinics USO - Georgia Public Telecommunications Commission USO - Georgia Radiation Therapy Center USO - Georgia Military College Research Consortium Special Funding Initiative Teaching Total Expenditures

$ 12,812,680.00 $ 14,478,344.00 $ 12,331,206.63 $ 2,147,137.37

72,785,946.00

99,958,196.00

81,586,773.72

18,371,422.28

4,944,522.00

6,367,072.00

5,748,773.79

618,298.21

54,449,313.00

67,193,497.00

61,788,328.12

5,405,168.88

1,071,179.00

1,451,365.00

1,092,181.62

359,183.38

1,200,848.00

1,340,819.00

1,143,276.07

197,542.93

2,524,781.00

2,954,781.00

2,502,541.94

452,239.06

4,865,489.00

5,613,568.00

4,902,458.11

711,109.89

2,569,841.00

2,569,841.00

2,569,841.00

-

10,008,086.00

16,029,872.00

12,664,826.84

3,365,045.16

17,662,612.00

19,229,016.00

18,392,003.89

837,012.11

229,506,478.00

336,815,482.00

316,048,722.94

20,766,759.06

4,684,099.00

5,082,087.00

4,794,329.79

287,757.21

36,720,024.00

37,537,156.00

35,204,489.44

2,332,666.56

8,401,788.00

8,401,788.00

8,401,787.55

0.45

28,297,463.00

28,297,463.00

28,297,463.00

-

14,513,070.00

14,513,070.00

14,513,070.00

-

3,625,810.00

3,779,621.00

3,779,621.00

-

2,288,309.00

2,288,309.00

2,288,309.00

-

6,104,447.00

6,104,447.00

6,104,447.00

-

25,303,326.00

26,703,326.00

26,567,052.59

136,273.41

5,859,983,538.00 6,305,726,498.00 5,831,295,553.63 474,430,944.37

$ 6,404,323,649.00 $ 7,012,435,618.00 $ 6,482,017,057.67 $ 530,418,560.33

Excess of Funds Available over Expenditures

$ 385,369,092.08

University System of Georgia Annual Financial Report FY 2014

Page 91

UNIVERSITY SYSTEM OF GEORGIA BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) Year Ended June 30, 2014 UNAUDITED

Beginning Fund Balance July 1, 2013 Reserved
Unreserved, Undesignated Fund Balance (Surplus) for fiscal year 2013
Unreserved, Unreserved Fund Balance (Surplus)
Early Return of Surplus in fiscal year 2014
Adjustments Prior Year Payables/Expenditures Prior Year Receivables/Revenues Reserved Fund Balance Carried Over from Prior Year as Funds Available
Ending Fund Balance - June 30, 2014
Summary of Fund Balance Reserved
Capital Outlay Department Sales & Services Indirect Cost Recovery Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Inventories Tuition Carry - Forward Carry-Over "Per Office of Planning and Budget" Early Retirement Program
Total Reserved Unreserved
Surplus
Ending Fund Balance - June 30, 2014

$ 354,306,782.94
4,231,298.94
(4,231,298.94)
(763,317.01)
2,602,963.75 (3,114,128.13) (326,862,418.53)
$ 411,538,975.10
$ 9,528,132.82 81,525,332.93
112,470,322.55 13,933,451.66
117,030,310.21 20,718,210.79 2,890,060.99 35,439,012.46 8,259,873.34 7,787,077.08
$ 409,581,784.83
1,957,190.27
$ 411,538,975.10

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.

