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

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State of GeorgiaAuditee’s Corrective Action PlansFor the Fiscal Year Ended June 30, 2012AUDITOR CONCLUDING REMARKS:The Unemployment Compensation Fund general ledger as maintained by the Department of Labor does not meet thedefinition of a general ledger as it relates to being self-balancing, or including net asset balances. The chart of accounts is notstandardized and uses multiple numbers to identify the same type of accounts.Finding Control Number: FS-440-12-04GENERAL LEDGERREVENUES AND EXPENDITURESInadequate Procedures over Cash Draws of Federal GrantsWe do not concur with this finding. The auditor's testing of cash management was flawed in the following two ways:1. The auditors used accounting period dates as the date drawdowns of Federal cash were made instead of post dates(calendar date the transaction actually occurred). This methodology incorrectly assumes cash draws are alwaysrecorded in the same period as the corresponding expenditure. The difference in timing between accounting perioddate and post date can be as much as 30 days thereby giving an inaccurate conclusion regarding the cashmanagement practices of the Department.2. The auditor's did not take into consideration the extent Obligation Authority was available based on expenditurescharged to the grant. In all cases, the auditors mistakenly assumed all expenditures charged to a Federal Grant wereavailable to be immediately reimbursed by a Federal Grant even though in some cases expenditures exceededobligation authority. In such cases, temporary program deficits did exist until Obligation Authority was received ata later date (i.e., operating under Federal Continuous Resolution) or expenditures were subsequently andappropriately moved to another eligible Federal grant.The Department has performed its own cash management testing using the exact methodology used by the auditors except theDepartment used post dates for Federal cash receipts instead of accounting dates as used by the auditors. This analysisindicated the Department's cash management performance was not flawed to the extent indicated by the auditors.In the case the of the programs funded by the American Recovery and Reinvestment Act, The Department concurs thatFederal cash should have been drawn in a more timely manner. However, as indicated by the finding, the amounts associatedwith these programs were relatively small.The Department will continue to strengthen controls to ensure federal cash is drawn more timely as expenses are paid.Contact Person: John T. Williams, Accounting DirectorTelephone: 404-232-3575 Fax: 404-232-3578 E-mail: JohnT.Williams@dol.state.ga.usAUDITOR 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-440-12-05BUDGETProgram Budget DeficienciesWe concur with this finding with the following explanation:The Georgia Department of Labor maintains its accounting records on the FARS (Federal Accounting and Reporting System)accounting system which is used by many other State Labor Departments across the Country. As noted by the auditors, thissystem does not facilitate maintaining accounting records on a program basis as the system is designed primarily to provideinformation to the U.S Department of Labor in a uniform reporting format that produces data in compliance with federalreporting requirements.322
State of GeorgiaAuditee’s Corrective Action PlansFor the Fiscal Year Ended June 30, 2012The Department continues to evolve the FARS accounting system and pursue ongoing efforts to exact appropriatemethodology usable by the FARS System to produce the required budgetary reports and is looking into accounting systemsthat can accommodate program budgeting as well as facilitate the provision of data to USDOL in accordance with federalreporting requirements.Contact Person: John T. Williams, Accounting DirectorTelephone: 404-232-3575 Fax: 404-232-3578 E-mail: JohnT.Williams@dol.state.ga.usFinding Control Number: FS-440-12-100BUDGETFailure to Certify the Accuracy of the Budget Compliance ReportWe concur with this finding with the following explanation.The finding cites 4 instances where the auditors claim expenditures exceeded funds available. This conclusion is incorrectbased on the following factors that are not disclosed by the auditors:1. Most of the Department's grant funds extend over multiple fiscal years. Because the State records expenditures based onencumbrances (not expenses), encumbrances may be recorded in one fiscal year, canceled and then re-established for anotherpurpose in a subsequent fiscal year. As required by State accounting procedures, cancellation of a prior year encumbranceresults in an entry to surplus (usually Federal) and de-obligation of the original liability encumbrance. Because a newexpenditure entry is required for the re-obligation of the funds involved, it may appear expenditures have exceeded fundsavailable in the fiscal year in question when in fact, this is not the case. The amount, required by State accounting proceduresto be recorded in surplus (usually Federal) is available to fund the new expenditure.2. The Department has multiple cost allocation ledgers which recognize encumbrances as expenditures in the accountingrecords. These ledgers are included in the various program budgets by the Office of Planning and Budget. Because theexpenditures (encumbrances) resident in these costs allocation ledgers have not been allocated and expensed in the Federalprograms (still open and active) at the close of the State Fiscal year, the revenue has not yet been recorded for theseexpenditures. This situation may make it appear that program expenditures have exceeded revenues.The Department notes that ALL Budgeted Programs closed the fiscal year with a positive fund balance and no deficitsexisted as inferred by the auditor's finding.Contact Person: John T. Williams, Accounting DirectorTelephone: 404-232-3575 Fax: 404-232-3578 E-mail: JohnT.Williams@dol.state.ga.usBEHAVIORAL HEALTH AND DEVELOPMENTAL DISABILITIES, DEPARTMENT OFFinding Control Number: FA-441-12-01PERIOD OF AVAILABILITY OF FEDERAL FUNDSExpenditures Charged Outside the Period of AvailabilityWe concur with this finding. A process will be developed and provided to DBHDD Grants Accounting and Budget personnelrequiring that all grant expenditures are within the grant's obligation and liquidation period. DBHDD General Ledgerpersonnel are developing a tool in Access that will provide any activity outside of the grant's eligible time period. Allexpenditures will be researched and corrections made periodically. The new process and tool should be completed and testedby February 2013. This will allow time to correct any transactions outside of grant period before State Fiscal Year End.Contact Person: Lee WrightTelephone: 404-657-1650 Fax: 770-342-7253 E-mail: lewright@dhr.state.ga.us323
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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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State of GeorgiaFinancial Statement
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State of GeorgiaFederal Awards Find
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Expenditures of Federal Awards
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State of GeorgiaSchedule of Expendi
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State of GeorgiaNotes to the Schedu
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State of GeorgiaSchedule of Cluster
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Summary Schedule of Prior YearFindi
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