Special examination: Department of Revenue's agency fees [Jan. 2013]

Special Examination Report No. 12-22

January 2013

Georgia Department of Audits and Accounts
Performance Audit Division
Greg S. Griffin, State Auditor Leslie McGuire, Director

Why we did this review
This special examination was conducted at the request of the House Appropriations Committee. The Committee requested that we review the Department of Revenue's fee collection policies, as well as the extent to which agency fees have been applied to the department's operating budget to offset state fund reductions. Our review also included an examination of DOR's basis for charging fees, retaining fee revenue, and setting fee amounts, as well as its transparency in doing so.
About the Department of Revenue
The Department of Revenue is the primary revenue collecting agency in the state, collecting more than $20 billion in fiscal year 2012. DOR's primary responsibility is enforcing the state's tax code and collecting tax revenue. DOR also regulates the manufacturing and sale of alcohol and tobacco products, production and sale of automobile license plates, and administers the Unclaimed Property program.

Department of Revenue's Agency Fees
DOR has increased its reliance on fees
What we found The Department of Revenue has increasingly relied upon retained fee revenue to fund program operations in recent years. From fiscal year 2009 to 2012, DOR created eight retained fees (bringing the total to 18) and increased the amount charged for three fees. During that same time frame, retained fee revenue grew from $19.0 million to $40.8 million. The 2012 retained fee revenue funded approximately 23% of agency expenditures, though fees comprised more than a third of expenditures for five programs.
Like most state agencies, DOR experienced budget cuts during much of the 2009-2012 period. However, several programs were able to increase fee revenue to fully or partially offset state fund reductions. Of the eight programs that receive fee revenue, six increased that revenue from 2009 to 2012. Five of those had fee revenue increases that exceeded their net reduction in state funds.1 For example, the Tax Compliance program had a net state fund reduction of $237,000 but had fee increases of $9.5 million. Similarly, since its creation in fiscal year 2010, the Tax Policy program has had a state fund increase of $47,000 but increased fee revenue of $614,000. It should be noted that these net revenue increases may be due to additional responsibilities or an increased demand for services.
In some cases, decisions to create new fees or increase fee amounts were communicated to legislative budget officials and documented in appropriations acts. Four of the eight fees created during the fiscal year 2009 to 2012 time period were noted in at least one appropriations act (three of the remaining fees were created in fiscal year 2012). In addition, two of the three fees that were increased are noted in an act. These changes were due to the

1 The change in state funds does not include reductions/additions for payments to the State Health Benefit Plan, workers compensation, the Employees Retirement System, the Georgia Technology Authority, or similar overhead changes.

270 Washington Street, SW, Suite 1-156

Atlanta, Georgia 30334

Phone: (404)657-5220

www.audits.ga.gov

General Assembly approving the replacement of state funds with the additional fee revenue. For changes not noted in an appropriations act, no replacement of state funds occurred. While evidence of fee changes were noted in some budget documents, these documents are not intended to detail an agency's basis for all new fees and fee amounts. The only formal method for documenting a reason for a fee (or fee amount change) that we identified is the User Fee Report compiled by the Governor's Office of Planning and Budget. This report, which was first compiled at the end of fiscal year 2010, includes user fee information reported by state agencies. DOR has reported some but not all fees that should be included in the OPB report.
When setting fee amounts, DOR was able to provide documentation for the changes made to five of ten fees changed since fiscal year 2009. In three cases, the analysis included a detailed accounting of actual or estimated costs, while the other two only noted the types of costs that would impact the fee amount. For the remaining five fees, DOR was unable to provide documentation of an analysis. DOR officials believe that three analyses were conducted but were unable to locate them. They noted that three of these analyses were not focused solely on costs but on the market rate for the service being provided.
Finally, in reviewing the legal authority for collecting and retaining fee revenue, we noted inconsistencies between the Constitution and various statutes. While the Constitution states that money collected as a result of revenue measures enacted by the General Assembly should be remitted to the state treasury, laws creating six DOR fees clearly state that the agency should retain the funds. In addition, like many agencies, DOR has general statutory authority that has been interpreted to allow the creation of fees that can be retained by the agency. However, O.C.G.A. 48-2-17 states that DOR must transfer all funds to the treasury if they are collected pursuant to a revenue title or licensing law, unless the law states otherwise. We determined that a legal opinion would be necessary to determine if DOR can retain any or many of the fees included in this examination.
Despite the uncertainty surrounding many fees, we could find no valid reason for the continued retention of two fees Tag Data Receipts and Alcohol Administrative Assessments. Tag Data Receipts is established in O.C.G.A. 40-3-23(e), which does not direct DOR to retain the revenue. DOR collected $1.8 million during fiscal year 2012. In addition, Alcohol Administrative Assessments, which are essentially penalties charged to those who violate DOR's alcohol beverage regulations, appear to be subject to O.C.G.A. 3-2-10, which requires that penalties collected pursuant to Title 3 be remitted to the state treasury. Finally, while DOR appears to have the legal authority to establish the Tobacco Stamp Surcharge, the manner in which it was created reduced state tax revenue. When it established the fee, DOR increased the discount rate applied to tobacco distributors' taxes, resulting in a decrease in revenue to the state treasury that equaled the increase in fee revenue to DOR.
What we recommend This report is intended to provide answers to questions posed by the House Appropriations Committee. We hope that this report provides pertinent information to help inform policy decisions.
DOR's Response: In its response, DOR stated that it has "maintained complete transparency with respect to fees" and "followed applicable state guidelines for amending additional funds into the budget." It also stated that fees were established to "make those using certain ancillary government services pay for those services for which they receive a direct benefit or create a direct cost." It noted that this reduced the use of taxpayer dollars. In regard to the authority to establish and retain fees, DOR stated that it has "performed due diligence in researching case law, opinions of the attorney general and the OCGA, in its attempt to be compliant." More detailed responses are found at the end of each finding.

Department of Revenue's Agency Fees

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Table of Contents

Purpose of the Special Examination

1

Background

1

Establishing and Retaining Fees

1

Department of Revenue Fees

1

Requested Information

4

DOR has used fee revenue to offset a significant portion of state fund cuts in

several programs.

4

DOR has largely complied with requirements associated with communicating

changes in fees. However, these requirements are limited and do not require

the communication of decisions related to establishing fees or changing fee

amounts.

9

DOR generally conducted some level of financial analysis in setting fee

amounts, though the level of detail present in the analyses varied. Analyses for

some fees could not be located.

12

While DOR may have the general authority to establish and retain fees for the

operation of its programs, we found fees whose retention or benefit is

questionable.

