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GEORGIA PERIMETER

COLLEGE
DECATUR, GEORGIA
MANAGEMENT REPORT
FOR FISCAL YEAR ENDED
JUNE 30, 2011

A Member Institution of the


University System of Georgia

Georgia Department of
Audits and Accounts
Russell W. Hinton
State Auditor

GEORGIA PERIMETER COLLEGE


-TABLE OF CONTENTS-

SECTION I
FINANCIAL
LETTER OF TRANSMITTAL
SELECTED FINANCIAL INFORMATION
EXHIBITS
A

STATEMENT OF NET ASSETS- (GMP BASIS)

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS(GMP BASIS)

STATEMENT OF CASH FLOWS- (GMP BASIS)

SELECTED FINANCIAL NOTES

SUPPLEMENTARY INFORMATION
SCHEDULES
1
2
3

BALANCE SHEET- (STATUTORY BASIS) BUDGET FUND


SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(STATUTORY BASIS) BUDGET FUND
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET
BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND
STATEMENT OF CHANGES TO FUND BALANCE
BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND
RECONCILIATION OF SALARIES AND TRAVEL

SECTION II
ENTITY'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

18
19

20

22
25

GEORGIA PERIMETER COLLEGE


-TABLE OF CONTENTS-

SECTION Ill
FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I
FINANCIAL

DEPARTMENT OF AUDITS AND ACCOUNTS


270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400

Russell W. Hinton
STATE AUDITOR
(404) 6562174

December 13, 2011

Honorable Nathan Deal, Governor


Members of the General Assembly of Georgia
Members of the State Board of Regents of the
University System of Georgia
and
Honorable Anthony Tricoli, President
Georgia Perimeter College
Ladies and Gentlemen:
As part of our audits of the basic financial statements of the University System of Georgia presented
in the Annual Financial Reportfor the University System of Georgia, the basic financial statements of
the State of Georgia presented in the State of Georgia Comprehensive Annual Financial Report and the
issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of
and for the year ended June 30, 2011, we have performed certain audit procedures at Georgia
Perimeter College. Accordingly, the financial statements and compliance activities of Georgia
Perimeter College were examined to the extent considered necessary in order to express an opinion
as to the fair presentation of the financial statements contained in the foregoing documents and to
issue reports on compliance and internal control as required by the Single Audit Act Amendments of

1996.
This Management Report contains information pertinent to the financial and compliance activities of
Georgia Perimeter College as of and for the year ended June 30, 2011. Information contained in this
report is a by-product of our audits of the basic financial statements of the University System of
Georgia and the basic financial statements of the State of Georgia and is the representation of
management. Accordingly, we do not express an opinion or any other form of assurance on it. The
particular information provided which includes a section on findings and other items reported in
accordance with Commission on Colleges regulation 2.11.1 is enumerated in the Table of Contents.
This report is intended solely for the information and use of the management of Georgia Perimeter
College, members of the Board of Regents of the University System of Georgia and the Southern
Association of Colleges and Schools - Commission on Colleges and is not intended to be and should
not be used by anyone other than these specified parties.
Respectfully submitted,

~.-<JQ.W.~
Russell W. Hinton, CPA, CGFM
State Auditor
RWH:as

SELECTED FINANCIAL INFORMATION

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GEORGIA PERIMETER COLLEGE


STATEMENT OF NET ASSETS- (GAAP BASIS)
JUNE 30, 2011

EXHIBIT"A"

Current Assets
Cash and Cash Equivalents
Short-Term Investments

3,846,784
18,293

Accounts Receivable, Net (Note 3)


Federal Financial Assistance
Other

775,495
5,432,507

Inventories (Note 4)
Prepaid Items

144,385
4,951

10,222,415

1,042,965
2,211
170,789,694

Total Noncurrent Assets

171,834,870

Total Assets

182,057,285

4,183,599
287,287
276,970

Total Current Assets


Noncurrent Assets
Noncurrent Cash
Notes Receivable, Net
Capital Assets, Net (Note 4)

LIABILITIES
Current Liabilities
Accounts Payable
Salaries Payable
Contracts Payable
Deferred Revenue (Note 6)
Other Liabilities

4,325,904
1,553,640
633,826

Deposits Held for Other Organizations


Lease Purchase Obligations
Compensated Absences

1,015,815
2,371,345

14,648,386

78,855,013
1,856,668

Total Noncurrent Liabilities

80,711,681

Total Liabilities

95,360,067

90,918,866

Total Current Liabilities


Noncurrent Liabilities
Lease Purchase Obligations
Compensated Absences

NET ASSETS
Invested in Capital Assets, Net of Related Debt
Restricted for
Nonexpendable
Expendable
Capital Projects

26,074
-224,278
526,684
-4,550,128

Unrestricted

Total Net Assets

$ ==8=6=,6=9=7=,2=18=

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GEORGIA PERIMETER COLLEGE


STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS- (GAAP BASIS)
YEAR ENDED JUNE 30, 2011

EXHIBIT"B"

OPERATING REVENUES

Student Tuition and Fees


Less: Scholarship Allowances

67,847,156
-22,779,157

Grants and Contracts


Federal

1,124,924

State
Other

1,152,921
68,976

Sales and Services of Educational Departments

4,204,301
26,030

Rents and Royalties


Auxiliary Enterprises

1,075,765
92,321

Bookstore
Food Services
Intercollegiate Athletics

2,123,770

Other Organizations

4,513,155

Other Operating Revenues

295,688

Total Operating Revenues

59,745,850

39,180,027
45,463,745

OPERATING EXPENSES
Salaries
Faculty
Staff
Employee Benefits
Other Personal Services

