Download report on audit of the financial statements june 30, 2014

UNIVERSITY OF GEORGIA
Annual Financial Report
(Including Independent Auditor’s Report)
Fiscal Year Ended June 30, 2015
Athens, Georgia
UNIVERSITY OF GEORGIA
- TABLE OF CONTENTS -
Page
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S REPORT
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
i
BASIC FINANCIAL STATEMENTS
EXHIBITS
A
STATEMENT OF NET POSITION
2
B
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
3
C
STATEMENT OF CASH FLOWS
4
D
NOTES TO THE FINANCIAL STATEMENTS
6
SCHEDULES
1
2
3
4
5
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
TEACHERS' RETIREMENT SYSTEM OF GEORGIA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
SCHEDULE OF CONTRIBUTIONS – TEACHERS' RETIREMENT SYSTEM OF GEORGIA
SCHEDULE OF CONTRIBUTIONS – EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
32
33
34
36
39
SUPPLEMENTARY INFORMATION
6
7
BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND
SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(NON-GAAP BASIS) BUDGET FUND
42
43
UNIVERSITY OF GEORGIA
- TABLE OF CONTENTS -
Page
SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
8
9
10
11
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET
BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND
STATEMENT OF CHANGES TO FUND BALANCE
BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND
RECONCILIATION OF BUDGET TO GAAP
RECONCILIATION OF SALARIES AND TRAVEL
SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SECTION III
CURRENT YEAR FINDINGS AND QUESTIONED COSTS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
44
48
52
55
SECTION I
FINANCIAL
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
Greg S. Griffin
STATE AUDITOR
(404) 656-2174
December 10, 2015
Honorable Nathan Deal, Governor
Members of the General Assembly of Georgia
Members of the Board of Regents of the
University System of Georgia
and
Jere W. Morehead, President
University of Georgia
INDEPENDENT AUDITOR'S REPORT
Ladies and Gentlemen:
Report on the Financial Statements
We have audited the accompanying basic financial statements (Exhibits A through D) of the University
of Georgia, a unit of the University System of Georgia, which is an organizational unit of the State of
Georgia, as of and for the year ended June 30, 2015.
M anagem ent’s R esponsibility for the Financial Statem ents
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
University of Georgia’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
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opinion on the effectiveness of the University of Georgia's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects,
the respective financial position of the University of Georgia as of June 30, 2015, and the respective
changes in financial position and cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Em phasis of M atter
As discussed in Note 1, the financial statements of the University of Georgia are intended to present
the financial position and changes in financial position and cash flows of only that portion of the
business-type activities of the State of Georgia that is attributable to the transactions of the University
of Georgia. They do not purport to, and do not, present fairly the financial position of the State of
Georgia as of June 30, 2015, the changes in its financial position or its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
As described in Note 1 to the financial statements, in 2015, the University of Georgia adopted new
accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68,
Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27, GASB
Statement No. 69, Government Combinations and Disposals of Government Operations and GASB
Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an
amendment of GASB Statement No. 68. The University of Georgia restated beginning Net Position for
the cumulative effect of these accounting changes which had a significant impact on the University of
Georgia’s financial statements. Our opinion is not modified with respect to this matter.
As discussed in Note 1 to the financial statements, the prior period financial statements have been
restated to correct a misstatement. Our opinion is not modified with respect to this matter.
Other M atters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis on pages I through ix and the Schedules of Proportionate
Share of the Net Pension Liability, Schedules of Contributions to Retirement Systems and the Notes
to the Required Supplemental Information on pages 32 through 39 be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part
of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquires of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
15ARL-62
basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of
the University of Georgia. The accompanying supplementary information (Schedules 6 through 11) is
presented for purposes of additional analysis and is not a required part of the basic financial
statements.
The accompanying supplementary information (Schedules 6 through 11) is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting or other
records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the information is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Other Reporting Required by Governm ent Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 10, 2015, on our consideration of the University of Georgia's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is to describe the scope of our testing
of internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
the University of Georgia's internal control over financial reporting and compliance.
Respectfully,
Greg S. Griffin
State Auditor
GSG:as
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REQUIRED SUPPLEMENTARY INFORMATION
UNIVERSITY OF GEORGIA
Management's Discussion and Analysis
Introduction
The University of Georgia is one of the 30 institutions of higher education of the University System of
Georgia. The University of Georgia was incorporated by an act of the General Assembly on
January 27, 1785. Georgia became the first state to charter a state-supported university.
The University of Georgia, a land-grant and sea-grant university with statewide commitments and
responsibilities is the state's flagship institution of higher education. It is also the state's oldest, most
comprehensive, and most diversified institution of higher education. Its motto, "to teach, to serve, and
to inquire into the nature of things," reflects the University's integral and unique role in the
conservation and enhancement of the state's and nation's intellectual, cultural, and environmental
heritage. As a comprehensive land-grant and sea-grant institution, the University of Georgia offers
baccalaureate, master's, doctoral and professional degrees in the arts, humanities, social sciences,
biological sciences, physical sciences, agricultural and environmental sciences, business, engineering,
environmental design, family and consumer sciences, forest resources, journalism and mass
communication, education, law, pharmacy, social work, and veterinary medicine. A comparison of
faculty and student numbers follows:
Faculty
Fiscal Year 2015
Fiscal Year 2014
Fiscal Year 2013
1,930
1,930
1,886
Students
(Headcount)
35,197
34,536
34,518
Students
(FTE)
33,550
33,257
33,119
Overview of the Financial Statements and Financial Analysis
The University of Georgia is pleased to present its financial statements for fiscal year 2015. The
emphasis of discussions about these statements will be on current year data. There are three financial
statements presented: the Statement of Net Position; the Statement of Revenues, Expenses and
Changes in Net Position; and the Statement of Cash Flows. This discussion and analysis of the
University's financial statements provides an overview of its financial activities for the year.
Comparative data is provided for fiscal year 2015 and fiscal year 2014. However, the comparative
data for fiscal year 2014 does not reflect the effects of the restatement of July 1, 2014 net position.
This restatement is related to the implementation of Governmental Accounting Standards Board
(GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 71
Pension Transition for Contributions Made Subsequent to the Measurement Date which were adopted by
the University for fiscal year 2015. The provisions of this Statement establish accounting and financial
reporting standards for pensions that are provided to the employees of state and local governmental
employers through pension plans that are administered through trusts. Implementation of this
Statement resulted in a restatement to beginning net position of $574,063,567. This restatement is
based on actuarial estimates and information is not available for the fiscal year 2014 comparative
balances. See Note 1 in the Notes to the Financial Statements for more information about the
restatement of July 1, 2014 net position.
i
Statement of Net Position
The Statement of Net Position is a financial condition snapshot as of June 30, 2015 and includes all
assets (current and noncurrent), deferred outflows of resources, liabilities (current and noncurrent),
deferred inflows of resources and net position. The differences between current and noncurrent assets
are discussed in the Notes to the Financial Statements. The Statement of Net Position is prepared
under the accrual basis of accounting which requires revenue and asset recognition when the service
is provided, and expense and liability recognition when goods or services are received despite when
cash is actually exchanged.
From the data presented, readers of the Statement of Net Position are able to determine the assets
available to continue the operations of the institution and how much the institution owes vendors. The
difference between assets, deferred outflows of resources, liabilities, and deferred inflows of
resources (net position) is one indicator of the University's financial health. Increases or decreases in
net position provide an indicator of the improvement or decline of the University's financial health
when considered in conjunction with other nonfinancial conditions, such as facilities and enrollment.
Net Position is divided into three major categories.
The first category, net investment in capital assets, provides the institution's equity in property, plant
and equipment owned by the institution.
The next category is restricted, which is divided into two categories, nonexpendable and expendable.
The corpus of nonexpendable, restricted resources is available only for investment purposes.
Expendable, restricted resources are available for expenditure by the institution but must be spent for
purposes as determined by donors and/or external entities that have placed time or purpose
restrictions on the use of the assets.
ii
The final category is unrestricted. Unrestricted resources are available to the institution for any lawful
purpose.
Statement of Net Position, Condensed
June 30, 2014 (1)
June 30, 2015
Assets
Current Assets
Capital Assets, Net
Other Assets
Total Assets
$
287,108,671
1,838,371,489
215,120,752
$
414,075,792
1,690,097,604
95,068,743
2,340,600,912
2,199,242,139
56,161,934
0
Liabilities
Current Liabilities
Noncurrent Liabilities
144,154,552
754,300,673
152,037,816
287,467,289
Total Liabilities
898,455,225
439,505,105
158,265,753
0
1,540,270,363
1,411,848,296
78,592,600
90,906,725
-369,727,820
75,806,989
86,436,729
185,645,020
Deferred Outflows of Resources
Deferred Inflows of Resources
N et Position
Net Investment in Capital Assets
Restricted
Nonexpendable
Expendable
Unrestricted
Total N et Position
$ 1,340,041,868
$
1,759,737,034
(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position.
See Note 1 in the Notes to the Financial Statements for more information.
Total assets and deferred outflows of resources increased by $197,520,707 which was primarily due
to an increase of $148,273,885 in Capital Assets, including new facilities such as the Veterinary
Medical Center and the Bolton Dining Commons, as well as an increase of $56,161,934 in Deferred
Outflows of Resources related to Defined Benefit Pension Plans offset by a net $6,915,112 decrease
in current and other assets. The Deferred Outflows of Resources on the defined benefit pension plans
is associated with the implementation of Governmental Accounting Standards Board (GASB)
Statement No. 68, Accounting and Financial Reporting for Pensions-An Amendment of GASB Statement
No. 27. GASB Statement No. 68 is effective for fiscal periods beginning after June 15, 2014.
Total liabilities and deferred inflows of resources increased for the year by $617,215,873, primarily
due to an increase in net pension liability of $454,977,572 and also in deferred inflows of resources
on defined benefit pension plan of $158,265,753, which is related to the implementation of GASB
Statement No. 68. The combination of the increase in total assets and deferred outflows of resources
of $197,520,707 and the increase of $617,215,873 in total liabilities and deferred inflows of
resources yields a decrease in net position of $419,695,166. The decrease in net position primarily
impacts Unrestricted Net Position, in the amount of $555,372,840, offset by an increase in Net
Investment in Capital Assets of $128,422,067.
iii
Statement of Revenues, Expenses and Changes in Net Position
Changes in total net position as presented on the Statement of Net Position are based on the activity
presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the
statement is to present the revenues received by the University, both operating and nonoperating, and
the expenses paid by the University, operating and nonoperating, and any other revenues, expenses,
gains and losses received or spent by the University. Generally, operating revenues are received for
providing goods and services to the various customers and constituencies of the University. Operating
expenses are those expenses paid to acquire or produce the goods and services provided in return for
the operating revenues, and to carry out the mission of the University. Nonoperating revenues are
revenues received for which goods and services are not provided. For example state appropriations
are nonoperating because they are provided by the Legislature to the University without the Legislature
directly receiving commensurate goods and services for those revenues.
Statement of Revenues, Expenses and Changes in Net Position, Condensed
June 30, 2015
Operating Revenues
Operating Expenses
Operating Loss
$
868,848,405
1,303,040,238
June 30, 2014 (1)
$
806,169,341
1,253,332,393
-434,191,833
-447,163,052
478,773,160
488,015,089
44,581,327
40,852,037
Other Revenues, Expenses, Gains or Losses
109,787,074
34,009,193
Increase in Net Position
154,368,401
74,861,230
1,759,737,034
1,684,875,804
Nonoperating Revenues and Expenses
Income Before Other Revenues,
Expenses, Gains or Losses
Net Position at Beginning of Year,
as Originally Reported
Prior Year Adjustments
Net Position at Beginning of Year, Restated
Net Position at End of Year
-574,063,567
1,185,673,467
$ 1,340,041,868
1,684,875,804
$
1,759,737,034
(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position.
See Note 1 in the Notes to the Financial Statements for more information.
The Statement of Revenues, Expenses and Changes in Net Position reflect a positive year from
operation, but an overall negative year due to the implementation of new accounting standards related
to pension plans, which is represented by a decrease in net position at the end of the year. Some
highlights of the information presented on this statement are as follows:
iv
Revenue by Source
For the years ended June 30, 2015 and June 30, 2014
Revenue by Source
For the Years Ended June 30, 2015 and June 30, 2014
June 30, 2015
Operating Revenue
Tuition and Fees
Federal Appropriations
Grants and Contracts
Sales and Services of Educational Departments
Auxiliary
Other
$
401,047,785
15,427,893
192,811,353
78,180,854
175,042,977
6,337,543
Total Operating Revenue
Nonoperating Revenue
State Appropriations
Grants and Contracts
Gifts
Investment Income
Other
Total Nonoperating Revenue
Capital Grants and Gifts
Federal
State
Other Capital Grants and Gifts
Total Capital Grants and Gifts
Total Revenues
June 30, 2014 (1)
$
364,533,204
13,487,647
185,176,165
69,923,239
169,958,352
3,090,734
868,848,405
806,169,341
400,083,488
69,230,533
13,865,975
2,431,477
11,521,240
387,087,925
72,578,935
12,485,412
9,736,591
24,247,014
497,132,713
506,135,877
83,177,989
26,609,085
10,805,000
13,540,353
9,663,840
109,787,074
34,009,193
$ 1,475,768,192
$
1,346,314,411
(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position.