University System of Georgia Annual Financial Report FY 2014

Page 92

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLEAND EXPENDITURES COMPARED TO BUDGET BUDGET FUNDS FOR YEAR ENDED JUNE30, 2014 (UNAUDITED)

Original Appropriation

Amended Appropriation

Final Budget

Funds Current Year
Revenues

Agricultural Experiment Station State Appropriation State General Funds Other Funds

$ 35,233,027.00 $ 37,552,919.00

35,233,027.00 $ 37,552,919.00

35,233,027.00 $ 64,725,169.00

35,233,027.00 46,226,158.06

Total Agricultural Experiment Station
Athens/Tifton Vet Laboratories State Appropriation State General Funds Other Funds

72,785,946.00

72,785,946.00

99,958,196.00

81,459,185.06

4,944,522.00

5,258,000.00

6,367,072.00

5,909,909.02

Total Athens/Tifton Vet Laboratories
Cooperative Extension Service State Appropriation State General Funds Other Funds

4,944,522.00

5,258,000.00

6,367,072.00

5,909,909.02

29,365,384.00 25,083,929.00

29,365,384.00 25,083,929.00

29,365,384.00 37,828,113.00

29,365,384.00 32,839,167.70

Total Cooperative Extension Service
Enterprise Innovation Institute State Appropriation State General Funds Federal Funds Federal Funds Not Itemized Other Funds

54,449,313.00

54,449,313.00

67,193,497.00

62,204,551.70

7,187,612.00
10,475,000.00

7,187,612.00
10,475,000.00

7,187,612.00
12,041,404.00

7,187,612.00
10,868,777.84

Total Enterprise Innovation Institute
Forestry Cooperative Extension State Appropriation State General Funds Other Funds

17,662,612.00

17,662,612.00

19,229,016.00

18,056,389.84

495,191.00 575,988.00

495,191.00 575,988.00

495,191.00 956,174.00

495,191.00 636,006.56

Total Forestry Cooperative Extension
Forestry Research State Appropriation State General Funds Other Funds

1,071,179.00

1,071,179.00

1,451,365.00

1,131,197.56

2,562,254.00 10,250,426.00

2,562,254.00 10,250,426.00

2,562,254.00 11,916,090.00

2,562,254.00 9,706,531.91

Total Forestry Research
Georgia Archives State Appropriation State General Funds Federal Funds Not Itemized Other Funds

12,812,680.00

12,812,680.00

14,478,344.00

12,268,785.91

4,151,428.00 -
532,671.00

4,151,428.00 -
689,281.00

4,151,428.00 -
930,659.00

4,151,428.00 -
834,440.17

Total Georgia Archives
Georgia Radiation Therapy Center Other Funds

4,684,099.00 3,625,810.00

4,840,709.00 3,779,621.00

5,082,087.00 3,779,621.00

4,985,868.17 3,779,621.00

University System of Georgia Annual Financial Report FY 2014

Page 93

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLEAND EXPENDITURES COMPARED TO BUDGET BUDGET FUNDS FOR YEAR ENDED JUNE30, 2014 (UNAUDITED)

Available Compared to Budget

Prior Year Reserve Program Transfers

Carry-Over

or Adjustments

Total Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

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

$

-$

17,319,722.66

17,319,722.66

- $ 35,233,027.00 $

- $ 35,233,027.00 $

-$

-

-

63,545,880.72

(1,179,288.28)

46,353,746.72

18,371,422.28

17,192,134.00

-

98,778,907.72

(1,179,288.28)

81,586,773.72

18,371,422.28

17,192,134.00

588,640.18
588,640.18

-

-

-

6,498,549.20

-

6,498,549.20

131,477.20
131,477.20

5,748,773.79
5,748,773.79

618,298.21
618,298.21

749,775.41
749,775.41

4,599,752.72
4,599,752.72

-

29,365,384.00

-

37,438,920.42

-

66,804,304.42

(389,192.58)
(389,192.58)

29,365,384.00 32,422,944.12
61,788,328.12

5,405,168.88
5,405,168.88

5,015,976.30
5,015,976.30

-

-

7,187,612.00

-

7,187,611.88

0.12

0.12

-

-

-

-

-

-

-

-

335,614.23

11,204,392.07

(837,011.93)

11,204,392.01

837,011.99

0.06

-

335,614.23

18,392,004.07

(837,011.93)

