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

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012statements prepared in accordance with generally accepted accounting principles (GAAP).Additionally, the University is required to annually submit GAAP basis financial statements forinclusion in the State of Georgia's Comprehensive Annual Financial Report (CAFR) and the State ofGeorgia's Single Audit Report.Information:Cause:Effect:Recommendation:During the audit the following deficiencies were noted in the University's GAAP basis financialstatements.1. The University did not restate their beginning net assets for a change in its method of reportingSummer Tuition and Fees and associated expenses. Adjustments to Tuition and Fees in theamount of ($3,304,376), Salaries and Benefits expenses of $1,059,232 and the net change tobeginning net assets of ($2,245,144) were proposed and accepted to correct the error.2. Activity between the University and Foundation was not reported properly. Funds due to theUniversity and held by the Foundation at June 30, 2012, were reported as an Investment instead ofas Accounts Receivable. A reclassification entry of $1,808,625 was proposed and accepted tocorrect the error3. During the fiscal year, it was determined that past Housing Revenues were improperly distributedto the University's Foundation. The University performed an analysis and recouped the funds fromthe Foundation. The recoup of funds associated with prior periods totaled $543,825, which wererecorded as revenue in the current fiscal year. An adjustment to auxiliary enterprises revenue andbeginning net assets was proposed and accepted to correct the error.4. Various errors were noted for correction by the auditors in the Notes to the Financial Statementsrelated to Note 2: Deposits and Investments and Note 8: Lease Obligations.5. Entries made during the fiscal year to record the activity of an investment account resulted in theinvestment being reported on the Statement of Net Assets as both an Investment and also withinCash and Cash Equivalents. This resulted in an overstatement of assets of $59,570.6. Accounts Payable in the amount of $1,277,121 could not be documented by the University.The University's management failed to adequately review the year-end financial statements to ensurethat the statements as presented for audit were accurate and properly supported by underlyingaccounting records.Significant and material misstatements were included in the financial statements presented for audit.In addition, the lack of controls and monitoring could impact the reporting of the University's financialposition and results of operations.The University should review the accounting controls and procedures currently in place, identifyweaknesses, and design and implement procedures necessary to strengthen controls over thepreparation of the financial statements.VALDOSTA STATE UNIVERSITYFinding Control Number: FS-551-12-01EMPLOYEE COMPENSATIONInadequate Controls over Employee CompensationCondition:Criteria:Information:The accounting procedures of the University were insufficient to provide adequate controls overemployee compensation.The University's management is responsible for designing and maintaining policies and procedures toensure that financial activity is properly processed and reflected on the University's financial records.The following deficiencies were noted during our review of activities performed by the HumanResource Department:1. Two employees had not properly elected to enroll in a retirement program and therefore nodeductions had been made to contribute to a retirement program.72