See Note 1 in the Notes to the Financial Statements for more information.
v
The illustration below is a comparison of the University's revenue sources by major category for the
years ended June 30, 2015 and June 30, 2014.
Expenses (By Functional Classification)
For the Years Ended June 30, 2015 and June 30, 2014
June 30, 2015
Operating Expenses
Instruction
Research
Public Service
Academic Support
Student Services
Institutional Support
Plant Operations and Maintenance
Scholarships and Fellowships
Auxiliary Enterprises
Total Operating Expenses
$
283,203,969
337,130,651
160,902,519
98,869,544
47,021,984
74,253,138
117,877,755
26,516,244
157,264,434
$
272,655,278
323,529,588
160,219,292
90,399,833
41,726,819
71,771,920
120,256,452
21,831,737
150,941,474
1,303,040,238
1,253,332,393
18,359,553
18,120,788
Nonoperating Expenses
Expense (Capital Assets)
Total Expenses
June 30, 2014 (1)
$ 1,321,399,791
$
1,271,453,181
(1) The June 30, 2014 amounts do not reflect the effects of the restatement of July 1, 2014 net position.
See Note 1 in the Notes to the Financial Statements for more information.
vi
Expenses are described above by functional classification. The illustration below is a comparison of
the University's operating expenses by natural classification for the years ended June 30, 2015 and
June 30, 2014.
Operating revenues increased by $62,679,064 in fiscal year 2015, which included a $36,514,581
net increase in tuition and fees and a $7,635,188 increase in operating grants and contracts, which
are grants that exchange payment for products or services.
As a result of additional participation in services provided by Auxiliary units, the Auxiliary revenue
increased overall by $5,084,625 with $3,101,954 of the increase in food services revenues and an
$879,631 increase in parking/transportation services revenues.
Nonoperating revenues decreased by $9,003,164 for the year primarily due to unrealized loss in
market value on long-term investments, a component of investment income and a decrease in other
nonoperating revenue, such as nonoperating contracts and grants and a one-time significant land sale
in fiscal year 2014. These decreases were offset by an increase of $12,995,563 in State
Appropriations.
Total operating expenses increased by $49,707,845 which included a $27,245,173 increase in
employee compensation and benefits reflecting the hiring of new faculty, merit increases, and the cost
of health insurance for the employees of the Institution.
Supplies and Other Services increased by $15,055,698 during the past year. The increase was
primarily associated with an increase in contracts for goods and services used by the Institution.
vii
Statem ent of Cash Flow s
The final statement presented by the University of Georgia is the Statement of Cash Flows. The
Statement of Cash Flows presents detailed information about the cash activity of the institution during
the year. Cash flow information can be used to evaluate the financial viability of the University's ability
to meet financial obligations as they mature. The statement is divided into five parts. The first part
deals with operating cash flows and shows the net cash used by the operating activities of the
institution. The second section reflects cash flows from noncapital financing activities. This section
reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing
purposes. The third section deals with cash flows from capital and related financing activities. This
section deals with the cash used for the acquisition and construction of capital and related items. The
fourth section reflects the cash flows from investing activities and shows the purchases, proceeds,
and interest received from investing activities. The fifth section reconciles the net cash used to the
operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net
Position.
Cash Flows for the Years Ended June 30, 2015 and June 30, 2014, Condensed
June 30, 2015
Cash Provided (Used) By:
Operating Activities
Noncapital Financing Activities
Capital and Related Financing Activities
Investing Activities
$
-375,337,927
473,946,457
-125,148,812
-47,628,423
Net Change in Cash
Cash, Beginning of Year
Cash, End of Year
June 30, 2014
$
-74,168,705
276,192,857
$
202,024,152
-367,993,323
504,191,004
-101,930,472
-474,252
33,792,957
311,286,435
$
345,079,392
Capital Assets
The University had two significant capital asset additions for facilities in fiscal year 2015. The new
$91.6 million Veterinary Medical Center opened in March 2015 with roughly 300,000 square feet of
instruction, classroom and teaching hospital space. The state-of-the-art facility was funded with
private donations and state bonds through the Georgia State Financing and Investment Commission
(GSFIC).
In August 2014, the new $26.6 million Bolton Dining Commons opened as the largest food services
facility on the Athens campus. The two-story, 56,000 square-foot building was financed with auxiliary
funds and bonds through the University of Georgia Real Estate Foundation.
Additionally, the Georgia State Financing and Investment Commission provided funding of $7.7 million
for various renovations and equipment.
For additional information concerning Capital Assets, see Notes 1, 6, 8, and 12 in the Notes to the
Financial Statements.
viii
Long-Term Liabilities
The University of Georgia had Long-Term Liabilities of which $454,977,572 is the new net pension
liability based on implementation of GASB Statement No. 68. The current portion of the
$791,003,675 long-term liability at June 30, 2015 is $36,703,002.
For additional information concerning Long-Term Liabilities, see Note 8 in the Notes to the Financial
Statements.
Economic Outlook
The University of Georgia continued to manage and use its resources wisely in fiscal year 2015. With
the new financial reality for public higher education, the University remains fully committed to student
affordability and prudent use of resources by spending carefully, wisely, and thoughtfully and allocating
its resources strategically to support our core academic and student-life missions. As a result of
modest increases in operating revenues and state appropriations, the University was able to provide
increased support to its instruction, research, and public service missions. This increase in support
was characterized by hiring new faculty and advisors, implementing new academic initiatives focused
on student success, enhancing research activities and economic development, and the construction
of state-of-the-art facilities to support the academic work of our faculty and students.
As fiscal year 2016 progresses, the University will build on its efforts to plan and manage its precious
resources to create unparalleled learning opportunities for students, to perform world-changing
research and scholarship, and to establish strong ties to communities throughout Georgia and beyond.
Jere W. Morehead, President
University of Georgia
ix
BASIC FINANCIAL STATEMENTS
-1-
UNIVERSITY OF GEORGIA
STATEMENT OF NET POSITION
JUNE 30, 2015
EXHIBIT "A"
ASSETS
Current Assets
Cash and Cash Equivalents
Short-Term Investments
Accounts Receivable, Net (Note 3)
Receivables - Federal Financial Assistance
Receivables - Other
Due from Affiliated Organizations
Inventories (Note 4)
Prepaid Items
$
199,430,706
1,190,446
4,080,596
31,064,705
39,714,138
6,519,956
5,108,124
Total Current Assets
287,108,671
Noncurrent Assets
Noncurrent Cash
Due from Institutions - Capital Liability Reserve Fund
Investments
Notes Receivable, Net
Capital Assets, Net (Note 6)
2,593,446
1,767,538
201,441,369
9,318,399
1,838,371,489
Total Noncurrent Assets
2,053,492,241
Total Assets
2,340,600,912
Deferred Outflows of Resources
Related to Defined Benefit Pension Plans
56,161,934
LIABILITIES
Current Liabilities
Accounts Payable
Salaries Payable
Contracts Payable
Deposits
Advances (Including Tuition and Fees) (Note 7)
Other Liabilities
Deposits Held for Other Organizations
Lease Purchase Obligations
Compensated Absences
Due to Affiliated Organizations
35,983,339
8,488,635
6,288,209
1,276,376
42,788,465
612,570
8,223,743
6,209,826
30,316,876
3,966,513
Total Current Liabilities
144,154,552
Noncurrent Liabilities
Lease Purchase Obligations
Compensated Absences
Net Pension Liability
Other Noncurrent Liabilities
285,603,091
13,022,179
454,977,572
697,831
Total Noncurrent Liabilities
754,300,673
Total Liabilities
898,455,225
Deferred Inflows of Resources
Related to Defined Benefit Pension Plans
158,265,753
NET POSITION
Net Investment in Capital Assets
Restricted for:
Nonexpendable
Expendable
Unrestricted (Deficit)
1,540,270,363
78,592,600
90,906,725
-369,727,820
Total Net Position
$
The notes to the financial statements are an integral part of this statement.
-2-
1,340,041,868
UNIVERSITY OF GEORGIA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
YEAR ENDED JUNE 30, 2015
EXHIBIT "B"
OPERATING REVENUES
Student Tuition and Fees (Net of Allowance for Doubtful Accounts)
Less: Scholarship Allowances
Federal Appropriations
Grants and Contracts
Federal
Federal Stimulus
State
Other
Sales and Services
Rents and Royalties
Auxiliary Enterprises
Residence Halls
Bookstore
Food Services
Parking/Transportation
Health Services
Intercollegiate Athletics
Other Organizations
Other Operating Revenues
$
523,437,561
-122,389,776
15,427,893
117,580,515
1,308,374
18,598,372
55,324,092
78,180,854
461,366
52,761,851
4,049,062
46,574,595
21,686,960
21,088,974
26,495,770
2,385,765
5,876,177
Total Operating Revenues
868,848,405
OPERATING EXPENSES
Salaries
Faculty
Staff
Employee Benefits
Other Personal Services
Travel
Scholarships and Fellowships
Utilities
Supplies and Other Services
Depreciation
220,484,328
465,274,864
195,232,396
784,958
16,833,885
31,300,254
35,301,988
252,447,483
85,380,082
Total Operating Expenses
1,303,040,238
Operating Loss
-434,191,833
NONOPERATING REVENUES (EXPENSES)
State Appropriations
Grants and Contracts
Federal
State
Other
Gifts
Investment Income (Endowments, Auxiliary and Other)
Interest Expense (Capital Assets)
Other Nonoperating Revenues (Expenses)
400,083,488
28,323,602
4,567,429
36,339,502
13,865,975
2,431,477
-18,359,553
11,521,240
Net Nonoperating Revenues
478,773,160
Income Before Other Revenues, Expenses, Gains, or Losses
44,581,327
Capital Grants and Gifts
State
Other
83,177,989
26,609,085
Total Other Revenues, Expenses, Gains or Losses
109,787,074
Increase in Net Position
154,368,401
Net Position - Beginning of Year, Restated
1,185,673,467
Net Position - End of Year
$
The notes to the financial statements are an integral part of this statement.
-3-
1,340,041,868
UNIVERSITY OF GEORGIA
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Tuition and Fees
Federal Appropriations
Grants and Contracts (Exchange)
Sales and Services
Payments to Suppliers
Payments to Employees
Payments for Scholarships and Fellowships
Loans Issued to Students and Employees
Collection of Loans to Students and Employees
Auxiliary Enterprise Charges:
Residence Halls
Bookstore
Food Services
Parking/Transportation
Health Services
Intercollegiate Athletics
Other Organizations
Other Receipts
Other Payments
EXHIBIT "C"
$
399,660,226
15,769,064
191,327,250
79,212,946
-514,366,511
-686,618,655
-31,300,254
-1,649,658
1,639,781
52,339,104
4,039,196
46,452,706
21,751,191
20,424,175
24,131,817
2,317,177
1,590,933
-2,058,415
Net Cash Used by Operating Activities
-375,337,927
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
State Appropriations
Agency Funds Transactions
Gifts and Grants Received for Other than Capital Purposes
Other Nonoperating Receipts (Expenses)
400,083,488
-20,575,326
83,096,508
11,341,787
Net Cash Flows Provided by Noncapital Financing Activities
473,946,457
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital Grants and Gifts Received
Proceeds from Sale of Capital Assets
Purchases of Capital Assets
Principal Paid on Capital Debt and Leases
Interest Paid on Capital Debt and Leases
23,445,406
1,360,591
-120,912,168
-10,683,088
-18,359,553
Net Cash Used by Capital and Related Financing Activities
-125,148,812
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Investments
Purchase of Investments
2,102,509
-49,730,932
Net Cash Used by Investing Activities
-47,628,423
Net Decrease in Cash
-74,168,705
Cash and Cash Equivalents - Beginning of Year, Restated
276,192,857
Cash and Cash Equivalents - End of Year
$
-4-
202,024,152
UNIVERSITY OF GEORGIA
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2015
RECONCILIATION OF OPERATING LOSS TO NET CASH
USED BY OPERATING ACTIVITIES:
Operating Loss
Adjustments to Reconcile Operating Loss to Net Cash
Used by Operating Activities
Depreciation
Change in Assets and Liabilities:
Receivables, Net
Inventories
Prepaid Items
Notes Receivable, Net
Accounts Payable
Salaries Payable
Advances (Including Tuition and Fees)
Other Liabilities
Compensated Absences
Change in Deferred Inflows/Outflows of Resources:
Deferred Inflows of Resources
Deferred Outflows of Resources
Net Pension Liability
EXHIBIT "C"
$
-434,191,833
85,380,082
-13,007,287
-908,989
-1,654,402
-9,877
4,301,369
342,562
-1,578,212
3,276,825
-305,989
158,265,753
-11,005,694
-164,242,235
Net Cash Used by Operating Activities
NONCASH ACTIVITY
Fixed Assets Acquired by Incurring Capital Lease Obligations
Change in Fair Value of Investments Recognized as a Component of Interest Income
Gift of Capital Assets Reducing Proceeds of Capital Gifts and Grants
The notes to the financial statements are an integral part of this statement.
