{"response":{"docs":[{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bv33-b2012-h2013-belec-p-btext","title":"Valdosta State University, Valdosta, Georgia, annual financial report for the fiscal year ended June 30, 2013 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, Lowndes County, Valdosta, 30.83334, -83.28032"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2012/2013"],"dcterms_description":["Began with: Fiscal year ended June 30, 2011.","Report year covers fiscal year.","For some years, report may be released instead called: Valdosta State University, Valdosta, Georgia, management report for fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on audit of the financial statements for the fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on review of the financial statements for the fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on review of the financial statements for the fiscal year ended ..., or: Annual financial report, Valdosta State University, for the fiscal year ended ... Valdosta, Georgia, or: Valdosta State University, Valdosta, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended ...","Fiscal year ended June 30, 2011; title from PDF cover (Georgia Government Publications database, viewed October 16, 2023).","Fiscal year ended June 30, 2015 (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); (Georgia Government Publications database, viewed October 16, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2013"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Valdosta State University--Appropriations and expenditures","Financial statements--Georgia","Auditors' reports--Georgia"],"dcterms_title":["Valdosta State University, Valdosta, Georgia, annual financial report for the fiscal year ended June 30, 2013 (including independent auditor's reports)"],"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-bv33-b2012-h2013-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bv33-b2012-h2013-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":null,"fulltext":"Annual \r\nFinancial Report \r\nFor the Fiscal Year Ended June 30, 2013 \r\nIncluding Independent Auditor's Report | Valdosta, Georgia \r\n \r\n VALDOSTA STATE UNIVERSITY - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\nBASIC FINANCIAL STATEMENTS \r\nEXHIBITS \r\nA STATEMENT OF NET POSITION \r\nB STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION \r\nC STATEMENT OF CASH FLOWS \r\nD NOTES TO THE FINANCIAL STATEMENTS \r\nSUPPLEMENTARY INFORMATION \r\nSCHEDULES \r\n1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT \r\n(NON-GAAP BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET \r\nBY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n5 RECONCILIATION OF BUDGET TO GAAP 6 RECONCILIATION OF SALARIES AND TRAVEL \r\n \r\nPage \r\ni \r\n2 3 4 6 \r\n26 27 28 30 32 33 \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\n  VALDOSTA STATE UNIVERSITY - TABLE OF CONTENTS - \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \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\nNovember 18, 2013 \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 Honorable William J. McKinney, President Valdosta State 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 Valdosta State 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, 2013. \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 Valdosta State 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 \r\n13ARL-62 \r\n \r\n  purpose of expressing an opinion on the effectiveness of Valdosta State 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 Valdosta State University as of June 30, 2013, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. \r\nEmphasis of Matter \r\nAs discussed in Note 1, the financial statements of Valdosta State 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 Valdosta State University. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2013, 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\nAs described in Note 1 to the financial statements, in 2013, Valdosta State University adopted new accounting guidance, GASB Statement No. 63, Reporting Deferred Outflows, Deferred Inflows, and Net Position. 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 vi be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. \r\nOther Information \r\nOur audit was conducted for the purpose of forming an opinion on the basic financial statements of Valdosta State University. The accompanying supplementary information (Schedules 1 through 6) is presented for purposes of additional analysis and is not a required part of the basic financial statements. \r\n13ARL-62 \r\n \r\n  The accompanying supplementary information (Schedules 1 through 6) 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 November 18, 2013, on our consideration of Valdosta State 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 Valdosta State University's internal control over financial reporting and compliance. \r\nRespectfully, \r\n \r\nGSG:as 13ARL-62 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n  VALDOSTA STATE UNIVERSITY \r\nManagement's Discussion and Analysis \r\n \r\nIntroduction \r\nValdosta State University is one of the 31 institutions of higher education of the University System of Georgia. The University, located in Valdosta, Georgia, was founded in 1906. The University offers nationally accredited programs in Art, Business, Music, Nursing, Speech Pathology, School Psychology and Teacher Education as well as baccalaureate and master's degrees in a wide variety of other subjects. This broad range of educational opportunities attracts a highly qualified faculty and a student body of more than 12,500 students each year. The institution's enrollment is shown by the comparison numbers that follow. \r\n \r\nFaculty \r\n \r\nStudents (Headcount) \r\n \r\nStudents (FTE) \r\n \r\nFiscal Year 2013 Fiscal Year 2012 Fiscal Year 2011 \r\n \r\n549 \r\n \r\n12,515 \r\n \r\n569 \r\n \r\n13,089 \r\n \r\n576 \r\n \r\n12,898 \r\n \r\nOverview of the Financial Statements and Financial Analysis \r\n \r\n11,384 11,903 11,846 \r\n \r\nValdosta State University is pleased to present its financial statements for fiscal year 2013. 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 2013 and fiscal year 2012. \r\n \r\nStatement of Net Position The Statement of Net Position presents the assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position of the University as of the end of the fiscal year. The Statement of Net Position is a point-of-time financial statement. The Statement of Net Position presents a fiscal snapshot of Valdosta State University. The Statement of Net Position presents endof-year data concerning assets (current and noncurrent) plus deferred outflows, and liabilities (current and noncurrent) plus deferred inflows, and net position (assets plus deferred outflows minus liabilities plus deferred inflows). The differences between current and noncurrent assets are discussed in the Notes to the Financial Statements. \r\n \r\nFrom 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. \r\n \r\nFinally, the Statement of Net Position provides a picture of the net position (assets plus deferred outflows of resources minus liabilities plus deferred inflows of resources) and their availability for expenditure by the institution. Net position is divided into three major categories. The first category, net investment in capital assets, provides the institution's equity in property, plant and equipment owned by the institution. The next category is restricted, which is divided into two categories, nonexpendable and expendable. \r\n \r\ni \r\n \r\n The corpus of nonexpendable, 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. The final category is unrestricted. Unrestricted resources are available to the institution for any lawful purpose. \r\nStatement of Net Position, Condensed \r\n \r\nJune 30, 2013 \r\n \r\nJune 30, 2012 \r\n \r\nAssets Current Assets Capital Assets, Net Other Assets \r\n \r\n$ 31,662,981 327,120,659 13,314,470 \r\n \r\n$ 34,244,410 327,718,574 12,746,073 \r\n \r\nTotal Assets \r\n \r\n$ 372,098,110 \r\n \r\n$ 374,709,057 \r\n \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\n \r\n$ 17,343,357 209,024,890 \r\n \r\n$ 17,633,027 212,794,134 \r\n \r\nTotal Liabilities \r\n \r\n$ 226,368,247 \r\n \r\n$ 230,427,161 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Nonexpendable Expendable Unrestricted \r\n \r\n$ 116,251,269 \r\n3,047,107 3,484,583 22,946,904 \r\n \r\n$ 113,488,324 \r\n2,658,741 3,409,843 24,724,988 \r\n \r\nTotal Net Position \r\n \r\n$ 145,729,863 \r\n \r\n$ 144,281,896 \r\n \r\nTotal assets decreased by $2,610,947 primarily due to a decrease in Cash as well as a decrease of $597,915 in the category of Capital Assets, Net. The consumption of assets follows the institutional philosophy to use available resources to acquire and improve all areas of the institution to better serve the instruction, research and public service missions of the institution. \r\nTotal liabilities of resources decreased for the year by $4,058,914. The combination of the decrease in total assets and the decrease in total liabilities yields an increase in net position of $1,447,967. The increase in net position is primarily in the category of Net Investment in Capital Assets, in the amount of $2,762,945. \r\n \r\nii \r\n \r\n Statement of Revenues, Expenses and Changes in Net Position \r\nChanges in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally, operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues. \r\nStatement of Revenues, Expenses and Changes in Net Position, Condensed \r\n \r\nJune 30, 2013 \r\n \r\nJune 30, 2012 \r\n \r\nOperating Revenues Operating Expenses \r\n \r\n$ 107,032,686 168,231,323 \r\n \r\n$ 106,440,088 164,183,751 \r\n \r\nOperating Loss \r\n \r\n$ -61,198,637 \r\n \r\n$ -57,743,663 \r\n \r\nNonoperating Revenues and Expenses \r\n \r\n59,986,940 \r\n \r\n58,745,116 \r\n \r\nIncome (Loss) Before Other Revenues, Expenses, Gains or Losses \r\n \r\n$ -1,211,697 \r\n \r\n$ \r\n \r\n1,001,453 \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\n2,659,664 \r\n \r\n2,571,169 \r\n \r\nIncrease (Decrease) in Net Position \r\n \r\n$ \r\n \r\n1,447,967 \r\n \r\n$ \r\n \r\n3,572,622 \r\n \r\nNet Position at Beginning of Year \r\n \r\n144,281,896 \r\n \r\n140,709,274 \r\n \r\nNet Position at End of Year \r\n \r\n$ 145,729,863 \r\n \r\n$ 144,281,896 \r\n \r\nThe 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\niii \r\n \r\n Revenue by Source For the Years Ended June 30, 2013 and June 30, 2012 \r\n \r\nJune 30, 2013 \r\n \r\nJune 30, 2012 \r\n \r\nOperating Revenue \r\n \r\nTuition and Fees \r\n \r\n$ \r\n \r\nGrants and Contracts \r\n \r\nSales and Services of Educational Departments \r\n \r\nAuxiliary \r\n \r\nOther \r\n \r\n60,105,797 2,811,985 1,534,486 \r\n41,549,891 1,030,527 \r\n \r\n$ 58,328,153 3,051,098 1,285,996 \r\n42,977,061 797,780 \r\n \r\nTotal Operating Revenue \r\n \r\n$ 107,032,686 \r\n \r\n$ 106,440,088 \r\n \r\nNonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income Other \r\n \r\n$ 44,831,698 22,278,685 1,266,519 722,870 17,538 \r\n \r\n$ 43,356,576 23,332,996 1,287,510 90,722 1,663 \r\n \r\nTotal Nonoperating Revenue \r\n \r\n$ 69,117,310 \r\n \r\n$ 68,069,467 \r\n \r\nCapital Grants and Gifts State Other \r\n \r\n$ \r\n \r\n2,131,963 \r\n \r\n527,701 \r\n \r\n$ \r\n \r\n2,418,839 \r\n \r\n152,330 \r\n \r\nTotal Capital Grants and Gifts \r\n \r\n$ \r\n \r\n2,659,664 \r\n \r\n$ \r\n \r\n2,571,169 \r\n \r\nTotal Revenues \r\n \r\n$ 178,809,660 \r\n \r\n$ 177,080,724 \r\n \r\nExpenses (By Functional Classification) For the Years Ended June 30, 2013 and June 30, 2012 \r\n \r\nJune 30, 2013 \r\n \r\nJune 30, 2012 \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$ 55,639,996 347,243 \r\n2,243,534 13,138,768 12,767,301 18,840,322 16,870,646 11,358,563 37,024,950 \r\n \r\n$ 54,012,196 530,627 \r\n1,959,154 12,186,987 12,155,952 15,695,921 15,970,084 12,741,201 38,931,629 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 168,231,323 \r\n \r\n$ 164,183,751 \r\n \r\nNonoperating Expenses Interest Expense (Capital Assets) \r\n \r\n9,130,370 \r\n \r\n9,324,351 \r\n \r\nTotal Expenses \r\n \r\n$ 177,361,693 \r\n \r\n$ 173,508,102 \r\n \r\niv \r\n \r\n Operating revenues increased by $592,598 in fiscal year 2013. Although Tuition and Fees included a 3% increase, revenues decreased in Grants and Contracts and Auxiliary categories. \r\nThe Auxiliary revenue decrease of $1,427,170 was the result of increased admission standards which reduced the size of the freshman class and the overall enrollment of Valdosta State. Auxiliary Services managed through this by reducing expenses by $1,909,926 and working to eliminate programs such as a failed venture into textbook rentals. Auxiliary Services continues to examine its operations to identify cost cuts to operations and generation of new revenue streams. \r\nNonoperating revenues increased by $1,047,843 for the year, primarily due to an increase in State Appropriations and Gifts categories. \r\nThe compensation and employee benefits category increased by $1,997,853 and primarily affected the Instruction, Academic Support, and Plant Operations and Maintenance categories. The increase reflects an increased cost of health insurance for the employees of the institution. \r\nUtilities decreased by $275,982 during the past year. The decrease was primarily associated with a very mild winter and summer weather pattern and affected the Plant Operations and Maintenance category. \r\nStatement of Cash Flows \r\nThe final statement presented by the Valdosta State University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Position. \r\nCash Flows for the Years Ended June 30, 2013 and 2012, Condensed \r\n \r\nJune 30, 2013 \r\n \r\nJune 30, 2012 \r\n \r\nCash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities \r\n \r\n$ \r\n \r\n-45,585,994 \r\n \r\n68,518,965 \r\n \r\n-25,328,436 \r\n \r\n206,713 \r\n \r\n$ \r\n \r\n-38,742,889 \r\n \r\n68,244,963 \r\n \r\n-27,875,931 \r\n \r\n212,589 \r\n \r\nNet Change in Cash Cash, Beginning of Year \r\n \r\n$ \r\n \r\n-2,188,752 \r\n \r\n27,787,044 \r\n \r\n$ \r\n \r\n1,838,732 \r\n \r\n25,948,312 \r\n \r\nCash, End of Year \r\n \r\n$ \r\n \r\n25,598,292 \r\n \r\n$ \r\n \r\n27,787,044 \r\n \r\nv \r\n \r\n Capital Assets The University had two significant capital asset additions for facilities in fiscal year 2013. The Ashley Hall renovation was completed, as well as the Langdale Hall C Wing renovation. For additional information concerning Capital Assets, see Notes 1, 6, 8, and 10 in the Notes to the Financial Statements. Long-Term Liabilities Valdosta State University had Long-Term Liabilities of $214,295,308 of which $5,811,200 was reflected as current liability at June 30, 2013. For additional information concerning Long-Term Liabilities, see Notes 1 and 8 in the Notes to the Financial Statements. Economic Outlook The 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 beyond those unknown variations having a global effect on virtually all types of business operations. The University's overall financial position is strong. Even with a relatively flat funded year, the University was able to generate a modest increase in Net Position. The University anticipates the current fiscal year will be much like last and will maintain a close watch over resources to maintain the University's ability to react to unknown internal and external issues. William J. McKinney, President Valdosta State University \r\nvi \r\n \r\n BASIC FINANCIAL STATEMENTS - 1 - \r\n \r\n ASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables - Other Inventories (Note 4) Prepaid Items \r\nTotal Current Assets \r\nNoncurrent Assets Noncurrent Cash Investments (Externally Restricted) Investments Notes Receivable, Net Capital Assets, Net (Note 6) \r\nTotal Noncurrent Assets \r\nTotal Assets \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Unearned Revenue (Note 7) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Lease Purchase Obligations Unearned Revenue Compensated Absences \r\nTotal Noncurrent Liabilities \r\nTotal Liabilities \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for: \r\nNonexpendable Expendable Unrestricted \r\nTotal Net Position \r\n \r\nVALDOSTA STATE UNIVERSITY STATEMENT OF NET ASSETS \r\nJUNE 30, 2013 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 2 - \r\n \r\nEXHIBIT \"A\" \r\n \r\n$ \r\n \r\n25,569,379 \r\n \r\n853,188 3,230,966 1,757,060 \r\n252,388 \r\n \r\n$ \r\n \r\n31,662,981 \r\n \r\n$ \r\n \r\n28,913 \r\n \r\n6,138,613 \r\n \r\n7,091,237 \r\n \r\n55,707 \r\n \r\n327,120,659 \r\n \r\n$ 340,435,129 \r\n \r\n$ 372,098,110 \r\n \r\n$ \r\n \r\n3,665,408 \r\n \r\n175,567 \r\n \r\n707,925 \r\n \r\n886,775 \r\n \r\n4,824,101 \r\n \r\n25,179 \r\n \r\n1,247,202 \r\n \r\n3,700,779 \r\n \r\n2,110,421 \r\n \r\n$ \r\n \r\n17,343,357 \r\n \r\n$ 207,168,611 540,782 \r\n1,315,497 \r\n$ 209,024,890 \r\n$ 226,368,247 \r\n \r\n$ 116,251,269 \r\n3,047,107 3,484,583 22,946,904 \r\n \r\n$ 145,729,863 \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION \r\nYEAR ENDED JUNE 30, 2013 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees Less: Scholarship Allowances \r\nGrants and Contracts Federal 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 Income (Loss) \r\nNONOPERATING REVENUES (EXPENSES) \r\nState Appropriations Grants and Contracts \r\nFederal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues \r\nNet Nonoperating Revenues \r\nIncome (Loss) Before Other Revenues, Expenses, Gains, or Losses \r\nCapital Grants and Gifts State Other \r\nTotal Other Revenues, Expenses, Gains or Losses \r\nIncrease (Decrease) in Net Position \r\nNet Position - Beginning of Year \r\nNet Position - End of Year \r\nThe notes to the financial statements are an integral part of this statement. \r\n- 3 - \r\n \r\nEXHIBIT \"B\" \r\n \r\n$ \r\n \r\n78,085,226 \r\n \r\n-17,979,429 \r\n \r\n1,200,058 789,103 822,824 \r\n1,534,486 5,490 \r\n \r\n11,893,386 6,715,554 \r\n12,235,106 3,575,319 3,034,105 3,447,006 649,415 1,025,037 \r\n \r\n$ \r\n \r\n107,032,686 \r\n \r\n$ \r\n \r\n37,320,407 \r\n \r\n35,255,110 \r\n \r\n22,066,964 \r\n \r\n491,711 \r\n \r\n1,077,685 \r\n \r\n13,233,411 \r\n \r\n5,689,134 \r\n \r\n36,958,263 \r\n \r\n16,138,638 \r\n \r\n$ \r\n \r\n168,231,323 \r\n \r\n$ \r\n \r\n-61,198,637 \r\n \r\n$ \r\n \r\n44,831,698 \r\n \r\n22,055,315 92,496 \r\n130,874 1,266,519 \r\n722,870 -9,130,370 \r\n17,538 \r\n \r\n$ \r\n \r\n59,986,940 \r\n \r\n$ \r\n \r\n-1,211,697 \r\n \r\n$ \r\n \r\n2,131,963 \r\n \r\n527,701 \r\n \r\n$ \r\n \r\n2,659,664 \r\n \r\n$ \r\n \r\n1,447,967 \r\n \r\n144,281,896 \r\n \r\n$ \r\n \r\n145,729,863 \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2013 \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 Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (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 \r\nNet Cash Flows Provided (Used) by Noncapital Financing Activities \r\nCASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases \r\nNet Cash Provided (Used) by Capital and Related Financing Activities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Interest on Investments \r\nNet Cash Provided (Used) by Investing Activities \r\nNet Increase (Decrease) 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\n60,105,657 \r\n \r\n2,766,453 \r\n \r\n1,534,486 \r\n \r\n-66,711,413 \r\n \r\n-71,513,761 \r\n \r\n-13,233,411 \r\n \r\n18,325 \r\n \r\n11,940,667 7,409,262 \r\n10,698,507 3,567,231 3,021,569 3,342,442 618,965 849,027 \r\n \r\n$ \r\n \r\n-45,585,994 \r\n \r\n$ \r\n \r\n44,831,698 \r\n \r\n136,461 \r\n \r\n23,550,806 \r\n \r\n$ \r\n \r\n68,518,965 \r\n \r\n$ \r\n \r\n2,131,963 \r\n \r\n111,023 \r\n \r\n-15,043,829 \r\n \r\n-3,397,223 \r\n \r\n-9,130,370 \r\n \r\n$ \r\n \r\n-25,328,436 \r\n \r\n$ \r\n \r\n47,607 \r\n \r\n159,106 \r\n \r\n$ \r\n \r\n206,713 \r\n \r\n$ \r\n \r\n-2,188,752 \r\n \r\n27,787,044 \r\n \r\n$ \r\n \r\n25,598,292 \r\n \r\n- 4 - \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2013 \r\nRECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: \r\nOperating Income (Loss) Adjustments to Reconcile Operating Income (loss) to Net Cash \r\nProvided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Receivables, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Unearned Revenue Other Liabilities Compensated Absences \r\nNet Cash Provided (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 Grants and Gifts \r\n \r\nEXHIBIT \"C\" \r\n \r\n$ \r\n \r\n-61,198,637 \r\n \r\n16,138,638 \r\n-143,980 542,403 -77,872 \r\n18,325 513,746 -1,538,751 \r\n53,409 106,725 \r\n \r\n$ \r\n \r\n-45,585,994 \r\n \r\n$ \r\n \r\n36,363 \r\n \r\n$ \r\n \r\n563,764 \r\n \r\n$ \r\n \r\n-527,701 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 5 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 1. Summary of Significant Accounting Policies \r\nNature of Operations Valdosta State 