{"response":{"docs":[{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bv6-bc32-b2011-h2012-belec-p-btext","title":"West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2012","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, Haralson County, Waco, 33.70288, -85.18328"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2011/2012"],"dcterms_description":["Began with: Fiscal year ended June 30, 2010.","Effective 2009, West Central Technical College merged with West Georgia Technical College to form a new college that retained the name of West Georgia Technical College.","For some years, report may be released instead called: West Georgia Technical College, Waco, Georgia, management report for fiscal year ended ...","Fiscal year ended June 30, 2010, released in 2011?; title from PDF cover (Georgia Government Publications database, viewed October 23, 2023).","Fiscal year ended June 30, 2012 (Georgia Government Publications database, viewed October 23, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2012-06-30"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["West Georgia Technical College (2009- )--Appropriations and expenditures--Periodicals.","Technical education--Georgia--Auditing--Periodicals.","Technical education--Georgia--Finance--Statistics--Periodicals.","Technical education--Finance","Georgia","Georgia Government Documents--Serial"],"dcterms_title":["West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2012"],"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-bv6-bc32-b2011-h2012-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bv6-bc32-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":"WEST GEORGIA TECHNICAL COLLEGE \r\nWACO, GEORGIA \r\nREPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \r\nGeorgia Department of Audits and Accounts Greg S. Griffin State Auditor \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE - 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 ASSETS \r\nB STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS \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 \r\nBUDGET BY 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 BUDGET TO GAAP RECONCILIATION 6 RECONCILIATION OF SALARIES AND TRAVEL \r\n \r\nPage \r\ni \r\n2 3 5 6 \r\n22 23 24 26 28 29 \r\n \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 WEST GEORGIA TECHNICAL COLLEGE - TABLE OF CONTENTS - \r\nSECTION III 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\nOctober 9, 2012 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors \r\nand Honorable Skip Sullivan, President West Georgia Technical College \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 West Georgia Technical College, 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 Technical College'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 the Technical College'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 and managing the enterprise accounting and payroll systems. \r\n \r\n12ARL-2TC \r\n \r\n In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of West Georgia Technical College 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\nAs discussed in Note 1, the financial statements of West Georgia Technical College 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 West Georgia Technical College. 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 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 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 West Georgia Technical College 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-2TC \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n West Georgia Technical College \r\nManagement's Discussion and Analysis \r\nThe following is management's discussion and analysis of West Georgia Technical College's financial performance for the fiscal year ending June 30, 2012 with comparative data from fiscal year ending June 30, 2011. This discussion has been prepared by and is the responsibility of management. \r\nOverview of the Financial Statements and Financial Analysis \r\nThis annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the Governmental Accounting Standards Board. \r\nThere 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. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question \"Is the Technical College as a whole better or worse off as a result of the year's activities?\" These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by corporations and other private sector companies. All revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the goods or service, regardless of when cash is exchanged. \r\nThe Statement of Cash Flows is a valuable tool when evaluating the ability of the Technical College to meet financial obligations as they mature. This statement presents information related to cash inflows and outflows summarized by operating, noncapital financing, capital and related financing and investing activities. \r\nThis discussion and analysis of the Technical College's financial statements provides an overview of its financial activities for the year. \r\nStatement of Net Assets \r\nThe purpose of the Statement of Net Assets is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities and net assets of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating. \r\nNet assets are divided into two major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College. \r\ni \r\n \r\n Statement of Net Assets, Condensed \r\n \r\nJune 30, 2012 \r\n \r\nJune 30, 2011 \r\n \r\nAssets Current Assets Capital Assets, Net \r\n \r\n$ \r\n \r\n5,783 \r\n \r\n53,774 \r\n \r\n$ \r\n \r\n4,638 \r\n \r\n54,468 \r\n \r\nTotal Assets \r\n \r\n$ \r\n \r\n59,557 \r\n \r\n$ \r\n \r\n59,106 \r\n \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\n \r\n$ \r\n \r\n2,877 \r\n \r\n711 \r\n \r\n$ \r\n \r\n3,246 \r\n \r\n781 \r\n \r\nTotal Liabilities \r\n \r\n$ \r\n \r\n3,588 \r\n \r\n$ \r\n \r\n4,027 \r\n \r\nNet Assets \r\n \r\nInvested in Capital Assets, Net of Debt \r\n \r\n$ \r\n \r\nUnrestricted \r\n \r\n53,774 2,195 \r\n \r\n$ \r\n \r\n54,467 \r\n \r\n612 \r\n \r\nTotal Net Assets \r\n \r\n$ \r\n \r\n55,969 \r\n \r\n$ \r\n \r\n55,079 \r\n \r\nThe total assets of the Technical College increased by approximately $451,000 from the prior year. This can be mainly attributed to an increase of approximately $1,145,000 in Current Assets and a decrease in Capital Assets, Net of approximately $694,000. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the Technical College to better serve the instruction and public service missions of the Technical College. \r\n \r\nTotal liabilities for the fiscal year decreased by approximately $439,000. The primary reason for the decrease was in current liabilities, predominately from the approximate decrease of $930,000 in accounts payable and increase in deferred revenue of $676,000. The combination of the increase in total assets of approximately $451,000 and the decrease in total liabilities of approximately $439,000 yields an increase in total net assets of approximately $890,000. \r\n \r\nStatement of Revenues, Expenses and Changes in Net Assets \r\n \r\nThe purpose of the Statement of Revenues, Expenses and Changes in Net Assets is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets. \r\n \r\nOperating revenues are received for providing goods and/or services to various customers and constituencies of the Technical College. Operating expenses are those expenses paid to acquire or produce the goods and/or services provided in return for the operating revenues, and to carry out the mission of the Technical College. Therefore, nonoperating revenue is received when no goods or services are provided in exchange for the revenue. With the issuance of Statement No. 35, new guidelines were established by the Governmental Accounting Standards Board (GASB), which changed the classifications of state appropriations and gifts from operating to nonoperating revenue. This change may result in an operating deficit that is offset by a nonoperating surplus. \r\n \r\nii \r\n \r\n Statement of Revenues, Expenses and Changes in Net Assets (Thousands of Dollars) \r\n \r\nJune 30, 2012 \r\n \r\nJune 30, 2011 \r\n \r\nOperating Revenues Operating Expenses \r\n \r\n$ \r\n \r\n10,813 \r\n \r\n47,875 \r\n \r\n$ \r\n \r\n14,560 \r\n \r\n46,784 \r\n \r\nOperating Loss \r\n \r\n$ \r\n \r\n-37,062 \r\n \r\n$ \r\n \r\n-32,224 \r\n \r\nNonoperating Revenues and Expenses \r\n \r\n36,683 \r\n \r\n31,615 \r\n \r\nIncome (Loss) Before Other Revenues, \r\n \r\nExpenses, Gains or Losses \r\n \r\n$ \r\n \r\n-379 \r\n \r\n$ \r\n \r\n-609 \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\n1,269 \r\n \r\n995 \r\n \r\nIncrease in Net Assets \r\n \r\n$ \r\n \r\n890 \r\n \r\n$ \r\n \r\n386 \r\n \r\nNet Assets at Beginning of Year \r\n \r\n55,079 \r\n \r\n54,693 \r\n \r\nNet Assets at End of Year \r\n \r\n$ \r\n \r\n55,969 \r\n \r\n$ \r\n \r\n55,079 \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\niii \r\n \r\n Revenue by Source (Thousands of Dollars) 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 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\nRents and Royalties \r\n \r\nOther \r\n \r\n7,801 154 \r\n2,694 141 23 \r\n \r\n$ \r\n \r\n11,673 \r\n \r\n197 \r\n \r\n2,471 \r\n \r\n219 \r\n \r\nTotal Operating Revenue \r\n \r\n$ \r\n \r\n10,813 \r\n \r\n$ \r\n \r\n14,560 \r\n \r\nNonoperating Revenue State Appropriations Federal Grants and Contracts Nonoperating State Grants and Contracts Nonoperating Gifts Other \r\n \r\n$ \r\n \r\n15,782 \r\n \r\n20,882 \r\n \r\n632 32 \r\n \r\n$ \r\n \r\n16,007 \r\n \r\n15,593 \r\n \r\n589 880 \r\n18 \r\n \r\nTotal Nonoperating Revenue \r\n \r\n$ \r\n \r\n37,328 \r\n \r\n$ \r\n \r\n33,087 \r\n \r\nCapital Grants and Gifts State Other \r\n \r\n$ \r\n \r\n717 \r\n \r\n$ \r\n \r\n1,467 \r\n \r\n553 \r\n \r\n-472 \r\n \r\nTotal Capital Grants and Gifts \r\n \r\n$ \r\n \r\n1,270 \r\n \r\n$ \r\n \r\n995 \r\n \r\nTotal Revenues \r\n \r\n$ \r\n \r\n49,411 \r\n \r\n$ \r\n \r\n48,642 \r\n \r\nExpenses (Thousands of Dollars) 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 \r\n \r\n$ \r\n \r\n47,876 \r\n \r\n$ \r\n \r\n46,784 \r\n \r\nNonoperating Expenses Nonoperating Expenses \r\n \r\n645 \r\n \r\n1,472 \r\n \r\nTotal Expenses \r\n \r\n$ \r\n \r\n48,521 \r\n \r\n$ \r\n \r\n48,256 \r\n \r\niv \r\n \r\n The sources of operating revenue for the College are tuition and fees, grants and contracts, auxiliary services, and educational activities. The decrease in operating revenue of approximately $3,747,000 is directly related to a decrease in Tuition and Fee Revenue of $3,872,000 for fiscal year 2012. Tuition and Fees decreased by $3,872,000. This is directly related to the decreased enrollment from fiscal year 2011 and the acceptance of Federal Loans. Nongovernmental grants and contracts decreased by $43,000. This is the result of the decrease in miscellaneous scholarships and gifts. Utilities costs remained constant between the two fiscal years. Personal Services expenses decreased by approximately $1,706,000. This decrease reflects a salary decrease of approximately $1,911,000 and benefit costs increase of $205,000. Scholarships and Fellowships increased by approximately $2,800,000. This increase is due to the reduction in Hope Scholarships and increase in Federal Direct Loans. Depreciation expense increased by $21,000 in fiscal year 2012. Under nonoperating revenues (expenses) state appropriations decreased by approximately $225,000 while Federal Grants and Contracts increased $5,289,000 due to the offering of Federal Loans. Statement of Cash Flows The purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the Technical College during the year. It also provides information concerning the Technical College's ability to generate future cash flows and to meet its obligations as they come due. The statement is divided into five sections. The first section reports on the operating cash flows and shows the net cash used by the operating activities of the Technical College. The second section reflects cash flows from noncapital financing activities. The third section deals with cash flows from capital and related financing activities, which reflects the cash used for the acquisition and construction of capital related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The final section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets. \r\nv \r\n \r\n Statement of Cash Flows (Thousands of Dollars) \r\n \r\nJune 30, 2012 \r\n \r\nJune 30, 2011 \r\n \r\nCash Provided (Used) By: \r\n \r\nOperating Activities \r\n \r\n$ \r\n \r\nNoncapital Financing Activities \r\n \r\nCapital and Related Financing Activities \r\n \r\nInvesting Activities \r\n \r\n-35,718 \r\n \r\n$ \r\n \r\n37,058 \r\n \r\n-910 \r\n \r\n32 \r\n \r\n-28,451 31,400 -1,702 \r\n19 \r\n \r\nNet Change in Cash \r\n \r\n$ \r\n \r\n462 \r\n \r\n$ \r\n \r\n1,266 \r\n \r\nCash, Beginning of Year \r\n \r\n2,343 \r\n \r\n1,077 \r\n \r\nCash, End of Year \r\nCapital Assets \r\n \r\n$ \r\n \r\n2,805 \r\n \r\n$ \r\n \r\n2,343 \r\n \r\nThe Technical College had additions to Capital Assets of approximately $1,850,000. Georgia State Financing and Investment Commission (GSFIC) bond payments for Capital Assets totaled $126,000. \r\nLong-Term Debt \r\n \r\nWest Georgia Technical College had a total long-term debt of $1,608,708.83 of which $897,302.34 was reflected as a current liability at June 30, 2012. \r\n \r\nFor additional information on Long-Term Debt see Notes to the Financial Statements. Economic Outlook \r\n \r\nThe Technical College is unaware of any currently known fact, decision, or condition that is expected to have a significant effect on the financial position or change how the Technical College operates for the next fiscal year. West Georgia Technical College reserved funds over the last several years which proved helpful in alleviating the effects of budget cuts and any potential decrease in enrollment. As in prior years, the Technical College's overall financial position is strong. As a result, the Technical College anticipates the next fiscal year will be much like the last and the Technical College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues. \r\n \r\nDr. Skip Sullivan, President West Georgia Technical College \r\n \r\nvi \r\n \r\n BASIC FINANCIAL STATEMENTS - 1 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30, 2012 \r\nASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items Inventories \r\nTotal Current Assets \r\nNoncurrent Assets Capital Assets, Net \r\nTotal Assets \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Deferred Revenue Funds Held for Others Compensated Absences \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Compensated Absences \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Unrestricted \r\nTotal Net Assets \r\n \r\nEXHIBIT \"A\" \r\n$ 2,804,682.61 203,800.81 \r\n1,997,516.87 302,190.33 475,047.45 \r\n$ 5,783,238.07 \r\n53,774,260.60 $ 59,557,498.67 \r\n$ 213,505.96 71,074.76 \r\n940,625.14 754,146.67 897,302.34 $ 2,876,654.87 \r\n711,406.49 $ 3,588,061.36 \r\n$ 53,774,260.60 2,195,176.71 \r\n$ 55,969,437.31 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 2 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS \r\nYEAR ENDED JUNE 30, 2012 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees Less: Scholarship Allowances \r\nGrants and Contracts Federal \r\nRents and Royalties Sales and Services Other Operating Revenues \r\nTotal Operating Revenues \r\nOPERATING EXPENSES \r\nSalaries Benefits 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 Gifts Interest and Other Investment Income Other Nonoperating Expenses \r\nNet Nonoperating Revenues \r\nIncome (Loss) Before Other Revenues, Expenses, Gains, or Losses \r\nCapital Grants and Gifts State Gain on Disposal of Capital Assets Loss on Disposal of Capital Assets Special Items \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\n \r\nEXHIBIT \"B\" \r\n \r\n$ 13,958,927.65 -6,157,542.98 \r\n154,388.91 141,121.38 2,693,756.56 \r\n22,541.20 \r\n$ 10,813,192.72 \r\n \r\n$ 19,089,345.21 6,745,543.69 136,928.00 \r\n12,712,359.96 1,766,358.27 4,552,541.81 2,872,854.94 \r\n$ 47,875,931.88 \r\n$ -37,062,739.16 \r\n \r\n$ 15,782,503.43 \r\n \r\n20,882,019.99 631,776.17 31,840.67 -644,900.24 \r\n \r\n$ 36,683,240.02 \r\n \r\n$ \r\n \r\n-379,499.14 \r\n \r\n$ \r\n \r\n717,245.22 \r\n \r\n574,604.15 \r\n \r\n-56,390.02 \r\n \r\n34,267.44 \r\n \r\n$ \r\n \r\n1,269,726.79 \r\n \r\n$ \r\n \r\n890,227.65 \r\n \r\n55,079,209.66 \r\n \r\n$ 55,969,437.31 \r\n \r\nThe notes to the financial statements are an integral part of this statement. - 3 - \r\n \r\n (This page left intentionally blank) \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2012 \r\nCASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships 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 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 Proceeds from Sale of Capital Assets \r\nNet Cash Provided (Used) by Capital and Related Financing Activities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments \r\nNet Increase (Decrease) in Cash \r\nCash and Cash Equivalents - Beginning of Year \r\nCash and Cash Equivalents - End of Year \r\nRECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: \r\nOperating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash \r\nProvided (Used) by Operating Activities Depreciation Expense Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Salaries Payable Accounts Payable Deferred Revenue Compensated Absences \r\nNet Cash Provided (Used) by Operating Activities \r\nNONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts \r\nThe notes to the financial statements are an integral part of this statement. \r\n- 5 - \r\n \r\nEXHIBIT \"C\" \r\n \r\n$ \r\n \r\n8,477,537.56 \r\n \r\n154,388.91 \r\n \r\n1,907,788.42 \r\n \r\n-13,819,927.91 \r\n \r\n-19,315,077.68 \r\n \r\n-12,712,359.96 \r\n \r\n-409,924.05 \r\n \r\n$ -35,717,574.71 \r\n \r\n$ 15,782,503.43 27,575.62 \r\n21,892,401.09 -644,900.24 \r\n$ 37,057,579.90 \r\n \r\n$ \r\n \r\n590,982.19 \r\n \r\n-1,576,698.51 \r\n \r\n75,732.60 \r\n \r\n$ \r\n \r\n-909,983.72 \r\n \r\n$ \r\n \r\n31,840.67 \r\n \r\n$ \r\n \r\n461,862.14 \r\n \r\n2,342,820.47 \r\n \r\n$ \r\n \r\n2,804,682.61 \r\n \r\n$ -37,062,739.16 \r\n2,872,854.94 \r\n-1,359,591.17 554,253.15 -256,276.81 -54,918.96 -930,665.00 676,189.29 -156,680.99 \r\n$ -35,717,574.71 \r\n \r\n$ \r\n \r\n126,263.03 \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE 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\nREPORTING ENTITY \r\nWest Georgia Technical College is one of twenty-five (25) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of West Georgia Technical College as a separate reporting entity. \r\nThe Technical College's Local Board of Directors is composed of 10 (ten) members serving staggered three-year terms who are appointed by the State Board of the Technical College System of Georgia. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount of State appropriations to be received by West Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, West Georgia Technical College is considered an organizational unit of the Technical College System of Georgia for financial reporting purposes because of the significance of its legal, operational, and financial relationships 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 organizations whose activities primarily support member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia (an organizational unit of the State of Georgia), are considered potential component units of the State. See Note (16) for additional information. \r\nFINANCIAL STATEMENT PRESENTATION \r\nThe 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 Technical College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required. \r\nBASIS OF ACCOUNTING \r\nFor financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College'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-college transactions have been eliminated. \r\nThe Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date. \r\nCASH AND CASH EQUIVALENTS \r\nCash and Cash Equivalents include petty cash and demand deposits in authorized financial institutions. \r\nACCOUNTS RECEIVABLE \r\nAccounts receivable consist of tuition and fee charges to students, allotments due from the Technical College System of Georgia - System Office, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available. Accounts receivable are recorded net of estimated uncollectible amounts. \r\n- 6 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nINVENTORIES \r\nResale inventories are recorded on the consumption method and are valued at cost using first in, first-out (FIFO) method. \r\nCAPITAL ASSETS \r\nCapital assets are recorded at cost at date of acquisition, or fair market value at the date of capital contribution. The Technical College capitalizes all land and land improvements. For equipment, the Technical College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Buildings and Building Improvements, Improvements Other Than Buildings, Easements, Rights, Patents, Trademarks, Copyrights and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastructure and software, the Technical College's capitalization threshold is $1,000,000.00. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 10 to 40 years for buildings, 15 to 25 years for infrastructure, 15 years for improvements other than buildings, 10 years for library books, 3 to 10 years for equipment and software, and 10 to 20 years for intangibles. \r\nTo fully portray capital assets acquired by the Technical Colleges of the Technical College System of Georgia, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to both the Technical College and the Technical College System of Georgia. The 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 GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes 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 major construction projects, GSFIC records construction in progress on its books throughout the construction period and at project completion transfers the entire project costs to West Georgia Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2012 GSFIC did not transfer any capital additions to West Georgia Technical College. \r\nDEFERRED REVENUES \r\nDeferred revenues include amounts received for tuition and fees and other activities prior to the end of the fiscal year but related to the subsequent accounting period. \r\nCOMPENSATED ABSENCES \r\nEmployee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable 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. West Georgia Technical College had an accrued liability for compensated absences in the amount of $1,765,389.82 as of July 1, 2011. For fiscal year 2012, $1,202,938.24 was earned in compensated absences and employees were paid $1,359,619.23, for a net increase of $156,680.99. The ending balance as of June 30, 2012 in accrued liability for compensated absences was $1,608,708.83. \r\nNONCURRENT LIABILITIES \r\nNoncurrent liabilities include liabilities that will not be paid within the next fiscal year. \r\n \r\n- 7 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNET ASSETS \r\nThe Technical College's net assets are classified as follows: \r\nInvested in capital assets, net of related debt: This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \r\nUnrestricted net assets: Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $46,120.10. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of the State Treasurer. \r\nWhen an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. \r\nINCOME TAXES \r\nWest Georgia Technical College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. \r\nClassification of Revenues and Expenses \r\nThe Statement of Revenues, Expenses and Changes in Net Assets classifies the College's fiscal year activity as operating and nonoperating according to the following criteria: Operating Revenues: Operating revenues include 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. Nonoperating Revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues 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. Operating Expenses: Operating expenses include activities that have the characteristics of exchange transactions. Nonoperating Expenses: Nonoperating expenses include activities that have the characteristics of nonexchange transactions, such as capital financing costs related to investment activity. \r\nSCHOLARSHIP ALLOWANCES \r\nStudent 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 Technical College, 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 Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances. \r\n- 8 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 2: DEPOSITS \r\n \r\nDEPOSITS \r\n \r\nThe custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: \r\n \r\n1. Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United \r\nStates or of the State of Georgia. \r\n \r\n2. Bonds, bills, certificates of indebtedness, notes, 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 \r\nstatute that created the authority authorized the use of the bonds for this purpose. \r\n \r\n4. Industrial revenue bonds and bonds of development authorities created by the laws of the \r\nState of Georgia. \r\n \r\n5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary \r\ncorporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or 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\nAt June 30, 2012, the carrying value of deposits was $2,795,707.61 and the bank balance was $4,389,844.71. Of the Technical College's deposits, $3,473,433.39 were uninsured. Of these uninsured deposits, $3,473,433.39 were collateralized with securities held by the financial institution's trust department or agency, but not in the Technical College's name. \r\n \r\nNOTE 3: ACCOUNTS RECEIVABLE \r\n \r\nAccounts receivable at June 30, 2012, consists of the following: \r\n \r\nStudent Tuition and Fees \r\n \r\n$ \r\n \r\nFederal, State and Private Funds \r\n \r\nGeorgia State Financing and Investment Commission \r\n \r\nOther \r\n \r\n861,405.93 203,800.81 142,468.58 1,299,592.09 \r\n \r\nLess: Allowance for Doubtful Accounts \r\n \r\n$ \r\n \r\n2,507,267.41 \r\n \r\n305,949.73 \r\n \r\nNet Accounts Receivable \r\n \r\n$ \r\n \r\n2,201,317.68 \r\n \r\nNOTE 4: INVENTORIES Inventories at June 30, 2012, consist of the following: \r\nBookstore \r\n \r\n$ \r\n \r\n475,047.45 \r\n \r\n- 9 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 5: CAPITAL ASSETS \r\n \r\nFollowing are the changes in capital assets for the year ended June 30, 2012: \r\n \r\nBeginning Balance July 1, 2011 \r\n \r\nSpecial Item Transfer \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 and Land Improvements Construction Work-In-Progress \r\n \r\n$ 3,112,762.00 $ 485,413.10 \r\n \r\n0.00 $ \r\n \r\n362,252.04 281,001.06 $ \r\n \r\n$ 3,475,014.04 \r\n \r\n485,413.10 \r\n \r\n281,001.06 \r\n \r\nTotal Capital Assets, Not Being Depreciated $ 3,598,175.10 $ \r\n \r\n0.00 $ 643,253.10 $ 485,413.10 $ 3,756,015.10 \r\n \r\nCapital Assets, Being Depreciated: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections \r\n \r\n$ 61,005,258.27 \r\n \r\n$ \r\n \r\n2,611,697.98 \r\n \r\n11,252,996.94 $ 153,462.50 \r\n \r\n1,773,414.80 \r\n \r\n661,568.11 59,026.80 \r\n799,460.29 $ 25,066.34 \r\n \r\n$ 720,066.19 \r\n \r\n61,666,826.38 2,670,724.78 \r\n11,485,853.54 1,798,481.14 \r\n \r\nTotal Assets Being Depreciated \r\n \r\n$ 76,643,367.99 $ 153,462.50 $ 1,545,121.54 $ 720,066.19 $ 77,621,885.84 \r\n \r\nLess: Accumulated Depreciation: Building and Building Improvements Improvements Other Than Buildings Equipment Library Collections \r\n \r\n$ 13,364,596.63 \r\n \r\n$ \r\n \r\n2,459,148.05 \r\n \r\n8,409,329.77 $ 119,195.06 \r\n \r\n1,541,063.61 \r\n \r\n1,590,328.30 16,470.98 \r\n1,209,463.19 $ 56,592.47 \r\n \r\n$ 1,162,547.72 \r\n \r\n14,954,924.93 2,475,619.03 8,575,440.30 1,597,656.08 \r\n \r\nTotal Accumulated Depreciation \r\n \r\n$ 25,774,138.06 $ 119,195.06 $ 2,872,854.94 $ 1,162,547.72 $ 27,603,640.34 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n$ 50,869,229.93 $ 34,267.44 $ -1,327,733.40 $ -442,481.53 $ 50,018,245.50 \r\n \r\nCapital Assets, Net \r\n \r\n$ 54,467,405.03 $ 34,267.44 $ -684,480.30 $ 42,931.57 $ 53,774,260.60 \r\n \r\nNOTE 6: DEFERRED REVENUE Deferred revenue at June 30, 2012, consists of the following: \r\nPrepaid Tuition and Fees \r\n \r\n$ 940,625.14 \r\n \r\nNOTE 7: LONG-TERM LIABILITIES \r\n \r\nLong-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\nCompensated Absences \r\n \r\n$ 1,765,389.82 $ 1,202,938.24 $ 1,359,619.23 $ 1,608,708.83 $ \r\n \r\nCurrent Portion \r\n897,302.34 \r\n \r\n- 10 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 8: NET ASSETS \r\n \r\nChanges in Net Asset 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\nInvested in Capital Assets Net of Related Debt \r\n \r\n$ 54,467,405.03 $ 1,737,228.98 $ 2,430,373.41 $ 53,774,260.60 \r\n \r\nRestricted Net Assets \r\n \r\n0.00 \r\n \r\n21,036,408.90 \r\n \r\n21,036,408.90 \r\n \r\n0.00 \r\n \r\nUnrestricted Net Assets \r\n \r\n611,804.63 \r\n \r\n29,024,863.73 \r\n \r\n27,441,491.65 \r\n \r\n2,195,176.71 \r\n \r\nTotal Net Assets \r\n \r\n$ 55,079,209.66 $ 51,798,501.61 $ 50,908,273.96 $ 55,969,437.31 \r\n \r\nNOTE 9: LEASE OBLIGATIONS \r\nOPERATING LEASES \r\nWest Georgia Technical College has entered into certain agreements to lease Administrative Offices, postage meters, copiers which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date of the original term of the lease, the Technical College has the option of renewing the lease on a year-toyear basis. Amounts are included only for multi-year leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised. \r\nExpenses for rental of Rental of Administrative Offices, postage meters, copiers under operating leases for the year ended June 30, 2012, totaled $502,919.01. \r\nSUMMARY OF LEASE OBLIGATIONS \r\nFuture commitments for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2012, were as follows: \r\nReal Property and Equipment Operating Leases \r\n \r\nYear Ending June 30: 2013 2014 2015 2016 \r\n \r\n$ \r\n \r\n280,951.16 \r\n \r\n12,816.00 \r\n \r\n12,816.00 \r\n \r\n5,340.00 \r\n \r\nTotal Minimum Lease Payments $ \r\n \r\n311,923.16 \r\n \r\nNOTE 10: RETIREMENT PLANS \r\nWest Georgia Technical College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required \r\n \r\n- 11 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nsupplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that West Georgia Technical College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law. \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). Members of the GSEPS plan may also participate in the GSEPS 401(k) defined contribution component described below. 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, West Georgia Technical College pays member contributions in excess of 1.25% of \r\n- 12 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nannual compensation. Under the old plan, these West Georgia Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. West Georgia Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These West Georgia Technical College contributions are not at any time refundable to the member or his/her beneficiary. \r\n \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\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\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- 13 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE 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\n \r\nThe following table summarizes West Georgia Technical College contributions by defined benefit plan for the years ending June 30, 2012, June 30, 2011, and June 30, 2010: \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 2011 2010 \r\n \r\n$ 595,301.27 $ 648,549.93 $ 664,497.03 \r\n \r\n100% 100% 100% \r\n \r\n$ 933,001.43 $ 922,596.39 $ 836,844.64 \r\n \r\n100% 100% 100% \r\n \r\nGSEPS 401(K) DEFINED CONTRIBUTION COMPONENT \r\n \r\nIn addition to the ERS defined benefit pension described above, GSEPS members may also participate in the Peach State Reserves 401(k) defined contribution plan and receive an employer matching contribution. The 401(k) plan is administered by the ERS System and was established by the State of Georgia Employee Benefit Plan Council in accordance with State law and Section 401(k) of the Internal Revenue Code. The GSEPS segment of the 401(k) plan was established by State law effective January 1, 2009. Plan provisions and contribution requirements specific to GSEPS can be amended by State law. Other general 401(k) plan provisions can be amended by the ERS Board of Trustees as required by changes in Federal tax law or for administrative purposes. The State was not required to make significant contributions to the 401(k) plan prior to GSEPS because most members under other segments of the plan either were not State employees or were not eligible to receive an employer match on their contributions. \r\n \r\nThe GSEPS plan includes automatic enrollment in the 401(k) plan at a contribution rate of 1% of salary, along with a matching contribution from the State. The State will match 100% of the employee's initial 1% contribution. Employees can elect to contribute up to an additional 4% and the State will match 50% of the additional 4% of salary. Therefore, the State will match 3% against the employee's 5% total savings. Contributions greater than 5% do not receive any matching funds. \r\n \r\nGSEPS employer contributions are subject to a vesting schedule, which determines eligibility to receive all or a portion of the employer contribution balance at the time of any distribution from the account after separation from all State service. Vesting is determined based on the following schedule: \r\n \r\nLess than 1 year 1 year 2 years 3 years 4 years 5 or more years \r\n \r\n0% 20% 40% 60% 80% 100% \r\n \r\n- 14 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nEmployee contributions and earnings thereon are 100% vested at all times. The 401(k) plan also allows participants to roll over amounts from other qualified plans to their respective account in the 401(k) plan on approval of the 401(k) plan administrator. Such rollovers are 100% vested at the time of transfer. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth. \r\nThe participants may receive the value of their vested accounts upon attaining age 59.5, qualifying financial hardship, or retirement or other termination of service (employer contribution balances are only eligible for distribution upon separation from service). Upon the death of a participant, his or her beneficiary shall be entitled to the vested value of his or her accounts. Distributions are made in installments or in a lump sum. \r\nIn 2012, West Georgia Technical College's employer and employee GSEPS contributions were $23,130.21 and $118,127.95, respectively. \r\nDEFINED CONTRIBUTION PLAN \r\nPlan Description \r\nWest Georgia Technical College 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 \r\nA 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 $3,500.00 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\nThe Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtained through ERS. \r\nContributions and Vesting \r\nMember 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. The Technical College's payroll for the year ended June 30, 2012, for employees covered by GDCP was $3,191,325.62. The Technical College's total payroll for all employees was $19,089,345.21. \r\nTotal contributions made by employees during fiscal year 2012 amounted to $239,262.59 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. \r\nNOTE 11: RISK MANAGEMENT \r\nPUBLIC ENTITY RISK POOL \r\nThe Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia. This plan is funded by \r\n- 15 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nparticipants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with United Healthcare to process medical claims and Medco to process prescription drug claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health. \r\nOTHER RISK MANAGEMENT \r\nThe Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Technical College, as an organizational unit of the Technical College 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\nNOTE 12: POST-EMPLOYMENT BENEFITS \r\nWest Georgia Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department - OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the offices that administer the plans. \r\nGEORGIA STATE EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND \r\nThe Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund) is a costsharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations (including technical colleges) and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). \r\n \r\n- 16 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nThe contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012, pay approximately 25 percent of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \r\n \r\nParticipating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \r\n \r\nThe combined required contribution rates established by the Board for the active and retiree plans for the fiscal year ended June 30, 2012, were as follows: \r\n \r\nJune 2011 July - November 2011 December 2011 - April 2012 May - June 2012 \r\n \r\n22.667% of covered payroll for July 2011 coverage 27.363% of covered payroll for August - December 2011 coverage 34.063% of covered payroll for January - May 2012 coverage 27.363% of covered payroll for June - July 2012 coverage \r\n \r\nNo additional contribution was required by the Board for fiscal year 2012 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe following table summarizes the West Georgia Technical College combined active and retiree contributions to the health insurance plans for the years ended June 30, 2012, June 30, 2011, and June 30, 2010 (dollars in thousands): \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2012 2011 2010 \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n4,544,803.60 4,032,689.61 3,145,321.34 \r\n \r\n- 17 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nSTATE EMPLOYEES' ASSURANCE DEPARTMENT - OPEB \r\nState Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit post-employment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees' (ERS), Judicial (JRS), and Legislative (LRS) Retirement Systems. Eligibility was amended to exclude GSEPS members of ERS effective January 1, 2009, and to exclude members of JRS and LRS hired on or after July 1, 2009. Pursuant to Title 47 of the OCGA, benefit provisions of the plan were established and can be amended by State statute. \r\nContributions by plan members are established by the ERS Board of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The ERS Board of Trustees establishes employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. For the fiscal year ended June 30, 2012, contributions of ERS \"old plan\" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS \"new plan\" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. \r\nThe SEAD-OPEB annual required contribution was 0.61% of payroll for fiscal year 2012 based on the actuarial valuation as of June 30, 2009. The ERS Board of Trustees voted and approved that the contribution would be paid from existing assets of the Survivors Benefit Fund (SBF) instead of requiring payment by the employers. The contribution by SBF made on-behalf of West Georgia Technical College for fiscal year 2012 was estimated to be $22,306.20. There were no required employer contributions for the fiscal years ended June 30, 2011, and 2010. \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 expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although West Georgia Technical College expects such amounts, if any, to be immaterial to its overall financial position. \r\nLitigation, claims and assessments filed against West Georgia Technical College (an organizational unit of the Technical College 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: SPECIAL ITEM \r\nCapital Assets were transferred from another technical college to West Georgia Technical College. The amount reported for Special Items on the \"Statement of Revenues, Expenses, and Changes in Net Assets\" is the difference in the cost of items transferred $153,462.50 and the accumulated depreciation $119,195.06 for a total of $34,267.44 \r\nNOTE 15: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS \r\nThe Technical College's operating expenses shown at the natural classification on the \"Statement of Revenues, Expenses and Changes in Net Assets\" are all classified as Instruction at the functional classification. \r\n \r\n- 18 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 16: AFFILIATED ORGANIZATIONS \r\nThe West Georgia Technical College Foundation, Inc. is a legally separate, tax exempt organization whose activities primarily support West Georgia Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from West Georgia Technical College. \r\n \r\n- 19 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SUPPLEMENTARY INFORMATION - 21 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30, 2012 \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable \r\nFederal Financial Assistance Other Prepaid Expenditures Inventories \r\nTotal Assets \r\nLIABILITIES AND FUND EQUITY \r\nLiabilities Salaries Payable Payroll Withholdings Accounts Payable Encumbrance Payable Deferred Revenue \r\nTotal Liabilities \r\nFund Balances Reserved Federal Financial Assistance Sales and Services Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition Unreserved Surplus \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\nSCHEDULE \"1\" \r\n \r\n$ \r\n \r\n3,065,602.61 \r\n \r\n227,351.74 1,174,272.06 \r\n287,487.33 475,047.45 \r\n \r\n$ \r\n \r\n5,229,761.19 \r\n \r\n$ \r\n \r\n69,706.76 \r\n \r\n164,211.15 114,047.71 857,657.59 \r\n \r\n$ \r\n \r\n1,205,623.21 \r\n \r\n$ \r\n \r\n292.61 \r\n \r\n3,814.09 \r\n \r\n112,124.49 \r\n \r\n292,660.81 \r\n \r\n230,402.49 \r\n \r\n305,949.73 \r\n \r\n297,145.32 \r\n \r\n1,058,610.89 \r\n \r\n1,677,017.45 \r\n \r\n46,120.10 \r\n \r\n$ \r\n \r\n4,024,137.98 \r\n \r\n$ \r\n \r\n5,229,761.19 \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- 22 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE 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\nFederal Funds Other Funds \r\nTotal Revenues \r\nADJUSTMENTS AND PROGRAM TRANSFERS \r\nCARRY-OVER FROM PRIOR YEAR \r\nTransfer from Reserved Fund Balance \r\nTotal Funds Available \r\nEXPENDITURES \r\nAdult Literacy Economic Development Technical Education \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\nFrom the Technical Colleges Year Ended June 30, 2011 \r\nRefunds to Grantors Federal Financial Assistance Returned to Technical College System of Georgia Year Ended June 30, 2011 \r\nPrior Year Reserved Fund Balance Included in Funds Available \r\nFUND BALANCE JUNE 30 \r\nSUMMARY OF FUND BALANCE \r\nReserved Federal Financial Assistance Sales and Services Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition \r\nTotal Reserved \r\nUnreserved Surplus \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- 23 - \r\n \r\nBUDGET \r\n \r\nACTUAL \r\n \r\nVARIANCE FAVORABLE (UNFAVORABLE) \r\n \r\n$ 15,812,275.03 $ 15,812,275.03 $ \r\n \r\n2,262,572.00 \r\n \r\n2,154,570.23 \r\n \r\n18,415,634.03 \r\n \r\n19,206,180.35 \r\n \r\n$ 36,490,481.06 $ 37,173,025.61 $ \r\n \r\n0.00 \r\n \r\n0.00 \r\n \r\n0.00 -108,001.77 790,546.32 \r\n682,544.55 \r\n0.00 \r\n \r\n0.00 \r\n \r\n1,698,153.33 \r\n \r\n$ 36,490,481.06 $ 38,871,178.94 $ \r\n \r\n1,698,153.33 2,380,697.88 \r\n \r\n$ 1,409,827.00 $ 1,454,293.71 $ \r\n \r\n154,200.00 \r\n \r\n244,137.20 \r\n \r\n34,926,454.06 \r\n \r\n33,535,088.98 \r\n \r\n$ 36,490,481.06 $ 35,233,519.89 $ \r\n \r\n$ \r\n \r\n0.00 $ 3,637,659.05 $ \r\n \r\n-44,466.71 -89,937.20 1,391,365.08 \r\n1,256,961.17 \r\n3,637,659.05 \r\n \r\n2,665,572.85 29,771.60 \r\n \r\n661.75 -581,366.34 \r\n-29,771.60 \r\n \r\n-236.00 -1,698,153.33 \r\n$ 4,024,137.98 \r\n \r\n$ \r\n \r\n292.61 \r\n \r\n3,814.09 \r\n \r\n112,124.49 \r\n \r\n292,660.81 \r\n \r\n230,402.49 \r\n \r\n305,949.73 \r\n \r\n297,145.32 \r\n \r\n1,058,610.89 \r\n \r\n1,677,017.45 \r\n \r\n$ 3,978,017.88 \r\n \r\n46,120.10 \r\n \r\n$ 4,024,137.98 \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE 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\nAdult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds \r\nTotal Adult Literacy \r\nEconomic Development Other Funds \r\nTechnical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds \r\nTotal Technical Education \r\nTotals By Program \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\n568,275.00 $ \r\n \r\n568,275.00 $ \r\n \r\n568,275.00 $ \r\n \r\n568,275.00 \r\n \r\n761,250.00 150,000.00 \r\n \r\n833,013.00 245,272.00 \r\n \r\n761,550.00 80,002.00 \r\n \r\n743,176.19 145,674.50 \r\n \r\n$ \r\n \r\n1,479,525.00 $ \r\n \r\n1,646,560.00 $ \r\n \r\n1,409,827.00 $ \r\n \r\n1,457,125.69 \r\n \r\n$ \r\n \r\n156,000.00 $ \r\n \r\n70,000.00 $ \r\n \r\n154,200.00 $ \r\n \r\n422,601.43 \r\n \r\n$ 15,185,827.00 $ 15,244,000.00 $ 15,244,000.03 $ 15,244,000.03 \r\n \r\n1,800,000.00 15,600,000.00 \r\n \r\n1,454,650.00 15,000,000.00 \r\n \r\n1,501,022.00 18,181,432.03 \r\n \r\n1,411,394.04 18,637,904.42 \r\n \r\n$ 32,585,827.00 $ 31,698,650.00 $ 34,926,454.06 $ 35,293,298.49 \r\n \r\n$ 34,221,352.00 $ 33,415,210.00 $ 36,490,481.06 $ 37,173,025.61 \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- 24 - \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 0.