-5-
$
-375,337,927
$
$
$
24,246,697
328,968
86,341,668
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 1. Summary of Significant Accounting Policies
Nature of Operations
The University of Georgia (the University) serves the State and national communities by providing its
students with academic instruction that advances fundamental knowledge, and by disseminating
knowledge to the people of Georgia and throughout the country.
Reporting Entity
The University of Georgia is one of thirty (30) State supported member institutions of higher education
in Georgia which comprise the University System of Georgia, an organizational unit of the State of
Georgia. The accompanying financial statements reflect the operations of the University of Georgia 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. The University of Georgia does not have
authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the
University of Georgia 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.
Legally separate, tax exempt Affiliated Organizations whose activities primarily support units of the
University System of Georgia, which are organizational units of the State of Georgia, are considered
potential Component Units of the State. See Note 18 for additional information.
Financial Statement Presentation
The financial statements have been prepared in accordance with generally accepted accounting
principles (GAAP) as prescribed by the GASB and are presented as required by these standards to
provide a comprehensive, entity-wide perspective of the University's assets, deferred outflows of
resources, liabilities, deferred inflows of resources, net position, revenues, expenses, changes in net
position and cash flows.
Basis of Accounting
For financial reporting purposes, the University is considered a special-purpose government engaged
only in business-type activities. Accordingly, the University's financial statements have been presented
using the economic resources measurement focus and the accrual basis of accounting. Under the
accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation
has been incurred. All significant intra-University transactions have been eliminated.
New Accounting Pronouncements
In fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB)
Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this Statement
establish accounting and financial reporting standards for pensions that are provided to the
employees of state and local governmental employers through pension plans that are administered
through trusts. Implementation of this statement requires a restatement to beginning net position. The
adoption of this statement has a significant impact on the University's financial statements.
-6-
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
In fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB)
Statement No. 69, Government Combinations and Disposals of Government Operations. This statement
provides specific accounting and financial reporting guidance for combinations in the governmental
environment. This statement also requires that disclosures be made by governments about
combination arrangements in which they engage and for disposals of government operations. The
adoption of this statement does not have a significant impact on the University's financial statements.
In fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB)
Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an
amendment of GASB No. 68. The objective of this statement is to improve accounting and financial
reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions,
concerning transition provisions related to certain pension contributions made to defined benefit
pension plans prior to implementation of statement. This statement amends paragraph 137 of
Statement No. 68 which limited recognition of pension-related deferred outflows of resources and
deferred inflows of resources at the transition to circumstances in which it is practical to determine
the amounts of all deferred outflows of resources and deferred inflows of resources related to
pensions. Adoption of this statement in conjunction with GASB No. 68 had a significant impact on the
University's financial statements.
Cash and Cash Equivalents
Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized
financial institutions, and cash management pools that have the general characteristics of demand
deposit accounts. This includes the State Investment Pool.
Investments
Investments include financial instruments with terms in excess of 13 months, certain other securities
for the production of revenue, land, and other real estate held as investments by endowments. The
University accounts for its investments at fair value. Changes in unrealized gain (loss) on the carrying
value of investments are reported as a component of investment income in the Statement of
Revenues, Expenses and Changes in Net Position. The Board of Regents Legal Fund and the Board of
Regents Diversified Fund are included under Investments.
Accounts Receivable
Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services
provided to students, faculty and staff, the majority of whom reside in the State of Georgia. Accounts
receivable also includes amounts due from the federal government, state and local governments, or
private sources, in connection with reimbursement of allowable expenditures made pursuant to the
University's grants and contracts. Accounts receivable are recorded net of estimated uncollectible
amounts.
Inventories
Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFO") basis.
Resale Inventories are valued at cost using the average cost basis.
Prepaid Items
Prepaid Items reflect payments of costs applicable to future accounting periods.
Noncurrent Cash and Investments
Cash and investments that are externally restricted and cannot be used to pay current liabilities are
classified as noncurrent assets in the Statement of Net Position.
-7-
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Capital Assets
Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of
donation in the case of gifts. For equipment, the University's capitalization policy includes all items
with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations
to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly
increase the value or extend the useful life of the structure are capitalized. Routine repairs and
maintenance are charged to operating expense in the year in which the expense was incurred.
Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral
rights, easements, patents, trademarks, and copyrights, as well as software, is computed using the
straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for
buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3
to 30 years for equipment. Residual values generally are 10% of historical costs for infrastructure,
buildings and building improvements, and facilities and other improvements.
To fully understand plant additions in the University System, it is necessary to look at the activities of
the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to
the System. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted
to it in the Constitution of the State of Georgia and the Act creating the GSFIC. These bonds constitute
direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and
taxing power of the State are pledged.
Capital Liability Reserve Fund
In fiscal year 2014, the Capital Liability Reserve Fund (Fund) was established by the Board of Regents
to protect the fiscal integrity of the University System of Georgia (USG) to maintain the strongest
possible credit ratings associated with Public Private Venture (PPV) projects and to ensure that the
Board of Regents can effectively support its long-term capital lease obligations. The Fund is financed
by all USG institutions participating in the PPV program. The Fund serves as a pooled reserve that is
managed by the Board of Regents. The Fund shall only be used to address significant shortfalls and
only insofar as a requesting USG institution is unable to make the required PPV capital lease payment
to the designated cooperative organization. The Fund will continue as long as the Board of Regents
has rental obligations under the PPV program and at the conclusion of the program, funds will be
returned to the University. The University of Georgia's contribution to the fund as of June 30, 2015 was
$1,767,538.
Deposits
Deposits represent good faith deposits from students to reserve housing assignments in a University
residence hall.
Advances
Advances include amounts received for tuition and fees and certain auxiliary activities prior to the end
of the fiscal year but related to the subsequent accounting period. Advances also include amounts
received from grant and contract sponsors that have not yet been earned.
Deferred Outflows of Resources
Deferred outflows of resources consists of the consumption of net assets by the University that are
applicable to a future reporting period.
Compensated Absences
Employee vacation pay is accrued at year-end for financial statement purposes. The liability and
expense incurred are recorded at year-end as compensated absences in the Statement of Net Position,
and as a component of compensation and benefit expense in the Statement of Revenues, Expenses
and Changes in Net Position.
-8-
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Noncurrent Liabilities
Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital
lease obligations with contractual maturities greater than one year; and (3) other liabilities that,
although payable within one year, are to be paid from funds that are classified as noncurrent assets.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the fiduciary net
position of the Teachers' Retirement System of Georgia (TRS) and Employees' Retirement System
(ERS), additions to/deductions for TRS's and ERS's fiduciary net position have been determined on the
same basis as they are reported by TRS and ERS. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
Deferred Inflows of Resources
Deferred inflows of resources consists of the acquisition of net assets by the University that are
applicable to a future reporting period.
Net Position
The University's net position is classified as follows:
Net Investment in Capital Assets: This represents the University's total investment in capital assets, net
of outstanding debt obligations related to those capital assets. To the extent debt has been incurred
but not yet expended for capital assets, such amounts are not included as a component of the net
investment in capital assets.
The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed
previously in Note 1 - Capital Assets section.
Restricted - nonexpendable: includes endowment and similar type funds, in which donors or other
outside sources have stipulated, as a condition of the gift instrument, that the principal is to be
maintained inviolate and in perpetuity, and invested for the purpose of producing present and future
income, which may be either expended or added to principal. The University may accumulate as much
of the annual net income of an institutional fund as is prudent under the standard established by Code
Section 44-15-7 of Annotated Code of Georgia.
Restricted - expendable: are restricted resources available for expenditure, but these restricted
resources must be spent for purposes as determined by donors and/or external entities that have
placed time or purpose restrictions on the use of the assets.
Unrestricted: Unrestricted net position is the net amount of the assets, deferred outflows of resources,
liabilities, and deferred inflows of resources that are not included in the determination of Investment
in Capital Assets. Included in the net deficit reported is the University's Net Pension liability of
$454,977,572 which is required for financial reporting and will not impact the economics of the plan
or affect budgets or cash flows. When an expense is incurred that can be paid using either restricted
or unrestricted resources, the University's policy is to first apply the expense towards unrestricted
resources, and then towards restricted resources.
Income Taxes
The University of Georgia, 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.
-9-
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Classification of Revenues and Expenses
The Statement of Revenues, Expenses and Changes in Net Position classify fiscal year activity as
operating and nonoperating according to the following criteria:
Operating revenue includes activities that have the characteristics of exchange transactions, such as
(1) student tuition and fees, net of scholarship allowances, (2) certain federal, state and local grants
and contracts, and (3) sales and services.
Nonoperating revenue includes activities that have the characteristics of nonexchange transactions,
such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue
by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental
Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and
investment income.
Operating Expenses: Operating expense includes activities that have the characteristics of exchange
transactions.
Nonoperating expense includes activities that have the characteristics of nonexchange transactions,
such as capital financing costs and costs related to investment activity.
Scholarship Allowances
Student tuition and fee revenues, and certain other revenues from students, are reported at gross with
a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and
Changes in Net Position. Scholarship allowances are the difference between the stated charge for
goods and services provided by the University, and the amount that is paid by students and/or third
parties making payments on the students' behalf.
Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental
programs are recorded as either operating or nonoperating revenues in the University's financial
statements. To the extent that revenues from such programs are used to satisfy tuition and fees and
other student charges, the University has recorded contra revenue for scholarship allowances.
Operating and Nonoperating Auxiliary/Transportation and Health Service revenues of $21,711,077
and $21,116,118, respectively, are reported net of discounts and allowances of $236,500 and
$542,420, respectively.
Restatement of Prior Year Net Position
For fiscal year 2015, the University made prior period adjustments due to the adoption of GASB
Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71 Pension
Transition for Contributions Made Subsequent to the Measurement Date, which requires the restatement
of the June 30, 2014, net position. The result is a decrease to Net Position at July 1, 2014 of
$574,063,567 of which $619,219,807 is represented by Net Pension Liability and $45,156,240 is
represented in deferred outflow. This change is in accordance with generally accepted accounting
principles.
For fiscal year 2015, UGA made reclassifications to properly reflect assets as cash & cash equivalents
and investments in accordance with GASB Statement No. 9, Reporting Cash Flows of Proprietary and
Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting. This
reclassification required the restatement of the June 30, 2014, Cash and Cash Equivalents reported
on the Statement of Cash Flows. The result is a decrease in Cash and Cash Equivalents at July 1, 2014
reported on the Statement of Cash Flows of $68,886,535. This change is in accordance with generally
accepted accounting principles.
- 10 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 2. Deposits and Investments
Deposits
The custodial credit risk for deposits is the risk that in the event of a bank failure, the University's
deposits may not be recovered. Funds belonging to the State of Georgia (and thus the University)
cannot be placed in a depository paying interest longer than ten days without the depository providing
a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or
more of the following securities as enumerated in the Official Code of Georgia Annotated Section
50-17-59:
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, 2015, the carrying value of deposits was $92,974,234 and the bank balance was
$93,499,201. Of the University's deposits, $92,714,338 were uninsured. Of these uninsured
deposits, $92,625,720 were collateralized with securities held by the financial institution's trust
department or agent in the University's name and $88,618 were uncollateralized.
Foreign Currency Risk
Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of
an investment or a deposit. The University has a formal policy for managing exposure to foreign
currency credit risk by requiring a maximum balance in a foreign account of $100,000 U.S. currency.
The University's exposure to foreign currency risk derives from deposits in foreign banks for operations
of studies abroad programs. These deposits are uninsured and uncollateralized in the amount of
$88,618 as follows:
Program
Institution
Currency
U.S. Value
UGA - Oxford Program
Barclay's
British Pound
UGA - Cortona Art Program
Banca CR Firenze
European Euro
42,420
UGA - Grady College of Journalism
Societe Generale
European Euro
4,597
$
$
- 11 -
41,601
88,618
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Investments
The University of Georgia maintains an investment policy which fosters sound and prudent judgment
in the management of assets to ensure safety of capital consistent with the fiduciary responsibility
each institution has to the citizens of Georgia and which conforms to Board of Regents investment
policy. All investments are consistent with donor intent, Board of Regents policy, and applicable federal
and state laws.
