{"response":{"docs":[{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bg46-b2016-belec-p-btext","title":"Georgia Southern University, Statesboro, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2016","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts"],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":null,"dc_date":["2016"],"dcterms_description":["This publication is the annual audit report for Georgia Southern University."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Georgia Southern University--Appropriations and expenditures--Periodicals.","Georgia Southern University--fast--(OCoLC)fst00697216","Education--Georgia--Auditing--Periodicals.","Education--Auditing","Expenditures, Public","Georgia","Georgia Government Documents--Serial"],"dcterms_title":["Georgia Southern University, Statesboro, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2016"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-bg46-b2016-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bg46-b2016-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["audits"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Georgia Southern University--fast--(OCoLC)fst00697216","Education--Auditing--fast--(OCoLC)fst00902522","Expenditures, Public--fast--(OCoLC)fst00918345","Georgia--fast--(OCoLC)fst01204622","Periodicals--fast--(OCoLC)fst01411641"],"fulltext":"Report on Audit of the Financial Statements for the Fiscal Year Ended June 30, 2016 \r\n \r\n GEORGIA SOUTHERN UNIVERSITY - TABLE OF CONTENTS - \r\n \r\nPage \r\n \r\nSECTION I \r\n \r\nINTRODUCTORY SECTION \r\n \r\nMESSAGE FROM THE PRESIDENT \r\n \r\nLETTER OF TRANSMITTAL \r\n \r\nSECTION II \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\ni \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nA STATEMENT OF NET POSITION \r\n \r\n2 \r\n \r\nB STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION \r\n \r\n4 \r\n \r\nC STATEMENT OF CASH FLOWS \r\n \r\n6 \r\n \r\nD NOTES TO THE FINANCIAL STATEMENTS \r\n \r\n9 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY - \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n41 \r\n \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY - \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n42 \r\n \r\n3 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n43 \r\n \r\n4 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 44 \r\n \r\n5 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n45 \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n6 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND \r\n \r\n47 \r\n \r\n7 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT \r\n \r\n(NON-GAAP BASIS) BUDGET FUND \r\n \r\n48 \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY - TABLE OF CONTENTS - \r\n \r\nSECTION II \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n8 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n9 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n \r\nPage \r\n50 52 \r\n \r\nSECTION III \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\n \r\nSECTION IV AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION V CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION I INTRODUCTORY SECTION \r\n \r\n (This page left intentionally blank) \r\n \r\n Message from the President \r\n \r\n (This page left intentionally blank) \r\n \r\n Letter of Transmittal \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION II FINANCIAL \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\n \r\nKristina A. Turner \r\nDIRECTOR \r\n(404) 657-4352 \r\n \r\nMarch 23, 2017 \r\nHonorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia \r\nand Dr. Jaimie Hebert, President Georgia Southern University \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the business-type activities, including each major fund of Georgia Southern University, a unit 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, 2016 and the related notes to the financial statements, which collectively comprise the Georgia Southern University's basic financial statements as listed in the tables of contents. \r\nManagement's Responsibility for the Financial Statements \r\nManagement 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. \r\nAuditor's Responsibility \r\nOur responsibility is to express opinions on this financial statement based on our audit. We did not audit the financial statements of Georgia Southern University Housing Foundation, Inc., which is a major fund and represents 6.77% of total assets and deferred outflows and 0.6% of total revenues of the Georgia Southern University's business-type activities. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for Georgia Southern University Housing Foundation, Inc. is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the Georgia Southern University Housing Foundation, Inc. was not audited in accordance with Government Auditing Standards. \r\n \r\n (This page left intentionally blank) \r\n \r\n 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 Georgia Southern University's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Georgia Southern University'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. \r\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. \r\nOpinions \r\nIn our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities, including each major fund of Georgia Southern University as of June 30, 2016, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \r\nEmphasis of Matter \r\nAs discussed in Note 1, the financial statements of Georgia Southern University are intended to present the financial position and changes in financial position and cash flows of only those portions of the business-type activities and the major funds of the State of Georgia that are attributable to the transactions of Georgia Southern University. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2016, 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. Our opinions are not modified with respect to this matter. \r\nAs described in Note 1 to the financial statements, in 2016, Georgia Southern University adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application. Our opinions are not modified with respect to this matter. \r\nAlso as described in Note 1 to the financial statements, the Georgia Southern University Housing Foundation, Inc. financial statements have been included as a separate major fund. Our opinions are not modified with respect to this matter. \r\nOther Matters \r\nRequired Supplementary Information \r\nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages i through vi and the Schedules of Proportionate Share of the Net Pension Liability, Schedules of Contributions to Retirement Systems and the Notes to the Required Supplemental Information on pages 41 through 45 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 and other auditors 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 \r\n \r\n (This page left intentionally blank) \r\n \r\n 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. \r\nSupplementary and Other Information \r\nOur audit was conducted for the purpose of forming opinions on the basic financial statements of Georgia Southern University. The accompanying introductory and supplementary information, 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. \r\nThe accompanying supplementary information (Schedules 6 through 9) 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 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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated March 23, 2017, on our consideration of Georgia Southern University's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Georgia Southern University's internal control over financial reporting and compliance. \r\nRespectfully, \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY \r\nManagement's Discussion and Analysis \r\n \r\nIntroduction \r\n \r\nGeorgia Southern University (Institution) is the state's largest and most comprehensive center of higher education south of Atlanta. With 125 degree programs at the baccalaureate, master's and doctoral levels, the Institution has been designated a Carnegie Doctoral-Research University and provides the classic residential campus experience and online learning options to about 20,500 students from 49 states and 86 nations. Georgia Southern University's nationally accredited academic programs prepare diverse scholars for leadership and service as world citizens. Georgia Southern University is one of 29 institutions of higher education of the University System of Georgia. The Institution boasts 200-plus student organizations, outstanding Division I athletics, and state-of-the art residence halls and campus facilities. Since 1906, the Institution's hallmark has been a culture of engagement that bridges theory with practice, extends the learning environment beyond the classroom, and promotes student growth and life success. Central to the Institution's mission is the faculty's dedication to excellence in teaching and the development of a fertile learning environment exemplified by a free exchange of ideas, high academic expectations, and individual responsibility for academic achievement. Faculty, staff, and students embrace core values expressed through integrity, civility, kindness, collaboration, and a commitment to lifelong learning, wellness, and social responsibility. \r\nStudents Students Faculty (Headcount) (FTE) \r\n \r\nFiscal Year 2016 Fiscal Year 2015 Fiscal Year 2014 \r\n \r\n905 \r\n \r\n20,466 18,779 \r\n \r\n899 \r\n \r\n20,542 18,821 \r\n \r\n881 \r\n \r\n20,516 18,685 \r\n \r\nOverview of the Financial Statements and Financial Analysis \r\n \r\nGeorgia Southern University is pleased to present its financial statements for fiscal year 2016. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Position; the Statement of Revenues, Expenses and Changes in Net Position; and the Statement of Cash Flows. This discussion and analysis of the Institution's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2016 and fiscal year 2015. \r\n \r\nIn fiscal year 2016, Georgia Southern University Housing Foundation, Inc. (Foundation), a blended component unit of the State, has been included as a separate enterprise fund since the Foundation has been determined to be essential to the fair presentation to these departmental statements. Fiscal year 2015 comparative data does not include the Georgia Southern University Housing Foundation, Inc. \r\n \r\nStatement of Net Position \r\n \r\nThe Statement of Net Position is a financial condition snapshot as of June 30, 2016 and includes all assets, deferred outflows of resources, liabilities, and deferred inflows of resources. The differences between current and non-current assets are discussed in the Notes to the Financial Statements. The Statement of Net Position is prepared under the accrual basis of accounting which requires revenue and asset recognition when the service is provided, and expense and liability recognition when goods or services are received despite when cash is actually exchanged. \r\n \r\ni \r\n \r\n From the data presented, readers of the Statement of Net Position are able to determine the assets available to continue the operations of the Institution and how much the Institution owes vendors. The difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources (net position) is one indicator of the Institution's financial health. Increase or decreases in net position provide an indicator of the improvement or decline of the Institution's financial health when considered in conjunction with other non-financial conditions, such as facilities and enrollment. Net Position is divided into three major categories. \r\n \r\nThe first category, net investment in capital assets, provides the Institution's equity in property, plant and equipment owned by the Institution. \r\n \r\nThe next category is restricted, which is divided into two categories, non-expendable and expendable. The corpus of non-expendable, restricted resources is available only for investment purposes. Expendable, restricted resources are available for expenditure by the Institution but 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. \r\n \r\nThe final category is unrestricted. Unrestricted resources are available to the Institution for any lawful purpose. \r\n \r\nStatement of Net Position, Condensed \r\n \r\nInstitution June 30, 2016 June 30, 2015 (1) \r\n \r\nFoundation June 30, 2016 \r\n \r\nEliminations June 30, 2016 \r\n \r\nTotals June 30, 2016 June 30, 2015 (1) \r\n \r\nAssets Current Assets Capital Assets, Net Other Assets \r\n \r\n$ 61,042,490 $ 549,604,319 13,515,296 \r\n \r\n59,529,960 $ 546,081,786 \r\n13,787,940 \r\n \r\n13,790,686 $ 429,942 \r\n232,334,286 \r\n \r\n-6,690,360 -202,153,453 \r\n \r\n$ 68,142,816 $ 550,034,261 43,696,129 \r\n \r\n59,529,960 546,081,786 \r\n13,787,940 \r\n \r\nTotal Assets \r\n \r\n624,162,105 \r\n \r\n619,399,686 \r\n \r\n246,554,914 \r\n \r\n-208,843,813 \r\n \r\n661,873,206 \r\n \r\n619,399,686 \r\n \r\nDeferred Outflows of Resources \r\n \r\n13,982,239 \r\n \r\n12,615,483 \r\n \r\n4,450,038 \r\n \r\n0 \r\n \r\n18,432,277 \r\n \r\n12,615,483 \r\n \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\n \r\n32,270,608 316,800,865 \r\n \r\n31,521,817 310,228,213 \r\n \r\n10,710,437 209,900,121 \r\n \r\n-6,690,360 -202,153,453 \r\n \r\n36,290,685 324,547,533 \r\n \r\n31,521,817 310,228,213 \r\n \r\nTotal Liabilities \r\n \r\n349,071,473 \r\n \r\n341,750,030 \r\n \r\n220,610,558 \r\n \r\n-208,843,813 \r\n \r\n360,838,218 \r\n \r\n341,750,030 \r\n \r\nDeferred Inflows of Resources \r\n \r\n11,809,616 \r\n \r\n26,983,742 \r\n \r\n472,520 \r\n \r\n0 \r\n \r\n12,282,136 \r\n \r\n26,983,742 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Nonexpendable Expendable Bond Covenants/Debt Service Unrestricted (Deficit) \r\n \r\n318,609,377 \r\n2,465,814 6,908,259 \r\n-50,720,195 \r\n \r\nTotal Net Position \r\n \r\n$ 277,263,255 $ \r\n \r\n(1) Does not include the Georgia Southern Housing Foundation \r\n \r\n308,053,863 2,465,814 8,553,930 \r\n-55,792,210 263,281,397 $ \r\n \r\n429,942 \r\n26,474,530 3,017,402 \r\n29,921,874 $ \r\n \r\n0 \r\n \r\n319,039,319 \r\n \r\n308,053,863 \r\n \r\n2,465,814 6,908,259 26,474,530 -47,702,793 \r\n \r\n2,465,814 8,553,930 \r\n-55,792,210 \r\n \r\n0 $ 307,185,129 $ 263,281,397 \r\n \r\nii \r\n \r\n Total assets and deferred outflows of resources for the Institution increased by $6,129,175 which was primarily due to an increase of $3,522,533 in the category of Capital Assets, Net, and $1,366,756 increase in estimated Deferred Loss on Defined Benefit Pension Plan. The balance of the increase is mainly in the current assets and deferred outflows categories. \r\nThe sum of total liabilities and deferred inflows of resources for the Institution decreased for the year by $7,852,683. This decrease is primarily due to an increase in pension liability and decrease in related deferred inflow. The combination of the increase in total assets and deferred outflows of resources and the decrease in total liabilities and deferred inflows of resources yielded an increase for the Institution in net position of $13,981,858. The increase in net position is primarily in the category of Net Investment in Capital Assets, in the amount of $10,555,514. Total net position increased by $53,903,732. The total increase in net position is primarily in the category of Bond Covenants/Debt Service in the amount of $26,474,530 associated with the blending of the Foundation. \r\n \r\nStatement of Revenues, Expenses and Changes in Net Position \r\n \r\nChanges in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the Institution, both operating and non-operating, and the expenses paid by the Institution, operating and non-operating, and any other revenues, expenses, gains and losses received or spent by the Institution. Generally, operating revenues are received for providing goods and services to the various customers and constituencies of the Institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the Institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are non-operating because they are provided by the Legislature to the Institution without the Legislature directly receiving commensurate goods and services for those revenues. \r\n \r\nStatement of Revenues, Expenses and Changes in Net Position, Condensed \r\n \r\nInstitution June 30, 2016 June 30, 2015 (1) \r\n \r\nFoundation June 30, 2016 \r\n \r\nElimination June 30, 2016 \r\n \r\nTotals June 30, 2016 June 30, 2015 (1) \r\n \r\nOperating Revenues Operating Expenses \r\n \r\n$ 225,844,385 $ 338,704,187 \r\n \r\n221,466,308 $ 327,870,789 \r\n \r\n12,551,615 $ 3,517,505 \r\n \r\n-12,397,676 $ -1,592,650 \r\n \r\n225,998,324 $ 340,629,042 \r\n \r\n221,466,308 327,870,789 \r\n \r\nOperating Loss Nonoperating Revenues and Expenses Income Before other Revenues, Expenses, Gains or Losses Other Revenues, Expenses, Gains or Losses Increase in Net Position Net Position at Beginning of Year \r\n \r\n-112,859,802 115,628,756 \r\n2,768,954 11,212,904 13,981,858 263,281,397 \r\n \r\nNet Position at End of Year \r\n \r\n$ 277,263,255 $ \r\n \r\n-106,404,481 108,955,031 \r\n2,550,550 939,153 \r\n3,489,703 259,791,694 263,281,397 $ \r\n \r\n9,034,110 -9,204,210 \r\n \r\n-10,805,026 10,805,026 \r\n \r\n-114,630,718 117,229,572 \r\n \r\n-106,404,481 108,955,031 \r\n \r\n-170,100 0 \r\n-170,100 30,091,974 \r\n29,921,874 $ \r\n \r\n0 0 0 0 \r\n0$ \r\n \r\n2,598,854 11,212,904 13,811,758 293,373,371 \r\n307,185,129 $ \r\n \r\n2,550,550 939,153 \r\n3,489,703 259,791,694 \r\n263,281,397 \r\n \r\n(1) Does not include Georgia Southern Housing Foundation \r\n \r\niii \r\n \r\n The Statement of Revenues, Expenses and Changes in Net Position reflect a positive year, which is represented by an increase in net position at the end of the year. Some highlights of the information presented on this statement are as follows: \r\n \r\nRevenue by Source For the Years Ended June 30, 2016 and June 30, 2015 \r\n \r\nOperating Revenues Tuition and Fees Grants and Contracts Sales and Services Auxiliary Other \r\nTotal Operating Revenues Nonoperating Revenues \r\nState Appropriations Grants and Contracts Gifts Investment Income Other \r\nTotal Nonoperating Revenues Capital Gifts and Grants \r\nState Other Capital Gifts and Grants \r\nTotal Capital Gifts and Grants \r\n \r\nInstitution June 30, 2016 June 30, 2015 (1) \r\n \r\nFoundation June 30, 2016 \r\n \r\nElimination June 30, 2016 \r\n \r\nTotals June 30, 2016 June 30, 2015 (1) \r\n \r\n$ 114,177,862 $ 111,214,653 \r\n \r\n14,321,548 \r\n \r\n17,328,121 \r\n \r\n5,563,121 \r\n \r\n4,736,641 \r\n \r\n89,397,136 \r\n \r\n86,006,395 \r\n \r\n2,384,718 \r\n \r\n2,180,498 $ \r\n \r\n225,844,385 \r\n \r\n221,466,308 \r\n \r\n12,551,615 $ 12,551,615 \r\n \r\n$ -12,397,676 \r\n \r\n114,177,862 $ 14,321,548 5,563,121 89,397,136 2,538,657 \r\n \r\n111,214,653 17,328,121 4,736,641 86,006,395 2,180,498 \r\n \r\n-12,397,676 \r\n \r\n225,998,324 \r\n \r\n221,466,308 \r\n \r\n91,640,673 31,745,661 \r\n4,240,402 210,645 -201,378 \r\n127,636,003 \r\n \r\n85,834,001 31,737,747 \r\n4,216,706 246,650 -264,607 \r\n121,770,497 \r\n \r\n427,113 427,113 \r\n \r\n0 \r\n \r\n91,640,673 \r\n \r\n85,834,001 \r\n \r\n31,745,661 \r\n \r\n31,737,747 \r\n \r\n4,240,402 \r\n \r\n4,216,706 \r\n \r\n637,758 \r\n \r\n246,650 \r\n \r\n-201,378 \r\n \r\n-264,607 \r\n \r\n0 \r\n \r\n128,063,116 \r\n \r\n121,770,497 \r\n \r\n9,959,147 1,253,757 \r\n11,212,904 \r\n \r\n939,153 939,153 \r\n \r\n0 \r\n \r\n0 \r\n \r\n9,959,147 \r\n \r\n939,153 \r\n \r\n1,253,757 \r\n \r\n0 \r\n \r\n0 \r\n \r\n11,212,904 \r\n \r\n939,153 \r\n \r\nTotal Revenues \r\n \r\n$ 364,693,292 $ 344,175,958 $ \r\n \r\n(1) Does not include Georgia Southern Housing Foundation \r\n \r\n12,978,728 $ \r\n \r\n-12,397,676 $ 365,274,344 $ 344,175,958 \r\n \r\nExpenses (By Functional Classification) For the ARS Ended June 30, 2016 and June 30, 2015 \r\n \r\nInstitution June 30, 2016 June 30, 2015 (1) \r\n \r\nFoundation June 30, 2016 \r\n \r\nElimination June 30, 2016 \r\n \r\nTotals June 30, 2016 June 30, 2015 (1) \r\n \r\nOperating Expenses \r\n \r\nInstruction \r\n \r\n$ \r\n \r\nResearch \r\n \r\nPublic Service \r\n \r\nAcademic Support \r\n \r\nStudent Services \r\n \r\nInstitutional Support \r\n \r\nPlant Operations and Maintenance \r\n \r\nScholarships and Fellowships \r\n \r\nAuxiliary Enterprises \r\n \r\n104,292,977 $ 16,085,335 1,869,418 33,769,077 26,375,464 30,802,260 37,409,018 9,361,042 78,739,596 \r\n \r\n100,489,820 16,921,157 1,590,018 31,983,196 24,224,085 $ 34,295,983 33,771,818 9,668,280 74,926,432 \r\n \r\n3,517,505 $ \r\n \r\n$ -1,592,650 \r\n \r\n104,292,977 $ 16,085,335 1,869,418 33,769,077 28,300,319 30,802,260 37,409,018 9,361,042 78,739,596 \r\n \r\n100,489,820 16,921,157 1,590,018 31,983,196 24,224,085 34,295,983 33,771,818 9,668,280 74,926,432 \r\n \r\nTotal Operating Expenses \r\nNonoperating Expenses Interest Expense (Capital Assets) \r\n \r\n338,704,187 12,007,247 \r\n \r\n327,870,789 12,815,466 \r\n \r\n3,517,505 9,631,323 \r\n \r\n-1,592,650 -10,805,026 \r\n \r\n340,629,042 10,833,544 \r\n \r\n327,870,789 12,815,466 \r\n \r\nTotal Expenses \r\n \r\n$ 350,711,434 $ \r\n \r\n(1) Does not include Georgia Southern Housing Foundation \r\n \r\n340,686,255 $ \r\n \r\n13,148,828 $ -12,397,676 $ 351,462,586 $ 340,686,255 \r\n \r\nOperating revenues for the Institution increased by $4,378,077 in fiscal year 2016. Although Tuition and Fees revenue increased by $2,963,209, revenues decreased in the Grants and Contracts category. \r\n \r\niv \r\n \r\n The Auxiliary revenue increase of $3,390,741 is a result of several factors including increased sales of conference services and dining plans as well as changes in health services which resulted in increased revenues. Additionally Intercollegiate Athletic revenue increased due to higher National Collegiate Athletic Association game guarantees in the Football Bowl Subdivision conference. \r\n \r\nNonoperating revenues for the Institution increased by $5,865,506 for the year primarily due to an increase of $5,806,672 in State Appropriations. \r\n \r\nThe compensation and employee benefits category increased by $7,234,170. The increases are primarily in direct student instruction and support services due to an overall 2% salary merit increase and an effective 8.5% TRS employer rate increase. \r\n \r\nStatement of Cash Flows \r\n \r\nThe final statement presented by the Georgia Southern University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the Institution during the year. Cash flow information can be used to evaluate the financial viability of the Institution's ability to meet financial obligations as they mature. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the Institution. The second section reflects cash flows from non-capital financing activities. This section reflects the cash received and spent for non-operating, non-investing, and non-capital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Position. \r\n \r\nCash Flows for the Years Ended June 30, 2016 and 2015, Condensed \r\n \r\nInstitution \r\n \r\nJune 30, 2016 \r\n \r\nJune 30, 2015 (1) \r\n \r\nFoundation June 30, 2016 \r\n \r\nElimination June 30, 2016 \r\n \r\nTotals \r\n \r\nJune 30, 2016 \r\n \r\nJune 30, 2015 (1) \r\n \r\nCash Provided (Used) By: \r\n \r\nOperating Activities \r\n \r\n$ -83,787,998 $ \r\n \r\nNoncapital Financing Activities \r\n \r\n117,167,029 \r\n \r\nCapital and Related Financing Activities \r\n \r\n-40,307,614 \r\n \r\nInvesting Activities \r\n \r\n217,630 \r\n \r\n-83,458,830 $ 121,433,606 -31,808,382 \r\n213,700 \r\n \r\n18,333,010 $ -10,805,026 $ -76,260,014 $ \r\n \r\n-440,178 \r\n \r\n116,726,851 \r\n \r\n-19,498,952 \r\n \r\n10,805,026 \r\n \r\n-49,001,540 \r\n \r\n-1,105,157 \r\n \r\n-887,527 \r\n \r\n-83,458,830 121,433,606 -31,808,382 \r\n213,700 \r\n \r\nNet Change in Cash Cash, Beginning of Year \r\n \r\n-6,710,953 42,889,571 \r\n \r\n6,380,094 36,509,477 \r\n \r\n-2,711,277 38,041,459 \r\n \r\n0 \r\n \r\n-9,422,230 \r\n \r\n0 \r\n \r\n80,931,030 \r\n \r\n6,380,094 36,509,477 \r\n \r\nCash, End of Year \r\n \r\n$ 36,178,618 $ \r\n \r\n(1) Does not include Georgia Southern University Housing Foundation \r\n \r\n42,889,571 $ \r\n \r\n35,330,182 $ \r\n \r\n0 $ 71,508,800 $ \r\n \r\n42,889,571 \r\n \r\nCapital Assets \r\n \r\nThe Institution had several significant capital asset additions for facilities in fiscal year 2016. At the beginning of fiscal year 2016 the new Shooting Sports Education Center was completed in the amount of $5,776,403. Construction of the new Central Warehouse was completed and placed into service in April 2016 in the amount of $6,820,858. The new Georgia Southern Health Services facility was fully funded by Georgia State Financing and Investment Commission (GSFIC) in the amount of $9,959,147. \r\n \r\nGeorgia Southern University also completed various major renovations to Herty Advanced Development Center in Savannah, Georgia in the amount of $2,750,626. In addition, there was a major repair to reroof Paulson Stadium in the amount of $822,748. \r\nv \r\n \r\n Georgia Southern University Housing Foundation, Inc. had capital assets in the amount of $429,942 in the category Land. \r\nFor additional information concerning Capital Assets, see Notes 1, 6, 8, and 13 in the Notes to the Financial Statements. \r\nLong-Term Liabilities \r\nGeorgia Southern University had Long-Term Liabilities of $329,149,806 of which $12,348,941 was reflected as current liability at June 30, 2016. \r\nGeorgia Southern University Housing Foundation, Inc. had Long-Term Liabilities of $216,143,646 of which $6,243,525 was reflected as current liability at June 30, 2016. \r\nFor additional information concerning Long-Term Liabilities, see Note 8 in the Notes to the Financial Statements. \r\nThe Notes to the Financial Statements are an integral part of the basic financial statements and communicate information essential for fair presentation. For example, the notes convey information concerning significant accounting policies used to prepare the financial statements, detailed information on cash and investments, receivables, capital leases, compensated absences, retirement and other postemployment benefits, capital assets and a report of operating expenses by function. \r\nEconomic Outlook \r\nGeorgia Southern University is not aware of any currently known facts, decisions, or conditions that are expected to have a significant effect on the financial position or results of operations during this fiscal year. Georgia Southern University continues to be financially stable as was reported by the 2015 SACS reaffirmation committee. Georgia Southern University anticipates the current fiscal year will be much like last and will maintain a close watch over resources to maintain the Institution's ability to react to unknown internal and external issues. \r\nStudent enrollment continues to remain consistent with previous years, indicating a stable student enrollment. Enrollment management strategies include focusing on retention of current students and strategies to improve student academic success. Additionally, in accordance with the Complete College Georgia initiative which is part of Georgia's Higher Education Completion Plan to make college more accessible to