SACS Accreditation

2.11.1 Financial Resources

Core Requirement: The institution has a sound financial base and demonstrated financial stability to support the mission of the institution and the scope of its programs and services.

X  Compliance
     Partial Compliance
     Non-Compliance

Georgia State University can demonstrate that it has a sound financial base, demonstrated financial stability, and adequate physical resources to support the mission of the University and the scope of its programs and services by providing

• An institutional audit and management letter for the most recent fiscal year prepared by the appropriate governmental auditing agency
• A statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributable to operations for the most recent year; and
• Evidence of the creation of an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.

Georgia State University’s fiscal year begins on July 1 and ends on June 30.  Fiscal year audits occur within the ensuing six months for the most recently completed fiscal year.

By Georgia law (OCGA 50-6-6) [1] and policy of the Board of Regents (BOR), the University’s governing body (BOR Policy Manual, Section 700) [2], the Georgia Department of Audits and Accounts conducts an annual audit of the financial statements and supporting records for Georgia State University. The audit is conducted in accordance with generally accepted auditing standards and an opinion is issued on the fairness of the statements presented.  The University’s audit for the fiscal year ended June 30, 2005 can be viewed at 2005 Audited Financial Statement [3]. The University’s audit for the fiscal year ended June 30, 2006 can be viewed at 2006 Audited Financial Statement [4].  Although the University has not received an audit management letter during this period of review, the University's audit for the fiscal year ended June 30, 2007 will be made available upon receipt.

Unrestricted Net Assets

The University’s annual financial statement contains a Statement of Net Assets that reflects balances for unrestricted net assets, exclusive of plant and other capital items. For the fiscal year ended June 30, 2005, the unrestricted net asset balance was $69,723,008.59 [5].  For the fiscal year ended June 30, 2006, the unrestricted net asset balance was $76,201,851.66 [6]. The increase of $6.5 million was planned to fund future construction and technology costs. The unrestricted net asset balance for the fiscal year ended June 30, 2007 will be made available upon receipt.

Budget Process

As a unit of the University System of Georgia, Georgia State University has a budget planning and administration system that is governed by Board of Regents’ bylaws (BOR Bylaws, Section VII) [7] and policies (BOR Policy Manual, Section 702 to specific section) [8] and also by the Governor’s Office of Planning and Budget [9] [10] requirements.  Internally, the president determines budget allocations on the advice of the provost and the vice president for Finance and Administration. The advice of the provost and vice president of Finance and Administration reflects discussions of the Fiscal Advisory Committee to the President, a standing committee of the University Senate that has representation from the campus community.

A major portion of Georgia State’s budget is contained in a group of funds known as “Resident Instruction,” which includes academic, administrative, facilities, and student service functions.  Resident Instruction functions are funded through state appropriations, tuition, indirect cost revenues, sponsored funds, and various other sources.  In addition, Georgia State has auxiliary and student activities fund groups for fee-based, self-supporting operations.  Finally, the University has various nonprofit affiliate organizations not governed by the University budget system, including the Georgia State Foundation, Georgia State University Research Foundation, and the Georgia State Athletic Association.

The Board of Regents requests Resident Instruction funding for the University System using a formula [11] that is driven by the number of credit hours generated by the entire system. The level of funding available to the Board of Regents is determined by the legislature via the annual General Appropriation Act [12] (Starting with S.F.Y 2005 General Appropriation and applying additions/reductions based on S.F.Y. 2006 legislation) for Fiscal Year 2006. The funding is always based on information from previous years.  The Board of Regents (BOR Bylaws, Section VII)  [13] then allocates funds to the various institutions. The Board of Regents allocates approximately 80 percent of the formula funding on the basis of the institutions’ enrollment and allocates the remaining 20 percent, called “strategic allocation funds,” on the basis of requests from institutions based on a formal submission process. This process involves forms and budget hearings. The Board of Regents also must annually approve tuition and fee changes by Georgia State based on recommendations from the president.

1. State of Georgia, OCGA 50-6-6, State Audit Requirement
2. Board of Regents, Policy Manual, Section 702, State Audit Requirement 
3. Georgia State University, 2005 Audited Financial Statement
4. Georgia State University, 2006 Audited Financial Statement
5. Georgia State University, 2005 Audited Financial Statement, Page 16 of 50
6. Georgia State University, 2006 Audited Financial Statement, Page 15 of 48
7. Board of Regents, Bylaws, Section VII, Budgets
8. Board of Regents, Policy Manual, Section 702, Budget Planning and Administration 
9. Governor’s Office of Planning and Budget, Budget Information 
10. State of Georgia, Office of Budget and Planning, Prioritized Program Budget 
11. State of Georgia, Office of Budget and Planning, Governor’s Budget Report 
12. State of Georgia, General Appropriations Act 
13. Board of Regents, Bylaws, Section VII Allocation of Funds