BURSAR’S DIVISION BURSAR’S OFFICE

The Bursar’s Office administers the University’s cashiering operations, distributes revenue to the appropriate accounts, and receives and processes student account payments. The office processes student refunds, prepares student tuition statements, oversees credit card processing, maintains petty cash funds, and functions as the University’s liaison with commercial banks. The office also administers endowment funds and forecasts cash flow requirements and availability of funds for temporary investment. Summary of Major Accomplishments Student Account System The Bursar’s Office continued to realize efficiencies throughout Fiscal Year 2010 resulting from process and system changes implemented in previous years. Of the non-financial aid payments received on student account balances, 61% were received via Automated Clearing House (ACH), 13% by credit card, 25.75% by check/cash and .25 by secure vault payment (SVP). The payments received by ACH reflected a 22% increase from ACH payments received in FY 2009 – exceeding the Fiscal Year 2010 goal. The number of credit card payments decreased an additional 5% while cash payments decreased 17.25%. The Bursar’s Office anticipates ACH payments increasing slightly and cash payments decreasing as SVP payments slightly increase. Credit card payments are expected to remain at the same level in FY 2011. SVP should increase by a high percentage when larger banks add this service. Electronic banking continues to be greatly emphasized during freshman orientation. While no additional charges were added in FY 2010, the addition of Bulldog Bucks charges continues to have a significant impact. Some technical issues will be addressed in the coming fiscal year. The process in FY 2010 was much more seamless than in FY 2009 when Bulldog Bucks began initiating charges to the student account system. In FY 2010, the Bursar’s Office was able to save Bulldog Bucks approximately $50,000 as a result of no longer incurring a credit card expense for student deposits. Bulldog Bucks was able to automate its process of sending over a reversal of charges when it comes time to refund a student as well as remove Bulldog Bucks charges when the deposit request is left unpaid for a number of months. The office did move study abroad program fees to the student account system in FY 2010. This is currently a manual process handled in the Bursar’s Office, but it is envisioned that this fee will be automated either by the Registrar’s Office or via another solution from the Office of International Education. By doing this students will have more options to make their payments, and it will allow the Bursar’s Office to continue to move forward with reducing the amount of checks/cash handled at the department level.

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Electronic 1098Ts The University reported tuition-related financial information to more than 40,000 students in FY 2010 using IRS Form 1098-T. Prior to January 2007, the office staff expended a significant amount of effort and money printing and mailing these forms, the dissemination of which is required by the IRS. In this third year of collecting electronic consent, the office was able to provide 95% of the statements to students electronically. This represented a 2% increase over 2009 and saved approximately $15,932 in FY 2010 postage costs. Credit Card Processing The Bursar’s Office continued to monitor the University’s compliance in regard to credit card processing standards. As noted in prior years of the Annual Management Report, UGA contracts with a third-party assessor to evaluate compliance with all credit card requirements. As part of this process, all UGA merchants complete an annual online questionnaire to determine compliance issues. Additionally, Ecommerce merchants initiate quarterly scans against their systems. With the implementation of the USG background check policy, all UGA merchants are now successfully meeting payment card industry standards for background checks on employees with credit card function responsibility. In addition to tracking all UGA merchants’ compliance, the Bursar’s Office remains proactive in reviewing compliance with any third-party vendors that have contracts with UGA. The bursar works with the Procurement Office and Legal Affairs to add wording to existing third-party contracts to address liability should a breach occur even though UGA is not storing, processing or transmitting credit card information. UGA merchants complete an annual questionnaire which includes solutions contracted with Ambiron Trustwave, the University’s third-party compliance consultant. This information is invaluable in assessing how UGA performs as a whole in regard to good practices. At the end of FY 2010, 70% of UGA’s merchants were compliant, 14% failed the scan, 3% had expired compliance but were working on the renewal, and 13% were incomplete. (This is a revolving percentage due to the timing of when a merchant is considered “expired.”) Approximately half of the merchants that failed the scan can attribute their failure to running an older version of Apache. The Georgia Center was one of the merchants that failed but has since upgraded to the newer version in FY10. Housing was another and is currently working on upgrading its software. The Bursar’s Office is currently working with the other merchants who need to address this issue; a lot of work has to be done by these units when upgrading to ensure they don’t “break” other systems that they are running on their hardware. Merchants identified as incomplete are either new to accepting credit cards or have a new point of contact who is unfamiliar with the PCI compliance process. The Bursar’s Office continues to utilize TouchNet Marketplace to provide a “virtual” mall for UGA units. In FY 2010, 28,975 Marketplace transactions totaling $2,857,402.72 were processed, resulting in a 6% increase for total transactions and a 26% increase in total sales. Several factors contributed to the increase in both transactions and sales in MarketPlace. There were a few new departments using MarketPlace, such as the Grady College of Journalism ($17,000 in sales), Peabody Awards ($134,100 in sales), College of Education CREATE conference ($13,000 in sales), and the Stadion Classic Golf Tournament ($70,300 in sales). In addition to these new merchants, several existing

