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

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012AGRICULTURE, DEPARTMENT OFFinding Control Number: FS-402-12-01ACCOUNTING CONTROLS (OVERALL)Failure to Obtain Verification Documentation for New Employees in a Timely MannerCondition:Criteria:The Department of Agriculture (Department) did not verify, in a timely manner, the employmenteligibility through the federal work authorization program, known as E-Verify, for four (4) newly hiredemployees. The Department verified the employment eligibility of the newly hired employeesbetween two (2) to twelve (12) months after the hire date. E-Verify is an electronic program,maintained by the U.S. Department of Homeland Security, through which employers verify theemployment eligibility of their employees after hire.An adequate system of internal controls dictates that the employment eligibility of each newly hiredemployee is verified in a timely manner.As prescribed by O.C.G.A. 13-10-91, "(a) Every public employer, including, but not limited to, everymunicipality and county, shall register and participate in the federal work authorization program toverify employment eligibility of all newly hired employees."Cause:Effect:Recommendation:The deficiency noted above was a result of the Department's failure to have proper controls in place toensure employment verifications were performed on all newly hired employees in a timely manner.Failure to verify employment eligibility for all newly hired employees in a timely manner is indicativeof a lack of adequate controls relating to the hiring process and noncompliance with O.C.G.A. 13-10-91 until the employment verifications were performed.The Department of Agriculture should enhance their policies and procedures related to their hiringprocess to ensure that employment eligibility is verified in a timely manner for all newly hiredemployees in accordance with O.C.G.A. 13-10-91.Finding Control Number: FS-402-12-06GENERAL LEDGEREXPENSES/EXPENDITURES AND LIABILITIESInternal Control Deficiencies Over Contractual ObligationsCondition:Our examination of the Department of Agriculture (Department) included a review of sourcedocumentation maintained in purchase order files for contractual obligations. Our review disclosed thefollowing deficiencies:(1) The Department did not record contracts payable in the amount of $50,472.86 on the generalledger at June 30, 2012.(2) The Department charged $32,745.00 of non-contract expenditures to contract expenditureaccounts.Criteria:Cause:The Accounting Procedures Manual for the State of Georgia, Section Three, states, in part: "Statebudgetary accounting practices require liabilities and expenditures to be recorded when a vendor hasbeen selected and a purchase order approved or a contract executed. In general, budgetary basisexpenditures are recorded based on encumbrances. This differs from GAAP in that goods and servicesneed not have been received for liabilities and expenditures to be recorded."The deficiencies noted above were a result of the Department's failure to implement adequate internalcontrol policies and procedures to ensure that contractual obligations are recorded on the generalledger in a timely manner and that expenditures are recorded correctly.26