The University's investments as of June 30, 2015 are presented below. All investments are presented
by investment type and debt securities are presented by maturity.
Investment Maturity
Investment Type
Fair
Less Than
Value
3 Months
More than
4 - 12 Months
1 - 5 Years
6 - 10 years
10 Years
Debt Securities
U. S. Treasuries
$
5,779,425
$
5,712,107 $
58,218 $
9,100
U. S. Agencies
Explicitly Guaranteed
13,446,012
Implicitly Guaranteed
99,486,672
Corporate Debt
103,864
Repurchase Agreements
962,610 $
$
119,778,583 $
$
962,610 $
75,843
Bond/Equity Mutual Funds
161,325
Bond/Equity Mutual Funds International
115,123
Equity Mutual Funds - Domestic
347,148
Equity Mutual Funds - International
564,865
Equity Securities - Domestic
461,175
Equity Securities - International
41,001
Miscellaneous Holdings
606
Real Estate Fund
259,491
Real Estate Held for
Investment Purposes
5,708,942
Investment Pools
Board of Regents
Legal Fund
14,524,724
Diversified Fund
61,555,601
Office of the State Treasurer
Georgia Fund 1
Total Investments
107,866,452
$
5,889,579
4,606,329
2,950,104
21,513,436
11,404,309
65,378,481
3,385
100,479
962,610
Other Investments
Cash Equivalent Money Market
1,190,446
311,460,879
- 12 -
1,190,446 $
33,118,507 $
16,169,335 $
68,337,685
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
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. Additional information on the Board of
Regents Investment Pool is disclosed in the audited Financial Statements of the Board of Regents of
the University System of Georgia - System Office (oversight unit). This audit can be obtained from the
Georgia Department of Audits - Education Audit Division or on their web site at
http://www.audits.ga.gov.
The Georgia Fund 1 Investment Pool, managed by the Office of the State Treasurer, is not registered
with the Securities and Exchange Commission as an investment company, and the State does not
consider Georgia Fund 1 to be a 2a7-like pool. This investment is valued at the pool's share price,
$1.00 per share. The Georgia Fund 1 Investment Pool is an AAAf rated investment pool by Standard
and Poor's. The Weighted Average Maturity of the Fund is 56 days.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the
fair value of an investment. The University's policy for managing interest rate risk is divided between
short-term and long-term investments. Short-term investments will have a maximum maturity of three
years and long-term investments will have a maximum maturity of ten years.
The Effective Duration of the Legal Fund is 3.43 years. Of the University's total investment of
$14,524,724 in the Legal Fund, $14,524,724 is invested in debt securities.
The Effective Duration of the Diversified Fund is 4.79 years. Of the University's total investment of
$61,555,601 in the Diversified Fund, $20,756,895 is invested in debt securities.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a
transaction, the university will not be able to recover the value of the investment or collateral securities
that are in the possession of an outside party. The University does not have a formal policy for
managing custodial credit risk for investments.
At June 30, 2015, $119,580,079 of the University's applicable investments were uninsured and held
by the investment's counterparty in the University's name and $2,224,475 were uninsured and held
by the investment's counterparty's trust department or agent, but not in the University's name.
Credit Quality Risk
Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. The University's policy for managing credit quality risk focuses on investment of loan and
endowment funds which are funded by private sources. For loan and endowment funds, investments
should have an average rating of "AAA". All other investments follow Board of Regents investment
guidelines.
- 13 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
The investments subject to credit quality risk are reflected below:
Fair Value
Credit Quality Risk
AAA
AA
A
BAA1
BAA2
BAA3
Unrated
$
99,459,350
$
27,548 $
41,424 $
19,300 $
11,586 $
4,007
27,548 $
41,424 $
19,300 $
11,586 $
4,007 $
99,459,350
Related Debt Investments
U. S. Treasuries
$
U. S. Agency Securities
5,779,425 $
99,486,672
5,779,425
27,322
Corporate Debt
103,865
Repurchase Agreements
962,610
962,610
106,332,572 $
6,769,357 $
$
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment
in a single issuer. The University's policy for managing concentration of credit risk is divided between
short-term and long-term investments. For short-term investments, certificates of deposit and
repurchase agreements should comprise 25-50%, investment in the Office of State Treasurer, Georgia
Fund 1 should not exceed 50%, and investment in U.S. Treasury obligations or U.S. Government agency
securities can be 100%. For long-term investment of loan and endowment funds, equities comprise
50-75%, fixed income can range between 25-50%, and cash and cash equivalents will range between
10-25%.
As of June 30, 2015, applicable investments in a single issuer where those investments exceed 5% of
the total investments were as follows:
FHLMC
FNMA
$
$
38,693,420
60,783,248
12.40%
19.50%
Note 3. Accounts Receivable
Accounts receivable consisted of the following at June 30, 2015:
Student Tuition and Fees
$
Auxiliary Enterprises and Other Operating Activities
Federal Financial Assistance
Georgia Student Finance Commission
Georgia State Financing and Investment Commission
Due from Affiliated Organizations
Other
3,269,247
1,528,525
4,080,596
8,453,087
4,331,323
39,714,138
14,404,596
Less Allowance for Doubtful Accounts
75,781,512
922,073
Net Accounts Receivable
$
- 14 -
74,859,439
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 4. Inventories
Inventories consisted of the following at June 30, 2015:
Food Services
Physical Plant
Other
Total
$
2,062,420
3,101,784
1,355,752
$
6,519,956
Note 5. Notes/Loans Receivable
The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at
June 30, 2015. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to
a maximum of 100% if the participant complies with certain provisions. The Federal government
reimburses the University for amounts cancelled under these provisions. As the University determines
that loans are uncollectible and not eligible for reimbursement by the Federal government, the loans
are written off and assigned to the U. S. Department of Education. The University has provided an
allowance for uncollectible loans, which, in management's opinion, is sufficient to absorb loans that
will ultimately be written off. At June 30, 2015, the allowance for uncollectible loans was
approximately $1,045,749.
- 15 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 6. Capital Assets
Following are the changes in capital assets for the year ended June 30, 2015:
Beginning
Ending
Balance
Balance
July 1, 2014
Additions
Reductions
June 30, 2015
Capital Assets, Not Being Depreciated:
Land
$
58,115,545
$
115,197 $
21,119,468 $
Construction Work-In-Progress
44,639,356
46,585,495
23,461,515
67,763,336
123,874,369
46,836,402
23,576,712
147,134,059
83,999
1,965,957,666
20,235,248
409,772,805
Total Capital Assets, Not Being Depreciated
250,907
58,000,348
Capitalized Collections
21,370,375
Capital Assets, Being Depreciated/Amortized:
Infrastructure
Building and Building Improvements
69,717,147
5,168,920
1,813,740,266
152,301,399
Facilities and Other Improvements
200,612,197
2,131,018
Equipment
395,837,750
34,170,303
Capital Leases
Library Collections
Software
74,886,067
202,743,215
185,240
46,630
89,460
142,410
295,131,646
13,517,061
24,676
308,624,031
18,524,941
4,124,887
2,793,749,187
211,460,218
22,649,828
Total Capital Assets Being Depreciated/
Amortized
20,433,383
2,984,776,022
75,599
625,076,369
315,267,435
Less: Accumulated Depreciation/Amortization
Infrastructure
Building and Building Improvements
Facilities and Other Improvements
Equipment
Capital Leases
Library Collections
Software
Total Accumulated Depreciation/Amortization
28,016,746
2,379,068
582,906,677
42,245,291
30,395,814
66,514,854
5,661,713
313,202,941
21,270,157
19,205,663
72,176,567
131,913
28,130
61,504
98,539
236,033,540
11,788,175
24,676
247,797,039
719,281
2,007,548
1,227,525,952
85,380,082
19,367,442
1,293,538,592
1,566,223,235
126,080,136
1,065,941
1,691,237,430
2,726,829
Total Capital Assets, Being Depreciated/
Amortized, Net
Capital Assets, Net
$ 1,690,097,604 $ 172,916,538 $ 24,642,653 $ 1,838,371,489
For projects managed by GSFIC, GSFIC retains construction-in-progress on its books throughout the
construction period and transfers the entire project to the University when complete. For projects
managed by the University, the University retains construction-in-progress on its books and is
reimbursed by GSFIC. For the year ended June 30, 2015, GSFIC transferred capital additions valued
at $93,798,240 to the University of Georgia, $31,203,383 of this transfer was funded by private
donations. In addition, at June 30, 2015, GSFIC had construction in progress of approximately
$9,242,856 for incomplete projects for the University.
- 16 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 7. Advances (Including Tuition and Fees)
Advances (Including Tuitions and Fees) consisted of the following at June 30, 2015:
Prepaid Tuition and Fees
Research
Other - Advances
Total Advances
$
14,399,967
15,196,157
13,192,341
$
42,788,465
Long-Term advances totaled $42,788,465 of which $42,788,465 was reflected as current.
Note 8. Long-Term Liabilities
Long-Term liability activity for the year ended June 30, 2015 was as follows:
Beginning
Ending
Balance
July 1, 2014
Additions
Reductions
Balance
Current
June 30, 2015
Portion
Leases
Lease Purchase Obligations
$ 278,249,308 $ 24,246,697 $
10,683,088 $ 291,812,917 $
6,209,826
Other Liabilities
Compensated Absences
Net Pension Liability
Pollution Remediation Obligation
Total
Total Long-Term Obligations
43,645,044
29,828,154
619,219,807
30,134,143
43,339,055
164,242,235
454,977,572
30,316,876
882,785
88,145
96,799
874,131
176,300
663,747,636
29,916,299
194,473,177
499,190,758
30,493,176
$ 941,996,944 $ 54,162,996 $ 205,156,265 $ 791,003,675 $ 36,703,002
Note 9. Net Position
Net position is reported in the following three categories: Net Investment in Capital Assets, Restricted
Nonexpendable, Restricted-Expendable, and Unrestricted.
- 17 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
The amounts within each category at June 30, 2015 were as follows:
June 30, 2015
Net Investments in Capital Assets
$
1,540,270,363
Restricted for
Permanent Endowment
78,592,600
Expendable
Organized Activities
Federal Loans
Institutional Loans
Capital Projects
57,608,528
9,378,450
10,669,353
13,250,394
Sub Total
90,906,725
Unrestricted
Auxiliary Operations
R & R Reserve
Reserve for Encumbrances
Reserve for Inventory
Other Unrestricted
USO Reserve Fund
60,699,443
30,037,351
67,819,870
1,487,000
-531,539,022
1,767,538
Sub Total
-369,727,820
TOTAL NET POSITION
$
1,340,041,868
Note 10. Endowments
Investments of the University's endowment funds are pooled, unless required to be separately invested
by the donor. For University controlled, donor-restricted endowments, where the donor has not
provided specific instructions, the Board of Regents permits the University of Georgia to develop
policies for authorizing and spending realized and unrealized endowment income and appreciation as
they determined to be prudent. Realized and unrealized appreciation in excess of the amount
budgeted for current spending is retained by the endowments.
For endowment funds where the donor has not provided specific instructions, investment return of the
University's endowment funds is predicated under classical trust doctrines. Unless the donor has
stipulated otherwise, capital gains and losses are accounted for as part of the endowment principal
and are not available for expenditure.
Note 11. Significant Commitments
The University had significant unearned, outstanding, construction or renovation contracts executed
in the amount of $11,139,240 as of June 30, 2015. This amount is not reflected in the accompanying
basic financial statements.
- 18 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 12. Lease Obligations
The University of Georgia is obligated under various operating leases for the use of real property (land,
buildings, and office facilities) and equipment, and also is obligated under capital leases and
installment purchase agreements for the acquisition of real property.
Capital Leases
Capital leases are generally payable in installments ranging from monthly to annually and have terms
expiring in various years between 2016 and 2044. Payments for fiscal year 2015 were $30,251,817
of which $18,359,553 represented interest and $1,209,176 represented executory costs. Total
principal paid on capital leases was $10,683,088 for the fiscal year ended June 30, 2015. Interest
rates range from 4.00 percent to 8.71 percent.