21,972,942
739,064

Travel
Scholarships and Fellowships

35,612,521

840,775

Utilities

3,673,397
13,706,148

Supplies and Other Services

7,291,822

Depreciation
Total Operating Expenses

168,480,441

Operating Income (Loss)

-108,734,591

52,190,921

NONOPERATING REVENUES CEXPENSESl


State Appropriations
Grants and Contracts
Federal

54,607,009

Interest and Other Investment Income

10,763

Interest Expense

-3,033,512

Other Nonoperating Revenues

-1,522,048

Net Nonoperating Revenues

102,253,133

Income (Loss) Before Other Revenues, Expenses, Gains, or Losses

-6,481,458

Capital Grants and Gifts


State

1,796,666

Increase in Net Assets


Net Assets- Beginning of Year

-4,684,792
91,382,010

$ =~8~6,~69~7~,2~18~

Net Assets- End of Year

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GEORGIA PERIMETER COLLEGE


STATEMENT OF CASH FLOWS- (GAAP BASIS)
YEAR ENDED JUNE 30, 2011

EXHIBIT "C"

CASH FLOWS FROM OPERATING ACTIVITIES

Tuition and Fees


Grants and Contracts

45,225,317
9,359,345

Sales and Services of Educational Departments

4,204,301

Payments to Suppliers
Payments to Employees

-41,562,693
-84,038,234

Payments for Scholarships and Fellowships

-35,612,521

Loans Issued to Students

-2,206

Auxiliary Enterprise Charges:


Bookstore

1,298,809
56,443

Food Services
Intercollegiate Athletics

1,820,115

Other Organizations

4,653,199

Other Receipts (Payments)

2,118,909

Net Gash Provided (Used) by Operating Activities

-92,4 79,216

52,190,921

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES


State Appropriations
Agency Funds Transactions
Gifts and Grants Received for Other than Capital Purposes

-2,648,428
54,814,886

Net Cash Flows Provided (Used) by Noncapital Financing Activities

104,357,379

1,796,666

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES


capital Gifts and Grants Received
Proceeds from Sale of Gapital Assets
Purchases of capital Assets

1,486,104
-18,752,391

Principal Paid on Capital Debt and Leases

-910,059

Interest Paid on Capital Debt and Leases

-3,033,512

Net Cash Provided (Used) by Capital and Related Financing Activities

-19,413,192

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from Sales and Maturities of Investments


Interest on Investments

211
10,763

Net Gash Provided (Used) by Investing Activities

10,974

Net Increase (Decrease) in Cash

-7,524,055

Cash and Gash Equivalents- Beginning of Year

12,413,804

Gash and Cash Equivalents - End of Year

4,889,749

-108,734,591

RECONCILIATION OF OPERATING LOSS TO NET CASH


PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss)
Adjustments to Reconcile Operating Income to Net Cash
Provided (Used) by Operating Activities
Depreciation

7,291,822

Change in Assets and Liabilities:


Accounts Receivable, Net

8,362,263
-2,143

Inventories
Prepaid Items

728
-2,206

Notes Receivable, Net


Accounts Payable

-1,617,567

Deferred Revenue
Other Liabilities

882,242

Compensated Absences

487,565

852,671

Net Gash Provided (Used) by Operating Activities

-4-

-92,479,216

GEORGIA PERIMETER COLLEGE


SELECTED FINANOAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


REPORTING ENTITY
Georgia Perimeter College is one of thirty-five (35) State supported member institutions of higher
education in Georgia which comprise the University System of Georgia, an organizational unit of the
State of Georgia. The accompanying financial statements reflect the operations of Georgia Perimeter
College as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University
System of Georgia. This authority includes but is not limited to the power to designate management,
the ability to significantly influence operations, the authority to control institutions' budgets, the
power to determine allotments of State funds to member institutions and the authority to prescribe
accounting systems and administrative policies for member institutions. Georgia Perimeter College
does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year.
Accordingly, Georgia Perimeter College is considered an organizational unit of the Board of Regents
of the University System of Georgia reporting entity for financial reporting purposes because of the
significance of its legal, operational, and financial relationships with the Board of Regents as defined
in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of
Governmental Accounting and Financial Reporting Standards.

NET ASSETS
The College's net assets are classified as follows:
Invested in capital assets, net of related debt: This represents the 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.
Restricted net assets - nonexpendable: Nonexpendable restricted net assets consist of endowment
and similar type funds in which donors or other outside sources have stipulated, as a condition of
the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for
the purpose of producing present and future income, which may either be expended or added to
principal. The College may accumulate as much of the annual net income of an institutional fund as
is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia.
Restricted net assets- expendable: Restricted expendable net assets include resources in which the
College is legally or contractually obligated to spend resources in accordance with restrictions
imposed by external third parties.
Unrestricted net assets: Unrestricted net assets represent resources derived from student tuition and
fees, state appropriations, and sales and services of educational departments and auxiliary
enterprises. These resources are used for transactions relating to the educational and general
operations of the College, and may be used at the discretion of the governing board to meet current
expenses for those purposes, except for unexpended state appropriations (surplus) of $113,576.62.

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GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Unexpended state appropriations must be refunded to the Board of Regents of the University System
of Georgia, University System Office for remittance to the Office of the State Treasurer. These
resources also include auxiliary enterprises, which are substantially self-supporting activities that
provide services for students, faculty and staff.
NOTE 2: DEPOSITS AND INVESTMENTS
DEPOSITS
The custodial credit risk for deposits is the risk that in the event of a bank failure, the College's
deposits may not be recovered. Funds belonging to the State of Georgia (and thus the 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:
1.

Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United
States or of the State of Georgia.

2.

Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or


municipalities of the State of Georgia.

3.

Bonds of any public authority created by the laws of the State of Georgia, providing that the
statute that created the authority authorized the use of the bonds for this purpose.

4.

Industrial revenue bonds and bonds of development authorities created by the laws of the
State of Georgia.

5.

Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary


corporation of the United States government, which are fully guaranteed by the United States
government both as to principal and interest and debt obligations issued by the Federal Land
Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank
for Cooperatives, the Farm 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.

The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required
depository protection for all units of the University System of Georgia.
At June 30, 2011, the carrying value of deposits was $1,722,964 and the bank balance was
$2,775,872. Of the College's deposits, $2,754,616 were uninsured. Of these uninsured deposits,
$2,754,616 were collateralized with securities held by the financial institution, by its trust
department or agency, but not in the College's name.

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GEORGIA PERIMETER COLLEGE


SELEcrED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 2: DEPOSITS AND INVESTMENTS


INVESTMENTS
At June 30, 2011, the carrying value of the College's investment was $3,152,078, which is
materially the same as fair value. These investments were comprised entirely of funds invested in
the Board of Regents and/or Office of the State Treasurer investment pools as follows:
Investment Pools
Office of the State Treasurer
Georgia Fund 1

3,152,078

===========

The Board of Regents Investment Pool is not registered with the Securities and Exchange
Commission as an investment company. The fair value of investments is determined daily. The pool
does not issue shares. Each participant is allocated a pro rata share of each investment at fair value
along with a pro rata share of the interest that it earns. Participation in the Board of Regents
Investment Pool is voluntary. The Board of Regents Investment Pool is not rated. The Board of
Regents Short-Term Fund is reported as Cash and Cash Equivalents on Exhibit "A" of this report.
The Georgia Fund 11nvestment Pool, managed by the Office of the State Treasurer, is not registered
with the Securities and Exchange Commission as an investment company, but does operate in a
manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. This investment
is valued at the pool's share price, $1.00 per share. The Georgia Fund 11nvestment Pool is an AAAm
rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 59
days.
NOTE 3: ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at June 30, 2011:
Student Tuition and Fees
Auxiliary Enterprises and Other Operating Activities
Federal, State and Private Funds
Other

2,203,573
351,363
775,495
4,875,870

8,206,301
1,998,299

6,208,002

Less Allowance for Doubtful Accounts


Net Accounts Receivable

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GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 4: CAPITAL ASSETS


Following are the changes in the College's capital assets for the year ended June 30, 2011:
Beginning

Ending

Balance

Balance

July 1, 2010

Additions

Reductions

June 30, 2011

Capital Assets, Not Being Depreciated:


Land

Construction Work-In-Progress
Total Capital Assets, Not Being Depreciated

5,022,604

5,022,604

3,279,329 $

3,973,608 $

4,589,663

2,663,274

8,301,933 $

3,973,608 $

4,589,663 $

7,685,878

104,062,892 $

117,164,604

Capital Assets, Being Depreciated:


Building and Building Improvements
Facilities and Other Improvements

9,955,054

Equipment

12,722,385

Capital Leases

79,580,508

Library Collections

13,532,260

Total Assets Being Depreciated

219,853,099 $

39,924,030 $

13,101,712
3,527,140 $

2,752,576

10,729,618

2,175,052

1,594,880

13,302,557
79,580,508

696,557

497,631

13,731,186

19,500,461 $

4,845,087 $

234,508,473

42,072,781

Less: Accumulated Depreciation:


Building and Building Improvements

2,148,751

Facilities and Other Improvements

2,680,070

90,017

Equipment

8,700,557

2,127,360 $

Capital Leases

3,755,194

2,345,481

10,683,124

Library Collections
Total Accumulated Depreciation

2,770,087
1,166,004

9,661,913

580,213

464,136

10,799,201

6,100,675

65,742,975 $

7,291,822 $

1,630,140 $

71,404,657

Total Capital Assets, Being Depreciated, Net

154,110,124 $

12,208,639 $

3,214,947 $

163,103,816

Capital Assets, Net

162,412,057 $

16,182,247 $

7,804,610 $

170,789,694

NOTE 5: DEFERRED REVENUE


Deferred revenue consisted of the following at June 30, 2011:
Prepaid Tuition and Fees

2,833,206
1,492,698

4,325,904

Other Deferred Revenue


Total Deferred Revenue

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GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 6: LONG-TERM LIABILITIES


The College's Long-Term liability activity for the year ended June 30, 2011 was as follows:
Beginning

Ending

Balance
July 1, 2010

Additions

Reductions

Balance

Current

June 30, 2011

Portion

Leases
Lease Obligations

80,780,887

910,059 $

79,870,828 $

1,015,815

Other Liabilities
3,740,448 $

Compensated Absences
Total Long-Term Obligations

84,521,335 $

3,039,821

2,552,256

3,039,821 $

3,462,315 $

4,228,013
84,098,841 $

2,371,345
3,387,160

NOTE 7: NET ASSETS


Changes in Net Asset activity for the year ended June 30, 2011 are as follows:
Beginning

