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

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 20122) Program-Medicaid: Aged, Blind and DisabledFund Source-Other FundsDeficit Ending Fund Balance-$88,488.923) Program-Medicaid: Low-Income MedicaidFund Source-State Funds-Prior Year Carry-Over/State General Funds-Prior YearDeficit Ending Fund Balance-$34,322,536.75Fund Source-Other FundsDeficit Ending fund Balance-$25,952.024) Program-Adult Essential Health Treatment ServicesFund Source-State Appropriation/State General FundsDeficit Ending Fund Balance-$49,637.455) Program-EpidemiologyFund Source-State Appropriation/State General FundsDeficit Ending Fund Balance-$55,372.776) Program-Public Health Formula Grants to CountiesFund Source-State Appropriation/State General FundsDeficit Ending Fund Balance-$122,945.30Criteria:Article VII, Section IV, Paragraph VIII of the Constitution of the State of Georgia provides, in part,"...the credit of the State shall not be pledged or loaned to any individual, company, corporation orassociation." As applied here, this means that Fund Balance by budget year, budget program, andfunding source (i.e., the legal level of budgetary control) should not be debit balances in the accountingrecords.The accounting records for each appropriated budget unit of the State should be maintained in such amanner to allow for budgetary reporting to be accurately prepared and supported.Cause:The deficiencies noted were a result of the Department's failure to implement adequate controls thatwould enable management to consistently monitor program fund balances between current year andprior years.In addition, a prior year accounting error in the Medicaid: Low-Income Medicaid program resulting inan inaccurate amount of reserves being recorded for the prior fiscal year and contributed to the deficitending fund balance for the prior year in this program.Effect:Noncompliance with the Constitution of the State of Georgia. In addition, inadequate internal controlsincrease the risk that material misstatement in the budget comparison report will occur and not bedetected.Lastly, upon discovery and correction of the prior year accounting error during the year under review,the Department failed to act in a timely manner and to take appropriate actions necessary to mitigatethe resulting instance of noncompliance, such as examining and writing off open purchase orders asapplicable.Recommendation:The Department of Community Health should implement additional policies and procedures, asneeded, to adequately monitor program fund balances between current year and prior years and tomake adjustments, as needed, to ensure compliance with Constitution of the State of Georgia.37