15

Appendices

Appendix A: Objectives, Scope, and Methodology

17

Appendix B: Fee Amount

19

Appendix C: Authorization for Fee

20

Appendix D: Expenditures by Fund Source for Programs with Fee Revenue FY

2009 2012

21

Department of Revenue's Agency Fees

ii

Department of Revenue's Agency Fees

1

Purpose of the Special Examination
This examination was requested by the House Appropriations Committee. The Committee asked that we review the Department of Revenue's fee collection policies, as well as to determine the extent to which agency fees have been applied to the department's operating budget to offset state fund reductions. Specifically, our examination set out to determine the following:
1. To what extent does DOR use fee revenue to fund programs and offset state funding cuts?
2. Is DOR accurately reporting fee collection information to state budget authorities?
3. Does DOR have a reasonable basis for setting fee amounts? 4. Does DOR have the legal authority for charging and retaining the fees it
collects?
A description of the objectives, scope, and methodology used in this review is included in Appendix A. A draft of the report was provided to the Department of Revenue for its review, and pertinent responses were incorporated into the report.
Background
Establishing and Retaining Fees The method by which a fee is created impacts an agency's authority to retain the fee. Article VII, Section III, Paragraph II of the Georgia Constitution states that "Except as otherwise provided in this Constitution, all revenue collected from taxes, fees, and assessments for state purposes, as authorized by revenue measures enacted by the General Assembly, shall be paid into the general fund of the State Treasury." This provision, along with similar language in O.C.G.A. 45-12-92 (Budget Act), has led to Attorney General opinions that fees specifically created in statute must be remitted to the state treasury. Fees may also be created by state agencies pursuant to general statutory authority. In those cases, because the fee is not a revenue measure "enacted by the General Assembly," state agencies can generally retain the revenue.
While these rules apply in many cases, there are some fees created by the General Assembly in which the statute directs the agency to retain the funds. In addition, the General Assembly may direct that all fee revenue collected by an agency pursuant to the agency's statutory authority be remitted to the treasury.
Department of Revenue Fees The Department of Revenue (DOR) is the primary revenue collecting agency in the state, collecting more than $20 billion in taxes and fees in fiscal year 2012. The department's most notable responsibility is the collection of income and sales tax. The department also regulates the manufacturing and sale of alcohol and tobacco products, production and sale of automobile license plates, and administers the Unclaimed Property program. These responsibilities are divided among several divisions, including Local Government Services, Motor Vehicle Registration and Titling, Taxpayer Services, and Alcohol & Tobacco Enforcement.

Department of Revenue's Agency Fees

2

DOR charges fees related to several of its functions. During fiscal year 2012, it charged more than 60 fees and retained revenue for 18 (see Exhibit 1/Appendix B for fee amounts). Nine of the fees were created by statute, and nine were created pursuant to DOR's general statutory authority (see Appendix C). The fees were associated with a variety of programs and activities, including licensing/permitting, the provision of goods or services, penalties or fines, or other fees intended to cover the costs of collecting taxes. It should be noted that not all of the fees retained by DOR would be categorized as "user fees," as defined in the Budget Act.

Exhibit 1 List of Fees Retained by DOR Between Fiscal Years 2009 and 2012

Fee Name Alcohol Administrative Assessment Coin-Operated Amusement Machine Fee (COAM) (1) Collection Fees
Electronic Lien & Title
Electronic Title & Registration FiFa Collection Costs Garnishments Processing Offer in Compromise Tag Data Receipts Tag Production Fee(1) Temporary Operating Permits Tobacco Stamp Surcharge Unclaimed Property
Unified Carrier Registration Local Government Training

Description
Administrative fine/penalty charged to alcohol beverage licensees found in violation of DOR's Rules and Regulations
Paid by licensees to cover the costs of processing applications and enforcement
Paid by individuals and businesses and intended to defray the costs of collecting deficient taxes Paid by participating banks or lenders and intended to cover costs associated with allowing lenders the ability to electronically issue and release liens on car titles. Fee/program will be mandatory as of Jan 1, 2013. Paid by auto dealer associations to allow dealers the option to electronically title and register vehicles onsite; participation is not mandatory Paid by individuals and businesses and intended to defray the costs of executing levies
Paid by wage earners and intended to recover the costs of issuing garnishments
Paid by individuals and businesses applying for a negotiated payment arrangement
Paid by those obtaining motor vehicle records from DOR
Portion of registration fee retained by DOR to cover costs of manufacturing and delivering license plates Paid by auto dealer associations to purchase blank digital drive out tags and to process/print the drive out tag after purchase Paid by businesses and intended to cover the costs associated with issuing tobacco stamps for the excise tax
Portion of unclaimed property funds retained by DOR to fund the program
Paid by companies that have commercial vehicles traveling on Georgia highways to cover cost of administering intrastate UCRA
Paid by participants of training classes to cover costs of providing classes

Donation Check-Offs

Portion of donation fund and tax credits retained by DOR to pay for its administration of those activities

Lottery Corp. Contract
Special Tag Manufacturing Fee

Paid by the Georgia Lottery Corporation to compensate DOR staff for providing auditing service personnel
Paid by applicants for new specialty tags to cover the costs of producing the new type of tag

Miscellaneous(2)

(1) DOR discontinued the retention of COAM and Tag Production fees after fiscal year 2012. (2) DOR groups several smaller fees into a Miscellaneous category for financial reporting purposes. We have listed the fees that generate the most revenue within the category.
Source: Review of agency documentation, interviews of agency personnel, and review of relevant Georgia Code

Department of Revenue's Agency Fees

3

As shown in Exhibit 2, DOR's retained fee revenue increased between 2009 and 2012. This can be attributed to changes in the number or methods of assessment, increasing fee amounts, as well as new fees. In 2012, DOR fee revenue totaled approximately $41 million.

Exhibit 2 DOR's Retained Revenue Has Increased From 2009 to 2012

Fee Name

2009

2010

2011

2012

Alcohol Administrative Assessment

$1,005,515

$964,739

$828,850

$1,042,675

Coin-Operated Amusement Machines

-

-

509,750

381,000

Collection Fees

10,473,615

11,109,293

12,517,743

16,807,973

Electronic Lien & Title

-

-

-

158,815

Electronic Title & Registration FiFa Collection Costs Garnishments Processing Miscellaneous(1)

3,016,378
1,714,670

3,498,717
1,065,321

5,613,134
743,385 1,393,346

763,722 2,021,283
885,272 1,010,419

Offer in Compromise

-

-

-

22,300

Tag Data Receipts

889,508

1,018,772

1,673,922

1,810,617

Tag Production Cost

-

910,267

7,972,189

8,760,361

Temporary Operating Permits Tobacco Stamp Surcharge Unclaimed Property

2,024,310

1,003,774 2,744,961

1,880,772 2,339,206

1,573,257 1,950,258 3,613,303

Total

$19,123,995

$22,315,843

$35,472,298

$40,801,255

Note: Totals may not equal sum due to rounding. (1) In its accounting system, DOR captures several fees within a Miscellaneous category. As noted in Exhibit 1, Miscellaneous includes fees for local government training, Unified Carrier Registration, donation tax check-offs, a contract with the Georgia Lottery Corporation, and manufacturing Special Tags.
Source: PeopleSoft financial system

To spend retained revenue that has been collected by state agencies, the money must first be included in a program's final budget. Fee revenue is generally appropriated by the General Assembly as "agency funds." Agencies provide estimates of what they believe fee revenue will be in the coming year, and the General Assembly directs the funds to certain programs. When fee revenue collected during the year exceeds the appropriated amount, the additional amount has to be amended into the budget and approved by the Governor's Office of Planning and Budget prior to being expended.

Department of Revenue's Agency Fees

4

Requested Information

DOR has used fee revenue to offset a significant portion of state fund cuts in several programs.

Austerity Cuts are reductions made specifically to a budget program or subprogram in order to reduce spending.

The Department of Revenue has undergone state funding cuts in recent years to balance spending with available revenues. In order to offset these cuts, DOR has increased fee revenue by adopting new fees and increasing fee amounts. The higher fee revenue has helped offset a portion of austerity cuts in several programs. Some programs have not received any reductions, while others have received strategic increases in an effort to increase state tax revenue. Many of these state fund reductions were offset by fees noted in the appropriations acts.
Fee Revenue as Portion of Budget
The portion of DOR's total operating revenue funded through fees has increased from approximately 12% in fiscal year 2009 to 23% in 2012, as shown in Exhibit 3 below. The increase in fee funding can be attributed to the addition of eight new fees, as well as fee amount increases in three fees. Over the same period, the portion of DOR's operations funded through state funds has dropped from 74% to 67%, though the amount of state funds received has actually increased from $115.3 million to $119.5 million.