18,392,003.89

837,012.11

0.18

123,699.85
123,699.85

-

495,191.00

-

759,706.41

-

1,254,897.41

(196,467.59)
(196,467.59)

495,191.00 596,990.62
1,092,181.62

359,183.38
359,183.38

162,715.79
162,715.79

2,485,968.19
2,485,968.19

-

2,562,254.00

-

12,192,500.10

-

14,754,754.10

276,410.10
276,410.10

2,562,254.00 9,768,952.63
12,331,206.63

2,147,137.37
2,147,137.37

2,423,547.47
2,423,547.47

-

-

4,151,428.00

-

4,151,425.98

-

0.44

0.44

0.44

0.44

-

684,563.77

1,519,003.94

588,344.94

642,903.37

-

684,564.21

5,670,432.38

588,345.38

4,794,329.79

-

-

3,779,621.00

-

3,779,621.00

University System of Georgia Annual Financial Report FY 2014

2.02 (0.44) 287,755.63
287,757.21
-

2.02 -
876,100.57 876,102.59
-
Page 94

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLEAND EXPENDITURES COMPARED TO BUDGET BUDGET FUNDS FOR YEAR ENDED JUNE30, 2014 (UNAUDITED)

Georgia Tech Research Institute State Appropriation State General Funds Other Funds
Total Georgia Tech Research Institute
Marine Institute State Appropriation State General Funds Other Funds
Total Marine Institute
Marine Resources Extension Center State Appropriation State General Funds Other Funds
Total Marine Resources Extension Center

Original Appropriation

Amended Appropriation

5,588,520.00 223,917,958.00
229,506,478.00

5,588,520.00 314,011,962.00
319,600,482.00

714,567.00 486,281.00
1,200,848.00

714,567.00 486,281.00
1,200,848.00

1,179,252.00 1,345,529.00
2,524,781.00

1,179,252.00 1,345,529.00
2,524,781.00

Medical College of Georgia Hospital and Clinics State Appropriation State General Funds
Public Libraries State Appropriation State General Funds Other Funds
Total Public Libraries
Public Service/Special Funding Initiatives State Appropriation State General Funds State Funds - Prior Year Carry-Over State General Funds - Prior Year
Other Funds
Total Public Service/Special Funding Initiatives
Regents Central Office State Appropriation State General Funds Other Funds
Total Regents Central Office
Research Consortium State Appropriation State General Funds
Total Research Consortium

28,297,463.00

28,297,463.00

31,497,624.00 5,222,400.00
36,720,024.00

31,497,624.00 5,222,400.00
36,720,024.00

25,303,326.00 -
25,303,326.00

26,703,326.00 -
26,703,326.00

8,401,788.00 -
8,401,788.00

8,401,788.00 -
8,401,788.00

6,104,447.00 6,104,447.00

6,104,447.00 6,104,447.00

University System of Georgia Annual Financial Report FY 2014

Final Budget

Funds Current Year
Revenues

5,588,520.00 331,226,962.00
336,815,482.00

5,588,520.00 310,742,979.24
316,331,499.24

714,567.00 626,252.00
1,340,819.00

714,567.00 444,583.74
1,159,150.74

1,179,252.00 1,775,529.00
2,954,781.00

1,179,252.00 1,322,761.23
2,502,013.23

28,297,463.00

28,297,463.00

31,497,624.00 6,039,532.00
37,537,156.00

31,497,624.00 3,707,171.84
35,204,795.84

26,703,326.00 -
26,703,326.00

26,703,326.00 -
26,703,326.00

8,401,788.00 -
8,401,788.00

8,401,788.00 -
8,401,788.00

6,104,447.00 6,104,447.00

6,104,447.00 6,104,447.00
Page 95

Available Compared to Budget

Prior Year Reserve Program Transfers

Carry-Over

or Adjustments

Total Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

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

-

-

5,588,520.00

-

5,588,520.00

-

-

-

-

310,742,979.24

(20,483,982.76)