everyone, Georgia Southern University is exploring alternative enrollment and collaborative projects, including programs for the adult population. This initiative will continue until 2020 with the goal of 60 percent of young adults in the state of Georgia holding a certificate or degree. The State of Georgia and Georgia Southern University's expectation is that this initiative and the resulting partnerships will provide economic sustainability to the people of Georgia by providing the educational tools necessary for employment success. \r\nDr. Jaimie L. Hebert, President Georgia Southern University \r\nvi \r\n \r\n BASIC FINANCIAL STATEMENTS - 1 - \r\n \r\n ASSETS \r\nCurrent Assets Cash and Cash Equivalents Short-term Investments Accounts Receivable, Net Receivables - Federal Financial Assistance Receivables - Other Due from Affiliated Organizations Due from Other Funds Interfund Receivables Inventories Prepaid Items \r\nTotal Current Assets \r\nNoncurrent Assets Non-current Cash (Externally Restricted) Investments (Externally Restricted) Due from Other Funds Interfund Receivables Due from USO - Capital Liability Reserve Fund Notes Receivable, Net Capital Assets, Net Other Assets \r\nTotal Noncurrent Assets \r\nTotal Assets \r\nDeferred Outflows of Resources Deferred Loss on Debt Refunding Deferred Loss on Defined Benefit Pension Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Deposits Advances (Including Tuition and Fees) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences Due to Affiliated Organizations Due to Other Funds Interfund Payables Revenue/Mortgage Bonds Payable Notes and Loans Payable \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Lease Purchase Obligations Compensated Absences Due to Other Funds Interfund Payables Net Pension Liability Notes and Loans Payable Revenue/Mortgage Bonds Payable \r\nTotal Noncurrent Liabilities \r\nTotal Liabilities \r\nDeferred Inflows of Resources Deferred Gain on Debt Refunding Deferred Gain on Defined Benefit Pension Plan \r\nTotal Deferred Inflows of Resources \r\n \r\nGEORGIA SOUTHERN UNIVERSITY STATEMENT OF NET POSITION JUNE 30, 2016 \r\n \r\nGeorgia Southern University \r\n \r\nGeorgia Southern University \r\nHousing Foundation \r\n \r\nInterfund Elimination \r\n \r\nEXHIBIT \"A\" Total \r\n \r\n$ \r\n \r\n36,178,618 $ \r\n \r\n2,910,536 4,000,797 \r\n \r\n12,272,338 5,501,637 3,375,746 33,525 \r\n3,565,105 115,521 \r\n \r\n128,904 \r\n$ 6,656,835 \r\n93,614 \r\n \r\n61,042,490 \r\n \r\n13,790,686 \r\n \r\n$ \r\n-33,525 -6,656,835 -6,690,360 \r\n \r\n39,089,154 4,000,797 \r\n12,272,338 5,630,541 3,375,746 0 0 3,565,105 209,135 \r\n68,142,816 \r\n \r\n5,474,704 3,859,400 \r\n1,778,721 2,402,471 549,604,319 \r\n563,119,615 \r\n624,162,105 \r\n \r\n32,419,646 \r\n198,294,053 \r\n429,942 1,620,587 232,764,228 246,554,914 \r\n \r\n-3,859,400 -198,294,053 \r\n-202,153,453 -208,843,813 \r\n \r\n32,419,646 5,474,704 0 0 1,778,721 2,402,471 \r\n550,034,261 1,620,587 \r\n593,730,390 \r\n661,873,206 \r\n \r\n13,982,239 13,982,239 \r\n \r\n4,450,038 4,450,038 \r\n \r\n0 \r\n \r\n4,450,038 \r\n \r\n13,982,239 \r\n \r\n0 \r\n \r\n18,432,277 \r\n \r\n7,391,429 1,016,896 \r\n505,974 1,016,876 \r\n61,298 823,965 7,501,723 \r\n2,043 1,598,255 \r\n595,926 4,964,938 \r\n3,208 \r\n6,656,835 \r\n131,242 \r\n32,270,608 \r\n \r\n4,466,912 \r\n33,525 6,210,000 10,710,437 \r\n \r\n-33,525 -6,656,835 \r\n-6,690,360 \r\n \r\n11,858,341 1,016,896 505,974 1,016,876 61,298 823,965 7,501,723 2,043 1,598,255 595,926 4,964,938 3,208 0 0 6,210,000 131,242 \r\n36,290,685 \r\n \r\n21,079,128 1,882,429 \r\n198,294,053 94,297,247 1,248,008 \r\n316,800,865 \r\n349,071,473 \r\n \r\n3,859,400 \r\n206,040,721 209,900,121 220,610,558 \r\n \r\n-3,859,400 -198,294,053 \r\n-202,153,453 -208,843,813 \r\n \r\n21,079,128 1,882,429 0 0 \r\n94,297,247 1,248,008 \r\n206,040,721 \r\n324,547,533 \r\n360,838,218 \r\n \r\n2,979,359 8,830,257 \r\n \r\n$ \r\n \r\n11,809,616 $ \r\n \r\n- 2 - \r\n \r\n472,520 472,520 $ \r\n \r\n0 \r\n \r\n3,451,879 \r\n \r\n8,830,257 \r\n \r\n0$ \r\n \r\n12,282,136 \r\n \r\n NET POSITION \r\nNet Investment in Capital Assets Restricted for: \r\nNonexpendable Expendable \r\nBond Covenants/Debt Service Unrestricted (Deficit) \r\nTotal Net Position \r\n \r\nGEORGIA SOUTHERN UNIVERSITY STATEMENT OF NET POSITION JUNE 30, 2016 \r\n \r\nGeorgia Southern University \r\n \r\nGeorgia Southern University \r\nHousing Foundation \r\n \r\nInterfund Elimination \r\n \r\nExhibit \"A\" Total \r\n \r\n$ \r\n \r\n318,609,377 $ \r\n \r\n2,465,814 6,908,259 \r\n \r\n-50,720,195 \r\n \r\n$ \r\n \r\n277,263,255 $ \r\n \r\n429,942 \r\n26,474,530 3,017,402 $ \r\n29,921,874 $ \r\n \r\n$ \r\n \r\n319,039,319 \r\n \r\n2,465,814 \r\n \r\n6,908,259 \r\n \r\n26,474,530 \r\n \r\n0 \r\n \r\n-47,702,793 \r\n \r\n0$ \r\n \r\n307,185,129 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 3 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION \r\nYEAR ENDED JUNE 30, 2016 \r\n \r\nEXHIBIT \"B\" \r\n \r\nOPERATING REVENUES \r\nStudent Tuition and Fees (Net) Grants and Contracts \r\nFederal 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 \r\nTotal Operating Revenues \r\nOPERATING EXPENSES \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Other Operating Expenses Payments to Other Funds Depreciation \r\nTotal Operating Expenses \r\nOperating Income (Loss) \r\nNONOPERATING REVENUES (EXPENSES) \r\nState Appropriations Grants and Contracts \r\nFederal Gifts Investment Income (Endowments, \r\nAuxiliary and Other) Interest Expense (Capital Assets) Other Nonoperating Revenues (Expenses) \r\nNet Nonoperating Revenues \r\nIncome Before Other Revenues, Expenses, Gains, or Losses \r\n \r\nGeorgia Southern University \r\n \r\nGeorgia Southern University \r\nHousing Foundation \r\n \r\nInterfund Elimination \r\n \r\n$ \r\n \r\n114,177,862 \r\n \r\n4,525,900 529,836 \r\n9,265,812 5,563,121 \r\n471,817 $ \r\n \r\n31,130,465 11,465,747 20,322,133 \r\n4,467,406 4,540,373 17,380,952 \r\n90,060 1,912,901 \r\n \r\n225,844,385 \r\n \r\n$ \r\n \r\n10,805,026 $ \r\n \r\n-10,805,026 \r\n \r\n1,746,589 12,551,615 \r\n \r\n-1,592,650 -12,397,676 \r\n \r\nTotal \r\n114,177,862 \r\n4,525,900 529,836 \r\n9,265,812 5,563,121 \r\n471,817 \r\n31,130,465 11,465,747 20,322,133 \r\n4,467,406 4,540,373 17,380,952 \r\n90,060 2,066,840 \r\n225,998,324 \r\n \r\n63,992,657 92,938,759 47,998,408 \r\n933,711 3,533,310 15,074,478 12,377,533 73,643,640 \r\n28,211,691 \r\n338,704,187 \r\n-112,859,802 \r\n \r\n203,349 \r\n3,254,230 59,926 \r\n3,517,505 9,034,110 \r\n \r\n-1,532,724 -59,926 \r\n-1,592,650 -10,805,026 \r\n \r\n63,992,657 92,938,759 47,998,408 \r\n1,137,060 3,533,310 15,074,478 12,377,533 72,110,916 3,254,230 \r\n0 28,211,691 \r\n340,629,042 \r\n-114,630,718 \r\n \r\n91,640,673 \r\n31,745,661 4,240,402 \r\n210,645 -12,007,247 \r\n-201,378 \r\n115,628,756 \r\n \r\n$ \r\n \r\n2,768,954 $ \r\n \r\n427,113 -9,631,323 \r\n-9,204,210 \r\n-170,100 $ \r\n \r\n10,805,026 10,805,026 \r\n0$ \r\n \r\n91,640,673 31,745,661 \r\n4,240,402 637,758 \r\n-10,833,544 -201,378 \r\n117,229,572 \r\n2,598,854 \r\n \r\n- 4 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION \r\nYEAR ENDED JUNE 30, 2016 \r\n \r\nEXHIBIT \"B\" \r\n \r\nCapital Grants and Gifts State Other \r\nTotal Other Revenues, Expenses, Gains or Losses \r\nIncrease in Net Position \r\nNet Position - Beginning of Year, Restated \r\n \r\nGeorgia Southern University \r\n \r\nGeorgia Southern University \r\nHousing Foundation \r\n \r\n$ \r\n \r\n9,959,147 \r\n \r\n1,253,757 $ \r\n \r\n0$ \r\n \r\nInterfund Elimination \r\n$ 0 \r\n \r\n11,212,904 \r\n \r\n0 \r\n \r\n0 \r\n \r\n13,981,858 \r\n \r\n-170,100 \r\n \r\n0 \r\n \r\n263,281,397 \r\n \r\n30,091,974 \r\n \r\n0 \r\n \r\nTotal 9,959,147 1,253,757 \r\n11,212,904 13,811,758 293,373,371 \r\n \r\nNet Position - End of Year \r\n \r\n$ \r\n \r\n277,263,255 $ \r\n \r\n29,921,874 $ \r\n \r\n0$ \r\n \r\n307,185,129 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 5 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2016 \r\n \r\nEXHIBIT \"C\" \r\n \r\nCASH FLOWS FROM OPERATING ACTIVITIES Payments from Customers Grants and Contracts (Exchange) Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students Collection of Loans to Students Receipts of Principal and Interest of Capital Leases Other Receipts Other Payments \r\nNet Cash Provided (Used) by Operating Activities \r\nCASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Noncapital Financing Payments \r\nNet Cash Flows Provided (Used) by Noncapital Financing Activities \r\nCASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets Proceeds from Issuance of Long-term Debt Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases \r\nNet Cash Used by Capital and Related Financing Activities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments Purchase of Investments \r\nNet Cash Provided (Used) by Investing Activities \r\nNet Decrease in Cash \r\nCash and Cash Equivalents - Beginning of Year \r\nCash and Cash Equivalents - End of Year \r\n \r\nGeorgia Southern University \r\n \r\nGeorgia Southern University \r\nHousing Foundation \r\n \r\nInterfund Elimination \r\n \r\nTotal \r\n \r\n$ \r\n \r\n211,357,312 \r\n \r\n15,979,324 \r\n \r\n-136,276,582 $ \r\n \r\n-159,836,116 \r\n \r\n-15,074,478 \r\n \r\n-385,205 \r\n \r\n450,864 \r\n \r\n-3,117 \r\n \r\n$ 211,357,312 \r\n \r\n15,979,324 \r\n \r\n-518,835 \r\n \r\n-136,795,417 \r\n \r\n-159,836,116 \r\n \r\n-15,074,478 \r\n \r\n-385,205 \r\n \r\n450,864 \r\n \r\n17,315,770 $ -10,805,026 \r\n \r\n6,510,744 \r\n \r\n1,536,075 \r\n \r\n1,536,075 \r\n \r\n-3,117 \r\n \r\n-83,787,998 \r\n \r\n18,333,010 -10,805,026 -76,260,014 \r\n \r\n91,640,673 -9,554,863 35,165,394 \r\n-84,175 \r\n \r\n-440,178 \r\n \r\n0 \r\n \r\n91,640,673 \r\n \r\n-9,554,863 \r\n \r\n35,165,394 \r\n \r\n-524,353 \r\n \r\n117,167,029 \r\n \r\n-440,178 \r\n \r\n0 116,726,851 \r\n \r\n327,090 -21,131,304 \r\n-7,354,278 -12,149,122 \r\n \r\n28,588,531 -37,790,000 -10,297,483 \r\n \r\n10,805,026 \r\n \r\n327,090 -21,131,304 28,588,531 -45,144,278 -11,641,579 \r\n \r\n-40,307,614 \r\n \r\n-19,498,952 10,805,026 -49,001,540 \r\n \r\n217,630 \r\n217,630 -6,710,953 42,889,571 \r\n \r\n364,737 -1,469,894 -1,105,157 -2,711,277 38,041,459 \r\n \r\n0 \r\n \r\n582,367 \r\n \r\n-1,469,894 \r\n \r\n0 \r\n \r\n-887,527 \r\n \r\n0 \r\n \r\n-9,422,230 \r\n \r\n0 \r\n \r\n80,931,030 \r\n \r\n$ \r\n \r\n36,178,618 $ \r\n \r\n35,330,182 $ \r\n \r\n0 $ 71,508,800 \r\n \r\n- 6 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2016 \r\n \r\nEXHIBIT \"C\" \r\n \r\nRECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH USED BY OPERATING ACTIVITIES: \r\nOperating Income (Loss) Adjustments to Reconcile Operating loss to Net Cash \r\nUsed by Operating Activities Depreciation Operating Expenses Related to Noncash Gifts Receipts of Principal on Capital Leases Change in Assets and Liabilities: Receivables, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Salaries Payable Contracts Payable Retainage Payable Deposits Advances (Including Tuition and Fees) Other Liabilities Funds Held for Others Compensated Absences Due to Affiliated Organizations Net Pension Liability \r\nChange in Deferred Inflows/Outflows of Resources: Deferred Inflows of Resources Deferred Outflows of Resources \r\n \r\nGeorgia Southern University \r\n \r\nGeorgia Southern University \r\nHousing Foundation \r\n \r\nInterfund Elimination \r\n \r\nTotal \r\n \r\n$ \r\n \r\n-112,859,802 $ \r\n \r\n9,034,110 $ -10,805,026 $ -114,630,718 \r\n \r\n28,211,691 976,867 \r\n1,768,699 -482,851 -5,822 65,659 187,424 248,086 517,814 50,906 45,759 -299,310 -131 -3,117 378,950 -9,936 \r\n16,941,357 \r\n \r\n6,368,870 3,006,660 \r\n-7,992 \r\n-210,512 \r\n \r\n28,211,691 976,867 \r\n6,368,870 \r\n1,768,699 -482,851 \r\n3,000,838 65,659 \r\n179,432 248,086 517,814 \r\n50,906 45,759 -299,310 -210,643 -3,117 378,950 -9,936 16,941,357 \r\n \r\n-18,153,485 -1,366,756 \r\n \r\n141,874 \r\n \r\n-18,011,611 -1,366,756 \r\n \r\nNet Cash Used by Operating Activities \r\n \r\n$ \r\n \r\n-83,787,998 $ \r\n \r\n18,333,010 $ -10,805,026 $ -76,260,014 \r\n \r\nNONCASH ACTIVITY Non-capital Financing Activities Accounts Receivable, Net of Allowances Non-capital Gifts (Foundations) Other Non-Capital Financing Activities Noncash items Gift of Capital Assets Loss on Disposal of Capital Assets Accrual of Capital Asset Related Payables Capital Assets Acquired by Incurring Capital Lease Obligations Gain/Loss on Capital Debt Refunded Amortization of Deferred Gain of Capital Debt Refunded Unrealized Loss on Investments \r\n \r\n$ \r\n \r\n156,198 \r\n \r\n$ \r\n \r\n976,867 \r\n \r\n$ \r\n \r\n-10,885,814 \r\n \r\n$ \r\n \r\n-211,880 \r\n \r\n$ \r\n \r\n-826,303 \r\n \r\n$ \r\n \r\n-452,780 \r\n \r\n$ \r\n \r\n3,121,233 \r\n \r\n$ \r\n \r\n141,875 \r\n \r\n$ \r\n \r\n-6,985 \r\n \r\n$ \r\n \r\n156,198 \r\n \r\n$ \r\n \r\n976,867 \r\n \r\n$ -10,885,814 \r\n \r\n$ \r\n \r\n-211,880 \r\n \r\n$ \r\n \r\n-826,303 \r\n \r\n$ \r\n \r\n-452,780 \r\n \r\n$ 3,121,233 \r\n \r\n$ \r\n \r\n141,875 \r\n \r\n$ \r\n \r\n-6,985 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 7 - \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 1. Summary of Significant Accounting Policies \r\nNature of Operations Georgia Southern University (Institution) 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. \r\nReporting Entity As defined by Official Code of Georgia Annotated (O.C.G.A)  20-3-50, the Institution is part of the University System of Georgia (USG), an organizational unit of the State of Georgia (the State) under the governance of the Board of Regents (Board). The Board has constitutional authority to govern, control and manage the USG. The Board is composed of 19 members, one member from each congressional district in the State and five additional members from the state-at-large, appointed by the Governor and confirmed by the Senate. Members of the Board serve a seven year term and members may be reappointed to subsequent terms by a sitting governor. \r\nThe Institution does not have the right to sue/be sued without recourse to the State. The Institution's property is the property of the State and subject to all the limitations and restrictions imposed upon other property of the State by the Constitution and laws of the State. In addition, the Institution is not legally separate from the State. Accordingly, the Institution is included within the State's basic financial statements as part of the primary government as defined in section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards. \r\nThe accompanying basic financial statements are intended to supplement the State's Comprehensive Annual Financial Report (CAFR) by presenting the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State that is attributable to the transactions of the Institution. In addition, the Georgia Southern University Housing Foundation, Inc. (Foundation), a blended component unit of the State, has been included since the Foundation has been determined to be essential to the fair presentation to these department statements. These financial statements do not purport to, and do not, present fairly the financial position of the State as of June 30, 2016, 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. \r\nThe accompanying basic financial statements should be read in conjunction with the State's CAFR. The most recent State of Georgia CAFR can be obtained through the State Accounting Office, 200 Piedmont Avenue, Suite 1604 (West Tower), Atlanta, Georgia 30334 or found at https://sao.georgia.gov/comprehensive-annual-financial-reports. \r\nThe Foundation is an independent nonprofit organization located in Statesboro, Georgia whose purpose is to acquire, construct or improve student housing and other student facilities. The construction projects completed include acquisition, construction and/or renovation of six housing facilities, containing approximately 4,348 beds, as well as other student facilities including expansion of the Recreation Athletic Complex, construction of a new track and a soccer field, a weight room renovation and expansion, a baseball stadium renovation and expansion, and two dining facilities, located on land owned by Georgia Southern University. Separately issued financial statements are available from the Foundation at the following address: Georgia Southern University Housing Foundation, Inc., P.O. Box 8020, Statesboro, GA 30460. \r\n \r\n- 9- \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nBasis of Accounting and 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 Institution's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows. \r\nThe Institution's business-type activities financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. Grants and similar items are recognized as revenues in the fiscal year in which eligibility requirements imposed by the provider have been met. All significant intra-Institution transactions have been eliminated. \r\nNew Accounting Pronouncements For fiscal year 2016, the Institution adopted Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application. This Statement addresses accounting and financial reporting issues related to fair value measurements. \r\nFor fiscal year 2016, the Institution adopted GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That are not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. The objective of this Statement is to improve the usefulness of information about pensions included in the general purpose external financial reports of state and local governments for making decisions and assessing accountability. The adoption of this Statement does not have a significant impact on the Institution's financial statements. \r\nFor fiscal year 2016, the Institution adopted GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The objective of this Statement is to identify--in the context of the current governmental financial reporting environment--the hierarchy of GAAP. The \"GAAP hierarchy\" consists of the sources of accounting principles used to prepare financial statements of state and local governmental entities in conformity with GAAP and the framework for selecting those principles. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. The adoption of this Statement does not have a significant impact on the Institution's financial statements. \r\nFor fiscal year 2016, the Institution adopted GASB Statement No. 79, Certain External Investment Pools and Pool Participants. This Statement addresses accounting and financial reporting for certain external investment pools and pool participants. The adoption of this Statement does not have a significant impact on the Institution's financial statements. \r\nCash 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 Board of Regents Short-Term Investment Pool. \r\n \r\n- 10 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nInvestments 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 Institution 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 Diversified Fund is included as Investments. \r\nAccounts 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. Accounts receivable also includes amounts due from the federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the Institution's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts. \r\nInventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out basis. Resale Inventories for Bookstore and other services are valued at cost using the first-in, first-out basis. Resale Inventories for Food Services are valued at cost using the average cost basis. \r\nNon-current Investments Investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Position. \r\nPrepaid Items Payments made to vendors and state and local government organizations for services that will benefit periods beyond June 30, 2016 are recorded as prepaid items. \r\nCapital Assets Capital assets are recorded at cost at the date of acquisition, or acquisition value (entry price) at the date of donation in the case of gifts. For equipment, the Institution'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 generally are 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. \r\nTo fully understand plant additions in the Institution, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC)  an organization that is external to the Institution. GSFIC issues bonds for and on behalf of the State, pursuant to powers granted to it in the Constitution of the State and the Act creating the GSFIC. These bonds constitute direct and general obligations of the State, to the payment of which the full faith, credit and taxing power of the State are pledged. \r\n \r\n- 11 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nDue From USO - Capital Liability Reserve Fund The Capital Liability Reserve Fund (Fund) was established by the Board of Regents to protect the fiscal integrity of the USG to maintain the strongest possible credit ratings associated with Public Private Venture (PPV) projects and to ensure that the Board of Regents can effectively support its long-term capital lease obligations. The Fund is financed by all USG Universities participating in the PPV program. The Fund serves as a pooled reserve that is managed by the University System Office. The Fund shall only be used to address significant shortfalls and only insofar as a requesting USG University is unable to make the required PPV capital lease payment to the designated cooperative organization. The Fund will continue as long as the USG has rental obligations under the PPV program. At the conclusion of the Institution's participation in the program, funds will be returned to the Institution. The balance included on the Institution's Statement of Net Position represents the Institution's contribution to the Fund. \r\nDeferred Outflows of Resources Deferred outflows of resources consist of the consumption of net assets by the Institution that are applicable to a future reporting period. \r\nDeposits Deposits represent good faith deposits from students to reserve housing assignments in the Institution's residence halls. \r\nAdvances 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. \r\nDeposits Held for Other Organizations Deposits held for other organizations result primarily from the Institution acting as an agent, or fiduciary, for another entity. Deposits held for others consist of scholarships, fellowships, study abroad deposits and other funds held for various governments, companies, clubs or individuals. \r\nCompensated Absences Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Position, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Position. \r\nNoncurrent Liabilities Noncurrent 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. \r\nLong-Term Obligations Outstanding long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are reported as an expense of the current period. Refunding of debt may result in deferred gains or losses and are reported as deferred inflows and outflows of resources. The difference between the reacquisition price and the net carrying amount of the old debt is deferred and amortized as a component of interest expense using the straight-line method. \r\n \r\n- 12 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nDeferred Inflows of Resources Deferred inflows of resources consist of the acquisition of net assets by the Institution that are applicable to a future reporting period. \r\nPensions and Net Pension Liability The Net Pension Liability represents the unfunded pension obligation which is the difference between the total pension obligation as a result of the exchange for employee services for compensation and the fiduciary net position or the fair value of the plan assets as of a given measurement date. \r\nFor the purpose of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position, additions/deductions from fiduciary net position have been determined on the same basis as they are reported by Teachers Retirement System of Georgia and Employees' Retirement System of Georgia. For this purpose, benefit payments (including refunds of employees' contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \r\nNet Position The Institution's net position is classified as follows: \r\nNet Investment in Capital Assets: This represents the Institution's total investment in capital assets, net of accumulated amortization/depreciation and reduced by outstanding debt obligations related to those 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. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction or improvement of capital assets or related debt are included in Net Investment in Capital Assets. If there are significant unspent related debt proceeds or deferred inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources attributable to the unspent amount are not included in Net Investment in Capital Assets. \r\nRestricted  non-expendable includes endowment and similar type funds, in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may be either expended or added to principal. For Institution - controlled, donorrestricted endowments, the by-laws of the Board of Regents of the University of System Georgia permits each individual Institution to use prudent judgment in the spending of current realized and unrealized endowment appreciation. Donor-restricted endowment appreciation is periodically transferred to restricted-expendable accounts for expenditure as specified by the purpose of the endowment. The Institution 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. \r\nRestricted  expendable includes resources in which the Institution is legally or contractually obligated to spend resources in accordance with restrictions by external third parties. \r\n \r\n- 13 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nUnrestricted: 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 Institution, and may be used at the discretion of the Institution to meet current expenses for those purposes, except for unexpended state appropriations (surplus) in the amount of $33,361. Unexpended state appropriations must be refunded to the Office of the State Treasurer. Unrestricted Net Position also includes resources specifically designated by management, such as: \r\n Auxiliary Enterprises Operations  These resources are used for the continued operation of auxiliary enterprise activities, which are substantially self-supporting business operations conducted on campuses that provide services to students, faculty, and staff. \r\n Auxiliary Enterprises Renewals and Replacement (R\u0026R) Reserve  These resources can be used for renewals and replacement of capitalizable assets related to auxiliary services. This R\u0026R reserve can also be used for major renovations and rehabilitations auxiliary projects that do not meet the capitalization threshold. \r\nWhen an expense is incurred that can be paid using either restricted or unrestricted resources, the Institution's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. \r\nSee Note 10, Net Position, for additional information. \r\nIncome Taxes The Institution, as a political subdivision of the State, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. \r\nClassification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Position classify fiscal year activity as operating and non-operating according to the following criteria: \r\n 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. \r\n 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 Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income. \r\n Operating expense includes activities that have the characteristics of exchange transactions. \r\n Non-operating expense includes activities that have the characteristics of non-exchange transactions, such as capital financing costs and costs related to investment activity. \r\n \r\n- 14 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nScholarship Allowances Scholarship allowances are the difference between the stated charge for goods and services provided by the Institution, 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 Institution's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Institution has recorded contra revenue for scholarship allowances. Student tuition and fees and auxiliary revenues reported on the Statement of Revenues, Expenses and Changes in Net Position are net of discounts and allowances of $31,189,060 and $142,245, respectively. \r\nChanges in Financial Accounting and Reporting In fiscal year 2016, Georgia Southern University Housing Foundation, Inc. (Foundation), a blended component unit of the State, has been included as a separate enterprise fund since the Foundation has been determined to be essential to the fair presentation to these departmental statements. This change resulted in an increase in the beginning net position for the enterprise fund of $30,091,974. In addition, beginning cash and cash equivalents in the statement of cash flows was increased $38,041,459. \r\nNote 2. Deposits and Investments \r\nDeposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the Institution's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Institution) 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: \r\n1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia. \r\n2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia. \r\n3. 