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

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State of GeorgiaFederal Awards Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012Management did not provide any documentation or satisfactory explanation in support of theseexpenditures.Criteria:Information:Cause:Effect:OMB Circular A-87 states, "A cost is allocable to a particular cost objective if the goods or servicesinvolved are chargeable or assignable to such cost objective in accordance with relative benefitsreceived... and any cost allocable to a particular Federal award or cost objective under the principlesprovided for in this Circular may not be charged to other Federal awards to overcome funddeficiencies, to avoid restrictions imposed by law or terms of the Federal awards, or for other reasons."The Department charged an average of $288,100 in personal services expenditures to the WIA clusterprogram for the months of July through November 2011 and February through June 2012. TheDepartment charged $1,142,915 of personal services for the month of December 2011 and charged$1,231,057 of personal services for the month of January 2012. We noted this large difference andinquired with the Department as to the cause of the significant variance. We received no supportingdocumentation or sufficient explanation to prove the allocability of the personal service charges to theWIA cluster program; and therefore, were unable to determine a projected question cost amount.The Department's failure to have adequate policies and procedures in place to ensure documentationand information supporting the allocation of personal service charges to the WIA cluster program wasavailable for review.Personal service expenditures were apparently allocated to the WIA cluster program without adequatesupporting documentation resulting in noncompliance with OMB Circular A-87. In addition, failure toadhere to OMB Circular A-87 could result in the reporting of inaccurate information.Recommendation: The Department should implement sufficient internal control procedures to adhere to OMB Circular A-87 cost principles and ensure that personal service charges being allocated to Federal awards andprograms are fully supported by adequate documentation.Finding Control Number: FA-440-12-03ALLOWABLE COSTS/COST PRINCIPLESQuestionable ExpendituresWIA Dislocated Workers (CFDA 17.260)WIA Dislocated Worker Formula Grants (CFDA 17.278)U.S. Department of LaborGrant Awards: Year 2011 - AA- 21390-11-55-A-13; Year 2010 - AA-20189-10-55-A-13Condition:Criteria:A review of the expenditures charged to the Workforce Investment Act (WIA) cluster programrevealed that the Department of Labor (Department) failed to follow the OMB Circular A-87guidelines for allocable program expenditures. We noted eight (8) transactions totaling 11,072.12were not allocable to the Federal program or adequately documented.Provisions of OMB Circular A-87, Cost Principles for Local, State and Indian Tribal Governments,require that "to be allowable under Federal awards, costs must be…allocable to Federal awards underthe provisions of this Circular." and "be adequately documented".Questioned Cost: $11,072.12Information:A review of the expenditures revealed that seven (7) of the eight (8) questionable expenditures lackedadequate documentation. In reviewing the accounts that the expenditures were charged to, we notedthat the expenditures were moved from the Employment Service Cluster (17.ESC) to the WIA clusterprogram. The Department could not provide evidence of the allocability of the expenditures to theWIA program.Additionally, we noted one (1) transaction was charged to the Rapid Response program, which is astatewide program within the Dislocated Worker program that is not allocable to the WIA cluster104
State of GeorgiaFederal Awards Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012program. The Department could not provide proof of how the expenditure related to the operating ofthe Rapid Response program, and therefore, we determined the cost to be unallowable.Cause:Effect:Recommendation:Management failed to monitor compliance with Federal guidelines to ensure that expenditures chargedto the Federal program were allowable.Total questioned costs in the amount of $11,072.12. In addition, failure to ensure that programexpenditures are allowable can result in noncompliance with the OMB Circular A-87.The Department of Labor should implement controls to ensure that all expenditures charged to theFederal program are allowable under OMB Circular A-87.Finding Control Number: FA-440-12-04PERIOD OF AVAILABILITY OF FEDERAL FUNDSExpenses Recorded Outside of Grant PeriodUnemployment Insurance (CFDA 17.225)U.S. Department of LaborGrant Awards: Year 2011 – UI-21094-11-55-A-13Condition:Criteria:Our examination included a review of expenses charged by the Department of Labor (Department) forthe Unemployment Insurance (UI) Administration program. We noted three (3) expenses totaling$1,849.98 were recorded outside of the grant period.The Unemployment Insurance Administration grant is made up of non-automation and automationfunds. ET Handbook No. 336 defines automation funds as: "the costs of goods and services directlyrelated to the automation of UI operations. Automation goods consist of computers and theirperipheral and auxiliary equipment and associated software." The handbook also defines the fundingperiod as follows: "Non-automation funds must be obligated by December 31 of the following fiscalyear, and liquidated within 90 days thereafter. ETA may extend the liquidation date upon writtenrequest. Automation funds must be obligated by the end of the 3rd fiscal year, and liquidated within90 days thereafter. ETA may extend the liquidation date on written request."Questioned Costs: $1,849.98Federal regulations at 29 CFR 97.23(b) states: "A grantee must liquidate all obligations incurred underthe award not later than 90 days after the end of the funding period...The Federal agency may extendthis deadline at the request of the grantee."Information:A review of expenses recorded on the general ledger for the Unemployment Insurance Administrationnon-automation grants noted that there were expenditures recorded outside of the 2011 grant period ofavailability. Based on our review of grant awards provided by the Department, expenses for the fiscalyear 2011 Unemployment Insurance Administration non-automation grants (Fund Ledger 0210) shouldnot have been recorded after December 31, 2011. The following expenses were allowable expenses forthe program and should have been charged to the 2012 grant year:$910.00 charged on March 22, 2012$64.98 charged on May 29, 2012$875.00 charged on June 13, 2012Cause:Effect:The Department's policies and procedures for recording Unemployment Insurance Administrationexpenses to the proper grant period were inadequate.Failure to develop adequate policies and procedures can result in noncompliance with applicableFederal laws, regulations, and other compliance requirements. In this instance, three (3) paymentswere made that were outside the period of availability for the grant to which they were charged.105
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Single Audit ReportFiscal Year Ende
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Report on Internal Control Over Fin
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Foundation, Incorporated, Georgia T
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Firefighters’ Pension Fund, Georg
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Greg S. GriffinSTATE AUDITOR(404) 6
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In our opinion, based on our audit
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Activities Allowed or UnallowedFA-4
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Findings and Questioned Costs
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State of GeorgiaSummary of Auditor
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Financial Statement Findings
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