310,460,202.94

20,766,759.06

282,776.30

-

-

316,331,499.24

(20,483,982.76)

316,048,722.94

20,766,759.06

282,776.30

363,804.72
363,804.72

-

714,567.00

-

808,388.46

-

1,522,955.46

182,136.46
182,136.46

714,567.00 428,709.07
1,143,276.07

197,542.93
197,542.93

379,679.39
379,679.39

159,265.31
159,265.31

-

1,179,252.00

-

1,482,026.54

-

2,661,278.54

(293,502.46)
(293,502.46)

1,179,252.00 1,323,289.94
2,502,541.94

452,239.06
452,239.06

158,736.60
158,736.60

-

-

28,297,463.00

-

28,297,463.00

-

-

-

31,497,624.00

-

31,497,622.85

1.15

-

-

3,707,171.84

(2,332,360.16)

3,706,866.59

2,332,665.41

-

-

35,204,795.84

(2,332,360.16)

35,204,489.44

2,332,666.56

-

-

26,703,326.00

-

26,567,052.59

136,273.41

-

-

-

-

-

-

-

-

-

-

-

-

-

-

26,703,326.00

-

26,567,052.59

136,273.41

-

-

8,401,788.00

-

8,401,787.55

0.45

-

-

-

-

-

-

-

-

8,401,788.00

-

8,401,787.55

0.45

-

-

6,104,447.00

-

6,104,447.00

-

-

-

6,104,447.00

-

6,104,447.00

-

University System of Georgia Annual Financial Report FY 2014

-
1.15 305.25 306.40
136,273.41 -
136,273.41
0.45 -
0.45
-
Page 96

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLEAND EXPENDITURES COMPARED TO BUDGET BUDGET FUNDS FOR YEAR ENDED JUNE30, 2014 (UNAUDITED)

Skidaway Institute of Oceanography State Appropriation State General Funds Other Funds
Total Skidaway Institute of Oceanography
Teaching State Appropriation State General Funds Other Funds
Total Teaching
Veterinary Medicine Experiment Station State Appropriation State General Funds
Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds
Total Veterinary Medicine Teaching Hospital

Original Appropriation

Amended Appropriation

1,214,869.00 3,650,620.00
4,865,489.00

1,214,869.00 3,950,620.00
5,165,489.00

1,676,074,685.00 4,183,908,853.00
5,859,983,538.00

1,677,032,595.00 4,243,957,206.00
5,920,989,801.00

2,569,841.00

2,569,841.00

386,135.00 9,621,951.00
10,008,086.00

386,135.00 10,088,255.00
10,474,390.00

Final Budget

Funds Current Year
Revenues

1,214,869.00 4,398,699.00
5,613,568.00

1,214,869.00 3,908,733.72
5,123,602.72

1,677,032,595.00 4,628,693,903.00
6,305,726,498.00

1,677,032,595.00 4,203,547,850.13
5,880,580,445.13

2,569,841.00

2,569,841.00

386,135.00 15,643,737.00
16,029,872.00

386,135.00 12,912,208.37
13,298,343.37

Agencies Attached for Administrative Purposes
Payments to Georgia Military College State Appropriation State General Funds
Payments to Public Telecommunications Commission, Georgia State Appropriation State General Funds
Total Payments to Public Telecommunications Commission, Georgia

2,288,309.00

2,288,309.00

2,288,309.00

2,288,309.00

14,513,070.00 14,513,070.00

14,513,070.00 14,513,070.00

14,513,070.00 14,513,070.00

14,513,070.00 14,513,070.00

Budget Unit Totals

$ 6,404,323,649.00 $ 6,558,214,119.00 $ 7,012,435,618.00 $ 6,532,873,602.53

University System of Georgia Annual Financial Report FY 2014

Page 97

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLEAND EXPENDITURES COMPARED TO BUDGET BUDGET FUNDS FOR YEAR ENDED JUNE30, 2014 (UNAUDITED)

