Single audit report for the fiscal year ended ended June 30, 1995 / State of Georgia

STATE OF GEORGIA SINGLE AUDIT REpORT
FOR THE FISCAL YEAR ENDED JUNE 30, 1995
RECEIVED
JUL 021996
OOCUMI:.NIS
~IGA UBRARIES

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1996

To the Citizens of the State of Georgia, The Honorable Zell Miller, Governor of Georgia
and Members of the General Assembly of Georgia
Greetings from Atlanta, Georgia, the host city of the 1996 Summer Olympic Games. You, the citizens of the State of Georgia, have reason to be excited about hosting this grand event on the 100th anniversary of the modern games. It is to this momentous and historic occasion that we dedicate the fiscal year ended June 30, 1995 Single Audit Report ofthe State ofGeorgia.
The Single Audit Report ofthe State ofGeorgia discloses the results of the financial operations of the State of Georgia reporting entity, as well as its compliance with requirements applicable to Federal financial assistance programs administered by the State. This report is the culmination of extensive planning, coordination, testing and evaluation by many different people, much like the effort, though on a much smaller scale, demonstrated by the citizens of the State of Georgia in preparation of the 1996 Summer Olympics.
It is with great pleasure and satisfaction that I submit to you the Single Audit Report ofthe State ofGeorgia for the fiscal year ended June 30, 1995.
Respectfully,
~~
Claude L. Vickers State Auditor

STATE OF GEORGIA TABLE OF CONTENTS

For the Fiscal Year Ended June 30, 1995
SECTION A - EXECUTIVE SUMMARY Executive Summary

Page A-3

SECTION B - GENERAL PURPOSE FINANCIAL STATEMENTS

Independent Auditor's Report on General Purpose Financial Statements

" B-3

General Purpose Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. B-8

SECTION C - SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

Report on Supplementary Schedule ofFederal Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. C-3

ScheduleofFederaIFinanciaIAss~tance

C-7

Summary ofFederal Expenditures By Organizational Unit

C-lOl

Detail ofU S. Department ofDefense

C-107

SECTION D - REPORTS ON INTERNAL CONTROL STRUCTURE

Report on the Internal Control Structure Based on an Audit ofthe General Purpose Financial Statements Performed in Accordance With Government Auditing Standards. . . . . . . . . . . . . . . . . . . .. D-3

Report on Internal Control Structure Used in Administering Federal Financial Assistance Programs

" D-7

SECTION E - REPORTS ON COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Report on Compliance Based on an Audit ofthe General Purpose Financial

Statements Performed in Accordance With Government Auditing Standards.

E-3

Single Audit Report on Compliance With the General Requirements Applicable

to Federal Financial Assistance Programs

E-5

Single Audit Opinion on Compliance With Specific Requirements Applicable to

Major Federal Financial Assistance Programs

E-7

Single Audit Report on Compliance With Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions

-

E-9

SECTION F - FINDINGS AND IMPROPER OR QUESTIONED COSTS Table ofContents Schedule ofFindings And Improper or Questioned Costs (Including Management Response).
Summary 0/Findings Applicable to Specific CFDA Numbers by Federal Grantor Agency

F-5 F-7 " F-309

APPENDIX "A" Listing ofOrganizational Units Comprising the State ofGeorgia Reporting Entity

AP-3

Georgia
Site of the 1996 Olympic Games
The modern Olympic games were inaugurated in the spring of1896, as a revival ofthe Olympian Games ofancient Greece. This revival was brought about through the efforts ofthe French sportsman and educator Baron Pierre de Coubertin.
In 1894, the International Olympic Committee was formed, Olympic policy adopted and Athens, Greece was selected as the first site ofthe Olympic Games.
Atlanta, Georgia will host the 1996 Centennial Olympic Games.

