Single Audit Report Fiscal Year Ended June 30, 2012 - State ...

State of GeorgiaFederal Awards Findings and Questioned CostsFor the Fiscal Year Ended June 30, 20121) Failure to consistently apply either the Cash Basis or the Accrual Basis with regards to thereconciliations.2) Failure to adequately document reconciliation of amounts other than Federal expenditures.Criteria:The Code of Federal Regulations, Title 2, Section 215.21, states:"(b) Recipients' financial management systems shall provide for the following.1. Accurate, current and complete disclosure of the financial results of each federally-sponsoredproject or program in accordance with the reporting requirements set forth in Section 215.52."Cause:Effect:Recommendation:The deficiencies noted above occurred as a result of the Department's failure to fully and adequatelyapply their existing internal control procedures to ensure that a consistent basis of accounting is usedon the reconciliations, and that Level of Effort and Earmarking expenditures are adequately reconciledback to the general ledger.Failure to adequately reconcile the Federal reports to the general ledger before submission to theFederal grantor agency could result in the submission of inaccurate and/or incomplete Federal financialreports. In addition, these deficiencies raise concerns as to the accuracy of the Level of Effort andEarmarking amounts reported.The Department of Human Services should ensure that existing policies and procedures are adequateand, if so, are being followed to ensure that the Federal financial reports are fully and adequatelyreconciled to the general ledger.Finding Control Number: FA-427-12-04MATCHING, LEVEL OF EFFORT, EARMARKINGREPORTINGFinancial Reporting Internal Control DeficienciesState Administrative Matching Grants for the Supplemental Nutrition Assistance Program (CFDA 10.561)U.S. Department of AgricultureGrant Awards: Year 2012 - 5GA810802; Year 2011 - 5GA400403; 5GA420413Condition:Our examination included a review of the financial reports (SF-425) for the State AdministrativeMatching Grants for the Supplemental Nutrition Assistance Program (SNAP) (CFDA No. 10.561) atthe Department of Human Services (Department) that were submitted to the Federal awarding agency.For the year under review, reports submitted for the quarters ending 9/30/2011 and 12/31/11 wereselected for testing. Although the reports were deemed to be materially correct, the followingdeficiencies were noted:1) Failure to document the accounting basis used for reporting.2) Failure to post correcting journal entries in a timely manner, causing the same reconciling items toappear on subsequent reconciliations.3) Failure to ensure reconciling items moving expenditures from one (1) fund source to anotherand/or one (1) budget year to another is actually posted on the corresponding reconciliation andagrees to the amounts actually being adjusted for.4) Failure to ensure the mathematical accuracy and completeness of the reconciliations.Criteria:The Code of Federal Regulations, Title 2, Section 215.21, states:"(b) Recipients' financial management systems shall provide for the following.98