Exhibit 3 Fee Revenue Comprised Increasing Portion of Agency Funding, FY 2009 - 2012

$200,000,000

Other - Fees

Other - Non Fees

Federal

State

$180,000,000

$160,000,000 $140,000,000 $120,000,000 $100,000,000

$19M (12%)
$17.3M (11%) $3.2M (2%)

$22.3M (16%)
$15.5M (11%) $1M (1%)

$35.4M (21%)
$17.2M (10%) $1.9M (1%)

$40.8M (23%)
$17.1M (10%) $0.95M (0.5%)

$80,000,000

$60,000,000 $40,000,000

$115.3M (74%)

$102.9M (73%)

$111M (67%)

$119.5M (67%)

$20,000,000

$0 2009

2010

2011

2012

Note: Totals may not equal sum due to rounding.
Note: Amounts do not include pass-through grants, including the Homeowners Tax Relief Grants in FY09 or the Forest Land Protection Grants in 2011 and 2012.
Source: PeopleSoft financial system

Department of Revenue's Agency Fees

The change in the portion of program expenditures funded by fee revenue varied between programs. In the 2012 Amended Budget, DOR had thirteen programs, eight of which received significant fee revenue during at least one of the four years we reviewed (see Appendix D for a listing of all DOR programs and related

Exhibit 4 Five of Eight Programs Receive Greater Portion of Budget from Fees Than in 2009

Fiscal Year 2009

Fiscal Year 2012

Difference

Program

Fee Revenue As % of Budget Fee Revenue As % of Budget Fee Revenue As % of Budget

Primary Reason for Change

Motor Vehicle Registration and Titling(1)

$2,346,946

16%

$12,791,441

56%

$10,444,495

+40%

Addition of Electronic Title and Registration Fee, Tag Production Fee, and Temporary Operating Permit Fee.

Industry Regulation Tax Policy(1)

$546,526 $448,046

9% 24%

$2,831,580 $1,061,837

43% 39%

$2,285,054 $613,791

+32% +15%

Addition of Tobacco Stamp Surcharge and Coin Operated Amusement Machine Fee.
Began receiving portion of Alcohol Administrative Assessments, as well as new Electronic Lien and Title fee, Electronic Title and Registration fee,
and Temporary Operating Permits.

Tax Compliance

$10,122,581

24%

$19,650,370

36%

$9,527,789

+12%

Movement of Collection Fee to higher priority than taxes and other funds
owed. Also, FiFa revenue moved to Tax Compliance and fee amount increas ed.

Local Govt. Services(1)

$2,893,182

55%

$3,773,943

61%

$880,761

+6%

FY12 increase in the Unclaimed Property revenue due to one-time
charges .

Departmental Administration

$431,922

10%

$503,695

6%

$71,773

Amount increased because program

began receiving small portion of

-4%

numerous new fees. However,

program's state funding increased as

well.

Revenue Processing

$3,039,635

6%

Customer Service

$3,575,801

26%

(1) Initial year f igures are f rom 2010, the f irst year of the program. Source: PeopleSoft financial system

$3,972 $141,369

0.03%

($3,035,663)

1%

($3,434,432)

-6% -25%

Reorganization re-directed fee revenue to other programs.
Reorganization re-directed fee revenue to other programs.

5

Department of Revenue's Agency Fees

6

expenditures by fund source for fiscal years 2009- 2012). As shown in Exhibit 4, the largest change occurred in the Motor Vehicle Registration & Titling program, and the least significant change occurred in the Local Government Services program. Three programs also saw a decrease in their reliance on fee revenue.
Of the other five programs in DOR's fiscal year 2012 budget, Technology Support Services did receive a small amount of fee revenue during the four-year period reviewed. The program, which was created in 2010, received less than 0.5% of its funding in the last three years from fees. The other four programs Forest Land Protection Grants, Office of Special Investigations, Local Tax Officials Retirement and FICA, and Fraud Detection and Prevention had no fee revenue.
Austerity Cuts and Fee Changes
Of the eight DOR programs that have fee revenue, six experienced increasing fee revenue over the fiscal year 2009 to 2012 time period.2 Five of six had fee increases that exceeded state funding reductions. A significant portion of the state funding cuts in three programs were specifically noted in appropriations acts as reductions to be offset by additional fee revenue.
In order to determine if DOR was offsetting austerity cuts with fee revenue, we isolated the state funding cuts/increases specific to the agency or program that occurred between fiscal years 2009 and 2012. We excluded other changes such as reductions (or additions) in funds for state health benefit plan or retirement system contributions or transfers of funds related to a realignment of programs. These changes are considered statewide funding cuts. Exhibit 5 shows the applicable changes in state funds, as well as changes in fee revenue for the six programs. The extent to which fee revenue offsets state austerity cuts, and those instances in which specific fees were noted as replacing state funds by the General Assembly, are detailed below.
Increased Fee Revenue Exceeded State Fund Loss Fee revenue increases in five programs exceeded state fund reductions over the 2009 to 2012 timeframe. In several instances, the General Assembly noted that state fund reductions should be offset with additional fee revenue. In some cases, the fee revenue collected exceeded the amount expected in the appropriation. It should not be presumed that programs are providing the same services provided in 2009. Fee revenue may be supporting new/additional services or an increased demand for services.
Industry Regulation The program had a net state fund reduction of $1.2 million in relation to a $2.3 million increase in fee revenue. The increase in fee revenue was primarily due to the adoption of the Tobacco Stamp Surcharge and COAM fee. The General Assembly anticipated additional fee revenue from these sources to generate $2.3 million between 2010 and 2012 to offset state fund reductions. Actual collections equaled the estimated amount.

2 The Customer Service and Revenue Processing programs had fee revenue declines over the period reviewed.

Department of Revenue's Agency Fees

7

Exhibit 5 Six DOR Programs Increased Fee Revenue to Offset Austerity Cuts, FY 2009 - 2012

Departmental Administration State Fund Reduction State Fund Addition Net State Fund Change

FY 2010 (change from
FY09)
($451,753) $0
($451,753)

Fee Increase/(Decrease)

($109,649)

Program Change
Industry Regulation State Fund Reduction State Fund Addition Net State Fund Change

($561,402)
($655,238) $0
($655,238)

Fee Increase/(Decrease)

$957,683

Program Change

$302,445

Local Government Services State Fund Reduction State Fund Addition Net State Fund Change

Fee Increase/(Decrease)

Program Change
Motor Vehicle Registration and Titling State Fund Reduction State Fund Addition Net State Fund Change

Fee Increase/(Decrease)

Program Change

Tax Compliance State Fund Reduction State Fund Addition Net State Fund Change

($3,167,654) $79,140
($3,088,514)

Fee Increase/(Decrease)

$3,256,702

Program Change

$168,188

FY 2011 (change from
FY10)
($707,153) $0
($707,153) $116,376
($590,777)
($1,441,134) $38,818
($1,402,316) $1,357,373 ($44,943)
($327,452) $0
($327,452) ($303,535) ($630,987)
($4,893,761) $1,258,608
($3,635,153) $7,865,431 $4,230,278
($2,472,386) $0
($2,472,386) $3,538,993 $1,066,607