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n$ 180,798.77 $ \r\n \r\n0.00 $ \r\n0.00 0.00 \r\n0.00 $ \r\n \r\n568,275.00 $ \r\n743,176.19 145,674.50 \r\n1,457,125.69 $ \r\n \r\n0.00 $ \r\n \r\n603,400.20 $ \r\n \r\n0.00 $ \r\n-18,373.81 65,672.50 \r\n47,298.69 $ \r\n \r\n567,739.23 $ \r\n743,152.53 143,401.95 \r\n1,454,293.71 $ \r\n \r\n449,200.20 $ \r\n \r\n244,137.20 $ \r\n \r\n535.77 $ 18,397.47 -63,399.95 -44,466.71 $ \r\n-89,937.20 $ \r\n \r\n535.77 23.66 \r\n2,272.55 2,831.98 \r\n359,263.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 1,517,354.56 \r\n \r\n$ 1,517,354.56 $ \r\n \r\n$ 1,698,153.33 $ \r\n \r\n0.00 $ 15,244,000.03 $ \r\n \r\n0.00 0.00 \r\n \r\n1,411,394.04 20,155,258.98 \r\n \r\n0.00 $ 36,810,653.05 $ \r\n \r\n0.00 $ 15,244,000.03 $ \r\n \r\n-89,627.96 1,973,826.95 \r\n \r\n1,411,394.04 16,879,694.91 \r\n \r\n1,884,198.99 $ 33,535,088.98 $ \r\n \r\n0.00 $ \r\n89,627.96 1,301,737.12 \r\n1,391,365.08 $ \r\n \r\n0.00 \r\n0.00 3,275,564.07 \r\n3,275,564.07 \r\n \r\n0.00 $ 38,871,178.94 $ \r\n \r\n2,380,697.88 $ 35,233,519.89 $ \r\n \r\n1,256,961.17 $ \r\n \r\n3,637,659.05 \r\n \r\n- 25 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE 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\nAdult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds \r\nTotal Adult Literacy \r\nEconomic Development Other Funds \r\nTechnical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds \r\nTotal Technical Education \r\nTotal Operating Activity \r\nPrior Year Reserves Not Available for Expenditure Inventories Refunds to Grantors 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\n23.00 $ \r\n \r\n0.00 0.00 \r\n \r\n$ \r\n \r\n23.00 $ \r\n \r\n$ \r\n \r\n180,798.77 $ \r\n \r\n0.00 $ 0.00 0.00 0.00 $ \r\n-180,798.77 $ \r\n \r\n-23.00 $ \r\n0.00 0.00 \r\n-23.00 $ \r\n \r\n0.00 \r\n252.99 -3,563.00 \r\n-3,310.01 \r\n \r\n0.00 $ \r\n \r\n-935.08 \r\n \r\n$ \r\n \r\n4,745.53 $ \r\n \r\n236.00 1,542,357.63 \r\n \r\n$ 1,547,339.16 $ \r\n \r\n$ 1,728,160.93 $ \r\n \r\n0.00 $ 0.00 -1,517,354.56 -1,517,354.56 $ -1,698,153.33 $ \r\n \r\n-4,745.53 $ \r\n \r\n-1,307.87 \r\n \r\n0.00 -25,003.07 \r\n \r\n15.96 -575,167.59 \r\n \r\n-29,748.60 $ -576,459.50 \r\n \r\n-29,771.60 $ -580,704.59 \r\n \r\n297,145.32 0.00 \r\n670,038.20 \r\n \r\n0.00 0.00 0.00 \r\n \r\n0.00 0.00 0.00 \r\n \r\n0.00 0.00 0.00 \r\n \r\nBudget Unit Totals \r\n \r\n$ 2,695,344.45 $ \r\n \r\n-1,698,153.33 $ \r\n \r\n-29,771.60 $ -580,704.59 \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 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\n0.00 $ \r\n \r\n0.00 6,663.95 \r\n \r\n$ \r\n \r\n6,663.95 $ \r\n \r\n$ \r\n \r\n0.16 $ \r\n \r\n0.00 $ 0.00 0.00 0.00 $ \r\n0.00 $ \r\n \r\n535.77 $ \r\n23.66 2,272.55 \r\n2,831.98 $ \r\n \r\n535.77 $ \r\n276.65 5,373.50 \r\n6,185.92 $ \r\n \r\n0.00 $ \r\n276.65 0.00 \r\n276.65 $ \r\n \r\n359,263.00 $ \r\n \r\n358,328.08 $ \r\n \r\n358,328.00 $ \r\n \r\n535.77 $ \r\n0.00 5,373.50 \r\n5,909.27 $ \r\n \r\n535.77 \r\n276.65 5,373.50 \r\n6,185.92 \r\n \r\n0.08 $ \r\n \r\n358,328.08 \r\n \r\n$ \r\n \r\n2,615.74 $ \r\n \r\n-236.00 354,808.62 \r\n \r\n$ 357,188.36 $ \r\n \r\n$ 363,852.47 $ \r\n \r\n0.00 $ 0.00 0.00 0.00 $ 0.00 $ \r\n \r\n0.00 $ 0.00 3,275,564.07 3,275,564.07 $ 3,637,659.05 $ \r\n \r\n1,307.87 $ \r\n \r\n0.00 $ \r\n \r\n15.96 3,055,205.10 \r\n \r\n15.96 3,016,302.22 \r\n \r\n3,056,528.93 $ 3,016,318.18 $ \r\n \r\n3,421,042.93 $ 3,374,922.83 $ \r\n \r\n1,307.87 $ \r\n \r\n1,307.87 \r\n \r\n0.00 38,902.88 \r\n \r\n15.96 3,055,205.10 \r\n \r\n40,210.75 $ 3,056,528.93 \r\n \r\n46,120.10 $ 3,421,042.93 \r\n \r\n0.00 0.00 -364,088.47 \r\n \r\n0.00 0.00 0.00 \r\n \r\n0.00 0.00 0.00 \r\n \r\n297,145.32 0.00 \r\n305,949.73 \r\n \r\n297,145.32 0.00 \r\n305,949.73 \r\n \r\n0.00 0.00 0.00 \r\n \r\n297,145.32 0.00 \r\n305,949.73 \r\n \r\n$ \r\n \r\n-236.00 $ \r\n \r\n0.00 $ \r\n \r\n3,637,659.05 $ 4,024,137.98 $ 3,978,017.88 $ \r\n \r\n46,120.10 $ 4,024,137.98 \r\n \r\nSummary of Ending Fund Balance Federal Financial Assistance Sales and Services Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable Inventories Bookstore Tuition \r\nUnreserved Surplus \r\nTotal Ending Fund Balance - June 30 \r\n \r\n$ \r\n \r\n292.61 \r\n \r\n3,814.09 \r\n \r\n112,124.49 \r\n \r\n292,660.81 \r\n \r\n230,402.49 \r\n \r\n305,949.73 \r\n \r\n297,145.32 \r\n \r\n1,058,610.89 \r\n \r\n1,677,017.45 \r\n \r\n$ \r\n \r\n$ 3,978,017.88 $ \r\n \r\n$ \r\n \r\n292.61 \r\n \r\n3,814.09 \r\n \r\n112,124.49 \r\n \r\n292,660.81 \r\n \r\n230,402.49 \r\n \r\n305,949.73 \r\n \r\n297,145.32 \r\n \r\n1,058,610.89 \r\n \r\n1,677,017.45 \r\n \r\n46,120.10 \r\n \r\n46,120.10 \r\n \r\n46,120.10 $ 4,024,137.98 \r\n \r\n- 27 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE BUDGET TO GAAP RECONCILIATION \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"5\" \r\n \r\nTotal Fund Balances - Budget Fund - Non-GAAP Basis (Schedule \"1\") \r\n \r\n$ 4,024,137.98 \r\n \r\nAmounts reported for Business-Type Activities in the Statement of Net Assets are different because: \r\n \r\nCapital Assets used in Business-Type Activities are not reported in the Budget Fund. \r\n \r\n53,774,260.60 \r\n \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\n \r\n-305,949.73 \r\n \r\nGeorgia State Financing and Investment Commission (GSFIC) projects are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of GSFIC Activity \r\n \r\n$ 252,339.68 -260,739.99 \r\n \r\n-8,400.31 \r\n \r\nAgency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity \r\n \r\n$ 884,387.35 -880,786.53 \r\n \r\n3,600.82 \r\n \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. Reimbursement from grantors reported as revenues in the Budget Fund that are for expenditures based on encumbrances are deferred for GAAP reporting. Total Net Effect of Encumbrance Activity \r\n \r\n$ 114,047.71 -23,550.93 \r\n \r\n90,496.78 \r\n \r\nCertain Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund. Compensated Absences Payable \r\n \r\n-1,608,708.83 \r\n \r\nNet Assets of Business-Type Activities (Exhibit \"A\") \r\n \r\n$ 55,969,437.31 \r\n \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- 28 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"6\" \r\n \r\nTotals per Annual Supplement \r\nAccruals June 30, 2012 June 30, 2011 \r\n \r\nSALARIES \r\n \r\nTRAVEL \r\n \r\n$ 19,687,828.89 $ 173,704.39 \r\n \r\n71,074.76 -125,993.72 \r\n \r\nCompensated Absences June 30, 2012 June 30, 2011 \r\nAgency Funds \r\nReimbursement from West Georgia Technical Technical College Foundation Joseph Dees Scotty Huey Steven Wheeler Joseph Wilson Larry Hornsby William Thornton Chad McIntyre \r\nReimbursement from Douglas County Board of Education Johnathon Wilson Brandon Morris \r\nRepayment of overpayment to employees set up as Accounts Receivable in Fiscal Year 2011 Troy Vann Tommie Simmon \r\nOverpayment to employee set up as Accounts Receivable: Christy More Mary Adaghebalu \r\nFiscal Year 2011 Void and Reissued Karen Sparks \r\nDifference in Actual and Estimated Salary Accrual for Fiscal Year 2011 \r\n \r\n1,225,860.37 -1,370,505.94 \r\n-386,192.08 \r\n \r\n-36,776.39 \r\n \r\n-110.00 -110.00 -110.00 -110.00 -110.00 -110.00 -110.00 \r\n \r\n-1,666.66 -9,607.26 \r\n \r\n1,591.30 550.85 \r\n \r\n-292.00 -954.44 \r\n \r\n51.74 -1,630.60 \r\n \r\n$ 19,089,345.21 $ 136,928.00 \r\n \r\n- 29 - \r\n \r\n SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFS-826-10-02 FS-826-10-03 FS-826-10-06 FS-826-11-01 FS-826-11-02 FS-826-11-03 FS-826-11-04 FS-826-11-05 FS-826-11-06 \r\n \r\nFurther Action Not Warranted Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Unresolved  See Corrective Action/Response Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Segregation of Duties Finding Control Number: FS-826-11-03 \r\n \r\nThe department will evaluate all job duties in relation to cash disbursements. Steps will be taken to modify the accounts payable processes and security of PeopleSoft financials to ensure that an employee creating an accounts payable voucher will not be allowed to initiate check runs. The rights to initiate check runs will be removed from all accounts payable technicians and only be given to the accounts payable supervisor and the Director of Accounting. \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n SECTION III FINDINGS AND QUESTIONED COSTS \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCOMMUNICATION OF INTERNAL CONTROL DEFICIENCIES \r\nThe auditor is required to communicate to management and those charged with governance deficiencies in internal control identified during the course of the financial statements audit that, in the auditor's judgment, constitute significant deficiencies or material weakness. \r\nA deficiency in internal controls exists when the design or operation of a control does not allow A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect 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\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 West Georgia Technical College's financial statements will not be prevented, or detected and corrected on a timely basis. \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\nAny identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within a separate management letter dated October 9, 2012. Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below: \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-12-01 \r\n \r\nCondition: Criteria: \r\n \r\nThis is a repeat finding (FS-826-11-03 and FS-826-10-03) from the years ended June 30, 2011, and June 30, 2010, respectively. The accounting procedures of the Technical College were insufficient to provide adequate segregation of duties. \r\nInternal control is a process  affected by an entity's board of directors, management and other personnel  designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations. \r\n \r\nSeparation of duties involving key accounting functions, both manual and automated, is the basis for achieving an adequate system of internal controls. \r\n \r\n- 1 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-12-01 \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nAccounting procedures were designed to allow certain employees the ability to create and post express vouchers within PeopleSoft and process check runs. Potential compensating controls could not be tested due to a lack of documentation. \r\n \r\nCause: \r\n \r\nThe Technical College has not adequately designed procedures to ensure different employees were responsible for initiating transactions, authorizing transactions, recording transactions, reconciling information, and maintaining custody of assets. In addition, potential compensating controls were either not adequately designed or not formally documented. \r\n \r\nEffect: \r\n \r\nMisstatements due to errors or fraud may occur and not be detected in a timely manner. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should revise and implement internal controls to ensure that proper segregation of duties is established. In the case when management determines segregation of duties is not cost beneficial, management should implement compensating controls that utilize system generated reports and data. \r\n \r\nFEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nREPORTING Failure to Award Federal Funds in a Timely Manner or Report Non-use of Funding Significant Deficiency U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-826-12-01 \r\n \r\nCondition: \r\n \r\nThe Technical College failed to award its fiscal year allocation of Federal Supplemental Education Opportunity Grant (FSEOG) funds in a timely manner, or report to the U. S. Department of Education that funds were not expended. \r\n \r\nCriteria: Questioned Cost: \r\n \r\nProvisions included in 34 CFR 673.4(d)(3) provide the requirements of the reallocation of unused FSEOG funds. The U. S. Department of Education requires awardees to report unexpended funds. \r\nN/A \r\n \r\n- 2 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nREPORTING Failure to Award Federal Funds in a Timely Manner or Report Non-Use of Funding Significant Deficiency U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-826-12-01 \r\n \r\nInformation: \r\n \r\nUpon review of the fiscal year allocations of FSEOG funds, it was noted that $217,431.00 was allocated to the Technical College to be awarded to students during fiscal year 2012. In addition, under the guidelines for Campus-Based Funds, the Technical College had $41,834.78 in unused Federal Work Study funds that could have been transferred into FSEOG and awarded to students. A total of $259,265.78 in available Federal funds remained unawarded at the end of the fiscal year. In June 2012 the U. S. Department of Education released a \"Dear Colleague\" letter requiring awardees to report any unexpended funds. The Technical College failed to meet this reporting requirement. This failure to report also resulted in the Technical College facing an underuse penalty which will result in the loss of the fiscal year 2013 allocation of $217,431.00. \r\n \r\nCause: \r\n \r\nThe Technical College has not adequately designed controls to ensure that Federal awards are awarded in a timely manner, or that if funds are not awarded they are reported and released to the U. S. Department of Education. \r\n \r\nEffect: \r\n \r\nThe Technical College was not in compliance with Federal regulations concerning the use of FSEOG funds. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should establish procedures to ensure that campusbased funds are awarded based on the allocation, or that if unused, the unexpended funds are reported to the U. S. Department of Education. \r\n \r\nSPECIAL TESTS AND PROVISIONS Failure to Properly Comply with the Verification Process Material Weakness U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-826-12-02 \r\n \r\nCondition: \r\n \r\nThe Student Financial Assistance Office failed to meet student verification and documentation requirements. \r\n \r\nCriteria: \r\n \r\nProvisions included in 34 CFR 668 provide the compliance requirements for the verification process that the Technical College should follow for students who receive financial aid and identifies the acceptable documentation. The OMB Circular A-133 Compliance Supplement requires implementation of internal controls over Federal awards. \r\n \r\nQuestioned Cost: \r\n \r\nQuestioned costs of $3,701.00 were identified in the sample of student verification, which when projected over the entire population, resulted in a projected misstatement of $642,728.98. \r\n \r\n- 3 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nSPECIAL TESTS AND PROVISIONS Failure to Properly Comply with the Verification Process Material Weakness U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-826-12-02 \r\n \r\nInformation: Cause: Effect: \r\n \r\nOur sample of 25 students selected for verification revealed one student verification for which sample documentation was not maintained by the Technical College. \r\nThe Student Financial Aid Office did not adequately follow the Federal requirements for verification, and internal controls are not in place to prevent or detect noncompliance. \r\nWithout properly verifying the information in the selected student files, the Technical College places itself in a position to award students incorrectly. \r\n \r\nRecommendation: \r\n \r\nThe Student Financial Aid Office must ensure that verification and documentation requirements are met, and internal controls are designed as required by OMB Circular A-133. \r\n \r\nSPECIAL TESTS AND PROVISIONS Deficiencies Over the Title IV Refunds Process Significant Deficiency U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-826-12-03 \r\n \r\nCondition: \r\n \r\nThe Student Financial Assistance Office (SFA) failed to properly perform the refund process and ensure that unearned Title IV funds were returned in a timely manner. \r\n \r\nCriteria: \r\nQuestioned Cost: Information: \r\n \r\nProvisions included in the 34 CFR 668 provide general provisions for administering Student Financial Assistance programs. 34 CFR 668.22(j)(1) states that \"An institution must return the amount of Title IV funds...as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew.\" \r\nN/A \r\nTwo students were identified in a sample of 25 students that withdrew from the Technical College that received Federal awards during the year whose refunds were not processed properly. Our examination revealed the following deficiencies: \r\n1. One student withdrew September 8, 2011, and the refund calculation was not completed until June 13, 2012. This student's refund was calculated correctly as $332.35; however, the refund was not processed in a timely manner. \r\n \r\n- 4 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nSPECIAL TESTS AND PROVISIONS Deficiencies Over the Title IV Refunds Process Significant Deficiency U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-826-12-03 \r\n \r\n2. One student withdrew on March 26, 2012, and at the time of audit testing in July 2012, the refund calculation had not been processed. This student had completed over 60% of the semester and did not owe a refund. \r\n \r\nCause: \r\n \r\nThese deficiencies were the result of management's failure to properly process student financial aid refunds in accordance with Federal regulations. \r\n \r\nEffect: \r\n \r\nThe Student Financial Assistance Office did not return unearned funds in a timely manner. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should develop and implement procedures to ensure that student financial aid refunds are properly calculated and that unearned funds are correctly returned to the appropriate accounts in a timely manner in accordance with the Higher Education Amendments 1998, Public Law 105244. The college should also contact the U. S. Department of Education regarding resolution of this finding. \r\n \r\n- 5 - \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bv6-bc32-b2010-h2011","title":"West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2011","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, Haralson County, Waco, 33.70288, -85.18328"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2010/2011"],"dcterms_description":["Began with: Fiscal year ended June 30, 2010.","Effective 2009, West Central Technical College merged with West Georgia Technical College to form a new college that retained the name of West Georgia Technical College.","For some years, report may be released instead called: West Georgia Technical College, Waco, Georgia, management report for fiscal year ended ...","Fiscal year ended June 30, 2010, released in 2011?; title from PDF cover (Georgia Government Publications database, viewed October 23, 2023).","Fiscal year ended June 30, 2012 (Georgia Government Publications database, viewed October 23, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2011-06-30"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["West Georgia Technical College (2009- )--Appropriations and expenditures--Periodicals.","Technical education--Georgia--Auditing--Periodicals.","Technical education--Georgia--Finance--Statistics--Periodicals.","Technical education--Finance","Georgia","Georgia Government Documents--Serial"],"dcterms_title":["West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2011"],"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-bv6-bc32-b2010-h2011"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bv6-bc32-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":"WEST GEORGLA TECHNICAL COLLEGE WACO,GEORGIA \r\nREPORT ON AUDIT O F THE FINANCLAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE30,2011 \r\nGeorgia Departma Audits and AccaMts \r\nRussell W.Hinton \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE - 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 FlNANClAL STATEMENTS \r\nEXHIBITS \r\nA STATEMENT OF NET ASSETS \r\nB STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS \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 \r\nBUDGET BY 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 SALARIES AND TRAVEL \r\n \r\nPage \r\n \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 WEST GEORGIA TECHNICAL COLLEGE \r\n- TABLE OF CONTENTS - \r\nSECTION Ill FINDINGS AND 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 1-156 Atlanta, Georgia 30334-8400 \r\nDecember 1 2 , 2 0 1 1 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of the Technical College System of Georgia Members of the Local Board of Directors \r\nand Honorable Skip Sullivan, President West Georgia Technical College \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 West Georgia Technical College, 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 Technical College'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 controls 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 the College'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 West Georgia Technical College 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 West Georgia Technical College. 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\nIn our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of West Georgia Technical College 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\n \r\n Management'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 supplementary information. However, we did not audit this information and express no opinion on it. \r\n \r\nOur audit was conducted for the purpose of forming an opinion on the basic financial statements of \r\n \r\nWest Georgia Technical College taken as a whole. The accompanying supplementary information \r\n \r\n(Schedules 1through 5) is presented for purposes of additional analysis and is not a required part of \r\n \r\nthe basic financial statements. Such information has been subjected to the auditing procedures \r\n \r\napplied in the audit of the basic financial statements and, in our opinion, is fairly stated in all \r\n \r\nmaterial respects in relation to the basic financial statements taken as a whole. Res~ectfullvsubmitted. \r\n \r\n. - \r\n \r\nRussell W. Hinton, CPA, CGFM State Auditor \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n West Georgia Technical College \r\nManagement's Discussion and Analysis \r\nThe following is management's discussion and analysis of West Georgia Technical College's financial performance for the fiscal year ending June 30, 2011 with comparative data from fiscal year ending June 30, 2010. This discussion has been prepared by and is the responsibility of management. \r\nOverview of the Financial Statemenk and Financial Analysis \r\nThis annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the GovernmentalAccounting Standards Board. \r\nThere 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. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question \"Is the Technical College as a whole better or worse off as a result of the year's activities?\" These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by corporations and other private sector companies. All revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the goods or service, regardless of when cash is exchanged. \r\nThe Statement of Cash Flows is a valuable tool when evaluating the ability of the Technical College to meet financial obligations as they mature. This statement presents information related to cash inflows and outflows summarized by operating, noncapital financing, capital and related financing and investing activities. \r\nThis discussion and analysis of the Technical College's financial statements provides an overview of its financial activities for the year. \r\nStatement of Net Assets \r\nThe purpose of the Statement of Net Assets is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities and net assets of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating. \r\nNet assets are divided into two major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College. \r\n \r\n Statement of Net Assets (thousands of dollars) \r\n \r\nJune 30,2011 \r\n \r\nAssets Current Assets Capital Assets, Net \r\n \r\nTotal Assets \r\n \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\n \r\nTotal Liabilities \r\n \r\nNet Assets \r\n \r\nInvested in Capital Assets, Net of Debt \r\n \r\n$ \r\n \r\nUnrestricted \r\n \r\n54,467 6 12 \r\n \r\nTotal Net Assets \r\n \r\nJune 30,2010 \r\n \r\n$ \r\n \r\n54,623 \r\n \r\n70 \r\n \r\nThe total assets of the Technical College increased by approximately $1,425,000 from the prior year. This can be mainly attributed to a decrease of approximately $154,000 in Capital Assets, Net and an increase in Current Assets of approximately $1,579,000. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the Technical College to better serve the instruction and public service missions of the Technical College. \r\nTotal liabilities for the fiscal year increased by approximately $1,039,000. This increase can be attributed to an approximate increase in Noncurrent Liabilities of $90,000 and an increase in Current Liabilities of $949,000. The combination of the increase in total assets of approximately $1,425,000 and the increase in total liabilities of approximately $1,039,000 yields an increase in total Net Assets of approximately $386,000. \r\nStatementof Revenues, Expenses and Changesin NetAssets \r\nThe purpose of the Statement of Revenues, Expenses and Changes in Net Assets is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets. \r\nOperating revenues are received for providing goods and/or services to various customers and constituencies of the Technical College. Operating expenses are those expenses paid to acquire or produce the goods and/or services provided in return for the operating revenues, and to carry out the mission of the Technical College. Therefore, nonoperating revenue is received when no goods or \r\n \r\n services are provided in exchange for the revenue. With the issuance of Statement No. 35, new guidelines were established by the Governmental Accounting Standards Board (GASB), which changed the classifications of state appropriations and gifts from operating to nonoperating revenue. This change may result in an operating deficit that is offset by a nonoperatingsurplus. \r\n \r\nStatement of Revenues, Expenses and Changes in Net Assets (Thousand of Dollars) \r\n \r\nJune 30,2011 \r\n \r\nJune 30,2010 \r\n \r\nOperating Revenues Operating Expenses \r\n \r\nOperating Loss \r\n \r\n$ \r\n \r\n-32,224 \r\n \r\n$ \r\n \r\n-30,584 \r\n \r\nNonoperatingRevenues and Expenses \r\n \r\n31,615 \r\n \r\n28,632 \r\n \r\nIncome (Loss) Before Other Revenues, \r\n \r\nExpenses, Gains or Losses \r\n \r\n$ \r\n \r\n-609 \r\n \r\n$ \r\n \r\n-1,952 \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\n995 \r\n \r\n8,428 \r\n \r\nIncrease in Net Assets \r\n \r\n$ \r\n \r\n386 \r\n \r\n$ \r\n \r\n6.476 \r\n \r\nNet Assets at Beginning of Year \r\n \r\nNet Assets at End of Year \r\n \r\nThe Statement of Revenues, Expenses and Changes in Net Assets reflects 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, Expensesand Changes in Net Assets are as follows: \r\n \r\n Revenue by Source (Thousands of Dollars) For the Years Ended June 30,2011, and June 30,2010 \r\n \r\nJune 30,2011 \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\nRents and Royalties \r\n \r\nOther \r\n \r\n11,673 197 \r\n2,471 219 \r\n \r\nTotal Operating Revenue \r\n \r\nJune 30,2010 \r\n \r\n$ \r\n \r\n10,591 \r\n \r\n180 \r\n \r\n1.550 \r\n \r\n264 \r\n \r\n3 \r\n \r\nNonoperating Revenue State Appropriations Federal Grants and Contracts Nonoperating State Grants and Contracts Nonoperating Gifts Other \r\n \r\nTotal NonoperatingRevenue \r\n \r\nCapital Grants and Gifts State Other \r\n \r\nTotal Capital Grants and Gifts Total Revenues \r\n \r\n$ \r\n \r\n995 \r\n \r\n$ \r\n \r\n8,428 \r\n \r\nExpenses (Thousands of Dollars) For the Years Ended June 30,2011, and June 30,2010 \r\n \r\nOperating Expenses Instruction \r\n \r\nJune 30,2011 \r\n \r\nJune 30,2010 \r\n \r\nNonoperating Expenses Nonoperating Expenses \r\nTotal Expenses \r\n \r\nThe sources of Operating Revenue for the Technical College are Tuition and Fees, Grants and Contracts, Rents, and Sales and Services activities. The increase in Operating Revenue of approximately $1,972,000 is related to increases in Student Tuition and Fees of $1,082,000, Sales and Services of $921,000 and Grants and Contracts of $17,000 and a decrease in Rents of $45,000 and Other Revenue of $3,000 for fiscal year 2011. \r\n \r\n Tuition and Fees increased by $1,082,000. This is directly related to an increase in the tuition rate along with an establishment for an Allowance for Doubtful Accounts. \r\nNongovernmental grants and contracts increased by $17,000. \r\nUtilities costs in general remained constant during the past year while technology costs associated with it decreased $710,000. \r\nPersonal Services expenses increased by approximately $2,378,000. This increase was due to an increase in enrollment for the Technical College and an increase in the benefit costs. \r\nUnder nonoperating revenues (expenses) state appropriations increased by approximately $2,139,000. This is due to the discontinuance of Federal Stimulus Funds which were supplementing the budget in the previous fiscal year. \r\nStatement of Cash Flows \r\nThe purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the Technical College during the year. It also provides information concerning the Technical College's ability to generate future cash flows and to meet its obligations as they come due. The statement is divided into five sections. The first section reports on the operating cash flows and shows the net cash used by the operating activities of the Technical College. The second section reflects cash flows from noncapital financing activities. The third section deals with cash flows from capital and related financing activities, which reflects the cash used for the acquisition and construction of capital related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The final section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets. \r\n \r\nJune 3 0 , 2 0 1 1 \r\n \r\nJune 30,2010 \r\n \r\nCash Provided (Used) By: \r\nOperating Activities Noncapital FinancingActivities Capital and Related FinancingActivities Investing Activities \r\n \r\n$ \r\n \r\n-28,451 \r\n \r\n31,400 \r\n \r\n-1,702 \r\n \r\n19 \r\n \r\n$ \r\n \r\n-28,082 \r\n \r\n28,598 \r\n \r\n-1,204 \r\n \r\n2 3 \r\n \r\nNet Change in Cash Cash, Beginningof Year \r\n \r\nCash, End of Year \r\nCapita/ Assets \r\nThe Technical College had additions to Capital Assets of approximately $3,363,000 with approximately $957,000 being a new Building addition on the Douglasville Campus (CCI). Some of the other additions were purchased with Bond Funds. Bond funded additions provided by the GSFlC totaled just over $232,000. \r\n \r\n Long- Term Liabilities \r\nWest Georgia Technical College had a total Long-Term Liabilities of $1,765,389.82 of which $984,695.55 was reflected as a current liability at June 30, 2010. \r\nFor additional information on Long-Term Liabilities see Notes 1and 7 in the Notes to the Financial Statements. \r\nEconomic Ou~ook \r\nThe Technical College is unaware of any currently known fact, decision, or condition that is expected to have a significant effect on the financial position or change how the Technical College operates for the next fiscal year. West Georgia Technical College reserved funds over the last few years which proved helpful in alleviating the effects of budget cuts and any potential decrease in enrollment due to the Quarter to Semester conversion. As in prior years, the Technical College's overall financial position is strong. As a result, the Technical College anticipates the next fiscal year will be much like the last and the Technical College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues. \r\nDr. Skip Sullivan, President West Georgia Technical College \r\n \r\n BASIC FINANCIAL STATEMENTS \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF NET ASSETS JUNE 30,2011 \r\nASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items Inventories \r\nTotal Current Assets \r\nNoncurrent Assets Cap~taAl ssets, Net \r\nTotal Assets \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Deferred Revenue Funds Held for Others Compensated Absences \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Compensated Absences \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Unrestricted \r\nTotal Net Assets \r\n \r\nEXHIBIT \"A\" \r\n \r\nThe notes to the financial statements are an integral part of this statement. \r\n- 2 - \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS \r\nYEAR ENDEDJUNE 30.2011 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees Less: Scholarship Allowances \r\nGrants and Contracts Federal \r\nRents and Royalties Sales and Services \r\nTotal Operating Revenues \r\nOPERATING EXPENSES \r\nSalaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\nTotal Operating Expenses \r\nOperating Income (Loss) \r\nNONOPERATING REVENUES (EXPENSES1 \r\nState Appropriations Grants and Contracts \r\nFederal State Gifts Interest and Other Investment Income Other Nonoperating Expenses \r\nNet Nonoperating Revenues \r\nIncome (Loss) Before Other Revenues. Expenses. Gains, or Losses \r\nCapital Grants and Gifts State Nongovernmental Loss on Disposal of Capital Assets Special Items \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 t o the financial statements are an integral part of this statement. -3- \r\n \r\nEXHIBIT \"BN \r\n \r\n (This page left intentionally blank) \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE 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 of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Rece~pts(Payments) \r\nNet Cash Provlded (Used) by Operating Activities \r\nCASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Receipts \r\nNet Cash Flows Provided (Used) by Noncapitai FinancingActivities \r\nCASH FLOWS FROM CAPITAL AN0 RELATED FINANCINGACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchases of Capital Assets \r\nNet Cash Provided (Used) by Capital and Related Financing Activities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments \r\nNet Increase (Decrease) in Cash \r\nCash and Cash Equivalents - Beginningof Yea1 \r\nCash and Cash Equivalents - End of Year \r\nRECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: \r\nOperating Income (Loss) Adjustments t o Reconc~leOperating Income to Net Cash \r\nProvided (Used) by OperatingActivities Depreciation Expense Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Salaries Payable Accounts Payable Deferred Revenue Compensated Absences \r\nNet Cash Provided (Used) by Operating Activities \r\nNONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts \r\nThe notes t o the financial statements are an integral part of this statement. \r\n- 5 - \r\n \r\nEXHIBIT \"C\" \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\nREPORllNG ENTITY \r\nWest Georgia Technical College is one of twenty-six (26) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of West Georgia Technical College as a separate reporting entity. \r\nThe Technical College's Local Board of Directors is composed of eleven (11)members serving staggered three-year terms who are appointed by the State Board of the Technical College System of Georgia. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount of State appropriations to be received by West Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, West Georgia Technical College is considered an organizational unit of the Technical College System of Georgia for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Re~ortingStandards. \r\nLegally separate, tax exempt organizations whose activities primarily support member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia (an organizational unit of the State of Georgia), are considered potential component units of the State. See Note 17 for additional information. \r\nFINANCIAL STATEMENT PRESENTATION \r\nThe 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 Technical College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required. \r\nGAAP requires that the reporting of summer school revenues and expenses be split between fiscal years rather than in one fiscal year. Due to lack of materiality, the Technical Colleges of the Technical College System of Georgia will continue to report summer revenues and expenses in the year in which the predominate activity takes place. \r\nBASIS OF ACCOUNTING \r\nFor financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College'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-college transactions have been eliminated. \r\nThe Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date. \r\nCASH AND CASH EQUIVALENTS \r\nCash and Cash Equivalents include petty cash and demand deposits in authorized financial institutions. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nACCOUNTS RECEIVABLE \r\nAccounts receivable consist of tuition and fee charges to students, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available. Accounts receivable are recorded net of estimated uncollectible amounts. \r\nINVENTORIES \r\nResale inventories are recorded on the consumption method and are valued at cost using first-in, first-out (FIFO) method. \r\nCAPITAL ASSETS \r\nCapital assets are recorded at cost at date of acquisition, or fair market value at the date of capital contribution. The Technical College capitalizes all land and land improvements. For equipment, the Technical College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Buildings and Building Improvements, Improvements Other Than Buildings, Easements, Rights, Patents, Trademarks, Copyrights and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastructure and software, the Technical College's capitalization threshold is $1,000,000.00. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 1 0 to 4 0 years for buildings, 1 5 to 25 years for infrastructure, 15 years for improvements other than buildings, 1 0 years for library books, 3 to 1 0 years for equipment and software, and 1 0 to 20 years for intangibles. \r\nTo fully portray capital assets acquired by the Technical Colleges of the Technical College System of Georgia, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to both the Technical College and the Technical College System of Georgia. The 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 GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes 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 major construction projects, GSFIC records construction in progress on its books throughout the construction period and at project completion transfers the entire project costs to West Georgia Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2011, GSFIC transferred capital additions valued at $956,948.47 to West Georgia Technical College. \r\nDEFERRED REVENUES \r\nDeferred revenues include amounts received for tuition and fees and other activities prior to the end of the fiscal year but related to the subsequent accounting period. \r\nCOMPENSATED ABSENCES \r\nEmployee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable 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. West Georgia Technical College had an accrued liability for compensated absences in the amount of $1,562,928.25 as of July 1,2010. For fiscal year 2011, $1,211,653.00 was earned in compensated absences and employees were paid $1,009,191.43, for a net increase of $202,461.57. The ending balance as of June 30, 2 0 1 1 in accrued liability for compensated absences was $1,765,389.82. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTESTO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNONCURRENT LIABILrnES \r\nNoncurrent liabilities include liabilities that will not be paid within the next fiscal year \r\nNET ASSETS \r\nThe Technical College's net assets are classified as follows: \r\nInvested in capital assets, net of related debt This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets, To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \r\nUnrestricted net assets: Unrestricted net assets represent available resources derived from student \r\ntuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $29,771.60. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of the State Treasurer. \r\nWhen an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. \r\nINCOME TAXES \r\nWest Georgia Technical College, as a political subdivision of the State of Georgia, is excluded from \r\nFederal income taxes under Section 115(1)of the Internal Revenue Code, as amended. \r\nCLASSIFICATION OF REVENUES AND EXPENSES \r\nThe Statement of Revenues, Expenses and Changes in Net Assets classifies the Technical College's fiscal year activity as operating and nonoperating according to the following criteria: \r\nOperating Revenues: Operating revenues include 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 Revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, RepoHng a s h Flows of Proprietaty and Nonexpendable Trust Funds and Governmental Entities That Use Pmprietaty Fund Accounting, and GASB No. 34, such as state appropriations and investment income. \r\nOperating Expenses: Operating expenses include activities that have the characteristics of exchange transactions. \r\nNonoperating Expenses: Nonoperating expenses include activities that have the characteristics of nonexchangetransactions, such as capital financing costs related to investment activity. \r\nSCHOLARSHIP ALLOWANCES \r\nStudent 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 Technical College, and the amount that is paid by students \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBll \"D\" \r\n \r\nand/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 Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances. \r\nNOTE 2: DEPOSITS \r\n \r\nThe custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: \r\n1. Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia. \r\n2. Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or \r\nmunicipalities of the State of Georgia. \r\n3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. \r\n4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. \r\n5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary \r\ncorporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or 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\nAt June 30, 2011, the carrying value of deposits was $2,333,845.47 and the bank balance was $3,338,222.18. Of the Technical College's deposits, $3,088,222.18 were uninsured. Of these uninsured deposits, $3,088,222.18 were collateralized with securities held by the financial institution's trust department or agency, but not in the Technical College's name. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\nNOTE 3: ACCOUNTS RECEIVABLE \r\nAccounts receivable at June 30, 2011, consists of the following: \r\nStudent Tuition and Fees Federal,State and Private Funds Georgia State Financingand Investment Commission Other \r\n \r\nEXHIBIT \"D\" \r\n \r\nLess: Allowance for Doubtful Accounts \r\nNet Accounts Receivable \r\nNOTE 4: INVENTORIES Inventories at June 30, 2011, consist of the following: \r\nBookstore \r\n \r\nNOTE 5: CAPITAL ASSETS Following are the changes in capital assets for the year ended June 30, 2011: \r\n \r\nCapital Assets, Not Belng Deprec~ated: Land Construction Work In Progress \r\n \r\nBeginning Balance Julv 1.2010 \r\n \r\nSpecial Item Transfer \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30.2011 \r\n \r\nTotal Capital Assets. Not Being Depreciated $ 3,112,762.00 $ \r\n \r\n0.00 $ 485,413.10 $ \r\n \r\n0.00 $ 3,598,175.10 \r\n \r\nCapital Assets, Being Depreciated: Buildingand Build~ngImprovements Improvements Other Than Buildings Equipment Library Collections \r\n \r\n$ 60.048.309.80 2.571.364.58 \r\n \r\n40.333.40 \r\n \r\n2.611.697.98 \r\n \r\nTotal Capital Assets, Belng Depreciated \r\n \r\n$ 74,327,126.23 $ 165.316.65 $ 2.71L918.27 $ 560.993.16 $ 76.643.367.99 \r\n \r\nLess: Accumulated Depreciation: Buildingand Building Improvements ImprovementsOther Than Buildings Equipment Library Collections \r\n \r\n$ 11.821.899.18 \r\n \r\n$ 1,542,697.45 \r\n \r\n2,436.627.84 \r\n \r\n22.520.21 \r\n \r\n7,075,110.68 $ 152,628.40 1,218,211.44 $ \r\n \r\nl.483.956.38 \r\n \r\n68.271.01 \r\n \r\n$ \r\n36,620.75 11.163.78 \r\n \r\n13.364.596.63 2,459,148.05 8,409,329.77 1.541.063.61 \r\n \r\nTotal Accumulated Depreciation \r\n \r\nTotal Capital Assets, Being Depreciated. Net $ 5%509,532.15 $ 12.688.25 $ -139.78184 $ 513.208.63 $ 50,869,229.93 Capital Assets. Net \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 6: DEFERRED REVENUE \r\nDeferred revenue at June 30, 2011, consists of the following: \r\nPrepaid Tuition and Fees \r\n \r\nNOTE 7: 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\nBeginning Balance July 1.2010 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30,2011 \r\n \r\nCompensated Absences \r\n \r\nCurrent Portion \r\n \r\nNOTE 8: NET ASSETS \r\n \r\nChanges in Net Asset activity for the year ended June 30, 2 0 1 1 was as follows: \r\n \r\nInvested in Capital Assets Net of Related Debt \r\n \r\nBednning Balance July 1,2010 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2011 \r\n \r\n$ 54,622,294.15 $ 358,319.51 $ 513,208.63 $ 54.467.405.03 \r\n \r\nRestricted Net Assets \r\n \r\n0.00 15,789,542.08 15,789.542.08 \r\n \r\n0.00 \r\n \r\nUnrestricted Net Assets \r\n \r\n70.265.00 33,069,497.49 32,527,957.86 \r\n \r\n611804.63 \r\n \r\nTotal Net Assets \r\n \r\nNOTE 9: LEASE OBLIGATIONS \r\nOPERATING LEASES \r\nWest Georgia Technical College has entered into certain agreements to lease administrative offices, copiers, modular classrooms and postage meters which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised. \r\nExpensesfor rental of administrative offices, copiers, modular classrooms and postage meters under operating leases for the year ended June 30, 2011, totaled $304,653.59. \r\nNOTE 10: RETIREMENT PLANS \r\nWest Georgia Technical College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"DM \r\n \r\nsupplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that West Georgia Technical College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law. \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 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 1 0 years of creditable service and attainment of age 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 2 5 years of creditable service for members under age 60. \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 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \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, West Georgia Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these West Georgia Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBrr \"D\" \r\n \r\nmembers' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. West Georgia Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These West Georgia Technical College contributions are not at any time refundable to the member or his/her beneficiary. \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\nOld Plan* New Plan GSEPS \r\n* 5.66%exclusive of contributions paid by the employer on behalf of old plan \r\nmembers \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 multipleemployer 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 1 0 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 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\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBlT \"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 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, 2007 actuarial valuation. \r\nThe following table summarizes West Georgia Technical College contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30, 2009: \r\n \r\nERS Required Contribution \r\n \r\nPercent Contributed \r\n \r\nTRS \r\n \r\nRequired \r\n \r\nPercent \r\n \r\nContribution \r\n \r\nContributed \r\n \r\nGEORGIA DEFINED CONTRIBUTION PLAN \r\nPlan Description West Georgia Technical College participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. \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 $3,500.00 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\nThe Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtained through ERS. \r\nContributions and Vesting 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. The Technical College's payroll for the year ended June 30, 2011, for employees covered by GDCP was $3,348,565.45. The Technical College's total payroll for all employees was $21,014,923.66. \r\nTotal contributions made by employees during fiscal year 2 0 1 1 amounted to $251,145.39 which \r\nrepresents 7.5% of covered payroll. These contributions met the requirements of the plan. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 11: RISK MANAGEMENT \r\nPUBLIC E N l T W RISK POOL \r\nThe Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with United Healthcare to process medical claims and Medco to process prescription drug claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health. \r\nOTHER RISK MANAGEMENT \r\nThe Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Technical College, as an organizational unit of the Technical College 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\nNOTE 12: POST-EMPLOYMENT BENEFITS \r\nWest Georgia Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department - OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices. \r\nRetiree health benefits were previously funded through the Georgia Retiree Health Benefit Fund (GRHBF). In 2009, the General Assembly revisited the GRHBF and enacted legislation that, effective August 31, 2009, separated the GRHBF into two new funds: the Georgia School Personnel Postemployment Health Benefit Fund and the Georgia State Employees Post-employment Health Benefit Fund. The purpose of this change was to assure employers responsible for planning and funding future retiree health costs that their contributions will be dedicated to their respective retiree populations. Funds in the GRHBF were transferred to the Georgia State Employees Post-employment Health Benefit Fund or the Georgia School Personnel Post-employment Health Benefit Fund as described in the plan financial statements. The statute that created the GRHBF is repealed effective September 1,2010. \r\nGEORGIA STATE EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND \r\nThe Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund) is a costsharing multipleemployer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations (including technical colleges) and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nOPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). \r\n \r\nThe contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage. \r\n \r\nParticipating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \r\n \r\nThe combined active and retiree contribution rates established by the Board for employers participating in the State OPEB Fund were as follows for the fiscal year ended June 30, 2011: \r\n \r\nJune 2010 July 2010 -April 2 0 1 1 May 2011-June 2 0 1 1 \r\n \r\n22.165% of covered payroll for July coverage 25.586% of covered payroll for August - May coverage 22.667% of covered payroll for June -July coverage \r\n \r\nNo additional contribution was required by the Board for fiscal year 2 0 1 1 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation. \r\nThe following table summarizes West Georgia Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30, 2011, June 30, 2010 and June 30,2009: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n- STATE EMPLOYEES' ASSURANCE DEPARTMENT OPEB \r\nState Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit post-employment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees', Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1,2009. Pursuant to Title 47 of the OCGA, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2011 \r\n \r\nEXHIBIT \"D\" \r\n \r\nContributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. For the fiscal year ended June 30, 2011, contributions of ERS \"old plan\" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS \"new plan\" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30,2011, June 30,2010 and June 30,2009. \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 expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although West Georgia Technical College expects such amounts, if any, to be immaterial to its overall financial position. \r\nLitigation, claims and assessments filed against West Georgia Technical College (an organizational unit of the Technical College 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: SUBSEOUENT EVENTS \r\nThe Technical College entered into a rental agreement with West Georgia Technical College Foundation Inc. on July l s t , 2011. The rental agreement is for classroom and administrative office space located at Adamson Square in Carrollton, Georgia. The rental agreement amount is $400,000.00 per annum for the 12 month term from July 2, 2 0 1 1 through June 30, 2012. If renewed, the rental rate would by $132,666.66 per annum for the next three years. \r\nNOTE 15: SPECIAL ITEM \r\nCapital Assets were transferred from another technical college to West Georgia Technical College. The amount reported for Special Item on the \"Statement of Revenues, Expenses and Changes in Net Assets\" is the difference in the cost of items transferred $165,316.65 and the accumulated depreciation $152,628.40 for a total of $12,688.25. \r\nNOTE 16: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS \r\nThe Technical College's operating expenses shown at the natural classification on the \"Statement of Revenues, Expenses and Changes in Net Assets\" are all classified as Instruction at the functional classification. \r\nNOTE 17: AFFILIATED ORGANIZATIONS \r\nThe West Georgia Technical College Foundation, Inc., is a legally separate, tax exempt organization whose activities primarily support West Georgia Technical College. This affiliated organization is considered a potential component unit of the State of Georgia in accordance with GAS6 Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial statements of the affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from West Georgia Technical College. \r\n \r\n (This page left intentionally blank) \r\n \r\n SUPPLEMENTARY INFORMATION \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30,2011 \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable \r\nFederal Financial Assistance Other Prepaid Expenditures Inventories \r\nTotal Assets \r\nLIABILITIES AND FUND EQUITY \r\nLiabilities Salaries Payable Payroll Withholdings Accounts Payable Encumbrance Payable Deferred Revenue \r\nTotal Liabilities \r\nFund Balances Reserved Refundsto Grantors Sales and Services Live Work Projects Continuing Education Technology Fees Uncollectible Accounts Receivable lnventories Bookstore Tuition 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 accounting that demonstrates compliance with budgetarystatutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NONGAAP BASIS) \r\nBUDGET FUND YEAR ENDED JUNE 30.2011 \r\n \r\nREVENUES \r\nState Appropriation State General Funds \r\nFederal Funds Other Funds \r\nTotal Revenues \r\nADJUSTMENTS AND PROGRAM TRANSFERS \r\nCARRYOVER FROM PRIOR YEAR \r\nTransfer from Reserved Fund Balance \r\nTotal Funds Available \r\nEXPENDITURES \r\nAdult Literacy Economic Development Technical Education \r\nTotal Expenditures \r\nExcess of Funds Available over Expenditures \r\nFUND BALANCE JULY 1 \r\nReserved Unreserved \r\nADJUSTMENTS \r\nPrlor Year Payables/Expenditures Prlor Year Receivables/Revenues Unreserved Fund Balance (Surplus)Returned \r\nFromthe Technical Colleges Year Ended June 30.2010 \r\nRefunds to Grantors Federal FlnanclalAssrstance Returned to Technical College System of Georgia Year Ended June 30.2010 \r\nPrior Year Reserved Fund Balance Includedin FundsAvailable \r\nFUND BALANCEJUNE 3Q \r\nSUMMARY OF FUND BALANCE \r\nReserved Refunds to Grantors Sales and Services L~veWork Projects Contlnulng Education Technology Fees UncollectibleAccounts Receivable Inventories Bookstore Tuition \r\nTotal Reserved \r\nUnreserved Surplus \r\nTotal Fund Balance \r\nActual amounts were preparedon a prescribed basisof accountingthat demonstrates compliance wlth budgetary statutes and regulationsof the State of Georgia. which is a comprehensive basisof accauntlngother than generally acceptedaccountingprinciples. \r\n \r\nBUDGEl \r\n \r\nACTUAL \r\n \r\nSCHEDULE 2\" \r\nVARIANCE FAVORABLE (UNFAVORABLE) \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF FUNDSAVAllABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE \r\n(NONGMP BASIS) BUDGET FUND YEAR ENDED JUNE 30,2011 \r\n \r\nAdult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically ldent~fied Other Funds \r\nTotal Adult Llteracy \r\nEconomic Development Other Funds \r\nTechnical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Other Funds \r\nTotal Technical Education \r\nTotals By Program \r\n \r\nOr~ginal Appropr~ation \r\n \r\nAmended Appropr~ation \r\n \r\nFinal Budget \r\n \r\nCurrent Year Revenues \r\n \r\nActual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetarystatutes and regulations of the State of Georgia, which is a comprehensivebasis of accounting other than generally accepted accounting principles. \r\n- 22 - \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\nActual \r\n \r\nVariance Pos~t~v(Neegative) \r\n \r\nExcess (Deficiency) of Funds Ava~lable \r\nOver/(Under) Expend~tures \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE \r\n(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011 \r\n \r\nAdult Literacy State Appropriation State General Funds Federal Funds Federal Funds Not Specifically ldentlfled Other Funds \r\nTotal Adult Literacy \r\nEconomic Development Other Funds \r\nTechnical Education State Appropriation State General Funds Federal Funds Federal Funds Not Specifically ldentlfied Other Funds \r\nTotal Technical Education \r\nTotal Operating Activity \r\nPrior Year R ~ s ~ N ~ s Not Avallable for Expenditure lnventor~es Refunds to Grantors Uncollectible Accounts Receivable \r\nBudget Unit Totals \r\n \r\nBeginning Fund Balance/(Deficit) \r\nJuly 1 \r\n \r\nFund Balance Carr~edOver from \r\nPrior Period as FundsAva~lable \r\n \r\nReturn of Fiscal Year 2010 \r\nSurplus \r\n \r\nPrior Period Adjustments \r\n \r\nActual amounts were prepared on a prescribed basis of accountingthat demonstrates compliance wlth budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting pnnc~ples. \r\n \r\n SCHEDULE V\" \r\n \r\nOther Adjustments \r\n \r\nEarly Return of Fiscal Year 2 0 1 1 \r\nSurplus \r\n \r\nExcess (Deficiency) 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\nResewed \r\n \r\nSurplus/(Deficit) \r\n \r\nTotal \r\n \r\nSummary of Endlng Fund Balance Reserved \r\nRefunds to Grantors Sales and Sew~ces Llve Work Projects Contlnulng Educat~on Technology Fees Uncollect~bleAccounts Recervable lnventor~es Bookstore Tultlon Unreserved Surplus \r\nTotal Ending Fund Balance -June 3 0 \r\n \r\n (This page left intentionally blank) \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 3 0 , 2 0 1 1 \r\n \r\nTotals per Annual Supplement \r\n \r\nAccruals June 30,2011 June 30,2010 \r\n \r\nCompensated Absences June 30,2011 June 30,2010 \r\n \r\nAgency Funds \r\n \r\nReimbursement from West Georgia Technical College Foundation \r\n \r\nBell, \r\n \r\nRicky \r\n \r\nHines, \r\n \r\nHarry \r\n \r\nTaylor, \r\n \r\nJarred \r\n \r\nWilliams. \r\n \r\nWade \r\n \r\nReimbursement from Douglas County Board of Education \r\n \r\nCrews, \r\n \r\nJudy \r\n \r\nWilson, \r\n \r\nJonathon \r\n \r\nUnidentified Variance \r\n \r\nSALARIES \r\n \r\nSCHEDULE \"5\" TRAVEL \r\n \r\n SECTION I1 AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONEDCOSTS \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2011 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\nFINDING CONTROL NUMBER AND STATUS \r\nPreviously Reported Corrective Action lmplemented Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Previously Reported Corrective Action lmplemented Previously Reported Corrective Action lmplemented Unresolved - See Corrective Action/Responses \r\nCORRECTIVE ACTION/RESPONSES \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Finding Control Number: FS-826-10-02 \r\nThe Technical College acknowledges that proper review was not done in tracking and monitoring bookstore sales in relation to mark-up percentages. It will be established that the bookstore manager for the Technical College can recommend mark-ups for the bookstore and then must have final approval from the VPA to implement those changes. Documentation will be maintained if percentages change within the fiscal year. Also, we recognizethat inventory balancing was not performed on a regular basis which can lead to potential errors in financial statement reporting. These inventories will be done on a monthly basis by each bookstore assistant on the respective campuses; the subsequent adjustment to inventory will be entered by the textbook manager of the Technical College. All adjustments will be reviewed by the bookstore manager to make sure to account for any discrepancies. A report of those discrepancies will be reported to the VPA on a monthly basis for review. The bookstore manager of the Technical College will review sales, percentages and inventory on a scheduled basis. Any monthly reconciliation showing sales not reflecting established markups shall be reported to the VPA and documented to reflect all adjustments that caused the discrepancy. This will allow the bookstore to better monitor activity of this department and ensure more accurate reporting. \r\nREVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER lnadequate Segregation of Duties Finding Control Number: FS-826-10-03 \r\nThe department is evaluating all job duties in relation to cash disbursements. Steps will be taken with the security of Peoplesoft Financials to ensure that an employee creating an accounts payable voucher will not be allowed to initiate check runs. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2011 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\nCORRECTIVE ACTION/RESPONSES \r\nINVENTORIES Inadequate Internal Controls over Bookstore Inventories Finding Control Number: FS-826-10-06 \r\nProcedures are being implemented to ensure that monthly reconciliations between the bookstore inventory subsidiary system and Peoplesoft Financials are being performed. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n SECTION Ill FINDINGS AND QUESTIONED COSTS \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2011 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND OUESTIONED 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 statements audit that, in the auditor's judgment, constitute significant deficiencies of material weakness. \r\n \r\nA deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, t o 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 West Georgia Technical College's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. \r\n \r\nAny identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weakness have been communicated to management and those charged with governance within a separate management letter dated December 12, 2011. lnternal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below: \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS Inadequate lnternal Controls over Accounts Receivables Significant Deficiency Finding Control Number: FS-826-11-01 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College are insufficient to ensure that uncollectible receivables are being properly reflected in the financial statements. \r\n \r\nCriteria: \r\n \r\nThe Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that receivable activity is properly documented, processed and reported. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe Technical College did not have procedures in place to properly identify and record an allowance for doubtful accounts receivable. A review of old receivable balances revealed uncollectible receivables in the amount of $670,038.20. An adjustment was made to properly reflect this balance within the financial statements. \r\n \r\nCause: \r\n \r\nThe Technical College's management failed to implement accounts receivable aging procedures and review these balances for uncollectible receivables. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 3 0 , 2 0 1 1 \r\n \r\nFINANCIAL STATEMENT FINDINGSAND QUESTIONED COSTS \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Accounts Receivables Significant Deficiency Finding Control Number: FS-826-11-01 \r\n \r\nEffect: \r\n \r\nFailure to have procedures in place over the aging of receivables could result in the Technical College placing itself in a position where misrepresentation of its financial position and results of operations could occur. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should design and implement accounts receivable aging procedures and review these balances for uncollectible receivables. \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Significant Deficiency Finding Control Number: FS-826-11-02 \r\n \r\nCondition: \r\n \r\nThis is a repeat finding (FS-826-10-02) from the year ended June 30, 2010. The accounting procedures of the Technical College are insufficient to ensure that bookstore sales are properly reflected in the financial statements. \r\n \r\nCriteria: \r\n \r\nThe Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that revenue activity is properly documented, processed and reported. \r\n \r\nThe Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integratd Framework states that separate and ongoing evaluations through methods such as the identification and monitoring of key control indicators enable management to determine whether the other components of internal control over financial reporting continue to function over time. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nTesting revealed significant unexplained differences between expected bookstore mark-up percentages and calculated mark-up percentages using financial data reported in the financial statements. The Technical College did not adequately monitor bookstore sales revenue. \r\n \r\nCause: \r\n \r\nThe Technical College has not implemented adequate monitoring procedures over bookstore sales. In addition, other control deficiencies exist such as not reconciling bookstore inventory balances, which increases the importance of strong monitoring controls. \r\n \r\nEffect: \r\n \r\nWithout satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where the potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and result of operations. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2011 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Significant Deficiency Finding Control Number: FS-826-11-02 \r\n \r\nRecommendation: \r\n \r\nThe Technical College should design and implement monitoring procedures over bookstore sales. These monitoring procedures should include but not be limited to the identification and ongoing monitoring of key control indicators such as inventory mark-up percentages. \r\n \r\nEXPENDlTURES/LIABILITIES/DISBURSEMENTS Inadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-11-03 \r\n \r\nCondition: \r\n \r\nThis is a repeat finding (FS-826-10-03) from the year ended June 30, 2010. The accounting procedures of the Technical College were insufficient to provide adequate separation of duties. \r\n \r\nCriteria: \r\n \r\nAlCPA Professional Standards, AU 319.04, state that internal control is a process - affected by an entity's board of directors, management and other personnel - designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations. \r\n \r\nSeparation of duties involving key accounting functions, both manual and automated, is the basis for achieving an adequate system of internal control. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nAccounting procedures were designed to allow certain employees the ability to create and post express vouchers within Peoplesoft and process check runs. Potential compensating controls could not be tested due to a lack of documentation. \r\n \r\nCause: \r\n \r\nThe Technical College has not adequately designed procedures to ensure different employees were responsible for initiating transactions, authorizing transactions, recording transactions, reconciling information, and maintaining custody of assets. In addition, potential compensating controls were either not adequately designed or not formally documented. \r\n \r\nEffect: \r\n \r\nMisstatements due to errors or fraud may occur and not be detected in a timely manner. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 3 0 , 2 0 1 1 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\n \r\nEXPENDlTURES/LIABILITIES/DISBURSEMENTS Inadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-11-03 \r\n \r\nRecommendation: \r\n \r\nThe Technical College should revise and implement internal controls to ensure that proper separation of duties is established. In the case when management determines segregation of duties is not cost beneficial, management should implement compensating controls that utilize system generated reports and data. \r\n \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS Inappropriate Cash Disbursements Significant Deficiency Finding Control Number: FS-826-11-04 \r\n \r\nCondition: \r\n \r\nThe Technical College expended funds renovating a building that is owned by West Georgia Technical College Foundation. \r\n \r\nCriteria: \r\n \r\nO.C.G.A. 50-16-7 states, in part, as follows: \"Any real estate held by the State \r\nof Georgia in f e simple... may be improved with funds appropriated for a \r\nState department...\" \r\n \r\nThis provision has been interpreted as the State must have title to land before permanent improvements may be made thereon. 1954-56 Op. Att'y Gen. pp. 574. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe Technical College entered into an agreement with the West Georgia Technical College Foundation, whereas, the Foundation would lease a building to the Technical College. The Technical College expended funds assisting in the renovation of this building. While the Technical College has received some reimbursement from the Foundation, management has not been able to determine if all expenses were reimbursed because a separate cost identifier was not used to track these disbursements. \r\n \r\nCause: \r\n \r\nThe Technical College did not have policies and procedures in place to ensure that disbursements were in compliance with state law. \r\n \r\nEffect: \r\n \r\nThese expenditures were a violation of state law. Additionally, failure to separate projects within the Technical College's general ledger could cause the Technical College to not be fully reimbursed for disbursements that do not provide a direct benefit to the Technical College. \r\n \r\nRecommendation: \r\n \r\nManagement should determine the entire amount of disbursements for this renovation project and request reimbursement from West Georgia Technical College Foundation. In addition, the Technical College should implement policies to ensure that all construction projects expenditures are in accordance with the state law. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2011 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nEMPLOYEE COMPENSATION lnadequate Internal Controls over Compensated Absences Significant Deficiency Finding Control Number: FS-826-11-05 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College were insufficient to provide adequate controls over compensated absences. \r\n \r\nCriteria: \r\n \r\nAlCPA Professional Standards provide that internal controls is a process placed into operations to achieve management's objectives related \"(a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations.\" \r\n \r\nThe Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Contol - Integrated Framework states that management should design policies and procedures to reduce the risk that financial reporting objectives are not being met. A key element to the objective of reliable financial statement reporting is ensuring the completeness of financial data and that transactions are reported in the proper period. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe Technical College did not reconcile the compensated absences subsidiary system to PeopleSoft. \r\n \r\nCause: \r\n \r\nThe Technical College did not have procedures in place to perform a reconciliation between the subsidiary system and PeopleSoft. \r\n \r\nEffect: \r\n \r\nMisstatements may occur and not be detected in a timely manner. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should establish policies and procedures to reconcile compensated absences reported in the subsystem to PeopleSoft to ensure that all activity is properly reflected in the financial statements. \r\n \r\nINVENTORIES lnadequate Internal Controls over Bookstore Inventories Significant Deficiency Finding Control Number: FS-826-11-06 \r\n \r\nCondition: \r\n \r\nThis is a repeat finding (FS-826-10-06) from the year ended June 30, 2010. The accounting procedures of the Technical College are insufficient to provide adequate controls over resale inventories. \r\n \r\nCriteria: \r\n \r\nAlCPA Professional Standards provide that internal controls is a process placed into operations to achieve management's objectives related \"(a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations.\" \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2011 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\n \r\nINVENTORIES Inadequate Internal Controls over Bookstore Inventories Significant Deficiency Finding Control Number: FS-826-11-06 \r\n \r\nThe Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that management should design policies and procedures to reduce the risk that financial reporting objectives are not being met. A key element to the objective of reliable financial statement reporting is ensuring the completeness of financial data and that transactions are reported in the proper period. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe Technical College did not reconcile the bookstore inventory subsidiary system to the financial statements. Unexplained variances exist between the inventory list and the inventory balance reported on the financial statements. In addition, a review of subsequent period inventory purchases revealed several transactions reported in the wrong period. \r\n \r\nCause: \r\n \r\nThe Technical College did not have procedures in place to perform a reconciliation between the bookstore inventory list and the bookstore inventory balance reported in the general ledger. In addition, the Technical College did not properly design procedures to ensure that inventory transactions are reported in the proper period. \r\n \r\nEffect: \r\n \r\nWithout satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact the reporting of its financial position and results of operations. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should establish policies and procedures to reconcile bookstore inventory listings to the general ledger to ensure that all activity is properly reflected in the financial statements. In addition, the Technical College should evaluate and modify existing procedures to ensure that all transactions are reported in the proper accounting period. \r\n \r\nFEDERAL AWARD FINDINGS AND OUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bv6-bc32-b2009-h2010","title":"West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2010","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, Haralson County, Waco, 33.70288, -85.18328"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2009/2010"],"dcterms_description":["Began with: Fiscal year ended June 30, 2010.","Effective 2009, West Central Technical College merged with West Georgia Technical College to form a new college that retained the name of West Georgia Technical College.","For some years, report may be released instead called: West Georgia Technical College, Waco, Georgia, management report for fiscal year ended ...","Fiscal year ended June 30, 2010, released in 2011?; title from PDF cover (Georgia Government Publications database, viewed October 23, 2023).","Fiscal year ended June 30, 2012 (Georgia Government Publications database, viewed October 23, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, GA : Georgia. Dept. of Audits and Accounts, 2010-06-30"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["West Georgia Technical College (2009- )--Appropriations and expenditures--Periodicals.","Technical education--Georgia--Auditing--Periodicals.","Technical education--Georgia--Finance--Statistics--Periodicals.","Technical education--Finance","Georgia","Georgia Government Documents--Serial"],"dcterms_title":["West Georgia Technical College, Waco, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2010"],"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-bv6-bc32-b2009-h2010"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bv6-bc32-b2009-h2010"],"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":"WEST GEORGIA TECHNICAL COLLEGE \r\nWACO,GEORGIA \r\nREPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED \r\nJUNE 30,2010 \r\n \r\n_ \r\n \r\nA \r\n \r\n- - -- \r\n \r\nGeorgia Department of \r\n \r\nAudits andAccou.nI Itq \r\nR ~ S S ~vIk.I hinti'nu \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE - 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 STATEMENTOFNETASSETS B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS C STATEMENTOFCASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULES \r\n1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND \r\n2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS) BUDGET FUND \r\n3 STATEMENT OF PROGRAM REVENUESAND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET (NON-GAAP BASIS) BUDGET FUND \r\n4 RECONCILIATION OF SALARIES AND TRAVEL \r\nSECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n SECTION I FI NANClAL \r\n \r\n Russell W. Hinton \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENOTF AUDITSAND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1 - 1 56 Atlanta, Georgia 30334-8400 \r\nJanuary 2 5 , 2 0 1 1 \r\n \r\nHonorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors \r\nand Honorable Skip Sullivan, President West Georgia Technical College \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 West Georgia Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2010. These financial statements are the responsibility of the Technical College'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 controls 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 the Technical College'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 West Georgia Technical College 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 West Georgia Technical College. 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 West Georgia Technical College as of June 30,2010, 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 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 West Georgia Technical College taken as a whole. The accompanying supplementary information (Schedules 1through 4) 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 d e lWl . Hinton, CPA, CGFM State Auditor \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n West Georgia Technical College \r\nManagement's Discussion and Analysis \r\nThe following is management's discussion and analysis of West Georgia Technical College's financial performance for the fiscal year ending June 30, 2010, with comparative data from fiscal year ending June 30, 2009. Effective July 1,2010, West Georgia Technical College and West Central Technical College merged under the name West Georgia Technical College. The comparative data from fiscal year ending June 30, 2009, includes data from both West Georgia Technical College and West Central Technical College. This discussion has been prepared by and is the responsibility of management. \r\nOverview of the Financial Shtementsand FinancialAnalysis \r\nThis annual report consists of a series of financial statements prepared in accordance with the rules and regulations established by the Governmental Accounting Standards Board. \r\nThere 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. The Statement of Net Assets used in conjunction with the Statement of Revenues, Expenses and Changes in Net Assets contains information concerning the Technical College's finances and activities as a whole and assists with providing an answer to the question \"Is the Technical College as a whole better or worse off as a result of the year's activities?\" These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting method used by corporations and other private sector companies. All revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the goods or service, regardless of when cash is exchanged. \r\nThe Statement of Cash Flows is a valuable tool when evaluating the ability of the Technical College to meet financial obligations as they mature. This statement presents information related to cash inflows and outflows summarized by operating, noncapital financing, capital and related financing and investing activities. \r\nThis discussion and analysis of the Technical College's financial statements provides an overview of its financial activities for the year. \r\nStatement of Net Assefs \r\nThe purpose of the Statement of Net Assets is to present to the users of the financial statements a fiscal snapshot of the Technical College at a specific point in time. The statement presents the assets, liabilities and net assets of the Technical College as of the end of the fiscal year. Assets and liabilities are reported as current and noncurrent and the difference between assets and liabilities is reported as net assets. Over a period of time the increases and decreases reflected in the Statement of Net Assets, when considered with other nonfinancial facts such as enrollment levels and the condition of the facilities, can provide a measure to aid in determining whether the Technical College's financial position is improving or deteriorating. \r\nNet assets are divided into two major categories. The first category, invested in capital assets, net of debt, provides information concerning the Technical College's equity in property, plant and equipment owned by the Technical College. The second category is unrestricted net assets, which are available for expenditure by the Technical College for any lawful purpose deemed necessary to operate the Technical College. \r\n \r\n Statement of Net Assets (thousands of dollars) June 30,2010 \r\n \r\nAssets Current Assets CapitalAssets, Net \r\n \r\nTotal Assets \r\n \r\nLiabilities Current Liabilities Noncurrent Liabilities \r\n \r\nTotal Liabilities \r\n \r\nNet Assets \r\n \r\nInvested in Capital Assets, Net of Debt \r\n \r\n$ \r\n \r\n54,623 \r\n \r\nUnrestricted \r\n \r\n7 0 \r\n \r\nTotal Net Assets \r\n \r\nJune 30,2009 \r\n \r\n$ \r\n \r\n47,487 \r\n \r\n730 \r\n \r\nThe total assets of the Technical College increased by approximately $6,495,000 from the prior year. This can be mainly attributed to an increase of approximately $7,135,000 in Capital Assets, Net offset by a decrease in Current Assets of approximately $640,000. This increase in assets follows the institutional philosophy to use available resources to acquire and improve all areas of the Technical College to better serve the instruction and public service missions of the Technical College. \r\nTotal liabilities for the fiscal year increased by approximately $19,000. The primary reason for the increase was in noncurrent liabilities of $43,000 offset by a decrease in current liabilities of $24,000. The combination of the increase in total assets of approximately $6,495,000 and the increase in total liabilities of approximately $19,000 yields an increase in total net assets of approximately $6,476,000. The increase in total net assets is primarily in the category of invested in capital assets, net of debt, which increased approximately $7,136,000 offset by a decrease in unrestricted net assets of $660,000. \r\nSmtement of Revenues, Expensesand Changesin Net Assets \r\nThe purpose of the Statement of Revenues, Expenses and Changes in Net Assets is to present the revenues received by the Technical College, both operating and nonoperating, and the expenses incurred by the Technical College, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the Technical College during the fiscal year. Changes in total net assets as presented on the Statement of Net Assets are based on the information presented in the Statement of Revenues, Expenses and Changes in Net Assets. \r\nOperating revenues are received for providing goods and/or services to various customers and constituencies of the Technical College. Operating expenses are those expenses paid to acquire or produce the goods and/or services provided in return for the operating revenues, and to carry out the mission of the Technical College. Therefore, nonoperating revenue is received when no goods or \r\n \r\n services are provided in exchange for the revenue. With the issuance of Statement No. 35, new guidelines were established by the Governmental Accounting Standards Board (GASB), which changed the classifications of state appropriations and gifts from operating to nonoperating revenue. This change may result in an operating deficit that is offset by a nonoperatingsurplus. \r\n \r\nStatement of Revenues, Expenses and Changes in Net Assets (Thousands of dollars) \r\nJune 30,2010 \r\n \r\nJune 30,2009 \r\n \r\nOperating Revenues Operating Expenses \r\n \r\nOperating Loss \r\n \r\n$ \r\n \r\n-30,584 \r\n \r\n$ \r\n \r\n-23,028 \r\n \r\nNonoperating Revenues and Expenses \r\n \r\n28,632 \r\n \r\n22,047 \r\n \r\nIncome (Loss) Before Other Revenues, \r\n \r\nExpenses, Gains or Losses \r\n \r\n$ \r\n \r\n-1,952 \r\n \r\n$ \r\n \r\n-981 \r\n \r\nOther Revenues, Expenses, Gains or Losses \r\n \r\n8,428 \r\n \r\n2,358 \r\n \r\nIncrease (Decrease) in Net Assets \r\n \r\n$ \r\n \r\n6,476 \r\n \r\n$ \r\n \r\n1,377 \r\n \r\nNet Assets at Beginningof Year \r\n \r\nNet Assets at End of Year \r\n \r\n The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with a n increase in the net assets a t 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 (Thousands of Dollars) For the Years Ended June 30,2010, and June 30,2009 \r\n \r\nJune 30,2010 \r\n \r\nJune 30,2009 \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\nRents \r\n \r\nOther \r\n \r\n10,591 180 \r\n1,550 264 3 \r\n \r\n$ \r\n \r\n8,666 \r\n \r\n2,213 \r\n \r\n2,028 \r\n \r\n236 \r\n \r\n6 \r\n \r\nTotal Operating Revenue \r\n \r\nNonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income \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\nExpenses (Thousands of Dollars) For the Years Ended June 30,2010, and June 30,2009 \r\nJune 30,2010 \r\nOperating Expenses Instruction \r\nNonoperating Expenses Other \r\nTotal Expenses \r\n \r\nJune 30,2009 \r\n \r\n The sources of operating revenue for the Technical College are tuition and fees, grants and contracts, rents, and sales and services activities. The decrease in operating revenue of approximately $561,000 is related to increases in Student Tuition and Fees of $1,925,000 and Rents of $28,000 and decreases in Grants and Contracts of $2,033,000, Sales and Services of $478,000 and Other Revenue of $3,000 for fiscal year 2010. \r\nTuition and Fees increased by $1,925,000. This is directly related to an increase in enrollment of 14.75% from fiscal year 2009, the addition of a facilities fee and an increase to the graduation fee. \r\nNongovernmental grants and contracts decreased by $2,033,000. This is a result of a misclassification, prior to the merger, of PELL and SEOG grant funds as operating grants and contracts that should have been classified as nonoperating grants and contracts in fiscal year 2009. \r\nUtilities increased by approximately $571,000 during the past year. This increase was generated by the building of a new facility (52,000 square feet) on the Douglasville Campus which houses a welding program that uses significant utility resources. Also, lighting improvements were installed at various locations which increased consumption. \r\nPersonal Services expenses increased by approximately $2,700,000. This increase was due to the large increase in enrollment for the Technical College, the necessary increase in adjunct faculty and the added staff and faculty to handle the newly merged Technical College. \r\nDepreciation expense increased by $421,000 due to the building of the new CCI building in Douglasvilleand the renovation/expansion of the Murphy Campus Student Center in Waco. \r\nUnder nonoperating revenues (expenses) state appropriations decreased by approximately $2,654,000. This is due to the mandated budget cuts received by Technical College System of Georgia to West Georgia Technical College in the form of austerity or budget reductions based on a mandate from the Governor's Office of Planning and Budget. \r\nStatement of Cash Flows \r\nThe purpose of the Statement of Cash Flows is to provide relevant information concerning the cash receipts and payments of the Technical College during the year. It also provides information concerning the Technical College's ability to generate future cash flows and to meet its obligations as they come due. The statement is divided into five sections. The first section reports on the operating cash flows and shows the net cash used by the operating activities of the Technical College. The second section reflects cash flows from noncapital financing activities. The third section deals with cash flows from capital and related financing activities, which reflects the cash used for the acquisition and construction of capital related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The final section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expensesand Changes in Net Assets. \r\n \r\n Statement of Cash Flows (thousands of dollars) June 30,2010 \r\n \r\nJune 30.2009 \r\n \r\nCash Provided (Used) By: \r\n \r\nOperating Activities \r\n \r\n$ \r\n \r\n-28,082 \r\n \r\nNoncapital FinancingActivities \r\n \r\n28,598 \r\n \r\nCapital and Related FinancingActivities \r\n \r\n-1,204 \r\n \r\nInvestingActivities \r\n \r\n2 3 \r\n \r\nNet Change in Cash Cash, Beginning of Year \r\n \r\nCash, End of Year \r\n \r\nCapital Assets \r\nThe Technical College had additions to capital assets of approximately $10,484,000 with approximately $8,221,000 being a new building on the Douglasville Campus. \r\n1ong-Term Liabilities \r\nWest Georgia Technical College had total Long-Term Liabilities of $1,562,928.25 of which $871,491.64 was reflected as current liability at June 30, 2010. \r\nFor additional information on Long-Term Liabilities, see Notes 1and 7 in the Notes to the Financial Statements. \r\nEconomic Out/ook \r\nThe Technical College is unaware of any currently known fact, decision, or condition that is expected to have a significant effect on the financial position or change how the Technical College operates for the next fiscal year. As in prior years, the Technical College's overall financial position is strong. Enrollment has increased by 10%on average annually for the past 4 years and this trend is expected to continue into the next fiscal year. As a result, the Technical College anticipates the next fiscal year will be much like the last and the Technical College will maintain a close watch over resources to maintain the ability to react to unknown internal and external issues. \r\n \r\nDr. Skip Sullivan, President West Georgia Technical College \r\n \r\n BASIC FINANCIAL STATEMENTS \r\n \r\n WEST GEORGIA TECH NlCAL COLLEGE STATEMENT OF NET ASSETS JUNE 30,2010 \r\nASSETS \r\nCurrent Assets Cash and Cash Equivalents Accounts Rece~vable,Net Federal F~nanciaAl ssistance Other Prepa~dItems Inventories \r\nTotal Current Assets \r\nNoncurrent Assets Capital Assets, Net \r\nTotal Assets \r\nLIABILITIES \r\nCurrent Liabilities Accounts Payable Salaries Payable Deferred Revenue Funds Held for Others Compensated Absences \r\nTotal Current Liabilities \r\nNoncurrent Liabilities Compensated Absences \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Unrestricted \r\nTotal Net Assets \r\n \r\nEXHIBIT \" A \r\n \r\nThe notes to the financial statements are an integral part of this statement. -2- \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS \r\nYEAR ENDED JUNE 30.2010 \r\nOPERATING REVENUES \r\nStudent Tuition and Fees Less: Scholarship Allowances \r\nGrants and Contracts Federal \r\nRents and Royalt~es Sales and Services Other Operating Revenues \r\nTotal Operating Revenues \r\nOPERATING EXPENSES \r\nSalaries Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation \r\nTotal Operating Expenses \r\nOperating lncome (Loss) \r\nNONOPERATING REVENUES (EXPENSES1 \r\nState Appropriations Grants and Contracts \r\nFederal State Gifts Interest and Other Investment lncome Other Nonoperating Expenses \r\nNet Nonoperating Revenues \r\nlncome (Loss) Before Other Revenues, Expenses, Gains, or Losses \r\nCapital Grants and Gifts State Loss on Disposalof Capital Assets \r\nTotal Other Revenues, Expenses, Gains, or Losses \r\nIncrease (Decrease) in Net Assets \r\nNet Assets - Beginningof Year \r\nNet Assets - End of Year \r\nThe notes to the financial statements are an integral pan of this statement. \r\n-3- \r\n \r\nEXHIBIT \"B\" \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30.2010 \r\nCASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarsh~psand Fellowsh~ps Other Rece~pts(Payments) \r\nNet Cash Provlded (Used) by Operatmg Actlvltles \r\nCASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropr~ations Agency Funds Transactions G~ftsand Grants Received for Other than Cap~taPl urposes Negative Cash Balance Implicitly Financed In Prior Year Other NonoperatingRece~pts \r\nNet Cash Flows Provlded (Used) by Noncapital F~nanclngACt~vities \r\nCASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Cap~taGl rants and G~ftsRecelved Purchases of Capltal Assets \r\nNet Cash Prov~ded(Used) by Capltal and Related FinancingActivities \r\nCASH FLOWS FROM INVESTING ACTIVITIES Earnlngs on Investments \r\nNet Increase (Decrease) In Cash \r\nCash and Cash Equ~valents- Beg~nnlngoYf ear \r\nCash and Cash Equ~valents- End of Year \r\nRECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: \r\nOperating Income (Loss) AdjuStJnentS to Reconc~leOperating lncorne to Net Cash \r\nProv~ded(Used) by Operating Actlvltles Deprec~at~oEnxpense Change in Assets and L i a b ~ l ~ t ~ e s Accounts Receivable, Net lnventorles Prepa~dItems Salar~esPayable Accounts Payable Deferred Revenue Compensated Absences \r\nNet Cash Prov~ded(Used) by Operating Actlvlties \r\nNONCASH ACTIVITY Loss on Disposal of Cap~taAl ssets Reduclng Proceeds from Sale of Capltal Assets G ~ fotf Capital Assets Reduclng Proceeds of Capltal Grants and Gifts \r\nThe notes to the financial statements are an integral part of this statement. \r\nA \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\nNOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\nREPORTING ENTITY West Georgia Technical College is one of twenty-seven (27) State supported member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia, an organizational unit of the State of Georgia. Effective July 1,2010, West Georgia Technical College and West Central Technical College merged under the name West Georgia Technical College. The accompanying financial statements reflect the operations of West Georgia Technical College as a separate reporting entity. \r\nThe Technical College's Local Board of Directors is composed of eleven (11) members serving staggered three-year terms who are appointed by the State Board of the Department of Technical and Adult Education. Appropriation of State funds is made to the Technical College System of Georgia by the General Assembly of Georgia. The System Office of the Technical College System of Georgia determines the amount of State appropriations to be received by West Georgia Technical College. The Technical College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, West Georgia Technical College is considered an organizational unit of the Technical College System of Georgia for financial reporting purposes because of the significance of its legal, operational, and financial relationships as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental AccountinP and Financial Reporting;Standards. \r\nLegally separate, tax exempt organizations whose activities primarily support member colleges of postsecondary education in Georgia which comprise the Technical College System of Georgia (an organizational unit 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 Technical College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required. \r\nGAAP requires that the reporting of summer school revenues and expenses be split between fiscal years rather than in one fiscal year. Due to lack of materiality, the Technical Colleges of the Technical College System of Georgia will continue to report summer revenues and expenses in the year in which the predominate activity takes place. \r\nBASIS OF ACCOUNTING For financial reporting purposes, the Technical College is considered a special-purpose government engaged only in business-type activities. Accordingly, the Technical College'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 intra-collegetransactions have been eliminated. \r\nThe Technical College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Technical College has elected to not apply FASB pronouncements issued after the applicable date. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nCASH AND CASH EQUIVALENTS Cash and Cash Equivalents include petty cash and demand deposits in authorized financial institutions. \r\nACCOUNTS RECEIVABLE Accounts receivable consist of tuition and fee charges to students, reimbursements due from Federal, State, local and private grants and contracts, and other receivables disclosed from information available. Accounts receivable are recorded net of estimated uncollectible amounts. \r\nINVENTORIES Consumable supplies are recorded on the consumption method and are valued at cost using the first-in, first-out (FIFO)weighted-average method. \r\nCAPITAL ASSETS Capital assets are recorded at cost at date of acquisition, or fair market value at the date of capital contribution. The Technical College capitalizes all land and land improvements. For equipment, the Technical College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Buildings and Building Improvements, Improvements Other Than Buildings, Easements, Rights, Patents, Trademarks, Copyrights and Library Collections that exceed $100,000.00 or significantly increase the value or extend the useful life of the asset are capitalized. For infrastructure and software, the Technical College's capitalization threshold is $1,000,000.00. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 1 0 to 4 0 years for buildings, 15 to 25 years for infrastructure, 1 5 years for improvements other than buildings, 1 0 years for library books, 3 to 1 0 years for equipment and software, and 1 0 to 20 years for intangibles. \r\nTo fully portray capital assets acquired by the Technical Colleges of the Technical College System of Georgia, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - a n organization that is external to both the Technical College and the Technical College System of Georgia. The 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 GSFIC. The bonds are issued for the purpose of acquiring capital assets and this debt constitutes 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 major construction projects, GSFIC records construction in progress on its books throughout the construction period and at project completion transfers the entire project costs to West Georgia Technical College to be recorded as an asset on the Technical College's books. For the year ended June 30, 2010, GSFIC transferred capital additions valued at $8,735,021.40 to West Georgia Technical College. \r\nDEFERRED REVENUES Deferred revenues include amounts received for tuition and fees and other activities prior to the end of the fiscal year but related to the subsequent accounting period. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"DM \r\n \r\nCOMPENSATED ABSENCES Employee vacation pay is accrued for financial statement purposes when vested. The liability and expense incurred are recorded at year-end as accrued vacation payable 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. West Georgia Technical College had an accrued liability for compensated absences in the amount of $1,466,287.64 as of July 1, 2009. For fiscal year 2010, $1,153,616.76 was earned in compensated absences and employees were paid $1,056,976.15, for a net increase of $96,640.61. The ending balance as of June 30, 2010 in accrued liability for compensated absences was $1,562,928.25. \r\nNONCURRENT LIABILITIES Noncurrent liabilities include liabilities that will not be paid within the next fiscal year. \r\nN ET ASSETS The Technical College's net assets are classified as follows: \r\nInvested in capital assets, net of related debt This amount represents the Technical College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \r\nUnrestricted net assets: Unrestricted net assets represent available resources derived from student tuition and fees, state appropriations, and sales and services of educational departments. These resources will be used for transactions relating to the educational and general operations of the Technical College, and may be used at the discretion of the governing board to meet subsequent fiscal year expenses for those purposes, except for unexpended state appropriations (surplus) of $20,973.63. Unexpended state appropriations must be refunded to the Technical College System of Georgia for remittance to the Office of Treasury and Fiscal Services. \r\nWhen an expense is incurred that can be paid using either restricted or unrestricted resources, the Technical College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. \r\nINCOME TAXES West Georgia Technical College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1)of the Internal Revenue Code, as amended. \r\nCLASSIFICATION OF REVENUES AND EXPENSES The Statement of Revenues, Expenses and Changes in Net Assets classify the Technical College's fiscal year activity as operating and nonoperating according to the following criteria: \r\nOperating Revenues: Operating revenues include 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 Revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable TrustFunds and GovernmentalEntities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nOperating Expenses: Operating expenses include activities that have the characteristics of exchange transactions. \r\nNonoperating Expenses: Nonoperating expenses include activities that have the characteristics of nonexchangetransactions, such as capital financing 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 Technical College, 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 Technical College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Technical College has recorded contra revenue for scholarship allowances. \r\nNOTE 2: DEPOSITS \r\nDEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the Technical College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the Technical College) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: \r\n1. Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United \r\nStates or of the State of Georgia. \r\n2. Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or \r\nmunicipalities of the State of Georgia. 3. Bonds of any public authority created by the laws of the State of Georgia, providing that the \r\nstatute that created the authority authorized the use of the bonds for this purpose. 4. Industrial revenue bonds and bonds of development authorities created by the laws of the \r\nState of Georgia. \r\n5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary \r\ncorporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. 6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. \r\nAs authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies, which allows agencies of the State of Georgia (and thus West Georgia Technical College), the option of exempting demand deposits from the collateral requirements. \r\nAt June 30, 2010, the carrying value of deposits was $1,067,904.53 and the bank balance was $3,349,672.40. Of the Technical College's deposits, $3,099,672.40 were uninsured. Of these uninsured deposits, $3,099,672.40 were collateralized with securities held by the financial institution's trust department or agency in the Technical College's name. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nNOTE 3: ACCOUNTS RECEIVABLE \r\n \r\nAccounts receivable at June 3 0 , 2 0 1 0 , consists of the following: \r\n \r\nStudent Tuition and Fees \r\n \r\n$ \r\n \r\nFederal, State and Private Funds \r\n \r\nGeorgia State Financing and Investment Commission \r\n \r\nOther \r\n \r\n360,889.56 268,138.95 182,093.48 384,109.16 \r\n \r\nLess: Allowance for Doubtful Accounts Total Accounts Receivable \r\n \r\nNOTE 4: INVENTORIES \r\n \r\nInventories a t June 30, 2010, consist of the following: \r\n \r\nBookstore \r\n \r\n$ 804,233.00 \r\n \r\nEXHIBIT \"D\" \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nNOTE 5: CAPITAL ASSITS Followingare the changes in capital assets for the year ended June 30,2010: \r\n \r\nBeginning Balance \r\nJuly 1.2009 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nCapital Assets, Not Being Depreciated: Land and Land lmprovements Construction Work-In-Progress \r\n \r\nTotal Capital Assets, Not Being Depreciated \r\n \r\nEnding Balance June 30,2010 \r\n \r\nCapital Assets. Being Depreciated: Buildingand Build~nglmprovements ImprovementsOther Than Buildings Equipment Library Collections \r\nTotal Assets Being Depreciated \r\n \r\nLess: Accumulated Depreciation: Building and Building lmprovements lmprovements Other Than Buildings Equipment Library Collections \r\n \r\nTotal Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Capital Assets. Net \r\n \r\nNOTE 6: DEFERRED REVENUE \r\n \r\nDeferred revenue at June 30, 2010, consists of the following: \r\n \r\nPrepaidTuition and Fees \r\n \r\n$ 261,292.83 \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"Dm \r\n \r\nNOTE 7: LONG-TERM LIABILITIES \r\n \r\nLong-Term liability activity for the year ended June 30, 2010 was as follows: \r\n \r\nBeg~nning Balance July 1,2009 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30,2010 \r\n \r\nCurrent Portion \r\n \r\nOther Liabilities Compensated Absences \r\n \r\nNOTE 8: NET ASSETS \r\n \r\nChanges in Net Asset activity for the year ended June 30, 2010 was as follows: \r\n \r\nBeginning \r\n \r\nBalance \r\n \r\nJuly 1,2009 \r\n \r\nAdditions \r\n \r\nReductions \r\n \r\nEnding Balance June 30, 2010 \r\n \r\nInvested in Capital Assets Net of Related Debt \r\n \r\nRestricted Net Assets \r\n \r\nUnrestricted Net Assets \r\n \r\nTotal Net Assets \r\n \r\nNOTE 9: LEASE OBLIGATIONS \r\nOPERATING LEASES West Georgia Technical College has entered into certain agreements to lease land, copiers, and postage meters, which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date of the original term of the lease, the Technical College has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancelable leases for which an option to renew for the subsequent fiscal year has been exercised. \r\nExpenses for rental of land, copiers, and postage meters under operating leases for the year ended June 30, 2010, totaled $73,381.06. \r\nNOTE 10: SIGNIFICANT COMMITMENTS \r\nWest Georgia Technical College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $866,760.00 as of June 30, 2010. This amount is not reflected in the accompanyingfinancial statements. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBTT \"D\" \r\n \r\nNOTE 11: RETIREMENT PLANS \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\nPlan Descripfion West Georgia Technical College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. \r\n \r\nFunding Policy Employees of West Georgia Technical College who are covered by TRS are required by State statute to contribute 5.25% of their gross earnings to TRS. West Georgia Technical College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2010, the employer contribution rate was 9.74% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nPlan Description West Georgia Technical College participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. \r\nThe ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1,1998. The SRBP 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 SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 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\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"Dl' \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 6 0 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 2 5 years of creditable service for members under age 60. \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 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \r\n \r\nFunding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members of other state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Technical College's payroll for the year ended June30, 2010, for employees covered by ERS was $6,434,355.49. The Technical College's total payroll for all employees was $19,739,559.24. \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, the Technical College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Technical College contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Technical College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Technical College contributions are not at any time refundable to the member or his/her beneficiary. \r\n \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired \r\nContribution \r\n \r\nACTUARIAL AND TREND INFORMATION Actuarial and historical trend information is presented in the ERS June 30, 2010 financial report, which may be obtained through ERS. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nGEORGIA DEFINED CONTRIBUTION PLAN \r\nPlan Description West Georgia Technical College 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\nBeMts 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 $3,500.00 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\nThe Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtained through ERS. \r\nContributions and Vesting 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. The Technical College's payroll for the year ended June 30, 2010, for employees covered by GDCP was $3,129,503.28. The Technical College's total payroll for all employees was $19,739,559.24. \r\nTotal contributions made by employees during fiscal year 2010 amounted to $234,327.36 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. \r\nNOTE 12: RISK MANAGEMENT \r\nPUBLIC ENTITY RlSK POOL The Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county governments, and local education agencies located with the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with United Healthcare to process medical claims and Medco to process prescription drug claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health. \r\nOTHER RlSK MANAGEMENT The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nLimited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Technical College, as an organizational unit of the Technical College 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\nNOTE 13: POSTEMPLOYMENT BENEFITS \r\nWest Georgia Technical College participates in the following State of Georgia post-employment benefit plans: the Georgia State Employees Post-employment Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department - OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices. \r\nRetiree health benefits were previously funded through the Georgia Retiree Health Benefit Fund (GRHBF). In 2009, the General Assembly revisited the GRHBF and enacted legislation that, effective August 31, 2009, separated the GRHBF into two new funds: the Georgia School Personnel Postemployment Health Benefit Fund and the Georgia State Employees Post-employment Health Benefit Fund. The purpose of this change was to assure employers responsible for planning and funding future retiree health costs that their contributions will be dedicated to their respective retiree populations. Funds in the GRHBF were transferred to the Georgia State Employees Post-employment Health Benefit Fund or the Georgia School Personnel Post-employment Health Benefit Fund as described in the plan financial statements. The statute that created the GRHBF is repealed effective September 1,2010. \r\nGEORGIA STATE EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND The Georgia State Employees Post-employment Health Benefit Fund (State OPEB Fund) is a costsharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of State organizations and other entities authorized by law to contract with the Department of Community Health for inclusion in the plan. The State OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). \r\nThe contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage. \r\nParticipating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nThe combined active and retiree contribution rates established by the Board for employers participating in the State OPEB Fund were as follows for the fiscal year ended June 30, 2010: \r\n \r\nJuly 2 0 0 9 August 2 0 0 9 - October 2 0 0 9 November 2009 -June 2 0 1 0 \r\n \r\n22.165% of covered payroll for August coverage 16.581% of covered payroll for September - November coverage 22.165% of covered payroll for December - July coverage \r\n \r\nNo additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe following table summarizes the West Georgia Technical College combined active and retiree contributions to the health insurance plans for the years ending June 30, 2010, June 30, 2009 and June 30,2008: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\nSTATE EMPLOYEES' ASSURANCE DEPARTMENT - OPEB State Employees' Assurance Department - OPEB (SEAD-OPEB) is a cost-sharing multiple-employer defined benefit post-employment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees', Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1,2009. Pursuant to Title 47 of the OCGA, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems. \r\nContributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1%of earnable compensation. For the fiscal year ended June 30, 2010, contributions of ERS \"old plan\" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS \"new plan\" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30,2010, June 30,2009 and June 30,2008. \r\nNOTE 14: 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 expenses which are disallowed under grant terms. The amount of expenses which may be disallowed by the grantor cannot be determined at this time although expects such amounts, if any, to be immaterial to its overall financial position. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS \r\nJUNE 30, 2010 \r\n \r\nEXHIBIT \"D\" \r\n \r\nLitigation, claims and assessments filed against (an organizational unit of the Technical College 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 30,2010. \r\nNOTE 15: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS \r\nThe Technical College's operating expenses shown at the natural classification on the \"Statement of Revenues, Expenses and Changes in Net Assets\" are all classified as Instruction at the functional classification. \r\nNOTE 16: AFFILIATED ORGANIZATIONS \r\nThe West Georgia Technical College Foundation, Inc., is a legally separate, tax exempt organization whose activities primarily support West Georgia Technical College. This affiliate organization is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organ~zationsare Component Units. Therefore, the financial statement of the affiliate organization is not included in these financial statements. A copy of the financial statement for the affiliated organizations may be obtained from West Georgia Technical College Foundation. \r\n \r\n (This page left intentionally blank) \r\n \r\n SUPPLEMENTARY INFORMATION \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) \r\nBUDGET FUND JUNE 30,2010 \r\nASSETS Cash and Cash Equivalents Accounts Receivable \r\nFederal Financial Assistance Other Prepaid Expenditures l nventories \r\nTotal Assets \r\nLIABILITIES AND FUND EOUITY Liabilities \r\nSalaries Payable Accounts Payable Encumbrances Payable Deferred Revenue \r\nTotal Liabilities Fund Balances \r\nReserved Federal Financial Assistance Sales and Services Live Work Projects Cont~nuingEducation Technology Fees UncollectibleAccounts Receivable Inventories Bookstore \r\nUnreserved Surplus Total Fund Balances \r\nTotal Liabilities and Fund Balances \r\nActual amounts were preparedon a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georg~aw, hich is a comprehensive basis of accounting other than generally accepted accounting principles. \r\n \r\nSCHEDULE \"1\" \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GA4P BASIS) \r\nBUDGET FUND YEAR ENDEDJUNE 30.2010 \r\n \r\nREVENUES \r\nState Approprlahon State General Funds \r\nFederal Funds Other Funds \r\nTotal Revenues \r\nCARRY-OVER FROM PRIOR YEAR \r\nTransfer from Reserved Fund Balance \r\nTotai Funds Available \r\nEXPENDITURES \r\nAdult Llteracy Econom~cDevelopment Technical Educatlon \r\nTotal Cxpendltures \r\nExcessof Funds Available over Exaenditures \r\nFUND BALANCE JULY 1 \r\nReserved Unreserved \r\nADJUSTMENTS \r\nPrlor Year Payables/Expendltures Pnor Year Receivabies/Revenues Unreserved Fund Balance [Surplus) Returned \r\nto Technlcai CollegeSystem of Georgia Year Ended June 30.2009 \r\nRefunds to Grantors Federal FlnanClalAssistance Returned to Technical College System of Georgia Year Ended June 30,2009 Federal Financial Assistance Returned to Department of Education Year Ended June 30,2009 \r\nPrior Year Reserved Fund Balance Included in Funds Available \r\nFUND BALANCE JUNE 30 \r\nSUMMARY OF FUND BAUNCE \r\nReserved Federal F~nanciaAl ssistance Saies and Serv~ces Uve Work Prqects Conunulng Educatlon TechnologV Fees Uncollectlble Accounts Receivable Inventories Bookstore \r\nTotal Reserved \r\nUnreserved Surplus \r\nTotal Fund Balance \r\nActual amounfs were prepared on a prescribed basis of accountlng that demonstrates compl~ancew ~ t hbudgetary statutes and regulations of the State of Georgia. which is a comprehensive basls of accountlng other than generally accepted accountlng principles. \r\n \r\nBUDGET \r\n \r\nACTUAL \r\n \r\nVARIANCE FAVORABLE (UNFAVORABLE) \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE STATEMENT OF PROGRAM REVENUES AND MPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET \r\n(NON~GMPBASIS) BUDGET FUND YE4R ENDED JUNE 30.2010 \r\n \r\nAdult Lneracy State Appropriation State General Funds Federal Funds Other Funds \r\nTotal Adult Literacy \r\n \r\nOrlglnal Approprlatlon \r\n \r\nFhnsl Budget \r\n \r\nCurrent Year Revenues \r\n \r\nFunds Available Compared t o Budget \r\n \r\n~ r l oyrear Carry-Over \r\n \r\nTotal FundsAva~lable \r\n \r\nvaroance ~osltlve (Negatove) \r\n \r\nEwnamlc Development Other Funds \r\n \r\nTechnical EdUCauOn State Approprlatlon State General Funds Federal Funds American Remvely and Reinvestment Act of 2009 Federal Stabilization Funds Other Federal Stimulus Other Federal Funds Other Funds \r\nTotal Technical Education \r\n \r\nGrand Totals - All Programs \r\n \r\nActual amount, were prepared on a prescribed basls of accountlng that demonstrates cornpllance w ~ t hbudgetary statutes and regulalons of the State of Georga, wh~ch1s a comprehensive bastoof accountlng other than generally accepted accountlng pr~nclples \r\n \r\n Expenditures Compared to Budget \r\n \r\nVariance \r\n \r\nPmitive \r\n \r\nActual \r\n \r\n(Negative) \r\n \r\nActual Funds nvallaole \r\nOver/(Under) Expenditures \r\n \r\nPrlor Period \r\n \r\nOther \r\n \r\nAd~ustments Adjustments \r\n \r\nTotal Program \r\nFund Balances \r\n \r\nTransfers \r\n \r\nProgram Fund Balances \r\n \r\nReserve \r\n \r\nSurplus \r\n \r\nTotal Fund Balance \r\n \r\nUnexpendabie Reserves Un~liectlbleAccounts Receivable Inventories \r\n \r\n11,277 75 297,145.32 \r\n \r\n (This page left intentionally blank) \r\n \r\n Totals per Annual Supplement \r\nAccruals June 30.2010 June 30,2009 \r\nCompensated Absences June 30,2010 June 30.2009 \r\nAgency Funds \r\nUnidentified Variance \r\n \r\nWEST GEORGIA TECHNICAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL \r\nYEAR ENDED JUNE 30.2010 \r\n \r\nSCHEDULE \"4\" \r\n \r\nSALARIES \r\n \r\nTRAVEL \r\n \r\n SECTION II FINDINGS AND QUESTIONED COSTS \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \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 weakness. \r\n \r\nA deficiency in internal controls 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 West Georgia Technical College's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. \r\n \r\nAny identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within a separate management letter dated January 25, 2011. Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below: \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS Inadequate Internal Controls over Cash Receipts Subsidiary System Significant Deficiency Finding Control Number: FS-826-10-01 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College were insufficient to \r\nensure that all Continuing Education revenue was being properly reflected in the financial statements. \r\n \r\nCriteria: \r\n \r\nThe Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that revenue activity is properly documented, processed and reported. \r\n \r\nThe Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that management should design policies and procedures to reduce the risk that financial reporting objectives are not being met. A key element to the objective of reliable financial statement reporting is the completeness of financial data. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe Technical College utilizes ACEware Student Registration software (ACEware) for the initialization, authorization, and collection of Continuing Education revenue. However, the Technical College does not reconcile activity recorded in ACEware to their financial account software (PeopleSoft) used for the preparation of the financial statements. Procedures performed reveal instances where activity recorded in ACEware was not properly reflected in the Technical College's financial statements. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nFINANCIALSTATEMENT FINDINGSAND QUESTIONED COSTS \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Cash Receipts Subsidiary System Significant Deficiency Finding Control Number: FS-826-10-01 \r\n \r\nCause: \r\n \r\nThe Technical College did not adequately design procedures to ensure that all activity recorded in ACEware is properly recorded in Peoplesoft. \r\n \r\nEffect: \r\n \r\nWithout satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls and procedures could impact reporting of its financial position and results of operations. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should establish policies and procedures to reconcile activity recorded within ACEware to the general ledger to ensure that all activity recorded within ACEware is properly reflected in the financial statements. \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Significant Deficiency Finding Control Number: FS-826-10-02 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College are insufficient to ensure that bookstore sales are properly reflected in the financial statements. \r\n \r\nCriteria: \r\n \r\nThe Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that revenue activity is properly documented, processed and reported. \r\n \r\nThe Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that separate and ongoing evaluations through methods such as the identification and monitoring of key control indicators enable management to determine whether the other components of internal control over financial reporting continue to function over time. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nTesting revealed significant unexplained differences between expected bookstore mark-up percentages and calculated mark-up percentages using financial data reported in the financial statements. It appears that the Technical College did not adequately monitor bookstore sales revenue. \r\n \r\nCause: \r\n \r\nThe Technical College has not implemented adequate monitoring procedures over bookstore sales. In addition, other control deficiencies exist such as not reconciling bookstore inventory balances, which increases the importance of strong monitoring controls. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over Bookstore Sales Significant Deficiency Finding Control Number: FS-826-10-02 \r\n \r\nEffect: \r\n \r\nWithout satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where the potential misappropriation 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 Technical College should design and implement monitoring procedures over bookstore sales. These monitoring procedures should include but not be limited to the identification and ongoing monitoring of key control indicators such as inventory mark-up percentages. \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LlABlLlTlES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER lnadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-10-03 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College were insufficient to provide adequate separation of duties. \r\n \r\nCriteria: \r\n \r\nAlCPA Professional Standards, AU 319.04, states that internal control is a process - affected by an entity's board of directors, management and other personnel - designed to provide reasonable assurance regarding the achievement of objectives in the following categories: (a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations. \r\n \r\nSeparation of duties involving key accounting functions, both manual and automated, is the basis for achieving an adequate system of internal control. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nRevenues/Receiva bles/Recei pts Deposit preparation was not separated from the record keeping and cash receipts subsidiary reconciliation functions. Additionally, the Technical College did not have procedures in place for a supervisory review of the cash drawer close-out process. \r\n \r\nExpenditures/Liabilities/Disbursements Accounting procedures were designed to allow certain employees the ability to create and post express vouchers within Peoplesoft and process check runs. Potential compensating controls could not be tested due to a lack of documentation. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30.2010 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\n \r\nREVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER lnadequate Segregation of Duties Significant Deficiency Finding Control Number: FS-826-10-03 \r\n \r\nEmployee Compensation Accounting procedures were designed to allow certain employees the ability to add new employees and make payroll changes within PeopleSoft. Potential compensating controls could not be tested due to a lack of documentation. \r\n \r\nGeneral Ledger Accounting procedures were designed to allow certain employees the ability to enter and post journal entries within PeopleSoft. Although, a second level approval occurs manually outside of PeopleSoft, the compensating control was not designed to prevent or detect unapproved journal entries from being posted. In addition, employees with the ability to enter and post journal entries within PeopleSoft have other job duties, such as bank reconciliation, that reduces the effectiveness of potential compensating controls. \r\n \r\nCause: \r\n \r\nThe Technical College did not adequately design procedures to ensure different employees were responsible for initiating transactions, authorizing transactions, recording transactions, reconciling information, and maintaining custody of assets. In addition, potential compensating controls were either not adequately designed or not formally documented. \r\n \r\nEffect: \r\n \r\nMisstatements due to error or fraud may occur and not be detected in a timely manner. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should revise and implement internal controls to ensure that proper separation of duties is established. In the case when management determines segregation of duties is not cost beneficial, management should implement compensating controls that utilize system generated reports and data. \r\n \r\nEMPLOYEE COMPENSATION lnadequate Internal Controls Significant Deficiency Finding Control Number: FS-826-10-04 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College were insufficient to provide for adequate internal controls over employee compensation. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nEMPLOYEE COMPENSATION lnadequate Internal Controls Significant Deficiency Finding Control Number: FS-826-10-04 \r\n \r\nCriteria: \r\n \r\nThe Technical College's management is responsible for designing and maintaining internal controls that provide reasonable assurance that employees are properly compensated and that supporting documentation related to employee compensation is maintained, processed and reported within the accounting records. \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nOur testing revealed instances where salary changes made during the year were not properly approved in accordance with established procedures. \r\n \r\nCause: \r\n \r\nThe Technical College's management failed to ensure that normal business procedures established for the approval of salaries were consistently applied. \r\n \r\nEffect: \r\n \r\nWithout proper accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation 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 Technical College should implement policies and procedures to ensure that normal business procedures are followed for all salary changes, which includes ensuring that adequate documentation is maintained to support the salary payments. \r\n \r\nCAPITAL ASSETS lnadequate Internal Controls over Capital Assets Material Weakness Finding Control Number: FS-826-10-05 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College were insufficient to provide for adequate internal controls over Capital Assets. \r\n \r\nCriteria: \r\n \r\nThe State Accounting Office's Accounting Procedures Manual for the State of Georgia states that, \"asset purchased, constructed, or donated that meet or exceed the State's established capitalization thresholds or minimum reporting requirements must be uniformly classified in conformity with the Accounting Procedures Manual\". \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nCAPITAL ASSETS lnadequate Internal Controls over Capital Assets Material Weakness Finding Control Number: FS-826-10-05 \r\n \r\nInformation: \r\n \r\nThe Technical College did not adequately conduct a physical inventory of capital assets. Procedures performed in the audit revealed numerous instances of missing, obsolete, or scrapped items that were included in the financial statements. Significant adjustments were made to the financial statements to remove these items. \r\n \r\nIn addition, the Technical College did not adequately reconcile the capital asset subsidiary system to the financial statements. Unknown variance were identified and adjusted through current year activity. \r\n \r\nCause: \r\n \r\nThe Technical College's management failed to implement appropriate internal controls and procedures necessary to properly record, maintain and track capital assets. \r\n \r\nEffect: \r\n \r\nFailure to properly record and reconcile capital assets could result in the Technical College placing itself in a position where misrepresentation of its financial position and results of operations could occur. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should design and implement controls over capital assets to ensure that inventory records are properly maintained to prevent reporting errors in the future. In addition, the Technical College should make appropriate correcting entries to the capital assets records to properly reflect capital asset balances. \r\n \r\nINVENTORIES lnadequate Internal Controls over Bookstore Inventories Significant Deficiency Finding Control Number: FS-826-10-06 \r\n \r\nCondition: \r\n \r\nThe accounting procedures of the Technical College were insufficient to provide adequate controls over resale inventories. \r\n \r\nCriiteria: \r\n \r\nAlCPA Professional Standards provide that internal control is a process placed into operations to achieve management's objectives related to \"(a) reliability of financial reporting, (b) effectiveness and efficiency of operations, and (c) compliance with applicable laws and regulations.\" The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework states that management should design policies and procedures to reduce the risk that financial reporting objectives are not being met. A key element to the objective of reliable financial statement reporting is ensuring the completeness of financial data and that transactions are reported in the proper period. \r\n \r\n WEST GEORGIA TECHNICAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nl NVENTORI ES Inadequate Internal Controls over Bookstore Inventories Significant Deficiency Finding Control Number: FS-826-10-06 \r\n \r\nQuestioned Cost: \r\n \r\nN/A \r\n \r\nInformation: \r\n \r\nThe Technical College did not reconcile the bookstore inventory subsidiary system to the financial statements. Unexplained variances existed between the inventory listing and the inventory balance reported on the financial statements. In addition, a review of subsequent period inventory purchases revealed several transactions reported in the wrong period. \r\n \r\nCause: \r\n \r\nThe Technical College did not have procedures in place to perform a reconciliation between the bookstore inventory listing and the bookstore inventory balance reported in the general ledger. In addition, the Technical College did not properly design procedures to ensure that inventory transactions are reported in the proper period. \r\n \r\nEffect: \r\n \r\nWithout satisfactory accounting controls and procedures in place, the Technical College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact the reporting of its financial position and results of operations. \r\n \r\nRecommendation: \r\n \r\nThe Technical College should establish policies and procedures to reconcile bookstore inventory listings to the general ledger to ensure that all activity is properly reflected in the financial statements. In addition, the Technical College should evaluate and modify existing procedures to ensure that all transactions are reported in the proper accounting period. \r\n \r\nFEDERAL AWARD FINDINGS AND OUESTIONED COSTS \r\n \r\nNo 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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