CONDENSED DATA, PAGE 8

AGENCY FUNDS

The University System held Agency Funds assets in trust at the end of the year in the amount of $49,264,955. This consisted of funds received and held by various units as custodians, and primarily represented funds held on deposit, designated scholarships, and payroll operations.

GENERAL COMMENTS

At June 30, 2001, consolidated financial statements for the University System of Georgia are presented in the next section of this report. Financial information for all of the institutions in the University System is included in the consolidated statements.

The University System of Georgia is in compliance with GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions.

On July 1, 2000, the Board of Regents of the University System of Georgia transferred the operations of the Medical College of Georgia Hospitals and Clinics to MCG Health, Incorporated, a 501c. 3 not-for-profit corporation. As part of this transaction, MCG Health, Incorporated acquired certain assets and liabilities from the University System of Georgia Board of Regents. This resulted in an adjustment of $119,004,773.66 to the fund balance of Unrestricted Current Funds.

An adjustment of $13,542,898.68 was made to the fund balance of Unrestricted Current Funds due to a FY2000 prepayment of pension expense for the early retirement program at the Medical College of Georgia.