FY 2012 (change from
FY11)
($160,000) $0
($160,000) $65,046
($94,954)
($291,800) $1,178,000
$886,200 ($30,002) $856,198
($46,000) $0
($46,000) $1,184,295 $1,138,295
($2,169,437) $0
($2,169,437) $2,579,064 $409,627
($11,776,892) $17,101,094 $5,324,202 $2,732,093 $8,056,295

Change FY 2009 - 2012
($1,318,906) $0
($1,318,906) $71,773
($1,247,133)
($2,388,172) $1,216,818
($1,171,354) $2,285,054 $1,113,700
($373,452) $0
($373,452) $880,760 $507,308
($7,063,198) $1,258,608
($5,804,590) $10,444,495
$4,639,905
($17,416,932) $17,810,234 ($236,698) $9,527,788 $9,291,090

Tax Policy State Fund Reduction State Fund Addition Net State Fund Change

$0 $77,184 $77,184

($30,000) $0
($30,000)

($30,000) $77,184 $47,184

Fee Increase/(Decrease)

($139,282)

$753,073

$613,791

Program Change

($62,098)

$723,073

$660,975

Note: This table only depicts austerity cuts and similar enhancements. It does not include changes in state funds associated with state health benefits, workers compensation rates, employee retirement rates, or similar instances.
Source: PeopleSoft financial system (fee changes), Appropriations Acts (state fund changes)

Department of Revenue's Agency Fees

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Motor Vehicle Registration and Titling The program experienced more than $5.8 million in state fund reductions over the period reviewed, though fee revenue increased more than $10.4 million. Some fee revenue was expected to offset cuts. The fiscal year 2011 appropriations act stated that $5.2 million in state funds was to be replaced by two fees: Tag Data Receipts ($1.3 million) and Tag Production Costs ($3.9 million). Over the period reviewed, these fees generated more revenue than expected by the General Assembly and other new fees not included in the appropriations acts were added to the program.
Tax Compliance Between 2009 and 2012, the program had a $237,000 net reduction in state funds,3 compared to fee increases of $9.5 million. According to 2010-2012 appropriations acts, approximately $9.5 million in state austerity cuts were to be offset by increasing fee revenue from Collection Fees, FiFa Collection Costs, and the Garnishments Processing fee. Collectively, the increase in revenue from these fees was similar to the amount anticipated in the appropriations acts, though Collection Fees greatly exceeded and FiFa was significantly lower than expected amounts.
Tax Policy Although the Tax Policy program had an increase in fee revenue of more than $600,000 during the period reviewed, it has not experienced a net reduction in state funds.
Local Government Services While Local Government Services falls in this category as well, its fee revenue increase was a result of a one-time increase in Unclaimed Property expenditures (and related fee revenue). Since the Unclaimed Property subprogram is intended to be funded by fee revenue, state fund reductions should not impact program funding.
Increased Fee Revenue Partially Offset State Fund Loss Departmental Administration The program had a minimal increase in fee revenue during the three-year period, and it had little impact on offsetting more than $1.3 million in state fund reductions. None of the appropriations acts directed the program to replace state funds with fees.
DOR Response: "The establishment of fee revenue was intended to make those using certain ancillary government services pay for those services for which they receive a direct benefit or create a direct cost. The establishment of fee revenue allowed DOR to reduce the amount of taxpayer dollars needed to support the DOR such that those funds may be utilized as determined by the Legislature. DOR has utilized fee revenue to offset its budget cuts during several of the last budget cycles, in the form of fund source swaps, switching State funds for Agency funds. The budget offsets were submitted as part of State fund cuts issued by the Governor's budget instructions and passed in the Appropriations Act by the General Assembly. In instances where our fees collected in a given year exceeded the intended fund source swaps, such as tag production costs, the fee is variable and driven by demand. Therefore, DOR cannot, with 100% accuracy, predict the amount of fees that will be collected. DOR carefully and meticulously reviews all fee generating programs and takes into account many factors when trying to estimate the amount of revenue that will be generated by such programs year after year."

3 The Tax Compliance program received a large increase in state funds during fiscal year 2012 that helped offset other cuts.

Department of Revenue's Agency Fees

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DOR has largely complied with requirements associated with communicating changes in fees. However, these requirements are limited and do not require the communication of decisions related to establishing fees or changing fee amounts.
Georgia does not require that new fees or changes in fee amounts be directly communicated to the General Assembly. When agencies have the general statutory authority to create a fee, the General Assembly may not become aware of the fee's creation until it is reported in budget documents or in the User Fee report produced by the Office of Planning and Budget (OPB).
DOR appeared to comply with most requirements for reporting fee information. The department reported fee-related information in four sources: budget requests/appropriations acts, BudgetNet amendments, the OPB User Fee Report, and DOR monthly reports to budget officials. In the last four years, DOR created eight new fees and changed fee amounts for three fees. Following are details on the sources which contained information on a new DOR fee or fee amount.
Budget Request/Appropriations Act Four new fees were noted in an appropriations act (generally associated with a corresponding state fund reduction), signifying that the fee's creation was communicated to the General Assembly. In addition, two of the three fee increases were noted in appropriations acts.
BudgetNet Amendment DOR submits amendments to its original budget throughout the year. While these amendments are submitted for OPB approval, legislative budget analysts have access to the information. All eight of the new fees appeared in BudgetNet in the first year they were collected, but the report does not specifically identify the fees as a new revenue source. When DOR changed a fee amount, additional revenue was shown in the budget amendment, but the amendment does not note that the revenue was associated with an increased fee amount.
OPB User Fee Report The Budget Act (O.C.G.A. 45-12-92) requires OPB to collect and report all agencies' user fees. The law defines these fees as "voluntary or mandatory payments made in exchange for a government good or service provided specifically to the fee payer." It also states that the revenue source must be associated with "the activities of a specific program" and that "fines, penalties, late fees or similar punitive charges are not included."
While the OPB report is based on a definition of user fees that does not apply to all fees included in this special examination, DOR's reporting has not been consistent with the legislation's definition. For example, DOR reported Alcohol Administrative Assessments in fiscal year 2011 and 2012 even though this fee is a fine/penalty. DOR did not report either the Electronic Lien & Title fee or the Electronic Title & Registration fee in fiscal year 2012, even though both fit the legislation's definition of a user fee. DOR reported two fees in 2010, five in 2011, and four in 2012.
DOR Monthly Reports Since August 2011, DOR budget officials have submitted monthly reports showing the amount collected for each retained fee to OPB, the House Budget and Research Office, and the Senate Budget and Evaluation Office.