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 Valdosta State University is one of thirty-one (31) 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 Valdosta State 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. Valdosta State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Valdosta State 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 16 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, liabilities, 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 2013, the University adopted the Governmental Accounting Standards Board (GASB) Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements. The provisions of this Statement establish accounting and financial reporting standards for governments who enter into Service Concession Arrangements (SCA) with other governmental or nongovernmental entities. As of June 30, 2013, the University has not entered into any arrangements that meet the qualifications to be reported as a SCA in accordance with this standard. \r\n \r\n- 6 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nIn fiscal year 2013, the University adopted the Governmental Accounting Standards Board (GASB) Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in PreNovember 30, 1989 FASB and AICPA Pronouncements. The provisions of this Statement incorporate certain accounting and financial reporting guidance into authoritative GASB literature. \r\nIn fiscal year 2013, the University adopted the Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. The provisions of this Statement establish financial reporting standards for the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government's net position. The University changed its presentation of net assets to net position for fiscal year 2013. There were no other applicable reporting changes for the University. \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. \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 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 Legal Fund, the Board of Regents Diversified Fund and the Georgia Extended Asset Pool are included under 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 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\nInventories Consumable supplies are carried at cost and are charged out to departments on the first-in, first-out (\"FIFO\") basis. Resale Inventories are valued at cost using the \"first-in, first-out\" (FIFO) basis. \r\nNoncurrent Cash and Investments Cash and 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 \r\n \r\n- 7 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\ncomputed 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\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, 2013, GSFIC did not transfer any capital additions to Valdosta State University. \r\nDeposits Deposits represent good faith deposits from students to reserve housing assignments in a University residence hall. \r\nUnearned Revenues Unearned Revenues 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. Unearned Revenues also include amounts received from grant and contract sponsors that have not yet been earned. \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. Valdosta State University had accrued liability for compensated absences in the amount of $3,319,194 as of July 1, 2012. For fiscal year 2013, $2,524,644 was earned in compensated absences and employees were paid $2,417,920, for a net increase of $106,724. The ending balance as of June 30, 2013 in accrued liability for compensated absences was $3,425,918. \r\nNoncurrent Liabilities Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets. \r\nNet Position The University's net position is classified as follows: \r\nNet Investment in Capital Assets: This represents the University's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of the net investment in capital assets. The term \"debt obligations\" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section. \r\n \r\n- 8 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nRestricted - nonexpendable includes endowment and similar type funds, in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may be either expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia. \r\nRestricted - expendable includes resources in which the University is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties. \r\nExpendable Restricted includes the following at June 30, 2013: \r\n \r\nRestricted - E\u0026G and Other Organized Activities Institutional Loans Term Endowments Quasi-Endowments \r\n \r\n$ \r\n \r\n2,103,808 \r\n \r\n360,742 \r\n \r\n900,425 \r\n \r\n119,608 \r\n \r\nTotal Restricted Expendable \r\n \r\n$ \r\n \r\n3,484,583 \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 University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $206,392.54. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. \r\n \r\nUnrestricted resources include the following items which are quasi-restricted by management at June 30, 2013: \r\n \r\nR \u0026 R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted \r\n \r\n$ \r\n \r\n647,863 \r\n \r\n12,467,095 \r\n \r\n93,019 \r\n \r\n9,738,927 \r\n \r\nTotal Unrestricted Net Position \r\n \r\n$ \r\n \r\n22,946,904 \r\n \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\n \r\nIncome Taxes Valdosta State 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\n \r\nClassification of Revenues and Expenses \r\n \r\nThe Statement of Revenues, Expenses and Changes in Net Position classify fiscal year activity as operating and nonoperating according to the following criteria: \r\n \r\n- 9 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \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\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 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\n \r\n- 10 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \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. \r\nThe 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, 2013, the carrying value of deposits was $25,569,632 and the bank balance was $27,385,303. Of the University's deposits, $27,385,303 were uninsured. Of these uninsured deposits, $27,343,466 were collateralized with securities held by the financial institution's trust department or agent in the University's name and $41,837 were uncollateralized. \r\nInvestments \r\nAt June 30, 2013, the carrying value of the University's investments were $13,229,850, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Board of Regents and/or Office of the State Treasurer investment pools as follows: \r\n \r\nInvestment Pools Board of Regents Diversified Fund \r\n \r\n$ \r\n \r\n6,532,793 \r\n \r\nOffice of the State Treasurer Georgia Extended Asset Pool \r\n \r\n6,697,057 \r\n \r\nTotal Investments \r\n \r\n$ \r\n \r\n13,229,850 \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\nThe Georgia Extended Asset Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company. Net Asset Value (NAV) is calculated daily to determine current share price, which was $2.00 at June 30, 2013. The Georgia Extended Asset Pool is an AA+f rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is .26 years. \r\n \r\n- 11 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \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 University does not have a formal policy for managing interest rate risk. \r\nThe Effective Duration of the Diversified Fund is 5.43 years. Of the University total investment of $6,532,793 in the Diversified Fund, $2,090,494 is invested in debt securities. \r\nNote 3. Accounts Receivable \r\nAccounts receivable consisted of the following at June 30, 2013: \r\n \r\nStudent Tuition and Fees \r\n \r\n$ \r\n \r\nAuxiliary Enterprises and Other Operating Activities \r\n \r\nFederal Financial Assistance \r\n \r\nDue from Georgia State Financing and Investment \r\n \r\nCommission \r\n \r\nDue from Affiliated Organizations \r\n \r\nOther \r\n \r\n665,325 481,364 853,188 \r\n1,062,154 71,384 \r\n1,120,438 \r\n \r\nLess Allowance for Doubtful Accounts \r\n \r\n$ \r\n \r\n4,253,853 \r\n \r\n169,699 \r\n \r\nNet Accounts Receivable \r\n \r\n$ \r\n \r\n4,084,154 \r\n \r\nNote 4. Inventories Inventories consisted of the following at June 30, 2013: \r\n \r\nBookstore \r\n \r\n$ \r\n \r\nOther \r\n \r\nTotal Inventories \r\n \r\n$ \r\n \r\n1,642,512 114,548 \r\n1,757,060 \r\n \r\nNote 5. Notes/Loans Receivable \r\nAt June 30, 2013, Notes/Loans Receivable were comprised of institutional loans, with no allowance for uncollectible loans. \r\n \r\n- 12 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \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, 2013: \r\n \r\nBeginning Balance July 1, 2012 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2013 \r\n \r\nCapital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress \r\n \r\n$ \r\n \r\n5,709,319 $ \r\n \r\n365,378 \r\n \r\n$ \r\n \r\n6,074,697 \r\n \r\n106,887 \r\n \r\n60,858 \r\n \r\n167,745 \r\n \r\n6,760,061 \r\n \r\n10,362,591 $ \r\n \r\n10,043,398 \r\n \r\n7,079,254 \r\n \r\nTotal Capital Assets, Not Being Depreciated $ \r\n \r\n12,576,267 $ \r\n \r\n10,788,827 $ \r\n \r\n10,043,398 $ \r\n \r\n13,321,696 \r\n \r\nCapital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections \r\n \r\n$ \r\n \r\n160,124,198 $ \r\n \r\n10,252,491 \r\n \r\n19,988,457 \r\n \r\n220,790,266 \r\n \r\n26,788,725 \r\n \r\n10,581,454 456,966 \r\n2,213,497 $ 36,363 \r\n1,606,103 \r\n \r\n$ \r\n466,165 30,402 \r\n143,811 \r\n \r\n170,705,652 10,709,457 21,735,789 \r\n220,796,227 28,251,017 \r\n \r\nTotal Assets Being Depreciated \r\n \r\n$ \r\n \r\n437,944,137 $ \r\n \r\n14,894,383 $ \r\n \r\n640,378 $ \r\n \r\n452,198,142 \r\n \r\nLess: Accumulated Depreciation: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections \r\n \r\n$ \r\n \r\n52,732,726 $ \r\n \r\n4,866,659 \r\n \r\n14,103,534 \r\n \r\n30,264,143 \r\n \r\n20,834,768 \r\n \r\n5,148,781 350,309 \r\n1,540,320 $ 7,981,312 1,117,916 \r\n \r\n$ \r\n367,076 30,402 \r\n143,811 \r\n \r\n57,881,507 5,216,968 \r\n15,276,778 38,215,053 21,808,873 \r\n \r\nTotal Accumulated Depreciation \r\n \r\n$ \r\n \r\n122,801,830 $ \r\n \r\n16,138,638 $ \r\n \r\n541,289 $ \r\n \r\n138,399,179 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n$ \r\n \r\n315,142,307 $ \r\n \r\n-1,244,255 $ \r\n \r\n99,089 $ \r\n \r\n313,798,963 \r\n \r\nCapital Assets, Net \r\n \r\n$ \r\n \r\n327,718,574 $ \r\n \r\n9,544,572 $ \r\n \r\n10,142,487 $ \r\n \r\n327,120,659 \r\n \r\nNote 7. Unearned Revenue \r\n \r\nUnearned Revenue consisted of the following at June 30, 2013: \r\n \r\nPrepaid Tuition and Fees Other Unearned Revenue \r\n \r\n$ \r\n \r\n3,947,859 \r\n \r\n876,242 \r\n \r\nTotal Unearned Revenue \r\n \r\n$ \r\n \r\n4,824,101 \r\n \r\nNoncurrent unearned revenue was $540,782 at June 30, 2013. \r\n \r\n- 13 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 8. Long-Term Liabilities Long-Term liability activity for the year ended June 30, 2013 was as follows: \r\n \r\nBeginning Balance July 1, 2012 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2013 \r\n \r\nCurrent Portion \r\n \r\nLeases Lease Obligations \r\n \r\n$ 214,230,250 $ \r\n \r\n36,363 $ 3,397,223 $ 210,869,390 $ 3,700,779 \r\n \r\nOther Liabilities Compensated Absences \r\n \r\n3,319,194 \r\n \r\n2,524,644 \r\n \r\n2,417,920 \r\n \r\n3,425,918 \r\n \r\n2,110,421 \r\n \r\nTotal Long-Term Obligations $ 217,549,444 $ 2,561,007 $ 5,815,143 $ 214,295,308 $ 5,811,200 \r\n \r\nNote 9. Significant Commitments \r\n \r\nThe University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $2,583,725 as of June 30, 2013. This amount is not reflected in the accompanying basic financial statements. \r\nNote 10. Lease Obligations \r\n \r\nValdosta State 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\n \r\nCAPITAL LEASES \r\n \r\nCapital leases are generally payable in installments ranging from monthly to annually and have \r\n \r\nterms expiring in various years between 2014 and 2039. Expenditures for fiscal year 2013 were \r\n \r\n$12.5 million of which $9.1 million represented interest. Total principal paid on capital leases was \r\n \r\n$3.4 million for the fiscal year ended June 30, 2013. Interest rates range from 4.15 percent to 8 \r\n \r\npercent. The following is a summary of the carrying values of assets held under capital lease at \r\n \r\nJune 30, 2013: \r\n \r\nNet Position \r\n \r\nOutstanding \r\n \r\nHeld Under \r\n \r\nBalances per \r\n \r\nAccumulated \r\n \r\nCapital Lease \r\n \r\nLease Schedules \r\n \r\nDescription \r\n \r\nGross Amount \r\n \r\nDepreciation \r\n \r\nat June 30, 2013 \r\n \r\nat June 30, 2013 \r\n \r\n(+) \r\n \r\n(-) \r\n \r\n(=) \r\n \r\nEquipment Equipment - (PPV Only) Buildings - (PPV Only) \r\n \r\n$ \r\n \r\n787,674 $ 370,844 $ \r\n \r\n734,748 \r\n \r\n612,739 \r\n \r\n219,273,805 \r\n \r\n37,231,470 \r\n \r\n416,830 $ 122,009 182,042,335 \r\n \r\n400,017 210,469,373 \r\n \r\nTotal Assets Held Under Capital Lease at June 30, 2013 \r\n \r\n$ 220,796,227 $ 38,215,053 $ 182,581,174 $ \r\n \r\n210,869,390 \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\n \r\n- 14 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nValdosta State University had ten capital leases with related entities in the current fiscal year. In fiscal year 2013, Valdosta State University entered into no new capital leases with related entities. \r\nValdosta State University has nine capital leases with VSU Auxiliary Real Estate Foundation, LLC, as follows: \r\n Georgia and Reade residence halls (combined) for $30,419,725 at an average coupon rate of 4.150% with an outstanding liability at June 30, 2013 of $30,592,750; \r\n Student Union for $60,747,911 at an average coupon rate of 4.514% with an outstanding liability at June 30, 2013 of $57,627,564; \r\n Hopper residence hall with dining services, campus mail and office space for $27,484,345 at an average coupon rate of 4.554% with an outstanding liability at June 30, 2013 of $27,037,271; \r\n Student Health Center for $12,221,729 at an average coupon rate of 4.649% with an outstanding liability at June 30, 2013 of $11,690,320; \r\n Oak Street Parking Deck for $24,869,880 at an average coupon rate of 4.649% with an outstanding liability at June 30, 2013 of $24,541,343; \r\n Sustella Parking Deck for $21,468,631, at an average coupon rate of 4.649% with an outstanding liability at June 30, 2013 of $21,185,027; \r\n Patterson residence hall for $10,399,786 at a varying interest rate with an outstanding liability at June 30, 2013 of $9,496,145; \r\n Lowndes residence hall for $7,116,694 at a varying interest rate with an outstanding liability at June 30, 2013 of $6,597,015; \r\n Centennial residence hall for $19,285,471 at a varying interest rate with an outstanding liability at June 30, 2013 of $16,479,657. \r\nValdosta State University has one capital building lease with Valdosta State University Foundation, LLC, as follows: \r\n Athletic Field House for $5,994,383 at an average coupon rate of 4.55% with an outstanding liability at June 30, 2013 of $5,222,281. \r\nValdosta State University entered into five new equipment capital leases, all of which are copiers, during fiscal year 2013 in the amount of $36,363. The outstanding liability at June 30, 2013 on these new equipment leases is $31,411. All of the new equipment leases are with third parties. \r\nValdosta State University also has various capital leases for equipment with an outstanding balance at June 30, 2013 in the amount of $368,606. \r\nOPERATING LEASES \r\nValdosta State University's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2014 through 2018. Certain operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers and other small business equipment. \r\n \r\n- 15 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nFUTURE COMMITMENTS \r\n \r\nFuture commitments for capital leases (which here and on the Statement of Net Position) include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2013, were as follows: \r\n \r\nReal Property and Equipment \r\n \r\nCapital \r\n \r\nOperating \r\n \r\nLeases \r\n \r\nLeases \r\n \r\nYear Ending June 30: 2014 2015 2016 2017 2018 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038 2039 \r\n \r\n$ \r\n \r\n12,677,516 $ \r\n \r\n12,811,685 \r\n \r\n12,945,293 \r\n \r\n13,071,865 \r\n \r\n13,255,771 \r\n \r\n69,313,968 \r\n \r\n73,669,840 \r\n \r\n66,785,009 \r\n \r\n62,918,889 \r\n \r\n6,063,344 \r\n \r\n1,196 1,196 1,196 1,196 \r\n299 \r\n \r\nTotal Minimum Lease Payments \r\n \r\n$ \r\n \r\n343,513,180 $ \r\n \r\n5,083 \r\n \r\nLess: Interest \r\n \r\n132,643,790 \r\n \r\nPrincipal Outstanding \r\n \r\n$ \r\n \r\n210,869,390 \r\n \r\nValdosta State University's fiscal year 2013 expense for rental of real property and equipment under operating leases was $6,579. \r\nNote 11. Retirement Plans \r\nValdosta State University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Valdosta State 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\nEmployees' Retirement System of Georgia \r\nThe ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing \r\n \r\n- 16 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nretirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract. \r\nOn November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415. \r\nThe benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an \"old plan\" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are \"new plan\" members subject to the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the \"old\" or \"new\" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan. \r\nUnder the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 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\nRetirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \r\nMember contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, Valdosta State University pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Valdosta State University 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. Valdosta State University is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Valdosta State University contributions are not at any time refundable to the member or his/her beneficiary. \r\n \r\n- 17 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nEmployer contributions required for fiscal year 2013 were based on the June 30, 2010 actuarial valuation as follows: \r\n \r\nOld Plan* New Plan GSEPS \r\n \r\n14.90% 14.90% 11.54% \r\n \r\n*10.15% exclusive of contributions paid by the employer on behalf of old plan members \r\n \r\nMembers become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits. \r\n \r\nTeachers Retirement System of Georgia \r\n \r\nThe Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. \r\n \r\nOn October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. \r\n \r\nTRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \r\n \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Options are available for distribution of the member's monthly pension, at a reduced rate, to a designated beneficiary on the member's death. Death, disability and spousal benefits are also available. \r\n \r\nTRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as \r\n \r\n- 18 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nadopted by the Board of Trustees for the fiscal year ended June 30, 2013 were 6.00% of annual salary. Employer contributions required for fiscal year 2013 were 11.41% of annual salary as required by the June 30, 2010 actuarial valuation. \r\nThe following table summarizes the Valdosta State University contributions by defined benefit plan for the years ending June 30, 2013, June 30, 2012, and June 30, 2011 (dollars in thousands): \r\n \r\nFiscal Year \r\n \r\nERS \r\n \r\nRequired \r\n \r\nPercentage \r\n \r\nContribution \r\n \r\nContributed \r\n \r\nTRS \r\n \r\nRequired \r\n \r\nPercentage \r\n \r\nContribution \r\n \r\nContributed \r\n \r\n2013 \r\n \r\n$ \r\n \r\n2012 \r\n \r\n$ \r\n \r\n2011 \r\n \r\n$ \r\n \r\nRegents Retirement Plan \r\n \r\n30,769 16,816 \r\n7,068 \r\n \r\n100% 100% 100% \r\n \r\n$ 3,974,517 $ 3,598,109 $ 3,568,464 \r\n \r\n100% 100% 100% \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 a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. \r\n \r\nFunding Policy Valdosta State 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 2013, 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\nValdosta State University and the covered employees made the required contributions of $2,545,838 (9.24%) and $1,517,693 (6%), respectively. \r\n \r\nAIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. \r\n \r\nGeorgia Defined Contribution Plan \r\n \r\nPlan Description Valdosta State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. \r\n \r\n- 19 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nBenefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. \r\nContributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. \r\nTotal contributions made by employees during fiscal year 2013 amounted to $153,323 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. \r\nThe Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices. \r\nNote 12. Risk Management \r\nThe University System of Georgia offers its employees and retirees access to four different selfinsured healthcare plan options. For the University System of Georgia's Plan Year 2013, the following health care options were available: \r\n Blue Choice HMO plan  (Blue Cross Blue Shield) HSA Open Access POS plan  (Blue Cross Blue Shield) Open Access POS plan  Kaiser Permanente HMO plan \r\nValdosta State University and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare 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 these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare 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. \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. Valdosta State 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, \r\n- 20 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nand 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. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. \r\nNote 13. 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 Valdosta State University expects such amounts, if any, to be immaterial to its overall financial position. \r\nLitigation, claims and assessments filed against Valdosta State 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, 2013. \r\nNote 14. 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. For the 2013 plan year, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%. \r\nAs of June 30, 2013, there were 561 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2013, Valdosta State University recognized as incurred $2,261,526 of expenditures, which was net of $1,148,619 of participant contributions. \r\n \r\n- 21 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 15. Natural Classifications with Functional Classifications The University's operating expenses by functional classification for fiscal year 2013 are shown below: \r\n \r\nFunctional Classification \r\n \r\nNatural Classification \r\n \r\nInstruction \r\n \r\nResearch \r\n \r\nPublic Service \r\n \r\nAcademic Support \r\n \r\nStudent Services \r\n \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\n \r\n$ 36,059,249 $ 4,559,059 \r\n10,263,059 3,424 \r\n387,302 202,171 198,757 3,510,029 456,946 \r\n \r\n84,070 $ 128,125 \r\n33,450 \r\n \r\n103,637 $ 1,108,676 \r\n245,895 \r\n \r\n24,012 7,517 \r\n65,791 4,278 \r\n \r\n35,653 24,587 \r\n7,296 687,245 \r\n30,545 \r\n \r\n1,010,400 $ 5,458,056 1,657,488 \r\n22,776 309,459 174,000 \r\n47,565 2,575,774 1,883,250 \r\n \r\n11,333 5,402,229 1,396,787 \r\n1,000 129,419 \r\n120,211 2,930,165 2,776,157 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 55,639,996 $ \r\n \r\n347,243 $ 2,243,534 $ 13,138,768 $ 12,767,301 \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 \r\n \r\nEnterprises \r\n \r\nTotal Operating Expenses \r\n \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\n \r\n$ \r\n \r\n42,112 \r\n \r\n6,861,249 $ \r\n \r\n4,681,475 \r\n \r\n464,511 \r\n \r\n81,015 \r\n \r\n203,292 6,032,601 \r\n474,067 \r\n \r\n5,920,354 2,078,991 -1,042,556 \r\n16,094 $ \r\n4,909,167 908,810 \r\n4,079,786 \r\n \r\n$ 11,358,563 \r\n \r\n9,606 $ 5,817,362 1,709,819 1,042,556 \r\n94,731 1,466,573 \r\n202,846 20,247,848 \r\n6,433,609 \r\n \r\n37,320,407 35,255,110 22,066,964 \r\n491,711 1,077,685 13,233,411 5,689,134 36,958,263 16,138,638 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 18,840,322 $ \r\n \r\n16,870,646 $ 11,358,563 $ 37,024,950 $ 168,231,323 \r\n \r\n- 22 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 16. Affiliated Organizations \r\nThe Valdosta State University Foundation, Inc., and VSU Auxiliary Services Real Estate Foundation are legally separate, tax-exempt organizations whose activities primarily support Valdosta State 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 organizations are not included in these financial statements. Copies of the financial statements for the affiliated organizations may be obtained from Valdosta State University. \r\nVSU Auxiliary Services Real Estate Foundation has been determined significant to the State of Georgia for the year ended June 30, 2013, and as such, is reported as a blended component unit in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). Significant blended affiliated organizations issue separate audited financial statements that can be obtained from Valdosta State University. \r\n \r\n- 23 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SUPPLEMENTARY INFORMATION - 25 - \r\n \r\n VALDOSTA STATE UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30, 2013 \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 Unearned Revenue 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 \"1\" \r\n \r\n$ \r\n \r\n10,248,378.74 \r\n \r\n8,920,756.18 \r\n \r\n486,937.98 1,466,712.44 \r\n231,334.06 117,172.31 \r\n \r\n$ \r\n \r\n21,471,291.71 \r\n \r\n$ \r\n \r\n145,909.12 \r\n \r\n11,898,992.10 \r\n \r\n269,389.19 \r\n \r\n3,353,033.25 \r\n \r\n25,179.21 \r\n \r\n$ \r\n \r\n15,692,502.87 \r\n \r\n$ \r\n \r\n755,191.84 \r\n \r\n506,447.65 \r\n \r\n320,811.00 \r\n \r\n2,098,632.25 \r\n \r\n150,362.69 \r\n \r\n1,647,932.14 \r\n \r\n93,018.73 \r\n \r\n206,392.54 \r\n \r\n$ \r\n \r\n5,778,788.84 \r\n \r\n$ \r\n \r\n21,471,291.71 \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- 26 - \r\n \r\n VALDOSTA STATE UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) \r\nBUDGET FUND YEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"2\" \r\n \r\nREVENUES \r\nState Appropriation State General Funds \r\nOther Funds \r\nTotal Revenues \r\nADJUSTMENTS AND PROGRAM TRANSFERS \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, 2012 \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$ 45,016,305.00 $ 100,462,744.00 \r\n \r\n45,016,305.00 $ 95,598,250.79 \r\n \r\n$ 145,479,049.00 $ 140,614,555.79 $ \r\n \r\n0.00 \r\n \r\n1,579,094.61 \r\n \r\n0.00 -4,864,493.21 \r\n-4,864,493.21 \r\n1,579,094.61 \r\n \r\n0.00 \r\n \r\n4,863,440.60 \r\n \r\n$ 145,479,049.00 $ 147,057,091.00 $ \r\n \r\n4,863,440.60 1,578,042.00 \r\n \r\n$ \r\n \r\n101,506.00 $ \r\n \r\n100,821.59 $ \r\n \r\n145,377,543.00 \r\n \r\n141,582,018.42 \r\n \r\n$ 145,479,049.00 $ 141,682,840.01 $ \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n5,374,250.99 $ \r\n \r\n684.41 3,795,524.58 \r\n3,796,208.99 \r\n5,374,250.99 \r\n \r\n5,070,987.62 184,607.06 \r\n \r\n160,248.34 36,742.49 \r\n \r\n-184,607.06 -4,863,440.60 \r\n \r\n$ \r\n \r\n5,778,788.84 \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\n755,191.84 \r\n \r\n506,447.65 \r\n \r\n320,811.00 \r\n \r\n2,098,632.25 \r\n \r\n150,362.69 \r\n \r\n1,647,932.14 \r\n \r\n93,018.73 \r\n \r\n$ \r\n \r\n5,572,396.30 \r\n \r\n206,392.54 \r\n \r\nTotal Fund Balance \r\n \r\n$ \r\n \r\n5,778,788.84 \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- 27 - \r\n \r\n VALDOSTA STATE 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, 2013 \r\n \r\nSpecial Funding Initiative 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\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n101,506.00 $ \r\n \r\n101,506.00 \r\n \r\n$ 47,090,687.00 $ 47,090,687.00 $ 44,914,799.00 $ 44,914,799.00 \r\n \r\n101,197,892.00 101,197,892.00 \r\n \r\n100,462,744.00 \r\n \r\n95,598,250.79 \r\n \r\n$ 148,288,579.00 $ 148,288,579.00 $ 145,377,543.00 $ 140,513,049.79 \r\n \r\n$ 148,288,579.00 $ 148,288,579.00 $ 145,479,049.00 $ 140,614,555.79 \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- 28 - \r\n \r\n SCHEDULE \"3\" \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 Positive (Negative) \r\n \r\nExpenditures Compared to Budget \r\n \r\nVariance \r\n \r\nActual \r\n \r\nPositive (Negative) \r\n \r\nExcess (Deficiency) of Funds Available \r\nOver/(Under) Expenditures \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n101,506.00 $ \r\n \r\n0.00 $ \r\n \r\n100,821.59 $ \r\n \r\n684.41 $ \r\n \r\n684.41 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n4,863,440.60 \r\n \r\n$ 4,863,440.60 $ \r\n \r\n0.00 $ 44,914,799.00 $ 1,579,094.61 102,040,786.00 \r\n1,579,094.61 $ 146,955,585.00 $ \r\n \r\n0.00 $ 1,578,042.00 \r\n \r\n44,914,365.22 $ 96,667,653.20 \r\n \r\n1,578,042.00 $ 141,582,018.42 $ \r\n \r\n433.78 $ 3,795,090.80 \r\n3,795,524.58 $ \r\n \r\n433.78 5,373,132.80 \r\n5,373,566.58 \r\n \r\n$ 4,863,440.60 $ \r\n \r\n1,579,094.61 $ 147,057,091.00 $ \r\n \r\n1,578,042.00 $ 141,682,840.01 $ \r\n \r\n3,796,208.99 $ \r\n \r\n5,374,250.99 \r\n \r\n- 29 - \r\n \r\n Special Funding Initiative 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\nVALDOSTA STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2013 \r\n \r\nBeginning Fund Balance/(Deficit) \r\nJuly 1 \r\n \r\nFund Balance Carried Over from \r\nPrior Period as Funds Available \r\n \r\nReturn of Fiscal Year 2012 \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\n$ \r\n \r\n112,666.39 $ \r\n \r\n4,935,381.27 \r\n \r\n$ 5,048,047.66 $ \r\n \r\n$ 5,048,047.66 $ \r\n \r\n0.00 $ -4,863,440.60 \r\n-4,863,440.60 $ \r\n-4,863,440.60 $ \r\n \r\n-112,666.39 $ 63,941.14 -71,940.67 133,049.69 \r\n-184,607.06 $ 196,990.83 \r\n-184,607.06 $ 196,990.83 \r\n \r\n93,619.62 113,927.40 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n$ 5,255,594.68 $ \r\n \r\n-4,863,440.60 $ \r\n \r\n-184,607.06 $ 196,990.83 \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- 30 - \r\n \r\n SCHEDULE \"4\" \r\n \r\nOther Adjustments \r\n \r\nEarly Return Fiscal Year 2013 \r\nSurplus \r\n \r\nExcess (Deficiency) of Funds Available \r\nOver/(Under) Expenditures \r\n \r\nEnding Fund Balance/(Deficit) \r\nJune 30 \r\n \r\nAnalysis of Ending Fund Balance \r\n \r\nReserved \r\n \r\nSurplus/(Deficit) \r\n \r\nTotal \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n$ \r\n \r\n600.89 $ \r\n \r\n-36,435.29 \r\n \r\n$ -35,834.40 $ \r\n \r\n$ -35,834.40 $ \r\n \r\n-600.89 36,435.29 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n684.41 $ \r\n \r\n684.41 $ \r\n \r\n0.00 $ \r\n \r\n684.41 $ \r\n \r\n684.41 \r\n \r\n0.00 $ 0.00 \r\n0.00 $ \r\n0.00 $ \r\n \r\n433.78 $ 5,373,132.80 \r\n5,373,566.58 $ \r\n5,374,250.99 $ \r\n \r\n64,975.81 $ \r\n \r\n0.00 $ \r\n \r\n5,469,747.20 5,329,014.88 \r\n \r\n5,534,723.01 $ 5,329,014.88 $ \r\n \r\n5,535,407.42 $ 5,329,014.88 $ \r\n \r\n64,975.81 $ \r\n \r\n64,975.81 \r\n \r\n140,732.32 5,469,747.20 \r\n \r\n205,708.13 $ 5,534,723.01 \r\n \r\n206,392.54 $ 5,535,407.42 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n93,018.73 150,362.69 \r\n \r\n93,018.73 150,362.69 \r\n \r\n0.00 0.00 \r\n \r\n93,018.73 150,362.69 \r\n \r\n0.00 $ \r\n \r\n5,374,250.99 $ 5,778,788.84 $ 5,572,396.30 $ \r\n \r\n206,392.54 $ 5,778,788.84 \r\n \r\nSummary of Ending Fund Balance Reserved \r\nDepartmental 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$ 755,191.84 506,447.65 320,811.00 \r\n2,098,632.25 150,362.69 \r\n1,647,932.14 93,018.73 \r\n$ \r\n$ 5,572,396.30 $ \r\n \r\n$ 755,191.84 506,447.65 320,811.00 \r\n2,098,632.25 150,362.69 \r\n1,647,932.14 93,018.73 \r\n \r\n206,392.54 \r\n \r\n206,392.54 \r\n \r\n206,392.54 $ 5,778,788.84 \r\n \r\n- 31 - \r\n \r\n VALDOSTA STATE UNIVERSITY RECONCILIATION OF BUDGET TO GAAP \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"5\" \r\n \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\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. Prepaid items reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Inventory items 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. 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. Capital Leases Payable Compensated Absences Payable Contracts Payable Total Liabilities \r\n \r\n$ \r\n \r\n5,778,788.84 \r\n \r\n327,120,659.00 \r\n \r\n$ \r\n \r\n806,255.00 \r\n \r\n-806,255.00 \r\n \r\n$ \r\n \r\n8,399,142.24 \r\n \r\n-2,786,106.18 \r\n \r\n$ \r\n \r\n4,073,874.52 \r\n \r\n-1,560.00 \r\n \r\n$ \r\n \r\n360,742.93 \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n7,411,966.15 \r\n \r\n-213,469.49 \r\n \r\n-150,362.69 -33,352.06 0.00 \r\n5,613,036.06 4,072,314.52 \r\n360,742.93 7,198,496.66 \r\n \r\n$ \r\n \r\n11,898,992.10 \r\n \r\n-4,815.00 \r\n \r\n-2,624.30 \r\n \r\n-1,118,780.06 \r\n \r\n10,772,772.74 \r\n \r\n$ -210,869,390.00 -3,425,918.00 -707,925.00 \r\n \r\n-215,003,233.00 \r\n \r\nNet Position of Business-Type Activities (Exhibit \"A\") \r\nThe supplementary information presented on Schedules 1, 2, 3 and 4 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- 32 - \r\n \r\n$ 145,729,863.00 \r\n \r\n VALDOSTA STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"6\" \r\n \r\nTotals per Annual Supplement \r\n \r\nAccruals June 30, 2013 June 30, 2012 \r\n \r\nCompensated Absences June 30, 2013 June 30, 2012 \r\n \r\nAdjustments \r\n \r\nShared Services on Jointly Staffed Personnel \r\n \r\nAbraham Baldwin Agricultural College \r\n \r\nMock, \r\n \r\nAshley \r\n \r\nWilliams, \r\n \r\nAmy \r\n \r\nAlbany State University \r\n \r\nRienberger, \r\n \r\nArt \r\n \r\nClayton State University \r\n \r\nReffel, \r\n \r\nJulia \r\n \r\nCoastal College of Georgia \r\n \r\nWikersham, \r\n \r\nMary Eleanor \r\n \r\nYehl, \r\n \r\nRobert \r\n \r\nColumbus State University \r\n \r\nWilliamson, \r\n \r\nLowell \r\n \r\nGeorgia Institute of Technology \r\n \r\nHansard, \r\n \r\nLarry \r\n \r\nGeorgia Southern University \r\n \r\nMartin, \r\n \r\nJohnathan \r\n \r\nMiddle Georgia State College \r\n \r\nCain, \r\n \r\nSara \r\n \r\nSouth Georgia State College \r\n \r\nMainella, \r\n \r\nMatthew \r\n \r\nNelson, \r\n \r\nDavid \r\n \r\nSmith, \r\n \r\nDaniel \r\n \r\nStelzer, \r\n \r\nJeri \r\n \r\nStevens, \r\n \r\nTerri \r\n \r\nWard, \r\n \r\nCharles \r\n \r\nSALARIES \r\n \r\n$ \r\n \r\n72,466,358 $ \r\n \r\nTRAVEL 1,077,685 \r\n \r\n175,567 -174,965 \r\n \r\n3,182,461 -3,083,320 \r\n \r\n4,629 4,468 \r\n54 \r\n-4,575 \r\n-2,745 -1,938 \r\n-2,121 \r\n2,476 \r\n2,150 \r\n1,659 \r\n2,153 -696 \r\n-1,050 -1,507 4,306 2,153 \r\n \r\n$ \r\n \r\n72,575,517 $ \r\n \r\n1,077,685 \r\n \r\n- 33 - \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\nNovember 18, 2013 \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 Honorable William J. McKinney, President Valdosta State 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 Valdosta State University as of and for the year ended June 30, 2013, and have issued our report thereon dated November 18, 2013. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered Valdosta State 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 Valdosta State University's internal control. Accordingly, we do not express an opinion on the effectiveness of Valdosta State 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\nOur 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 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\n2013YB-10 \r\n \r\n  Compliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Valdosta State 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 a certain matter that we have reported to management of Valdosta State University in a separate letter dated November 18, 2013. \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:as 2013YB-10 \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  VALDOSTA STATE UNIVERSITY AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2013 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFS-551-12-01 \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n  SECTION IV CURRENT YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n  VALDOSTA STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND MANAGEMENT'S CORRECTIVE ACTION PLAN \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFS-551-13-01 Inadequate Controls over Expenditures \r\n \r\nControl Category: Internal Control Impact: \r\n \r\nExpenditures/Disbursements Significant Deficiency \r\n \r\nDescription: \r\n \r\nThe expenditure process at the University's Bookstore did not include a requirement that purchases be pre-approved. \r\n \r\nCriteria: \r\n \r\nThe University's management is responsible for designing and maintaining internal controls over expenditures that provide reasonable assurance that transactions are valid and are in line with program objectives. \r\n \r\nCondition: \r\n \r\nThe University's Bookstore does not have policies or procedures in place over expenditures that require proper approval before an expense is incurred. The Bookstore does not consistently utilize purchase requisitions or purchase orders in order to document approval. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nCause: \r\n \r\nIn discussing these conditions with University personnel, they stated that there was a lack of departmental policy in place over the expenditure process. \r\n \r\nEffect: \r\n \r\nWithout satisfactory accounting controls and procedures in place, the University could place itself in a position where potential misappropriate of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations. \r\n \r\nRecommendation: \r\n \r\nThe University's management should design and implement a departmental policy that requires pre-authorization of all bookstore purchases. \r\n \r\nViews of Responsible Officials and Corrective Action Plans: \r\n \r\nWe concur with the recommendation. A policy is being designed and will be implemented that will require pre-authorization of all bookstore purchases that exceed the amount of a purchase that can be made with a purchasing card. \r\n \r\nContact Persons: Dr. Rob Kellner, Auxiliary Services Director, rkellner@valdosta.edu Bethanie Bass, Director of University Stores, bbbass@valdosta.edu (Auxiliary Services, phone: 229-333-5706) \r\n \r\nFEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bv33-b2011-h2012-belec-p-btext","title":"Valdosta State University, Valdosta, Georgia, annual financial report for the fiscal year ended June 30, 2012 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, Lowndes County, Valdosta, 30.83334, -83.28032"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2011/2012"],"dcterms_description":["Began with: Fiscal year ended June 30, 2011.","Report year covers fiscal year.","For some years, report may be released instead called: Valdosta State University, Valdosta, Georgia, management report for fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on audit of the financial statements for the fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on review of the financial statements for the fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on review of the financial statements for the fiscal year ended ..., or: Annual financial report, Valdosta State University, for the fiscal year ended ... Valdosta, Georgia, or: Valdosta State University, Valdosta, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended ...","Fiscal year ended June 30, 2011; title from PDF cover (Georgia Government Publications database, viewed October 16, 2023).","Fiscal year ended June 30, 2015 (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); (Georgia Government Publications database, viewed October 16, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2012"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Valdosta State University--Appropriations and expenditures","Financial statements--Georgia","Auditors' reports--Georgia"],"dcterms_title":["Valdosta State University, Valdosta, Georgia, annual financial report for the fiscal year ended June 30, 2012 (including independent auditor's reports)"],"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-bv33-b2011-h2012-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bv33-b2011-h2012-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":null,"fulltext":"Annual Financial Report \r\nFor the Fiscal Year Ended June 30, 2012 \r\n(Including Independent Auditor's Report) \r\nValdosta, Georgia \r\nA Regional University of the University System of Georgia \r\n \r\n VALDOSTA STATE UNIVERSITY - TABLE OF CONTENTS - \r\nSECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS C STATEMENT OF CASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULES 1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND 4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND 5 BUDGET TO GAAP RECONCILIATION 6 RECONCILIATION OF SALARIES AND TRAVEL \r\nSECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\nPage \r\ni \r\n2 3 4 6 \r\n26 27 28 30 32 33 \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\nNovember 9, 2012 \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 Honorable William J. McKinney, President Valdosta State University \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION \r\nLadies and Gentlemen: \r\nWe have audited the accompanying basic financial statements (Exhibits A through D) of Valdosta State 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, 2012. These financial statements are the responsibility of the Valdosta State University's management. Our responsibility is to express an opinion on these financial statements based on our audit. \r\nExcept as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of University's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. \r\nIn accordance with section 50-6-1(c) of the Official Code of Georgia Annotated, Greg S. Griffin was appointed State Auditor on July 1, 2012. During the year under review, Mr. Griffin served as the State Accounting Officer. As the State Accounting Officer, Mr. Griffin was responsible for the State's accounting and financial reporting practices. \r\nIn our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of Valdosta State University as of June 30, 2012, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. \r\n \r\n12ARL-62 \r\n \r\n  As discussed in Note 1, the financial statements of Valdosta State 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 Valdosta State University. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2012, 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\nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages i through v 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 consists of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. \r\nOur audit was conducted for the purpose of forming an opinion on the basic financial statements of Valdosta State University taken as a whole. The accompanying supplementary information (Schedules 1 through 6) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting or other records used to prepare the financial statements or to the 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\nRespectfully, \r\n \r\nGSG:as 12ARL-62 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n  VALDOSTA STATE UNIVERSITY \r\nManagement's Discussion and Analysis \r\n \r\nIntroduction \r\n \r\nValdosta State University is one of the 35 institutions of higher education of the University System of \r\n \r\nGeorgia. The University, located in Valdosta, Georgia, was founded in 1906. The University offers \r\n \r\nnationally accredited programs in Art, Business, Music, Nursing, Speech Language Pathology, School \r\n \r\nPsychology and Teacher Education as well as baccalaureate and master's degrees in a wide variety \r\n \r\nof other subjects. This wide range of educational opportunities attracts a highly qualified faculty and \r\n \r\na student body of more than 13,000 students each year. The institution continues to grow as shown \r\n \r\nby the comparison numbers that follow. \r\n \r\nStudents \r\n \r\nStudents \r\n \r\nFaculty \r\n \r\n(Headcount) \r\n \r\n(FTE) \r\n \r\nFiscal Year 2012 Fiscal Year 2011 Fiscal Year 2010 \r\n \r\n569 \r\n \r\n13,089 \r\n \r\n576 \r\n \r\n12,898 \r\n \r\n549 \r\n \r\n12,391 \r\n \r\nOverview of the Financial Statements and Financial Analysis \r\n \r\n11,903 11,846 11,853 \r\n \r\nValdosta State University is proud to present its financial statements for fiscal year 2012. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; 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 2012 and fiscal year 2011. \r\n \r\nStatement of Net Assets \r\n \r\nThe Statement of Net Assets presents the assets, liabilities, and net assets of the University as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of Valdosta State University. The Statement of Net Assets presents end-of-year data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements. \r\n \r\nFrom the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors. \r\n \r\nFinally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which is divided into two categories, nonexpendable and expendable. The corpus of nonexpendable restricted resources is only available for investment purposes. Expendable restricted net assets 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. The final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution. \r\n \r\ni \r\n \r\n Statement of Net Assets, Condensed \r\nAssets Current Assets Capital Assets, Net Other Assets \r\nTotal Assets \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\nTotal Liabilities \r\nNet Assets Invested in Capital Assets, Net of Debt Restricted - Nonexpendable Restricted - Expendable Unrestricted \r\nTotal Net Assets \r\n \r\nJune 30, 2012 \r\n$ 34,244,410 327,718,574 12,746,073 \r\n$ 374,709,057 \r\n$ 17,633,027 212,794,134 \r\n$ 230,427,161 \r\n$ 113,488,324 2,658,741 3,409,843 \r\n24,724,988 $ 144,281,896 \r\n \r\nJune 30, 2011 \r\n$ 34,315,204 323,574,865 12,823,351 \r\n$ 370,713,420 \r\n$ 13,682,895 216,321,251 \r\n$ 230,004,146 \r\n$ 106,759,759 2,700,858 3,547,278 \r\n27,701,379 $ 140,709,274 \r\n \r\nThe total assets increased by $3,995,637. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $4,143,709 in the category of Capital Assets, Net. The balance of the increase is mainly in receivable categories. \r\nThe total liabilities increased for the year by $423,015. The combination of the increase in total assets of $3,995,637 and the increase in total liabilities of $423,015 yields an increase in total net assets of $3,572,622. The increase in total net assets is primarily in the category of Invested in Capital Assets, Net of Debt, in the amount of $6,728,565. \r\nStatement of Revenues, Expenses and Changes in Net Assets \r\nChanges in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues. \r\n \r\nii \r\n \r\n Statement of Revenues, Expenses and Changes in Net Assets, Condensed \r\n \r\nJune 30, 2012 \r\n \r\nJune 30, 2011 \r\n \r\nOperating Revenues Operating Expenses \r\n \r\n$ 106,440,088 164,183,751 \r\n \r\n$ 101,500,325 160,612,416 \r\n \r\nOperating Loss \r\n \r\n$ -57,743,663 \r\n \r\n$ -59,112,091 \r\n \r\nNonoperating Revenues and Expenses \r\n \r\n58,745,116 \r\n \r\n63,362,317 \r\n \r\nIncome (Loss) Before Other Revenues, Expenses, Gains or Losses \r\n \r\n$ 1,001,453 \r\n \r\n$ 4,250,226 \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\n2,571,169 \r\n \r\n4,770,113 \r\n \r\nIncrease (Decrease) in Net Assets \r\n \r\n$ 3,572,622 \r\n \r\n$ 9,020,339 \r\n \r\nNet Assets at Beginning of Year \r\n \r\n140,709,274 \r\n \r\n131,688,935 \r\n \r\nNet Assets at End of Year \r\n \r\n$ 144,281,896 \r\n \r\n$ 140,709,274 \r\n \r\nThe Statement of Revenues, Expenses and Changes in Net Assets reflect a positive year with an increase in the net assets at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows: \r\n \r\nRevenue by Source For the Years Ended June 30, 2012 and June 30, 2011 \r\n \r\nJune 30, 2012 \r\n \r\nOperating Revenue \r\n \r\nTuition and Fees \r\n \r\n$ \r\n \r\nGrants and Contracts \r\n \r\nSales and Services of Educational Departments \r\n \r\nAuxiliary \r\n \r\nOther \r\n \r\n58,328,153 3,051,098 1,285,996 \r\n42,977,061 797,780 \r\n \r\nTotal Operating Revenue \r\n \r\n$ 106,440,088 \r\n \r\nNonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income Other \r\n \r\n$ 43,356,576 23,332,996 1,287,510 90,722 1,663 \r\n \r\nTotal Nonoperating Revenue \r\n \r\n$ 68,069,467 \r\n \r\nCapital Grants and Gifts State Other \r\n \r\n$ 2,418,839 152,330 \r\n \r\nTotal Capital Grants and Gifts \r\n \r\n$ 2,571,169 \r\n \r\nTotal Revenues \r\n \r\n$ 177,080,724 \r\n \r\nJune 30, 2011 \r\n$ 54,456,368 2,861,607 1,089,482 \r\n42,383,803 709,065 \r\n$ 101,500,325 \r\n$ 45,398,704 25,714,119 469,131 1,152,936 112,782 \r\n$ 72,847,672 \r\n$ 2,549,147 3,286,415 \r\n$ 5,835,562 \r\n$ 180,183,559 \r\n \r\niii \r\n \r\n Expenses (By Functional Classification) For the Years Ended June 30, 2012 and June 30, 2011 \r\n \r\nJune 30, 2012 \r\n \r\nJune 30, 2011 \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$ 54,012,196 530,627 \r\n1,959,154 12,186,987 12,155,952 15,695,921 15,970,084 12,741,201 38,931,629 \r\n \r\n$ 53,641,882 667,732 \r\n1,550,037 12,279,142 13,376,197 15,356,636 14,648,461 13,068,915 36,023,414 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 164,183,751 \r\n \r\n$ 160,612,416 \r\n \r\nNonoperating Expenses Interest Expense (Capital Assets) \r\nSpecial Item Loss on Demolition of Building \r\nTotal Expenses \r\n \r\n9,324,351 $ 173,508,102 \r\n \r\n9,485,355 1,065,449 $ 171,163,220 \r\n \r\nOperating revenues increased by $4,939,763 in fiscal year 2012. Tuition and Fees included an 7% increase and smaller increases were realized in Auxiliary and the other areas. \r\nThe Auxiliary revenue increase of $593,258 is a result of an increase in commissions earned on food service related to the change of vendors as well as a small rate increase in housing charges as approved by the University System of Georgia Board of Regents and outlined in bond documents, offset by a 9.4% decrease in Bookstore Sales, which is primarily attributed to the implementation of a textbook rental program. \r\nNonoperating revenues decreased by $4,778,205 for the year primarily due to a decrease in State Appropriations. \r\nThe compensation and employee benefits category increased by $1,759,717 and primarily affected the Operation and Maintenance of Plant, Public Service, and Institutional Support categories. The increase in this category reflects a wellness benefit for employees as well as an increase in the cost of health insurance. \r\nUtilities decreased by $54,577 during the past year. Decreases in natural gas, fuel oil and telecommunications expenses were offset by an increase in electricity costs. The primary category affected was Institutional Support. \r\nStatement of Cash Flows \r\nThe final statement presented by the Valdosta State University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and \r\niv \r\n \r\n spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets. \r\n \r\nCash Flows for the Years Ended June 30, 2012 and June 30, 2011, Condensed \r\n \r\nJune 30, 2012 \r\n \r\nJune 30, 2011 \r\n \r\nCash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities \r\n \r\n$ \r\n \r\n-38,742,889 \r\n \r\n68,244,963 \r\n \r\n-27,875,931 \r\n \r\n212,589 \r\n \r\n$ \r\n \r\n-41,867,066 \r\n \r\n69,401,291 \r\n \r\n-20,958,964 \r\n \r\n239,916 \r\n \r\nNet Change in Cash Cash, Beginning of Year \r\n \r\n$ \r\n \r\n1,838,732 \r\n \r\n25,948,312 \r\n \r\n$ \r\n \r\n6,815,177 \r\n \r\n19,133,135 \r\n \r\nCash, End of Year Capital Assets \r\n \r\n$ \r\n \r\n27,787,044 \r\n \r\n$ \r\n \r\n25,948,312 \r\n \r\nThe University had several significant capital asset additions for buildings in fiscal year 2012. Renovations to the Langdale Residence Hall were completed, as was construction of the Psychology Building and the Bailey Science Center addition. Valdosta State University also completed two major re-roofing projects for Odum Library and the Education Center in fiscal year 2012. \r\n \r\nFor additional information concerning Capital Assets, see Notes 1, 6, 8, and 10 in the Notes to the Financial Statements. \r\n \r\nLong-Term Liabilities \r\n \r\nValdosta State University had Long-Term Liabilities of $217,549,444 which $5,348,282 was reflected as current liability at June 30, 2012. \r\n \r\nFor additional information concerning Long-Term Liabilities, see Notes 1 and 8 in the Notes to the Financial Statements. \r\nEconomic Outlook \r\n \r\nThe 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 beyond those unknown variations having a global effect on virtually all types of business operations. The University's overall financial position is strong. The University anticipates the current fiscal year will be much like last and will maintain a close watch over resources to maintain the University's ability to react to unknown internal and external issues. \r\n \r\nWilliam J. McKinney, President Valdosta State University \r\n \r\nv \r\n \r\n  BASIC FINANCIAL STATEMENTS - 1 - \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF NET ASSETS \r\nJUNE 30, 2012 \r\nASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables - Other Inventories (Note 4) Prepaid Items \r\nTotal Current Assets \r\nNoncurrent Assets Noncurrent Cash Investments (Externally Restricted) Investments Notes Receivable, Net Capital Assets, Net (Note 6) \r\nTotal Noncurrent Assets \r\nTotal Assets \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Deferred Revenue (Note 7) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Lease Purchase Obligations Deferred Revenue Compensated Absences \r\nTotal Noncurrent Liabilities \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Restricted for: \r\nNonexpendable Expendable Unrestricted \r\nTotal Net Assets \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\n27,760,789 \r\n \r\n709,542 3,300,100 2,299,463 \r\n174,516 \r\n \r\n$ \r\n \r\n34,244,410 \r\n \r\n$ \r\n \r\n26,255 \r\n \r\n5,617,802 \r\n \r\n7,027,983 \r\n \r\n74,033 \r\n \r\n327,718,574 \r\n \r\n$ 340,464,647 \r\n \r\n$ 374,709,057 \r\n \r\n$ \r\n \r\n3,128,675 \r\n \r\n174,965 \r\n \r\n676,006 \r\n \r\n911,925 \r\n \r\n6,310,662 \r\n \r\n-28,229 \r\n \r\n1,110,741 \r\n \r\n3,392,679 \r\n \r\n1,955,603 \r\n \r\n$ \r\n \r\n17,633,027 \r\n \r\n$ 210,837,571 592,972 \r\n1,363,591 \r\n$ 212,794,134 \r\n$ 230,427,161 \r\n \r\n$ 113,488,324 \r\n2,658,741 3,409,843 24,724,988 \r\n \r\n$ 144,281,896 \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS \r\nYEAR ENDED JUNE 30, 2012 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees (Net of Allowance for Doubtful Accounts) Less: Scholarship Allowances \r\nGrants and Contracts Federal 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 Income (Loss) \r\nNONOPERATING REVENUES (EXPENSES) \r\nState Appropriations Grants and Contracts \r\nFederal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues \r\nNet Nonoperating Revenues \r\nIncome (Loss) Before Other Revenues, Expenses, Gains, or Losses \r\nCapital Grants and Gifts State Other \r\nTotal Other Revenues, Expenses, Gains or Losses \r\nIncrease (Decrease) in Net Assets \r\nNet Assets - Beginning of Year \r\nNet Assets - End of Year \r\nThe notes to the financial statements are an integral part of this statement. \r\n- 3 - \r\n \r\nEXHIBIT \"B\" \r\n \r\n$ \r\n \r\n76,030,494 \r\n \r\n-17,702,341 \r\n \r\n1,566,839 732,471 751,788 \r\n1,285,996 6,895 \r\n \r\n11,816,964 7,840,369 \r\n12,689,169 3,613,396 3,025,118 3,355,453 636,592 790,885 \r\n \r\n$ \r\n \r\n106,440,088 \r\n \r\n$ \r\n \r\n36,271,268 \r\n \r\n34,833,669 \r\n \r\n21,539,691 \r\n \r\n454,564 \r\n \r\n1,042,624 \r\n \r\n14,565,473 \r\n \r\n5,965,116 \r\n \r\n34,464,994 \r\n \r\n15,046,352 \r\n \r\n$ \r\n \r\n164,183,751 \r\n \r\n$ \r\n \r\n-57,743,663 \r\n \r\n$ \r\n \r\n43,356,576 \r\n \r\n23,121,008 56,391 \r\n155,597 1,287,510 \r\n90,722 -9,324,351 \r\n1,663 \r\n \r\n$ \r\n \r\n58,745,116 \r\n \r\n$ \r\n \r\n1,001,453 \r\n \r\n$ \r\n \r\n2,418,839 \r\n \r\n152,330 \r\n \r\n$ \r\n \r\n2,571,169 \r\n \r\n$ \r\n \r\n3,572,622 \r\n \r\n140,709,274 \r\n \r\n$ \r\n \r\n144,281,896 \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2012 \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 Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (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 \r\nNet Cash Flows Provided (Used) by Noncapital Financing Activities \r\nCASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases \r\nNet Cash Provided (Used) by Capital and Related Financing Activities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Interest on Investments \r\nNet Cash Provided (Used) by Investing Activities \r\nNet Increase (Decrease) 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\n58,283,703 \r\n \r\n3,509,071 \r\n \r\n1,285,996 \r\n \r\n-63,932,622 \r\n \r\n-72,419,717 \r\n \r\n-14,565,473 \r\n \r\n-47,135 \r\n \r\n11,767,876 7,910,618 \r\n15,024,551 3,708,087 3,133,620 3,401,791 634,462 3,562,283 \r\n \r\n$ \r\n \r\n-38,742,889 \r\n \r\n$ \r\n \r\n43,356,576 \r\n \r\n142,680 \r\n \r\n24,745,707 \r\n \r\n$ \r\n \r\n68,244,963 \r\n \r\n$ \r\n \r\n2,418,839 \r\n \r\n1,211,890 \r\n \r\n-19,199,873 \r\n \r\n-2,982,436 \r\n \r\n-9,324,351 \r\n \r\n$ \r\n \r\n-27,875,931 \r\n \r\n$ \r\n \r\n35,084 \r\n \r\n177,505 \r\n \r\n$ \r\n \r\n212,589 \r\n \r\n$ \r\n \r\n1,838,732 \r\n \r\n25,948,312 \r\n \r\n$ \r\n \r\n27,787,044 \r\n \r\n- 4 - \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2012 \r\nRECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: \r\nOperating Income (Loss) Adjustments to Reconcile Operating Income (loss) to Net Cash \r\nProvided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Receivables, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Deferred Revenue Other Liabilities Compensated Absences \r\nNet Cash Provided (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 Grants and Gifts \r\n \r\nEXHIBIT \"C\" \r\n \r\n$ \r\n \r\n-57,743,663 \r\n \r\n15,046,352 \r\n-324,034 145,429 590,877 -47,135 -2,508,987 6,159,341 -47,454 -13,615 \r\n \r\n$ \r\n \r\n-38,742,889 \r\n \r\n$ \r\n \r\n397,280 \r\n \r\n$ \r\n \r\n-86,783 \r\n \r\n$ \r\n \r\n-152,330 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 5 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 1: Summary of Significant Accounting Policies \r\nNature of Operations Valdosta State 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 Valdosta State University is one of thirty-five (35) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Valdosta State 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. Valdosta State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Valdosta State 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 16 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, liabilities, net assets, revenues, expenses, changes in net assets and cash flows. \r\nGenerally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than one fiscal year. For fiscal year 2012, the calculation used to determine this split was based on the academic calendar of days taught. For consistency and transparency, this will be the basis used for this calculation by Valdosta State University. \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, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intraUniversity transactions have been eliminated. \r\nThe University has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The University has elected to not apply FASB pronouncements issued after the applicable date. \r\n \r\n- 6 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \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. \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 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 Assets. The Board of Regents Diversified Fund and the Georgia Extended Asset Pool are included under 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 each residing 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\nInventories Consumable supplies are carried at cost and are charged out to departments on the first-in, first-out (\"FIFO\") basis. Resale Inventories are valued at cost using the \"first in, first out\" (FIFO) basis. \r\nNoncurrent Cash and Investments Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets. \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 will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. \r\nTo obtain the total picture of 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. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged. \r\n \r\n- 7 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nFor projects managed by GSFIC, the 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, 2012, GSFIC did not transfer any capital additions to Valdosta State University. \r\nDeposits Deposits represent good faith deposits from students to reserve housing assignments in a University residence hall. \r\nDeferred Revenues Deferred revenues 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. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned. \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 Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Valdosta State University had accrued liability for compensated absences in the amount of $3,332,810 as of July 1, 2011. For fiscal year 2012, $2,416,833 was earned in compensated absences and employees were paid $2,430,449 for a net decrease of $13,616. The ending balance as of June 30, 2012, in accrued liability for compensated absences was $3,319,194. \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\nNet Assets The University's net assets are classified as follows: \r\nInvested in capital assets, net of related debt: 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 invested in capital assets, net of related debt. 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. \r\nRestricted net assets - nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The 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 net assets - expendable: Restricted expendable net assets include resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties. \r\n \r\n- 8 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nExpendable Restricted Net Assets include the following: \r\n \r\nRestricted - E\u0026G and Other Organized Activities Institutional Loans Term Endowments Quasi-Endowments \r\n \r\n$ \r\n \r\n2,200,090 \r\n \r\n350,902 \r\n \r\n750,254 \r\n \r\n108,597 \r\n \r\nTotal Restricted Expendable \r\n \r\n$ \r\n \r\n3,409,843 \r\n \r\nUnrestricted net assets: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $184,607.06. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. \r\n \r\nUnrestricted Net Assets includes the following items which are quasi-restricted by management. \r\n \r\nR \u0026 R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted \r\n \r\n$ \r\n \r\n3,109 \r\n \r\n14,554,232 \r\n \r\n93,620 \r\n \r\n10,074,027 \r\n \r\nTotal Unrestricted Net Assets \r\n \r\n$ \r\n \r\n24,724,988 \r\n \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\n \r\nIncome Taxes Valdosta State 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\n \r\nClassification of Revenues and Expenses \r\n \r\nThe Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria: \r\n \r\nOperating Revenues: 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 \r\n- 9 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNonoperating Revenues: Nonoperating 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 Expenses: Nonoperating 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 Assets. 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. Certain 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\nDuring fiscal year 2012, Valdosta State University changed its method of accounting for summer school revenues and expenses to more accurately reflect periodic results of operations between fiscal years. Beginning net assets were not restated due to lack of materiality and time and effort considerations. Therefore, the effects of the change are prospectively applied reflecting a net decrease of revenues of approximately $2,531,866 in fiscal year 2012. \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 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\n \r\n- 10 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \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\n \r\n6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. \r\n \r\nThe 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\nAt June 30, 2012, the carrying value of deposits was $27,758,644 and the bank balance was $30,965,685. Of the University's deposits, $30,965,685 were uninsured. Of these uninsured deposits, $30,965,685 were collateralized with securities held by the financial institution's trust department or agent but not in the University's name. \r\n \r\nInvestments At June 30, 2012, the carrying value of the University's investments were $12,645,785, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Board of Regents and/or Office of the State Treasurer investment pools as follows: \r\n \r\nInvestment Pools Board of Regents Diversified Fund Office of the State Treasurer Georgia Extended Asset Pool \r\n \r\n$ \r\n \r\n5,973,610 \r\n \r\n6,672,175 \r\n \r\nTotal Investments \r\n \r\n$ \r\n \r\n12,645,785 \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 - Education Audit Division or on their web site at http://www.audits.ga.gov. \r\n \r\nThe Georgia Extended Asset Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company. Net Asset Value (NAV) is calculated daily to determine current share price, which was $2.0 at June 30, 2012. The Georgia Extended Asset Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is .33 years. \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 University does not have a formal policy for managing interest rate risk. \r\n \r\n- 11 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nThe Effective Duration of the Diversified Fund is 4.01 years. Of the University's total investment of $5,973,610 in the Diversified Fund, $1,816,038 is invested in debt securities. \r\nNote 3: Accounts Receivable \r\nAccounts receivable consisted of the following at June 30, 2012: \r\n \r\nStudent Tuition and Fees \r\n \r\n$ \r\n \r\nAuxiliary Enterprises and Other Operating Activities \r\n \r\nFederal, State and Private Funds \r\n \r\nGeorgia State Financing and Investment Commission \r\n \r\nDue from Affiliated Organizations \r\n \r\nOther \r\n \r\n561,194 551,980 709,542 1,107,325 \r\n44,665 1,164,751 \r\n \r\nLess Allowance for Doubtful Accounts \r\n \r\n$ \r\n \r\n4,139,457 \r\n \r\n129,815 \r\n \r\nNet Accounts Receivable \r\n \r\n$ \r\n \r\nNote 4: Inventories \r\n \r\nInventories consisted of the following at June 30, 2012: \r\n \r\n4,009,642 \r\n \r\nBookstore Other \r\n \r\n$ \r\n \r\n2,205,842 \r\n \r\n93,621 \r\n \r\nTotal Inventories \r\n \r\n$ \r\n \r\n2,299,463 \r\n \r\nNote 5: Notes/Loans Receivable \r\n \r\nAt June 30, 2012, Notes/Loans Receivable were comprised of institutional loans, with no allowance for uncollectible loans. \r\n \r\n- 12 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \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, 2012: \r\n \r\nBeginning Balance July 1, 2011 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2012 \r\n \r\nCapital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress \r\n \r\n$ \r\n \r\n3,688,752 $ \r\n \r\n2,020,567 \r\n \r\n$ \r\n \r\n47,187 \r\n \r\n59,700 \r\n \r\n11,264,409 \r\n \r\n13,858,834 $ \r\n \r\n18,363,182 \r\n \r\n5,709,319 106,887 \r\n6,760,061 \r\n \r\nTotal Capital Assets, Not Being Depreciated $ \r\n \r\n15,000,348 $ \r\n \r\n15,939,101 $ \r\n \r\n18,363,182 $ \r\n \r\n12,576,267 \r\n \r\nCapital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections \r\n \r\n$ 142,909,461 $ 9,631,550 \r\n19,127,731 220,413,044 \r\n25,445,304 \r\n \r\n17,214,737 620,941 \r\n2,037,833 $ 397,280 \r\n1,381,684 \r\n \r\n$ \r\n1,177,107 20,058 38,263 \r\n \r\n160,124,198 10,252,491 19,988,457 \r\n220,790,266 26,788,725 \r\n \r\nTotal Assets Being Depreciated \r\n \r\n$ 417,527,090 $ \r\n \r\n21,652,475 $ \r\n \r\n1,235,428 $ 437,944,137 \r\n \r\nLess: Accumulated Depreciation: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections \r\n \r\n$ \r\n \r\n48,457,477 $ \r\n \r\n4,512,244 \r\n \r\n13,931,216 \r\n \r\n22,318,733 \r\n \r\n19,732,903 \r\n \r\n4,275,249 354,415 \r\n1,321,092 $ 7,955,468 1,140,128 \r\n \r\n$ \r\n1,148,774 10,058 38,263 \r\n \r\n52,732,726 4,866,659 \r\n14,103,534 30,264,143 20,834,768 \r\n \r\nTotal Accumulated Depreciation \r\n \r\n$ 108,952,573 $ \r\n \r\n15,046,352 $ \r\n \r\n1,197,095 $ 122,801,830 \r\n \r\nTotal Capital Assets, Being Depreciated, Net $ 308,574,517 $ \r\n \r\n6,606,123 $ \r\n \r\n38,333 $ 315,142,307 \r\n \r\nCapital Assets, Net \r\n \r\n$ 323,574,865 $ \r\n \r\n22,545,224 $ \r\n \r\n18,401,515 $ 327,718,574 \r\n \r\nNote 7: Deferred Revenue \r\n \r\nDeferred revenue consisted of the following at June 30, 2012: \r\n \r\nPrepaid Tuition and Fees Other Deferred Revenue \r\n \r\n$ \r\n \r\n3,864,453 \r\n \r\n2,446,209 \r\n \r\nTotal Deferred Revenue \r\n \r\n$ \r\n \r\n6,310,662 \r\n \r\nNoncurrent deferred revenue was $592,972 at June 30, 2012. - 13 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 8: Long-Term Liabilities Long-Term liability activity for the year ended June 30, 2012, was as follows: \r\n \r\nBeginning Balance July 1, 2011 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2012 \r\n \r\nCurrent Portion \r\n \r\nLeases Lease Obligations \r\n \r\n$ 216,815,406 $ \r\n \r\n397,280 $ 2,982,436 $ 214,230,250 $ 3,392,679 \r\n \r\nOther Liabilities Compensated Absences \r\n \r\n3,332,810 \r\n \r\n2,416,833 \r\n \r\n2,430,449 \r\n \r\n3,319,194 \r\n \r\n1,955,603 \r\n \r\nTotal Long-Term Obligations \r\n \r\n$ 220,148,216 $ 2,814,113 $ 5,412,885 $ 217,549,444 $ 5,348,282 \r\n \r\nNote 9: Significant Commitments \r\n \r\nThe University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $3,610,506 as of June 30, 2012. This amount is not reflected in the accompanying basic financial statements. \r\n \r\nNote 10: Lease Obligations \r\n \r\nValdosta State 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\n \r\nCAPITAL LEASES \r\n \r\nCapital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2013 and 2039. Expenditures for fiscal year 2012 were $12.3 million of which $9.3 million represented interest. Total principal paid on capital leases was $3.0 million for the fiscal year ended June 30, 2012. Interest rates range from 4.15 percent to 8.00 percent. The following is a summary of the carrying values of assets held under capital lease at June 30, 2012: \r\n \r\nOutstanding \r\n \r\nNet Assets Held \r\n \r\nBalances \r\n \r\nUnder Capital \r\n \r\nper Lease \r\n \r\nAccumulated \r\n \r\nLease at \r\n \r\nSchedules at \r\n \r\nDescription \r\n \r\nGross Amount Depreciation June 30, 2012 \r\n \r\nJune 30, 2012 \r\n \r\n(+) \r\n \r\n(-) \r\n \r\n(=) \r\n \r\nEquipment \r\n \r\n$ \r\n \r\n781,711 $ -243,956 $ \r\n \r\n537,755 $ \r\n \r\n523,126 \r\n \r\nBuildings \r\n \r\n220,008,555 \r\n \r\n-30,020,187 \r\n \r\n189,988,368 \r\n \r\n213,707,124 \r\n \r\nTotal Assets Held Under Capital Lease \r\n \r\nat June 30, 2012 \r\n \r\n$ 220,790,266 $ -30,264,143 $ 190,526,123 $ 214,230,250 \r\n \r\n- 14 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \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\nValdosta State University had ten capital building leases with related entities in the current fiscal year. In fiscal year 2012, Valdosta State University entered into no new capital leases with related entities. \r\nValdosta State University has nine capital building leases with VSU Auxiliary Real Estate Foundation, LLC, as follows: \r\n Georgia and Reade residence halls (combined) for $30,419,725 at an average coupon rate of 4.150% with an outstanding liability at June 30, 2012, of $30,773,025; \r\n Student Union for $60,747,911 at an average coupon rate of 4.514% with an outstanding liability at June 30, 2012, of $58,747,758; \r\n Hopper residence hall with dining services, campus mail and office space for $27,484,345 at an average coupon rate of 4.554% with an outstanding liability at June 30, 2012, of $27,188,746; \r\n Student Health Center for $12,221,729 at an average coupon rate of 4.649% with an outstanding liability at June 30, 2012, of $11,923,126; \r\n Oak Street Parking Deck for $24,869,880 at an average coupon rate of 4.649% with an outstanding liability at June 30, 2012, of $24,822,187; \r\n Sustella Parking Deck for $21,468,631, at an average coupon rate of 4.649% with an outstanding liability at June 30, 2012, of $21,427,463; \r\n Patterson residence hall for $10,399,786 at a varying interest rate with an outstanding liability at June 30, 2012, of $9,724,135; \r\n Lowndes residence hall for $7,116,694 at a varying interest rate with an outstanding liability at June 30, 2012, of $6,749,398; and \r\n Centennial residence hall for $19,285,471 at a varying interest rate with an outstanding liability at June 30, 2012, of $16,912,795. \r\nValdosta State University has one capital building lease with Valdosta State University Foundation, LLC, as follows: \r\n Athletic Field House for $5,994,383 at an average coupon rate of 4.55% with an outstanding liability at June 30, 2012, of $5,438,491. \r\nValdosta State University entered into fifty-nine new equipment capital leases, most of which are student fee funded printers and copiers, during fiscal year 2012 in the amount of $397,280. The outstanding liability at June 30, 2012, on these new equipment leases is $338,629. All of the new equipment leases are with third parties. \r\nValdosta State University also has various capital leases for equipment from prior fiscal years with an outstanding balance at June 30, 2012, in the amount of $184,497. \r\nOPERATING LEASES \r\nValdosta State University's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2012 through 2013. Certain operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is \r\n \r\n- 15 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nconsidered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers and other small business equipment. \r\nFUTURE COMMITMENTS \r\nFuture commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2012, were as follows: \r\n \r\nReal Property and Equipment \r\n \r\nCapital \r\n \r\nOperating \r\n \r\nLeases \r\n \r\nLeases \r\n \r\nYear Ending June 30: 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 2028 - 2032 2033 - 2037 2038 - 2039 \r\n \r\n$ 12,521,157 $ 12,667,275 12,802,020 12,935,628 13,065,724 68,310,548 72,893,018 69,750,087 62,056,517 18,995,978 \r\n \r\n5,682 \r\n \r\nTotal Minimum Lease Payments \r\n \r\n$ 355,997,952 $ \r\n \r\n5,682 \r\n \r\nLess: Interest \r\n \r\n141,767,702 \r\n \r\nPrincipal Outstanding \r\n \r\n$ 214,230,250 \r\n \r\nValdosta State University's fiscal year 2012 expense for rental of real property and equipment under operating leases was $13,082. \r\nNote 11: Retirement Plans \r\nValdosta State University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Valdosta State 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- 16 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nEmployees' Retirement System of Georgia \r\nThe ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract. \r\nOn November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415. \r\nThe benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an \"old plan\" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are \"new plan\" members subject to the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the \"old\" or \"new\" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009, also have the option to irrevocably change their membership to the GSEPS plan. \r\nUnder the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 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\nRetirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \r\nMember contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, Valdosta State University pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Valdosta State University contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable \r\n \r\n- 17 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\ncompensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. Valdosta State University is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Valdosta State University contributions are not at any time refundable to the member or his/her beneficiary. \r\nEmployer contributions required for fiscal year 2012 were based on the June 30, 2009, actuarial valuation as follows: \r\n \r\nOld Plan* New Plan GSEPS \r\n \r\n11.63% 11.63% \r\n7.42% \r\n \r\n* 6.88% exclusive of contributions paid by the employer on behalf of old plan members \r\nMembers become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits. \r\nTeachers Retirement System of Georgia \r\nThe Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. \r\nOn October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. \r\nTRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \r\n \r\n- 18 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2012, were 5.53% of annual salary. Employer contributions required for fiscal year 2012 were 10.28% of annual salary as required by the June 30, 2009, actuarial valuation. \r\nThe following table summarizes the Valdosta State University contributions by defined benefit plan for the years ending June 30, 2012, June 30, 2011, and June 30, 2010 (dollars in thousands): \r\n \r\nFiscal Year \r\n \r\nERS \r\n \r\nRequired \r\n \r\nPercentage \r\n \r\nContribution \r\n \r\nContributed \r\n \r\nTRS \r\n \r\nRequired \r\n \r\nPercentage \r\n \r\nContribution \r\n \r\nContributed \r\n \r\n2012 \r\n \r\n$ \r\n \r\n2011 \r\n \r\n$ \r\n \r\n2010 \r\n \r\n$ \r\n \r\nRegents Retirement Plan \r\n \r\n16,816 7,068 6,840 \r\n \r\n100% 100% 100% \r\n \r\n$ 3,598,109 $ 3,568,464 $ 3,391,860 \r\n \r\n100% 100% 100% \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 a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. \r\n \r\nFunding Policy Valdosta State 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 2012, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. \r\n \r\nValdosta State University and the covered employees made the required contributions of $2,484,435 (9.24%) and $1,344,394 (5%), respectively. \r\n \r\nAIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. \r\n \r\n- 19 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nGeorgia Defined Contribution Plan \r\nPlan Description Valdosta State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. \r\nBenefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. \r\nContributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. \r\nTotal contributions made by employees during fiscal year 2012 amounted to $158,970 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. \r\nThe Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices. \r\nNote 12: Risk Management \r\nThe University System of Georgia offers its employees and retirees access to three different selfinsured healthcare plan options. Effective January 1, 2012, The Blue Cross Blue Shield of Georgia PPO and HDHP plan names were changed to BCBS Open Access PPO and HAS/HDHP Open Access POS, respectively; both plans use the Blue Cross Blue Shield Open Access POS network. Also effective January 1, 2012, the Consumer Choice Option was eliminated and the Blue Cross Blue Shield of Georgia HMO and the Kaiser Permanente HMO were frozen for new enrollment for active employees only; the Senior Advantage Plan 65+ remained open for new enrollment. \r\nValdosta State University and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare 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 these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare 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. \r\n \r\n- 20 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \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. Valdosta State 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. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. \r\nNote 13: 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 Valdosta State University expects such amounts, if any, to be immaterial to its overall financial position. \r\nLitigation, claims and assessments filed against Valdosta State 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, 2012. \r\nNote 14: 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 \r\n \r\n- 21 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\npays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2012 plan year, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%. \r\nAs of June 30, 2012, there were 531 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2012, Valdosta State University recognized as incurred $2,141,237 of expenditures, which was net of $1,109,888 of participant contributions. \r\nNote 15: Natural Classifications with Functional Classifications \r\nThe University's operating expenses by functional classification for fiscal year 2012 are shown below: \r\n \r\nFunctional Classification \r\n \r\nNatural Classification \r\n \r\nInstruction \r\n \r\nResearch \r\n \r\nPublic Service \r\n \r\nAcademic Support \r\n \r\nStudent Services \r\n \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\n \r\n$ 34,914,042 $ 4,604,826 9,928,751 2,350 370,747 336,976 191,539 3,223,733 439,232 \r\n \r\n156,547 $ 156,858 \r\n45,478 \r\n \r\n108,958 $ 1,018,035 \r\n243,321 \r\n \r\n22,009 20,103 \r\n123,172 6,460 \r\n \r\n34,586 24,323 \r\n7,471 506,341 \r\n16,119 \r\n \r\n1,033,106 $ 5,307,189 1,519,447 \r\n37,190 314,739 \r\n \r\n9,333 5,300,351 1,291,879 \r\n129,851 \r\n \r\n43,257 2,094,371 1,837,688 \r\n \r\n138,179 2,585,220 2,701,139 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 54,012,196 $ \r\n \r\n530,627 $ 1,959,154 $ 12,186,987 $ 12,155,952 \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\nMaintenance \r\n \r\nFellowships \r\n \r\nAuxiliary Enterprises \r\n \r\nTotal Operating Expenses \r\n \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\n \r\n$ \r\n \r\n40,731 \r\n \r\n6,772,356 $ \r\n \r\n4,839,300 \r\n \r\n414,024 \r\n \r\n66,514 \r\n \r\n119,498 3,083,677 \r\n359,821 \r\n \r\n5,730,004 1,980,204 -1,010,383 \r\n10,136 $ \r\n5,289,913 541,832 \r\n3,428,378 \r\n \r\n$ 12,741,201 \r\n \r\n8,551 $ 5,944,050 1,691,311 1,011,383 \r\n94,042 1,442,870 \r\n175,259 22,306,648 \r\n6,257,515 \r\n \r\n36,271,268 34,833,669 21,539,691 \r\n454,564 1,042,624 14,565,473 5,965,116 34,464,994 15,046,352 \r\n \r\nTotal Operating Expenses \r\n \r\n$ 15,695,921 $ \r\n \r\n15,970,084 $ 12,741,201 $ 38,931,629 $ 164,183,751 \r\n \r\n- 22 - \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 16: Affiliated Organizations \r\nIn accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an amendment of GASB Statement No. 14, The Reporting Entity which became effective for the year ended June 30, 2004, Valdosta State University Foundation, and Valdosta State University Auxiliary Services Real Estate Foundation are legally separate tax exempt organizations whose activities primarily support Valdosta State University, a unit of the University System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office determined Component Units of the State of Georgia, as required by GASB Statement No. 39 should not be assessed in relation to their significance to Valdosta State University, but instead based on their significance to the State of Georgia. \r\nValdosta State University