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

State of GeorgiaSchedule of Prior Year Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012will clearly link the Accounting Records to the Federal Reports.Finding Control Number: FS-440-11-01ACCOUNTING CONTROLS (OVERALL)Inadequate Supporting Documentation for Adjusting Journal EntriesThe Department has implemented procedures to improve the level of documentation that is readily available to supportadjusting journal entries made by the Department. This documentation has been included as a part of the Department'sAccounting and Procedures Manual.Finding Control Number: FS-440-11-05GENERAL LEDGERREVENUES AND RECEIVABLESInadequate Procedures over Cash Draws of Federal GrantsThe Department has implemented additional procedures to improve the timing of cash drawn from the Federal Governmentwith payment of the actual expenditures. These additional procedures include the scheduling of draw downs on a morefrequent basis and creation of a new consolidated management report that groups Federal expenditures by funding source.However, the auditor’s testing continues to incorrectly include flawed procedures in doing their cash management testing asdiscussed below:1. The auditors continued to use accounting period dates as the date draw downs of Federal cash were made instead ofpost dates (calendar date the transaction actually occurred). The difference in timing between these dates can be asmuch as 30 days thereby giving an inaccurate conclusion.2. The auditors did not take into consideration the extent Obligation Authority was available based on the expenditurescharged to the grant. In all cases, the auditors mistakenly assumed all expenditures charged to a grant were availableto be immediately reimbursed by a Federal Grant even though, in some cases, expenditures exceeded ObligationAuthority. In such cases, temporary program deficits did exist until Obligation Authority was received at a later date(i.e. operating under federal continuous resolution) or expenditures were subsequently moved to another FederalGrant.AUDITOR CONCLUDING REMARKS:Accounting period dates provide the best measurement of cash drawdown activity. Post dates (calendar dates) could includeactivity in months not within the fiscal year.Finding Control Number: FS-440-11-08BUDGETProgram Budget DeficienciesThe Department of Labor maintains its accounting records on the FARS (Federal Accounting and Reporting) accountingsystem, which is used by many other State Labor Departments across the Nation. As noted by the auditor, this system doesnot facilitate maintaining accounting records on a program by program basis as the system is designed to provideinformation to the U.S. Department of Labor in a uniform reporting format from the various States.285