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. \r\n4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. \r\n5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association. \r\n6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia. \r\n \r\n- 15 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nAt June 30, 2016, the carrying value of deposits was $30,546,575 and the bank balance was $33,137,959. Of the Institution's deposits, $32,887,959 were uninsured. Of these uninsured deposits, $32,887,959 were collateralized with securities held by the financial institution, by its trust department or agent, but not in the Institution's name. \r\n \r\nThe following schedule reconciles cash and cash equivalents to the carrying value of deposits: \r\n \r\nReconciliation of Cash and Cash Equivalents Balances to Carrying Value of Deposits: \r\n \r\nBusiness-type Activities: \r\nStatement of Net Position Cash and Cash Equivalents Non-Current Cash and Cash Equivalents \r\n \r\nInstitution \r\n \r\nFoundation \r\n \r\nTotal \r\n \r\n$ \r\n \r\n36,178,618 $ \r\n \r\n2,910,536 $ 39,089,154 32,419,646 32,419,646 \r\n \r\nTotal Cash and Cash Equivalents \r\n \r\n36,178,618 \r\n \r\n35,330,182 71,508,800 \r\n \r\nLess: Cash on Hand \r\n \r\n-153,000 \r\n \r\n-153,000 \r\n \r\nInvestments with original maturity less than 90 days reported as Cash and Cash Equivalents \r\nInvestment pool reported as Cash and Cash Equivalents Board of Regents Short-Term Fund \r\n \r\n-5,479,043 \r\n \r\n-32,419,646 \r\n \r\n-32,419,646 -5,479,043 \r\n \r\nTotal Carrying Value of Deposits - June 30, 2016 \r\n \r\n$ \r\n \r\n30,546,575 $ \r\n \r\n2,910,536 $ 33,457,111 \r\n \r\nInvestments The Institution 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. \r\n \r\nThe Institution has adopted GASB No. 72, Fair Value Measurements and Application, which requires fair value measurement be classified and disclosed in one of the following three categories (\"Fair Value Hierarchy\"): \r\nLevel 1  Quoted prices are available in active markets for identical investments as of the reporting date. The types of investments which would generally be included in Level 1 include listed equity securities, mutual funds, and money market funds. As required by accounting principles generally accepted in the United States of America, the Foundation, to the intent that it holds such investments, does not adjust the quoted price for these investments, even in situations where the Foundation holds a large position and a sale could reasonably impact the quoted price. \r\nLevel 2  Pricing inputs are observable for the investments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1: inputs include comparable market transactions, pricing of similar instruments, values reported by the administrator, and pricing expectations based on internal modeling. Fair value is determined through the use of models or other valuation methodologies. The types of investments which would generally be included in this category include publicly traded securities with restrictions on disposition, corporate obligations, and U.S. Government and Agency Treasure Inflation Indices. \r\n \r\n- 16 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nLevel 3  Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investments. The types of investments which would generally be included in this category include debt and equity securities issued by private judgement or estimation. Inputs include recent transactions, earning forecasts, market multiples, and future cash flows. \r\n \r\nThe following table summarizes the valuation of the Institution's investments measured at fair value on a recurring basis and at net asset value as of June 30, 2016. \r\n \r\nInvestment by fair value level Money Market Mutual Fund Repurchase Agreements Other \r\n \r\nFair Value \r\n \r\nLevel 1 \r\n \r\nLevel 2 \r\n \r\nLevel 3 \r\n \r\n$ 25,087,788 $ 25,087,788 \r\n \r\n7,331,847 \r\n \r\n$ 7,331,847 \r\n \r\n11 \r\n \r\n$ \r\n \r\n11 \r\n \r\nTotal Investments by fair value level \r\nInvestment Pools Board of Regents Short-Term Fund Balanced Income Fund Diversified Fund Diversified Fund for Foundations \r\n \r\n32,419,646 $ 25,087,788 $ 7,331,847 $ \r\n \r\n11 \r\n \r\n5,479,043 1,483,036 2,517,761 5,474,704 \r\n \r\nTotal Investments measured at fair value \r\n \r\n$ 47,374,190 \r\n \r\nInvestments classified in Level 1 are value using prices quoted in active markets for those securities. Investments classified in Level 2 are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. \r\nThe Board of Regents Investment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents Investment Pool is voluntary. The Board of Regents Investment Pool is not rated. Additional information on the Board of Regents Investment Pool is disclosed in the audited Financial Statements of the Board of Regents of the University System of Georgia  System Office (oversight unit). This audit can be obtained from the Georgia Department of Audits and Accounts  Education Audit Division or on their web site at http://www.audits.ga.gov. \r\nThe USG's policy for managing interest rate risk is contained in the investment policy guidelines for the various pooled funds: \r\n1. In the Short-Term Fund, the average maturity of the fixed income portfolio shall not exceed three years. \r\n2. In all the other pooled funds, the average maturity of the fixed income portfolio shall not exceed ten years. \r\n3. Fixed income investments, except in the Diversified Fund, shall be limited to the U.S. government agency and corporate debt instruments that meet investment eligibility under Georgia Code 50-17-63. \r\n \r\n- 17 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\n4. 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 investment manager and approval by the Board of Regents. \r\n \r\nInterest 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 Institution does not have a formal policy for managing interest rate risk. \r\n \r\nThe investments subject to interest rate risk are reflected below: \r\n \r\nInvestment type Debt Securities Money Market Mutual Fund Repurchase Agreements \r\n \r\nFair Value \r\n \r\nLess Than 3 Months \r\n \r\n$ 25,087,788 $ 25,087,788 \r\n \r\n7,331,847 \r\n \r\n7,331,847 \r\n \r\n32,419,635 $ 32,419,635 \r\n \r\nOther Investments \r\n \r\nOther \r\n \r\n11 \r\n \r\nInvestment Pools Board of Regents Short-Term Fund Balanced Income Fund Diversified Fund Diversified Fund for Foundations \r\n \r\n5,479,043 1,483,036 2,517,761 5,474,704 \r\n \r\nTotal Investments measured at fair value \r\n \r\n$ 47,374,190 \r\n \r\nThe Effective Duration of the Short-Term Fund is 0.47 years. Of the Institution's total investment of $5,479,043 in the Short-Term Fund, $5,479,043 is invested in debt securities. \r\nThe Effective Duration of the Balanced Income Fund is 4.78 years. Of the Institution's total investment of $1,483,036 in the Balanced Income Fund, $993,635 is invested in debt securities. \r\nThe Effective Duration of the Diversified Fund is 4.64 years. Of the Institution's total investment of $5,474,704 in the Diversified Fund, $1,916,146 is invested in debt securities. \r\nThe Effective Duration of the Diversified Fund for Foundations is 3.98 years. Of the Institution's total investment of $2,517,761 in the Diversified Fund, $503,552 is invested in debt securities. \r\nCustodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to the transaction, the Institution will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The Institution does not have a formal policy for managing custodial credit risk for investments. \r\nAt June 30, 2016, $32,419,635 were uninsured and held by the investment's counterparty's trust department or agent, but not in the Institution's name. \r\n- 18 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nCredit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Institution does not have a formal policy for managing credit quality risk. \r\n \r\nThe investments subject to credit quality risk are reflected on the following page: \r\n \r\nInvestment type Debt Securities Money Market Mutual Fund Repurchase Agreements \r\n \r\nFair Value \r\n \r\nUnrated \r\n \r\n$ 25,087,788 $ 25,087,788 \r\n \r\n7,331,847 \r\n \r\n7,331,847 \r\n \r\n$ 32,419,635 $ 32,419,635 \r\nConcentration 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 Institution does not have a formal policy for managing concentration of credit risk. Approximately 53% and 15.5% of investments are invested in Money Market Mutual Funds and Repurchase Agreements, respectively. The Money Market Mutual Funds and Repurchase Agreements were collateralized with investments in securities of U.S. agencies not explicitly guaranteed by the U.S. government. \r\n \r\nNote 3. Accounts Receivable and Interfund Balances \r\n \r\n3a. Accounts Receivable Accounts receivable consisted of the following at June 30, 2016: \r\n \r\nInstitution Foundation \r\n \r\nTotal \r\n \r\nStudent Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal Financial Assistance Georgia Student Finance Commission Georgia State Financing and Investment Commission Due from Affiliated Organizations Due From USO - Capital and Liability Reserve Fund Other \r\n \r\n$ 378,144 1,718,627 \r\n12,272,338 3,090,742 448,288 3,375,746 1,778,721 225,586 $ \r\n \r\n$ 378,144 \r\n \r\n1,718,627 \r\n \r\n12,272,338 \r\n \r\n3,090,742 \r\n \r\n448,288 \r\n \r\n3,375,746 \r\n \r\n1,778,721 \r\n \r\n128,904 \r\n \r\n354,490 \r\n \r\nLess Allowance for Doubtful Accounts \r\n \r\n23,288,192 359,750 \r\n \r\n128,904 23,417,096 359,750 \r\n \r\nNet Accounts Receivable \r\n \r\n$ 22,928,442 $ 128,904 $ 23,057,346 \r\n \r\n- 19 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\n3b. Interfund Balances The following is a summary of the receivables and payables between and among the Institution and the blended component unit at June 30, 2016: \r\n \r\nGeorgia Southern University Georgia Southern Housing Foundation - Interfund Payables - Current \r\n \r\nDue From $ \r\n \r\nDue To 6,656,835 \r\n \r\nGeorgia Southern Housing Foundation - Interfund Payables - Noncurrent \r\n \r\n198,294,053 \r\n \r\n$ \r\n \r\n204,950,888 \r\n \r\nGeorgia Southern Housing Foundation - Due From Other Funds - Current \r\n \r\n$ \r\n \r\n33,525 \r\n \r\nGeorgia Southern Housing Foundation - Due From Other Funds - Noncurrent $ \r\n \r\n3,859,400 3,892,925 \r\n \r\nGeorgia Southern University Housing Foundation Georgia Southern University - Interfund Receivables - Current \r\n \r\n$ \r\n \r\n6,656,835 \r\n \r\nGeorgia Southern University - Interfund Receivables - Noncurrent \r\n \r\n198,294,053 \r\n \r\n$ \r\n \r\n204,950,888 \r\n \r\nGeorgia Southern University - Due To Other Funds - Current \r\n \r\n$ \r\n \r\n33,525 \r\n \r\nGeorgia Southern University - Due To Other Funds - Noncurrent \r\n \r\n3,859,400 \r\n \r\n$ \r\n \r\n3,892,925 \r\n \r\nActivities between the Institution and the blended component unit that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are presented as Interfund Receivables and Interfund Payables. All other outstanding balances between the Institution and blended component unit, which are primarily related to services provided or used, are presented as Due to/from Other Funds. \r\n \r\nNote 4. Inventories \r\n \r\nInventories consisted of the following at June 30, 2016: \r\n \r\nInstitution \r\n \r\nFoundation \r\n \r\nTotal \r\n \r\nConsumable Supplies Merchandise for Resale \r\n \r\n$ \r\n \r\n85,174 $ \r\n \r\n3,479,931 \r\n \r\n0$ \r\n \r\n85,174 \r\n \r\n3,479,931 \r\n \r\nTotal \r\n \r\n$ \r\n \r\nNote 5. Notes/Loans Receivable  The Institution \r\n \r\n3,565,105 $ \r\n \r\n0 $ 3,565,105 \r\n \r\nThe Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2016. 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 Institution for amounts cancelled under these provisions. As the Institution 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 Institution 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, 2016, the Institution did not have an allowance for uncollectible loans. \r\n- 20 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 6. Capital Assets  The Institution \r\n \r\nFollowing are the changes in capital assets for the year ended June 30, 2016: \r\n \r\nBeginning Balance July 1, 2015 \r\n \r\nCapital Leases Recategorization \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2016 (1) \r\n \r\nCapital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress \r\n \r\n$ 18,875,157 $ 490,880 \r\n6,182,558 \r\n \r\n12,024,271 $ \r\n \r\n$ 504,720 13,273,808 $ 16,823,515 \r\n \r\n30,899,428 995,600 \r\n2,632,851 \r\n \r\nTotal Capital Assets, Not Being Depreciated \r\n \r\n25,548,595 \r\n \r\n12,024,271 13,778,528 16,823,515 \r\n \r\n34,527,879 \r\n \r\nCapital Assets, Being Depreciated/Amortized Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections \r\n \r\n21,168,417 405,920,247 \r\n12,764,759 48,279,805 270,727,582 50,139,498 \r\n0 \r\n \r\n256,917,884 26,455,572 \r\n \r\n988,744 -269,930,899 \r\n \r\n5,550,783 424,047 \r\n2,546,189 14,500 \r\n \r\n2,112,508 1,220,730 \r\n28,139 \r\n \r\n21,168,417 689,293,703 \r\n12,764,759 52,706,824 \r\n0 52,657,548 \r\n14,500 \r\n \r\nTotal Assets Being Depreciated/Amortized \r\n \r\n809,000,308 \r\n \r\n-12,024,271 34,991,091 \r\n \r\n3,361,377 \r\n \r\n828,605,751 \r\n \r\nLess: Accumulated Depreciation/Amortization Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collecctions \r\n \r\n16,326,701 133,820,272 \r\n2,450,369 32,512,436 62,860,789 40,496,550 \r\n0 \r\n \r\n68,512,970 \r\n308,013 -68,820,983 \r\n \r\n188,942 12,484,211 \r\n456,389 6,208,977 7,038,961 1,833,879 \r\n332 \r\n \r\n2,042,591 1,078,767 \r\n28,139 \r\n \r\n16,515,643 214,817,453 \r\n2,906,758 36,986,835 \r\n0 42,302,290 \r\n332 \r\n \r\nTotal Accumulated Depreciation/Amortization \r\n \r\n288,467,117 \r\n \r\n0 28,211,691 \r\n \r\n3,149,497 \r\n \r\n313,529,311 \r\n \r\nTotal Capital Assets, Being Depreciated/Amortized 520,533,191 \r\n \r\nCapital Assets, Net \r\n \r\n$ 546,081,786 $ \r\n \r\n-12,024,271 \r\n \r\n6,779,400 \r\n \r\n211,880 \r\n \r\n0 $ 20,557,928 $ 17,035,395 $ \r\n \r\n515,076,440 549,604,319 \r\n \r\n(1) Land in the amount of $429,942 for the Georgia Southern University Housing Foundation, Inc. is not included in the above balances. \r\nFor projects managed by GSFIC, GSFIC retains construction-in-progress on its books throughout the construction period and transfers the entire project to the Institution when complete. For projects managed by the Institution, the Institution retains construction-in-progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2016, GSFIC transferred capital additions valued at $9,959,147 to Georgia Southern University. In addition, at June 30, 2016, GSFIC had construction in progress of approximately $3,358,834 for incomplete projects for the Institution. \r\n \r\n- 21 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 7. Advances (Including Tuition and Fees)  The Institution Advances (Including Tuitions and Fees) consisted of the following at June 30, 2016: \r\n \r\nPrepaid Tuition and Fees Other Advances \r\n \r\n$ \r\n \r\n5,994,695 \r\n \r\n1,507,028 \r\n \r\nTotal Advances \r\n \r\n$ \r\n \r\n7,501,723 \r\n \r\nNote 8. Long-Term Liabilities Long-Term liability activity for the year ended June 30, 2016 was as follows: \r\n \r\nBeginning Balance July 1, 2015 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2016 \r\n \r\nCurrent Portion \r\n \r\nGeorgia Southern University \r\nLease Purchase Obligations Compensated Absences Interfund Payables Net Pension Liability Notes and Loans Payable \r\nTotal Long-Term Liabilities Georgia Southern University \r\nGeorgia Southern University Housing Foundation \r\nDue to Other Funds Revenue Bonds Payable Bond Discount Bond Premium \r\n \r\n$ \r\n \r\n22,083,371 $ \r\n \r\n452,780 $ \r\n \r\n6,468,416 \r\n \r\n5,411,972 \r\n \r\n214,440,993 \r\n \r\n77,355,890 \r\n \r\n16,941,357 \r\n \r\n1,503,559 \r\n \r\n861,097 $ 21,675,054 $ \r\n \r\n5,033,021 \r\n \r\n6,847,367 \r\n \r\n9,490,105 204,950,888 \r\n \r\n94,297,247 \r\n \r\n124,309 \r\n \r\n1,379,250 \r\n \r\n595,926 4,964,938 6,656,835 \r\n131,242 \r\n \r\n$ 321,852,229 $ 22,806,109 $ 15,508,532 $ 329,149,806 $ 12,348,941 \r\n \r\n$ \r\n \r\n4,543,615 \r\n \r\n$ \r\n \r\n650,690 $ \r\n \r\n3,892,925 $ \r\n \r\n216,245,000 $ 26,270,000 \r\n \r\n37,790,000 204,725,000 \r\n \r\n-245,448 \r\n \r\n-98,866 \r\n \r\n-13,964 \r\n \r\n-330,350 \r\n \r\n6,429,985 \r\n \r\n2,417,397 \r\n \r\n991,311 \r\n \r\n7,856,071 \r\n \r\n33,525 6,210,000 \r\n \r\nTotal Long-Term Liabilities Georgia Southern Housing Foundation $ \r\n \r\n226,973,152 $ \r\n \r\n28,588,531 $ \r\n \r\n39,418,037 $ 216,143,646 $ \r\n \r\n6,243,525 \r\n \r\n- 22 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNotes and Loans Payable  The Institution Included in Long-Term liabilities is a $3,000,000 note payable that was originally payable to Georgia Education Authority (University), (GEA(U)). In July 2007, GEA(U) met and resolved to no longer conduct business as a state authority and dispose of all its assets and liabilities. As a result of that decision, a Note Receivable that was payable from Georgia Southern University was transferred by Resolution from GEA(U) to the University System Office (USO) of the University System of Georgia. Georgia Southern University continues to render payments according to the original amortization schedule to the USO. The note carries an interest rate of 5.50% and is due semi-annually through the year 2025. The outstanding balance at June 30, 2016 is $1,379,250. Annual maturities are as follows: \r\n \r\nYear Ending June 30: \r\n2017 2018 2019 2020 2021 2022 - 2025 \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nTotal Payments \r\n \r\nCurrent Liabilities \r\n \r\nLong-Term Liabilities \r\n \r\n$ 131,242 $ 138,559 146,284 154,441 163,052 645,672 \r\n \r\n74,078 $ 66,761 59,036 50,879 42,268 72,948 \r\n \r\n205,320 $ 205,320 205,320 205,320 205,320 718,620 \r\n \r\n131,242 $ \r\n \r\n138,559 146,284 154,441 163,052 645,672 \r\n \r\n$ 1,379,250 $ 365,970 $ \r\n \r\n1,745,220 $ 131,242 $ 1,248,008 \r\n \r\n- 23 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\nBond Obligations  Georgia Southern Housing Foundation Bonds payable as of June 30, 2016 consisted of the following: \r\nGSUHF1 Student Housing Refunding Revenue Bonds, Series 2012; issued November 29, 2012 in the original amount of $27,590,000; consisting of Serial Bonds, maturing annually through 2028, with interest rates varying from 2.00% to 5.00% over the bond term \r\nGSUHF2 Refunding Revenue Bonds, Series 2013; dated March 14, 2013 in the original amount of $27,800,000; consisting of $23,970,000 Serial Bonds, maturing annually through 2028, and $3,830,000 Term Bonds, due August 1, 2030, with ineterest rates varying from 2.00% to 5.00% over the obligation term \r\nGSUHF3 Student Housing Lease Revenue Bonds, Series 2005A (tax-exempt) and 2005B (non-exempt); issued March 9, 2005 in the original amount of $40,540,000; consisting of $13,235,000 Serial 2005A Bonds, maturing annually through 2021 $9,800,000 Term I 2005A Bonds, due August 1, 2026, $7,135,000 Term II 2005A Bonds, due August 1, 2029, $5,360,000 Term III 2005A Bonds, due August 1, 2031, and $5,010,000 Serial 2005B Bonds, matured annually through 2012, with interest rates varying from 3.50% to 5.25% over the obligation term \r\nRefunding Revenue Bonds, Series 2015; issued November 17, 2015 in the original amount of $26,270,000; maturing annually through 2030, with interest rates varying from 3.00% to 5.00% over the obligation term \r\nGSUHF4 Student Housing Lease Revenue Bonds, Series 2008; issued February 28, 2008 in the original amount of $69,000,000; consisting of $69,000,000 Serial Bonds, maturing annually through 2039, with interest rates varying from 3.00% to 5.00% over the obligation term \r\nGSUHF5 Student Housing Lease Revenue Bonds, Series 2011; issued May 19, 2011 in the original amount of $42,770,000; consisting of $42,779,000 Serial Bonds, maturing annually through 2041, with interest rates varying from 2.00% to 5.125% over the obligation term \r\nGSUHF6 Student Dining Revenue Bonds, Series 2012; issued August 22, 2012 in the original amount of $27,280,000; consisting of $10,270,000 Serial Bonds, maturing annually through 2028, $3,870,000 Term I Bonds, due July 1, 2032, $5,835,000 Term II Bonds, due July 1, 2037 and $7,305,000 Term Bonds, due July 1, 2042, with interest rates varying from 2.00% to 5.00% over the obligation term \r\nSubtotal \r\nPlus: Unamortized bond premium \r\nLess: Unamortized bond discount \r\nTotal bond obligations \r\n \r\nEXHIBIT \"D\" \r\n \r\n$ \r\n \r\n24,150,000 \r\n \r\n23,965,000 \r\n \r\n26,270,000 \r\n62,980,000 \r\n41,140,000 \r\n26,220,000 204,725,000 \r\n7,856,071 -330,350 \r\n$ 212,250,721 \r\n \r\n- 24 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\n$27,590,000 Student Housing Refunding Revenue Bonds, Series 2012 On October 1, 2002 the Development Authority of Bulloch County issued $38,180,000 of Student Housing Lease Revenue Bonds, Series 2002 on behalf of GSUHF1 which were used for the construction of student housing facilities. During the fiscal year ended June 30, 2013, the Development Authority of Bulloch County issued $27,590,000 of Student Housing Refunding Revenue Bonds, Series 2012, on behalf of GSUHF1 which were used to retire the Series 2002 bonds. Principal payments on the refunding bonds are due annually on August 1, commencing August 1, 2013 with interest payments due semi-annually on February 1 and August 1, commencing February 1, 2013, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Debt Service Reserve Fund and the Replacement Fund, both created pursuant to the provisions of the indenture. \r\n$27,800,000 Refunding Revenue Bonds, Series 2013 On May 3, 2004 the Development Authority of Bulloch County issued $35,900,000 of Student Housing Lease Revenue Bonds, Series 2004 on behalf of GSUHF2 which were used for the construction of student housing facilities, an athletic training facility, the J I Clements Baseball Stadium, and a soccer and track stadium. On March 14, 2013, the Development Authority of Bulloch County issued $27,800,000 of Refunding Revenue Bonds, Series 2013, on behalf of GSUHF2 which were used to defease the Series 2004 bonds, which were paid in full on August 1, 2014. Principal payments are due annually on August 1, commencing August 1, 2013, with interest payments due semi-annually on February 1 and August 1, commencing August 1, 2013, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Debt Service Reserve Fund and the Replacement Fund, both created pursuant to the provisions of the indenture. \r\n$40,540,000 Student Housing Lease Revenue Bonds, Series 2005A and 2005B On March 9, 2005, the Development Authority of Bulloch County issued $40,540,000 of Student Housing Lease Revenue Bonds, Series 2005A (tax-exempt) and Series 2005B (nonexempt), on behalf of GSUHF3 which were used for the construction of student recreation facilities. Principal payments are due annually on August 1, commencing August 1, 2008 with interest payments due semi-annually on February 1 and August 1, commencing August 1, 2005, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Debt Service Reserve Fund and the Replacement Fund, both created pursuant to the provisions of the indenture. The Series 2005A have been fully repaid as of August 1, 2012. \r\nOn November 17, 2015, the Development Authority of Bulloch County issued $26,270,000 Refunding Revenue Bonds. The proceeds of those bonds and funds available in the debt service reserve account were used to retire the Series 2005 bonds totaling $31,395,000, which were called. \r\n$26,270,000 Refunding Revenue Bonds Pursuant to the refunding of the 2005 Series bonds noted above, the Development Authority of Bulloch County issued $26,270,000 of Refunding Revenue Bonds, Series 2015, on behalf of GSUHF3, which were used to retire the Series 2005 bonds. Principal payments are due annually on August 1, commencing August 1, 2016, with interest payments due semi-annually on February 1 and August 1, commencing February 1, 2016, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Replacement Fund, created pursuant to the provisions of the indenture. \r\n- 25 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\n$69,000,000 Student Housing Lease Revenue Bonds, Series 2008 On February 28, 2008, the Development Authority of Bulloch County issued $69,000,000 of Student Housing Lease Revenue Bonds, Series 2008, on behalf of GSUHF4 which were used for the acquisition of 472 beds of student housing and the construction of four new buildings to house 1,000 new beds of student housing. The project also included the design, development, and construction of approximately 8,700 square feet of retail space. Principal payments are due annually on July 1, commencing July 1, 2010 with interest payments due semi-annually on January 1 and July 1, commencing July 1, 2008, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Debt Service Reserve Fund and the Replacement Fund, both created pursuant to the provisions of the indenture. \r\n$42,770,000 Student Housing Lease Revenue Bonds, Series 2011 On May 19, 2011 the Development Authority of Bulloch County issued $42,770,000 of Student Housing Lease Revenue Bonds, Series 2011, on behalf of GSUHF5 which were used for the acquisition of 276 units and 984 beds of student housing and amenities, including a swimming pool and surface parking. Principal payments are due annually on July 1, commencing July 1, 2014 with interest payments due semi-annually on January 1 and July 1, commencing July 1, 2011, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Debt Service Reserve Fund and the Replacement Fund, both created pursuant to the provisions of the indenture. \r\n \r\n$27,280,000 Student Dining Revenue Bonds, Series 2012 On August 16, 2012 the Development Authority of Bulloch County issued $27,280,000 of Student Dining Revenue, Series 2012, on behalf of GSUHF6 which were used for the construction of replacements for the dining facilities currently known as \"Dining Commons\" and \"Lakeside Dining Commons.