Available Compared to Budget

Prior Year Reserve Program Transfers

Carry-Over

or Adjustments

Total Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

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

147,832.90
147,832.90

-

1,214,869.00

-

4,056,566.62

-

5,271,435.62

(342,132.38)
(342,132.38)

1,214,869.00 3,687,589.11
4,902,458.11

711,109.89
711,109.89

368,977.51
368,977.51

299,324,026.01
299,431,647.93

50,382.09 6,579,568.16
6,629,950.25

1,677,082,977.09 4,509,451,444.30
6,186,642,043.31

50,382.09 (119,242,458.70)
(119,084,454.69)

1,676,908,057.24 4,154,387,496.39
5,831,295,553.63

124,537.76 474,306,406.61
474,430,944.37

174,919.85 355,063,947.91
355,346,489.68

-

-

2,569,841.00

-

2,569,841.00

-

-

1,642,084.07
1,642,084.07

-

386,135.00

-

386,135.00

-

14,554,292.44

(1,089,444.56)

12,278,691.84

-

14,940,427.44

(1,089,444.56)

12,664,826.84

3,365,045.16
3,365,045.16

2,275,600.60
2,275,600.60

-

-

2,288,309.00

-

2,288,309.00

-

-

-

-

14,513,070.00

-

14,513,070.00

-

-

-

-

14,513,070.00

-

14,513,070.00

-

-

$ 326,862,418.53 $ 7,650,128.69 $ 6,867,386,149.75 $ (145,049,468.25) $ 6,482,017,057.67 $ 530,418,560.33 $ 385,369,092.08

University System of Georgia Annual Financial Report FY 2014

Page 98

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCEBY PROGRAM AND FUNDING SOURCE BUDGET FUNDS FOR YEARD ENDED JUNE30, 2014 (UNAUDITED)

Regents, University System of Georgia
Agricultural Experiment Station State Appropriation State General Funds Other Funds
Total Agricultural Experiment Station
Athens/Tifton Vet Laboratories Other Funds
Cooperative Extension Service State Appropriation State General Funds Other Funds
Total Cooperative Extension Service
Enterprise Innovation Institute State Appropriation State General Funds Federal Funds Federal Funds Not Itemized Other Funds
Total Enterprise Innovation Institute
Forestry Cooperative Extension State Appropriation State General Funds Other Funds
Total Forestry Cooperative Extension
Forestry Research State Appropriation State General Funds Other Funds
Total Forestry Research
Georgia Archives State Appropriation State General Funds Federal Funds Not Itemized Other Funds
Total Georgia Archives
Georgia Radiation Therapy Center Other Funds

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Year as Funds Available

Return of Fiscal Year 2013
Surplus

Prior Year Adjustments

$

46,558.28 $

-$

17,319,722.66

(17,319,722.66)

(46,558.28) $ -

17,366,280.94

(17,319,722.66)

(46,558.28)

42,603.42 17,169.99
59,773.41

588,640.18

(588,640.18)

-

3,366.18

4,595.59 4,599,752.72
4,604,348.31

(4,599,752.72)
(4,599,752.72)

(4,595.59) -
(4,595.59)

3,339.40 9,297.46
12,636.86

0.02

-

(0.02)

-

-

-

-

-

-

-

-

-

0.02

-

(0.02)

-

123,699.85
123,699.85

(123,699.85)
(123,699.85)

-

0.01

-

1.00

-

1.01

382.13 2,485,968.19
2,486,350.32

(2,485,968.19)
(2,485,968.19)

(382.13) -
(382.13)

2,088.07 388.98
2,477.05

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

University System of Georgia Annual Financial Report FY 2014

Page 99

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCEBY PROGRAM AND FUNDING SOURCE BUDGET FUNDS FOR YEARD ENDED JUNE30, 2014 (UNAUDITED)