Ending

Balance

Balance

July 1, 2010

Additions

Reductions

June 30, 2011

Invested in Capital Assets


Net of Related Debt

Restricted Net Assets


Unrestricted Net Assets
Total Net Assets

81,631,170 $

17,092,306 $

7,804,610 $

90,918,866

782,808

55,731,933

56,186,261

328,480

8,968,032

110,822,610

124,340,770

-4,550,128

183,646,849 $

188,331,641 $

91,382,010 $

86,697,218

NOTE 8: LEASE OBLIGATIONS


Georgia Perimeter College is obligated under capital leases for the acquisition of real property.
CAPITAL LEASES
Capital leases are generally payable in installments ranging from monthly to annually and have
terms expiring in various years between 2011 and 2035. Expenditures for fiscal year 2011 were
$3.9 million of which $3.0 million represented interest. Total principal paid on capital leases was
$0.9 million for the fiscal year ended June 30, 2011. Interest rates range from 4.743 percent to
4.813 percent.
OPERATING LEASES
Georgia Perimeter College had no expense for rental of real property and equipment under operating
leases in fiscal year 2011, and had no operating leases having remaining terms of more than one
year at June 30, 2011.

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GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 8: LEASE OBLIGATIONS


FUTURE COMMITMENTS
Future commitments for capital leases (which here and on the Statement of Net Assets include other
installment purchase agreements) and for noncancellable operating leases having remaining terms
in excess of one year as of June 30, 2011, were as follows:
Real Property
and
Equipment
Capital
Leases
Year Ending June 30:
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2035
Total Minimum Lease Payments

4,833,843
4,907,086
4,986,554
5,065,436
5,144,869
27,010,834
29,344,978
31,978,187
26,612,964

139,884,751
60,008,613
5,310

Less: Interest
Less: Executory Costs (if paid)
Principal Outstanding

79,870,828

======

NOTE 9: RETIREMENT PLANS


Georgia Perimeter 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
supplementary information. The reports may be obtained from the respective system offices. The
significant retirement plans that Georgia Perimeter 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.

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GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS


Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all
employees of the State of Georgia except for teachers and other employees covered by the Teachers
Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of
Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established
by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing
retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is
directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts
pursuant to statutory direction and guidelines, which may be amended prospectively for new hires
but for existing members and beneficiaries may be amended in some aspects only subject to
potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of
ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with
Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is
to provide retirement benefits to employees covered byERS whose benefits are otherwise limited by
IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are
eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on
benefits imposed by IRC Section 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines.
Unless the employee elects otherwise, an employee who currently maintains membership with ERS
based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to
the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to
January 1, 2009 are "new plan" members subject to the modified plan provisions. Effective January
1, 2009, newly hired State employees, as well as rehired State employees who did not maintain
eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and
Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change
their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement
benefits after 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.
Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees
for such purpose. The formula considers the monthly average of the member's highest 24
consecutive calendar months of salary, the number of years of creditable service, and the member's
age at retirement. 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.

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GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS


Member contribution rates are set by law. Member contributions under the old plan are 4% of annual
compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old
plan, Georgia Perimeter College pays member contributions in excess of 1.25% of annual
compensation. Under the old plan, these Georgia Perimeter 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. Georgia Perimeter 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 Georgia Perimeter College contributions are not at any time refundable to the
member or his/her beneficiary.
Employer contributions required for fiscal year 2011 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:
Old Plan*
New Plan
GSEPS

10.41%
10.41%
6.54%

* 5.66% exclusive of contributions paid by the employer on behalf of old plan members
Members 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.
Teachers Retirement System of Georgia
The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined
benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement
benefits for qualifying employees in educational service. A Board of Trustees comprised of active and
retired members and ex-officio State employees is ultimately responsible for the administration of
TRS.
On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia
Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental
excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion
of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS
whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and
retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits
under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure
of TRS is defined and may be amended by State statute. A member is eligible for normal service
retirement after 30 years of creditable service, regardless of age, or after 10 years of service and
attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.

-12-

EXHIBIT "D"

GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

NOTE 9: RETIREMENT PLANS


Normal retirement (pension) benefits paid to members are equal to 2% of the average of the
member's two highest paid consecutive years of service, multiplied by the number of years of
creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth
of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by
which the member has less than 30 years of service. 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.
TRS is funded by member and employer contributions as adopted and amended by the Board of
Trustees. Members become fully vested after 10 years of service. If a member terminates with less
than 10 years of 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, 2011 were 5.53% of annual
salary. Employer contributions required for fiscal year 2011 were 10.28% of annual salary as
required by the June 30, 2008 actuarial valuation.
The following table summarizes the Georgia Perimeter College contributions by defined benefit plan
for the years ending June 30, 2011, June 2010, and June 2009 (dollars in thousands):
ERS
Fiscal Year

2011
2010
2009

TRS

Required

Percentage

Contribution

Contributed

$
$
$

13,890
11,324
10,815

100%
100%
100%

Required
Contribution

$
$
$

4,769,633
4,188,588
3,508,988

Percentage
Contributed

100%
100%
100%

Regents Retirement Plan


Plan Description
The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement
plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and
administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a)
defines who may participate in the Regents Retirement Plan. An "eligible university system
employee" is a faculty member or a principal administrator, as designated by the regulations of the
Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity
contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIM-CREF) for the
purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed
to the plan plus investment earnings. Benefits are payable to participating employees or their
beneficiaries in accordance with the terms of the annuity contracts.

