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

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012Finding Control Number: FS-571-12-02GENERAL LEDGERREVENUES/RECEIVABLES/RECEIPTSInadequate Controls over Restricted FundsCondition:Criteria:Information:The accounting procedures of the College were insufficient to provide adequate controls over theRestricted Fund activity.NCGA Statement 1, paragraph 1, prescribes that an accounting system (1) present fairly and fullydisclose the funds of the governmental unit in accordance with generally accepted accountingprinciples and (2) demonstrate compliance with finance related legal and contractual provisions.Additional administrative requirements are contained in the University System of Georgia, Board ofRegents Business Procedure Manual and pertinent sections of the Official Code of Georgia Annotated(O.C.G.A.).The following deficiencies were noted in the review of the Restricted Grant Activity:1. Revenues/Receivables/ReceiptsNumerous accounts receivable and revenues associated with Restricted Grant funds wereinadequately documented and/or inaccurately recorded on the general ledger. The College madesignificant adjustments throughout the fiscal year in an effort to correct these issues.2. General LedgerReconciliations of net assets by Restricted fund project were not performed to ensure that revenuesequaled expenditures. At the beginning of fiscal year 2012, deficit balances existed totaling$1,433,607.29 within 18 restricted projects. The College has performed procedures to correcterrors related to these deficits. A net unidentified excess fund balance of approximately $108,000remained as of the end of fieldwork. The College is continuing efforts to identify the properrestricted projects related to the unidentified fund balance.Cause:Effect:Recommendation:The College's previous management failed to implement satisfactory controls to ensure that activity forthe Restricted Grant Funds is properly documented and recorded in the accounting records.Failure to implement satisfactory accounting controls and procedures could cause internal reports tomanagement, grantor reimbursement request and other restricted grant information generated from thegeneral ledger to be inaccurate and misleading. In addition, the College could place itself in a positionwhere potential misrepresentations of financial activities could occur.The College should review the accounting controls and procedures currently in place, identifyweaknesses, and design and implement procedures necessary to strengthen controls over theaccounting function for Restricted Grant Funds.Finding Control Number: FS-571-12-03FINANCIAL REPORTINGInadequate Accounting Procedures over Budget Preparation and ExecutionCondition:Criteria:Information:The College failed to properly monitor budgetary financial activity during the year.Management is responsible for establishing, maintaining and monitoring procedures, the purpose ofwhich is to ensure the fair presentation of the budget basis financial statements provided for inclusionin the State of Georgia Budgetary Compliance Report.The following deficiencies were noted in the College's budget preparation and execution:1. Budget amendments submitted to the Board of Regents were not accurately loaded into theCollege's financial system until the end of the fiscal year.74