Department of Revenue's Agency Fees

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While the General Assembly could become aware of the existence of new fees or additional fee revenue through these sources, the sources do not necessarily note the reason for the creation of the fee or the reason the fee amount changed. Therefore, we interviewed personnel and reviewed DOR documents related to fees created or changed during the 2009-2012 timeframe. As noted in the finding on page 4, a reduction in state funds was an underlying factor in many decisions. Other details regarding the reason for fee changes and the information reported in budget documents are below.
Coin-Operated Amusement Machine (COAM) Fee Passage of HB 1055 in 2010 increased COAM fees to be paid to the state treasury. DOR expected to increase enforcement of COAM regulations but believed that it did not have the resources for the additional workload. In 2011, DOR began retaining a portion of the fees set in state law. While the fiscal year 2011 amended appropriations act notes that DOR will retain a COAM fee, it does not note that the fee was being taken from revenue intended for the state treasury. DOR discontinued retention of this fee in 2013.
Electronic Lien & Title Fee DOR allows lenders to electronically place or release liens on car titles. While DOR has provided this service for several years, it instituted the fee during fiscal year 2012 to cover its costs (primarily IT-related). The fee had no corresponding reduction in state funds, so it did not appear in an appropriations act. The fee does appear in a fiscal year 2012 BudgetNet amended budget request.
Electronic Title & Registration Fee In fiscal year 2012, DOR began allowing auto dealers to issue car titles on premises. Georgia auto dealer associations signed contracts with DOR to provide this service, which includes access to the state's motor vehicle database. DOR established the fee when the service began in 2012. This fee did not correspond with a reduction in state funds, so it does not appear in an appropriations act. It does appear in a 2012 BudgetNet amendment.
Tag Production Fee Passage of HB 1055 also allowed DOR to retain a portion of the annual vehicle registration fee for the costs of producing and delivering license plates. The state's registration fee did not change. Instead, the act stated that DOR could retain a portion of the fee previously sent to the state treasury. The fee was noted in HB 1055 and additional language was included in the fiscal year 2011 appropriations act, making it clear that the General Assembly and state budget authorities were aware of the fee. DOR discontinued retention of this fee in 2013.
FiFa Collection Cost The FiFa fee is charged in conjunction with the Cost of Collections fee. The FiFa fee amount was increased from $25 to $50 in fiscal year 2011 and coincided with a state funding cut. The fiscal year 2012 amended appropriations act notes that the fee will be increased to account for the reduction in state funds. DOR reported that the FiFa fee was not collected for several months during fiscal year 2012 due to a planned computer outage related a system conversion.

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Garnishments Processing Fee DOR began charging this fee, also in conjunction with the Cost of Collections fee, in fiscal year 2011. While DOR had already been issuing garnishments, it stated that the number (and resulting costs) began to increase in recent years. DOR then instituted the fee to offset related costs. The garnishments processing fee is listed in the fiscal year 2011 amended appropriations act.
Tag Data Receipts Fee DOR manages Georgia's motor vehicle database and is allowed to provide certain data to state agencies, local governments and private companies in exchange for a fee. DOR has charged this fee and provided motor vehicle data for several years.
During the period under review, DOR raised the tag data receipts fee twice but did not have an associated reduction in state funds. To address ordered budget reductions in 2010, DOR proposed increasing the fee collections by $500,000 (with an equal reduction in state funds). This was accomplished by a fee increase from $0.035 to $0.05 per record. Negotiated in March 2010, the new fee was retroactive to October 2009. During the 2010 session, the General Assembly agreed with the budget reduction of $500,000 but directed DOR to raise an additional $809,000 through the fee in fiscal year 2011. According to DOR officials, they tried a second increase to $0.07 to generate the additional revenue, but the primary vendors discontinued purchases. Available invoices indicate that the vendors did not make a purchase from March until DOR lowered the rate to $0.06 in September 2010.
Before fee increases, DOR's baseline for collections were $800,000. The rate increases were expected to generate an additional $1.3 million, bringing total collections to $2.1 million. Because DOR had been unsuccessful in obtaining the full amount of the second fee increase, it did not believe it could generate the $2.1 million. In the fiscal year 2011 amended appropriations act, the General Assembly restored $1.3 million in state funds. In fiscal year 2012, the fee generated $1.8 million.
Temporary Operating Permit Fee DOR contracts with auto dealer associations to provide digitally printed temporary operating permits for those purchasing motor vehicles from a dealer. DOR began facilitating the service and charging the corresponding fee in fiscal year 2012. The fee is intended to cover the costs of printing and processing these electronic temporary tags. The fee does not have a matching reduction in state funds and is not noted in an appropriations act. The fee does appear in a fiscal year 2012 BudgetNet amendment.
Tobacco Stamp Surcharge This is an administrative fee DOR charges to tobacco distributors for the cost of purchasing tobacco stamps. DOR added this fee in fiscal year 2009 and increased the amount in 2011; both are noted in an appropriations act (fiscal year 2010 amended and fiscal year 2011, respectively). DOR cites several costs that necessitated the fee addition and increase (see finding on page 12).

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Unified Carrier Registration Administration Fee This fee was part of the Unified Carrier Registration Act of 2005. One portion of the Act provides federal funds to DOR for the enforcement of specific programs. However, DOR charges and retains this fee for a different purpose than the federal program. The fee was not noted in an appropriations act but is authorized by legislation. DOR began collecting the fee in fiscal year 2011.
DOR Response: "As noted in the most recent audit report, over the past four fiscal years the Department has maintained complete transparency with respect to fees. Fees have been uniquely identified by establishing fund source and project codes, to allow for easier tracking and monitoring, not only for DOR, but for the Governor's Office and the Legislature as well. DOR has consistently reported its fee revenue and followed applicable State guidelines for amending additional funds into the budget."

DOR generally conducted some level of financial analysis in setting fee amounts, though the level of detail present in the analyses varied. Analyses for some fees could not be located.
DOR conducted some level of analysis to assist in setting fee amounts for at least half of the fees created or amended since 2009. However, the level of detail in the analyses varied and was missing a detailed accounting of costs in some cases. Additionally, DOR was unable to locate the analyses it stated had been performed to support several other fees.
In order to determine the basis for DOR fee amounts, we reviewed those amounts set (fees added or changed) during the fiscal year 2009-2012 timeframe. Our review was limited to whether a financial analysis served as the basis for the fee amount and the level of detail included in the analysis. For example, we determined if DOR had identified the types of costs associated with the service and whether the actual costs had been analyzed. We also considered if DOR had another justification for the fee amount, such as the amounts charged by other states or the amount users were willing to pay.
Of the ten fees created and/or changed during the four years reviewed, DOR provided documentation showing the basis for the fee amount in five cases (see Exhibit 6). In three of those cases, the analysis included a detailed accounting of costs to support the amount ultimately charged. The other two analyses noted the types of costs that were expected to be incurred by DOR but did not contain an estimate of those costs. Finally, in five cases, DOR was unable to locate documentation of an analysis produced prior to setting the fee amount, though DOR was confident that three were conducted by a former employee. A summary of the fees is included below.
Analysis Provided For three fees, DOR provided an analysis showing how the fee amount related to the cost of delivering the associated service. For example, the Garnishments Processing fee analysis included an estimate of the costs of DOR labor, court filings, serving judgments, and related factors. For the Tag

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Exhibit 6 DOR Could Provide Analyses Supporting Half of the Fee Amounts Set Since FY 2009

Fee Name Coin-Operated Amusement Machines

Analysis Provided Yes

Electronic Lien & Title

No

Electronic Title & Registration

No

FiFa Collection Costs (Changed)

No

Garnishments Processing

Yes

Tag Data Receipts (Changed)

Yes

Tag Production Costs

Yes

Temporary Operating Permits

No

Tobacco Stamp Surcharge (Added & Changed)

Yes

Unified Carrier Registration Act

No

Source: Department of Revenue policy documents and cost analyses

Detailed Financial Analysis No n/a n/a n/a Yes Yes Yes n/a
No
n/a

Data Receipts fee, DOR calculated the costs of providing a record, including the costs of DOR labor, hardware/software, and data processing. DOR also noted that an effort to charge a higher rate had led to a reduction in tag purchases. Finally, the tag production fee had an analysis that included the costs of the actual tag, printing, shipping, and labor.