\" Principal payments are due annually on July 1, commencing July 1, 2014 with interest payments due semi-annually on January 1 and July 1, commencing January 1, 2013, in the amounts so as to enable the trustee, Branch Banking and Trust to pay, on or before the dates due, the debt service on the bonds and any amounts required to be deposited to the Debt Service Reserve Fund and the Replacement Fund, both created pursuant to the provisions of the indenture. \r\n \r\nMaturities of Debt Approximate maturities of the bonds are as follows: \r\n \r\nJune 30: \r\n2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 2036 2037 - 2041 2042 - 2043 \r\nTotal \r\n \r\nSeries 2012 GSUHF1 \r\n \r\nSeries 2013 GSUHF2 \r\n \r\nSeries 2015 GSUHF3 \r\n \r\nSeries 2008 GSUHF4 \r\n \r\nSeries 2011 GSUHF5 \r\n \r\nSeries 2012 GSUHF6 \r\n \r\nTotal \r\n \r\n$ 1,260,000 $ 1,295,000 1,360,000 1,425,000 1,495,000 8,665,000 8,650,000 \r\n \r\n1,295,000 $ 1,325,000 1,375,000 1,415,000 1,445,000 7,880,000 9,230,000 \r\n \r\n915,000 $ 1,340,000 1,395,000 1,450,000 1,520,000 8,755,000 10,895,000 \r\n \r\n1,315,000 $ 1,485,000 1,570,000 1,645,000 1,730,000 10,045,000 12,775,000 16,400,000 16,015,000 \r\n \r\n870,000 $ 905,000 935,000 965,000 1,000,000 5,790,000 7,195,000 9,125,000 11,655,000 2,700,000 \r\n \r\n555,000 $ 570,000 595,000 615,000 635,000 3,665,000 4,440,000 5,335,000 6,715,000 3,095,000 \r\n \r\n6,210,000 6,920,000 7,230,000 7,515,000 7,825,000 44,800,000 53,185,000 30,860,000 34,385,000 5,795,000 \r\n \r\n$ 24,150,000 $ 23,965,000 $ 26,270,000 $ 62,980,000 $ 41,140,000 $ 26,220,000 $ 204,725,000 \r\n \r\n- 26 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 9. Service Concession Arrangements  The Institution For the year ended June 30, 2016, the Institution did not have any service concession arrangements. Note 10. Net Position Net Position is reported in the following three categories: Net Investment in Capital Assets, Restricted Non-Expendable, Restricted-Expendable, and Unrestricted. The amounts within each category at June 30, 2016 were as follows: \r\n \r\nNet Position Net Investments in Capital Assets \r\n \r\nInstitution \r\n \r\nFoundation \r\n \r\nTotal \r\n \r\n$ 318,609,377 $ \r\n \r\n429,942 $ 319,039,319 \r\n \r\nRestricted for Nonexpendable Permanent Endowment \r\n \r\n2,465,814 \r\n \r\n2,465,814 \r\n \r\nExpendable Bond Covenants/Debt Service Organized Activities Federal Loans Institutional Loans \r\n \r\n4,145,130 2,707,936 \r\n55,193 \r\n \r\n26,474,530 \r\n \r\n26,474,530 4,145,130 2,707,936 55,193 \r\n \r\nTotal Restricted \r\n \r\n9,374,073 \r\n \r\n26,474,530 \r\n \r\n35,848,603 \r\n \r\nUnrestricted Auxiliary Operations R \u0026 R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted USO Reserve Fund \r\n \r\n14,041,544 13,026,635 18,091,563 \r\n50,000 -97,708,658 \r\n1,778,721 \r\n \r\n3,017,402 \r\n \r\n14,041,544 13,026,635 18,091,563 \r\n50,000 -94,691,256 \r\n1,778,721 \r\n \r\nTotal Unrestricted \r\n \r\n-50,720,195 \r\n \r\n3,017,402 \r\n \r\n-47,702,793 \r\n \r\nTotal Net Position \r\n \r\n$ 277,263,255 $ \r\n \r\n29,921,874 $ 307,185,129 \r\n \r\n- 27 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 11. Endowments  The Institution \r\nDonor Restricted Endowments: Investments of the Institution's endowment funds are pooled, unless required to be separately invested by the donor. For Institution controlled, donor-restricted endowments, where the donor has not provided specific instructions, the Board of Regents permits Georgia Southern University to develop policies for authorizing and spending realized and unrealized endowment income and appreciation as they determine to be prudent. Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Endowment net income of $60,159 and net appreciation of ($5,874) are reflected as restricted expendable change in net position of $54,285. \r\nThe Institution uses a conservative approach for endowment management by using a hybrid combination of the total return concept for income and gains/losses, and the classical trust method that protects the corpus of the endowments. Annual payouts from the Institution's endowment funds are based on a spending policy which limits annual endowed scholarship spending as 4% of the 3 year moving average of the endowment fair market value. To the extent that the total return for the current year exceeds payout, the excess is added to restricted expendable net position. If total payouts exceed total return, prior years' net appreciation is reduced. \r\nNote 12. Significant Commitments  The Institution \r\nSee Note 10 for amounts reserved for outstanding encumbrances at June 30, 2016. In addition to these encumbrances, the Institution had other significant unearned, outstanding, construction or renovation contracts executed in the amount of $9,109,183 as of June 30, 2016. This amount is not reflected in the accompanying basic financial statements. \r\nNote 13. Lease Obligations  The Institution \r\nThe Institution 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. \r\n \r\n- 28 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nCapital Leases Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2017 and 2043. Below is a schedule of capital lease activity. \r\n \r\nDescription \r\n \r\nCAPITAL LEASE SCHEDULE \r\n \r\nLessor \r\n \r\nOriginal Principal \r\n \r\nLease Term \r\n \r\nBegin \r\n \r\nOutstanding Principal Balance End at June 30, 2016 \r\n \r\nPPV3901001 - Southern Courtyard PPV3901002 - Southern Pines PPV3902000 - Eagle Village PPV3903001 - J.I. Clements Baseball Stadium PPV3903002 - Athletic Training Center (Ironworks) PPV3903003 - Soccer \u0026 Track Stadium PPV3904001 - Recreation Activity Center (RAC) PPV3905000 - Centennial Place PPV3906000 - Campus Courtyard (University Villas) PPV390700 - Freedom's Landing PPV3908000 - Dining Commons Lakeside PPV3909000 - Dining Commons (Landrum) PPV3910000 - Football Stadium Expansion PPV3911000 - Football Operations Center Equipment \r\n \r\nGeorgia Southern Housing Foundation $ 18,296,060 \r\n \r\n27 years 9/2003 9/2030 $ \r\n \r\nGeorgia Southern Housing Foundation 24,371,991 \r\n \r\n27 years 9/2003 9/2030 \r\n \r\nGeorgia Southern Housing Foundation 30,179,998 \r\n \r\n25 years 8/2005 7/2030 \r\n \r\nGeorgia Southern Housing Foundation \r\n \r\n2,230,350 \r\n \r\n24 years 8/2005 7/2029 \r\n \r\nGeorgia Southern Housing Foundation \r\n \r\n694,056 \r\n \r\n24 years 8/2005 7/2029 \r\n \r\nGeorgia Southern Housing Foundation \r\n \r\n1,677,441 \r\n \r\n24 years 8/2005 7/2029 \r\n \r\nGeorgia Southern Housing Foundation 28,884,853 \r\n \r\n15 years 11/2015 6/2030 \r\n \r\nGeorgia Southern Housing Foundation 56,096,073 \r\n \r\n30 years 8/2009 7/2039 \r\n \r\nGeorgia Southern Housing Foundation 13,360,301 \r\n \r\n30 years 8/2008 7/2038 \r\n \r\nGeorgia Southern Housing Foundation 34,599,940 \r\n \r\n29 years 7/2012 6/2041 \r\n \r\nGeorgia Southern Housing Foundation \r\n \r\n7,851,917 \r\n \r\n29 years 8/2013 6/2042 \r\n \r\nGeorgia Southern Housing Foundation 18,321,141 \r\n \r\n29 years 8/2013 6/2042 \r\n \r\nAthletic Foundation, Inc. \r\n \r\n10,168,728 \r\n \r\n29 years 8/2014 6/2043 \r\n \r\nAthletic Foundation, Inc. \r\n \r\n10,830,102 \r\n \r\n29 years 10/2014 6/2043 \r\n \r\nVarious \r\n \r\n988,744 36 to 60 mths 09/2009 FY 2020 \r\n \r\n12,420,246 (1) 16,544,880 (1) 20,998,634 (1) \r\n1,530,198 (1) 475,944 (1) \r\n1,149,275 (1) 27,642,602 (1) 51,945,580 (1) 12,647,961 (1) 34,037,617 (1) \r\n7,699,294 (1) 17,858,660 (1) 10,253,601 (2) 10,786,142 (2) \r\n635,308 \r\n \r\nTotal Leases \r\n \r\n$ 258,551,695 \r\n \r\n$ 226,625,942 \r\n \r\n(1) These capital leases are with the blended component unit. (2) These capital leases are related party transactions with affiliated organizations. \r\n \r\nOperating Leases The Institution's non-cancellable operating lease having a remaining term of more than one year expires in fiscal year 2027. 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. \r\nFacilities and equipment rented through operating leases are not recorded as assets on the balance sheet. Operating lease expenditures totaled $208,721 for the fiscal year ended June 30, 2016. \r\nIn 2014, Georgia Southern University entered into a real property operating lease with The Odd Lot, Inc., an unrelated party, for office space from July 2015 through June 2016 for a monthly rent of $10,833. The agreement contains a renewal option on a year-to-year basis. This real property operating lease expired June 30, 2016 and will not be renewed. Under this agreement, the Institution paid $130,000 in the current year. \r\nIn 2014, Georgia Southern University entered into a real property operating lease with S \u0026 F Partnership and FFF Properties LLC., an unrelated party, for Costume Shop storage space for monthly rental payments of $3,500. The agreement contains a renewal option on a year-to-year basis. This real property operating lease expired June 30, 2016 and will not be renewed. Under this agreement, the Institution paid $42,000 in the current year. \r\n \r\n- 29 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nIn 2014, Georgia Southern University entered into a real property operating lease with Southern Trailers, an unrelated party, for storage space for monthly rental payments of $4,415. There was an additional agreement for in which remodeling costs would be deducted from monthly rent owed. The agreement contains a renewal option on a year-to-year basis. This real property operating lease expired June 30, 2016 and will not be renewed. Under this agreement, the Institution paid $35,321 in the current year. \r\n \r\nIn 2007, Georgia Southern University Herty Advanced Materials Development Center entered into a real property operating lease with the Georgia Ports Authority for land, at the site of the Herty Facility, located at 110 Brampton Road, Savannah, Georgia. The lease has a 20 year term and terminates July 27, 2027. The rental payment for the current year was $1,400. Subsequent years rent increase 5% annually, through the term of the lease. \r\n \r\nFuture Commitments Future commitments for capital leases (which include other installment purchase agreements) and for the non-cancellable operating lease having a remaining term in excess of one year as of June 30, 2016, were as follows: \r\n \r\nYear Ending June 30: \r\n2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 2036 2037 - 2041 2042 - 2046 \r\n \r\nCapital Leases with the Foundation \r\n \r\nCapital Leases with Other Organizations \r\n \r\nOperating Leases \r\n \r\n$ \r\n \r\n17,199,994 $ \r\n \r\n17,221,778 \r\n \r\n17,220,045 \r\n \r\n17,220,545 \r\n \r\n17,235,861 \r\n \r\n86,281,251 \r\n \r\n79,293,448 \r\n \r\n48,943,463 \r\n \r\n38,647,117 \r\n \r\n1,914,240 \r\n \r\n1,698,980 $ 1,626,938 1,569,082 1,507,915 1,425,068 7,137,496 7,162,944 7,210,316 7,248,945 2,910,371 \r\n \r\n1,470 1,543 1,620 1,702 1,787 10,366 2,394 \r\n \r\nTotal Minimum Lease Payments \r\n \r\n341,177,742 \r\n \r\n39,498,055 $ \r\n \r\n20,882 \r\n \r\nLess: Interest Principal Outstanding \r\n \r\n136,226,854 \r\n \r\n$ \r\n \r\n204,950,888 $ \r\n \r\n17,823,001 21,675,054 \r\n \r\n- 30 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nThe following is a summary of the carrying values of assets held under capital lease at June 30, 2016: \r\n \r\nDescription \r\nCapital Leases with Georgia Southern University Housing Foundation \r\nBuildings - (PPV Only) \r\n \r\nGross Amount (+) \r\n \r\nAccumulated Depreciation \r\n(-) \r\n \r\nNet Capital Assets Held Under Capital Lease \r\nat June 30, 2016 (=) \r\n \r\nOutstanding Balances per Lease Schedules at June 30, 2016 \r\n \r\n$ \r\n \r\n235,919,055 $ 70,400,154 $ 165,518,901 $ 204,950,888 \r\n \r\nCapital Leases with Other Organizations \r\n \r\nLand - (PPV Only) \r\n \r\n$ \r\n \r\nEquipment \r\n \r\nBuildings - (PPV Only) \r\n \r\n12,024,271 988,744 $ \r\n20,998,829 \r\n \r\n$ 279,163 1,327,513 \r\n \r\n12,024,271 709,581 $ \r\n19,671,316 \r\n \r\n635,308 21,039,746 \r\n \r\nTotal Assets Held Under Capital Lease \r\n \r\nat June 30, 2016 \r\n \r\n$ \r\n \r\n34,011,844 $ 1,606,676 $ \r\n \r\n32,405,168 $ 21,675,054 \r\n \r\nNote 14. Retirement Plans  The Institution \r\nThe Institution participates in various retirement plans administered by the State of Georgia under two major retirement systems: Teachers Retirement System of Georgia (TRS) and Employees' Retirement System of Georgia (ERS). 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 administrative offices. \r\nIn addition to the retirement plans administered by TRS and ERS, USG administers the Regents Retirement Plan as an optional retirement plan. \r\nThe significant retirement plans that the Institution 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. \r\nA. Defined Benefit Plans: \r\nTeachers Retirement System of Georgia and Employees' Retirement System of Georgia \r\nSummary of Significant Accounting Policies \r\nPensions: For purposes of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers Retirement System of Georgia (TRS) and Employees' Retirement System (ERS), additions to/deductions for TRS's and ERS's fiduciary net position have been determined on the same basis as they are reported by TRS and ERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \r\n \r\n- 31 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nGeneral Information about the Teachers Retirement System \r\nPlan description: All teachers of the Institution as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at www.trsga.com/publications. \r\nBenefits provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee 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. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \r\nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2016. The Institution's contractually required contribution rate for the year ended June 30, 2016 was 14.27% of annual Institution payroll. Institution contributions to TRS were $9,781,560 for the year ended June 30, 2016. \r\nGeneral Information about the Employees' Retirement System \r\nPlan description: ERS is a cost-sharing multiple-employer defined benefit pension plan 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. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \r\nBenefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to 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 modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. \r\nUnder the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60. \r\n \r\n- 32 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nRetirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also 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. \r\nContributions: 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 state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Institution's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2016 was 24.72% of annual covered payroll for old and new plan members and 21.69% for GSEPS members. The Institution's contributions to ERS totaled $57,061 for the year ended June 30, 2016. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\nAt June 30, 2016, the Institution reported a liability for its proportionate share of the Net Pension Liability for TRS and ERS. The Net Pension Liability was measured as of June 30, 2015. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2014. An expected total pension liability as of June 30, 2015 was determined using standard roll-forward techniques. The Institution's proportion of the Net Pension Liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2015. At June 30 2015, the Institution's TRS proportion was 0.617783%, which was an increase of 0.007640% from its proportion measured as of June 30, 2014. At June 30, 2015, the Institution's ERS proportion was 0.006070%, which was a decrease of 0.001192% from its proportion measured as of June 30, 2014. \r\n \r\n- 33 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nFor the year ended June 30, 2016, the Institution recognized pension expense of $7,296,802 for TRS and ($37,065) for ERS. At June 30, 2016, the Institution reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nERS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nDifferences between expected and actual experience \r\n \r\n$ 827,230 \r\n \r\n$ \r\n \r\n1,965 \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n7,933,328 \r\n \r\n17,744 \r\n \r\nChanges in proportion and differences between \r\n \r\nInstitution contributions and proportionate share of \r\n \r\ncontributions \r\n \r\n$ \r\n \r\n4,143,618 \r\n \r\n49,990 \r\n \r\nInstitution contributions subsequent to the measurement date \r\n \r\n9,781,560 \r\n \r\n$ \r\n \r\n57,061 \r\n \r\nTotal \r\n \r\n$ 13,925,178 $ 8,760,558 $ \r\n \r\n57,061 $ \r\n \r\n69,699 \r\n \r\nInstitution contributions subsequent to the measurement date of $9,781,560 for TRS and $57,061 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ending June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2017 2018 2019 2020 2021 \r\n \r\n$ -2,721,072 $ -48,086 \r\n \r\n$ -2,721,072 $ -19,687 \r\n \r\n$ -2,721,078 $ \r\n \r\n-7,909 \r\n \r\n$ \r\n \r\n3,535,598 $ \r\n \r\n5,983 \r\n \r\n$ \r\n \r\n10,684 \r\n \r\nActuarial assumptions: The total pension liability as of June 30, 2015 was determined by an actuarial valuation as of June 30, 2014 using the following actuarial assumptions, applied to all periods included in the measurement: \r\n \r\nTeachers Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\n \r\n3.00% 3.75  7.00%, average, including inflation 7.50%, net of pension plan investment expense, including inflation \r\n \r\nMortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females. \r\n \r\nThe actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \r\n \r\n- 34 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nEmployees' Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\n \r\n3.00% \r\n5.45  9.25%, including inflation 7.50%, net of pension plan investment expense, including inflation \r\n \r\nMortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement. \r\n \r\nThe actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \r\n \r\nThe long-term expected rate of return on TRS and ERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of 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 expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \r\n \r\nAsset class \r\nFixed income Domestic large equities Domestic mid equities Domestic small equities International developed market equities International emerging market equities \r\nTotal \r\n* Rates shown are net of the 3.00% assumed rate of inflation \r\n \r\nTarget allocation \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n100.00% \r\n \r\nLong-term expected real rate of return* \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\nDiscount rate: The discount rate used to measure the total TRS and ERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and ERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \r\n \r\n- 35 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nSensitivity of the Institution's proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the Institution's proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the Institution's proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \r\n \r\nTeachers Retirement System: \r\nInstitution's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent discount rate \r\n(7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ 161,620,095 $ 94,051,327 $ 38,358,585 \r\n \r\nEmployees' Retirement System: \r\nInstitution's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent discount rate \r\n(7.50%) \r\n \r\n$ \r\n \r\n348,600 $ \r\n \r\n245,920 $ \r\n \r\n1% Increase (8.50%) \r\n158,381 \r\n \r\nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and ERS financial reports which are publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs, respectively. \r\nB. Defined Contribution Plan: \r\nRegents Retirement Plan \r\nPlan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An \"eligible university system employee\" is a faculty member or all exempt full and partial benefit eligible employees, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (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. \r\nFunding Policy The Institution makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2016, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. \r\nThe Institution and the covered employees made the required contributions of $6,326,242 (9.24%) and $4,107,951 (6%), respectively. \r\nVALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. \r\n- 36 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 15. Risk Management  The Institution \r\nThe USG offers its employees and retirees under the age of 65 access to four different healthcare plan options. For the USG's Plan Year 2016, the following healthcare plan options were available: \r\n BlueChoice HMO  Comprehensive Care  Consumer Choice HSA  Kaiser Permanente HMO \r\nThe Institution, participating employees and retirees pay premiums to the healthcare plan options to access benefits coverage. The respective health plan options are included in the financial statements of the Board of Regents of the University System of Georgia  University System Office. All units of the USG share the risk of loss for claims associated with the self-insured plans; including the BlueChoice HMO, Comprehensive Care, and Consumer Choice HSA Plan. \r\nRetirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree healthcare exchange option. The USG makes contributions to a health reimbursement account, which can be used by the retiree to pay premiums and out-ofpocket healthcare-related expenses. \r\nThe 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 to serve as the claims administrator for the selfinsured healthcare plans. In addition to the self-insured healthcare plan options offered to the employees of the USG, fully insured HMO healthcare plan are also offered to System employees. \r\nThe 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 Institution, as an organizational unit of the Board of Regents of the University System of Georgia, 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. \r\nA self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. \r\nThe 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. \r\n \r\n- 37 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 16. Contingencies  The Institution \r\nAmounts 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 expenditure disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institution expects such amounts, if any, to be immaterial to its overall financial position. \r\nLitigation, claims and assessments filed against the Institution (an organizational unit of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2016. \r\nDuring the period of May 11, 2015 and May 15, 2015, the U.S. Department of Education conducted a compliance program review of Georgia Southern University's administration of the program authorized pursuant to Title IV of the Higher Education Act of 1965. The compliance program review revealed several deficiencies which will result in questioned costs being refunded to the grantor agency. At this time an estimate of the amount of questioned costs cannot be determined by the Institution. Note 17. Post-Employment Benefits Other Than Pension Benefits  The Institution \r\nPursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee. \r\nThe Board of Regents Retiree Health Benefit Plan is a single-employer, defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The Institution pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. \r\nAs of June 30, 2016, there were 860 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2016, Georgia Southern University recognized as incurred $3,690,827 of expenditures, which was net of $1,445,472 of participant contributions. \r\n \r\n- 38 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 18. Natural Classifications with Functional Classifications  The Institution \r\n \r\nThe Institution's operating expenses by functional classification for fiscal year 2016 are shown below: \r\n \r\nNatural Classification \r\nSalaries Faculty Staff \r\nBenefits Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\nTotal Operating Expenses \r\nNatural Classification \r\nSalaries Faculty Staff \r\nBenefits Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\nTotal Operating Expenses \r\n \r\nInstruction \r\n \r\nFunctional Classification \r\n \r\nResearch \r\n \r\nPublic Service \r\n \r\nAcademic Support \r\n \r\nStudent Services \r\n \r\n$ 59,802,773 $ 12,655,944 20,402,415 76,076 1,133,397 68,715 25,836 7,440,386 2,687,435 \r\n \r\n2,569,365 $ 5,092,319 1,764,715 \r\n159,576 579,867 109,563 1,093,757 3,065,986 1,650,187 \r\n \r\n79,162 $ 707,956 233,429 \r\n9,378 36,783 49,499 \r\n4,125 738,004 \r\n11,082 \r\n \r\n1,501,626 $ 15,502,386 \r\n4,961,598 105,134 425,271 \r\n64,436 8,847,851 2,360,775 \r\n \r\n7,952 14,826,314 \r\n4,037,702 21,681 \r\n282,824 476,379 651,300 5,540,298 531,014 \r\n \r\n$ 104,292,977 $ 16,085,335 $ 1,869,418 $ 33,769,077 $ 26,375,464 \r\n \r\nInstitutional Support \r\n \r\nFunctional Classification \r\n \r\nPlant Operations and \r\nMaintenance \r\n \r\nScholarships and \r\nFellowships \r\n \r\nAuxiliary Enterprises \r\n \r\nTotal Expenses \r\n \r\n$ \r\n \r\n30,110 \r\n \r\n12,794,001 $ \r\n \r\n6,580,552 \r\n \r\n82,237 \r\n \r\n333,914 \r\n \r\n413 \r\n \r\n114,322 \r\n \r\n10,626,002 \r\n \r\n240,709 \r\n \r\n$ 11,758,462 \r\n4,536,114 \r\n \r\n21,441 $ \r\n6,310,654 4,174,311 10,608,036 \r\n \r\n9,355,525 5,517 \r\n \r\n1,669 $ 19,601,377 \r\n5,481,883 479,629 719,813 \r\n5,014,384 4,113,103 33,205,285 10,122,453 \r\n \r\n63,992,657 92,938,759 47,998,408 \r\n933,711 3,533,310 15,074,478 12,377,533 73,643,640 28,211,691 \r\n \r\n$ 30,802,260 $ 37,409,018 $ 9,361,042 $ 78,739,596 $ 338,704,187 \r\n \r\n- 39 - \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION - 40 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"1\" \r\n \r\nYear Ended \r\n \r\nProportion of the Net Pension Liability \r\n \r\nProportionate Share of the Net Pension \r\nLiability \r\n \r\nCovered Employee Payroll \r\n \r\nProportionate Share of the Net Pension \r\nLiability as a Percentage of Covered Payroll \r\n \r\nPlan Fiduciary Net Position as a \r\nPercentage of the Total Pension Liability \r\n \r\nJune 30, 