Other Adjustments

Early Return of Fiscal Year 2014
Surplus

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

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

$

-$

(480.00)

(480.00)

-

-$

- $ 42,603.42 $

-$

-

17,192,134.00

17,208,823.99

17,208,823.99

-

17,192,134.00

17,251,427.41

17,208,823.99

42,603.42 $ 42,603.42

-

17,208,823.99

42,603.42

17,251,427.41

-

749,775.41

753,141.59

753,141.59

-

753,141.59

550.00
550.00

-

-

3,339.40

-

-

5,015,976.30

5,025,823.76

5,025,823.76

-

5,015,976.30

5,029,163.16

5,025,823.76

3,339.40 -
3,339.40

3,339.40 5,025,823.76
5,029,163.16

-

-

0.12

0.12

-

0.12

0.12

-

-

-

-

-

-

-

-

-

0.06

0.06

-

0.06

0.06

-

-

0.18

0.18

-

0.18

0.18

-

-

-

0.01

-

0.01

0.01

-

-

162,715.79

162,716.79

162,716.79

-

162,716.79

-

-

162,715.79

162,716.80

162,716.79

0.01

162,716.80

-

-

-

2,088.07

-

2,088.07

2,088.07

-

-

2,423,547.47

2,423,936.45

2,423,936.45

-

2,423,936.45

-

-

2,423,547.47

2,426,024.52

2,423,936.45

2,088.07

2,426,024.52

-

-

2.02

2.02

-

-

-

-

-

-

876,100.57

876,100.57

-

-

876,102.59

876,102.59

-

-

-

-

University System of Georgia Annual Financial Report FY 2014

876,100.57
876,100.57
-

2.02

2.02

-

-

-

876,100.57

2.02

876,102.59

-

-

Page 100

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCEBY PROGRAM AND FUNDING SOURCE BUDGET FUNDS FOR YEARD ENDED JUNE30, 2014 (UNAUDITED)

Regents, University System of Georgia
Georgia Tech Research Institute State Appropriation State General Funds Other Funds
Total Georgia Tech Research Institute
Marine Institute State Appropriation State General Funds Other Funds
Total Marine Institute
Marine Resources Extension Center State Appropriation State General Funds Other Funds
Total Marine Resources Extension Center

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Year as Funds Available

Return of Fiscal Year 2013
Surplus

Prior Year Adjustments

1,369.71 -
1,369.71

-

(1,369.71)

-

-

-

(1,369.71)

1,222.70 -
1,222.70

-

-

-

-

363,804.72

(363,804.72)

-

-

363,804.72

(363,804.72)

-

-

933.56 159,265.31
160,198.87

(159,265.31)
(159,265.31)

(933.56) -
(933.56)

883.12 27.31
910.43

Medical College of Georgia Hospital and Clinics State Appropriation State General Funds
Public Libraries State Appropriation State General Funds Other Funds
Total Public Libraries
Public Service/Special Funding Initiatives State Appropriation State General Funds State Funds - Prior Year Carry-Over State General Funds - Prior Year
Total Public Service/Special Funding Initiatives
Regents Central Office State Appropriation State General Funds
Research Consortium State Appropriation State General Funds
Total Research Consortium

-
1,193.88 -
1,193.88
243,865.98 -
243,865.98
5,742.30
-

-

-

-

-

(1,193.88)

-

-

-

(1,193.88)

569.90 -
569.90

-

(243,865.98)

-

-

-

(243,865.98)

50,531.07 -
50,531.07

-

(5,742.30)

194.22

-

-

-

-

-

-

University System of Georgia Annual Financial Report FY 2014

Page 101

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCEBY PROGRAM AND FUNDING SOURCE BUDGET FUNDS FOR YEARD ENDED JUNE30, 2014 (UNAUDITED)