DOR analyses for two other fees did not include the same level of detail. The Tobacco Stamp Surcharge documentation noted that the program had costs related to an increase in vendor reporting, additional security, enforcement and compliance, and the expiration of an existing vendor contract. However, it did not contain either actual or estimated costs of these factors, making it difficult to determine how the final surcharge amount was set. The COAM documentation was similar, in that it noted that DOR had costs associated with "processing, maintaining, and enforcing new COAM laws and regulations," including new licenses, machine decals, and permits, but the documentation did not detail the actual or estimated costs of those items.

No Analysis Provided DOR was unable to provide documentation of analyses for five fee amounts. It indicated that an analysis was conducted for three of these Electronic Lien & Title, Electronic Title & Registration, and Temporary Operating Permits but was unable to locate the documentation. DOR officials stated that the amounts for each of these fees were also based on what the market would bear.

The FiFa and UCRA fees had no analysis conducted to support the amounts. The FiFa fee amount was increased from $25 to $50, and state funds were reduced that offset the increase. The annual UCRA fee was set at $5 per vehicle.

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Unclear Guidance Regarding Retention of Fee Revenue
Determining whether an agency has the authority to retain fee revenue requires guidance from the Georgia Constitution, applicable statutes, and legal interpretations found in Attorney General opinions. For many of the 18 fees retained by the Department of Revenue, we found the guidance to be unclear and subject to multiple interpretations. Depending on the interpretation, DOR may be authorized to retain all or none of the fees noted in this examination. A legal opinion from the Attorney General would be necessary to clarify DOR's responsibilities for retaining or remitting fees.
Fees Created In Statute DOR is directed by statute to both collect and retain at least six fees. While statute directs DOR to retain the revenue, the Georgia Constitution may require that all fees in statute be remitted to the treasury. A similar inconsistency likely impacts agencies beyond DOR. The ambiguity regarding the retention of fees that are established in statute is found when comparing the Constitution, the Budget Act, and statutes establishing certain fees. DOR is also subject to a statute requiring remittance of certain revenue to the treasury.
The Georgia Constitution appears to require that any fee created by the General Assembly be remitted to the state treasury, unless the Constitution provides an exception. Specifically, Article VII, Section III, Paragraph II states that "Except as otherwise provided in this Constitution, all revenue collected from taxes, fees, and assessments for state purposes, as authorized by revenue measures enacted by the General Assembly, shall be paid into the general fund of the state treasury." The Constitution does not specifically address the General Assembly's ability to statutorily permit an agency to retain funds.
O.C.G.A. 45-12-92 (a) states "All departments, agencies, and budget units charged with the duty of collecting taxes, fees, assessments, or other moneys, the collection of which is imposed by law, if required, shall pay all revenues collected by them into the state treasury on a monthly basis..." The phrase, "if required," was added as a result of 2010 legislation. The intended effect of the additional language is unclear.
O.C.G.A. 45-12-92.1, which also passed during the 2010 session, states that "The General Assembly finds and determines that certain fees imposed or authorized by law are not `revenue measures' within the meaning of Article VII, Section III, Paragraph II of the Constitution but only incidentally create revenue pursuant to the facilitation of another primary purpose." It further states that if a code section requires or authorizes a fee and refers to O.C.G.A. 45-12-92.1, the agency can retain the fee revenue. This statute attempts to define the Constitutional requirements for fee remittance.
O.C.G.A. 48-2-17, which specifically applies to DOR, states "Except as otherwise provided by law, all taxes, penalties, interest, and other moneys collected or received by the commissioner, the department...pursuant to this title or any other revenue or licensing law shall be paid to the Office of the State Treasurer and deposited within 45 days of such collection or receipt." This statute would appear to require that DOR remit all fee revenue to the state treasury, unless another law specifically states otherwise.
At least six statutes require DOR to both collect and retain fee revenue. For example, O.C.G.A. 48-16-10, which authorizes collection fees on deficient taxes, states "Notwithstanding any other provision of law, the department is authorized to retain all funds received as collection fees imposed by the commissioner for use in defraying the cost of collection of deficient taxes." This statute clearly expresses legislative intent regarding the fee retention.
Fees Created By DOR Nine fees retained by DOR were created pursuant to general statutory authority and are intended to offset the costs of services. AG Opinion 77-77 noted that the Constitution allows agencies to retain fee revenue if the fee is not required by or authorized in statute (i.e., not "revenue measures enacted by the General Assembly"). However, O.C.G.A. 48-2-17 requires DOR to pay all money to the treasury if collected "pursuant to this title or any other revenue or licensing law." The fees created and retained by DOR are based on general statutory authority found in various titles, though the actual fees are not in statute.
Effect While ensuring legal compliance is an important reason for establishing the appropriate destination for fee revenue, there are additional issues to consider as well. Fee revenue retained by an agency reduces the state funds available for appropriation by the General Assembly. The General Assembly does have some control over retained revenue, through the appropriation of agency funds, but it has less flexibility to direct funding to particular programs. Also, the General Assembly has less ability to set a program's budget when an agency can amend retained fee revenue into a budget late in the fiscal year. In contrast, there are practical benefits to retained revenue. When fee revenue is retained by an agency, it is more likely to be expended on services used by the payers. Finally, if an agency also has the ability to set the fee amount, it has an incentive to update the amount to cover costs that change over time.
Our Analysis The inconsistent legal guidance above makes the appropriate destination for several fees uncertain. For our review, we focused on those fees created in statutes that do not clearly state that DOR should retain the revenue. This assessment is consistent with both the Constitution and O.C.G.A. 48-2-17.

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While DOR may have the general authority to establish and retain fees for the operation of its programs, we found fees whose retention or benefit is questionable.
Over the past four years, the Department of Revenue has used its general statutory authority and case law to justify an increase in the number of fees collected and retained. While the department may have the legal authority to establish and retain fee revenue, we found instances in which its rationale for doing so was questionable, as well as instances in which fee creation may not have been in the best interests of the state. These include three fees that should be remitted to the state treasury and a fee that reduced state tax collections. (As shown in the box on page 14, legal clarification is required for an assessment of DOR's ability to retain the remaining fees.)
Questionable Retention
Article VII, Section III, Paragraph II of the Georgia Constitution states that funds resulting from revenue measures enacted by the General Assembly must be remitted to the state treasury. The Constitution does not address statutes directing an agency to both collect and retain fee revenue. While DOR does collect and retain several fees as directed by statute, we found three retained fees with associated statutes that do not direct DOR to retain the revenue. It appears that the Georgia Constitution would require these fees to be remitted to the state treasury.
Tag Data Receipts O.C.G.A. 40-3-23(e) states that "motor vehicle records... shall, in such manner and under such conditions as prescribed by the commissioner, be furnished individually or in bulk to any person upon payment of a reasonable fee..." This statute appears to be the basis for DOR providing the records and collecting the associated fee. It should be noted that the statute does not specify the destination for the revenue, only that it be collected in exchange for the data. Total fee revenue for fiscal year 2012 was $1.8 million.
Alcohol Administrative Assessments The Georgia Alcoholic Beverage Code (O.C.G.A. Title 3) governs activities associated with the regulation of alcohol sales/distribution. While the code does not specifically mandate fees (or penalties) for violations of DOR regulations, O.C.G.A. 3-2-10 states that "all taxes, penalties, interest and fees collected by the commissioner pursuant to this title shall be remitted to the Office of the State Treasurer to the credit of the general fund of this state." DOR charges administrative assessments to violators of its alcoholic beverage regulations and does not remit the assessment revenue. In a decision memo justifying the funds be retained, DOR noted the revenue was an "assessment" instead of a "penalty." However, these charges occur in relation to violations of DOR regulations and even the decision memo refers to them as administrative penalties in some instances. The memo also noted that retention is allowed because the assessments are created by regulation, not by the General Assembly. Total fee revenue for fiscal year 2012 was $1 million.
Coin-Operated Amusement Machine Fee HB 1055 passed in 2010 increased the fees charged to owners of Coin-Operated Amusement Machines (Title 48, Chapter 17). DOR noted that the increased regulations and higher fees