2016 June 30, 2015 \r\n \r\n0.617783% $ 0.610143% $ \r\n \r\n94,051,327 $ 77,083,520 $ \r\n \r\n64,900,115 61,951,356 \r\n \r\n144.92% 124.43% \r\n \r\n81.44% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. - 41 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"2\" \r\n \r\nYear Ended \r\n \r\nProportion of the Net Pension Liability \r\n \r\nProportionate Share of the Net Pension \r\nLiability \r\n \r\nCovered Employee Payroll \r\n \r\nProportionate Share of the Net Pension \r\nLiability as a Percentage of Covered Payroll \r\n \r\nPlan Fiduciary Net Position as a \r\nPercentage of the Total Pension Liability \r\n \r\nJune 30, 2016 June 30, 2015 \r\n \r\n0.006070% $ 0.007262% $ \r\n \r\n245,920 $ 272,370 $ \r\n \r\n138,794 163,525 \r\n \r\n177.18% 166.56% \r\n \r\n76.20% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. - 42 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"3\" \r\n \r\nYear Ended \r\nJune 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011 June 30, 2010 June 30, 2009 June 30, 2008 June 30, 2007 \r\n \r\nContractually Required \r\nContribution \r\n \r\nContributions in Relation to the Contractually Required Contribution \r\n \r\nContribution Deficiency (Excess) \r\n \r\nCovered Employee Payroll \r\n \r\nContributions as a Percentage of Covered- \r\nEmployee Payroll \r\n \r\n$ \r\n \r\n9,781,560 $ \r\n \r\n$ \r\n \r\n8,575,191 $ \r\n \r\n$ \r\n \r\n7,643,896 $ \r\n \r\n$ \r\n \r\n6,685,303 $ \r\n \r\n$ \r\n \r\n5,748,680 $ \r\n \r\n$ \r\n \r\n5,470,825 $ \r\n \r\n$ \r\n \r\n5,078,763 $ \r\n \r\n$ \r\n \r\n4,658,740 $ \r\n \r\n$ \r\n \r\n4,403,648 $ \r\n \r\n$ \r\n \r\n4,074,725 $ \r\n \r\n9,781,560 $ 8,575,191 $ 7,643,896 $ 6,685,303 $ 5,748,680 $ 5,470,825 $ 5,078,763 $ 4,658,740 $ 4,403,648 $ 4,074,725 $ \r\n \r\n0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ \r\n \r\n68,228,960 64,900,115 61,951,356 58,603,283 55,921,012 53,218,142 52,143,357 50,201,940 47,453,103 43,908,675 \r\n \r\n14.34% 13.21% 12.34% 11.41% 10.28% 10.28% \r\n9.74% 9.28% 9.28% 9.28% \r\n \r\n- 43 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"4\" \r\n \r\nYear Ended \r\n \r\nContractually Required \r\nContribution \r\n \r\nContributions in Relation to the Contractually Required Contribution \r\n \r\nContribution Deficiency (Excess) \r\n \r\nCovered Employee Payroll \r\n \r\nContributions as a Percentage of Covered- \r\nEmployee Payroll \r\n \r\nJune 30, 2016 $ June 30, 2015 $ June 30, 2014 $ June 30, 2013 $ June 30, 2012 $ June 30, 2011 $ June 30, 2010 $ June 30, 2009 $ June 30, 2008 $ June 30, 2007 $ \r\n \r\n57,061 $ 30,479 $ 30,187 $ 29,986 $ 26,844 $ 26,056 $ 30,300 $ 39,842 $ 31,755 $ 25,615 $ \r\n \r\n57,061 $ 30,479 $ 30,187 $ 29,986 $ 26,844 $ 26,056 $ 30,300 $ 39,842 $ 31,755 $ 25,615 $ \r\n \r\n0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ \r\n \r\n230,829 138,794 163,525 210,458 230,817 250,298 291,066 334,252 304,514 245,721 \r\n \r\n24.72% 21.96% 18.46% 14.25% 11.63% 10.41% 10.41% 11.92% 10.43% 10.42% \r\n \r\n- 44 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2016 \r\n \r\nSCHEDULE \"5\" \r\n \r\nTeachers Retirement System \r\nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2016 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return \r\n \r\nJune 30, 2013 Entry age Level percentage of payroll, open 30 years Seven-year smoothed market 3.00% 3.75  7.00%, including inflation 7.50%, net of pension plan investment \r\nexpense, including inflation \r\n \r\nEmployees' Retirement System \r\n \r\nChanges of assumptions: There were no changes in assumptions or benefits that affect the measurement of the total pension liability since the prior measurement date. \r\n \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2016 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases \r\nInvestment rate of return \r\n \r\nJune 30, 2013 Entry age Level dollar, open 30 years Seven-year smoothed market 3.00% 2.725%  4.625% for FY 2012-2013, 5.45% - 9.25% for FY2014+ 7.50%, net of pension plan investment \r\nexpense, including inflation \r\n \r\n- 45 - \r\n \r\n SUPPLEMENTARY INFORMATION - 46 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30, 2016 \r\nASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable \r\nFederal Financial Assistance Other Prepaid Expenditures Inventories \r\nTotal Assets \r\nLIABILITIES AND FUND EQUITY \r\nLiabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue Funds Held for Others Other Liabilities \r\nTotal Liabilities \r\nFund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\nSCHEDULE \"6\" \r\n \r\n$ \r\n \r\n30,830,425.96 \r\n \r\n2,750,919.04 \r\n \r\n1,654,576.19 4,128,411.68 \r\n109,612.37 42,954.74 \r\n \r\n$ \r\n \r\n39,516,899.98 \r\n \r\n$ \r\n \r\n618,241.58 \r\n \r\n16,031,845.53 \r\n \r\n275,312.78 \r\n \r\n5,905,868.72 \r\n \r\n-1,679.45 \r\n \r\n-1,939.82 \r\n \r\n22,827,649.34 \r\n \r\n6,606,066.19 2,664,467.50 \r\n223,461.18 3,887,160.21 \r\n192,363.37 3,032,371.20 \r\n50,000.00 \r\n33,360.99 \r\n16,689,250.64 \r\n \r\n$ \r\n \r\n39,516,899.98 \r\n \r\nActual 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 special purpose framework. \r\n- 47 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) \r\nBUDGET FUND YEAR ENDED JUNE 30, 2016 \r\n \r\nSCHEDULE \"7\" \r\n \r\nREVENUES \r\nState Appropriation State General Funds \r\nOther Funds \r\nTotal Revenues \r\nCARRY-OVER FROM PRIOR YEARS \r\nTransfers from Reserved Fund Balance \r\nTotal Funds Available \r\nEXPENDITURES \r\nSpecial Funding Initiative Teaching \r\nTotal Expenditures \r\nExcess of Funds Available over Expenditures \r\nFUND BALANCE JULY 1 \r\nReserved Unreserved \r\nADJUSTMENTS \r\nPrior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned \r\nto Board of Regents - University System Office Year Ended June 30, 2015 \r\nPrior Year Reserved Fund Balance Included in Funds Available \r\nFUND BALANCE JUNE 30 \r\n \r\nBUDGET \r\n \r\nACTUAL \r\n \r\nVARIANCE FAVORABLE (UNFAVORABLE) \r\n \r\n$ \r\n \r\n91,737,886.00 $ \r\n \r\n91,737,886.00 $ \r\n \r\n205,653,473.00 \r\n \r\n183,497,016.73 \r\n \r\n297,391,359.00 \r\n \r\n275,234,902.73 \r\n \r\n0.00 -22,156,456.27 \r\n-22,156,456.27 \r\n \r\n0.00 297,391,359.00 \r\n \r\n16,475,561.04 291,710,463.77 \r\n \r\n16,475,561.04 -5,680,895.23 \r\n \r\n198,784.00 297,192,575.00 \r\n \r\n297,391,359.00 \r\n \r\n$ \r\n \r\n0.00 \r\n \r\n198,784.00 275,023,955.53 \r\n275,222,739.53 \r\n16,487,724.24 $ \r\n \r\n0.00 22,168,619.47 \r\n22,168,619.47 \r\n16,487,724.24 \r\n \r\n16,672,372.39 97,213.01 \r\n \r\n30,012.53 -25,297.48 \r\n \r\n-97,213.01 -16,475,561.04 \r\n \r\n$ \r\n \r\n16,689,250.64 \r\n \r\nSUMMARY OF FUND BALANCE \r\nReserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories \r\nTotal Reserved \r\nUnreserved Surplus \r\n \r\n$ \r\n \r\n6,606,066.19 \r\n \r\n2,664,467.50 \r\n \r\n223,461.18 \r\n \r\n3,887,160.21 \r\n \r\n192,363.37 \r\n \r\n3,032,371.20 \r\n \r\n50,000.00 \r\n \r\n16,655,889.65 \r\n \r\n33,360.99 \r\n \r\nTotal Fund Balance \r\n \r\n$ \r\n \r\n16,689,250.64 \r\n \r\nActual 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 special purpose framework. \r\n- 48 - \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2016 \r\n \r\nState Funding Initiatives State Appropriation State General Funds \r\nTeaching State Appropriation State General Funds Other Funds \r\nTotal Teaching \r\nTotal Operating Activity \r\n \r\nOriginal Appropriation \r\n \r\nAmended Appropriation \r\n \r\nFinal Budget \r\n \r\nCurrent Year Revenues \r\n \r\n$ \r\n \r\n198,784.00 $ \r\n \r\n198,784.00 $ \r\n \r\n198,784.00 $ \r\n \r\n198,784.00 \r\n \r\n91,460,935.00 185,018,855.00 \r\n276,479,790.00 \r\n \r\n91,460,935.00 185,018,855.00 \r\n276,479,790.00 \r\n \r\n91,539,102.00 205,653,473.00 \r\n297,192,575.00 \r\n \r\n91,539,102.00 183,497,016.73 \r\n275,036,118.73 \r\n \r\n$ 276,678,574.00 $ 276,678,574.00 $ 297,391,359.00 $ 275,234,902.73 \r\n \r\nActual 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 special purpose framework. \r\n- 50 - \r\n \r\n SCHEDULE \"8\" \r\n \r\nFunds Available Compared to Budget \r\n \r\nPrior Year \r\n \r\nAdjustments and \r\n \r\nTotal \r\n \r\nCarry-Over \r\n \r\nProgram Transfers \r\n \r\nFunds Available \r\n \r\nVariance Negative \r\n \r\nExpenditures Compared to Budget \r\n \r\nVariance \r\n \r\nActual \r\n \r\nPositive \r\n \r\nExcess of Funds Available \r\nOver Expenditures \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n198,784.00 $ \r\n \r\n0.00 $ \r\n \r\n198,784.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n0.00 16,475,561.04 \r\n16,475,561.04 \r\n \r\n0.00 0.00 \r\n0.00 \r\n \r\n91,539,102.00 199,972,577.77 \r\n291,511,679.77 \r\n \r\n0.00 -5,680,895.23 \r\n-5,680,895.23 \r\n \r\n91,539,102.00 183,484,853.53 \r\n275,023,955.53 \r\n \r\n0.00 22,168,619.47 \r\n22,168,619.47 \r\n \r\n0.00 16,487,724.24 \r\n16,487,724.24 \r\n \r\n$ 16,475,561.04 $ \r\n \r\n0.00 $ 291,710,463.77 $ \r\n \r\n-5,680,895.23 $ 275,222,739.53 $ 22,168,619.47 $ \r\n \r\n16,487,724.24 \r\n \r\n- 51 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2016 \r\n \r\nSpecial Funding Initiatives State Appropriation State General Funds \r\nTeaching State Appropriation State General Funds Other Funds \r\nTotal Teaching \r\nTotal Operating Activity \r\nPrior Year Reserves Not Available for Expenditure Inventories Uncollectible Accounts Receivable \r\n \r\nBeginning Fund Balance July 1 \r\n \r\nFund Balance Carried Over from \r\nPrior Period as Funds Available \r\n \r\nReturn of Fiscal Year 2015 \r\nSurplus \r\n \r\nPrior Period Adjustments \r\n \r\n$ \r\n \r\n8,194.49 $ \r\n \r\n0.00 $ \r\n \r\n-8,194.49 $ \r\n \r\n1,290.61 \r\n \r\n23,420.96 16,541,158.60 \r\n16,564,579.56 \r\n16,572,774.05 \r\n \r\n0.00 -16,475,561.04 \r\n-16,475,561.04 \r\n-16,475,561.04 \r\n \r\n-23,420.96 -65,597.56 \r\n-89,018.52 \r\n-97,213.01 \r\n \r\n12,341.58 -8,917.14 \r\n3,424.44 \r\n4,715.05 \r\n \r\n64,000.00 132,811.35 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\nBudget Unit Totals \r\n \r\n$ \r\n \r\n16,769,585.40 $ \r\n \r\n-16,475,561.04 $ \r\n \r\n-97,213.01 $ \r\n \r\n4,715.05 \r\n \r\nActual 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 special purpose framework. \r\n- 52 - \r\n \r\n SCHEDULE \"9\" \r\n \r\nOther Adjustments \r\n \r\nEarly Return Fiscal Year 2016 \r\nSurplus \r\n \r\nExcess of Funds Available \r\nOver Expenditures \r\n \r\nEnding Fund Balance June 30 \r\n \r\nAnalysis of Ending Fund Balance \r\n \r\nReserved \r\n \r\nSurplus \r\n \r\nTotal \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n1,290.61 $ \r\n \r\n0.00 $ \r\n \r\n1,290.61 $ \r\n \r\n1,290.61 \r\n \r\n14,000.00 -59,552.02 \r\n-45,552.02 \r\n-45,552.02 \r\n \r\n0.00 0.00 \r\n0.00 \r\n0.00 \r\n \r\n0.00 16,487,724.24 \r\n16,487,724.24 \r\n16,487,724.24 \r\n \r\n26,341.58 16,419,255.08 \r\n \r\n0.00 16,413,526.28 \r\n \r\n16,445,596.66 16,413,526.28 \r\n \r\n16,446,887.27 16,413,526.28 \r\n \r\n26,341.58 5,728.80 \r\n32,070.38 \r\n33,360.99 \r\n \r\n26,341.58 16,419,255.08 \r\n16,445,596.66 \r\n16,446,887.27 \r\n \r\n-14,000.00 59,552.02 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n50,000.00 192,363.37 \r\n \r\n50,000.00 192,363.37 \r\n \r\n0.00 0.00 \r\n \r\n50,000.00 192,363.37 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n16,487,724.24 $ 16,689,250.64 $ 16,655,889.65 $ \r\n \r\n33,360.99 $ 16,689,250.64 \r\n \r\nSummary of Ending Fund Balance Reserved \r\nDepartment Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus \r\nTotal Ending Fund Balance - June 30 \r\n \r\n$ 6,606,066.19 2,664,467.50 223,461.18 3,887,160.21 192,363.37 3,032,371.20 50,000.00 \r\n$ \r\n$ 16,655,889.65 $ \r\n \r\n$ 6,606,066.19 2,664,467.50 223,461.18 3,887,160.21 192,363.37 3,032,371.20 50,000.00 \r\n \r\n33,360.99 \r\n \r\n33,360.99 \r\n \r\n33,360.99 $ 16,689,250.64 \r\n \r\n- 53 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION III COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nMarch 23, 2017 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia \r\nand Dr. Jaimie Hebert, President Georgia Southern University \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\nLadies and Gentlemen: \r\nWe have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the business-type and major funds of Georgia Southern University as of and for the year ended June 30, 2016 and the related notes to the financial statements, and have issued our report thereon dated March 23, 2017. \r\nOur report includes a reference to other auditors who audited the financial statements of Georgia Southern University Housing Foundation, Inc. as described in our report on Georgia Southern University's basic financial statements. \r\nThis report includes our consideration of the results of other auditors' testing of internal control over financial reporting and compliance and other matters that are reported on separately by those other auditors. However, this report, insofar as it relates to the results of the other auditors is based solely on the reports of the other auditors. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered Georgia Southern University's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Georgia Southern University's internal control. Accordingly, we do not express an opinion on the effectiveness of Georgia Southern University's internal control. \r\n \r\n (This page left intentionally blank) \r\n \r\n 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 entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a 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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we and other auditors did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Georgia Southern University's financial statements are free from material misstatement, we and other auditors performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests and those of other auditors disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. \r\nPurpose of this Report \r\nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION IV AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2016 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFS-2015-001 Inadequate Controls over the Information Technology Store \r\n \r\nControl Category: \r\nInternal Control Impact: Compliance Impact: \r\n \r\nExpenditures/Liabilities/Disbursements Inventories Significant Deficiency N/A \r\n \r\nFinding Status: \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nFA-539-14-01 Calculation of Title IV Refunds \r\n \r\nControl Category: Internal Control Impact: Compliance Impact: Federal Award Agency: CFDA Number and Title: \r\n \r\nSpecial Tests and Provisions Significant Deficiency Nonmaterial Noncompliance U.S. Department of Education 84.SFA  Student Financial Assistance Cluster \r\n \r\nFinding Status: \r\n \r\nPartially Resolved \r\n \r\nThe corrective action plan for this finding has been fully implemented. The auditors nor Federal Program Reviewers found any problems with refund calculations in fiscal year 2015. We are awaiting confirmation from the U.S. Department of Education that this finding has been resolved. \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION V CURRENT YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2016 \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bg46-b2015-belec-p-btext","title":"Georgia Southern University, Statesboro, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2015","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts."],"dcterms_spatial":["United States, Georgia, Bulloch County, Statesboro, 32.44879, -81.78317"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2014/2015"],"dcterms_description":["June 30, 2000-","Ceased with fiscal year ended June 30, 2014.","Title from cover.","From some providers, may include also a letter dated November 8, 2007 from State Auditor, regarding certain matters of internal control and operations of Georgia Southern University.","Report year covers fiscal year.","Fiscal year ended June 30, 2014 (online surrogate) (Georgia Government Publications database, viewed July 2, 2020)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2015"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Georgia Southern University--Appropriations and expenditures--Periodicals.","Georgia Southern University--fast--(OCoLC)fst00697216","Education--Georgia--Auditing--Periodicals.","Education--Auditing","Expenditures, Public","Georgia","Georgia Government Documents--Serial"],"dcterms_title":["Georgia Southern University, Statesboro, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2015"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-bg46-b2015-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bg46-b2015-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Georgia Southern University--fast--(OCoLC)fst00697216","Education--Auditing--fast--(OCoLC)fst00902522","Expenditures, Public--fast--(OCoLC)fst00918345","Georgia--fast--(OCoLC)fst01204622","Periodicals--fast--(OCoLC)fst01411641"],"fulltext":" GEORGIA SOUTHERN UNIVERSITY - TABLE OF CONTENTS - \r\n \r\nSECTION I FINANCIAL INDEPENDENT AUDITOR'S REPORT REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET POSITION B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION C STATEMENT OF CASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS \r\n \r\nPage \r\ni \r\n2 3 4 7 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY  TEACHERS' \r\n \r\nRETIREMENT SYSTEM OF GEORGIA \r\n \r\n31 \r\n \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY  EMPLOYEES' \r\n \r\nRETIREMENT SYSTEM OF GEORGIA \r\n \r\n32 \r\n \r\n3 SCHEDULE OF CONTRIBUTIONS  TEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n33 \r\n \r\n4 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 35 \r\n \r\n5 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n37 \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n6 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND \r\n \r\n39 \r\n \r\n7 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT \r\n \r\n(NON-GAAP BASIS) BUDGET FUND \r\n \r\n40 \r\n \r\n  GEORGIA SOUTHERN UNIVERSITY - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n8 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n9 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n10 RECONCILIATION OF BUDGET TO GAAP 11 RECONCILIATION OF SALARIES AND TRAVEL \r\n \r\nPage \r\n41 43 45 47 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n  SECTION I FINANCIAL \r\n \r\n  Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJanuary 19, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia \r\nand Dr. Jean E. Bartels, Interim President Georgia Southern University \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\nReport on the Financial Statements \r\nWe have audited the accompanying basic financial statements (Exhibits A through D) of Georgia Southern University, a unit 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, 2015. \r\nManagement's Responsibility for the Financial Statements \r\nManagement 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. \r\nAuditor's Responsibility \r\nOur 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. \r\nAn 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 Georgia Southern University's preparation and fair presentation of the financial statements in order to design \r\n \r\n15ARL-62 \r\n \r\n  audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Georgia Southern University'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. \r\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. \r\nOpinion \r\nIn our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of Georgia Southern University as of June 30, 2015, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \r\nEmphasis of Matter \r\nAs discussed in Note 1, the financial statements of Georgia Southern University 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 Georgia Southern University. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2015, 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. Our opinion is not modified with respect to this matter. \r\nAs described in Note 1 to the financial statements, in 2015, Georgia Southern University adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions  an amendment of GASB Statement No. 27, GASB Statement No. 69, Government Combinations and Disposals of Government Operations and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB Statement No. 68. Georgia Southern University restated beginning Net Position for the cumulative effect of these accounting changes which had a significant impact on Georgia Southern University's financial statements. Our opinion is not modified with respect to this matter. \r\nOther Matters \r\nRequired Supplementary Information \r\nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages i through viii and the Schedules of Proportionate Share of the Net Pension Liability, Schedules of Contributions to Retirement Systems and the Notes to the Required Supplemental Information on pages 31 through 47 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 inquiries 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 \r\n15ARL-62 \r\n \r\n  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. \r\nOther Information \r\nOur audit was conducted for the purpose of forming an opinion on the basic financial statements of Georgia Southern University. The accompanying supplementary information (Schedules 6 through 11) is presented for purposes of additional analysis and is not a required part of the basic financial statements. \r\nThe accompanying supplementary information (Schedules 6 through 11) 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 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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated January 19, 2016, on our consideration of Georgia Southern University's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Georgia Southern University's internal control over financial reporting and compliance. \r\nRespectfully, \r\n \r\nGSG:er 15ARL-62 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n  GEORGIA SOUTHERN UNIVERSITY \r\nManagement's Discussion and Analysis \r\n \r\nIntroduction \r\n \r\nGeorgia Southern University is the state's largest and most comprehensive center of higher education south of Atlanta. With 124 degree programs at the baccalaureate, master's and doctoral levels, Georgia Southern has been designated a Carnegie Doctoral-Research university and provides the classic residential campus experience and online learning options to more than 20,500 students from 48 states and 88 nations. Georgia Southern's nationally accredited academic programs prepare diverse scholars for leadership and service as world citizens. Georgia Southern University is one of 30 University's of higher education of the University System of Georgia. The University boasts 200-plus student organizations, outstanding Division I athletics, and state-of-the art residence halls and campus facilities. Since 1906, the University's hallmark has been a culture of engagement that bridges theory with practice, extends the learning environment beyond the classroom, and promotes student growth and life success. Central to the University's mission is the faculty's dedication to excellence in teaching and the development of a fertile learning environment exemplified by a free exchange of ideas, high academic expectations, and individual responsibility for academic achievement. Faculty, staff, and students embrace core values expressed through integrity, civility, kindness, collaboration, and a commitment to lifelong learning, wellness, and social responsibility. \r\n \r\nFaculty \r\n \r\nStudents (Headcount) \r\n \r\nStudents (FTE) \r\n \r\nFiscal Year 2015 \r\n \r\n899 \r\n \r\nFiscal Year 2014 \r\n \r\n881 \r\n \r\nFiscal Year 2013 \r\n \r\n844 \r\n \r\n20,542 20,516 20,574 \r\n \r\n18,821 18,685 18,706 \r\n \r\nOverview of the Financial Statements and Financial Analysis \r\n \r\nGeorgia Southern University is pleased to present its financial statements for fiscal year 2015. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Position; the Statement of Revenues, Expenses and Changes in Net Position; and the Statement of Cash Flows. This discussion and analysis of the University's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2015 and fiscal year 2014. However, the comparative data for fiscal year 2014 does not reflect the effects of the restatement of July 1, 2014 net position. This restatement is related to the implementation of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, which were adopted by the University for fiscal year 2015. The provisions of these Statements 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 these Statements resulted in a restatement to beginning net position of $94,155,812. This restatement is based on actuarial estimates and information is not available for the fiscal year 2014 comparative balances. See Note 1 in the Notes to the Financial Statements for more information about the restatement of July 1, 2014 net position. \r\n \r\ni \r\n \r\n Statement of Net Position The Statement of Net Position is a financial condition snapshot as of June 30, 2015 and includes all assets, deferred outflows of resources, liabilities, and deferred inflows of resources both current and noncurrent. The differences between current and noncurrent assets are discussed in the Notes to the Financial Statements. The Statement of Net Position is prepared under the accrual basis of accounting which requires revenue and asset recognition when the service is provided, and expense and liability recognition when goods or services are received despite when cash is actually exchanged. From the data presented, readers of the Statement of Net Position are able to determine the assets available to continue the operations of the University and how much the University owes vendors. The difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources (net position) is one indicator of the University's financial health. Increase or decreases in net position provide an indicator of the improvement or decline of the University's financial health when considered in conjunction with other nonfinancial conditions, such as facilities and enrollment. Net Position is divided into three major categories. The first category, net investment in capital assets, provides the University's equity in property, plant and equipment owned by the University. The next category is restricted, which is divided into two categories, nonexpendable and expendable. The corpus of nonexpendable, restricted resources is available only for investment purposes. Expendable, restricted resources are available for expenditure by the University but 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. Unrestricted resources are available to the University for any lawful purpose. \r\nii \r\n \r\n Statement of Net Position, Condensed \r\n \r\nJune 30, 2015 June 30, 2014 (1) \r\n \r\nAssets Current Assets Capital Assets, Net Other Assets \r\n \r\n$ 59,529,960 $ 546,081,786 13,787,940 \r\n \r\n49,784,531 536,509,911 \r\n14,219,387 \r\n \r\nTotal Assets \r\n \r\n619,399,686 \r\n \r\n600,513,829 \r\n \r\nDeferred Outflows of Resources \r\n \r\n12,615,483 \r\n \r\n0 \r\n \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\n \r\n31,521,817 310,228,213 \r\n \r\n28,153,389 218,412,934 \r\n \r\nTotal Liabilities \r\n \r\n341,750,030 \r\n \r\n246,566,323 \r\n \r\nDeferred Inflows of Resources \r\n \r\n26,983,742 \r\n \r\n0 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Nonexpendable Expendable Unrestricted \r\n \r\n308,053,863 \r\n2,465,814 8,553,930 -55,792,210 \r\n \r\n313,675,376 \r\n2,465,814 10,105,690 27,700,626 \r\n \r\nTotal Net Position \r\n \r\n$ 263,281,397 $ 353,947,506 \r\n \r\n(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position related to the implementation of GASB 68. See Note 1 in the Notes to the Financial Statements for more information. \r\nTotal assets and deferred outflows of resources increased by $31,501,340. Total assets increased due to an increase of $9,571,875 in the category of Capital Assets, Net primarily due to the new Athletic Football Operations Center and Football Stadium Expansion, and an increase of $9,745,429 in Current Assets. Deferred Outflows of Resources increased by $12,615,483 due to the adoption of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. \r\nTotal liabilities and deferred inflows of resources increased for the year by $122,167,449. The combination of the increase in total assets and deferred outflows of resources of $31,501,340 and the increase in total liabilities and deferred inflows of resources of $122,167,449 yields a decrease in net position of $90,666,109. The decrease in net position is primarily in the category of Net Pension Liability, in the amount of $77,355,890. \r\n \r\niii \r\n \r\n Statement of Revenues, Expenses and Changes in Net Position \r\nChanges in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the University, both operating and nonoperating, and the expenses paid by the University, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the University. Generally, operating revenues are received for providing goods and services to the various customers and constituencies of the University. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the University. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the University without the Legislature directly receiving commensurate goods and services for those revenues. \r\nStatement of Revenues, Expenses and Changes in Net Position, Condensed \r\n \r\nJune 30, 2015 \r\n \r\nJune 30, 2014 (1) \r\n \r\nOperating Revenues Operating Expenses \r\n \r\n$ 221,466,308 327,870,789 \r\n \r\n$ 213,235,517 326,585,167 \r\n \r\nOperating Loss \r\n \r\n-106,404,481 \r\n \r\n-113,349,650 \r\n \r\nNonoperating Revenues and Expenses \r\n \r\n108,955,031 \r\n \r\n106,433,641 \r\n \r\nIncome (Loss) Before Other Revenues, Expenses, Gains or Losses \r\n \r\n2,550,550 \r\n \r\n-6,916,009 \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\n939,153 \r\n \r\n4,722,432 \r\n \r\nIncrease (Decrease) in Net Position \r\n \r\n3,489,703 \r\n \r\n-2,193,577 \r\n \r\nNet Position at Beginning of Year, as Originally Reported \r\nPrior Year Adjustments \r\n \r\n353,947,506 -94,155,812 \r\n \r\n353,124,623 3,016,460 \r\n \r\nNet Position at Beginning of Year, Restated \r\n \r\n259,791,694 \r\n \r\n356,141,083 \r\n \r\nNet Position at End of Year \r\n \r\n$ 263,281,397 \r\n \r\n$ 353,947,506 \r\n \r\n(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position related to the implementation of GASB 68. See Note 1 in the Notes to the Financial Statements for more information. \r\n \r\nThe Statement of Revenues, Expenses and Changes in Net Position reflect a positive year from current year operations but an overall negative year due to the implementation of new accounting standards related to pension plans, which is represented by a decrease in net position at the end of the year. Some highlights of the information presented on this statement are as follows: \r\n \r\niv \r\n \r\n Revenue by Source For the Years Ended June 30, 2015 and June 30, 2014 \r\nJune 30, 2015 \r\n \r\nJune 30, 2014 (1) \r\n \r\nOperating Revenue Tuition and Fees Grants and Contracts Sales and Services Auxiliary Other \r\n \r\n$ 111,214,653 17,328,121 4,736,641 86,006,395 2,180,498 \r\n \r\n$ 107,971,597 16,084,037 4,536,869 82,600,488 2,042,526 \r\n \r\nTotal Operating Revenue \r\n \r\n221,466,308 \r\n \r\n213,235,517 \r\n \r\nNonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income Other \r\n \r\n85,834,001 31,737,747 \r\n4,216,706 246,650 -264,607 \r\n \r\n81,442,638 32,037,080 \r\n4,243,746 717,814 74,296 \r\n \r\nTotal Nonoperating Revenue \r\n \r\n121,770,497 \r\n \r\n118,515,574 \r\n \r\nCapital Grants and Gifts State Other Capital Gifts and Grants \r\n \r\n939,153 \r\n \r\n4,613,832 108,600 \r\n \r\nTotal Capital Gifts and Grants \r\n \r\n939,153 \r\n \r\n4,722,432 \r\n \r\nTotal Revenues \r\n \r\n$ 344,175,958 \r\n \r\n$ 336,473,523 \r\n \r\n(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position related to the implementation of GASB 68. See Note 1 in the Notes to the Financial Statements for more information. \r\n \r\nv \r\n \r\n Expenses (By Functional Classification) For the Years Ended June 30, 2015 and June 30, 2014 \r\n \r\nJune 30, 2015 \r\n \r\nOperating Expenses Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises \r\n \r\n$ 100,489,820 16,921,157 1,590,018 31,983,196 24,224,085 34,295,983 33,771,818 9,668,280 74,926,432 \r\n \r\nTotal Operating Expenses \r\n \r\n327,870,789 \r\n \r\nNonoperating Expenses Interest Expense (Capital Assets) \r\n \r\n12,815,466 \r\n \r\nJune 30, 2014 (1) \r\n \r\n$ \r\n \r\n98,311,368 \r\n \r\n17,299,470 \r\n \r\n1,622,287 \r\n \r\n30,221,540 \r\n \r\n23,360,529 \r\n \r\n29,754,055 \r\n \r\n37,046,835 \r\n \r\n9,911,109 \r\n \r\n79,057,974 \r\n \r\n326,585,167 \r\n \r\n12,081,933 \r\n \r\nTotal Expenses \r\n \r\n$ 340,686,255 \r\n \r\n$ 338,667,100 \r\n \r\n(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position related to the implementation of GASB 68. See Note 1 in the Notes to the Financial Statements for more information. \r\nOperating revenues increased by $8,230,791 in fiscal year 2015. Tuition and Fees were increased by 3.0%. Grants and Contracts increased by $1,244,084. Auxiliary revenue increased $3,405,907 of which $2,801,912 is a result of the increase in the category of Intercollegiate Athletics advertising, ticket sales and Sun Belt Conference guarantees. \r\nNonoperating revenues increased by $3,254,923 for the year primarily due to an increase in State Appropriations. \r\nThe compensation and employee benefits category increased by $3,786,277 and primarily affected the Instruction, Academic Support, and Student Services and Instructional Support categories. The increase reflects the addition of 18 faculty members, merit increases and an increased cost of health insurance for the employees of the University. \r\nStatement of Cash Flows \r\nThe final statement presented by the Georgia Southern University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the University during the year. Cash flow information can be used to evaluate the financial viability of the University's ability to meet financial obligations as they mature. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the University. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing \r\nvi \r\n \r\n purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Position. \r\nCash Flows for the Years Ended June 30, 2015 and 2014, Condensed \r\n \r\nJune 30, 2015 \r\n \r\nJune 30, 2014 \r\n \r\nCash Provided (Used) By: \r\n \r\nOperating Activities \r\n \r\n$ \r\n \r\nNoncapital Financing Activities \r\n \r\nCapital and Related Financing Activities \r\n \r\nInvesting Activities \r\n \r\n-83,458,830 121,433,606 -31,808,382 \r\n213,700 \r\n \r\n$ \r\n \r\n-88,280,550 \r\n \r\n118,440,824 \r\n \r\n-36,945,013 \r\n \r\n215,359 \r\n \r\nNet Change in Cash Cash, Beginning of Year \r\n \r\n6,380,094 36,509,477 \r\n \r\n-6,569,380 43,078,857 \r\n \r\nCash, End of Year \r\n \r\n$ \r\n \r\n42,889,571 \r\n \r\n$ \r\n \r\n36,509,477 \r\n \r\nCapital Assets \r\n \r\nThe University had several significant capital asset additions for facilities in fiscal year 2015. At the beginning of fiscal year 2015, the University opened the new Athletic Football Operations Center, as a public-private venture with GSU Athletic Foundation, in the amount of $10.8 million. In addition, the University expanded the football stadium seating, as a public-private venture with GSU Athletic Foundation, in the amount of $10.1 million. \r\n \r\nDuring fiscal year 2015, the University also completed several renovation projects to existing facilities in the amount of $1.7 million. Among these renovations included a new parking lot for Facilities Services Shops building 448. \r\n \r\nFor additional information concerning Capital Assets, see Notes 1, 6, 8, and 12 in the Notes to the Financial Statements. \r\n \r\nLong-Term Liabilities \r\n \r\nGeorgia Southern University had Long-Term Liabilities of $321,852,229 of which $77,355,890 was the new net pension liability based on implementation of GASB Statement No. 68 The current portion of long-term liabilities at June 30, 2015 was $11,624,016. \r\n \r\nFor additional information concerning Long-Term Liabilities, see Note 8 in the Notes to the Financial Statements. \r\n \r\nEconomic Outlook \r\n \r\nGeorgia Southern University is not aware of any currently known facts, decisions, or conditions that are expected to have a significant effect on the financial position or results of operations during this fiscal year. Georgia Southern continues to be financially stable as was reported by the 2015 SACS reaffirmation committee. Georgia Southern anticipates the current fiscal year will be much like last \r\n \r\nvii \r\n \r\n and will maintain a close watch over resources to maintain the University's ability to react to unknown internal and external issues. Student enrollment increased slightly compared to the previous year, indicating a slow but steady student enrollment growth. Enrollment management strategies include focusing on student transfers and retention of current students. Additionally, in accordance with the Complete College Georgia initiative which is part of Georgia's Higher Education Completion Plan to make college more accessible to everyone, Georgia Southern is exploring alternative enrollment and collaborative projects, including programs for the adult population. This initiative will continue until 2020 with the goal of 60 percent of young adults in the state of Georgia holding a certificate or degree. The State of Georgia and Georgia Southern's expectation is that this initiative and the resulting partnerships will provide economic sustainability to the people of Georgia by providing the educational tools necessary for employment success. Dr. Jean E. Bartels, Interim President Georgia Southern University \r\nviii \r\n \r\n BASIC FINANCIAL STATEMENTS - 1 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF NET POSITION JUNE 30, 2015 \r\nASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables - Other Due from Affiliated Organizations Inventories (Note 4) Prepaid Items \r\nTotal Current Assets \r\nNoncurrent Assets Investments Due from Affiliated Organizations Due from Institutions - Capital Liability Reserve Fund Notes Receivable, Net Capital Assets, Net (Note 6) \r\nTotal Noncurrent Assets \r\nTotal Assets \r\nDeferred Outflows of Resources Related to Defined Benefit pension Plans \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Advances (Including Tuition and Fees) (Note 7) Other Liabilities Deposits Held for Other Organizations Due to Affiliated Organizations Lease Purchase Obligations Compensated Absences Notes and Loans Payable \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Lease Purchase Obligations Compensated Absences Net Pension Liability Notes and Loans Payable \r\nTotal Noncurrent Liabilities \r\nTotal Liabilities \r\nDeferred Inflows of Resources Related to Defined Benefit Pension Plans \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for: \r\nNonexpendable Expendable Unrestricted \r\nTotal Net Position \r\nThe notes to the financial statements are an integral part of this statement. \r\n- 2 - \r\n \r\nEXHIBIT \"A\" \r\n \r\n$ \r\n \r\n42,889,571 \r\n \r\n4,688,185 5,479,270 3,289,359 3,082,254 \r\n101,321 \r\n \r\n59,529,960 \r\n \r\n5,481,689 4,059,400 1,778,721 2,468,130 546,081,786 \r\n559,869,726 \r\n619,399,686 \r\n \r\n12,615,483 \r\n \r\n7,643,615 768,810 \r\n1,164,776 578,723 \r\n8,000,518 1,348 \r\n1,726,867 13,144 \r\n6,895,842 4,603,864 \r\n124,310 \r\n31,521,817 \r\n229,628,522 1,864,552 \r\n77,355,890 1,379,249 \r\n310,228,213 \r\n341,750,030 \r\n26,983,742 \r\n \r\n308,053,863 \r\n2,465,814 8,553,930 -55,792,210 \r\n \r\n$ \r\n \r\n263,281,397 \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION \r\nYEAR ENDED JUNE 30, 2015 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees (Net of Allowance for Doubtful Accounts) Less: Scholarship Allowances \r\nGrants and Contracts Federal Federal Stimulus State Other \r\nSales and Services Rents and Royalties Auxiliary Enterprises \r\nResidence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues \r\nTotal Operating Revenues \r\nOPERATING EXPENSES \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\nTotal Operating Expenses \r\nOperating Loss \r\nNONOPERATING REVENUES (EXPENSES) \r\nState Appropriations Grants and Contracts \r\nFederal Gifts Investment Income (Endowments, Auxiliary and Other) Interest Expense (Capital Assets) Other Nonoperating Revenues (Expenses) \r\nNet Nonoperating Revenues \r\nIncome Before Other Revenues, Expenses, Gains, or Losses \r\nCapital Grants and Gifts State \r\nIncrease in Net Position \r\nNet Position - Beginning of Year, Restated \r\nNet Position - End of Year \r\n \r\nEXHIBIT \"B\" \r\n \r\n$ \r\n \r\n141,104,983 \r\n \r\n-29,890,330 \r\n \r\n8,527,430 263,169 211,281 \r\n8,326,241 4,736,641 \r\n427,647 \r\n \r\n30,683,330 11,165,371 20,041,879 \r\n4,401,633 4,217,851 15,401,930 \r\n94,401 1,752,851 \r\n \r\n221,466,308 \r\n \r\n62,202,436 90,076,024 45,417,194 \r\n679,652 3,192,413 15,419,884 12,265,800 72,251,476 26,365,910 \r\n327,870,789 \r\n-106,404,481 \r\n \r\n85,834,001 \r\n31,737,747 4,216,706 246,650 \r\n-12,815,466 -264,607 \r\n108,955,031 \r\n2,550,550 \r\n939,153 \r\n3,489,703 \r\n259,791,694 \r\n \r\n$ \r\n \r\n263,281,397 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 3 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2015 \r\nCASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts (Exchange) Sales and Services 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: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts Other Payments \r\nNet Cash Used by Operating Activities \r\nCASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Receipts \r\nNet Cash Flows Provided by Noncapital Financing Activities \r\nCASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases \r\nNet Cash Used by Capital and Related Financing Activities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments \r\nNet Increase in Cash \r\nCash and Cash Equivalents - Beginning of Year \r\nCash and Cash Equivalents - End of Year \r\n \r\nEXHIBIT \"C\" \r\n \r\n$ \r\n \r\n111,016,582 \r\n \r\n14,993,303 \r\n \r\n4,736,641 \r\n \r\n-135,309,690 \r\n \r\n-152,080,362 \r\n \r\n-15,419,884 \r\n \r\n-906,141 \r\n \r\n970,538 \r\n \r\n30,720,579 11,363,553 20,081,431 \r\n4,349,133 4,210,885 15,553,705 \r\n-49,323 2,335,112 \r\n-24,892 \r\n \r\n-83,458,830 \r\n \r\n85,834,001 -404,323 \r\n35,954,453 49,475 \r\n121,433,606 \r\n \r\n856,653 -13,906,491 \r\n-5,943,078 -12,815,466 \r\n-31,808,382 \r\n \r\n213,700 6,380,094 36,509,477 \r\n \r\n$ \r\n \r\n42,889,571 \r\n \r\n- 4 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2015 \r\nRECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: \r\nOperating Loss Adjustments to Reconcile Operating loss to Net Cash \r\nUsed by Operating Activities Depreciation Change in Assets and Liabilities: Receivables, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Salaries Payable Advances (Including Tuition and Fees) Other Liabilities Compensated Absences Net Pension Liability Change in Deferred Inflows/Outflows of Resources: Deferred Inflows of Resources Deferred Outflows of Resources \r\nNet Cash Used by Operating Activities \r\nNONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations Change in Fair Value of Investments Recognized as a Component of Interest Income Gift of Capital Assets Reducing Proceeds of Capital Gifts and Grants \r\n \r\nEXHIBIT \"C\" \r\n \r\n$ -106,404,481 \r\n \r\n26,365,910 \r\n \r\n-2,681,591 -186,465 9,127 64,397 208,392 \r\n1,210,202 315,447 -82,707 154,602 \r\n-24,474,005 \r\n \r\n26,983,742 -4,941,400 \r\n \r\n$ \r\n \r\n-83,458,830 \r\n \r\n$ \r\n \r\n21,136,466 \r\n \r\n$ \r\n \r\n32,950 \r\n \r\n$ \r\n \r\n82,500 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 5 - \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 1. Summary of Significant Accounting Policies \r\nNature of Operations Georgia Southern University (the University) 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. \r\nReporting Entity Georgia Southern University is one of thirty (30) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Georgia Southern University as a separate reporting entity. \r\nThe 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. Georgia Southern University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Georgia Southern University is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards. \r\nLegally separate, tax exempt Affiliated Organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential Component Units of the State. See Note 18 for additional information. \r\nFinancial 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 University's assets, deferred outflow of resources, liabilities, deferred inflows of resources, net position, revenues, expenses, changes in net position and cash flows. \r\nBasis of Accounting For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-University transactions have been eliminated. \r\nNew Accounting Pronouncements In fiscal year 2015, the University adopted 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 requires a restatement to beginning net position. The adoption of this statement has a significant impact on the University's financial statements. \r\n \r\n- 7 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nIn fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The adoption of this statement does not have a significant impact on the University's financial statements. \r\nIn fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred outflows of resources and deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. Adoption of this statement in conjunction with GASB No. 68 had a significant impact on the University's Financial Statements. \r\nCash 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 Board of Regents Short-Term Investment Pool. \r\nAccounts 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 the federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the University's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts. \r\nInvestments 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. \r\nThe University 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 Short-Term Fund and Diversified Fund are included under Investments. \r\nInventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out (\"FIFO\") basis. Resale Inventories for Bookstore and other services are valued at cost using the \"first in, first out\" (FIFO) basis. Resale inventories for Food Services are valued at cost using the average cost basis. \r\n \r\n- 8 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nPrepaid Items Prepaid Items reflect payments of costs applicable to future accounting periods. \r\nNoncurrent Investments Investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Position. \r\nCapital 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 University'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 generally are 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. \r\nTo fully understand plant additions in the University System, 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 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. These bonds 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. \r\nCapital Liability Reserve Fund In fiscal year 2014, the Capital Liability Reserve Fund (Fund) was established by the Board of Regents to protect the fiscal integrity of the University System of Georgia (USG) to maintain the strongest possible credit ratings associated with Public Private Venture (PPV) projects and to ensure that the Board of Regents can effectively support its long-term capital lease obligations. The Fund is financed by all USG institutions participating in the PPV program. The Fund serves as a pooled reserve that is managed by the Board of Regents. The Fund shall only be used to address significant shortfalls and only insofar as a requesting USG institution is unable to make the required PPV capital lease payment to the designated cooperative organization. The Fund will continue as long as the Board of Regents has rental obligations under the PPV program and at the conclusion of the program, funds will be returned to the University. The University's contribution to the fund as of June 30, 2015 was $1,778,721. \r\nDeposits Deposits represent good faith deposits from students to reserve housing assignments in a University residence hall. \r\nAdvances 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. \r\n \r\n- 9 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nDeferred Outflows of Resources Deferred outflows of resources consists of the consumption of net assets by the University that are applicable to a future reporting period. \r\nCompensated Absences Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Position, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Position. \r\nNoncurrent Liabilities Noncurrent 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 noncurrent assets. \r\nPensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers Retirement System of Georgia (TRS) and Employees' Retirement System (ERS), additions to/deductions for TRS's and ERS's fiduciary net position have been determined on the same basis as they are reported by TRS and ERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \r\nDeferred Inflows of Resources Deferred inflows of resources consists of the acquisition of net assets by the University that are applicable to a future reporting period. \r\nNet Position The University's net position is classified as follows: \r\nNet Investment in Capital Assets: This represents the University'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 the net investment in capital assets. \r\nThe term \"debt obligations\" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1  Capital Assets section. \r\nRestricted  nonexpendable includes endowment and similar type funds, in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may be either expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia. \r\nRestricted  expendable 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. \r\n \r\n- 10 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nUnrestricted: Unrestricted net position is the net amount of assets, deferred outflows of resources, liabilities and deferred inflows of resources that are not included in the determination of the other net position categories. Included in the net deficit reported is noncurrent liabilities of $77,355,890 which is required for financial reporting and will not impact the economics of the plan or affect budgets or cash flows. \r\nWhen an expense is incurred that can be paid using either restricted or unrestricted resources, the University's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. \r\nIncome Taxes Georgia Southern University, 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. \r\nClassification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Position classify fiscal year activity as operating and nonoperating according to the following criteria: \r\nOperating 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. \r\nNonoperating revenue includes activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income. \r\nOperating Expenses: Operating expense includes activities that have the characteristics of exchange transactions. \r\nNonoperating expense includes activities that have the characteristics of nonexchange transactions, such as capital financing costs and costs related to investment activity. \r\nScholarship 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 University, and the amount that is paid by students and/or third parties making payments on the students' behalf. \r\nCertain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the University's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University has recorded contra revenue for scholarship allowances. \r\nRestatement Note Disclosure For fiscal year 2015, the University made prior period adjustments due to the adoption of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date which require the restatement of the June 30, 2014, net position. The result is a decrease in Net Position at \r\n \r\n- 11 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nJuly 1, 2014 of $94,155,812 of which $101,829,895 is represented in Net Pension Liability and $7,674,083 is represented in deferred outflow. This change is in accordance with generally accepted accounting principles. \r\nNote 2. Deposits and Investments \r\nDeposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the University's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the University) 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 5017-59: \r\n1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia. \r\n2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia. \r\n3. 