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

In planning and performing our audit, we and other auditors considered the State of Georgia'sinternal control over compliance with the requirements that could have a direct and materialeffect on a major federal program to determine the auditing procedures for the purpose ofexpressing our opinion on compliance and to test and report on internal control over compliancein accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on theeffectiveness of internal control over compliance. Accordingly, we do not express an opinion onthe effectiveness of the State of Georgia’s internal control over compliance.Our consideration of internal control over compliance was for the limited purpose described inthe preceding paragraph and was not designed to identify all deficiencies in internal control overcompliance that might be significant deficiencies or material weaknesses and therefore, there canbe no assurance that all deficiencies, significant deficiencies, or material weaknesses have beenidentified. However, as discussed below, we and other auditors identified certain deficiencies ininternal control over compliance that we considered to be material weaknesses and otherdeficiencies that we consider to be significant deficiencies.A deficiency in internal control over compliance exists when the design or operation of a controlover compliance does not allow management or employees, in the normal course of performingtheir assigned functions, to prevent, or detect and correct, noncompliance with a type ofcompliance requirement of a federal program on a timely basis. A material weakness in internalcontrol over compliance is a deficiency, or combination of deficiencies, in internal control overcompliance, such that there is reasonable possibility that material noncompliance with a type ofcompliance requirement of a federal program will not be prevented, or detected and corrected, ona timely basis. We and other auditors consider the deficiencies in internal control overcompliance described in the accompanying schedule of Findings and Questioned Costs as itemslisted below to be material weaknesses.Matching, Level of Effort,EarmarkingFA-427-12-01Period of Availability of FederalFundsFA-440-12-05Program IncomeFA-427-12-01ReportingFA-427-12-01FA-427-12-07FA-571-12-01Subrecipient MonitoringFA-427-12-11FA-441-12-04FA-484-12-05Special Tests and ProvisionsFA-427-12-12A significant deficiency in internal control over compliance is a deficiency, or a combination ofdeficiencies, in internal control over compliance with a type of compliance requirement of afederal program that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance. We and otherauditors consider the deficiencies in internal control over compliance described in the FederalAwards Findings and Questioned Costs section of the accompanying schedule of Findings andQuestioned Costs as items listed below to be significant deficiencies.14