Georgia
Site ofthe 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

INTRODUCTION
The Single Audit of the State of Georgia for the fiscal year ended June 30, 1995, contains the general purpose financial statements and the independent auditor's report thereon, the Schedule of Federal Financial Assistance and the auditor's report thereon, reports on the State's internal control structure and on the State's compliance with laws and regulations. The Single Audit also contains a Schedule of Findings and Improper or Questioned Costs and management corrective action plans and responses.
The Single Audit includes all organizations and component units of the State of Georgia as defined by the Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining The Financial Reporting Entity". Appendix "A" of this report is a comprehensive listing of organizational units which comprise the State's reporting entity. To facilitate the usage of the Schedule of Findings and Improper or Questioned Costs of this report, the control numbers which have been assigned to each organizational unit are provided.
SINGLE AUDIT ACT
Nonmajor Program Compliance Major Program Compliance
Internal Controls - Federal Financial Assistance Programs
GOVERNMENT AUDITING STANDARDS
Compliance with Laws and Regulations Internal Control- Financial Statements Audit of General Purpose Financial Statements
GENERALLY ACCEPTED AUDITING STANDARDS
Audit of General Purpose Financial Statements

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

OBJECTIVES
The objectives of the Single Audit of the State of Georgia for the year ended June 30, 1995, were as follows:
To obtain reasonable assurance as to whether the general purpose financial statements ofthe State of Georgia present fairly, in all material respects, the financial position and results of operations in accordance with generally accepted accounting principles;
To consider the internal control structure in order to determine auditing procedures necessary for the purpose of expressing an opinion on the financial statements;
To obtain reasonable assurance as to whether the State has complied, in all material respects, with State and Federal laws and regulations that may have a material effect on its financial statements;
To obtain reasonable assurance as to whether the Schedule of Federal Financial Assistance was fairly presented in all material respects in relation to the general purpose financial statements of the State of Georgia;
To determine whether the State of Georgia has an internal control structure to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations;
To obtain reasonable assurance as to whether the State of Georgia has complied, in all material respects, with specific requirements that may have a material effect on each major Federal financial assistance program;
To test for compliance with specific requirements any transactions of nonmajor programs that were tested in connection with either the State's general purpose financial statements or the consideration of the internal control structure; and
To test for compliance with general requirements applicable to Federal financial assistance programs.

A-4

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

SCOPE/AuDIT STRATEGY
FINANCIAL STATEMENTS Every effort was made to maximize the use of our audit resources in order that we might accomplish the audit objectives as previously outlined as well as comply with the statutory provisions requiring the State Auditor to conduct an examination of the accounting records of each organizational unit. As a result ofthis planning, we identified certain organizational units within the State of Georgia which were material to the total assets, liabilities, revenues and expenses/expenditures for all fund types. These organizations were designated as "primary organizations" and have been audited by the Department of Audits and independent certified public accountants in accordance with generally accepted auditing standards.

ASSETS

LIABILITIES

REVENUES

(*) EXPENSES -!!~!!!!~!,!!!
o 10 20 30 40 50 60 70 60 90 100



%AUDIT COVERAGE



%REVIEW COVERAGE

(*) Represents total Expenses and Expenditures

All remammg organizations were designated as "secondary organizations". The examinations of "secondary organizations" were performed on a review basis in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. These financial statements were examined to the extent considered necessary to enable us to express an opinion on the general purpose financial statements of the State of Georgia as a whole.
We obtained an understanding of and documentation for the internal control structure at the "primary organization" level. At such organizations, after an understanding of the internal control structure was obtained, a level of control risk was assessed for each accounting control category. Maximum control risk was assessed when described controls were not likely to be effective, or when additional tests of controls would have been inefficient. Less than maximum control risk was assessed when warranted in order to evaluate the operating effectiveness of primary organization policies and procedures.
Inherent risk was assessed by accounting control category and substantive testing levels were determined based on the assessed level of control and inherent risk.