-13-

GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS


Funding Policy
Georgia Perimeter College makes monthly employer contributions for the Regents Retirement Plan at
rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with
State statute and as advised by their independent actuary. For fiscal year 2011, the employer
contribution was 9.24% for the participating employee's earnable compensation. Employees
contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully
vested and non-forfeitable at all times.
Georgia Perimeter College and the covered employees made the required contributions of
$2,129,268 (9.24%) and $1,152,204 (5%), respectively.
AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which
may be obtained through their respective corporate offices.
Georgia Defined Contribution Plan
Plan Description
Georgia Perimeter 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.
Benefits
A member may retire and elect to receive periodic payments after attainment of age 65. The
payment will be based upon mortality tables and interest assumptions to be adopted by the Board of
Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has
the option of requiring a lump sum distribution to the member in lieu of making periodic payments.
Upon the death of a member, a lump sum distribution equaling the amount credited to his/her
account will be paid to the member's designated beneficiary. Benefit provisions are established by
State statute.
Contributions
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.
Total contributions made by employees during fiscal year 2011 amounted to $7 48,411 which
represents 7.5% of covered payroll. These contributions met the requirements of the plan.
The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be
obtained from the ERS offices.

-14-

GEORGIA PERIMETER COLLEGE


SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 10: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS


Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31,
the Board of Regents of the University System of Georgia has established group health and life
insurance programs for regular employees of the University System of Georgia. It is the policy of the
Board of Regents to permit employees of the University System of Georgia eligible for retirement or
that become permanently and totally disabled to continue as members of the group health and life
insurance programs. The policies of the Board of Regents of the University System of Georgia define
and delineate who is eligible for these post-employment health and life insurance benefits.
Organizational units of the Board of Regents of the University System of Georgia pay the employer
portion for group insurance for affected individuals. With regard to life insurance, the employer
covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental,
and/or, dependent life insurance coverage, such costs are borne entirely by the employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial
statements and required supplementary information for the Plan are included in the publicly
available Consolidated Annual Financial Report of the University System of Georgia. The College pays
the employer portion of health insurance for its eligible retirees based on rates that are established
annually by the Board of Regents for the upcoming plan year. For the 2010 and 2011 plan years, the
employer rate was between 70-75% of the total health insurance cost for eligible retirees and the
retiree rate was between 25-30%.
As of June 30, 2011, there were 34 7 employees who had retired or were disabled that were
receiving these post-employment health and life insurance benefits. For the year ended June 30,
2011, Georgia Perimeter College recognized as incurred $1,581,420 of expenditures, which was net
of $1,101,507 of participant contributions.

NOTE 11: AFFILIATED ORGANIZATIONS


Georgia Perimeter College Foundation, Georgia Perimeter College Real Estate Foundation, Georgia
Perimeter College Research Foundation, and Peachtree State Athletic Foundation are legally
separate tax exempt organizations whose activities primarily support Georgia Perimeter College, a
unit of the University System of Georgia (an organizational unit of the State of Georgia). These
affiliated organizations are considered potential component units of the State of Georgia in
accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component
Units. Therefore, the financial statements of these affiliated organizations are not included in these
financial statements. Copies of the financial statements for the affiliated organizations may be
obtained from Georgia Perimeter College.

-15-

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SUPPLEMENTARY INFORMATION

-17-

GEORGIA PERIMETER COLLEGE

SCHEDULE "1"

BALANCE SHEET (STATUTORY BASIS)


BUDGET FUND
JUNE 30, 2011

Cash and Cash Equivalents

1,227,061.11
8,292.67

Investments
Accounts Receivable
Federal Financial Assistance

1,839,697.07

Other

5,639,013.39
610.20

Prepaid Expenditures

144,848.19

Inventories

$ ==8;,;,;;85;;;;9;.;.;,5;.;;2~2.~6,;;3

Total Assets

LIABILITIES AND FUND EQUITY


Liabilities

Accrued Payroll

281,704.59

Encumbrances Payable

414,942.58

Accounts Payable

834,908.23

Deferred Revenue

4,917,593.71
16,668.70

Funds Held for Others


Total Liabilities

6,465,817.81

-271,248.25

Fund Balances
Reserved
Department Sales and Services

1,509.98

Indirect Cost Recoveries

-94,896.75

Technology Fees

526,684.18

Capital Outlay

-200,575.84

Restricted/Sponsored Funds

2,106,938.50

Uncollectible Accounts Receivable

74,250.25

Tuition Carry-Over

137,466.13

Inventories
Unreserved

113,576.62

Surplus
Total Fund Balances

Total Liabilities and Fund Balances

$ ==.;,8;,;8;;;;59;;,;;,5;;;;2;;2;;;;.6;;;;.3

Statutory Basis financial information 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.
-18-

2,393, 704.82

GEORGIA PERIMETER COLLEGE


SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND
YEAR ENDED JUNE 30, 2011

BUDGET

State Appropriation
State General Funds
Other Funds
Total Revenues

SCHEDULE "2"

ACTUAL

VARIANCEFAVORABLE
(UNFAVORABLE)

52,911,645.00 $
139,763,007.00

52,911,645.00 $
126,262.453.26

0.00
-13,500,553.74

192,674,652.00 $

179,174,098.26 $

-13,500,553.74

CARRY-OVER FROM PRIOR YEARS


Transfers from Reserved Fund Balance
Adjustments and Program Transfers

3,059,912.46

0.00
0.00

86,730.00

3,059,912.46
86,730.00

192,674,652.00 $

182,320,740.72 $

-10,353,911.28

128,000.00 $
192,546,652.00

127,791.40 $
181,680.435.29

208.60
10,866,216.71

Total Expenditures

192,674,652.00 $

181,808,226.69 $

10,866.425.31

Excess of Funds Available over Expenditures

0.00 $

512,514.03 $

512,514.03

Total Funds Available


EXPENDITURES
Special Funding Initiative
Teaching

FUNP BALANCE JULY 1


Reserved
Unreserved

4,944,524.49
582,866.81

ADJUSTMENJS
Prior Year Payables/Expenditures
Prior Year Receivables/Revenues
Unreserved Fund Balance (Surplus) Returned
to Board of Regents- University System Office
Year Ended June 30, 2010
Early Return of Surplus in Current Year
Prior Year Reserved Fund Balance Included in Funds Available