Other Adjustments

Early Return of Fiscal Year 2014
Surplus

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

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

-

-

-

1,222.70

-

1,222.70

1,222.70

-

-

282,776.30

282,776.30

282,776.30

-

282,776.30

-

-

282,776.30

283,999.00

282,776.30

1,222.70

283,999.00

-

-

-

-

-

-

-

-

-

379,679.39

379,679.39

379,679.39

-

379,679.39

-

-

379,679.39

379,679.39

379,679.39

-

379,679.39

-

-

-

883.12

-

883.12

883.12

-

-

158,736.60

158,763.91

158,763.91

-

158,763.91

-

-

158,736.60

159,647.03

158,763.91

883.12

159,647.03

-

-

-

-

-

-

1.15

571.05

-

-

305.25

305.25

-

-

306.40

876.30

-

(822.00)

136,273.41

185,982.48

-

-

-

-

-

(822.00)

136,273.41

185,982.48

-

-

0.45

194.67

-

-

-

-

-

-

-

-

University System of Georgia Annual Financial Report FY 2014

-

-

-

-

571.05

571.05

-

305.25

305.25

-

876.30

876.30

-

185,982.48

185,982.48

-

-

-

-

185,982.48

185,982.48

-

194.67

194.67

-

-

-

-

-

-

Page 102

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCEBY PROGRAM AND FUNDING SOURCE BUDGET FUNDS FOR YEARD ENDED JUNE30, 2014 (UNAUDITED)

Regents, University System of Georgia
Skidaway Institute of Oceanography State Appropriation State General Funds Other Funds
Total Skidaway Institute of Oceanography
Teaching State Appropriation State General Funds State Appropriation State General Fund Prior Year Other Funds
Total Teaching
Veterinary Medicine Experiment Station State Appropriation State General Funds
Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds
Total Veterinary Medicine Teaching Hospital
Payments to the Georgia Cancer Coalition State Appropriation Tobacco Settlement Funds

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Year as Funds Available

Return of Fiscal Year 2013
Surplus

Prior Year Adjustments

0.32

-

(0.32)

-

155,268.46

(147,832.90)

(7,435.56)

-

155,268.78

(147,832.90)

(7,435.88)

-

1,994,994.28
120,027.47 301,235,179.19
303,350,200.94

-
(107,621.92) (299,324,026.01)
(299,431,647.93)

(1,994,994.28)
(12,405.55) (1,911,153.18)
(3,918,553.01)

1,553,374.77
(2,199,017.91)
(645,643.14)

668.60

-

(668.60)

904.99

1,642,084.07
1,642,084.07

(1,642,084.07)
(1,642,084.07)

-

1,024.00

-

866.94

-

1,890.94

-

-

-

-

Payments to Georgia Military College State Appropriation State General Funds
Payments to Public Telecommunications Commission, Georgia State Appropriation State General Funds
Total Payments to Public Telecommunications Commission, Georgia
Total Operating Activity
Prior Year Reserve Not Available for Expenditure Inventories Other Reserves

-
331,093,717.47
3,112,681.70 24,331,682.71

-
(326,862,418.53)
-

-
(4,231,298.94)
-

-
(511,164.38)
-

Budget Unit Totals

$ 358,538,081.88 $ (326,862,418.53) $ (4,231,298.94) $ (511,164.38)

University System of Georgia Annual Financial Report FY 2014

Page 103

UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCEBY PROGRAM AND FUNDING SOURCE BUDGET FUNDS FOR YEARD ENDED JUNE30, 2014 (UNAUDITED)

Other Adjustments

Early Return of Fiscal Year 2014
Surplus

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

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

-

-

-

-

-

-

-

-

-

368,977.51

368,977.51

368,977.51

-

368,977.51

-

-

368,977.51

368,977.51

368,977.51

-

368,977.51

2,791.54
(3,948,648.86)
(3,945,857.32)

(762,495.01)
-
(762,495.01)