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. \r\n4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. \r\n5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association. \r\n6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia. \r\nAt June 30, 2015, the carrying value of deposits was $37,254,812 and the bank balance was $39,950,512. Of the University's deposits, $39,700,512 was uninsured. Of these uninsured deposits, $39,700,512 was collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name. \r\nInvestments Georgia Southern 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 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. \r\nAt June 30, 2015, the carrying value of the University's investments were $10,961,098, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Board of Regents investment pool as follows: \r\n- 12 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nInvestment Pool \r\n \r\nBoard of Regents \r\n \r\nShort-Term Fund \r\n \r\n$ \r\n \r\nDiversified Fund \r\n \r\nTotal Investment Pool $ \r\n \r\n5,479,409 5,481,689 \r\n10,961,098 \r\n \r\nThe Board of Regents Investment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents Investment Pool is voluntary. The Board of Regents Investment Pool is not rated. Additional information on the Board of Regents Investment Pool is disclosed in the audited Financial Statements of the Board of Regents of the University System of Georgia  System Office (oversight unit). This audit can be obtained from the Georgia Department of Audits and Accounts  Education Audit Division or on their web site at http://www.audits.ga.gov. \r\nInterest 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 University does not have a formal policy for managing interest rate risk. \r\nThe Effective Duration of the Short-Term Fund is 0.33 years. Of the University's total investment of $5,479,409 in the Short-Term Fund, $5,479,409 is invested in debt securities. \r\nThe Effective Duration of the Diversified Fund is 4.79 years. Of the University's total investment of $5,481,689 in the Diversified Fund, $1,848,456 is invested in debt securities. \r\nNote 3. Accounts Receivable \r\nAccounts receivable consisted of the following at June 30, 2015: \r\n \r\nStudent Tuition and Fees \r\n \r\n$ \r\n \r\nAuxiliary Enterprises and Other Operating Activities \r\n \r\nFederal Financial Assistance \r\n \r\nGeorgia Student Finance Commission \r\n \r\nGeorgia State Financing and Investment Commission \r\n \r\nDue from Affiliated Organizations \r\n \r\nOther \r\n \r\n383,949 1,699,915 4,688,185 2,732,749 \r\n604,487 3,289,359 \r\n367,732 \r\n \r\nLess Allowance for Doubtful Accounts \r\n \r\n13,766,376 309,562 \r\n \r\nNet Accounts Receivable \r\n \r\n$ \r\n \r\n13,456,814 \r\n \r\n- 13 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 4. Inventories Inventories consisted of the following at June 30, 2015: \r\n \r\nBookstore Food Services Other \r\n \r\n$ \r\n \r\n2,476,362 \r\n \r\n517,750 \r\n \r\n88,142 \r\n \r\nTotal Inventories $ \r\n \r\n3,082,254 \r\n \r\nNote 5. Notes/Loans Receivable \r\nThe Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2015. 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 for amounts cancelled under these provisions. As the University 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. At June 30, 2015, the University did not have an allowance for uncollectible loans. \r\n \r\n- 14 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 6. Capital Assets Following are the changes in capital assets for the year ended June 30, 2015: \r\n \r\nBeginning Balance July 1, 2014 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2015 \r\n \r\nCapital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress \r\n \r\n$ \r\n \r\n18,875,157 \r\n \r\n490,880 \r\n \r\n422,010 $ \r\n \r\n7,972,168 $ \r\n \r\n$ 2,211,620 \r\n \r\n18,875,157 490,880 \r\n6,182,558 \r\n \r\nTotal Capital Assets, Not Being Depreciated \r\n \r\n19,788,047 \r\n \r\n7,972,168 \r\n \r\n2,211,620 \r\n \r\n25,548,595 \r\n \r\nCapital Assets, Not Being Depreciated: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections \r\n \r\n21,168,417 405,138,821 \r\n12,190,416 44,468,842 249,776,111 48,109,775 \r\n \r\n1,725,426 574,343 \r\n5,018,049 21,136,466 \r\n2,037,037 \r\n \r\n944,000 \r\n1,207,086 184,995 7,314 \r\n \r\n21,168,417 405,920,247 \r\n12,764,759 48,279,805 270,727,582 50,139,498 \r\n \r\nTotal Assets Being Depreciated \r\n \r\n780,852,382 \r\n \r\n30,491,321 \r\n \r\n2,343,395 \r\n \r\n809,000,308 \r\n \r\nLess: Accumulated Depreciation: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections \r\n \r\n16,137,759 125,772,617 \r\n1,950,073 28,308,993 53,078,546 38,882,530 \r\n \r\n188,942 8,850,776 \r\n500,296 5,260,860 9,943,702 1,621,334 \r\n \r\n803,121 \r\n1,057,417 161,459 7,314 \r\n \r\n16,326,701 133,820,272 \r\n2,450,369 32,512,436 62,860,789 40,496,550 \r\n \r\nTotal Accumulated Depreciation \r\n \r\n264,130,518 \r\n \r\n26,365,910 \r\n \r\n2,029,311 \r\n \r\n288,467,117 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n516,721,864 \r\n \r\n4,125,411 \r\n \r\n314,084 \r\n \r\n520,533,191 \r\n \r\nCapital Assets, Net \r\n \r\n$ \r\n \r\n536,509,911 $ \r\n \r\n12,097,579 $ \r\n \r\n2,525,704 $ \r\n \r\n546,081,786 \r\n \r\nFor projects managed by GSFIC, GSFIC retains construction-in-progress on its books throughout the construction period and transfers the entire project to the University when complete. For projects managed by the University, the University retains construction-in-progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2015, GSFIC transferred capital additions valued at $82,500 to Georgia Southern University. In addition, at June 30, 2015, GSFIC had construction in progress of approximately $5,629,598 for incomplete projects for the University. \r\n \r\n- 15 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 7. Advances (Including Tuition and Fees) Advances (Including Tuitions and Fees) consisted of the following at June 30, 2015: \r\n \r\nPrepaid Tuition and Fees $ Other - Advances \r\n \r\n6,051,392 1,949,126 \r\n \r\nTotal Advances \r\n \r\n$ \r\n \r\n8,000,518 \r\n \r\nNote 8. Long-Term Liabilities Long-Term liability activity for the year ended June 30, 2015 was as follows: \r\n \r\nLeases Lease Obligations $ \r\nOther Liabilities Compensated Absences Notes and Loans Payable Net Pension Liability \r\n \r\nBeginning Balance July 1, 2014 \r\n221,213,231 $ \r\n6,313,814 1,621,304 101,829,895 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2015 \r\n \r\n21,136,466 $ 5,825,333 $ 236,524,364 $ \r\n \r\n5,122,280 \r\n \r\n4,967,678 117,745 \r\n24,474,005 \r\n \r\n6,468,416 1,503,559 77,355,890 \r\n \r\nCurrent Portion \r\n6,895,842 4,603,864 \r\n124,310 \r\n \r\nTotal \r\n \r\n109,765,013 \r\n \r\n5,122,280 \r\n \r\n29,559,428 \r\n \r\n85,327,865 \r\n \r\n4,728,174 \r\n \r\nTotal Long-Term Obligations $ 330,978,244 $ 26,258,746 $ 35,384,761 $ 321,852,229 $ 11,624,016 \r\n \r\nNotes and Loans Payable Included in Long-Term liabilities is a $3,000,000 note payable that was originally payable to Georgia Education Authority (University), (GEA(U)). In July 2007, GEA(U) met and resolved to no longer conduct business as a state authority and dispose of all its assets and liabilities. As a result of that decision, a Note Receivable that was payable from Georgia Southern University was transferred by Resolution from GEA(U) to the University System Office (USO) of the University System of Georgia. Georgia Southern University continues to render payments according to the original amortization schedule to the USO. The note carries an interest rate of 5.50% and is due semi-annually through the year 2025. The outstanding balance at June 30, 2015 is $1,503,559. Annual maturities are as follows: \r\n \r\nYear Ending June 30 \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nTotal Payments \r\n \r\nCurr Liab \r\n \r\nL/T Liab \r\n \r\n2016 \r\n \r\n$ \r\n \r\n2017 \r\n \r\n2018 \r\n \r\n2019 \r\n \r\n2020 \r\n \r\n2021 through 2025 \r\n \r\n124,310 $ 131,241 138,559 146,284 154,441 808,724 \r\n \r\n81,010 $ 74,079 66,761 59,036 50,879 115,216 \r\n \r\n205,320 $ 205,320 205,320 205,320 205,320 923,940 \r\n \r\n124,310 $ \r\n \r\n131,241 138,559 146,284 154,441 808,724 \r\n \r\n$ 1,503,559 $ \r\n \r\n446,981 $ \r\n \r\n1,950,540 $ \r\n \r\n124,310 $ \r\n \r\n1,379,249 \r\n \r\n- 16 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 9. Net Position \r\nNet position is reported in the following three categories: Net Investment in Capital Assets, Restricted Nonexpendable, Restricted-Expendable, and Unrestricted. \r\nThe amounts within each category at June 30, 2015 were as follows: \r\n \r\nNet Investments in Capital Assets $ \r\n \r\n308,053,863 \r\n \r\nRestricted for Nonexpendable Permanent Endowment \r\n \r\n2,465,814 \r\n \r\nExpendable Organized Activities Federal Loans Institutional Loans \r\n \r\n5,769,497 2,729,888 \r\n54,545 \r\n \r\nTotal Expendable \r\n \r\n8,553,930 \r\n \r\nUnrestricted R \u0026 R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted USO Reserve Fund \r\n \r\n13,920,763 17,925,211 \r\n64,000 -89,480,905 \r\n1,778,721 \r\n \r\nTotal Unrestricted \r\n \r\n-55,792,210 \r\n \r\nTOTAL NET POSITION \r\n \r\n$ \r\n \r\n263,281,397 \r\n \r\nNote 10. Endowments \r\nInvestments of the University's endowment funds are pooled, unless required to be separately invested by the donor. For University controlled, donor-restricted endowments, where the donor has not provided specific instructions, the Board of Regents permits Georgia Southern University to develop policies for authorizing and spending realized and unrealized endowment income and appreciation as they determined to be prudent. Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Endowment net income of $55,444 and net appreciation of $14,995 are reflected as restricted expendable change in net position of $70,439. \r\nThe University uses a conservative approach for endowment management by using a hybrid combination of the total return concept for income and gains/losses, and the classical trust method that protects the corpus of the endowments. Annual payouts from the University's endowment funds are based on a spending policy which limits annual endowed scholarship spending as 4% of the 3 year moving average of the endowment fair market value. To the extent that the total return for the current year exceeds payout, the excess is added to restricted expendable net position. If total payouts exceed total return, prior years' net appreciation is reduced. \r\n \r\n- 17 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 11. Significant Commitments \r\nThe University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $9,612,431 as of June 30, 2015. This amount is not reflected in the accompanying basic financial statements. \r\nNote 12. Lease Obligations \r\nGeorgia Southern University 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. \r\nCapital Leases \r\nCapital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2016 and 2043. Payments for fiscal year 2015 were $18,923,330 of which $12,727,891 represented interest and $370,106 executory costs. Total principal paid on capital leases was $5,825,333 for the fiscal year ended June 30, 2015. Interest rates range from 2.24% to 13.13%. \r\n \r\nDescription \r\n \r\nCAPITAL LEASE SCHEDULE \r\n \r\nLessor \r\n \r\nOriginal Principal \r\n \r\nLease Term \r\n \r\nBegin End \r\n \r\nOutstanding Principal \r\nBalance at 6/30/15 (1) \r\n \r\nPPV3901001 - Southern Courtyard (1) \r\n \r\nHF \r\n \r\n$ \r\n \r\nPPV3901002 - Southern Pines (1) \r\n \r\nHF \r\n \r\nPPV3902000 - Eagle Village (1) \r\n \r\nHF \r\n \r\nPPV3903001 - J.I. Clements Baseball (1) \r\n \r\nHF \r\n \r\nPPV3903002 - Ath Trng Ctr (Ironworks (1) \r\n \r\nHF \r\n \r\nPPV3903003 - Soccer \u0026 Track St (1) \r\n \r\nHF \r\n \r\nPPV3904001 - Rec Act Ctr (RAC) (1) \r\n \r\nHF \r\n \r\nPPV3905000 - Centennial Place (1) \r\n \r\nHF \r\n \r\nPPV3906000 - Campus Courtyard Univ V (1) HF \r\n \r\nPPV3907000 - Freedom's Landing (1) \r\n \r\nHF \r\n \r\nPPV3908000 - Dining Commons Lakeside (1) HF \r\n \r\nPPV3909000 - Dining Comm Landrum (1) HF \r\n \r\nPPV391000 - Football Stadium Expansion (1) Athletic F \r\n \r\nPPV3911000 - Football Oper Ctr (1) \r\n \r\nAthletic F \r\n \r\nEquipment \r\n \r\nVarious \r\n \r\n18,296,060 \r\n \r\n28 yrs \r\n \r\n24,371,991 \r\n \r\n28 yrs \r\n \r\n30,179,998 \r\n \r\n25 yrs \r\n \r\n2,230,350 \r\n \r\n24 yrs \r\n \r\n694,056 \r\n \r\n24 yrs \r\n \r\n1,677,441 \r\n \r\n24 yrs \r\n \r\n40,264,057 \r\n \r\n25 yrs \r\n \r\n56,096,073 \r\n \r\n30 yrs \r\n \r\n13,360,301 \r\n \r\n30 yrs \r\n \r\n34,599,940 \r\n \r\n29 yrs \r\n \r\n7,851,917 \r\n \r\n29 yrs \r\n \r\n18,321,140 \r\n \r\n29 yrs \r\n \r\n10,168,728 \r\n \r\n29 yrs \r\n \r\n10,830,102 \r\n \r\n29 yrs \r\n \r\n1,785,428 36 to 60 mths \r\n \r\n09/03 09/03 08/05 08/05 08/05 08/05 08/06 08/09 08/08 07/12 08/13 08/13 08/14 08/14 Various \r\n \r\n10/2031 $ 10/2031 07/2030 07/2029 07/2029 07/2029 07/2031 07/2039 07/2038 06/2041 06/2042 06/2042 06/2043 06/2043 Various \r\n \r\nTotal Leases \r\n \r\n$ 270,727,582 \r\n \r\n$ \r\n \r\n13,013,952 17,335,749 22,043,804 \r\n1,610,131 500,852 \r\n1,209,813 32,459,255 52,940,871 12,923,622 34,436,378 \r\n7,815,675 18,150,893 10,406,612 10,962,323 \r\n714,434 \r\n236,524,364 \r\n \r\n(1) These capital leases are considered related party transactions with affiliated organizations. \r\nOperating Leases \r\nGeorgia Southern University's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2016 through 2027. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the \r\n \r\n- 18 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nnormal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. \r\nFacilities and equipment rented through operating leases are not recorded as assets on the balance sheet. Operating lease expenditures totaled $222,086 for the fiscal year ended June 30, 2015. \r\nIn 2014, Georgia Southern University entered into a real property operating lease with The Odd Lot, Inc., an unrelated party, for office space at College Plaza from July 2014 through June 2015. The monthly rent of $10,400 increased in January 2015 to $10,833 per the renewal option. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $127,400 in the current year. \r\nIn 2014, Georgia Southern University entered into a real property operating lease with S \u0026 F Partnership and FFF Properties LLC., an unrelated party, for Costume Shop storage space for monthly rental payments of $3,500. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $42,000 in the current year. \r\nIn 2014, Georgia Southern University entered into a real property operating lease with Market District Center MSB, LLC, an unrelated party, for office space for six monthly rental payments of $1,323. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $7,938 in the current year. In 2014, Georgia Southern University entered into a real property operating lease with Southern Trailers, an unrelated party, for storage space for monthly rental payments of $4,415. There was an additional agreement for in which remodeling costs would be deducted from monthly rent owed. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $43,552 in the current year. \r\nIn 2007, Georgia Southern University Herty Advanced Materials Development Center entered into a real property operating lease with the Georgia Ports Authority for land, at the site of the Herty Facility, located at 110 Brampton Road, Savannah, Georgia. The lease has a 20 year term and terminates July 27, 2027. The rental payment for the current year was $1,196. Subsequent years rent increase 5% annually, through the term of the lease. \r\nFuture Commitments \r\nFuture commitments for capital leases (which here and on the Statement of Net Position) include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2015, were as follows: \r\n \r\n- 19 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nCapital Leases \r\n \r\nOperating Leases \r\n \r\nYear Ending June 30: 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2030 2031 - 2035 2036 - 2040 2041 - 2043 \r\n \r\n$ 19,483,132 $ 19,247,006 19,127,769 19,099,868 19,103,614 95,660,111 95,630,589 59,801,388 50,740,573 11,260,015 \r\n \r\nTotal Minimum Lease Payments 409,154,065 $ \r\n \r\n221,039 1,256 1,319 1,385 1,454 8,434 3,994 \r\n238,881 \r\n \r\nLess: Interest \r\n \r\n172,629,701 \r\n \r\nPrincipal Outstanding \r\n \r\n$ 236,524,364 \r\n \r\nThe following is a summary of the carrying values of assets held under capital lease at June 30, 2015: \r\n \r\nDescription \r\n \r\nGross Amount (+) \r\n \r\nAccumulated Depreciation \r\n(-) \r\n \r\nNet Capital Assets Held Under Capital Lease \r\nat June 30, 2015 (=) \r\n \r\nOutstanding Balances per Lease Schedules at June 30, 2015 \r\n \r\nLand - (PPV) \r\n \r\n$ \r\n \r\nEquipment \r\n \r\nBuildings - (PPV) \r\n \r\n$ \r\n \r\n12,024,271 1,785,428 \r\n256,917,883 \r\n \r\n$ 784,462 62,076,327 \r\n \r\n12,024,271 1,000,966 $ \r\n194,841,556 \r\n \r\n714,434 235,809,930 \r\n \r\n270,727,582 $ 62,860,789 $ 207,866,793 $ 236,524,364 \r\n \r\nCertain 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. \r\nNote 13. Retirement Plans \r\nGeorgia Southern University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Teachers Retirement System of Georgia (TRS) and Employees' Retirement System of Georgia (ERS). 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 administrative offices. \r\nThe significant retirement plans that Georgia Southern University 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. \r\n \r\n- 20 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTeachers' Retirement System of Georgia and Employees' Retirement System of Georgia \r\nGeneral Information about the Teachers' Retirement System \r\nPlan description: All teachers of the University as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) are provided a pension through the Teachers' Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at www.trsga.com/publications. \r\nBenefits provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee 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. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \r\nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2015. The University's contractually required contribution rate for the year ended June 30, 2015 was 13.15 % of annual University payroll. University contributions to TRS were $8,583,283 for the reporting period (fiscal year ended June 30, 2015) and $7,643,896 for the measurement period (fiscal year ended June 30,2014). \r\nGeneral Information about the Employees' Retirement System \r\nPlan description:  ERS is a cost-sharing multiple-employer defined benefit pension plan 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. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \r\nBenefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to 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 modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. \r\nUnder the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60. \r\n \r\n- 21 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nRetirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also 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. \r\nContributions: 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 state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The University's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. The University's contributions to ERS were $30,479 for the reporting period (fiscal year ended June 30, 2015) and $30,187 for the measurement period (fiscal year ended June 30, 2014). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\nAt June 30, 2015, the University reported a liability for its proportionate share of the net pension liability for TRS and ERS totaling $77,355,890. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The University's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2014. At June 30 2014, the University's TRS proportion was 0.610143%, which was an increase of 0.028185% from its proportion measured as of June 30, 2013. At June 30, 2014, the University's ERS proportion was 0.007262%, which was a decrease of 0.001484% from its proportion measured as of June 30, 2013. \r\nFor the year ended June 30, 2015, the University recognized pension expense of $6,193,161 for TRS and $-11,062 for ERS. At June 30, 2015, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\n- 22 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTRS Deferred Outflow of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nERS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflow of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n$ 26,872,949 \r\n \r\n$ \r\n \r\n66,477 \r\n \r\nChanges in proportion and differences between University contributions and proportionate share of contributions $ \r\n \r\n4,001,721 \r\n \r\n44,316 \r\n \r\nUniversity contributions subsequent to the measurement date \r\n \r\n8,583,283 \r\n \r\n$ \r\n \r\n30,479 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n12,585,004 $ 26,872,949 $ \r\n \r\n30,479 $ \r\n \r\n110,793 \r\n \r\nThe University contributions subsequent to the measurement date of $8,583,283 for TRS and $30,479 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ending June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2016 2017 2018 2019 2020 \r\n \r\n$ -5,808,754 $ \r\n \r\n$ -5,808,754 $ \r\n \r\n$ -5,808,754 $ \r\n \r\n$ -5,808,760 $ \r\n \r\n$ \r\n \r\n363,794 \r\n \r\n-44,317 -33,238 -16,619 -16,619 \r\n \r\nActuarial assumptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of June 30, 2013 using the following actuarial assumptions, applied to all periods included in the measurement: \r\nTeachers' Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\n \r\n3.00% 3.75% - 7.00% \r\n7.50% \r\n \r\naverage, including inflation net of pension plan investment expense \r\nincluding inflation \r\n \r\nMortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females. \r\nThe actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \r\n \r\n- 23 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nEmployees' Retirement System \r\n \r\nInflation Salary increases Investment rate of return \r\n \r\n3.00% 5.45% - 9.25% \r\n7.50% \r\n \r\naverage, including inflation net of pension plan investment expense \r\nincluding inflation \r\n \r\nMortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement. \r\nThe actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \r\n \r\nThe long-term expected rate of return on TRS and ERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of 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 expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return * \r\n \r\nFixed Income Domestic large equities Domestic mid equities Domestic small equities International developed market equities International emerging market equities \r\n \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\n100.00% * Rates shown are net of the 3.00% assumed rate of inflation \r\n \r\nDiscount rate: The discount rate used to measure the total TRS and ERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and ERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \r\n \r\n- 24 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nSensitivity of the University's proportionate share of the net pension liability to changes in the discount rate: The following presents the University's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the University's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \r\n \r\nTeachers' Retirement System: \r\nUniversity's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate \r\n(7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ 142,054,585 $ 77,083,520 $ 23,581,197 \r\n \r\nEmployees' Retirement System: \r\n \r\n1% \r\n \r\nCurrent \r\n \r\n1% \r\n \r\nDecrease \r\n \r\nDiscount Rate \r\n \r\nIncrease \r\n \r\n(6.50%) \r\n \r\n(7.50%) \r\n \r\n(8.50%) \r\n \r\nUniversity's proportionate share \r\n \r\nof the net pension liability \r\n \r\n$ \r\n \r\n397,169 $ \r\n \r\n272,370 $ \r\n \r\n166,136 \r\n \r\nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and ERS financial reports which are publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs, respectively. \r\n \r\nRegents Retirement Plan \r\n \r\nPlan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An \"eligible university system employee\" is a faculty member or all exempt full and partial benefit eligible employees, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (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. \r\n \r\nFunding Policy Georgia Southern University makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2015, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. \r\n \r\nGeorgia Southern University and the covered employees made the required contributions of $6,207,725 (9.24%) and $4,030,991 (6%), respectively. \r\n \r\nVALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. \r\n \r\n- 25 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 14. Risk Management \r\nThe University System of Georgia offers its employees and retirees access to four different healthcare plan options. For the University System of Georgia's Plan Year 2015, the following healthcare plan options were available: \r\n BlueChoice HMO  Comprehensive Care Plan  Consumer Choice HSA Plan  Kaiser Permanente HMO \r\nGeorgia Southern University and participating employees and retirees pay premiums to the healthcare plan options to access benefits coverage. The respective health plan options are included in the financial statements of the Board of Regents of the University System of Georgia  University System Office. All units of the University System of Georgia share the risk of loss for claims associated with the self-insured plans; including the BlueChoice HMO, Comprehensive Care Plan and Consumer Choice HSA Plan. \r\nThe 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 to serve as the claims administrator for the selfinsured healthcare plans. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser Permanente. \r\nThe 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. Georgia Southern University, as an organizational unit of the Board of Regents of the University System of Georgia, 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. \r\nA self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. \r\nThe 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. \r\nNote 15. Contingencies \r\nAmounts 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 expenditure disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Georgia Southern University expects such amounts, if any, to be immaterial to its overall financial position. \r\n- 26 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nLitigation, claims and assessments filed against Georgia Southern University (an organizational unit of the Board of Regents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015. \r\nNote 16. Post-Employment Benefits Other Than Pension Benefits \r\nPursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee. \r\nThe Board of Regents Retiree Health Benefit Plan is a single-employer, defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The University pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. \r\nAs of June 30, 2015, there were 842 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2015, Georgia Southern University recognized as incurred $3,900,193 of expenditures, which was net of $1,900,588 of participant contributions. \r\n \r\n- 27 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 17. Natural Classifications with Functional Classifications \r\nThe University's operating expenses by functional classification for fiscal year 2015 are shown below: \r\nFunctional Classification \r\n \r\nNatural Classification \r\n \r\nInstruction \r\n \r\nResearch \r\n \r\nPublic Service \r\n \r\nAcademic Support \r\n \r\nStudent Services \r\n \r\nSalaries \r\n \r\nFaculty \r\n \r\n$ \r\n \r\nStaff \r\n \r\nEmployee Benefits \r\n \r\nPersonal Services \r\n \r\nTravel \r\n \r\nScholarships and Fellowships \r\n \r\nUtilities \r\n \r\nSupplies and Other Services \r\n \r\nDepreciation \r\n \r\n58,318,864 $ 12,086,721 19,491,317 \r\n90,154 1,098,418 \r\n244,992 45,695 \r\n6,747,465 2,366,194 \r\n \r\n2,403,429 $ 5,490,895 1,780,054 \r\n3,073 490,025 130,553 1,047,725 4,295,761 1,279,642 \r\n \r\n22,463 $ 730,918 227,692 \r\n1,165 31,700 111,436 \r\n2,431 451,131 \r\n11,082 \r\n \r\n1,351,650 $ 14,476,152 \r\n4,428,255 21,577 \r\n382,478 89,483 83,195 \r\n9,080,713 2,069,693 \r\n \r\n20,006 14,092,371 \r\n3,649,861 6,578 \r\n231507 371,048 597,366 4,850,566 404,782 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 100,489,820 $ 16,921,157 $ 1,590,018 $ 31,983,196 $ 24,224,085 \r\n \r\nNatural Classification \r\n \r\nInstitutional Support \r\n \r\nFunctional Classification \r\n \r\nPlant Operations Scholarships \r\n \r\nand \r\n \r\nand \r\n \r\nAuxiliary \r\n \r\nMaintenance \r\n \r\nFellowships Enterprises \r\n \r\nTotal Operating Expenses \r\n \r\nSalaries \r\n \r\nFaculty \r\n \r\n$ \r\n \r\nStaff \r\n \r\nEmployee Benefits \r\n \r\nPersonal Services \r\n \r\nTravel \r\n \r\nScholarships and Fellowships \r\n \r\nUtilities \r\n \r\nSupplies and Other Services \r\n \r\nDepreciation \r\n \r\n86,024 12,869,715 $ \r\n6,746,253 481,476 297,816 \r\n57,893 13,522,780 \r\n234,026 \r\n \r\n11,333,652 4,160,776 -383,476 32,066 $ 6,397,505 2,260,456 9,970,839 \r\n \r\n$ 9,668,280 \r\n \r\n$ 18,995,600 \r\n4,932,986 459,105 628,403 \r\n4,804,092 4,033,990 31,042,604 10,029,652 \r\n \r\n62,202,436 90,076,024 45,417,194 \r\n679,652 3,192,413 15,419,884 12,265,800 72,251,476 26,365,910 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 34,295,983 $ \r\n \r\nNote 18. Affiliated Organizations \r\n \r\n33,771,818 $ 9,668,280 $ 74,926,432 $ 327,870,789 \r\n \r\nThe Georgia Southern University Foundation, Inc., Georgia Southern University Housing Foundation, Inc., Georgia Southern University Athletics Foundation, Inc., and Georgia Southern University Research and Service Foundation, Inc. are legally separate, tax exempt organizations whose activities primarily support Georgia Southern University. 