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. One employee continued to accrue sick and vacation time while on unpaid leave.3. One individual received a direct deposit payment for salary who was not officially hired by theUniversity.4. One employee received four months salary while on unpaid leave during fiscal years 2011 and2012.5. Several errors were noted in the payment of benefit premiums for those employees who were onunpaid leave.Cause:Effect:Recommendation:These deficiencies were the result of management's failure to ensure that internal controls over theemployee compensation process were established, implemented and functioning.This could result in errors in financial reporting and increases the risk of material misstatement in thefinancial statements, including misstatements due to fraud.The University should review the accounting controls and procedures in place and design andimplement procedures relative to the accounting functions in the human resources department toensure that financial activity is properly processed and reflected on the University's accounting records.GEORGIA PERIMETER COLLEGEFinding Control Number: FS-571-12-01CAPITAL ASSETSInadequate Internal ControlsCondition:Criteria:Information:The accounting procedures of the College were insufficient to provide adequate control over CapitalAssets.The College should maintain capital asset records in accordance with capitalization guidelines andinstructions provided in Chapter 7 of the Board of Regents' Business Procedures Manual.The following deficiencies were noted relating to Capital Assets:1. Periodic reconciliations of capital asset additions to capital outlay expenses were not performedfor the period under review.2. During the financial statement preparation process, the College identified and corrected numerouserrors related to unrecorded capital assets, unsupported acquisition costs, and inaccuratedepreciation expense.Cause:Effect:Recommendation:The College's previous management failed to implement appropriate internal controls and proceduresnecessary to properly record, maintain and track capital assets.By failing to accurately record and track capital assets, the College could place itself in a positionwhere potential misappropriation of assets could occur and impact reporting of its financial positionand results of operations.While clean-up efforts were completed by the end of the fiscal year, the College should ensure thatappropriate procedures and controls exist throughout the year to ensure that capital asset activity isproperly recorded, maintained and reported on the financial accounting system.73