CAPITAL LEASE SCHEDULE
Outstanding
Lessor
Description
Lease
Principal
Term
Principal Balance
Begin
End
at June 30, 2015
Complex Carbohydrate Research Center
(1) UGA Real Estate Foundation
35,730,770
30 yrs
Oct-03
Sep-33
East Campus Village Residence Halls
(1) UGA Real Estate Foundation
65,631,566
30 yrs
Jul-04
Jun-34
54,589,839
East Village Dinning Commons
(1) UGA Real Estate Foundation
16,371,385
30 yrs
07/04
Jun-34
13,625,153
Paul D. Coverdell Center for Biomedic
(1) UGA Real Estate Foundation
22,018,138
30 yrs
Dec-05
Jun-35
18,941,771
Tate Student Center Parking Deck
(1) UGA Real Estate Foundation
13,400,000
29 yrs
Aug-08
Jun-37
12,216,770
Tate Student Center Expansion
(1) UGA Real Estate Foundation
40,868,389
29 yrs
May-09
Jun-38
43,894,119
Intramural Parking Deck
(1) UGA Real Estate Foundation
7,795,000
30 yrs
Aug-09
Jun-39
7,080,612
Performing Arts Center Parking Deck
(1) UGA Real Estate Foundation
9,468,747
30 yrs
Nov-09
Jun-39
8,599,703
Greek Park House #1 - Pi Kappa Alph
(1) UGA Real Estate Foundation
3,287,613
30 yrs
Aug-09
Jul-39
3,067,941
Greek Park House #2 - Tau Epsilion
(1) UGA Real Estate Foundation
3,287,613
30 yrs
Aug-09
Jul-39
3,067,941
Greek Park House #3 - Sigma Nu
(1) UGA Real Estate Foundation
3,287,613
30 yrs
Aug-09
Jul-39
3,067,941
Greek Park House #7 - Phi Delta
(1) UGA Real Estate Foundation
2,246,232
30 yrs
Aug-09
Jul-39
2,096,144
Medical Partnership Building
(1) UGA Real Estate Foundation
16,005,155
19 yrs
Jul-09
Jun-28
11,585,345
East Campus Housing Phase II
(1) UGA Real Estate Foundation
48,741,608
30 yrs
Jul-10
Jun-40
45,243,079
Rutherford Hall
(1) UGA Real Estate Foundation
21,700,179
20 yrs
Aug-13
Jun-33
14,427,938
Bolton Dining Commons
(1) UGA Real Estate Foundation
24,200,067
30 yrs
Aug-14
Jun-44
20,138,890
Communication Equipment
Brocade Communications System
95,780
4 yrs
Mar-12
Jun-16
13,332
Truck
Acme Auto Leasing, LLC
22,517
4 yrs
Jul-14
Jun-18
16,888
Tractor
Deere & Company
25,952
5 yrs
Feb-14
Jun-19
20,341
Total Leases
(1)
$
Original
$
334,184,324
$
$
30,119,170
291,812,917
These capital leases are with related entities.
Operating Leases
The University of Georgia is Lessee under a number of one-year operating leases, which generally
provide for four (4) renewal option periods. All agreements are cancellable if the State of Georgia does
not provide adequate funding, but that is considered a remote possibility. In the normal course of
business, operating leases are generally renewed or replaced by other leases. Operating leases are
generally payable on a monthly basis.
Facilities and equipment rented through operating leases are not recorded as assets on the balance
sheet. Operating lease expenditures totaled $6,351,054 for the fiscal year ended June 30, 2015.
- 19 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Future Commitments
Future commitments for capital leases (which here and on the Statement of Net Position) include other
installment purchase agreements and for noncancellable operating leases having remaining terms in
excess of one year as of June 30, 2015, were as follows:
Real Property and Equipment
Capital
Operating
Leases
Leases
Year Ending June 30:
2016
$
26,399,534
2017
26,388,811
2018
26,392,352
2019
26,259,325
2020
5,795,262
$
5,795,262
26,256,588
2021 - 2025
131,309,958
2026 - 2030
128,638,732
2031 - 2035
109,524,189
2036 - 2040
47,861,415
2041 - 2045
6,474,027
Total Minimum Lease Payments
555,504,931
Less: Interest
234,473,285
Less:Executory costs (if paid)
Principal Outstanding
$
29,218,729
$
291,812,917
The following is a summary of the carrying values of assets held under capital lease at June 30, 2015:
Description
Equipment
$
Buildings - (PPV Only)
Total Assets Held Under Capital Lease
at June 30, 2015
Outstanding
Held Under
Balances per
Accumulated
Capital Lease
Lease Schedules
Gross Amount
Depreciation
at June 30, 2015
at June 30, 2015
(+)
(-)
(=)
142,410
$
334,040,074
$
Net Capital Assets
334,182,484
98,538
$
48,573,435
$
48,671,973
43,872
$
285,466,639
$
285,510,511
50,561
291,762,356
$
291,812,917
Certain capital leases provide for renewal and/or purchase options. Generally purchase options at
bargain prices of one dollar are exercisable at the expiration of the lease terms.
Note 13. Retirement Plans
The University of Georgia participates in various retirement plans administered by the State of Georgia
under two major retirement systems: Teachers' Retirement System of Georgia (TRS) and Employees'
Retirement System of Georgia (ERS). These two systems issue separate publicly available financial
reports that include the applicable financial statements and required supplementary information. The
reports may be obtained from the respective administrative offices.
- 20 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
The significant retirement plans that the University of Georgia 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.
Teachers' Retirement System of Georgia and Employees' Retirement System of Georgia
General I nform ation about the Teachers' Retirem ent System
P lan description: All teachers of the University as defined in §47-3-60 of the Official Code of Georgia
Annotated (O.C.G.A.) are provided a pension through the Teachers' Retirement System of Georgia (TRS).
TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board
of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the
benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be
obtained at www.trsga.com/publications.
Benefits provided: TRS provides service retirement, disability retirement, and death benefits. Normal
retirement benefits are determined as 2% of the average of the employee's two highest paid
consecutive years of service, multiplied by the number of years of creditable service up to 40 years.
An employee is eligible for normal service retirement after 30 years of creditable service, regardless
of age, or after 10 years of service and attainment of age 60. Ten years of service is required for
disability and death benefits eligibility. Disability benefits are based on the employee's creditable
service and compensation up to the time of disability. Death benefits equal the amount that would be
payable to the employee's beneficiary had the employee retired on the date of death. Death benefits
are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and
participating employers, as actuarially determined, are established and may be amended by the TRS
Board. Contributions are expected to finance the costs of benefits earned by employees during the
year, with an additional amount to finance any unfunded accrued liability. Employees were required to
contribute 6% of their annual pay during fiscal year 2015. The University's contractually required
contribution rate for the year ended June 30, 2015 was 13.10% of annual University payroll. University
contributions to TRS were $49,534,749 for the reporting period (fiscal year ended June 30, 2015)
and $44,786,220 for the measurement period (fiscal year ended June 30, 2014).
General I nform ation about the Em ployees' R etirem ent System
P lan description: ERS is a cost-sharing multiple-employer defined benefit pension plan established
by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing
retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is
directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend
the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can
be obtained at www.ers.ga.gov/formspubs/formspubs.
Benefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State
Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership
prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired
on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan
provisions. Effective January 1, 2009, new state employees and rehired state employees who did not
retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired
prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
- 21 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement
benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of
creditable service regardless of age. Additionally, there are some provisions allowing for early
retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest
24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied
by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made
to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement
pension is payable monthly for life; however, options are available for distribution of the member's
monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and
disability benefits are also available through ERS.
Contributions : Member contributions under the old plan are 4% of annual compensation, up to
$4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the state pays
member contributions in excess of 1.25% of annual compensation. Under the old plan, these state
contributions are included in the members' accounts for refund purposes and are used in the
computation of the members' earnable compensation for the purpose of computing retirement
benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation.
The University's contractually required contribution rate, actuarially determined annually, for the year
ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and
18.87% for GSEPS members. The University's contributions to ERS were $385,819 for the reporting
period (fiscal year ended June 30, 2015) and $370,020 for the measurement period (fiscal year
ended June 30, 2014). Contributions are expected to finance the costs of benefits earned by
employees during the year, with an additional amount to finance any unfunded accrued liability.
P ension Liabilities, P ension Ex pense, and Deferred Outflow s of R esources and Deferred
I nflow s of Resources R elated to P ensions
At June 30, 2015, the University reported a liability for its proportionate share of the net pension
liability for TRS and ERS. The net pension liability was measured as of June 30, 2014. The total
pension liability used to calculate the net pension liability was based on an actuarial valuation as of
June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard
roll-forward techniques. The University's proportion of the net pension liability was based on
contributions to TRS and ERS during the fiscal year ended June 30, 2014. At June 30, 2014, the
University's TRS proportion was 3.57%, which was an increase of 0.04% from its proportion measured
as of June 30, 2013. At June 30, 2014, the University's ERS proportion was 0.09%, which was an
increase of 0.03% from its proportion measured as of June 30, 2013.
For the year ended June 30, 2015, the University recognized pension expense of $32,171,159 for
TRS and $767,232 for ERS. At June 30, 2015, the University reported deferred outflows of resources
and deferred inflows of resources related to pensions from the following sources:
- 22 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
TRS
EXHIBIT "D"
ERS
Deferred
Deferred
Deferred
Deferred
Outflow of
Inflows of
Outflow of
Inflows of
Resources
Resources
Resources
Resources
Net difference between projected and
actual earnings on pension plan
investments
$ 157,450,863
$
814,890
$
814,890
Changes in proportion and differences
between University contributions
and proportionate share of contributions $
5,340,029
$
901,338
University contributions
subsequent to the measurement date
49,534,749
Total
$ 54,874,778
385,818
$ 157,450,863
$ 1,287,156
University contributions subsequent to the measurement date of $49,534,749 for TRS and $385,818
for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the
net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to pensions will be recognized in pension expense
as follows:
Year Ending June 30:
TRS
ERS
2016
$
-38,149,064
$
359,614
2017
$
-38,149,064
$
134,279
2018
$
-38,149,064
$
-203,723
2019
$
-38,149,064
$
-203,722
2020
$
485,422
$
0
Actuarial assum ptions: The total pension liability as of June 30, 2014 was determined by an
actuarial valuation as of June 30, 2013 using the following actuarial assumptions, applied to all
periods included in the measurement:
Teachers' Retirem ent System :
Inflation
3.00%
Salary increases
3.75% - 7.00% average, including inflation
Investment rate of return
7.50%
net of pension plan investment expense
including inflation
Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back
two years for males and set back three years for females.
The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an
actuarial experience study for the period July 1, 2004 - June 30, 2009.
- 23 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Em ployees' Retirem ent System :
Inflation
Salary increases
Investment rate of return
3.00%
5.45% - 9.25%
7.50%
average, including inflation
net of pension plan investment expense
including inflation
Mortality rates were based on the RP-2000 Combined Mortality Table for the periods after service
retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled
Mortality Table set back eleven years for males for the period after disability retirement.
The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an
actuarial experience study for the period July 1, 2004 - June 30, 2009.
The long-term expected rate of return on TRS and ERS pension plan investments was determined using
a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return
(expected nominal returns, net of pension plan investment expense and the assumed rate of inflation)
are developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. The target allocation and best estimates of
arithmetic real rates of return for each major asset class are summarized in the following table:
Target
Asset Class
Allocation
Long-Term Expected
Real Rate of Return *
Fixed Income
30.00%
Domestic large equities
39.70%
6.50%
Domestic mid equities
3.70%
10.00%
Domestic small equities
3.00%
1.60%
13.00%
International developed market equities
18.90%
6.50%
International emerging market equities
6.10%
11.00%
100.00%
* Rates shown are net of the 3.00% assumed rate of inflation
Discount rate: The discount rate used to measure the total TRS and ERS pension liability was 7.50%.
The projection of cash flows used to determine the discount rate assumed that plan member
contributions will be made at the current contribution rate and that employer and State of Georgia
contributions will be made at rates equal to the difference between actuarially determined contribution
rates and the member rate. Based on those assumptions, the TRS and ERS pension plan's fiduciary
net position was projected to be available to make all projected future benefit payments of current
plan members. Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the University's proportionate share of the net pension liability to changes in the
discount rate: The following presents the University's proportionate share of the net pension liability
calculated using the discount rate of 7.50%, as well as what the University's proportionate share of
the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:
- 24 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Te a che r s' R e ti r e me nt Sy ste m:
1%
Current
1%
Decrease
Discount Rate
Increase
(6.50%)
(7.50%)
(8.50%)
University's proportionate share
of the net pension liability
$
832,309,728 $
451,638,809
$
138,164,211
Emp l o y e e s' R e ti r e me nt Sy ste m:
1%
Current
1%
Decrease
Discount Rate
Increase
(6.50%)
(7.50%)
(8.50%)
University's proportionate share
of the net pension liability
$
4,868,578
$
3,338,763
$
2,036,533
P ension plan fiduciary net position: Detailed information about the pension plan's fiduciary net
position is available in the separately issued TRS and ERS financial reports which are publically
available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs, respectively.
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 all exempt full and partial benefit eligible employees, as designated by the
regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may
purchase annuity contracts from three approved vendors (VALIC, Fidelity, and TIAA-CREF) for the
purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed
to the plan plus investment earnings. Benefits are payable to participating employees or their
beneficiaries in accordance with the terms of the annuity contracts.