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 organization are not included in these financial statements. Copies of the financial statements for the affiliated organizations may be obtained from Georgia Southern University. \r\n- 28 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nGeorgia Southern University Housing Foundation, Inc., has been determined significant to the State of Georgia for the year ended June 30, 2015, and as such, is reported as a component unit in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). This affiliated organization issues separate audited financial statements that can be obtained from Georgia Southern University. \r\n \r\n- 29 - \r\n \r\n  REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n  GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"1\" \r\n \r\nUniversity's proportion of the net pension liability University's proportionate share of the net pension liability University's covered-employee payroll University's proportionate share of the net pension liability \r\nas a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability \r\n \r\n2015 0.610% \r\n$ 77,083,520.00 $ 61,951,356.00 \r\n124.43% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. - 31 - \r\n \r\n  GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"2\" \r\n \r\nUniversity's proportion of the net pension liability University's proportionate share of the net pension liability University's covered-employee payroll University's proportionate share of the net pension liability \r\nas a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability \r\n \r\n2015 0.007% \r\n$ 272,370.00 $ 163,525.00 \r\n166.56% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. - 32 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nContractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) University's covered-employee payroll Contributions as a percentage of covered-employee payroll \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n2013 \r\n \r\n2012 \r\n \r\n$ 8,583,283.00 $ 7,643,896.00 $ 6,685,303.00 $ 5,748,680.00 \r\n \r\n$ 8,583,283.00 $ 7,643,896.00 $ 6,685,303.00 $ 5,748,680.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ 64,900,115.00 $ 61,951,356.00 $ 58,603,283.00 $ 55,921,011.67 \r\n \r\n13.23% \r\n \r\n12.34% \r\n \r\n11.41% \r\n \r\n10.28% \r\n \r\n- 33 - \r\n \r\n SCHEDULE \"3\" \r\n \r\n2011 \r\n \r\n2010 \r\n \r\n2009 \r\n \r\n2008 \r\n \r\n2007 \r\n \r\n2006 \r\n \r\n$ 5,470,825.00 $ 5,078,763.00 $ 4,658,740.00 $ 4,403,648.00 $ 4,074,725.00 $ 3,867,088.00 \r\n \r\n$ 5,470,825.00 $ 5,078,763.00 $ 4,658,740.00 $ 4,403,648.00 $ 4,074,725.00 $ 3,867,088.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ 53,218,142.00 $ 52,143,357.00 $ 50,201,940.00 $ 47,453,103.00 $ 43,908,675.00 $ 41,851,602.00 \r\n \r\n10.28% \r\n \r\n9.74% \r\n \r\n9.28% \r\n \r\n9.28% \r\n \r\n9.28% \r\n \r\n9.24% \r\n \r\n- 34 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR YEAR ENDED JUNE 30 \r\n \r\nContractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) University's covered-employee payroll Contributions as a percentage of covered-employee payroll \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n2013 \r\n \r\n2012 \r\n \r\n$ \r\n \r\n30,479.00 $ 30,187.00 $ 30,247.00 $ 26,844.00 \r\n \r\n$ \r\n \r\n30,479.00 $ 30,187.00 $ 30,247.00 $ 26,844.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n138,794.00 $ 163,525.00 $ 202,999.00 $ 230,815.00 \r\n \r\n21.96% \r\n \r\n18.46% \r\n \r\n14.90% \r\n \r\n11.63% \r\n \r\n- 35 - \r\n \r\n SCHEDULE \"4\" \r\n \r\n2011 \r\n \r\n2010 \r\n \r\n2009 \r\n \r\n2008 \r\n \r\n2007 \r\n \r\n2006 \r\n \r\n$ 26,056.00 $ 30,300.00 $ 39,842.00 $ 31,755.00 $ 25,615.00 $ 18,074.00 \r\n \r\n$ 26,056.00 $ 30,300.00 $ 39,842.00 $ 31,755.00 $ 25,615.00 $ 18,074.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ 250,294.00 $ 291,066.00 $ 334,252.00 $ 304,514.00 $ 245,721.00 $ 173,622.00 \r\n \r\n10.41% \r\n \r\n10.41% \r\n \r\n11.92% \r\n \r\n10.43% \r\n \r\n10.42% \r\n \r\n10.41% \r\n \r\n- 36 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY NOTES TO REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"5\" \r\n \r\nTeachers' Retirement System \r\nChanges of assumptions : In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. \r\nMethod and assumptions used in calculations of actuarially determined contributions : The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return \r\n \r\nJune 30, 2012 Entry age Level percentage of payroll, open 30 years Seven-year smoothed market 3.00% 3.75  7.00%, including inflation 7.50%, net of pension plan investment \r\nexpense, including inflation \r\n \r\nEmployees' Retirement System \r\n \r\nChanges of assumptions : There were no changes in assumptions or benefits that affect the measurement of the total pension liability since the prior measurement date. \r\n \r\nMethod and assumptions used in calculations of actuarially determined contributions : The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases \r\nInvestment rate of return \r\n \r\nJune 30, 2012 Entry age Level dollar, open 30 years Seven-year smoothed market 3.00% 2.725%  4.625% for FY 2012-2013, 5.45% - 9.25% for FY2014+ 7.50%, net of pension plan investment \r\nexpense, including inflation \r\n \r\n- 37 - \r\n \r\n SUPPLEMENTARY INFORMATION -38 - \r\n \r\n ASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable \r\nFederal Financial Assistance Other Prepaid Expenditures Inventories \r\nTotal Assets \r\nLIABILITIES AND FUND EQUITY \r\nLiabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue \r\nTotal Liabilities \r\nFund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\nGEORGIA SOUTHERN UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30, 2015 \r\n \r\nSCHEDULE \"6\" \r\n \r\n$ \r\n \r\n31,030,394.86 \r\n \r\n2,611,429.82 \r\n \r\n3,577,093.41 3,185,920.03 \r\n99,924.25 46,689.75 \r\n \r\n40,551,452.12 \r\n \r\n462,570.29 16,735,133.21 \r\n266,892.63 6,317,270.59 \r\n23,781,866.72 \r\n \r\n5,594,232.07 2,517,807.60 \r\n392,339.27 5,365,051.81 \r\n132,811.35 2,606,130.29 \r\n64,000.00 \r\n97,213.01 \r\n16,769,585.40 \r\n \r\n$ \r\n \r\n40,551,452.12 \r\n \r\nActual 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 special purpose framework. \r\n- 39 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) \r\nBUDGET FUND YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"7\" \r\n \r\nREVENUES \r\nState Appropriation State General Funds \r\nOther Funds \r\nTotal Revenues \r\nCARRY-OVER FROM PRIOR YEARS \r\nTransfers from Reserved Fund Balance \r\nTotal Funds Available \r\nEXPENDITURES \r\nSpecial Funding Initiative Teaching \r\nTotal Expenditures \r\nExcess of Funds Available over Expenditures \r\nFUND BALANCE JULY 1 \r\nReserved Unreserved \r\nADJUSTMENTS \r\nPrior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned \r\nto Board of Regents - University System Office Year Ended June 30, 2015 \r\nPrior Year Reserved Fund Balance Included in Funds Available \r\nFUND BALANCE JUNE 30 \r\n \r\nBUDGET \r\n \r\nACTUAL \r\n \r\nVARIANCE FAVORABLE (UNFAVORABLE) \r\n \r\n$ \r\n \r\n85,934,264.00 $ \r\n \r\n205,937,991.00 \r\n \r\n291,872,255.00 \r\n \r\n85,934,264.00 $ 183,801,465.60 \r\n269,735,729.60 \r\n \r\n0.00 -22,136,525.40 \r\n-22,136,525.40 \r\n \r\n0.00 291,872,255.00 \r\n \r\n16,577,037.57 286,312,767.17 \r\n \r\n16,577,037.57 -5,559,487.83 \r\n \r\n208,159.00 291,664,096.00 \r\n291,872,255.00 \r\n \r\n$ \r\n \r\n0.00 \r\n \r\n199,964.51 269,589,117.62 269,789,082.13 \r\n16,523,685.04 $ \r\n \r\n8,194.49 22,074,978.38 22,083,172.87 \r\n16,523,685.04 \r\n \r\n16,744,470.85 100,262.70 \r\n \r\n88,013.43 -9,546.35 \r\n \r\n-100,262.70 -16,577,037.57 \r\n \r\n$ \r\n \r\n16,769,585.40 \r\n \r\nSUMMARY OF FUND BALANCE \r\nReserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories \r\nTotal Reserved \r\nUnreserved Surplus \r\nTotal Fund Balance \r\n \r\n$ \r\n \r\n5,594,232.07 \r\n \r\n2,517,807.60 \r\n \r\n392,339.27 \r\n \r\n5,365,051.81 \r\n \r\n132,811.35 \r\n \r\n2,606,130.29 \r\n \r\n64,000.00 \r\n \r\n16,672,372.39 \r\n \r\n97,213.01 \r\n \r\n$ \r\n \r\n16,769,585.40 \r\n \r\nActual 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 special purpose framework. \r\n- 40 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2015 \r\n \r\nSpecial Funding Initiatives State Appropriation \r\nState General Funds \r\nTeaching State Appropriation \r\nState General Funds \r\nOther Funds \r\nTotal Teaching \r\nTotal Operating Activity \r\n \r\nOriginal Appropriation \r\n \r\nAmended Appropriation \r\n \r\nFinal Budget \r\n \r\nCurrent Year Revenues \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n208,159.00 $ \r\n \r\n208,159.00 \r\n \r\n85,726,105.00 186,561,855.00 \r\n272,287,960.00 \r\n \r\n85,726,105.00 186,561,855.00 \r\n272,287,960.00 \r\n \r\n85,726,105.00 205,937,991.00 \r\n291,664,096.00 \r\n \r\n85,726,105.00 183,801,465.60 \r\n269,527,570.60 \r\n \r\n$ \r\n \r\n272,287,960.00 $ \r\n \r\n272,287,960.00 $ \r\n \r\n291,872,255.00 $ \r\n \r\n269,735,729.60 \r\n \r\nActual 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 special purpose framework. \r\n- 41 - \r\n \r\n SCHEDULE \"8\" \r\n \r\nFunds Available Compared to Budget \r\n \r\nPrior Year \r\n \r\nAdjustments and \r\n \r\nTotal \r\n \r\nCarry-Over \r\n \r\nProgram Transfers \r\n \r\nFunds Available \r\n \r\nVariance Negative \r\n \r\nExpenditures Compared to Budget \r\n \r\nVariance \r\n \r\nActual \r\n \r\nPositive \r\n \r\nExcess of Funds Available Over Expenditures \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n208,159.00 $ \r\n \r\n0.00 $ \r\n \r\n199,964.51 $ \r\n \r\n8,194.49 $ \r\n \r\n8,194.49 \r\n \r\n0.00 16,577,037.57 \r\n16,577,037.57 \r\n \r\n$ \r\n \r\n16,577,037.57 $ \r\n \r\n0.00 0.00 \r\n0.00 \r\n \r\n85,726,105.00 200,378,503.17 \r\n286,104,608.17 \r\n \r\n0.00 -5,559,487.83 \r\n-5,559,487.83 \r\n \r\n85,715,105.00 183,874,012.62 \r\n269,589,117.62 \r\n \r\n11,000.00 22,063,978.38 \r\n22,074,978.38 \r\n \r\n11,000.00 16,504,490.55 \r\n16,515,490.55 \r\n \r\n0.00 $ \r\n \r\n286,312,767.17 $ \r\n \r\n-5,559,487.83 $ \r\n \r\n269,789,082.13 $ \r\n \r\n22,083,172.87 $ \r\n \r\n16,523,685.04 \r\n \r\n- 42 - \r\n \r\n Special Funding Initiatives State Appropriation State General Funds \r\nTeaching State Appropriation State General Funds Other Funds \r\nTotal Teaching \r\nTotal Operating Activity \r\nPrior Year Reserves Not Available for Expenditure Inventories Uncollectible Accounts Receivable \r\nBudget Unit Totals \r\n \r\nGEORGIA SOUTHERN UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2015 \r\n \r\nBeginning Fund Balance July 1 \r\n \r\nFund Balance Carried Over from \r\nPrior Period as Funds Available \r\n \r\nReturn of Fiscal Year 2014 \r\nSurplus \r\n \r\nPrior Period Adjustments \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n73,096.21 16,604,204.06 16,677,300.27 \r\n16,677,300.27 \r\n \r\n0.00 -16,577,037.57 -16,577,037.57 \r\n-16,577,037.57 \r\n \r\n-73,096.21 -27,166.49 -100,262.70 \r\n-100,262.70 \r\n \r\n53,000.00 114,433.28 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n$ \r\n \r\n16,844,733.55 $ \r\n \r\n-16,577,037.57 $ \r\n \r\n-100,262.70 $ \r\n \r\n23,420.96 55,046.12 78,467.08 \r\n78,467.08 \r\n0.00 0.00 \r\n78,467.08 \r\n \r\nActual 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 special purpose framework. \r\n- 43 - \r\n \r\n SCHEDULE \"9\" \r\n \r\nOther Adjustments \r\n \r\nEarly Return Fiscal Year 2015 \r\nSurplus \r\n \r\nExcess of Funds Available \r\nOver Expenditures \r\n \r\nEnding Fund Balance June 30 \r\n \r\nAnalysis of Ending Fund Balance \r\n \r\nReserved \r\n \r\nSurplus \r\n \r\nTotal \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n8,194.49 $ \r\n \r\n8,194.49 $ \r\n \r\n0.00 $ \r\n \r\n8,194.49 $ \r\n \r\n8,194.49 \r\n \r\n-11,000.00 -18,378.07 -29,378.07 \r\n-29,378.07 \r\n \r\n11,000.00 18,378.07 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 0.00 0.00 \r\n0.00 \r\n \r\n11,000.00 16,504,490.55 16,515,490.55 \r\n16,523,685.04 \r\n \r\n23,420.96 16,541,158.60 16,564,579.56 \r\n16,572,774.05 \r\n \r\n0.00 16,475,561.04 16,475,561.04 \r\n16,475,561.04 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n64,000.00 132,811.35 \r\n \r\n64,000.00 132,811.35 \r\n \r\n0.00 $ \r\n \r\n16,523,685.04 $ \r\n \r\n16,769,585.40 $ \r\n \r\n16,672,372.39 $ \r\n \r\nSummary of Ending Fund Balance Reserved \r\nDepartment Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus \r\nTotal Ending Fund Balance - June 30 \r\n \r\n$ \r\n \r\n5,594,232.07 \r\n \r\n2,517,807.60 \r\n \r\n392,339.27 \r\n \r\n5,365,051.81 \r\n \r\n132,811.35 \r\n \r\n2,606,130.29 \r\n \r\n64,000.00 \r\n \r\n$ \r\n \r\n16,672,372.39 $ \r\n \r\n23,420.96 65,597.56 \r\n89,018.52 \r\n \r\n23,420.96 16,541,158.60 \r\n16,564,579.56 \r\n \r\n97,213.01 16,572,774.05 \r\n \r\n0.00 0.00 \r\n \r\n64,000.00 132,811.35 \r\n \r\n97,213.01 $ 16,769,585.40 \r\n \r\n$ 5,594,232.07 2,517,807.60 392,339.27 5,365,051.81 132,811.35 2,606,130.29 64,000.00 \r\n \r\n97,213.01 \r\n \r\n97,213.01 \r\n \r\n97,213.01 $ 16,769,585.40 \r\n \r\n- 44 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY RECONCILIATION OF BUDGET TO GAAP \r\nYEAR ENDED JUNE 30, 2015 \r\nPresented below is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A. \r\nTotal Fund Balances - Budget Fund - Non-GAAP Basis (Schedule \"1\") \r\nAmounts reported for Business-Type Activities in the Statement of Net Position are different because: \r\nCapital Assets used in Business-Type Activities are not reported in the Budget Fund. \r\nUncollectible accounts receivable are reported as an asset and reserved fund balance in the Budget Fund and as a contra-asset account on the Statement of Net Position. \r\nCollection of AR amounts that were Reserved as Uncollectible in Prior Years \r\nChanges in the Fair Market Value of Investments are recognized on the Statement of Net Position, but are not reported in the Budget Fund. \r\nAgency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity \r\nAuxiliary Enterprises Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Auxiliary Enterprises Fund Activity \r\nEndowment Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Endowment Fund Activity \r\nLoan Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Loan Fund Activity \r\nStudent Activities Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Student Activity Fund Activity \r\nThe budgetary basis of accounting implemented by the State of Georgia recognizes expenditures when encumbered. The following adjustments were made to eliminate this activity for reporting on the Statement of Net Position. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Payables for goods and services provided in the current fiscal year reported in the Budget Fund as encumbrances payable are reported as accounts payable for GAAP reporting. Reimbursement from grantors reported as revenues in the Budget Fund that are for expenditures based on encumbrances are deferred for GAAP reporting. Total Net Effect of Encumbrance Activity \r\nCertain Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund. Accounts Payable Capital Leases Payable Compensated Absences Payable Contracts Payable Deferred Outflows on Defined Benefit Pension Plan Deferred Defined Benefit Pension Plan Due From Component Units Due To Component Units Deferred Inflows on Defined Benefit Pension Plan Notes and Loans Payable Total Liabilities \r\nNet Position of Business-Type Activities (Exhibit \"A\") \r\nThe supplementary information presented on Schedules 6, 7, 8, and 9 was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. The information was derived from, and relates directly to, the same information used to prepare the financial statements. However, the budgetary statutes and regulations of the State of Georgia require reporting of certain information that is not in accordance with generally accepted accounting principles. Presented on this schedule is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A. \r\n- 45 - \r\n \r\nSCHEDULE \"10\" \r\n \r\n$ \r\n \r\n16,769,585.40 \r\n \r\n$ \r\n \r\n6,723,014.11 \r\n \r\n-6,723,014.11 \r\n \r\n$ \r\n \r\n6,603,811.26 \r\n \r\n-2,106,291.86 \r\n \r\n$ \r\n \r\n2,465,814.07 \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n2,784,432.63 \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n8,139,788.18 \r\n \r\n-155,677.55 \r\n \r\n546,081,785.84 -132,811.35 -3,322.52 54,651.36 \r\n0.00 4,497,519.40 2,465,814.07 2,784,432.63 7,984,110.63 \r\n \r\n$ \r\n \r\n16,735,133.21 \r\n \r\n-1,814,014.18 -2,996,409.69 \r\n \r\n11,924,709.34 \r\n \r\n$ \r\n \r\n-874,150.13 \r\n \r\n-236,524,363.10 \r\n \r\n-6,468,416.33 \r\n \r\n-1,164,775.68 \r\n \r\n12,615,483.00 \r\n \r\n-77,355,890.00 \r\n \r\n9,127,479.82 \r\n \r\n-13,143.98 \r\n \r\n-26,983,742.00 \r\n \r\n-1,503,559.46 \r\n \r\n-329,145,077.86 \r\n \r\n$ \r\n \r\n263,281,396.94 \r\n \r\n (This page left intentionally blank) \r\n \r\n GEORGIA SOUTHERN UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"11\" \r\n \r\nTotals per Annual Supplement \r\nAccruals June 30, 2015 June 30, 2014 \r\nCompensated Absences June 30, 2015 June 30, 2014 \r\nAdjustments Shared Services on Jointly Staffed Personnel Armstrong Atlantic State University Lewis, Geoj Lubecki, Jacek Marshall, Nandi Sturz, Bradley Columbus State University Keeley, Howard Levernier, Edna East Georgia College Aceto, Jonathan Fort Valley State University Moore, Teah Georgia Southwestern State University Patternson, Charles Georgia State University Szymanski, Robert Skidaway Institute of Oceanography Clark, Alexander University of Georgia Smith, Ralphel University of West Georgia Chibbaro, Julia Defoor, Leanne Prince, Bradley \r\nImmaterial Variance \r\n \r\nSALARIES \r\n \r\n$ \r\n \r\n152,141,714 $ \r\n \r\nTRAVEL 3,163,359 \r\n \r\n768,810 -674,002 \r\n \r\n75,356 -39,580 \r\n \r\n6,008,747 -5,865,131 \r\n \r\n3,229 -100 269 \r\n-3,500 \r\n-1,077 -27,451 \r\n355 \r\n3,000 \r\n-146,557 \r\n-7,535 \r\n30,000 \r\n14,533 \r\n4,501 17,890 10,765 \r\n \r\n$ \r\n \r\n152,278,460 $ \r\n \r\n-12,402 \r\n5,680 3,192,413 \r\n \r\n- 47 - \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n  Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJanuary 19, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia \r\nand Dr. Jean E. Bartels, Interim President Georgia Southern University \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\nLadies and Gentlemen: \r\nWe have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of Georgia Southern University as of and for the year ended June 30, 2015, and have issued our report thereon dated January 19, 2016. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered Georgia Southern University's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Georgia Southern University's internal control. Accordingly, we do not express an opinion on the effectiveness of Georgia Southern University's internal control. \r\nA 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 entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a 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. \r\n \r\n2015YB-30 \r\n \r\n  Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item FS 2015-001 that we consider to be a significant deficiency. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Georgia Southern University's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. \r\nWe noted certain matters that we have reported to management of Georgia Southern University in a separate letter dated January 19, 2016. \r\nGeorgia Southern University's Response to Findings \r\nGeorgia Southern University's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Georgia Southern University's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \r\nPurpose of this Report \r\nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \r\nRespectfully submitted, \r\n \r\nGSG:er 2015YB-30 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n  GEORGIA SOUTHERN UNIVERSITY AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFA-539-14-01 \r\n \r\nPartially Resolved - See Corrective Action/Responses \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\nSPECIAL TESTS AND PROVISIONS Calculation of Title IV Refunds U.S. Department of Education 84.SFA Student Financial Aid Cluster Finding Control Number: FA-539-14-01 \r\nThe corrective action plan for this finding has been fully implemented. The auditors nor Federal Program Reviewers found any problems with refund calculations in fiscal year 2015. We are awaiting confirmation from the U.S. Department of Education that this finding has been resolved. \r\n \r\n- 1 - \r\n \r\n  SECTION IV CURRENT YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n  GEORGIA SOUTHERN UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2015 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFS-2015-001 Inadequate Controls over the Information Technology Store \r\n \r\nControl Category: \r\n \r\nExpenditures/Liabilities/Disbursements \r\n \r\nInventories \r\n \r\nInternal Control Impact: Significant Deficiency \r\n \r\nCompliance Impact: N/A \r\n \r\nDescription: \r\n \r\nThe University's Information Technology Store did not have adequate separation of duties and internal controls in place over the expenditure and inventory processes to ensure that all inventory for resale were run through the Point-of-Sale inventory system as required. \r\n \r\nCriteria: \r\n \r\nManagement is responsible for designing and maintaining internal controls that provide reasonable assurance that all transactions are processed according to established procedures. All inventory for resale should be entered into the Point-of-Sale inventory system when received. In addition, all sales should be recorded in the Point-of-Sale inventory system. \r\n \r\nCondition: \r\n \r\nOur test of seven Technology Store orders revealed that four orders (457 items with a total value of $10,039.00) were not entered into the Point-of-Sale inventory system when received. Included in these items was a computer that was sold and delivered to a customer without being entered into the Point-ofSale inventory system or receipt of payment from the customer. After this issue was brought to the attention of management by the auditors, the computer was entered into the inventory system and payment was processed. The ordering/purchasing, receiving, inventory control and record keeping functions were not properly separated. \r\n \r\nCause: \r\n \r\nIn discussing the deficiency with management, they stated that the employees did not properly enter the items into the point-of-sale inventory system and track payments. In addition, there was not appropriate staffing to adequately separate all duties. \r\n \r\nEffect or Potential Effect: Inventory for resale items were purchased and sold without being properly accounted for and recorded. Failure to implement and maintain adequate internal controls over inventory for resale increases the risk that misappropriation of assets, fraud, errors, and irregularities could occur and not be detected by the University. \r\n \r\nRecommendation: \r\n \r\nManagement should investigate any inventory items not entered into the Pointof-Sale inventory system and take appropriate action. The University should implement controls to ensure that all merchandise items purchased for retail are properly accounted for in the Point-of-Sale inventory system. Management should also monitor controls to provide reasonable assurance that transactions are processed according to established procedures and payment is received for all transactions. In addition, the University should implement procedures to ensure the key accounting functions of ordering/purchasing, receiving, inventory control and record keeping are properly separated. \r\n \r\n- 1 - \r\n \r\n GEORGIA SOUTHERN UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2015 \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS Views of Responsible Officials and Corrective Action Plans: We concur with this finding. Tech Corner current procedures for ordering, receiving, recording in point of sale inventory and subsequent recording of sales, will be reviewed by a team comprised of store management, Auxiliary Division accounting management and University financial management. Processes will be flowcharted and examined for weaknesses in separation of duties and generally accepted accounting internal controls. This task will be finalized by development of written procedures approved by Auxiliary AVP, AVP-Finance and Vice President for Business and Finance. In July 2015, The Tech Corner store purchased and implemented a new inventory point of sale system specifically designed for operations of this business type. The implementation of this system coupled with implementation of revised procedures will further enhance the security and controls over Tech Corner inventory and sales operations. In addition to development of written procedures, Tech Corner staff, Auxiliary accounting staff and Financial Account staff will be trained on approved procedures. The addition of an assistant manager in Tech Corner has allowed implementation of more separation of duties, by implementation of separate job duties for ordering resale product and receiving of products for resale Estimated Corrective Action Date: Contact Person: Eddie Mills Title: Director of Auxiliary Operations Telephone: 912-478-1302 E-mail: emills@georgiasouthern.edu FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n- 2 - \r\n \r\n "}],"pages":{"current_page":1,"next_page":null,"prev_page":null,"total_pages":1,"limit_value":10,"offset_value":0,"total_count":2,"first_page?":true,"last_page?":true},"facets":[{"name":"type_facet","items":[{"value":"Text","hits":2}],"options":{"sort":"count","limit":16,"offset":0,"prefix":null}},{"name":"creator_facet","items":[{"value":"Georgia. 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