174,919.85
107,621.92 355,063,947.91
355,346,489.68

968,591.15
107,621.92 348,916,281.14
349,992,494.21

-
348,274,425.30
348,274,425.30

968,591.15
107,621.92 641,855.84
1,718,068.91

968,591.15
107,621.92 348,916,281.14
349,992,494.21

-

-

-

904.99

-

904.99

904.99

(5,197.13)
(5,197.13)

-

-

1,024.00

-

-

2,275,600.60

2,271,270.41

2,271,270.41

-

2,275,600.60

2,272,294.41

2,271,270.41

1,024.00 -
1,024.00

1,024.00 2,271,270.41
2,272,294.41

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(3,950,984.45)

(763,317.01)

385,369,092.08

380,143,626.24

378,186,435.97

1,957,190.27

380,143,626.24

(222,620.71)

-

4,173,605.16

-

-

2,890,060.99

2,890,060.99

-

28,505,287.87

28,505,287.87

-

2,890,060.99

-

28,505,287.87

$

- $ (763,317.01) $ 385,369,092.08 $ 411,538,975.10 $ 409,581,784.83 $ 1,957,190.27 $ 411,538,975.10

University System of Georgia Annual Financial Report FY 2014

Page 104

Financial Statement Findings June 30, 2014
The auditor is required to communicate to management and those charged with governance deficiencies in internal controls identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weakness.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the University System of Georgia's financial statements will not be prevented, or detected and corrected on a timely basis.
A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Any identified deficiencies in internal controls that the auditors did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within separate management letters for each applicable individual college or university. Internal control deficiencies that were considered to be significant deficiencies and/or material weaknesses are presented below:
Clayton State University - FS-528-14-01 Fort Valley State University - FS-533-14-01 Georgia College and State University - FS-536-14-01 Georgia Institute of Technology - FS-503-14-01 University System Office of the Board of Regents - FS-472-14-01 & FS-472-14-02
Detailed information on these findings is available in the individual college or university report for the fiscal year ended June 30, 2014 located at http://www.audits.ga.gov.

University System of Georgia Annual Financial Report FY 2014

Page 105

Acknowledgements
Published by Office of Fiscal Affairs: John E. Brown Vice Chancellor, Fiscal Affairs Vikki L. Williamson Theresa L. Jackson Ben M. Riden, Jr. Bruce Jackson Claire Arnold
University System of Georgia Chief Business Officers: Paul Willis, Abraham Baldwin Agricultural College Larry Wakefield, Albany State University Rebecca Carroll, Armstrong Atlantic State University Freddie Johnson, Atlanta Metropolitan State College Shawn McGee, Bainbridge State College Corlis Cummings, Clayton State University Jeffrey Preston, College of Coastal Georgia J. Thomas Helton, Columbus State University Scott Bailey, Dalton State College John Clemens, Darton State College Cliff Gay, East Georgia State College Lynn Hobbs, Fort Valley State University Susan Allen, Georgia College & State University Laura Maxwell, Georgia Gwinnett College Jeff Davis, Georgia Highlands College Steve Swant, Georgia Institute of Technology Ron Stark, Georgia Perimeter College Anthony Wagner, Georgia Regents University Robert Whitaker, Georgia Southern University Cody King, Georgia Southwestern State University Jerry Rackliffe, Georgia State University Lee Fruitticher, Gordon State College Randy Hinds, Kennesaw State University Nancy Stroud, Middle Georgia State College Edward Jolley, Savannah State University Marcus J. Latham, South Georgia State College Michael Foxman, Southern Polytechnic State University Ryan Nesbit, University of Georgia Mac McConnell, University of North Georgia Jim Sutherland, University of West Georgia Traycee Martin, Valdosta State University Kristi Fuss, University System Office
Photography: Courtesy of University System of Georgia Institutions
University System of Georgia Annual Financial Report FY 2014

Page 106

University System of Georgia Annual Financial Report FY 2014

Page 107

Published by the Office of Fiscal Affairs 270 Washington Street, SW Atlanta, Georgia 30334
www.usg.edu