A-5

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30,1995

SCOPE/AuDIT STRATEGY
FEDERAL FINANCIAL ASSISTANCE The scope of our examination also included all Federal financial assistance administered by the organizational units comprising the State of Georgia financial reporting entity. For the fiscal year ended June 30, 1995, the State of Georgia incurred approximately 5.2 billion dollars in monetary expenditures and approximately 2.4 billion dollars in nonmonetary expenditures for Federal financial assistance programs.
We performed procedures to test that the State of Georgia had complied with the general requirements as identified in the Office of Management and Budget Compliance Supplement for Single Audits of State and Local Governments. These procedures were performed at all organizations where major program testing was performed.
Major Federal financial assistance programs have been defined on a statewide basis in accordance with guidance contained in OMB Circular A-128. Based on total Federal financial assistance expenditures of approximately $ 5.2 billion and certain nonmonetary expenditures of $ .8 billion, the threshold for determining major Federal financial assistance programs was set at $19 million.
FISCAL YEAR 1995 FEDERAL FINANCIAL ASSISTANCE
GROSS TOTAL $7,822,891,531.05

AGRICULTURE

EDUCATION

HEALTH AND HUMAN SERVICES"

LABOR

TRANSPORTATION

OTHER FEDERAL AGENCIES

o

0.5

1

1.5

2

2.5

3

BILLIONS OF DOLLARS

MAJOR PROGRAMS

~
~tt NONMAJOR PROGRAMS

A-6

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

Using the above criteria, 34 Federal financial assistance programs were determined to be major programs and are listed as follows:

MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

U.S. Department of Agriculture

10.550 10.551 10.553 10.555 10.557 10.558 10.561

Food Distribution Food Stamps School Breakfast Program National School Lunch Program Special Supplemental Food Program for Women, Infants, and Children Child and Adult Care Food Program State Administrative Matching Grants for the Food Stamp Program

U.S. Department of Housing and Urban Development

14.228 14.856

Community Development Block Grants/State's Program Lower Income Housing Assistance Program - Section 8, Moderate Rehabilitation

U.S. Department of Labor

17.207 17.225 17.250

Employment Service Unemployment Insurance Job Training Partnership Act

U.S. Department of Transportation

20.205

Highway Planning and Construction

General Services Administration

39.003

Donation of Federal Surplus Personal Property

Environmental Protection Agency

66.458

Capitalization Grants for State Revolving Funds

Federal Emergency Management Agency

83.516

Disaster Assistance

U.S. Department of Education

84.010 84.027 84.032 84.038 84.048 84.063 84.126 84.268

Chapter I Programs - Local Educational Agencies Special Education - Grants to States Federal Family Education Loans Federal Perkins Loan Program - Federal Capital Contributions Vocational Education - Basic Grants to States Federal Pell Grant Program Rehabilitation Services - Vocational Rehabilitation of State Grants Federal Direct Student Loan

U.S. Department of Health and Human Services

93.268 93.560 93.561 93.563 93.575 93.658 93.667 93.778 93.802 93.959

Childhood Immunization Grants Family Support Payments to States - Assistance Payments Job Opportunities and Basic Skills Training Child Support Enforcement Payments to States for Child Care Assistance Foster Care - Title IV-E Social Services Block Grant Medical Assistance Program Social Security - Disability Insurance Block Grants for Prevention and Treatment of Substance Abuse

A-7

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

We assessed control risk over relevant internal control structure policies and procedures used in administering each of the major Federal financial assistance programs. The assessment included tests of controls to determine the effectiveness of design or operation of internal control structure policies and procedures.
Audit procedures for each major Federal financial assistance program were developed from the suggested procedures outlined in the OMB Compliance Supplement.
Audit procedures for nonmajor programs included obtaining an understanding of significant internal control structure policies and procedures applicable to certain programs. Because of the large number of nonmajor programs and the decentralized administration of these programs, we are performing these procedures on a three year cycle. Fiscal year 1995 was the second year of a three year cycle of examinations of all nonmajor programs for the State of Georgia.

AU D IT 0 F 1995 FEDERAL FINANCIAL ASSISTANCE

Major Programs (100% Tested) Nonmajor Programs - Internal Control Understanding
11 Nonmajor Programs - No Understanding
In addition, Federal financial assistance nonmajor program transactions were included within the population of transactions subject to testing at all organizations. When such transactions were selected for review, appropriate tests for compliance with laws and regulations were conducted.
A-8

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

RESULTS
OVERALL ASSESSMENT The audit of the general purpose financial statements and Federal financial assistance programs administered by the organizational units comprising the State of Georgia reporting entity revealed certain deficiencies. These deficiencies are addressed in required auditor's reports listed in the Table of Contents, and in the Schedule ofFindings and Improper or Questioned Costs, which includes management's responses and proposed corrective actions.
Approximately fifty percent of the findings reported in the fiscal year 1994 Single Audit Report were corrected during fiscal year 1995.