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required by the legislation increased the need to properly monitor COAM operators. In fiscal year 2011, DOR began collecting COAM application processing fees by retaining a portion of the statutorily mandated fees, which were being remitted to the treasury.
The retention of this fee was questioned in the fiscal year 2011 financial audit, and DOR discontinued its retention in 2013. Total fee revenue for fiscal year 2012 was $381,000.
Reduction of Tobacco Tax Collections
O.C.G.A. 48-11-3 requires that taxes on tobacco products be collected through the sale of stamps and allows the commissioner to set a discount rate between 2% and 8% of the stamps' value. The discount rate reduces the amount owed by the distributor, who must affix the stamps to tobacco products. In order to create the tobacco stamp surcharge without increasing costs to the distributors, DOR increased the discount rate in an amount equal to the added fee revenue. While DOR increased its fee revenue, it also created an equal reduction in tax revenue remitted to the treasury for appropriation by the General Assembly. This occurred when the fee was created in fiscal year 2010 and increased when the surcharge changed in 2011. Total fee revenue for fiscal year 2012 was $1.95 million.
DOR Response: "As to DOR's legal authority to establish and retain fees, DOR has performed due diligence in researching case law, opinions of the attorney general and the OCGA, in its attempt to be compliant. DOR only proceeds with programs or services for which it believes it has a legal right to keep based on such research. The question of whether to allow DOR to keep its fee revenue going forward is a policy decision of the Governor's Office and Legislature will have to decide. DOR has no preference on how its operating budget is funded, whether all State funds or a mixture of State and Agency funds. However, DOR would note that its current operating budget is approximately $160M (excluding pass throughs) and any reduction in this amount, coupled with an inability to retain any Agency funds, will likely result in DOR collecting less revenue, impede DOR's enforcement ability, and/or lessen DOR's ability to provide a consistently high level of customer service. Additionally, if DOR is not able to retain Agency funds and is not appropriated additional State funds to replace the loss of the Agency funds used to operate and maintain the programs and services which DOR has created, such programs and services may have to be discontinued."

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Appendix A: Objectives, Scope, and Methodology
Objectives This report examines the fee collection activities of the Department of Revenue. Specifically, our examination set out to determine the following:
1. To what extent does DOR use fee revenue to fund programs and offset state funding cuts?
2. Is DOR accurately reporting fee collection information to state budget authorities?
3. Does DOR have a reasonable basis for setting fee amounts? 4. Does DOR have the legal authority for charging and retaining the fees it
collects?
Scope This examination generally covered activity related to fee collections that occurred during/from fiscal year 2009 through 2012, with consideration of earlier or later periods when relevant. Information used in this report was obtained by reviewing relevant laws, rules, and regulations, interviewing DOR officials and staff from the state's executive and legislative budget offices, analyzing financial data, and reviewing activity data for program operations.
Methodology To determine the extent that DOR has used fee revenue to fund programs and offset state funding cuts, we reviewed revenue and expenditure data obtained from PeopleSoft. We tied expenditures to DOR programs and calculated the portion of those expenditures to the revenue sources for each. We also reviewed budget documents, such as the Governor's Budget Report and the appropriations acts for each year reviewed, noting any funding changes involving fee revenue.
To determine if DOR was accurately reporting fee collection information to state budget authorities, we reviewed appropriations acts, BudgetNet reports and amendments, OPB User Fee reports, and monthly revenue reports submitted by DOR to OPB, HBRO and SBEO. We looked specifically for documentation of new fees or changes in fee amounts in these documents.
To determine the extent to which DOR has a reasonable basis for setting fee amounts, we reviewed fee-related documentation, including enabling legislation, policy memos, and agency cost analyses. In some cases, fee revenue was compared to program expenditures to determine if fee collections were comparable to the expenses funded by the fees.
To determine the extent to which DOR has the legal authority for charging and retaining the fees it collects, we reviewed the State Constitution and statutes related to each fee, as well as departmental regulations and policy initiatives. We also interviewed agency personnel to ensure that all relevant statutory and policy directives had been identified, as well as to determine the purpose and function of each fee. We also conferred with personnel from the Attorney General's Office, as well as reviewed official Attorney General opinions relevant to the issues involved.

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This special examination was not conducted in accordance with generally accepted government auditing standards (GAGAS) given the timeframe in which the report was needed. However, it was conducted in accordance with Performance Audit Division policies and procedures for non-GAGAS engagements. These policies and procedures require that we plan and perform the engagement to obtain sufficient, appropriate evidence to provide a reasonable basis for the information reported and that data limitations be identified for the reader.

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Appendix B: Retained Fee Amounts

Fee Name Alcohol Administrative Assessment Coin Operated Amusement Machine Fee Collection Fees
Electronic Lien & Title
Electronic Title & Registration FiFa Collection Costs Garnishments Processing Offer in Compromise Tag Data Receipts

Fee Amount
Determined by Administrative Review Panel
$250 per master license or temporary operating permit, $50 per location license or temporary location license
Amount equal to 20% of the deficient taxes owed Annual user fee of $1,000. Transaction fees between $.55 and $.75 each, depending on volume. Inquiry fees between $1.00 and $1.75, depending on volume. Annual user fee of $10,000. Transaction fee between $4.00 and $5.00, depending on volume. $50 for each FiFa case
$351 per garnishment
$100 for each case
$.06 per bulk record, $1.00 per record for all others

Tag Production Fee

$3.88 per license plate

Temporary Operating Permits

$2.00 per blank TOP, $1.00 processing fee per TOP printed

Tobacco Stamp Surcharge

1% of the total excise tax owed

Unclaimed Property

Amount equal to the expenditures required to operate the program

Unified Carrier Registration

$5.00 per vehicle per year

Local Government Training Donation Check-Offs Lottery Corp. Contract

Range from $25 to $100 per participant, depending on the class
Capped at $50,000 per fund per year; DOR currently takes $25,000 per fund per year
Capped at $290,000 per year

Special Tag Manufacturing Fee

Special Tags Fee: $25 per application

Source: Review of agency documentation, interviews of agency personnel, and review of relevant Georgia Code

Miscellaneous(1)

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Appendix C: Authorization for Fee

Fee Name

Authorization

Fees Established in Statute

Collection Fees

O.C.G.A. 48-16-10

Donation Check-offs Local Government Training

O.C.G.A. 31-12-14(e)(2) 49-1-7(f)(2), 12-6A-4-(f)(2), 12-3-602(c)(2), 4-15-1(c)(2)
O.C.G.A. 48-5-126.1(d)

Offer in Compromise

O.C.G.A. 48-2-18.1

Special Tags Manuf. Fee Tag Production Costs(1)

O.C.G.A 40-2-60.1 O.C.G.A. 40-2-31(b.1)

