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

State of GeorgiaFederal Awards Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012Section 1605 of the American Recovery and Reinvestment Act specifies that for any ARRA fundedproject requiring the construction, alteration, maintenance or repair of a public building or public work,100% of the iron, steel and manufactured goods used in the project must be produced in the UnitedStates.Information:Cause:Effect:Recommendation:During the last two months of fiscal year 2012, the Office of Materials and Research hired an internalfield auditor to review project files for missing quarterly Materials Certificate Checklists. At the timeof our examination the field auditor had identified one (1) of the project files that were selected fortesting and had mailed an internal audit field letter requesting the missing quarterly MaterialsCertificate Checklists from the District Engineer.The deficiencies noted were the result of the Department’s failure to ensure that the quarterly MaterialsCertificate Checklists were consistently completed and maintained in accordance with the internalcontrol procedures established in the Quality Assurance program.Failure to adhere to the prescribed internal control procedures may affect project costs and projectcloseout procedures and could result in noncompliance with Federal regulations.The Department of Transportation should review their internal controls and implement additionalcontrols, as needed, to ensure that the established procedures relating to the completion of the quarterlyMaterials Certificate Checklists are properly and consistently followed.Finding Control Number: FA-484-12-04REPORTINGInternal Control Deficiencies/Noncompliance with Federal Program RegulationsFormula Grants for Other Than Urbanized Areas (CFDA 20.509)U.S. Department of TransportationGrant Awards: Year 2012 - GA-18-X032; Year 2011 - GA-18-X031; Year 2010 - GA-18-X030; Year 2009 – GA-18-X029;GA-86-X001; Year 2008 - GA-18-X028Condition:Our examination of Special Reporting for the Nonurbanized Area Formula Grants program included areview of the Statewide Summary report (RU-30) that the Department of Transportation (Department)submitted to the National Transit Database (NTD) during fiscal year 2012 and the supporting sourcedocumentation, which included the following:- Rural General Public Transit Service forms (RU-20)- Subrecipient Financial and Operating Information (reported in the Rural Management InformationSystem)Our examination revealed the following deficiencies:(1) The Department did not have a review process in place to ensure the accuracy and completeness ofthe financial and operating information reported in the RU-30 report and the supporting RU-20forms.(2) Discrepancies were identified between the financial and operating information reported in theRural General Public Transit Service forms and Rural Management Information System for eight(8) of the 20 subrecipients that were randomly selected for testing.Criteria:The Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, Part 1, Page1-6, states, in part: “As a condition of receiving Federal awards, non-Federal entities agree to complywith applicable laws, regulations, and the provisions of contract and grant agreements, and to maintaininternal control to provide reasonable assurance of compliance with these requirements.”An adequate system of internal controls requires that reports of Federal Awards be reviewed by asupervisor or manager prior to being submitted to the Federal awarding agency to assure accuracy and114