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

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012reported. Based on fiscal year 2012 testing, $34,719,326.80 should have been reported as the passthroughamount for the program. An audit adjustment was made to correct the SEFA.Criteria:In accordance with OMB Circular A-133 Subpart C, Section .300, "The auditee shall: (a) Identify, inits accounts, all Federal awards received and expended and the Federal programs under which theywere received. Federal program and award identification shall include, as applicable, the CFDA titleand number, award number and year, name of the Federal agency, and name of the pass-throughentity."The State Accounting Office also issued instructions to all organizations of the State of Georgiareporting entity for the SEFA which state, "Agency management is responsible for the properaccounting and reporting of federal grants. Expenditures reported in the SEFA must be reported on theGAAP basis of accounting relevant to the organization's reporting fund and must reconcile toexpenditures recorded in the organization's accounting records..."Cause:Effect:Recommendation:The Department failed to implement adequate policies and procedures to ensure that total Federalaward amounts provided to subrecipients are reported correctly in the SEFA.Failure to accurately report Federal award amounts could result in inaccurate reporting of the SEFAwithin the Single Audit Report.The Department of Behavioral Health and Developmental Disabilities should implement policies andprocedures to ensure that total award amounts provided to subrecipients are accurately reported in theSchedule of Expenditures of Federal Awards database for reporting within the Single Audit Report.Finding Control Number: FS-441-12-02CASH, INVESTMENTS AND INVESTMENT RELATED ACTIVITYInadequate Bank Reconciliation ProceduresCondition:Our examination included a review of the Department of Behavioral Health and DevelopmentalDisabilities' (Department) bank reconciliation procedures performed on their Operating Account. Thefollowing deficiency was noted:The outstanding checklist has 170 checks, totaling $80,611.25, dating back to July 2009 which are six(6) months or older that have yet to be cancelled or corrected.Criteria:Cause:Effect:Recommendation:Policy Number CM-100006 of the State Accounting Manual Policies and Procedures issued by theState Accounting Office provides guidance on the proper accounting procedures regarding oldoutstanding checks. In addition, the Disposition of Unclaimed Property Act as identified in OCGA 44-12-190 through 44-12-236 provides for procedures to be followed for those holding property forsomeone else and contact has been lost with that person. This act applies to outstanding checks writtento both individuals and vendors.The Department failed to have adequate policies and procedures in place relating to their bank accountreconciliation process to ensure that outstanding checks were being canceled in a timely manner.Although the total old outstanding check amount is minimal, failure to maintain an effective bankaccount reconciliation process increases the risk of misstatement due to fraud and the possiblemisappropriation of the Department's assets, as well as potential book errors and noncompliance withState laws, policies and procedures.The Department of Behavioral Health and Developmental Disabilities should review their currentinternal control procedures in relation to bank reconciliations and implement additional policies andprocedures to ensure an effective bank reconciliation process is in place to manage and monitor thebank accounts in accordance with applicable State laws, policies and procedures.57