Tag Data Receipts

O.C.G.A. 40-3-23(e)

Unclaimed Property

O.C.G.A. 44-12-218(b)

Unified Carrier Registration Act

O.C.G.A. 40-2-140(c)(1)

Fees Established by DOR Pursuant to General Statutory Authority Alcohol Administrative Assessments Coin-Operated Amusement Machines (COAM) (1)

Electronic Lien and Title

Electronic Title and Registration FiFa Collection Costs Garnishments Processing

General Statutory Authority Associated with Relevant Function

Lottery Corporation

Temporary Operating Permits

Tobacco Stamp Surcharge

(1) DOR discontinued the retention of Tag Production and COAM fees in fiscal year 2013. Source: Legislation, DOR Decision Memos

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Appendix D: Expenditures by Fund Source for Programs with Fee Revenue
FY 2009 2012

Customer Service
Departmental Administration
Industry Regulation
Local Government Services

Fund Source State Federal Other - Non Fees Other - Fees
Alcohol Administrative Assessment Collection Fees Miscellaneous Unclaimed Property Total State Federal Other - Non Fees Other - Fees Alcohol Administrative Assessment Collection Fees Electronic Title and Registration Miscellaneous Temporary Operating Permits Unclaimed Property Total State Federal Other - Non Fees Other - Fees Alcohol Administrative Assessment Coin-Operated Amusement Machines Miscellaneous Tobacco Stamp Surcharge Total State Federal Other - Non Fees Other - Fees
Miscellaneous Unclaimed Property Total

FY 2009 $10,128,954
$0 $0 $3,575,800 $1,005,515 $0 $575,364
$1,994,922 $13,704,754
$3,706,589 $0 $0
$431,922 $0
$374,999 $0
$11,785 $0
$45,137 $4,138,511 $4,520,122
$487,862 $489,450 $546,526
$0 $0 $546,526 $0 $6,043,960

FY 2010 $13,074,541
$253,874 $0
$67,283 $0
($67,613) $137,365
-$2,469 $13,395,697
$7,478,173 $0 $0
$322,274 $22,478
$258,985 $0
$6,293 $0
$34,517 $7,800,448 $3,018,586
$359,928 $413,243 $1,504,209 $500,000
$0 $435 $1,003,774 $5,295,966 $2,405,868
$0 $0 $2,893,182 $188,530 $2,704,652 $5,299,050

FY 2011 $12,840,841
$233,431 $0
$173,707 $0 $0
$173,707
$0 $13,247,979
$7,533,395 $0
$96,267 $438,649
$60,000 $296,000
$0 $43,673
$0 $38,976 $8,068,311 $1,476,211 $599,505 $70,183 $2,861,582 $468,850 $509,750
$2,210 $1,880,772 $5,277,482 $2,199,492
$0 $0 $2,589,648 $289,417 $2,300,230 $4,789,140

FY 2012 $15,548,300
$102,819 $0
$141,369 $0 $0
$141,369
$0 $15,792,488
$7,661,472 $0
$69,552 $503,695
$84,833 $324,701
$13,558 $5,129
$32,199 $43,276 $8,234,718 $2,764,632 $688,582 $291,972 $2,831,580 $500,000 $381,000
$321 $1,950,258 $6,576,765 $2,416,798
$0 $0 $3,773,943 $203,915 $3,570,028 $6,190,741

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Appendix D (continued)

Motor Vehicle Registration & Titling
Revenue Processing
Tag & Title Registration
Tax Compliance
Tax Compliance Special Project

Fund Source State Federal Other - Non Fees Other - Fees
Electronic Title and Registration Miscellaneous Tag Data Receipts Tag Production Costs Temporary Operating Permits Total State Federal Other - Non Fees Other - Fees FiFa Collection Costs Miscellaneous Total State Federal Other - Non Fees Other - Fees Miscellaneous Tag Data Receipts Total State Federal Other - Non Fees Other - Fees Collection Fees FiFa Collection Costs Garnishments Processing Miscellaneous Total State Federal Other - Non Fees Other - Fees Garnishments Processing Total

FY 2009
$38,211,653 $75,031
$11,730,457 $3,039,635 $3,016,378 $23,257
$53,056,776 $20,412,567
$0 $5,153,220 $1,298,730
$309,222 $989,508 $26,864,517 $30,901,124 $2,654,953
$0 $10,122,581
$9,874,065 $0 $0
$248,516 $43,678,658

FY 2010 $9,413,441
$291,904 $2,654,684 $2,346,946
$0 $417,076 $1,019,603 $910,267
$0 $14,706,974 $11,106,403
$0 $0 $1,285,196 $1,281,285 $3,911 $12,391,598 ($33,807) $0 $0 ($831) $0 ($831) ($34,638) $24,728,766 $109,667 $0 $13,379,283 $10,855,966 $2,217,432 $0 $305,885 $38,217,717 $17,982 $0 $0 $0 $0 $17,982

FY 2011 $6,324,394
$951,315 $4,881,396 $10,212,377
$0 $566,265 $1,673,922 $7,972,189
$0 $22,369,482 $11,956,036
$0 $787,254 $1,662,567 $1,656,116
$6,451 $14,414,856
$0 $0 ($577) $0 $0 $0 ($577) $19,722,703 $119,711 $0 $16,918,277 $12,221,743 $3,957,018 $490,158 $249,357 $36,760,690 $8,381,731 $0 $0 $253,227 $253,227 $8,634,958

FY 2012 $5,685,337
$37,025 $4,207,377 $12,791,441
$378,319 $344,816 $1,810,617 $8,760,361 $1,497,327 $22,271,180 $14,375,356
$0 $790,628
$3,972 $0
$3,972 $15,169,955
$34,804,230 $120,908 $0
$19,650,370 $16,483,272
$2,021,283 $886,327 $259,487
$54,575,508 ($400) $0 $0
($1,056) ($1,056) ($1,455)

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Appendix D (continued)

Tax Law & Policy

Fund Source State Federal Other - Non Fees Other - Fees
Alcohol Administrative Assessment
Electronic Lien and Title Electronic Title and Registration Miscellaneous Offer in Compromise Temporary Operating Permits Total State Federal

Technology Support Services

Other - Non Fees Other - Fees
Collection Fees Miscellaneous Unclaimed Property Total

Source: PeopleSoft financial system

FY 2009

FY 2010 $1,298,981
$0 $100,951 $448,046
$442,261
$0 $0 $5,785 $0 $0 $1,847,978 $21,997,264 $0 $12,337,839 $70,249 $61,955 $35 $8,260 $34,405,352

FY 2011 $1,425,486
$0 $191,574 $308,764
$300,000
$0 $0 $8,764 $0 $0 $1,925,824 $23,061,520 $0 $11,196,667 $53,501 $0 $53,501 $0 $34,311,688

FY 2012 $1,556,946
$0 $111,685 $1,061,837
$457,842
$158,815 $371,845
$7,304 $22,300 $43,731 $2,730,468 $21,640,576
$0 $11,643,880
$44,105 $0
$44,105 $0
$33,328,561

The Performance Audit Division was established in 1971 to conduct in-depth reviews of state-funded programs. Our reviews determine if programs are meeting goals and objectives; measure program results and effectiveness; identify alternate methods to meet goals; evaluate efficiency of resource allocation; assess compliance with laws and regulations; and provide credible management information to decision-makers. For more information, contact
us at (404)657-5220 or visit our website at www.audits.ga.gov.