Funding Policy
The University of Georgia makes monthly employer contributions for the Regents Retirement Plan at
rates adopted by the Teachers' Retirement System of Georgia Board of Trustees in accordance with
State statute and as advised by their independent actuary. For fiscal year 2015, the employer
contribution was 9.24% for the participating employee's earnable compensation. Employees
contribute 6% of their earnable compensation. Amounts attributable to all plan contributions are fully
vested and nonforfeitable at all times.
The University of Georgia and the covered employees made the required contributions of $17,728,686
(9.24%) and $11,510,054 (6%), respectively.
VALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through
their respective corporate offices.
- 25 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 14. Risk Management
The University System of Georgia offers its employees and retirees access to four different healthcare
plan options. For the University System of Georgia's Plan Year 2015, the following healthcare plan
options were available:
• BlueChoice HMO
• Comprehensive Care Plan
• Consumer Choice HSA Plan
• Kaiser Permanente HMO
The University of Georgia and participating employees and retirees pay premiums to the healthcare
plan options to access benefits coverage. The respective health plan options are included in the
financial statements of the Board of Regents of the University System of Georgia - University System
Office. All units of the University System of Georgia share the risk of loss for claims associated with the
self-insured plans; including the BlueChoice HMO, Comprehensive Care Plan and Consumer Choice
HSA Plan.
The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents
has contracted with Blue Cross Blue Shield of Georgia to serve as the claims administrator for the selfinsured healthcare plans. In addition to the self-insured healthcare plan options offered to the
employees of the University System of Georgia, a fully insured HMO healthcare plan option is also
offered to System employees through Kaiser Permanente.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of
making and carrying out decisions that will minimize the adverse effects of accidental losses that
involve State government assets. The State believes it is more economical to manage its risks
internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of
loss to which the State is exposed, including general liability, property and casualty, workers'
compensation, unemployment compensation, and law enforcement officers' indemnification. Limited
amounts of commercial insurance are purchased applicable to property, employee and automobile
liability, fidelity and certain other risks. The University of Georgia, as an organizational unit of the Board
of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as
such, is covered by the State of Georgia risk management program administered by DOAS. Premiums
for the risk management program are charged to the various state organizations by DOAS to provide
claims servicing and claims payment.
A self-insured program of professional liability for its employees was established by the Board of
Regents of the University System of Georgia under powers authorized by the Official Code of Georgia
Annotated Section 45-9-1.
The program insures the employees to the extent that they are not immune from liability against
personal liability for damages arising out of the performance of their duties or in any way connected
therewith. The program is administered by DOAS as a Self-Insurance Fund.
The University of Georgia is responsible for pollution remediation at the Milledge Avenue landfill site.
The University of Georgia has recorded a liability and expense related to this pollution remediation in
the amount of $874,131. The liability is reflected on the Statement of Net Assets in Other Liabilities
and on the Statement of Revenues, Expenses and Changes in Net Assets in Supplies and Other
Services. The liability was determined using a 5 year budget estimate provided by Brown and Caldwell.
The University of Georgia does not anticipate any significant changes to the expected remediation
outlay. There are no expected recoveries that have reduced the liability. Pollution remediation liability
activity in fiscal 2015 was as follows:
- 26 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Beginning
Ending
Balance
Balance
Current
June 30, 2015
Portion
July 1, 2014
Additions
Reductions
Pollution Remediation
Obligations
$
882,785 $
88,145 $
96,799 $
874,131 $ 176,300
Note 15. Contingencies
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor
agencies. This could result in refunds to the grantor agency for any expenditure disallowed under grant
terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at
this time although the University of Georgia expects such amounts, if any, to be immaterial to its overall
financial position.
Litigation, claims and assessments filed against the University of Georgia (an organizational unit of the
Board of Regents of the University System of Georgia), if any, are generally considered to be actions
against the State of Georgia. Accordingly, significant litigation, claims and assessments pending
against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial
Report for the fiscal year ended June 30, 2015.
Note 16. 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 University pays the
employer portion of health insurance for its eligible retirees based on rates that are established
annually by the Board of Regents for the upcoming plan year.
As of June 30, 2015, there were 4769 employees who had retired or were disabled that were receiving
these post-employment health and life insurance benefits. For the year ended June 30, 2015, The
University of Georgia recognized as incurred $25,857,742 of expenditures, which was net of
$12,378,711 of participant contributions.
- 27 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
Note 17. Natural Classifications with Functional Classifications
The University's operating expenses by functional classification for fiscal year 2015 are shown below:
Functional Classification
Natural Classification
Instruction
Research
Public
Academic
Student
Service
Support
Services
Salaries
Faculty
$
107,042,863 $
Staff
95,219,207 $
16,812,623 $
1,368,909 $
8,000
80,783,828
100,374,245
72,035,124
43,006,392
20,156,421
47,858,708
44,506,363
30,190,393
14,008,835
5,780,128
57,518
20,832
6,501
39,863
43,242
Travel
3,018,380
7,864,376
3,511,405
628,843
551,511
Scholarships and Fellowships
1,346,108
2,012,820
486,833
1,906
650,896
Utilities
1,504,697
1,641,904
1,185,605
703,394
239,167
Supplies and Other Services
27,611,320
65,517,983
31,575,635
21,535,448
17,577,330
Depreciation
13,980,547
19,972,921
5,098,400
17,575,954
2,015,289
Employee Benefits
Other Personal Services
Total Operating Expenses
$
283,203,969 $
337,130,651 $ 160,902,519 $
98,869,544 $
47,021,984
Functional Classification
Plant Operations
Scholarships
Institutional
and
and
Auxiliary
Operating
Support
Maintenance
Fellowships
Enterprises
Expenses
Natural Classification
Total
Salaries
Faculty
$
Staff
Employee Benefits
25,000 $
7,726
41,790,555
41,298,928
19,111,875
15,926,676
$
$
220,484,328
65,829,371
465,274,864
17,849,418
195,232,396
Other Personal Services
609,181
Travel
944,614
109,661
462,488
23,174,057
6,390,676
35,301,988
Supplies and Other Services
9,667,886
32,185,719
46,776,162
252,447,483
Depreciation
1,641,539
5,174,988
19,920,444
85,380,082
Scholarships and Fellowships
$
Utilities
Total Operating Expenses
$
74,253,138 $
117,877,755 $
26,516,244
26,516,244 $
7,821
784,958
205,095
16,833,885
285,447
31,300,254
157,264,434 $
1,303,040,238
Note 18. Affiliated Organizations
The University of Georgia Research Foundation, the University of Georgia Athletic Association, Inc., and
the University of Georgia Foundation are legally separate, tax-exempt organizations whose activities
primarily support the University of Georgia, a unit of the University System of Georgia. Because the
University System of Georgia is 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 Statements 61, 39 and 14. Therefore, the financial statements of these affiliated organizations
are not included in these financial statements. Copies of the financial statements may be obtained
from the University of Georgia.
- 28 -
UNIVERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "D"
The University of Georgia Research Foundation, the University of Georgia Athletic Association, Inc., and
the University of Georgia Foundation have been determined significant to the State of Georgia for the
year ended June 30, 2015, and as such, are reported as a component unit in the Comprehensive
Annual Financial Report of the State of Georgia (CAFR). Significant discretely presented affiliated
organizations issue separate audited financial statements that can be obtained from the Board of
Regents of the University System of Georgia.
- 29 -
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REQUIRED SUPPLEMENTARY INFORMATION
UNIVERSITY OF GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
TEACHERS' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2015
SCHEDULE "1"
2015
University's proportion of the net pension liability
3.57%
University's proportionate share of the net pension liability
$
451,638,809.00
University's covered-employee payroll
$
359,137,320.00
University's proportionate share of the net pension liability
as a percentage of its covered employee payroll
1.26%
Plan fiduciary net position as a percentage of the total pension liability
This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
- 32 -
84.03%
UNIVERSITY OF GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2015
SCHEDULE "2"
2015
University's proportion of the net pension liability
0.09%
University's proportionate share of the net pension liability
$
3,338,763.00
University's covered-employee payroll
$
2,058,830.00
University's proportionate share of the net pension liability
as a percentage of its covered employee payroll
1.62%
Plan fiduciary net position as a percentage of the total pension liability
This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
- 33 -
77.99%
UNIVERSITY OF GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS
SCHEDULE OF CONTRIBUTIONS
TEACHERS' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30
2015
2014
2013
2012
Contractually required contribution
$
49,534,749.00 $
44,786,220.00 $
39,890,243.00 $
35,415,805.00
Contributions in relation to the contractually required contribution
$
49,534,749.00 $
44,786,220.00 $
39,890,243.00 $
35,415,805.00
Contribution deficiency (excess)
$
0.00 $
0.00 $
0.00 $
0.00
University's covered-employee payroll
$
378,176,373.30 $
359,137,320.00 $
351,639,966.48 $
344,511,721.79
Contributions as a percentage of covered-employee payroll
13.10%
- 34 -
12.47%
11.34%
10.28%
SCHEDULE "3"
2011
2010
2009
2008
2007
2006
$
35,124,704.00 $
34,327,891.00 $
33,264,426.00 $
32,103,416.00 $
30,182,072.00 $
29,007,246.00
$
35,124,704.00 $
34,327,891.00 $
33,264,426.00 $
32,103,416.00 $
30,182,072.00 $
29,007,246.00
$
0.00 $
0.00 $
0.00 $
0.00 $
0.00 $
0.00
$
341,680,000.00 $
352,442,412.73 $
358,452,866.38 $
345,941,982.76 $
325,237,844.83 $
313,931,233.77
10.28%
9.74%
9.28%
9.28%
- 35 -
9.28%
9.24%
UNIVERSITY OF GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS
SCHEDULE OF CONTRIBUTIONS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30
2015
2014
2013
2012
Contractually required contribution
$
385,819.00 $
370,020.00 $
230,629.00 $
155,689.00
Contributions in relation to the contractually required contribution
$
385,819.00 $
370,020.00 $
230,629.00 $
155,689.00
Contribution deficiency (excess)
$
0.00 $
0.00 $
0.00 $
0.00
University's covered-employee payroll
$
1,733,437.08 $
2,058,830.00 $
1,433,328.52 $
1,338,684.44
Contributions as a percentage of covered-employee payroll
22.26%
- 36 -
17.97%
16.09%
11.63%
SCHEDULE "4"
2011
2010
2009
2008
2007
2006
$
123,062.00 $
130,229.00 $
142,826.00 $
122,876.00 $
98,268.00 $
59,819.00
$
123,062.00 $
130,229.00 $
142,826.00 $
122,876.00 $
98,268.00 $
59,819.00
$
0.00 $
0.00 $
0.00 $
0.00 $
0.00 $
0.00
$
1,182,151.78 $
1,250,999.04 $
1,372,862.00 $
1,122,242.00 $
929,110.00 $
574,630.16
10.41%
10.41%
10.40%
10.95%
- 37 -
10.58%
10.41%
(This page left intentionally blank)
UNIVERSITY OF GEORGIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2015
Teachers Retirement System
Changes of assumptions : In 2010 and later, the expectation of retired life mortality was changed to the
RP‑2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010.
In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual
experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and
anticipated experience.
Method and assumptions used in calculations of actuarially determined contributions : The actuarially
determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior
to the end of the fiscal year in which contributions are reported. The following actuarial methods and
assumptions were used to determine the contractually required contributions for year ended June 30, 2015
reported in that schedule:
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation rate
Salary increases
Investment rate of return
June 30, 2012
Entry age
Level percentage of payroll, open
30 years
Seven-year smoothed market
3.00%
3.75 – 7.00%, including inflation
7.50%, net of pension plan investment
expense, including inflation
Employees’ Retirement System
Changes of assumptions : There were no changes in assumptions or benefits that affect the measurement of
the total pension liability since the prior measurement date.
Method and assumptions used in calculations of actuarially determined contributions : The actuarially
determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior
to the end of the fiscal year in which contributions are reported. The following actuarial methods and
assumptions were used to determine the contractually required contributions for year ended June 30, 2015
reported in that schedule:
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Inflation rate
Salary increases
Investment rate of return
June 30, 2012
Entry age
Level dollar, open
30 years
Seven-year smoothed market
3.00%
2.725% – 4.625% for FY 2012-2013,
5.45% - 9.25% for FY2014+
7.50%, net of pension plan investment
expense, including inflation
- 39 -
SCHEDULE "5"
(This page left intentionally blank)
SUPPLEMENTARY INFORMATION
- 41 -
UNIVERSITY OF GEORGIA
BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND
JUNE 30, 2015
SCHEDULE "6"
ASSETS
Cash and Cash Equivalents
Accounts Receivable
Federal Financial Assistance
Other
Prepaid Expenditures
Inventories
$
192,296,133.04
18,328,389.22
41,288,078.61
1,737,798.09
3,282,965.56
Total Assets
$
256,933,364.52
$
2,604,819.51
65,525,658.06
815,776.76
56,938,057.49
1,125,407.74
LIABILITIES AND FUND EQUITY
Liabilities
Accrued Payroll
Encumbrances Payable
Accounts Payable
Deferred Revenue
Other Liabilities
Total Liabilities
127,009,719.56
Fund Balances
Reserved
Department Sales and Services
Indirect Cost Recoveries
Technology Fees
Capital Outlay
Restricted/Sponsored Funds
Uncollectible Accounts Receivable
Tuition Carry-Over
Inventories
Unreserved
Surplus
19,977,622.10
17,505,835.69
4,613,720.49
5,930,055.00
70,775,562.20
854,826.13
8,625,290.25
1,487,000.00
153,733.10
Total Fund Balances
129,923,644.96
Total Liabilities and Fund Balances
$
Actual amounts were prepared on a prescribed basis of accounting that demonstrates
compliance with budgetary statutes and regulations of the State of Georgia, which is a
special purpose framework.