Auxiliary Services Real Estate Foundation has been determined significant to the State of Georgia for the year ended June 30, 2012, and as such, is reported as a discretely presented component unit in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). Significant discretely presented affiliated organizations issue separate audited financial statements that can be obtained from Valdosta State University. \r\n \r\n- 23 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SUPPLEMENTARY INFORMATION - 25 - \r\n \r\n VALDOSTA STATE UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30, 2012 \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 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 \"1\" \r\n \r\n$ \r\n \r\n11,588,438.14 \r\n \r\n8,892,088.22 \r\n \r\n515,159.16 1,729,023.19 \r\n121,247.18 93,986.70 \r\n \r\n$ \r\n \r\n22,939,942.59 \r\n \r\n$ \r\n \r\n145,598.80 \r\n \r\n13,914,880.49 \r\n \r\n293,043.80 \r\n \r\n3,359,054.30 \r\n \r\n-28,229.48 \r\n \r\n$ \r\n \r\n17,684,347.91 \r\n \r\n$ \r\n \r\n518,778.82 \r\n \r\n443,817.93 \r\n \r\n134,566.57 \r\n \r\n2,186,560.92 \r\n \r\n113,927.40 \r\n \r\n1,579,716.36 \r\n \r\n93,619.62 \r\n \r\n184,607.06 \r\n \r\n$ \r\n \r\n5,255,594.68 \r\n \r\n$ \r\n \r\n22,939,942.59 \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 comprehensive basis of accounting other than generally accepted accounting principles. \r\n- 26 - \r\n \r\n VALDOSTA STATE UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) \r\nBUDGET FUND YEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"2\" \r\n \r\nREVENUES \r\nState Appropriation State General Funds \r\nOther Funds \r\nTotal Revenue \r\nADJUSTMENTS AND PROGRAM TRANSFERS \r\nCARRY-OVER FROM PRIOR YEARS \r\nTransfers from Reserved Fund Balance \r\nTotal Funds Available \r\nEXPENDITURES \r\nTeaching \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, 2011 \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\n43,612,773.00 $ \r\n \r\n43,612,773.00 $ \r\n \r\n98,499,580.00 \r\n \r\n94,553,372.24 \r\n \r\n$ \r\n \r\n142,112,353.00 $ \r\n \r\n138,166,145.24 $ \r\n \r\n0.00 \r\n \r\n1,559,548.05 \r\n \r\n0.00 -3,946,207.76 \r\n-3,946,207.76 \r\n1,559,548.05 \r\n \r\n0.00 \r\n \r\n5,018,113.60 \r\n \r\n$ \r\n \r\n142,112,353.00 $ \r\n \r\n144,743,806.89 $ \r\n \r\n5,018,113.60 2,631,453.89 \r\n \r\n$ \r\n \r\n142,112,353.00 $ \r\n \r\n139,877,341.52 $ \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n4,866,465.37 $ \r\n \r\n2,235,011.48 4,866,465.37 \r\n \r\n5,296,213.33 256,196.81 \r\n \r\n103,051.82 7,977.76 \r\n \r\n-256,196.81 -5,018,113.60 \r\n \r\n$ \r\n \r\n5,255,594.68 \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\n518,778.82 \r\n \r\n443,817.93 \r\n \r\n134,566.57 \r\n \r\n2,186,560.92 \r\n \r\n113,927.40 \r\n \r\n1,579,716.36 \r\n \r\n93,619.62 \r\n \r\n$ \r\n \r\n5,070,987.62 \r\n \r\n184,607.06 \r\n \r\nTotal Fund Balance \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 comprehensive basis of accounting other than generally accepted accounting principles. \r\n- 27 - \r\n \r\n$ \r\n \r\n5,255,594.68 \r\n \r\n VALDOSTA STATE 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, 2012 \r\n \r\nTeaching State Appropriation State General Funds Other Funds \r\nTotal Teaching \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\n44,502,830.00 $ 44,502,830.00 $ 43,612,773.00 $ 43,612,773.00 \r\n \r\n98,686,926.00 \r\n \r\n98,686,926.00 \r\n \r\n98,499,580.00 \r\n \r\n94,553,372.24 \r\n \r\n$ 143,189,756.00 $ 143,189,756.00 $ 142,112,353.00 $ 138,166,145.24 \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 comprehensive basis of accounting other than generally accepted accounting principles. \r\n- 28 - \r\n \r\n SCHEDULE \"3\" \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 Positive (Negative) \r\n \r\nExpenditures Compared to Budget \r\n \r\nVariance \r\n \r\nActual \r\n \r\nPositive (Negative) \r\n \r\nExcess (Deficiency) of Funds Available \r\nOver/(Under) Expenditures \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n5,018,113.60 \r\n \r\n0.00 $ 43,612,773.00 $ \r\n \r\n1,559,548.05 \r\n \r\n101,131,033.89 \r\n \r\n0.00 $ 2,631,453.89 \r\n \r\n43,612,161.56 $ 96,265,179.96 \r\n \r\n611.44 $ 2,234,400.04 \r\n \r\n611.44 4,865,853.93 \r\n \r\n$ 5,018,113.60 $ \r\n \r\n1,559,548.05 $ 144,743,806.89 $ \r\n \r\n2,631,453.89 $ 139,877,341.52 $ \r\n \r\n2,235,011.48 $ \r\n \r\n4,866,465.37 \r\n \r\n- 29 - \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2012 \r\n \r\nTeaching State Appropriation State General Funds Other Funds \r\nTotal Teaching \r\nPrior Year Reserves Not Available for Expenditure Inventories Uncollectible Accounts Receivable \r\n \r\nBeginning Fund Balance/(Deficit) \r\nJuly 1 \r\n \r\nFund Balance Carried Over from \r\nPrior Period as Funds Available \r\n \r\nReturn of Fiscal Year 2011 \r\nSurplus \r\n \r\nPrior Period Adjustments \r\n \r\n$ \r\n \r\n140,084.07 $ \r\n \r\n0.00 $ \r\n \r\n5,134,226.34 \r\n \r\n-5,018,113.60 \r\n \r\n$ \r\n \r\n5,274,310.41 $ \r\n \r\n-5,018,113.60 $ \r\n \r\n-140,084.07 $ -116,112.74 \r\n-256,196.81 $ \r\n \r\n33,524.48 77,505.10 \r\n111,029.58 \r\n \r\n172,150.09 105,949.64 \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\n5,552,410.14 $ \r\n \r\n-5,018,113.60 $ \r\n \r\n-256,196.81 $ \r\n \r\n111,029.58 \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 comprehensive basis of accounting other than generally accepted accounting principles. \r\n- 30 - \r\n \r\n SCHEDULE \"4\" \r\n \r\nOther Adjustments \r\n \r\nEarly Return Fiscal Year 2012 \r\nSurplus \r\n \r\nExcess (Deficiency) of Funds Available \r\nOver/(Under) Expenditures \r\n \r\nEnding Fund Balance/(Deficit) \r\nJune 30 \r\n \r\nAnalysis of Ending Fund Balance \r\n \r\nReserved \r\n \r\nSurplus/(Deficit) \r\n \r\nTotal \r\n \r\n$ \r\n \r\n78,530.47 $ \r\n \r\n-7,977.76 \r\n \r\n$ \r\n \r\n70,552.71 $ \r\n \r\n0.00 $ 0.00 \r\n0.00 $ \r\n \r\n611.44 $ 4,865,853.93 \r\n4,866,465.37 $ \r\n \r\n112,666.39 $ 4,935,381.27 \r\n \r\n0.00 $ 4,863,440.60 \r\n \r\n5,048,047.66 $ 4,863,440.60 $ \r\n \r\n112,666.39 $ 71,940.67 \r\n \r\n112,666.39 4,935,381.27 \r\n \r\n184,607.06 $ 5,048,047.66 \r\n \r\n-78,530.47 7,977.76 \r\n \r\n0.00 0.00 \r\n \r\n0.00 0.00 \r\n \r\n93,619.62 113,927.40 \r\n \r\n93,619.62 113,927.40 \r\n \r\n0.00 0.00 \r\n \r\n93,619.62 113,927.40 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n4,866,465.37 $ 5,255,594.68 $ 5,070,987.62 $ \r\n \r\n184,607.06 $ 5,255,594.68 \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\n518,778.82 \r\n \r\n443,817.93 \r\n \r\n134,566.57 \r\n \r\n2,186,560.92 \r\n \r\n113,927.40 \r\n \r\n1,579,716.36 \r\n \r\n93,619.62 \r\n \r\n$ \r\n \r\n$ 5,070,987.62 $ \r\n \r\n$ \r\n \r\n518,778.82 \r\n \r\n443,817.93 \r\n \r\n134,566.57 \r\n \r\n2,186,560.92 \r\n \r\n113,927.40 \r\n \r\n1,579,716.36 \r\n \r\n93,619.62 \r\n \r\n184,607.06 \r\n \r\n184,607.06 \r\n \r\n184,607.06 $ 5,255,594.68 \r\n \r\n- 31 - \r\n \r\n VALDOSTA STATE UNIVERSITY BUDGET TO GAAP RECONCILIATION \r\nJUNE 30, 2012 \r\nTotal Fund Balances - Budget Fund - Non-GAAP Basis (Schedule \"1\") \r\nAmounts reported for Business-Type Activities in the Statement of Net Assets 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 Assets. \r\nNon-mandatory transfers from a non-Budget Fund into a Budget Fund. \r\nChanges in the Fair Market Value of Investments are recognized on the Statement of Net Assets, 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 Assets. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Prepaid items reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Accounts Receivable items reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Inventory items 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. 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. Capital Leases Payable Compensated Absences Payable Contracts Payable Total Liabilities \r\nNet Assets of Business-Type Activities (Exhibit \"A\") \r\nThe supplementary information presented on Schedules 1, 2, 3 and 4 was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. 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 Assets of business-type activities, as reported on Exhibit A. \r\n- 32 - \r\n \r\nSCHEDULE \"5\" \r\n \r\n$ \r\n \r\n5,255,594.68 \r\n \r\n327,718,574.00 \r\n \r\n$ \r\n \r\n3,199,495.98 \r\n \r\n-3,199,495.98 \r\n \r\n$ \r\n \r\n10,269,085.40 \r\n \r\n-3,822,067.38 \r\n \r\n$ \r\n \r\n3,517,592.30 \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n350,901.50 \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n8,065,379.17 \r\n \r\n-245,929.80 \r\n \r\n-27,991.96 -1,559,548.05 \r\n-33,352.06 0.00 \r\n6,447,018.02 3,517,592.30 \r\n350,901.50 7,819,449.37 \r\n \r\n$ \r\n \r\n13,914,880.49 \r\n \r\n-22,845.50 \r\n \r\n-236,810.00 \r\n \r\n-366.45 \r\n \r\n-635,750.34 \r\n \r\n13,019,108.20 \r\n \r\n$ -214,230,250.00 -3,319,194.00 -676,006.00 \r\n \r\n-218,225,450.00 \r\n \r\n$ 144,281,896.00 \r\n \r\n VALDOSTA STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"6\" \r\n \r\nTotals per Annual Supplement \r\n \r\nAccruals June 30, 2012 June 30, 2011 \r\n \r\nCompensated Absences June 30, 2012 June 30, 2011 \r\n \r\nAdjustments \r\n \r\nShared Services on Jointly Staffed Personnel \r\n \r\nAbraham Baldwin Agricultural College \r\n \r\nMock, \r\n \r\nAshley \r\n \r\nMorgan, \r\n \r\nBrenda \r\n \r\nRivers, \r\n \r\nJewell \r\n \r\nWilliams, \r\n \r\nAmy \r\n \r\nArmstrong Atlantic State University \r\n \r\nBarrett, \r\n \r\nLaura \r\n \r\nClayton State University \r\n \r\nReffel, \r\n \r\nJulia \r\n \r\nCoastal College of Georgia \r\n \r\nAguado, \r\n \r\nDavid \r\n \r\nMortier, \r\n \r\nJane \r\n \r\nWaters, \r\n \r\nLaura \r\n \r\nColumbus State University \r\n \r\nWilliamson, \r\n \r\nLowell \r\n \r\nGeorgia Institute of Technology \r\n \r\nHansard, \r\n \r\nLarry \r\n \r\nSouth Georgia College \r\n \r\nBowe, \r\n \r\nAnne \r\n \r\nBrumfield, \r\n \r\nAdam \r\n \r\nHalter, \r\n \r\nJulie \r\n \r\nNelson, \r\n \r\nDavid \r\n \r\nPadilla-Hernadez, Remigia \r\n \r\nSmith, \r\n \r\nDaniel \r\n \r\nStelzer, \r\n \r\nJeri \r\n \r\nStevens, \r\n \r\nTerri \r\n \r\nWard, \r\n \r\nCharles \r\n \r\nUniversity of Georgia Libraries \r\n \r\nMiller, \r\n \r\nMary \r\n \r\nPayroll Error Correction \r\n \r\nSALARIES \r\n \r\n$ \r\n \r\n72,509,499 $ \r\n \r\nTRAVEL 1,042,624 \r\n \r\n174,965 -1,548,774 \r\n \r\n3,083,320 -3,095,968 \r\n \r\n2,150 -2,261 2,476 4,629 \r\n1,077 \r\n-5,490 \r\n-1,723 4,306 2,153 \r\n-606 \r\n4,952 \r\n-2,099 -2,099 -2,261 -1,130 -5,598 -7,347 -3,014 4,306 4,058 \r\n2,476 \r\n-17,060 \r\n \r\n$ \r\n \r\n71,104,937 $ \r\n \r\n1,042,624 \r\n \r\n- 33 - \r\n \r\n  SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n  VALDOSTA STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nCOMMUNICATION OF INTERNAL CONTROL DEFICIENCIES \r\n \r\nThe auditor is required to communicate to management and those charged with governance control deficiencies identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weaknesses. \r\n \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 misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively. \r\n \r\nA material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of Valdosta State University's financial statements will not be prevented, or detected and corrected on a timely basis. \r\n \r\nA 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\nEMPLOYEE COMPENSATION Inadequate Controls over Employee Compensation Significant Deficiency Finding Control Number: FS-551-12-01 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the University were insufficient to provide adequate controls over employee compensation. \r\n \r\nCriteria: \r\n \r\nThe University's management is responsible for designing and maintaining policies and procedures to ensure that financial activity is properly processed and reflected on the University's financial records. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe following deficiencies were noted during our review of activities performed by the Human Resource Department: \r\n \r\n1. Two employees had not properly elected to enroll in a retirement program and therefore no deductions had been made to contribute to a retirement program. \r\n2. One employee continued to accrue sick and vacation time while on unpaid leave. \r\n3. One individual received a direct deposit payment for salary who was not officially hired by the University. \r\n \r\n- 1 - \r\n \r\n VALDOSTA STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nEMPLOYEE COMPENSATION Inadequate Controls over Employee Compensation Significant Deficiency Finding Control Number: FS-551-12-01 \r\n \r\n4. One employee received four months salary while on unpaid leave during fiscal years 2011 and 2012. \r\n5. Several errors were noted in the payment of benefit premiums for those employees who were on unpaid leave. \r\n \r\nCause: \r\n \r\nThese deficiencies were the result of management's failure to ensure that internal controls over the employee compensation process were established, implemented and functioning. \r\n \r\nEffect: \r\n \r\nThis could result in errors in financial reporting and increases the risk of material misstatement in the financial statements, including misstatements due to fraud. \r\n \r\nRecommendation: \r\n \r\nThe University should review the accounting controls and procedures in place and design and implement procedures relative to the accounting functions in the human resources department to ensure that financial activity is properly processed and reflected on the University's accounting records. \r\n \r\nFEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n- 2 - \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bv33-b2010-h2011","title":"Valdosta State University, Valdosta, Georgia, annual financial report for the fiscal year ended June 30, 2011 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, Lowndes County, Valdosta, 30.83334, -83.28032"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2010/2011"],"dcterms_description":["Began with: Fiscal year ended June 30, 2011.","Report year covers fiscal year.","For some years, report may be released instead called: Valdosta State University, Valdosta, Georgia, management report for fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on audit of the financial statements for the fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on review of the financial statements for the fiscal year ended ..., or: Valdosta State University, Valdosta, Georgia, report on review of the financial statements for the fiscal year ended ..., or: Annual financial report, Valdosta State University, for the fiscal year ended ... Valdosta, Georgia, or: Valdosta State University, Valdosta, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended ...","Fiscal year ended June 30, 2011; title from PDF cover (Georgia Government Publications database, viewed October 16, 2023).","Fiscal year ended June 30, 2015 (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); (Georgia Government Publications database, viewed October 16, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2011"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Valdosta State University--Appropriations and expenditures","Financial statements--Georgia","Auditors' reports--Georgia"],"dcterms_title":["Valdosta State University, Valdosta, Georgia, annual financial report for the fiscal year ended June 30, 2011 (including independent auditor's reports)"],"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-bv33-b2010-h2011"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bv33-b2010-h2011"],"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":null,"fulltext":" VALDOSTA STATE UNIVERSITY - TABLE OF CONTENTS - \r\nSECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS B STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS C STATEMENT OF CASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULES \r\n1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT \r\n(NON-GAAP BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURESCOMPARED TO BUDGET \r\nBY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND \r\n5 RECONCILIATIONOF SALARIES AND TRAVEL \r\nSECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n VALDOSTA STATE UNIVERSITY - TABLE OF CONTENTS - \r\nSECTION Ill CURRENT YEAR FINDINGSAND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n SECTION I FINANCIAL \r\n \r\n Russell W. Hinton \r\nSTATE AUDITOR \r\n(404) 666-2174 \r\n \r\nDEPARTMENOTF AUDITSAND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-1 56 Atlanta, Georgia 30334-8400 \r\nNovember 2 8 , 2 0 1 1 \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 Honorable Louis H. Levy, Interim President Valdosta State University \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION \r\nLadies and Gentlemen: \r\nWe have audited the accompanying basic financial statements (Exhibits A through D) of Valdosta State 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 30,2011. These financial statements are the responsibility of the Valdosta State University's management. Our responsibility is to express an opinion on these financial statements based on our audit. \r\nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of University's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. \r\nAs discussed in Note 1,the financial statements of Valdosta State 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 Valdosta State University. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America. \r\n \r\n In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Valdosta State University as of June 30,2011, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. \r\nManagement's Discussion and Analysis is not a part of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this required supplementary information. However, we did not audit this information and express no opinion on it. \r\nOur audit was conducted for the purpose of forming an opinion on the basic financial statements of Valdosta State University taken as a whole. The accompanying supplementary information (Schedules 1through 5) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. \r\nRespectfully submitted, \r\n~ u \u0026 e l lW. Hinton, CPA, CGFM State Auditor \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n VALDOSTA STATE UNIVERSITY \r\nManagement's Discussion and Analysis \r\n \r\nIntroduction \r\n \r\nValdosta State University is one of the 35 institutions of higher education of the University System of Georgia. The University, located in Valdosta, Georgia, was founded in 1906 and has become known for its state-of-the-art technology and technology-related programs. The University offers nationally accredited programs in Art, Business, Music, Nursing, Speech Language Pathology, School Psychology and Teacher as well as baccalaureate and masters degrees in a wide variety of other subjects. This wide range of educational opportunities attracts a highly qualified faculty and a student body of more than 12,000 students. The institution continues to grow as shown by the comparison numbers that follow. \r\n \r\nStudents \r\n \r\nStudents \r\n \r\nFaculty \r\n \r\n(Headcount) \r\n \r\n(FTE) \r\n \r\nFiscal Year 2 0 1 1 Fiscal Year 2 0 1 0 Fiscal Year 2 0 0 9 \r\nOverview of theFinancialrnternen\u0026 and Financial Analysis \r\nValdosta State University is proud to present its financial statements for fiscal year 2011. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; 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 2 0 1 1 and fiscal year 2010. \r\nStatement of Net Assets \r\nThe Statement of Net Assets presents the assets, liabilities, and net assets of the Universityas of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of Valdosta State University. The Statement of Net Assets presents end-of-year data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements. \r\nFrom the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors. \r\nFinally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which is divided into two categories, nonexpendable and expendable. The corpus of nonexpendable restricted resources is only available for investment purposes. Expendable restricted net assets 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. The final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution. \r\n \r\n Statement of Net Assets, Condensed \r\nAssets \r\nCurrent Assets Capital Assets, Net Other Assets \r\nTotal Assets \r\nLiabilities \r\nCurrent Liabilities Noncurrent Liabilities \r\nTotal Liabilities \r\nNet Assets \r\nInvested in Capital Assets, Net of Debt \r\nRestricted - Nonexpendable \r\nRestricted - Expendable Unrestricted \r\nTotal Net Assets \r\n \r\nJune 3 0 , 2 0 1 1 \r\n$ 106,759,759 2,700,858 3,547,278 \r\n27,701,379 $ 140.709.274 \r\n \r\nJune 30,2010 \r\n$ 102,182,637 2,052,958 3,344,869 \r\n24,108,471 $ 131,688,935 \r\n \r\nThe total assets of the institution increased by $6,999,182. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $1,698,707 in the category of Capital Assets, Net. The balance of the increase is mainly in cash and cash equivalents. \r\nThe total liabilities for the year decreased by $2,021,157. The combination of the increase in total assets of $6,999,182 and the decrease in total liabilities of $2,021,157 yields an increase in total net assets of $9,020,339. The increase in total net assets is primarily in the category of Invested in Capital Assets, Net of Debt, in the amount of $4,577,122 as well as an additional increase in Unrestricted Net Assets. \r\nStatement of Revenues, Expenses and Changesin Net Assets \r\nChanges in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking 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 nonoperating 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\n Statement of Revenues, Expenses and Changes in Net Assets, Condensed \r\n \r\nJune 3 0 , 2 0 1 1 \r\n \r\nJune 30,2010 \r\n \r\nOperating Revenues Operating Expenses \r\n \r\nOperating Loss \r\n \r\nNonoperating Revenuesand Expenses \r\n \r\nIncome (Loss) Before Other Revenues, Expenses, Gains or Losses \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\nIncrease in Net Assets \r\n \r\nNet Assets at Beginningof Year, as Originally Reported \r\n \r\nPrior Year Adjustments \r\n \r\nNet Assets at Beginningof Year, Restated \r\n \r\nNet Assets at End of Year \r\n \r\n The Statement of Revenues, Expenses and Changes in Net Assets reflect a positive year with an increase in the net assets at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows: \r\n \r\nRevenue by Source Forthe Years Ended June 3 0 , 2 0 1 1 and June 3 0 , 2 0 1 0 \r\n \r\nJune 3 0 , 2 0 1 1 \r\n \r\nJune 3 0 , 2 0 1 0 \r\n \r\nOperating Revenue Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Auxiliary Other \r\n \r\nTotal Operating Revenue \r\n \r\nNonoperating Revenue State Appropriations Federal Stimulus - Stabilization Funds Grants and Contracts Gifts Investment Income Other \r\n \r\nTotal Nonoperating Revenue \r\n \r\nCapital Grants and Gifts State Other \r\n \r\nTotal Capital Grants and Gifts \r\n \r\nTotal Revenues \r\n \r\n Expenses (By Functional Classification) For the Years Ended June 3 0 , 2 0 1 1 and June 30,2010 \r\n \r\nJune 3 0 , 2 0 1 1 \r\n \r\nJune 3 0 , 2 0 1 0 \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\nTotal Operating Expenses \r\n \r\n$ 160,612,416 \r\n \r\n$ 148,920,301 \r\n \r\nNonoperating Expenses Interest Expense (Capital Assets) \r\n \r\nSpecial Item Loss on Demolition of Building \r\n \r\nTotal Expenses \r\n \r\nOperating revenues increased by $9,402,863 in fiscal year 2011. Although Tuition and Fees included a 17% increase, revenues decreased marginally in both Federal and state Grants and Contracts - Operating. \r\nThe Auxiliary revenue increase of $1,776,660 is primarily due to an increase in Bookstore Sales related to the Tech Store, as well as Dining Services. \r\nNonoperating revenues decreased for the year primarily due to an decrease of $8,506,075 in Federal Stimulus Stabilization Funds. \r\nThe compensation and employee benefits category increased by $4,776,466 and primarily affected the Instruction and Auxiliary Services categories. The increase reflects the addition of faculty members to meet enrollment demands and the increased cost of health insurance for the employees of the institution. \r\nUtilities increased by $556,891 during the past year. The increase was primarily associated with the increases in utility rates across the state and affected the Plant Operations and Maintenance category. \r\n \r\n Statement of Cash Flows \r\nThe final statement presented by the Valdosta State University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets. \r\nCash Flows for the Years Ended June 3 0 , 2 0 1 1 and 2010, Condensed \r\n \r\nJune 3 0 , 2 0 1 1 \r\n \r\nJune 30,2010 \r\n \r\nCash Provided(Used) B y Operating Activities Noncapital FinancingActivities Capital and Related FinancingActivities InvestingActivities \r\n \r\n$ 41,867,066 69,401,291 -20,958,964 239,916 \r\n \r\n$ 47,487,688 70,718,511 -18,055,838 206,573 \r\n \r\nNet Change in Cash Cash, Beginningof Year \r\n \r\nCash, End of Year \r\nCapita/ Assets \r\nThe University had several significant capital asset additions for facilities in fiscal year 2011. The Odum Library and Communication Arts Building renovations were completed and construction of the Jennett Lecture Hall was completed and opened during fiscal year 2011. \r\nValdosta State University also completed major renovations to Nevins Hall in fiscal year 2011. The $4.0 million for this project was funded by the Georgia State Financing and Investment Commission (GSFIC). Other capital projects funded by the GSFIC included $1.0 million for mechanical upgrades in the Education Center. \r\nFor additional information concerning Capital Assets, see Notes 1,6,8, and 1 0 in the Notes to the Financial Statements. \r\nLong- Term Liabilities \r\nValdosta State University had Long-Term Liabilities of $220,148,216, of which $4,733,488 was reflected as current liability at June 30, 2011. \r\nFor additional information concerning Long-Term Liabilities, see Notes 1and 8 in the Notes to the Financial Statements. \r\n \r\n Economic Outlook \r\nThe 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 beyond those unknown variations having a global effect on virtually all types of business operations. The University's overall financial position is strong. The University anticipates the current fiscal year will be much like last and will maintain a close watch over resources to maintain the University's ability to react to unknown internal and external issues. \r\nDr. Louis H. Levy, Interim President Valdosta State University \r\n \r\n BASIC FINANCIAL STATEMENTS \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF NET ASSETS \r\nJUNE 30,2011 \r\nASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables - Other Inventories (Note 4) Prepaid Items \r\nTotal Current Assets \r\nNoncurrent Assets Noncurrent Cash Investments (ExternallyRestricted) Investments Notes Receivable Capital Assets, Net (Note 6) \r\nTotal Noncurrent Assets \r\nTotal Assets \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Deferred Revenue (Note 7) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Lease Purchase Obligations Deferred Revenue Compensated Absences \r\nTotal Noncurrent Liabilities \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets. Net of Related Debt Restricted for: \r\nNonexpendable Expendable Unrestricted \r\nTotal Net Assets \r\nThe notes to the financial statements are an integral part of this statement. \r\n \r\nEXHIBIT \"A\" \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS \r\nYEAR ENDEDJUNE 30.2011 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees Less: ScholarshipAllowances \r\nGrants and Contracts Federal Federal Stimulus State Other \r\nSales and Services Rents and Royalties Auxil~aryEnterprises \r\nResidence Halls Bookstore Food Servlces ParhingKransportat~on Health Servlces IntercollegiateAthletics Other Organizations Other Operating Revenues \r\nTotal Operatlng Revenues \r\nQPERATINS EXPENSES \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplles and Other Services Depreciation \r\nTotal Operatlng Expenses \r\nOperating lncome [Loss) \r\nNONOPERATING REVENUES (EXPENSES) \r\nState Appropriations Grants and Contracts \r\nFederal Federal Stimulus State Other G~fls Investment lncome Interest Expense Other NonoperatingRevenues \r\nNet NonoperatingRevenues \r\nlncome (Loss) Before Other Revenues. Expenses. Galns, or Losses \r\nCapital Grants and Gifts State Other \r\nTotal Capital Grants and Gifts \r\nSpeclal Item (See Note 14) \r\nTotal Other Revenues. Expenses. Gains or Losses \r\nIncrease (Decrease)In Net Assets \r\nNet Assets - BeBnnlngof Year \r\nNet Assets - End of Year \r\nThe notes to the financial statements are an Integralpart of t h ~ statement. \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDEDJUNE 3 0 . 2 0 1 1 \r\nCASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Paymentsto Suppliers Paymentsto Employees Paymentsfor Scholarships and Fellowships Loans Issued t o Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments) \r\nNet Cash Provided (Used) by OperatingActivities \r\nCASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Receivedfor Other than Capital Purposes Other Nonoperating Receipts \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 Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases \r\nNet Cash Provided (Used) by Capital and Related FinancingActivities \r\nCASH FLOWS FROM INVESTING ACTIVITIES lnterest on lnvestments Purchase of Investments \r\nNet Cash Provided (Used) by Investing Activit~es \r\nNet Increase (Decrease) 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 VALDOSTA STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDEDJUNE 30.2011 \r\nRECONCILIATIONOF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: \r\nOperating lncome (Loss) Adjustments to ReconcileOperatinglncome (Loss)to Net Cash \r\nProvided(Used) by OperatingActivities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Notes Receivable. Net Accounts Payable Deferred Revenue Other Liabilities Compensated Absences \r\nNet Cash Provlded (Used) by OperatingActivities \r\nNONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations Change in Fair Value of Investments Recognizedas a Component of lnterest lncome Special Item-Demolitionof Building Interest on Capital Debt Forgiven by VSU Auxiliary Real Estate Foundation, LLC Principal on Capital Debt Forgiven by VSU Auxiliary Real Estate Foundation, LLC Gift of Capital Assets ReduclngProceeds of Capital Grants and Gifts \r\n \r\nEXHIBIT \"C\" \r\n \r\nThe notes to the financial statements are an integral part of this statement. \r\n- 5- \r\n \r\n VALDOSTA STATE UNIVERSrrY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"Dl' \r\n \r\nNote 1: Summary of SignifiwntAccounting Policies \r\nNature of Operations Valdosta State 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 Valdosta State University is one of thirty-five (35) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Valdosta State 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. Valdosta State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Valdosta State 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 Renortins! Standards. \r\nLegally separate, tax exempt organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential affiliated organizations of the State. See Note 17 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, liabilities, net assets, revenues, expenses, changes in net assets and cash flows. \r\nGenerally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than in one fiscal year. Due to the lack of materiality, Institutions of the University System of Georgia will continue to report summer revenues and expenses in the year in which the predominant activity takes place. \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, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intraUniversity transactions have been eliminated. \r\nThe University has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The University has elected to not apply FASB pronouncements issued after the applicable date. \r\n \r\n VALDOSTA STATE UNIVERSrrY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \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. \r\nInvestments lnvestments 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 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 Assets. The Board of Regents Diversified Fund and the Georgia Extended Asset Pool are included under 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 each residing 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\nInventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out (\"FIFO\") basis. Resale lnventories are valued at cost usingthe average cost basis. \r\nNoncurrent Cash and Investments Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets. \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 4 0 to 6 0 years for buildings, 20 to 25 years for infrastructure and land improvements, 1 0 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. \r\nTo obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financingand 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. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nFor projects managed by GSFIC, the 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, 2011, GSFIC did not transfer any capital additions to Valdosta State University. \r\nDeposits Deposits represent good faith deposits from students to reserve housing assignments in University residence halls. \r\nDeferred Revenues Deferred revenues 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. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned. \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 Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Valdosta State University had accrued liability for compensated absences in the amount of $3,466,285 as of July 1, 2010. For fiscal year 2011, $2,394,895 was earned in compensated absences and employees were paid $2,528,370, for a net decrease of $133,475. The ending balance as of June 3 0 , 2 0 1 1 in accrued liability for compensated absences was $3,332,810. \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\nNet Assets \r\nThe University's net assets are classified as follows: \r\nInvested in capital assets, net of related debt: 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 invested in capital assets, net of related debt. 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. \r\nRestrided net assefs - nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The 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\nRestrided net assets - expendable: Restricted expendable net assets include resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBlT \"D\" \r\n \r\nExpendable Restricted Net Assets include the following: \r\n \r\nRestricted - E\u0026G and Other Organized Activities $ Institutional Loans Term Endowments Quasi-Endowments \r\n \r\n2,319,500 347,685 769,355 \r\n \r\nTotal Restricted Expendable \r\n \r\n$ \r\n \r\n3,547,278 \r\n \r\nUnrestrictednetasse\u0026: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $256,196.81. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. \r\n \r\nUnrestricted Net Assets includes the following items which are quasi-restricted by management. \r\n \r\nR \u0026 R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted \r\n \r\nTotal Unrestricted Net Assets \r\n \r\n$ \r\n \r\n27,701,379 \r\n \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\n \r\nIncome Taxes Valdosta State 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\n \r\nClassification of Revenues and Expenses \r\n \r\nThe Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria: \r\n \r\nOperating Revenues: 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 \r\nNonoperating Revenues: Nonoperating 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, Repotting Cash Flows of Pmprietaty and Nonexpendable Tmst Funds and GovernmentalEntities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"DM \r\n \r\nOperating Expenses: Operating expense includes activities that have the characteristics of exchange transactions. \r\n \r\nNonoperating Expenses: Nonoperating expense includes activities that have the characteristics of nonexchange transactions, such as capital financing costs and costs related to investment activity. \r\n \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 Assets. 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. Certain 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\n \r\nNote 2: Deposits and I nvestments \r\n \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 50-17-59: \r\n \r\n1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United \r\nStates or of the State of Georgia. \r\n \r\n2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or \r\nmunicipalities of the State of Georgia. \r\n \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\n \r\n4. \r\n \r\nIndustrial revenue bonds and bonds of development authorities created by the laws of the \r\n \r\nState of Georgia. \r\n \r\n5. \r\n \r\nBonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary \r\n \r\ncorporation of the United States government, which are fully guaranteed by the United States \r\n \r\ngovernment both as to principal and interest and debt obligations issued by the Federal Land \r\n \r\nBank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank \r\n \r\nfor Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and \r\n \r\nthe Federal National MortgageAssociation. \r\n \r\n6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. \r\n \r\nThe 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 VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nAt June 30, 2011, the carrying value of deposits was $25,919,787 and the bank balance was $28,156,529. Of the University's deposits, $28,156,529 was uninsured. Of these uninsured deposits, $28,129,353 was collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name. \r\nInvestments \r\nAt June 30, 2011, the carrying value of the University's investments was $12,765,798, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Board of Regents and/or Office of the State Treasurer investment pools as follows: \r\n \r\nlnvestment Pools Board of Regents Diversified Fund \r\n \r\nOffice of the State Treasurer Georgia Extended Asset Pool \r\n \r\nTotal lnvestrnents \r\n \r\n$ \r\n \r\n12,765,798 \r\n \r\nThe Board of Regents lnvestment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents lnvestment Pool is voluntary. The Board of Regents lnvestment Pool is not rated. Additional information on the Board of Regents lnvestment 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 - Education Audit Division or on their web site at http://www.audits.aa.aov. \r\nThe Georgia Extended Asset Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company. Net Asset Value (NAV) is calculated daily to determine current share price, which was $2.00 at June 30, 2011. The Georgia Extended Asset Pool is an AAAf rated investment pool by Standard and Poor's. The effective duration for the fund is .63 years. \r\nlnterest Rate Risk lnterest 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 Diversified Fund is 4.31 years. Of the University's total investment of $6,136,489 in the Diversified Fund, $1,986,901 is invested in debt securities. \r\n \r\n VALDOSTA STATE UNIVERSIlY NOTES T O THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nNote 3: Accounts Receivable \r\n \r\nAccounts receivable consisted of the following at June 3 0 , 2011: \r\n \r\nStudent Tuition and Fees Auxiliary Enterprisesand Other OperatingActivities Federal FinancialAssistance Georgia State Financingand Investment Commission Due from Affiliated Organizations Other \r\n \r\n$ \r\n \r\n406,420 \r\n \r\n243,370 \r\n \r\n1,270,383 \r\n \r\n97,004 \r\n \r\n1,709,723 \r\n \r\n1,780,394 \r\n \r\nEXHIBIT \"D\" \r\n \r\nLess Allowance for Doubtful Accounts \r\n \r\nNet Accounts Receivable \r\n \r\n$ 5,376,580 \r\n \r\nNote 4: Inventvries \r\n \r\nlnventories consisted of the following at June 3 0 , 2011: \r\n \r\nBookstore Other \r\n \r\nTotal lnventories \r\n \r\nNote 5: Notes/Loans Receivable \r\n \r\nAt June 3 0 , 2 0 1 1 , Note/Loans Receivable were comprised of institutional loans, with no allowance for uncollectible loans. \r\n \r\n VALDOSTA STATE UNIVERSrPl NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \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, 2011: \r\n \r\nBeginning Balance July 1,2010 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30,2011 \r\n \r\nCapital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress \r\n \r\n$ 3,662,832$ 39.187 \r\n \r\n25,920 8,000 \r\n \r\n$ \r\n \r\n3,688,752 \r\n \r\n47,187 \r\n \r\nTotal Capital Assets, Not Being Depreciated $ 12,741,985$ \r\n \r\n14,884,314$ \r\n \r\n12,625,951 $ \r\n \r\n15,000,348 \r\n \r\nCapital Assets. Being Depreciated: Building and Building Improvements Facilitiesand Other Improvements Equipment Capital Leases Library Collections \r\n \r\n$ 132,320.408 $ 9,377.190 18.697.615 \r\n220,246,695 24,239,071 \r\n \r\n11,970,211 $ 284,275 \r\n1,202,282 208.712 \r\n1,350,182 \r\n \r\n1.381.158 $ 29.915 \r\n772.166 42.363 143,949 \r\n \r\n142,909,461 9,631,550 19,127,731 \r\n220,413,044 25.445.304 \r\n \r\nTotal Assets Being Depreciated \r\n \r\nLess: Accumulated Depreciation: Building and Building Improvements Facilitiesand Other Improvements Equipment Capital Leases Library Collections \r\n \r\n$ 45,002,415 $ 4,173,952 13,381,647 14,487,054 \r\n18,701,738 \r\n \r\n3.717.547 $ 368.207 \r\n1,317,643 7,876,098 1,175,114 \r\n \r\n262,485 $ 29,915 \r\n768,074 44,419 \r\n143,949 \r\n \r\n48,457,477 4,512.244 \r\n13,931,216 22.318.733 19,732.903 \r\n \r\nTotal Accumulated Depreciation \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n$ 309,134,173$ \r\n \r\n561,053 $ \r\n \r\n1.120.709 $ 308,574,517 \r\n \r\nCapital Assets, Net \r\n \r\nNote 7: Deferred Revenue Current deferred revenue consisted of the following at June 30, 2011: \r\nPrepaid Tuition and Fees Other Deferred Revenue \r\nTotal Deferred Revenue \r\n \r\nNoncurrent deferred revenue was $906,523 at June 30, 2011. \r\n \r\n VALDOSTA STATE UNIVERSIlY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 8: Long- Term Liabilities \r\n \r\nLong-Term liability activity for the year ended June 30, 2 0 1 1was as follows: \r\n \r\nBe@nn i ng Balance July 1.2010 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30,2011 \r\n \r\nCurrent Portion \r\n \r\nLeases Lease Obligations \r\n \r\n$ 219,129,235 $ \r\n \r\n208,712 $ 2,522,541$ 216,815,406$ 2,922,787 \r\n \r\nOther Liabilities \r\n \r\nNotes and Loans \r\n \r\n15,265 \r\n \r\n15,265 \r\n \r\n0 \r\n \r\nTotal Total LongTerm Obligations $ 222,610,785$ \r\nNote 9: Signifiwnt Commitmenis \r\n \r\n2.603.607 $ \r\n \r\n- - 5,066,176 $ 220.148.216 $ 4,733.488 \r\n \r\nThe University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $12,022,098 as of June 30, 2011. This amount is not reflected in the accompanying basic financial statements. \r\n \r\nNote 10: Lease Obligations \r\n \r\nValdosta State 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\n \r\nCAPITAL LEASES \r\n \r\nCapital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2012 and 2039. Expenditures for fiscal year 2 0 1 1 were $9.4 million of which $7.4 million represented interest. Total principal paid on capital leases was $2.0 million for the fiscal year ended June 30, 2011. Additionally the VSU Auxiliary Real Estate Foundation, LLC forgave VSU capital debt principal and interest during fiscal year 2 0 1 1 of $488,460 and $2,055,998, respectively. Interest rates range from 4.25 percent to 10 percent. The following is a summary of the carrying values of assets held under capital lease at June 30,2011: \r\n \r\nEquipment Buildings \r\n \r\nTotal Assets Held Under Capital Lease \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\n \r\nValdosta State University had ten capital building leases with related entities in the current fiscal year, In fiscal year 2011, Valdosta State University entered into no new capital leases with related entities. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBll \"D\" \r\n \r\nValdosta State University has nine capital building leases with VSU Auxiliary Real Estate Foundation, LLC, as follows: \r\nGeorgia and Reade residence halls (combined) for $30,419,725 at an average coupon rate of 4.150% with an outstanding liability at June 30,2011 of $30,918,987; Student Union for $60,747,911 at an average coupon rate of 4.514% with an outstanding liability at June 30, 2 0 1 1 of $59,739,108; Hopper residence hall with dining services, campus mail and office space for $27,484,345 at an average coupon rate of 4.554% with an outstanding liability at June 30, 2 0 1 1 of $27,297,700; Student Health Center for $12,221,729 at an average coupon rate of 4.649% with an outstanding liability at June 30, 2 0 1 1 of $12,145,048; Oak Street Parking Deck for $24,869,880 at an average coupon rate of 4.649% with an outstanding liability at June 30, 2 0 1 1 of $25,073,126; Sustella Parking Deck for $21,468,631, at an average coupon rate of 4.649% with an outstanding liability at June 30, 2 0 1 1 of $21,644,084; Patterson residence hall for $10,399,786 at a varying interest rate with an outstanding liability at June 30, 2 0 1 1 of $9,920,041; Lowndes residence hall for $7,116,694 at a varying interest rate with an outstanding liability at June 30, 2 0 1 1 of $6,879,925; Centennial residence hall for $19,285,471 at a varying interest rate with an outstanding liability at June 30, 2 0 1 1 of $17,287,585. \r\nValdosta State University has one capital building lease with Valdosta State University Foundation, LLC, as follows: \r\nAthletic Field House for $5,994,383 at an average coupon rate of 4.55% with an outstanding liability at June 30, 2 0 1 1of $5,638,864. \r\nValdosta State University entered into six new equipment capital leases during fiscal year 2 0 1 1 in the amount of $208,712. The outstanding liability at June 30, 2 0 1 1 on these new equipment leases is $170,996. All but one of the new equipment leases are with third parties; the University leases electronic display boards located in the PE Complex from the Valdosta State University Foundation, LLC, a related party. \r\nValdosta State University also has various capital leases for equipment from prior fiscal years with an outstanding balance at June 3 0 , 2 0 1 1 in the amount of $99,942. \r\nOPERATING LEASES \r\nValdosta State University's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2 0 1 1 through 2013. Certain operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers and other small business equipment. \r\nFUTURE COMMITMENTS \r\nFuture commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows: \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"DM \r\n \r\nYear EndingJune 30: 2012 2013 2014 2015 2016 2017 - 2021 2022 - 2026 2027 - 2031 2032 - 2036 2037 - 2039 \r\nTotal Minimum Lease Payments \r\nLess: Interest \r\nPrincipal Outstanding \r\n \r\nReal Property and Equipment \r\n \r\nCapital \r\n \r\nOperating \r\n \r\nLeases \r\n \r\nLeases \r\n \r\nValdosta State University's fiscal year 2011 expense for rental of real property and equipment under operating leases was $24,603. \r\nNote 11: RetirementPtans \r\nValdosta State University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Valdosta State 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\nEmployees' Retirement System of GeorgSa \r\nThe ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multipleemployer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nOn November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1,1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415. \r\n \r\nThe benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1,1982, is an \"old plan\" member subject to the plan provisions in effect prior to July 1,1982. Members hired on or after July 1,1982 but prior to January 1,2009 are \"new plan\" members subject to the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the \"old\" or \"new\" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1,2009 also have the option to change their membership to the GSEPS plan. \r\n \r\nUnder the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 60 or 3 0 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\nRetirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \r\n \r\nMember contribution rates are set by law. Member contributions under the old plan are 4%of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, Valdosta State University pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Valdosta State University 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. Valdosta State University is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Valdosta State University contributions are not at any time refundable to the member or his/her beneficiary. \r\n \r\nEmployer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows: \r\n \r\nOld Plan* New Plan GSEPS \r\n \r\n10.41% 10.41% \r\n6.54% \r\n \r\n* 5.66% exclusive of contributions paid by the employer on behalf of old plan members \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nMembers become vested after 1 0 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits. \r\nTeachers Retirement System of Georgia \r\nThe Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. \r\nOn October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. \r\nTRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 2 5 years of creditable service. \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \r\nTRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2009 actuarial valuation. \r\n \r\n VALDOSTA STATE UNIVERSrPl NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nThe following table summarizes the Valdosta State University contributions by defined benefit plan for the years ending June 30,2011, June 30, 2010, and June 30, 2009 (dollars in thousands): \r\n \r\nFiscal Year \r\n \r\nERS \r\n \r\nRequired \r\n \r\nPercentage \r\n \r\nContribution \r\n \r\nContributed \r\n \r\nTRS \r\n \r\nRequired \r\n \r\nPercentage \r\n \r\nContribution \r\n \r\nContributed \r\n \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. 47-21-1et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An \"eligible university system employee\" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC,American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. \r\nFunding Policy Valdosta State 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 2011, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5%of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. \r\nValdosta State University and the covered employees made the required contributions of $2,362,879 (9.24%) and $1,278,616 (5%),respectively. \r\nAIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. \r\nGeorgia Defined Contribution Plan \r\nPlan Description Valdosta State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBrr \"D\" \r\n \r\nBenefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. \r\nContributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. \r\nTotal contributions made by employees during fiscal year 2 0 1 1 amounted to $136,628 which represents 7.5%of covered payroll. These contributions met the requirements of the plan. \r\nThe Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices. \r\nNote 12: Risk Management \r\nThe University System of Georgia offers its employees and retirees access to three different selfinsured healthcare plan options. A PPO/PPO Consumer healthcare plan was offered for the entire reporting period, and effective 01/01/2011, a HSA/High Deductible PPO and a HMO are also offered on a self-insured basis. The HSA/High Deductible PPO and HMO were previously insured through Blue Cross Blue Shield of Georgia. Valdosta State University and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare 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 these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare 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. \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. Valdosta State 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\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"D\" \r\n \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. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. \r\nNote 13: 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 expenditures disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Valdosta State University expects such amounts, if any, to be immaterial to its overall financial position. \r\nLitigation, claims and assessments filed against Valdosta State 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, 2011. \r\nNote 14: Special Items \r\nA portion of Converse Hall, a dormitory on campus, was demolished during fiscal year 2 0 1 1to make room for a new building. The portion of the building being demolished was of such a magnitude that the decision was made to delete a portion of the asset. This deletion resulted in a loss of $1,065,449. \r\nNote 15: Post-Employment BenefiB 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 College pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regentsfor the upcoming plan year. For the 2010 and 2 0 1 1 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%. \r\n \r\n VALDOSTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nAs of June 30, 2011, there were 505 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2011, Valdosta State University recognized as incurred $2,015,464 of expenditures, which was net of $1,067,959 of participant contributions. \r\nNote 16: Natural Classificationswith Functional Classifiwtions \r\nThe University's operating expenses by functional classification for fiscal year 2011are shown below: \r\n \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 Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\n \r\nTotal Operating Expenses \r\n \r\nNatural Classification \r\n \r\nlnst~tut~onal Support \r\n \r\nFunctional Classification \r\n \r\nPlant Operations Scholarships \r\n \r\nand \r\n \r\nand \r\n \r\nMaintenance \r\n \r\nFellowships \r\n \r\nAuxiliary Enterprises \r\n \r\nTotal Operating Expenses \r\n \r\nSalaries Faculty Staff \r\nEmployee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\n \r\nTotal Operating Expenses \r\n \r\n VALDOSTA STATE UNIVERSIlY NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNote 17: AMIiated Organizations \r\nValdosta State University Foundation, Inc., and Valdosta State University Auxiliary Services Real Estate Foundation, Inc., are legally separate, tax exempt organizations whose activities primarily support Valdosta State University, a unit of the University System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office determined Component Units of the State of Georgia, as required by GAS6 Statement No. 39 should not be assessed in relation to their significance to Valdosta State University, but instead based on their significance to the State of Georgia. Accordingly, Valdosta State University has not included financial activity for Valdosta State University Foundation, Inc., and VSU Auxiliary Services Real Estate Foundation, Inc. in these financial statements. \r\nThe Valdosta State University Auxiliary Services Real Estate Foundation, Inc. has been determined as being significant to the State of Georgia for the year ended June 30, 2011, and as such, is reported as a discretely presented component unit in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). The significant discretely presented component units issue separate audited financial statements that can be obtained from the Board of Regents of the University System of Georgia. \r\n \r\n (This page left intentionally blank) \r\n \r\n SUPPLEMENTARY INFORMATION \r\n \r\n VALDOSTA STATE UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30,2011 \r\nASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable \r\nFederal Financial Assrstance Other Prepaid Expenditures lnventories \r\nTotal Assets \r\nLIABILITIESAND FUND EOUITY \r\nLiabil~tres Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue 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 lnventories Unreserved Surplus \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\nSCHEDULE \"1\" \r\n \r\nActual amounts were prepared on a prescribed basis of accountingthat demonstrates compliance with budgetary statutes and regulations of the State of Georgia, whrch is a comprehensive basis of accounting other than generally accepted accounting principles. \r\n-26- \r\n \r\n VALWSTA STATE UNIVERSIlY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NONGAAP BASIS) \r\nBUDGET FUND YEAR ENDEDJUNE 30.2011 \r\n \r\nSCHEDULE '2\" \r\n \r\nREVENUES \r\nState Approprlatlon State General Funds \r\nOther Funds \r\nTotal Revenues \r\nADJUSTMENTSAND PROGRAM TRANSFERS \r\nCARRY-OVER FROM PRIOR YEARS \r\nTransfers from Reserved Fund Balance \r\nTotal Funds Available \r\nEXPENDITURES \r\nTeaching \r\nExcess of Funds Avallable over Expenditures \r\nFUND BALANCE JULY 1 \r\nReserved Unreserved \r\nADJUSTMENTS \r\nPrior Year Payables/Expenditure$ Prlor Year Rece~vables/Revenues Unreserved Fund Balance (Surplus) Returned \r\nto Board of Regents - University System Office Year Ended June 30,2010 \r\nEarly Return of Surplus in Current Fiscal Year Prlor Year R e s e ~ e dFund Balance Included in Funds Avallable \r\nFUND BALANCE JUNE 3Q \r\n \r\nBUDGET \r\n \r\nACTUAL \r\n \r\nVARIANCE - \r\nFAVORABLE (UNFAVORABLE) \r\n \r\nSUMMARY OF FUND BALANCF \r\nResewed Department Sales and Sewlces Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carryaver l nventories \r\nTotal Resewed \r\nUnreSe~ed Surplus \r\n \r\nTotal Fund Balance \r\n \r\nActual amounts were prepared on a prescribed basis of accounting that demonstrates compliance wlth budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE \r\n(NONGAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011 \r\n \r\nTeaching State Appropriation State General Funds Federal Funds American Recovery and Reinvestment Act Federal Stabilization Funds Other Funds \r\nTotal Teachtng \r\n \r\nOriginal Appropriation \r\n \r\nAmended Appropr~at~on \r\n \r\nFtnal Budget \r\n \r\nCurrent Year Revenues \r\n \r\nActual amounts were prepared on a prescribed basls of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. \r\n \r\n SCHEDULE \"3\" \r\n \r\nFunds Ava~lableCompared to Budget \r\n \r\nPrior Year \r\n \r\nAdjustments and \r\n \r\nTotal \r\n \r\nCarryaver \r\n \r\nProgram Transfers \r\n \r\nFunds Available \r\n \r\nvarlance Positive (Negattve) \r\n \r\nExpenditures Compared to Budget \r\n \r\nActual \r\n \r\nVariance Positive (Negauve) \r\n \r\nExcess (Deficiency) of Funds Ava~lable \r\nOver/(Under) Expenditures \r\n \r\n$ 4.438.182.22$ \r\nP \r\n \r\n-- 724.884.00 $ 144.255.151.643 \r\n \r\n238.579.64 $ 139.189.931.51$ \r\n \r\nI \r\n \r\n- \r\n \r\n4,826,640.49$ \r\n \r\n5,065,220.13 \r\n \r\n VALDOSTA STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE \r\n[NONGAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011 \r\n \r\nTeachlng State Appropr~ation State General Funds Federal Funds Amerlcan Recovery and Reinvestment Act Federal Stabilization Funds Other Funds \r\nTotal Teaching \r\nTotal OperatingActlvily \r\nPr~oYr ear Reserves Not Available for Expenditure Inventories UncollectlbleAccounts Rece~vable \r\n \r\nBeg~nn~nFgund Balance/(Dehclt) \r\nJuly 1 \r\n \r\nFund Balance Carr~edOver from \r\nPrlor Perlod as Funds Available \r\n \r\nReturn of FlscalYear 2010 \r\nSurplus \r\n \r\nPrlor Perlod Adjustments \r\n \r\nBudget unlt ~ o t a l s \r\n \r\nActual amounts were prepared on a prescribedbasis of accountingthat demonstrates compliance with budgetary statutes and regulationsof the State of Georgia. which is a comprehensive basis of accountingother than generally accepted accounting principles. \r\n \r\n other Adjustments \r\n \r\nEarly Return F~scaYl ear 2 0 1 1 \r\nSurplus \r\n \r\nExcess (Defic~ency) of Funds Available \r\nOver/(Under) Expenditures \r\n \r\nEnding Fund Balance/(Deficit) \r\nJune 3 0 \r\n \r\nAnalysis of Endlng Fund Balance \r\n \r\nReserved \r\n \r\nSurplus/(Deficit) \r\n \r\nTotal \r\n \r\nSummaryof Ending Fund Balance \r\nReserved Department Sales and Services Indirect Cost Recover~es Technology Fees Restricted/Sponsored Funds Uncollect~bleAccounts Receivable Tuition Carryover lnventorles \r\nUnreserved Surplus \r\nTotal Ending Fund Balance - June 30 \r\n \r\n (This page left intentionally blank) \r\n \r\n VALDOSTA STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 30,2011 \r\n \r\nSCHEDULE \"5\" \r\n \r\nTotals per Annual Supplement \r\n \r\nAccruals June 30,2011 June 30,2010 \r\n \r\nCompensated Absences June 3 0 . 2 0 1 1 June 30,2010 \r\n \r\nAdjustments \r\n \r\nShared Services on Jointly Staffed Personnel \r\n \r\nAbraham Baldwin Agricultural College \r\n \r\nChason, \r\n \r\nMichael \r\n \r\nRivers, \r\n \r\nJewell \r\n \r\nWilliams, \r\n \r\nAmy \r\n \r\nCollege of Coastal Georgia \r\n \r\nAguado, \r\n \r\nDavid \r\n \r\nMortier, \r\n \r\nJane \r\n \r\nGeorgia Institute of Technology \r\n \r\nHansard. \r\n \r\nLa r ly \r\n \r\nGeorgia Southwestern State University \r\n \r\nSiders, \r\n \r\nJanet \r\n \r\nKennesaw State University \r\n \r\nRandall, \r\n \r\nChristopher \r\n \r\nSouth Georgia College \r\n \r\nCano, \r\n \r\nIsrael \r\n \r\nCano, \r\n \r\nLilia \r\n \r\nEaves. \r\n \r\nMichael \r\n \r\nHalter. \r\n \r\nJulie \r\n \r\nManganaro, \r\n \r\nDebb~e \r\n \r\nSmith, \r\n \r\nDaniel \r\n \r\nStelzer, \r\n \r\nJiri \r\n \r\nStevens, \r\n \r\nTerri \r\n \r\nTemplin, \r\n \r\nWyonne \r\n \r\nWard. \r\n \r\nCharles \r\n \r\nUniversity of Georgia \r\n \r\nGraham, \r\n \r\nSuzanne \r\n \r\nUniversityof Georgia Libraries \r\n \r\nMiller, \r\n \r\nMary \r\n \r\nUnidentified Variance \r\n \r\nSALARIES \r\n \r\nTRAVEL \r\n \r\n$ \r\n \r\n70,155,782 $ \r\n \r\n835,016 \r\n \r\n SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGSAND QUESTIONEDCOSTS \r\n \r\n VALDOSTA STATE UNIVERSITY AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2011 \r\n \r\nPRlOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFS-551-10-01 \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n VALDOSTA STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 3 0 , 2 0 1 1 \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 "}],"pages":{"current_page":1,"next_page":null,"prev_page":null,"total_pages":1,"limit_value":10,"offset_value":0,"total_count":3,"first_page?":true,"last_page?":true},"facets":[{"name":"type_facet","items":[{"value":"Text","hits":3}],"options":{"sort":"count","limit":16,"offset":0,"prefix":null}},{"name":"creator_facet","items":[{"value":"Georgia. 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