252,925.30
-118.489.15

-582,866.81
-137,857.39
-3,059,912.46

FUNP BALANCE JUNE 30

2,393,704.82

-271,248.25
1,509.98
-94,896.75
526,684.18
-200,575.84
2,106,938.50
74,250.25

SUMMARY OF FUND BALANCE


Reserved
Department Sales and Services
Indirect Cost Recoveries
Technology Fees
Capital Outlay
Restricted/Sponsored Funds
Uncollectible Accounts Receivable
Tuition Carry-Over
Inventories

137.466.13

Total Reserved
Unreserved
Surplus

2,280,128.20

113,576.62

$ ==~2~,3.;.93=.;,7.;...0;..4.;.;.8~2

Total Fund Balance

Statutory Basis financial information 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.

-19-

GEORGIA PERIMETER COLLEGE


STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND
YEAR ENDED JUNE 30, 2011

Original
Appropriation

Amended
Appropriation

Final
Budget

Current Year
Revenues

Special Funding Initiatives


State Appropriation
State General Funds

128,000.00 $

128,000.00 $

128,000.00 $

128,000.00

Teaching
State Appropriation
State General Funds

56,111,086.00 $

52,783,645.00 $

52,783,645.00 $

52,783,645.00

807,779.00
92,683,007.00

0.00
99,683,007.00

Federal Funds
American Recovery and Reinvestment Act of 2009
Federal Stabilization Funds
Other Funds

0.00
139,763,007.00

0.00
126,262,453.26

Total Teaching

149,601,872.00 $

152,466,652.00 $

192,546,652.00 $

179,046,098.26

Total Operating Activity

149,729,872.00 $

152,594,652.00 $

192,674,652.00 $

179,174,098.26

Statutory Basis financial information 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.

-20-

SCHEDULE "3"

Funds Available Compared to Budget


Prior Year
Carry-Over

Adjustments and
Program Transfers

0.00 $==~-~0-~0.;.0 $

0.00 $

0.00 $

Total
Funds Available

Expenditures Compared to Budget


Variance
Positive (Negative)

128,000.00 $====...;..0.~00.;.$

52,783,645.00 $

0.00
129,409,095.72

0.00 $

Actual

127,791.40 $

52,763,483.19 $

Over/(Under)
Expenditures

208.60 $ ===-~2~08;,..;~60=

20,161.81 $

20,161.81

0.00
3,059,912.46

0.00
86,730.00

3,059,912.46 $

86,730.00 $ 182,192,740.72 $

-10,353,911.28 $ 181,680,435.29 $

10,866,216.71 $ _ ___;5;.::1:::2:.::,3:::05::.;...:.43::...

3,059,912.46 $

86,730.00 $ 182,320,740.72 $

-10,353,911.28 $ 181,808,226.69 $

10,866,425.31 $ =~....;;5;.;;1;;;;2;;;;5~14,;,;.;;;03;;.

0.00
-10,353,911.28

-21-

0.00
128,916,952.10

Variance
Positive (Negative)

Excess (Deficiency)
of Funds Available

0.00
10,846,054.90

0.00
492,143.62

GEORGIA PERIMETER COLLEGE


STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND
YEAR ENDED JUNE 30, 2011

Beginning Fund
Balance/(Deficit)
July 1
Special Funding Initiatives
State Appropriation
State General Funds

Fund Balance
Carried Over from
Prior Period
as Funds Available

Return of
Fiscal Year 2010
Surplus

Prior Period
Adjustments

15,63B.29 $

0.00 $

-15,63B.29 $

1,365.26

0.00 $
3,627,140.98

0.00 $
-3,059,912.46

0.00 $
-567,228.52

122,931.51
10,139.38

Total Teaching

3,627,140.98 $

-3,059,912.46 $

-567,228.52 $

133,070.89

Total Operating Activity

3,642,779.27 $

-3,059,912.46 $

-582,866.81 $

134.436.15

Teaching
State Appropriation
State General Funds
Other Funds

Prior Year Reserves


Not Available for Expenditure
Inventories
Uncollectible Accounts Receivable

198,250.62
1,686,361.41

0.00
0.00

0.00
0.00

0.00
0.00

Budget Unit Totals

5,527,391.30 $

Statutory Basis financial information 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.
-22-

-3,059,912.46 $

-582,866.81 $

134.436.15

SCHEDULE "4"

Other
Adjustments

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

Early Return
Fiscal Year 2011
Surplus

Ending Fund
Balance/(Deficit)
June 30

Reserved

Analysis of Ending Fund Balance


Surplus/(Deficit)