- 42 -
256,933,364.52
UNIVERSITY OF GEORGIA
SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND
YEAR ENDED JUNE 30, 2015
BUDGET
SCHEDULE "7"
VARIANCE FAVORABLE
(UNFAVORABLE)
ACTUAL
REVENUES
State Appropriation
State General Funds
Other Funds
$
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS
400,157,682.00 $
970,707,925.00
400,157,682.00 $
870,959,170.22
0.00
-99,748,754.78
1,370,865,607.00
1,271,116,852.22
-99,748,754.78
0.00
0.00
0.00
0.00
122,360,830.65
122,360,830.65
1,370,865,607.00
1,393,477,682.87
22,612,075.87
94,541,060.00
6,700,014.00
68,975,093.00
1,190,339.00
14,787,557.00
1,342,492.00
3,000,040.00
5,805,254.00
1,153,735,344.00
2,618,043.00
18,170,371.00
81,151,254.47
5,960,363.62
64,108,406.16
784,693.30
13,289,602.21
1,185,579.53
2,450,781.24
5,318,540.18
1,073,398,018.52
2,618,043.00
15,934,522.30
13,389,805.53
739,650.38
4,866,686.84
405,645.70
1,497,954.79
156,912.47
549,258.76
486,713.82
80,337,325.48
0.00
2,235,848.70
1,370,865,607.00
1,266,199,804.53
104,665,802.47
CARRY-OVER FROM PRIOR YEARS
Prior Year Reserves Available for Expenditure
Total Funds Available
EXPENDITURES
Agricultural Experiment Station
Athens and Tifton Veterinary Laboratories
Cooperative Extension Service
Forestry Cooperative Extension
Forestry Research
Marine Institute
Marine Resources Extension Center
Skidaway Institute of Oceanography
Teaching
Veterinary Medicine Experiment Station
Veterinary Medicine Teaching Hospital
Total Expenditures
Excess of Funds Available over Expenditures
$
0.00
127,277,878.34 $
FUND BALANCE JULY 1
Reserved
Unreserved, Undesignated Fund Balance (Surplus) for FY15
Unreserved, Unreserved Fund Balance (Surplus) Returned to
Office of State Treasurer Year Ended June 30, 2014
124,622,221.41
74,193.63
-74,193.63
ADJUSTMENTS
Prior Year Payables/Expenditures
Prior Year Receivables/Revenues
Reserved Fund Balance Carried Over from Prior Year as Funds Available
432,498.06
-48,122.20
-122,360,830.65
FUND BALANCE JUNE 30
$
129,923,644.96
$
19,977,622.10
17,505,835.69
4,613,720.49
5,930,055.00
70,775,562.20
854,826.13
8,625,290.25
1,487,000.00
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
Total Reserved
129,769,911.86
Unreserved
Surplus
153,733.10
Total Fund Balance
$
Actual amounts were prepared on a prescribed basis of accounting that demonstrates
compliance with budgetary statutes and regulations of the State of Georgia, which is a
special purpose framework.
- 43 -
129,923,644.96
127,277,878.34
UNIVERSITY OF GEORGIA
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND
YEAR ENDED JUNE 30, 2015
Original
Appropriation
Agricultural Experiment Station
State Appropriation
State General Funds
Other Funds
Final
Budget
Current Year
Revenues
36,858,936.00 $
37,552,919.00
36,858,936.00 $
37,552,919.00
36,858,936.00 $
57,682,124.00
36,858,936.00
47,215,955.25
74,411,855.00
74,411,855.00
94,541,060.00
84,074,891.25
5,258,000.00
5,258,000.00
6,700,014.00
5,973,746.77
Cooperative Extension Service
State Appropriation
State General Funds
Other Funds
30,465,088.00
25,083,929.00
30,465,088.00
25,083,929.00
30,465,088.00
38,510,005.00
30,465,088.00
34,098,757.46
Total Cooperative Extension Service
55,549,017.00
55,549,017.00
68,975,093.00
64,563,845.46
502,941.00
575,988.00
502,941.00
575,988.00
502,941.00
687,398.00
502,941.00
298,040.87
1,078,929.00
1,078,929.00
1,190,339.00
800,981.87
Forestry Research
State Appropriation
State General Funds
Other Funds
2,651,747.00
10,250,426.00
2,651,747.00
10,250,426.00
2,651,747.00
12,135,810.00
2,651,747.00
10,964,067.58
Total Forestry Research
12,902,173.00
12,902,173.00
14,787,557.00
13,615,814.58
728,632.00
486,281.00
728,632.00
486,281.00
728,632.00
613,860.00
728,632.00
466,579.73
Total Marine Institute
1,214,913.00
1,214,913.00
1,342,492.00
1,195,211.73
Marine Resources Extension Center
State Appropriation
State General Funds
Other Funds
1,214,511.00
1,345,529.00
1,214,511.00
1,345,529.00
1,214,511.00
1,785,529.00
1,214,511.00
1,248,977.72
Total Marine Resources Extension Center
2,560,040.00
2,560,040.00
3,000,040.00
2,463,488.72
Skidaway Institute of Oceanography
State Appropriation
State General Funds
Other Funds
1,240,167.00
3,950,620.00
1,240,167.00
3,950,620.00
1,240,167.00
4,565,087.00
1,240,167.00
4,413,337.26
Total Skidaway Institute of Oceanography
5,190,787.00
5,190,787.00
5,805,254.00
5,653,504.26
318,696,849.00
754,936,559.00
318,696,849.00
754,936,559.00
323,484,500.00
830,250,844.00
323,484,500.00
751,906,214.57
1,073,633,408.00
1,073,633,408.00
1,153,735,344.00
1,075,390,714.57
Total Agricultural Experiment Station
Athens and Tifton Veterinary Laboratories
Other Funds
Forestry Cooperative Extension
State Appropriation
State General Funds
Other Funds
Total Forestry Cooperative Extension
Marine Institute
State Appropriation
State General Funds
Other Funds
Teaching
State Appropriation
State General Funds
Other Funds
Total Teaching
$
Amended
Appropriation
- 44 -
SCHEDULE "8"
$
Variance
Positive
0.00 $
17,208,823.99
0.00 $
0.00
0.00 $
6,742,655.24
36,858,936.00 $
44,292,318.47
0.00 $
13,389,805.53
0.00
20,132,460.77
17,208,823.99
0.00
101,283,715.24
6,742,655.24
81,151,254.47
13,389,805.53
20,132,460.77
753,141.59
0.00
6,726,888.36
26,874.36
5,960,363.62
739,650.38
766,524.74
0.00
5,025,823.76
0.00
0.00
30,465,088.00
39,124,581.22
0.00
614,576.22
30,465,088.00
33,643,318.16
0.00
4,866,686.84
0.00
5,481,263.06
5,025,823.76
0.00
69,589,669.22
614,576.22
64,108,406.16
4,866,686.84
5,481,263.06
0.00
162,716.79
0.00
0.00
502,941.00
460,757.66
0.00
-226,640.34
502,941.00
281,752.30
0.00
405,645.70
0.00
179,005.36
162,716.79
0.00
963,698.66
-226,640.34
784,693.30
405,645.70
179,005.36
0.00
2,423,936.45
0.00
0.00
2,651,747.00
13,388,004.03
0.00
1,252,194.03
2,651,747.00
10,637,855.21
0.00
1,497,954.79
0.00
2,750,148.82
2,423,936.45
0.00
16,039,751.03
1,252,194.03
13,289,602.21
1,497,954.79
2,750,148.82
0.00
379,679.39
0.00
0.00
728,632.00
846,259.12
0.00
232,399.12
728,632.00
456,947.53
0.00
156,912.47
0.00
389,311.59
379,679.39
0.00
1,574,891.12
232,399.12
1,185,579.53
156,912.47
389,311.59
0.00
158,763.91
0.00
0.00
1,214,511.00
1,407,741.63
0.00
-377,787.37
1,214,511.00
1,236,270.24
0.00
549,258.76
0.00
171,471.39
158,763.91
0.00
2,622,252.63
-377,787.37
2,450,781.24
549,258.76
171,471.39
0.00
368,977.51
0.00
0.00
1,240,167.00
4,782,314.77
0.00
217,227.77
1,240,167.00
4,078,373.18
0.00
486,713.82
0.00
703,941.59
368,977.51
0.00
6,022,481.77
217,227.77
5,318,540.18
486,713.82
703,941.59
0.00
93,607,696.85
0.00
0.00
323,484,500.00
845,513,911.42
0.00
15,263,067.42
323,484,500.00
749,913,518.52
0.00
80,337,325.48
0.00
95,600,392.90
93,607,696.85
0.00
1,168,998,411.42
15,263,067.42
1,073,398,018.52
80,337,325.48
95,600,392.90
36,858,936.00 $
64,424,779.24
- 45 -
Expenditures Compared to Budget
Variance
Actual
Positive
Excess
of Funds Available
Over
Expenditures
Funds Available Compared to Budget
Prior Year
Adjustments and
Total
Carry-Over
Program Transfers
Funds Available
UNIVERSITY OF GEORGIA
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND
YEAR ENDED JUNE 30, 2015
Original
Appropriation
Veterinary Medicine Experiment Station
State Appropriation
State General Funds
$
2,618,043.00 $
Amended
Appropriation
2,618,043.00 $
Final
Budget
2,618,043.00 $
Current Year
Revenues
2,618,043.00
Veterinary Medicine Teaching Hospital
State Appropriation
State General Funds
Other Funds
393,117.00
10,088,255.00
393,117.00
10,088,255.00
393,117.00
17,777,254.00
393,117.00
14,373,493.01
Total Veterinary Medicine Teaching Hospital
10,481,372.00
10,481,372.00
18,170,371.00
14,766,610.01
1,244,898,537.00 $
1,244,898,537.00 $
1,370,865,607.00 $
Total Operating Activity
$
Actual amounts were prepared on a prescribed basis of accounting that demonstrates
compliance with budgetary statutes and regulations of the State of Georgia, which is a
special purpose framework.
- 46 -
1,271,116,852.22
SCHEDULE "8"
Funds Available Compared to Budget
Prior Year
Adjustments and
Total
Carry-Over
Program Transfers
Funds Available
$
$
0.00 $
0.00 $
Variance
Positive
2,618,043.00 $
Excess
of Funds Available
Over
Expenditures
Expenditures Compared to Budget
Variance
Actual
Positive
0.00 $
2,618,043.00 $
0.00 $
0.00
0.00
2,271,270.41
0.00
0.00
393,117.00
16,644,763.42
0.00
-1,132,490.58
393,117.00
15,541,405.30
0.00
2,235,848.70
0.00
1,103,358.12
2,271,270.41
0.00
17,037,880.42
-1,132,490.58
15,934,522.30
2,235,848.70
1,103,358.12
1,266,199,804.53 $
104,665,802.47 $
122,360,830.65 $
0.00 $
1,393,477,682.87 $
22,612,075.87 $
- 47 -
127,277,878.34
UNIVERSITY OF GEORGIA
STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND
YEAR ENDED JUNE 30, 2015
Beginning Fund
Balance
July 1
Agricultural Experiment Station
State Appropriation
State General Funds
Other Funds
$
Fund Balance
Carried Over from
Prior Period
as Funds Available
Return of
Fiscal Year 2014
Surplus
Prior Period
Adjustments
42,603.42 $
17,208,823.99
0.00 $
-17,208,823.99
-42,603.42 $
0.00
33,681.81
17,971.41
17,251,427.41
-17,208,823.99
-42,603.42
51,653.22
753,141.59
-753,141.59
0.00
35,564.58
Cooperative Extension Service
State Appropriation
State General Funds
Other Funds
3,339.40
5,025,823.76
0.00
-5,025,823.76
-3,339.40
0.00
5,959.83
34,055.98
Total Cooperative Extension Service
5,029,163.16
-5,025,823.76
-3,339.40
40,015.81
Forestry Cooperative Extension
State Appropriation
State General Funds
Other Funds
0.01
162,716.79
0.00
-162,716.79
-0.01
0.00
0.00
250.00
Total Forestry Cooperative Extension
162,716.80
-162,716.79
-0.01
250.00
Forestry Research
State Appropriation
State General Funds
Other Funds
2,088.07
2,423,936.45
0.00
-2,423,936.45
-2,088.07
0.00
760.04
1,919.04
Total Forestry Research
2,426,024.52
-2,423,936.45
-2,088.07
2,679.08
Marine Institute
State Appropriation
State General Funds
Other Funds
0.00
379,679.39
0.00
-379,679.39
0.00
0.00
0.01
0.00
Total Marine Institute
379,679.39
-379,679.39
0.00
0.01
Marine Resources Extension Center
State Appropriation
State General Funds
Other Funds
883.12
158,763.91
0.00
-158,763.91
-883.12
0.00
155.82
70.00
Total Marine Resources Extension Center
159,647.03
-158,763.91
-883.12
225.82
Skidaway Institute of Oceanography
State Appropriation
State General Funds
Other Funds
0.00
368,977.51
0.00
-368,977.51
0.00
0.00
2,489.63
158.19
Total Skidaway Institute of Oceanography
368,977.51
-368,977.51
0.00
2,647.82
Teaching
State Appropriation
State General Funds
Other Funds
23,350.62
93,607,696.85
0.00
-93,607,696.85
-23,350.62
0.00
110,184.82
145,948.89
Total Teaching
93,631,047.47
-93,607,696.85
-23,350.62
256,133.71
Total Agricultural Experiment Station
Athens and Tifton Veterinary Laboratories
Other Funds
- 48 -
SCHEDULE "9"
Other
Adjustments
$
Early Return
Fiscal Year 2015
Surplus
Excess
of Funds Available
Over
Expenditures
Ending Fund
Balance
June 30
Reserved
Analysis of Ending Fund Balance
Surplus
Total
0.00 $
480.00
0.00 $
0.00
0.00 $
20,132,460.77
33,681.81 $
20,150,912.18
0.00 $
20,150,912.18
33,681.81 $
0.00
33,681.81
20,150,912.18
480.00
0.00
20,132,460.77
20,184,593.99
20,150,912.18
33,681.81
20,184,593.99
0.00
0.00
766,524.74
802,089.32
802,089.32
0.00
802,089.32
0.00
0.00
0.00
0.00
0.00
5,481,263.06
5,959.83
5,515,319.04
0.00
5,515,319.04
5,959.83
0.00
5,959.83
5,515,319.04
0.00
0.00
5,481,263.06
5,521,278.87
5,515,319.04
5,959.83
5,521,278.87
0.00
0.00
0.00
0.00
0.00
179,005.36
0.00
179,255.36
0.00
179,255.36
0.00
0.00
0.00
179,255.36
0.00
0.00
179,005.36
179,255.36
179,255.36
0.00
179,255.36
0.00
0.00
0.00
0.00
0.00
2,750,148.82
760.04
2,752,067.86
0.00
2,752,067.86
760.04
0.00
760.04
2,752,067.86
0.00
0.00
2,750,148.82
2,752,827.90
2,752,067.86
760.04
2,752,827.90
0.00
0.00
0.00
0.00
0.00
389,311.59
0.01
389,311.59
0.00
389,311.59
0.01
0.00
0.01
389,311.59
0.00
0.00
389,311.59
389,311.60
389,311.59
0.01
389,311.60
0.00
0.00
0.00
0.00
0.00
171,471.39
155.82
171,541.39
0.00
171,541.39
155.82
0.00
155.82
171,541.39
0.00
0.00
171,471.39
171,697.21
171,541.39
155.82
171,697.21
0.00
0.00
0.00
0.00
0.00
703,941.59
2,489.63
704,099.78
0.00
704,099.78
2,489.63
0.00
2,489.63
704,099.78
0.00
0.00
703,941.59
706,589.41
704,099.78
2,489.63
706,589.41
0.00
-35,069.46
0.00
0.00
0.00
95,600,392.90
110,184.82
95,711,272.33
0.00
95,711,272.33
110,184.82
0.00
110,184.82
95,711,272.33
-35,069.46
0.00
95,600,392.90
95,821,457.15
95,711,272.33
110,184.82
95,821,457.15
- 49 -
UNIVERSITY OF GEORGIA
STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND
YEAR ENDED JUNE 30, 2015
Beginning Fund
Balance
July 1
Veterinary Medicine Experiment Station
State Appropriation
State General Funds
$
904.99 $
Fund Balance
Carried Over from
Prior Period
as Funds Available
0.00 $
Return of
Fiscal Year 2014
Surplus
-904.99 $
Prior Period
Adjustments
501.14
Veterinary Medicine Teaching Hospital
State Appropriation
State General Funds
Other Funds
1,024.00
2,271,270.41
0.00
-2,271,270.41
-1,024.00
0.00
0.00
-5,295.33
Total Veterinary Medicine Teaching Hospital
2,272,294.41
-2,271,270.41
-1,024.00
-5,295.33
122,435,024.28
-122,360,830.65
-74,193.63
384,375.86
1,487,000.00
774,390.76
0.00
0.00
0.00
0.00
0.00
0.00
Total Operating Activity
Prior Year Reserves
Not Available for Expenditure
Inventories
Uncollectible Accounts Receivable
Budget Unit Totals
$
Actual amounts were prepared on a prescribed basis of accounting that demonstrates
compliance with budgetary statutes and regulations of the State of Georgia, which is a
special purpose framework.
- 50 -
124,696,415.04 $
-122,360,830.65 $
-74,193.63 $
384,375.86
SCHEDULE "9"
Other
Adjustments
$
$
0.00 $
Excess
of Funds Available
Over
Expenditures
Early Return
Fiscal Year 2015
Surplus
0.00 $
Ending Fund
Balance
June 30
0.00 $
Reserved
501.14 $
Analysis of Ending Fund Balance
Surplus
0.00 $
501.14 $
Total
501.14
0.00
-45,845.91
0.00
0.00
0.00
1,103,358.12
0.00
1,052,216.88
0.00
1,052,216.88
0.00
0.00
0.00
1,052,216.88
-45,845.91
0.00
1,103,358.12
1,052,216.88
1,052,216.88
0.00
1,052,216.88
-80,435.37
0.00
127,277,878.34
127,581,818.83
127,428,085.73
153,733.10
127,581,818.83
0.00
80,435.37
0.00
0.00
0.00
0.00
1,487,000.00
854,826.13
1,487,000.00
854,826.13
0.00
0.00
1,487,000.00
854,826.13
129,923,644.96 $
129,769,911.86 $
0.00 $
0.00 $
127,277,878.34 $
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
Total Ending Fund Balance - June 30
$
- 51 -
129,923,644.96
$
19,977,622.10
17,505,835.69
4,613,720.49
5,930,055.00
70,775,562.20
854,826.13
8,625,290.25
1,487,000.00
19,977,622.10
17,505,835.69
4,613,720.49
5,930,055.00
70,775,562.20
854,826.13
8,625,290.25
1,487,000.00
$
$
153,733.10 $
129,769,911.86 $
153,733.10
153,733.10 $
153,733.10
129,923,644.96
UNIVERSITY OF GEORGIA
BUDGET TO GAAP RECONCILIATION
JUNE 30, 2015
SCHEDULE "10"
Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "6")
$
129,923,644.96
Amounts reported for Business-Type Activities in the Statement of Net Position are
different because:
Capital Assets used in Business-Type Activities are not reported in the Budget Fund.
1,838,371,488.38
Prepaid student tuition and fees for services provided in the subsequent
period are reported as revenues in the Statement of Net Position but are deferred
for reporting on the Budget Fund.
14,932,883.06
Uncollectible accounts receivable are reported as an asset and reserved
fund balance in the Budget Fund and as a contra-asset account on
the Statement of Net Position.
-854,826.13
Funds placed on deposit with the Georgia State Financing and Investment
Commission for use in capital outlay projects are reported as an outlay in the
Budget Fund, but are included as a cash item on the Statement of Net Position.
1,591,206.75
Changes in the Fair Market Value of Investments are recognized on the Statement
of Net Position, but are not reported in the Budget Fund.
39,733.53
Agency Fund activities are not reported as a component of the Budget Fund.
Assets
Liabilities
Total Net Effect of Agency Fund Activity
$
31,460,690.40
-31,460,690.40
0.00
Auxiliary Enterprises Fund activities are not reported as a component of the Budget Fund.
Assets
Liabilities
Total Net Effect of Auxiliary Enterprises Fund Activity
99,633,875.37
-3,429,465.12
Endowment Fund activities are not reported as a component of the Budget Fund.
Assets
Liabilities
Total Net Effect of Endowment Fund Activity
78,592,599.69
0.00
Loan Fund activities are not reported as a component of the Budget Fund.
Assets
Liabilities
Total Net Effect of Loan Fund Activity
20,047,802.97
0.00
96,204,410.25
78,592,599.69
20,047,802.97
Student Activities Fund activities are not reported as a component of the Budget Fund.
Assets
Liabilities
Total Net Effect of Student Activities Fund Activity
The budgetary basis of accounting implemented by the State of Georgia
recognizes expenditures when encumbered. The following adjustments were
made to eliminate this activity for reporting on the Statement of Net Position.
Payables reported in the Budget Fund that are based on encumbrances
are eliminated for GAAP reporting.
Prepaid items reported in the Budget Fund that are based on encumbrances
are eliminated for GAAP reporting.
5,647,412.90
0.00
5,647,412.90
65,525,658.06
2,000,000.00
Payables for goods and services provided in the current fiscal year reported
in the Budget Fund as encumbrances payable are reported as accounts
payable for GAAP reporting.
Recording of subsequent payments in the GAAP ledger.
-11,457,679.19
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
56,067,978.87
Pension Deferred Outflows
56,161,934.36
- 52 -
UNIVERSITY OF GEORGIA
BUDGET TO GAAP RECONCILIATION
JUNE 30, 2015
SCHEDULE "10"
Certain receivables are not recorded in the Budget Fund but are reported as
receivables and revenue for GAAP reporting.
Certain Liabilities and Deferred Inflows of Resources are not due and payable in the current
period and therefore are not reported in the Budget Fund.
Salaries Payable
Other Liabilities
Capital Leases Payable
Pension Liability and Deferred Inflows on Pension Plans
Compensated Absences Payable
Contracts Payable
Total Liabilities
Net Position of Business-Type Activities (Exhibit "A")
$
$
-4,782,331.32
-881,068.52
-291,812,916.53
-613,243,325.00
-43,339,054.93
-6,288,209.17
-960,346,905.47
$
The supplementary information presented on Schedules 6, 7, 8 and 9 was prepared on a
prescribed basis of accounting that demonstrates compliance with budgetary statutes
and regulations of the State of Georgia, which is a special purpose framework.
The information was derived from, and relates directly to, the same information
used to prepare the financial statements. However, the budgetary statutes and
regulations of the State of Georgia require reporting of certain information that is not
in accordance with generally accepted accounting principles. Presented on this schedule
is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 6,
to Net Position of business-type activities, as reported on Exhibit A.
- 53 -
3,662,503.89
1,340,041,868.01
(This page left intentionally blank)
UNIVERSITY OF GEORGIA
RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2015
Totals per Annual Supplement
SCHEDULE "11"
$
Accruals
June 30, 2015
June 30, 2014
SALARIES
TRAVEL
686,095,303 $
16,833,885
3,590,421
-3,175,542
Compensated Absences
June 30, 2015
June 30, 2014
40,259,224
-40,543,469
Prepaid Salaries
June 30, 2015
June 30, 2014
4,036,286
-4,238,754
Adjustments
Salaries Capitalized as a Part of Capital Construction
Subsequent Period Adjustment Posted to Current Period in Error
-262,194
-2,083
$
- 55 -
685,759,192 $
16,833,885
SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
Greg S. Griffin
STATE AUDITOR
(404) 656-2174
December 10, 2015
Honorable Nathan Deal, Governor
Members of the General Assembly of Georgia
Members of the Board of Regents of the
University System of Georgia
and
Jere W. Morehead, President
University of Georgia
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the basic financial statements of the University
of Georgia as of and for the year ended June 30, 2015, and have issued our report thereon dated
December 10, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the University of
Georgia’s internal control over financial reporting (internal control) to determine the audit procedures
that are appropriate in the circumstances for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the University of
Georgia’s internal control. Accordingly, we do not express an opinion on the effectiveness of the
University of Georgia’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on
a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
2015YB-10
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the University of Georgia’s financial
statements are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have
a direct and material effect on the determination of financial statement amounts. However, providing
an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we
do not express such an opinion. The results of our tests disclosed no instances of noncompliance or
other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,
Greg S. Griffin
State Auditor
GSG:as
2015YB-10
SECTION III
CURRENT YEAR FINDINGS AND QUESTIONED COSTS
UNIVERSITY OF GEORGIA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.