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MarketPlace merchants increased the number of conferences and/or events in MarketPlace, e.g., Vet School Alumni, Extension Food Science, and Football Parking. Parking Services has become UGA’s first merchant to use a wireless solution. Credit card payments are now accepted at six UGA Parking Decks. Each pay station where the credit card is swiped (the number at each deck is determined by the number of exits a deck has) is connected to an IPTran device that is behind a firewall unique to each deck. The IPTran device routes the encrypted credit card transaction via a wireless cellular modem to FDMS where the transaction is authorized and then returned to the deck. After the transaction is authorized, only the data essential for settlement is kept at the credit card terminal. After settlement, all credit card data is deleted. University-wide credit card sales continued to decrease in FY 2010. This decrease can be attributed to the decrease in student accounts being paid by credit card (5% decrease) as a result of other electronic payments being offered as well as having to pay a convenience fee when using a credit card for payment on a student account balance. Banking In accordance with Board of Regents Policy 9.1.2, the University of Georgia was required to competitively bid out its bank services. A Request for Qualified Contractor (RFQC) was submitted in Spring 2010 for all interested banks to submit their responses. An external review was done by the State Treasury office to pick its top choices for the University to then further evaluate. The University is currently working on a contract with the selected bank. In regard to Secure Vault Payment, the Bursar’s Office hopes to see larger banks adopt this fairly new payment solution as a product for customers. Usage of this payment option has increased at UGA since it was made available, but the Bursar’s Office would prefer to see much wider use. Petty Cash During FY 2010 the office continued to work with individual study abroad programs to decrease the amount of petty cash needed and instead to have the University of Georgia invoiced by providers. The goals are to reduce the liability and risk to the individual petty cash holders, to provide a more efficient means to pay for program expenses, and to assist the program directors in reducing administrative burdens. Some statistics of interest since FY 2005 indicate that the Bursar’s Office has reduced the number of regular petty cash accounts from 204 accounts ($718,007) to just 47 accounts ($428,448). Study abroad accounts have been reduced as well, from 203 accounts ($4,375,603) to 108 accounts ($5,498,317). While study abroad accounts have decreased due to many of these programs finding better ways to pay for services via accounts payable versus petty cash, the need for cash in the remaining programs has increased due to some of the programs going for a longer period of time and/or the increased cost of the programs.

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Cashiering During FY 2010 the Bursar’s Office fully implemented phase I of the Core Business Solutions purchased in FY 2008. The new system has imaging capabilities that have enhanced productivity and efficiency in the Bursar’s Office. In addition, the office is processing most checks via electronic files to the bank as opposed to sending the actual checks in a deposit each day. This efficiency allows the funds to be credited to the University’s bank account faster. Summary of FY 2011 Goals Student Accounts The Bursar’s Office hopes to continue to realize an increase in ACH payments in FY 2011; however, it will be hard to match the 22% increase realized in the past year. Expansion will occur when larger banks begin offering this solution to their customers. The Bursar’s Office continues to work with Bulldog Bucks staff to address some technical issues and establish a more automated reconciliation between the two systems. The Bursar’s Office continues working with Application Development and Database Management to complete the necessary programming to finish the work on past due balances, collections and write-offs. The Bursar’s Office and Student Accounts are assisting the University in completing an assessment of student systems and determining what is best for the University to move ahead. Both offices anticipate having to plan for whatever decision is made and foresee this being a three to five-year project depending on the direction the University takes. It is very possible additional staff members will have to be added in order to respond to these changes. Credit Card Processing The PCI DSS Council released the PCI DSS version 2.0 and PA DSS version 2.0 October 28, 2010. These new or revised standards should go into effect around July 2011, so the Bursar’s Office must review and prepare a plan to address the changes that affect UGA. The Bursar’s Office will conduct a mandatory training session for all merchants on campus to discuss upcoming changes as well as to review policies and procedures. Internal Audit and Information Security will assist in this training as well. Additional reporting requirements are coming. A new credit card regulation is pending that will mandate the reporting of the gross amount of credit card transactions per credit card type to the IRS using Form 1099-K. The IRS also has a program where the name of the merchant and TIN as reported to the credit card companies has to match exactly what the IRS has on file. Failure to comply with the reporting or an inability to match what the IRS has as the merchant name and TIN will result in 28% federal back-up withholding from all settlement payments.

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Banking The Bursar’s Office also will be issuing a request for information on armored car service during FY 2011. The existing contract was extended until December 31, 2010 so that services would not be interrupted. The Bursar’s Office wants to readdress the potential for adding a safe product on the campus for processing cash in high volume areas such as the parking decks. This product would guarantee funds and give instant credit before funds are ever deposited to UGA’s bank. Cashiering The Bursar’s Office will be working on phase II of the CORE cashiering solutions product. This additional product, referred to as “ipayment,” will be phased in across campus during FY 2011. The introduction will most likely start with Student Activities and the Ramsey Center and then add Contracts and Grants. Additional customization and work on the bursar’s side had to be done as a result of the Accounting Department needing some additional fields to be put into place to capture and store in order for them to meet reporting requirements by the State and Board of Regents. This second phase will impact the individual UGA departments that currently prepare and transmit deposits.

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Statistical Information The following charts illustrate the number of charge and payment transactions processed through the student account system from July 1, 2009 to June 30, 2010:

Charges # of Transactions Dollar AmountAdmissions Orientation Fee 7,559 579,700.00 Bulldog Bucks 70,985 2,413,779.24 Bookstore Charges 312 77,246.22 Return Checks/Late Fees/Reinstatements 26,804 2,309,744.97 Course and Lab Fees 88,526 949,675.21 Financial Aid Repayments 2,729 1,643,942.13 Food Services 19,802 28,756,217.55 Graduate School Penalty Fee 13 22,500.00 Housing 49,599 32,611,399.04 Family Housing 11,389 3,203,386.29 Non-Resident Alien Tax 61 6,291.56 Health Insurance 3,700 522,829.00 International Scholar Compliance Fee 3,597 156,350.00 Freshman College 308 364,600.00 Field Study Program Fee (PF) 6,158 15,885,479.17 Parking 43,417 4,962,974.00 Direct Billing 2,514 3,159,587.96 Deferred 1,215 1,814,153.33 Payroll Deduct 11,857 1,122,853.38 Tuition and Fees 1,869,320 379,200,929.11 Tifton 419 19,485.00 Write-Off Charges 288 2,291.94 Charges Sent to Collections 94 (12,411.63)Total 2,220,666 479,773,003.47

Payments # of Transactions Dollar AmountACH (AH) 124,677 93,143,371.88 Bill to Sponsor (07) 2,238 3,159,587.96 Cash/Check (CS) 27,752 39,446,163.40 Charge to Account (08) 5,087 10,928,189.71 Commit/Law/Vet Deposits 5,175 1,010,097.25 Credit Card (CF) 30,814 19,334,509.29 Deferments (05) 773 1,814,165.33 Financial Aid (SG) 132,182 196,605,112.17 Payments from Collection Agency 116 4,089.52 Payroll Deduct (06) 2,990 1,122,853.38 Secure Vault Payment (VP) 98 35,382.90 Total 331,902 366,603,522.79

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STUDENT RECEIVABLES AGING SUMMARY As of June 30, 2010

Sending Unit Current >30 >60 >90 >120 >180 >1 >3 >5 >10 TOTAL Admissions 75,850.00 81,560.00 0.00 0.00 180.00 600.00 0.00 0.00 0.00 0.00 158,190.00 Bursar’s Office 17,583.12 2,616.50 611.00 1,114.37 16,170.60 35,687.96 31,200.04 0.00 10,025.00 0.00 115,008.59 Collections 1,400.21 0.00 0.00 0.00 0.00 266.10 137,310.13 445.06 0.00 0.00 139,421.50 Course and Lab 487.25 0.00 0.00 0.00 0.00 (10.00) 0.00 0.00 0.00 0.00 477.25 Deferments 69,017.21 0.00 0.00 0.00 0.00 0.00 213.21 0.00 0.00 0.00 69,230.42 Financial Aid 183,708.50 104,662.58 91,399.00 154,841.06 11,658.00 192,137.00 198,206.00 51,502.00 48,840.04 0.00 1,036,954.18 Freshman College 47,678.00 0.00 0.00 0.00 0.00 0.00 768.00 0.00 0.00 0.00 48,446.00 Graduate 2,250.00 0.00 0.00 0.00 0.00 0.00 2,061.00 0.00 0.00 0.00 4,311.00 Health Insurance 657.00 0.00 0.00 0.00 (12.00) 0.00 716.00 0.00 0.00 0.00 1,361.00 Payroll Deduct 20.00 0.00 0.00 0.00 (298.45) 0.00 0.00 0.00 0.00 0.00 (278.45) Program Fees 3,898,973.62 292,828.22 86,078.00 4,138.00 18,096.00 7,532.82 0.00 0.00 0.00 0.00 4,307,646.66 Sevis 1,405.66 50.00 0.00 0.00 0.00 0.01 100.00 0.00 0.00 0.00 1,555.67 Sponsors 236,960.85 0.00 7,954.00 0.00 (595.19) 0.00 0.00 0.00 0.00 0.00 244,319.66 Tifton 0.00 0.00 0.00 0.00 45.00 0.00 0.00 0.00 0.00 0.00 45.00 Tuition 1,197,713.44 14,933.00 0.00 213.78 19,972.09 27,635.95 13,836.51 0.00 0.00 0.00 1,274,304.77 Unapplied (22,927.03) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (22,927.03) RI Summary 5,710,777.83 496,650.30 186,042.00 160,307.21 65,216.05 263,849.84 384,410.89 51,947.06 58,865.04 0.00 7,378,066.22 Books 0.00 0.00 0.00 0.00 0.00 27.04 0.00 0.00 0.00 0.00 27.04 Bulldog Bucks 1,881.30 0.00 0.00 0.00 (1,413.91) (55.76) 40.00 0.00 0.00 0.00 451.63 Family Housing Electricity 10,558.41 293.05 241.68 281.59 571.42 844.02 2,638.05 0.00 0.00 0.00 15,428.22 Family Housing Fines 919.51 0.00 275.00 0.00 1,200.00 173.00 145.00 0.00 0.00 0.00 2,712.51 Family Housing Rent 15,992.22 6,177.50 4,827.00 3,504.49 4,291.48 7,119.51 26,166.25 0.00 0.00 0.00 68,078.45 Food Fines 1,416.75 50.00 0.00 50.00 0.00 0.00 0.00 0.00 0.00 0.00 1,516.75 Food Services 185,158.35 1,995.79 0.00 0.00 1,051.60 2,419.96 8,443.11 0.00 0.00 0.00 199,068.81 Housing Buyout 2,207.12 9,887.92 0.00 0.00 575.00 1,425.00 1,150.00 0.00 0.00 0.00 15,245.04 Housing Fines 24,123.24 1,480.00 490.72 140.00 557.16 398.77 436.25 0.00 0.00 0.00 27,626.14 Housing Prepay 19,457.33 2,960.00 1,499.00 2,295.00 225.00 0.00 0.00 0.00 0.00 0.00 26,436.33 Housing Rent 236,823.00 9,321.62 0.00 0.00 1,971.45 80.00 7,775.21 0.00 0.00 0.00 255,971.28 Parking Citations 23,298.27 16,428.00 6,315.00 6,328.89 2,668.00 4,422.44 1,153.00 0.00 40.00 0.00 60,653.60 Parking Misc Fines 3,027.00 686.00 320.00 356.00 174.00 48.00 43.00 0.00 0.00 0.00 4,654.00 Parking Permits 48,293.45 1,580.00 680.50 1,030.00 1,338.94 2,670.00 3,875.00 0.00 0.00 0.00 59,467.89 Auxiliary Summary 573,155.95 50,859.88 14,648.90 13,985.97 13,210.14 19,571.98 51,864.87 0.00 40.00 0.00 737,337.69 TOTAL 6,283,933.78 547,510.18 200,690.90 174,293.18 78,426.19 283,421.82 436,275.76 51,947.06 58,905.04 0.00 8,115,403.91