Total

0.00 $

0.00 $

208.60 $

1,573.86 $

0.00 $

1,573.86 $

1,573.86

60,784.49 $
-420,577.09

137,857.39 $
0.00

20,161.81 $
492,143.62

66,020.42 $
81,705.91

0.00 $
35,723.57

66,020.42 $
45,982.34

66,020.42
81,705.91

$ 359,792.60 $

137,857.39 $

512,305.43 $

147,726.33 $

35,723.57 $

112,002.76 $

147,726.33

$ 359,792.60 $

137,857.39 $

512,514.03 $

149,300.19 $

35,723.57 $

113,576.62 $

149,300.19

60,784.49
420,577.09

0.00 $

0.00
0.00

0.00
0.00

-137,857.39 $

512,514.03 $

137.466.13
2,106,938.50

137.466.13
2,106,938.50

2,393,704.82 $

2,280,128.20 $

Summary of Ending Fund Balance


Reserved
Department Sales and Services
Indirect Cost Recoveries
Technology Fees
Capital Outlay
Restricted/Sponsored Funds
Uncollectible Accounts Receivable
Tuition Carry-Over
Inventories
Unreserved
Surplus

0.00
0.00

Total Ending Fund Balance- June 30

-23-

113,576.62 $

2,393,704.82

-271,248.25
1,509.98
-94,896.75
526,684.18
-200,575.84
2,106,938.50
74,250.25
137.466.13

-271,248.25
1,509.98
-94,896.75
526,684.18
-200,575.84
2,106,938.50
74,250.25
137.466.13

$
2,280,128.20 $

137.466.13
2,106,938.50

113,576.62
113,576.62 $

113,576.62
2,393,704.82

(This page left intentionally blank)

GEORGIA PERIMETER COLLEGE


RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2011

SCHEDULE "5"

SALARIES

Totals per Annual Supplement


Accruals
June 30, 2011

84,344,064.10 $

287,287.00
-187,264.95

June 30, 2010

TRAVEL
835,049.05

5,725.56

Compensated Absences
June 30, 2011
June 30, 2010

3,927,554.67
-3,474,637.71

Adjustments
Shared Services on Jointly Staffed Personnel
Atlanta Metropolitan College
GodfreyNoe

-500.00

Ossie Carney
Silveree Benson
Board of Regents

4,704.65
3,360.00

Virginia Michelich
Felita Williams
Fort Valley State University

-177,454.00
-136,949.64

Shae Anderson
Georgia Gwinnett College
Janita Rawls
Stephanie Whittington

2,100.00
-8,612.00
11,733.44

Georgia Highlands College


Merry Clark
Georgia Institute of Technology

8,800.04

Demetris Geddis
Georgia Southwestern State University

14,666.80

James Kahiga
Georgia State University

-6,000.00
-200.00

Robert Jenkins
Sarah Paschal
Sarah Spencer

-6,000.00
880.02

Gordon College
Darren Broom
Kennesaw State University

4,200.00

Amy Hopkins
North Georgia College and State University
Pamela Moolinar Wirsiy

1,400.00
-300.00

University of West Georgia


Meda Rollings
Ronald Chilluffo

6,300.00
13,200.08

Unidentified Variance

11,439.73

-25-

0.39

84,643,772.23 $ ===8=40==7=75=.0=0=

SECTION II
ENTITY'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA PERIMETER COLLEGE


ENTITY'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2011

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS


FINDING CONTROL NUMBER AND STATUS
FS-571-10-01

Partially Resolved- See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES
ACCOUNTING CONTROLS (OVERALL)
Inadequate Accounting Procedures
Finding Control Number: FS-571-10-01
Georgia Perimeter College continues to improve accounting procedures and internal
controls through an organizational redesign of Accounting Services to review, determine,
and implement: (1) the clear requirements for Accounting Services; (2) improved
procedures and strengthened controls, and (3) processes of accountability. The first phase
of the reorganization is underway with several steps completed. A completely new
Accounting organization, overall enhanced controls, and policies and procedures will be
implemented by December 31, 2011. Once fully implemented, Financial Affairs will
schedule an engagement with Georgia Perimeter College Internal Audit to assess the
effectiveness.
The statuses of the corrective actions to the four specific deficiencies follow:
1.
2.
3.
4.

Previously Reported Corrective Action Implemented


Previously Reported Corrective Action Implemented
Previously Reported Corrective Action Implemented
Partially Resolved: Georgia Perimeter College is working with ITS to resolve remaining
items related to the 2002 conversion of CUFA to PeopleSoft where some assets were
not added directly to the AM Module.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS


No matters were reported.

SECTION Ill
FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

GEORGIA PERIMETER COLLEGE


SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2011

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS


FINANCIAL REPORTING
Errors Noted in Financial Statement Preparation
Material Weakness
Finding Control Number: FS-571-11-01
Condition:

The accounting procedures of the College were insufficient to ensure that


various account balances were properly reflected on both the accounting
records and the College's financial statements.

Criteria:

NCGA Statement 1, paragraph 1, prescribes that an accounting system (1)


present fairly and fully disclose funds of the governmental unit in accordance
with generally accepted accounting principles and (2) demonstrate
compliance with finance related legal and contractual provisions. Additional
administrative requirements are contained in the University System of
Georgia, Board of Regents' Business Procedures Manual.
Management is responsible for establishing and implementing policies and
procedures over the preparation of financial statements prepared in
accordance with generally accepted accounting principles (GMP).
Additionally, the College is required to annually submit GMP basis financial
statements for inclusion in the State of Georgia's Comprehensive Annual
Financial Report (CAFR) and the State of Georgia's Single Audit Report.

