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. 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 implement adequateinternal controls to ensure that the basis of accounting is documented and reconciliations are accurate.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 Matching amountsreported.The Department of Human Services should implement adequate internal controls to ensure that theFederal financial reports are fully and adequately reconciled to the general ledger.Finding Control Number: FA-427-12-05PROGRAM INCOMEInternal Control Deficiencies Over Program IncomeChild Support Enforcement (CFDA 93.563)U.S. Department of Health and Human ServicesGrant Awards: Year - 2012 - 2012G9912CS; Year 2011 - 2011G9911CJ; 2011G9911CSCondition:Our examination included a review of Program Income collected by the Child Support Enforcement(CSE) program (CFDA No. 93.563) at the Department of Human Services (Department). For the yearunder review, all CSE revenue collections for quarters ending 9/30/2011 and 12/31/2011 were selectedfor testing. The following deficiencies were noted:1) The revenue was not recorded on the general ledger in a timely manner.2) There was no reconciliation between the income collected and the income recorded on the generalledger.Criteria:The Code of Federal Regulations Title 2, section 215.24, states: "(b) ...program income earned duringthe project period shall be retained by the recipient and, in accordance with Federal awarding agencyregulations or the terms and conditions of the award, shall be used in one or more of the ways listed inthe following.(1) Added to funds committed to the project by the Federal awarding agency and recipient and used tofurther eligible project or program objectives.(2) Used to finance the non-Federal share of the project or program.(3) Deducted from the total project or program allowable cost in determining the net allowable costson which the Federal share of costs is based."Cause:Effect:Recommendation:The deficiencies noted occurred as a result of the Department's failure to establish adequate internalcontrol procedures to ensure that program income is recorded on the general ledger in a timely mannerand reconciliation exists between the income collected and the income recorded on the general ledger.In addition, high turnover in staff may also have been a contributing factor.Failure to record program income collected in a timely manner and the failure to reconcile programincome to the general ledger could result in the submission of inaccurate Federal financial reports.The Department of Human Services should implement adequate internal control procedures to ensurethat all program income revenue collected is recorded on the general ledger in a timely manner andreconciled to the general ledger on a regular basis.99