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

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012Cause:Effect:Recommendation:Due to the uncertainty regarding the accuracy of the Statement of Funds Available and ExpendituresCompared to Budget by Program and Funding Source Budget Fund, the Department declined toprepare and sign a letter of representation for the examination engagement of the organization'scompliance with the 2012 Appropriations Act, as amended, and Article VII, Section IV Paragraph VIIIof the Constitution of the State of Georgia.The amounts reported in the Department’s BCR should not be used for decision-making purposes atthe legal level of budgetary control because of the lack of assurances by management and thelikelihood that material errors are present.The Department of Community Affairs should manage its budgetary activity at the legal level ofcontrol, which is fund source within program. In order to produce accurate and useful BCR reports inthe future, actions to be taken by the Department should include, but not be limited to, the following:SUPERIOR COURTS1. Ensure that all staff involved in the Department's budgetary activities have an adequateunderstanding of Program-Based Budgeting.2. Ensure that staff obtains additional training relating to Program-Based Budgeting as appropriate.3. Monitor budgetary reports on a monthly basis.Finding Control Number: FS-436-12-01ACCOUNTING CONTROLS (OVERALL)CASH, INVESTMENTS AND INVESTMENT RELATED ACTIVITYInaccurate Bank Reconciliations and Old Outstanding ChecksCondition:Criteria:Our examination included a review of Superior Courts' bank reconciliation for the Operating Account.The June 30th bank reconciliation outstanding check list contained one (1) check where the amounthad been changed from the accounting records and seventeen (17) checks were left off of theoutstanding checks list in their entirety, for an unidentified cash variance totaling $50,786.50. Theoutstanding check list also included 55 checks, totaling $20,249.50, that were outstanding for morethan 180 days.The State Accounting Office Cash Management Policy number CM-100008 states, “It is theresponsibility of each Agency to reconcile its bank accounts monthly and to satisfactorily track allreconciling items to resolution in a timely manner. All methods (manual, semi-manual, automaticbank reconciliation) should clearly show the balances being reconciled and the details of allreconciling items.”The State Accounting Office Cash Management Policy number CM-100006 states, "All agencies shallcomply with state statutes, 'Disposition Unclaimed Property Act', and filing requirements establishedby the Georgia Department of Revenue." Section V of this policy outlines specific actions that theagency should take, including attempting to locate all payees for checks held over 180 days that areover $50 and escheating all stale checks over 180 days old, regardless of amount. After five (5) years,agencies must make a final attempt to locate the payee for checks over $50 and then remit the paymentto the Department of Revenue. For checks less than $50, the payment should be remitted to theDepartment of Revenue.Information:Cause:Subsequent to the completion of field work, Superior Courts disclosed concerns regarding inaccuratebank reconciliations. As a result, our review of bank reconciliations for the Operating Account wasexpanded.Superior Courts policies and procedures were inadequate to ensure compliance with the StateAccounting Office Cash Management Policies.50