Questioned Cost:

N/A

Information:

The following deficiencies were noted in the financial statements prepared by


the College:
1. The College did not adequately monitor Restricted and Agency Fund
activity, which resulted in invalid accounts receivable and deficit fund
balances. Items noted include:
a. Invalid accounts receivable were recorded for HOPE activity, resulting
in an overstatement of accounts receivable and deposits held for
other organizations of $3,274,133. An entry was proposed and
accepted by the College to correct.
b. Invalid accounts receivable totaling $1,064,202 were recorded for
various Federal grants. An entry was proposed and accepted by the
College to correct.
c. Accounts receivable totaling $427,384 were noted for grants with
prior budget periods and/or grant codes. These items should be
reviewed by the College to determine whether the accounts
receivable are still valid.
d. A prior period adjustment to the HOPE program totaling $1,262,269
was not posted by the College, resulting in an understatement of
accounts receivable and deposits held for others. An entry was
proposed and accepted by the College to correct.
e. Restricted net assets were reported at a negative balance of
$310,135.

-1-

GEORGIA PERIMETER COLLEGE


SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2011

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS


FINANCIAL REPORTING
Errors Noted in Financial Statement Preparation
Material Weakness
Finding Control Number: FS-571-11-01
2. Accumulated Depreciation recorded on the financial statements did not
agree to the amount on the accounting records by $1,444,308. An entry
was proposed and accepted by the College to reduce depreciation
expense by this amount.
3. The Cash Flow Statement did not accurately reflect activity for the
following items:
a. Principal Paid on Capital Debt was overstated by $24,806,138. Error
was corrected.
b. Beginning cash on hand did not agree to the prior year ending cash
balance by $1,675,4 75. Error was corrected.
c. An unreconciled variance of $44,451 was noted for cash flows for
purchases of Capital Assets to Capital Assets additions reported in
the Selected Notes to the Financial Statements.
d. Other items on the cash flow statement do not appear reasonable in
comparison to other financial data presented in the financial
statements. Cash flows from operating activities for grants and
contracts and other receipts appear overstated based on operating
grants and contracts on the Statement of Revenues, Expenses, and
Changes in Net Assets. Cash flows for Agency Fund activities appear
understated.
4. Various other adjustments to the financial statements were identified by
Department of Audits and Accounts and adjusted/corrected during the
Board of Regents review process.
a. Beginning net assets did not agree to the prior year ending net assets
by $21,389,989.
b. Net assets on the Statement of Net Assets did not agree to the net
assets on the Statement of Revenues, Expenses, and Changes in Net
Assets due to various rounding items.
c. State appropriations revenue was not reduced by the amount of
surplus remitted to the State of Georgia in the current year.
Cause:

The College's management failed to implement satisfactory procedures to


ensure that the financial statements were accurate, adequately documented
and presented fairly in accordance with generally accepted accounting
principles.

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GEORGIA PERIMETER COLLEGE


SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2011

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS


FINANCIAL REPORTING
Errors Noted in Financial Statement Preparation
Material Weakness
Finding Control Number: FS-571-11-01
Effect:

Significant errors were included in the financial statements presented for


review. In addition, the lack of satisfactory procedures and failure to adhere
to Board of Regents policies could impact reporting of the College's financial
position and results of operations.

Recommendation:

The College should develop procedures to ensure that the financial


statements are accurate, adequately documented, and presented fairly in
accordance with generally accepted accounting principles.

FINANCIAL REPORTING
Inadequate Accounting Procedures over Budget Preparation and Execution
Significant Deficiency
Finding Control Number: FS-571-11-02
Condition:

Through our examination, it was determined that the College failed to


properly monitor budgetary financial activity during the year. At June 30,
2011, the College maintained several funds in a deficit situation.

Criteria:

Management is responsible for establishing, maintaining and monitoring


procedures, the purpose of which is to ensure the fair presentation of the
budget basis financial statements provided for inclusion in the State of
Georgia Budgetary Compliance Report.

Questioned Cost:

N/A

Information:

The following deficiencies were noted in the College's budget basis financial
statements presented in Schedules 1-4:
1. Balances maintained on the College's general ledger did not agree to the
budgetary statements for cash ($54,550.64 overstatement) and
encumbrances payable ($130, 773.26 overstatement).
2. The College was in a reserved deficit in the Department Sales and
Services Fund ($271,248.25), Technology Fees Fund ($94,896.75), and
Restricted/Sponsored Funds ($200,575.84).
3. Encumbrances Payable with a credit balance of $54,616.04 were
determined to be invalid and were removed from the budgetary
statements.
4. The budget ledger within the accounting system, was not being properly
monitored and maintained. Certain entries posted to the budget ledger
were not reflected on the budgetary statements.

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GEORGIA PERIMETER COLLEGE


SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2011

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS


FINANCIAL REPORTING
Inadequate Accounting Procedures over Budget Preparation and Execution
Significant Deficiency
Finding Control Number: FS-571-11-02
Cause:

These deficiencies were a result of a lack of adequate procedures over the


preparation of the budget basis financial statements. Additionally, the College
failed to implement adequate procedures over its expenditures to ensure that
they did not exceed the funds available in each fund.

Effect:

Failure to submit accurate budget basis statements prohibits users from


having access to pertinent financial information needed for decision making.

Recommendation:

The College should design and implement procedures over its expenditures
process to ensure that expenditures do not exceed the budget or funds
available. Open Purchase Orders should be monitored closely to ensure that
encumbrances payable accurately reflect a true obligation of funds.

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS


No matters were reported.
OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION)
RECONCILIATION OF SALARIES AND TRAVEL
Salaries paid totaling $825,257.24 were originally reported as a reconciling item and not reported
as payments of salaries to the Department of Audits and Accounts. When brought to the attention of
the College, a corrected report was resubmitted to properly report these payments of salary by
employee.

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