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Short-Term Investment Income Interest rates continued to fall in FY 2010 causing earnings on short-term investments to decrease over FY 2009. The University continued to earn interest from the operating account with Wachovia, the investments in the Georgia Fund, and the Board of Regents Short-Term Fund. The following schedule reflects the net earnings and distribution of earnings for the current and past three years on short-term investments: Fund FY 2010 FY 2009 FY 2008 FY 2007 Plant Funds $2,441,346.84 $4,870,907.29 $8,599,983.39 $9,952,137.47 Auxiliary Enterprises $676,179.71 $1,629,631.37 $2,529,979.61 $2,963,257.80 Agency Funds $8,102.23 $25,833.85 $45,056.12 $58,012.78 Student Activity Funds $887,068.57 $48,863.88 $188,442.69 $272,302.30 Loan Funds $5,671.42 $59,877.57 $260,788.85 $166,440.83 Endowment Funds $6,872.23 $261,293.87 $463,806.26 $933,414.82 Total $4,025,241.00 $6,896,407.83 $12,088,056.92 $14,345,566.00

Endowment Funds The Bursar’s Office administers 205 University endowment funds which provide general support for the University, student scholarships and loans, salary supplements and other funding as provided for the individual trust agreements. One new endowment fund was established in FY 2010. The largest portion of these funds is invested with RidgeWorth Capital (formerly Trusco Capital Management) under a plan approved by the Board of Regents. Endowment funds experienced unrealized market appreciation due to a rebound in markets in the United States and abroad.

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Exhibits summarizing statistical data are presented on the following pages: Exhibit 1 - Endowment Fund Balances Exhibit 2 - UGA Income, Cash Receipts vs. Credit Card Receipts Exhibit 3 - Percent of Cash Receipts Received via Wires/ACH Exhibit 4 - UGA Credit Card Merchants’ Processes Exhibit 5 - Student Accounts Charges, Resident Instruction vs. Auxiliary Exhibit 6 - Student Account Resident Instruction Related Charges Exhibit 7 - Student Account Auxiliary Related Charges Exhibit 8 - Student Account Payments Exhibit 9 - Student Account Non-Student Financial Aid Payments Exhibit 10 - Student Account Financial Aid Payments Organizational Chart

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EXHIBIT 1

EXHIBIT 2

EXHIBIT 3

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EXHIBIT 4

EXHIBIT 5

EXHIBIT 6

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EXHIBIT 7

EXHIBIT 8

EXHIBIT 9

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EXHIBIT 10

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BursarLisa McCleary

BURSAR’S DIVISIONORGANIZATION CHART

Bursar’s OfficeLisa McCleary

Accounts ReceivableThérèse Hodges

Student AccountsShannon Lay

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Sr. Financial AcctSusan McCullough

Admin Assoc IISuzanne Brown

Systems Admin Spec

Jill Jerome

BursarLisa McCleary

BURSAR’S OFFICEORGANIZATION CHART

Assistant BursarThérèse Hodges

Senior Financial Accountant

Elizabeth Quillian

Accounts ReceivableDepartment

Assistant ManagerAmy Brown

Senior Accounting TechnicianKaren Pitts

Senior AccountantSusan Caldwell

Senior Acctg TechAnn Smith

Sr. Operations SupervisorVacant

Senior AccountantNicole Burkhalter

AccountantAmber Redfern

Sr. Accounting TechLeah King

Sr. Accounting TechBrandi Aycock

Customer Service RepMelissa LaValle-Parent

IT Professional Specialist

Jennifer Lazo

Customer Service RepVacant

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