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2. Core requirements

Core Requirement:

2.11.1 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. The member institution provides the following financial statements: (1) an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a systemwide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate audit (or Standard Review Report) guide; (2) 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 (3) an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board. Audit requirements for applicant institutions may be found in the Commission policy "Accreditation Procedures for Applicant Institutions." (Financial Resources)

Statement of Compliance:   Partial Compliance.


The University of West Georgia (UWG) has a sound financial base and demonstrates financial support that adequately supports the mission of the University and the scope of its programs and services. The steady growth in student population from 2003 at a head count of 10,255 to a headcount of 11,770 in 2012 indicates a strong and stable enrollment base. This growth coupled with the strong financial performance displayed in our schedule of unrestricted net assets, exclusive of plant assets and related debt, for the previous five years [1] is an additional indicator that UWG meets this Core Requirement. This schedule of unrestricted net assets, exclusive of plant assets and related debt, shows a growth of 233% from $11,022,725 to $36,737,344. Other indicators of financial strength over this five-year period are a growth in UWG’s current assets by 76%, an improvement in current ratio from 1.75 to 3.46, and a growth in year-end cash balance from $25,278,039 to $44,340,939. These trends demonstrate that the university is "living within its means" and this performance is sustainable. It should be noted that online and face-to-face programs are budgeted and funded through the same process. Also, some e-tuition funds provide additional support services for online program.

See Comprehensive Standard 3.10.1 for more information about the recent financial history of the University.

Institutional Audits

UWG is audited annually by the State of Georgia.  The audit reports are issued by the Georgia Department of Audits and Accounts [2].  Audit reports from 2001-2012 [3] show the University has adequate internal controls.  The audited financial statements are prepared in accordance with Generally Accepted Accounting Principles as defined by the Governmental Accounting Standards Board [4].  Standard 2.11.1 requires that the institution provide the audited financial statements for the most recent fiscal year. Due to the audit schedule of the Georgia Department of Audits and Accounts, the audited financial statements for the fiscal year ended June 30, 2013 will not be available until December 2013 or January 2014. This complication will leave UWG non-compliant until the subsequent submission of the audited financials.

The most recent five years audited statements received unqualified opinions on the fairness of the presentation of the financial statements.  The 2009 audit noted two discrepancies: “1. The subsidiary detail listing of accounts payable provided by the University was $55,066.70 less than the amount reported on the Annual Financial Report., and 2. We noted that equipment items totaling $9,806.00 were capitalized even though the items were below the capitalization threshold of $5,000.00. The University should capitalize assets in accordance with the Board of Regents' capitalization policy.”  Neither of these discrepancies indicates a systemic failure of internal controls, and both issues were corrected prior to the 2010 audit.

Unrestricted Net Assets

The Annual Financial Report for the Fiscal Year Ended June 30, 2012 [5] shows the University holds total assets of $272,370,340 and total liabilities of $128,165,936.  The Total Current Assets of $51,102,796 show a high level of liquidity when compared to the $14,753,025 in Total Current Liabilities.   Total Non-Current Liabilities are $113,412,911.  Unrestricted Net Assets, which can be used for any lawful purpose of the institution, have increased over time with a June 2012 balance of $36,737,344 as compared to the June 2011 balance of $33,257,037.

 Annual Budget

UWG operates under a budget that is preceded by sound planning; reviewed by divisional and advisory committees; and approved by the Board of Regents of the University System of Georgia.  During the year, budget review is applied to every transaction utilizing the “Budget Check” features of our PeopleSoft financial system.

Budget Development and Approval

Budget development at UWG is decentralized within each of the five divisions:  Academic Affairs, Business and Finance, Student Affairs and Enrollment Management, University Advancement, and the Offices of the President.  The annual process is initiated by the University Budget Office with the President and Vice Presidents [6][7] .The divisions are responsible for developing their requests with their department managers following the strategic directives provided by the system office and specified by the university president.   All requests for new funding and reprioritization are tied to one of the strategic directives [8], [9], and [10].

Base funding details for the current year are provided each department [7]. The departments provide changes or reprioritizations within existing funding as well as plans for budget increases or decreases.

The President’s Advisory Committee and the Faculty Senate Budget Committee [11], [12] review the funding requests and provide recommendations to the President.  Final funding decisions are made by the President in conjunction with the Vice Presidents of each division in a consensus-based environment.

The university’s new funding budget request is presented to the Board of Regents (BOR) in late winter preceding the start of the next fiscal year [8], [9], and [10]. Several additional questionnaires are requested by the system office providing data such as enrollment projections, staffing numbers, revenue estimates, fund balances, etc [13]. In April after legislative approval occurs, the tuition rates and new year allocations are distributed by the BOR and sent to the colleges and universities [14]. The complete budget detail (including new funding) is submitted to the Board of Regents the first of May with final Board approval scheduled the second week of the month [15].

More information regarding the University System of Georgia’s budgeting process may be found atthe Board of Regents website [16].

Budget Monitoring

Throughout the year, quarterly budget updates are submitted to the system office as well as budget-to-actual variance reporting [17].  The reports are reviewed with the Vice President for Business and Finance prior to submission.  In addition, various monthly and quarterly reports are provided the Vice President of Business and Finance to include revenue collections, auxiliary budget variances, and divisional spending levels [18].

On a monthly basis, training is provided to department and budget managers on budget monitoring and reconciliation, reading financial reports, and extracting data from PeopleSoft financials [19] In the fall, early spring, and prior to year end, deficit or anticipated deficit notifications are sent to departments.  In late spring, balance remaining reports are provided the Vice Presidents for review and year-end planning.

The results of the recent internal audit of the university’s budget processes and controls reads: "The University of West Georgia’s budgeting process was found to be well managed with a strong system of internal controls as implemented…" [20].

Preceded by Sound Planning

The strategic plan [21] adopted by the University of West Georgia and approved by the University System of Georgia forms the basis of the University Budget.  The institution seeks to allocate its financial resources to meet the strategic plan initiatives. 

Since 2009, the University’s Budget Committee [12] has allowed stakeholders to provide input in to University budgets.  Other education and communication methods include many open meetings, online presentations [22], and emailed information on budget changes. 

Subject to Sound Fiscal Procedures

The University has adhered to a conservative approach in budgeting revenues and expenditures demonstrated by the change in the Unrestricted Net Assets.  As part of the sound fiscal procedures, UWG follows an “open book” policy that seeks to make virtually all budget information available to internal and external users.   Via the Controller’s website anyone can review the Annual Financial Reports from the Fiscal Year 2005 to present day [3]. Twice annually, University Department Heads are required to send to the Office of the Controller verification that funds for which they have responsibility have been reconciled.   University Financial Statements are reviewed monthly with the Vice President for Business and Finance to monitor the overall financial activities of university. Similarly, compensation data is available to the public at the Georgia Department of Audits website [2] .

Supporting Documentation: