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

State of GeorgiaFederal Awards Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012completeness of the data and information included in the reports. Proper documentation should bemaintained to preserve evidence that the review was performed. The date of the review and thesignature of the reviewer (even in electronic form) should be included in the supportingdocumentation.Cause:Effect:Recommendation:The deficiencies noted were the result of the Department’s failure to have adequate internal controlprocedures over Special Reporting to ensure the accuracy and completeness of the financial andoperating information reported in the Statewide Summary report and supporting Rural General PublicTransit Service forms.Inadequate internal controls over Special Reporting resulted in the submission of inaccurate and/orincomplete information to the National Transit Database and increased the risk that the Departmentwill not comply with Federal regulations.The Department of Transportation should develop and implement internal controls over SpecialReporting to ensure that reviews of the financial and operating information included in the StatewideSummary report and Rural General Public Transit Service forms are performed and that theinformation reported is accurate and properly supported by the subrecipient information maintained inthe Rural Management Information System.Finding Control Number: FA-484-12-05SUBRECIPIENT MONITORINGInadequate Internal Controls over Subrecipient MonitoringHighway Planning and Construction (CFDA 20.205)U.S. Department of TransportationGrant Awards: Year 2012 - N4510.746; N4510.749; N4510.750; N4520.211; N4520.214; N4520.216Condition:Our examination of Subrecipient Monitoring for the Highway Planning and Construction Cluster(HPCC) revealed that the deficiencies reported in prior year finding control number FA-484-11-03were not resolved by the Department of Transportation (Department) during fiscal year 2012. Wewere unable to determine if the Department complied with the Subrecipient Monitoring requirementsas a result of these deficiencies, which included inadequate documentation of Subrecipient Monitoringprocedures and failure to provide formal written internal control policies and procedures for:(1) Evaluating and monitoring compliance with the Subrecipient Monitoring requirements whendetermining Subrecipient Eligibility, Central Contractor Registration, Award Identification, Pass-Through Entity Impact, and subrecipient project delivery systems and accounting controls.(2) Defining or establishing what constitutes reasonable or adequate performance and documentationof “During-the-Award Monitoring” of HPCC subrecipients, except to require that subrecipientexpenditures be approved prior to reimbursement.(3) Monitoring compliance with the subrecipient audit requirements of OMB Circular A-133, whichincludes: a) ensuring that subrecipients expending $500,000 or more in Federal awards have therequired audits, b) enforcing sanctions or other appropriate actions for noncompliance with theaudit requirements, c) issuing management decisions on subrecipient audit findings and d)verifying the timely implementation of corrective actions by subrecipients.Criteria:The OMB Circular A-133 Compliance Supplement, Part 1, Page 1-6, states: “As a condition ofreceiving Federal awards, non-Federal entities agree to comply with laws, regulations, and theprovisions of contract and grant agreements, and to maintain internal control to provide reasonableassurance of compliance with these requirements.”According to the Subrecipient Monitoring section included in Part 3 of the OMB Circular A-133Compliance Supplement, a pass-through entity is responsible for:115