STATUS OF UNRESOLVED FINDINGS
nAS OF JUNE 30, 1995 n

Current Year Findings Only Prior Year/Current Year Findings (Repeat Findings) Prior Year Findings (Unresolved)
A-9

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

TOTAL FINDINGS
Bf ORGANIZATION i'fP:::

1[""

~

<""'_&_-

f

Units of the University System

i

Totals

Agencies and Authorities

Technical Institutes

Fiscal Year 1994 @ Fiscal Year 1995

INTERNAL CONTROL DEFICIENCIES
Reportable Conditions
Cash and Cash Equivalents (Department of Medical Assistance) Cash Management - Cash Management Improvement Act (CMIA) Electronic Data Processing Controls (Various Organizations) Expenditures, Liabilities, and Disbursements (Workers' Compensation Insurance
Program)
Reportable Conditions and Material Weaknesses
General Fixed Assets/Property Management Administrative Requirements (General Fixed Assets/Property Management)
COMPLIANCE DEFICIENCIES
Material Noncompliance
Cash Management - Cash Management Improvement Act (CMIA) Monitoring Subrecipients

A-lO

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 3D, 1995

QUESTIONED COSTS
The Single Audit of Georgia resulted in fiscal year 1995 questioned costs of $ 202,284.82 which are detailed in the Schedule of Findings and Improper or Questioned Costs. The Summary of Findings Applicable To Specific CFDA Numbers By Federal Agency in Section F of this report provides questioned costs of Federal financial assistance programs. The final resolution of these questioned costs will be determined by the respective grantors.

$1 ,000,000.00 --r------------------------
I I
$800,000.00 -t--------

I
$600,000.00 ~-----------.I

$400,000.00 i-I------------

T-III
$200,000.00

J-r-J $0.00 . !

1992

1993

- - - - --_.-... _-----

1994

1995

A-ll

Georgia
Site of the 1996 Olympic Games

_
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1995

RECOMMENDATIONS
Each organization of the State of Georgia should make every effort to resolve their respective audit findings during the subsequent fiscal year. Special emphasis should be given to repeat findings. Those audit findings which have appeared for more than one year should be reassessed as to the sufficiency of planned corrective action. Assistance from specialists or consultants, when necessary, should be obtained. In many situations emerging technologies such as electronic funds transfer, electronic data interchange, electronic benefits transfer and imaging should be considered.
Particular emphasis should be given to the area of equipment inventories. Inadequacies in this area are widespread throughout the State. In many instances, this problem exists as a result of apparently being made a low priority by management at certain organizational units of the State.
Further, we strongly encourage those organizations with findings regarding Federal financial assistance to aggressively seek guidance from the appropriate Federal grantor agencies.
To provide reasonable assurance that the State of Georgia's objectives will continue to be met to the greatest extent possible, the internal control structure of each organizational unit of the State should be under ongoing evaluation by management to ensure that it is operating as intended. Ongoing evaluation by management involves an assessment by appropriate personnel of the design and operation of controls. Corrective action should be then implemented on a timely basis.
Compliance with laws, regulations, contracts, and grants applicable to the State of Georgia is the responsibility of the State's management. Laws and regulations imposed on organizational units change frequently. Each organizational unit of the State should ensure that appropriate personnel have been assigned responsibilities involving the identification and application oflaws and regulations. Managements failure to observe pertinent laws and regulations could result in direct material affects on the financial statements.

A-12

Georgia
Site of the 1996 Olympic Games
At the first modern Games (Athens, Greece, 1896), Crown Prince Constantine established what would become the Greeks' Olympic legacy with his words at the opening ceremony. "May it be, oh King, that the revival ofOlympic Games binds closer the links ofmutual affection ofthe Greek and ofother peoples...that it brings new life into physical exercises and the moral outlook and that it contributes to the formation ofa new Greek generation worthy ofits ancestors. "

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the accompanying general purpose financial statements of the State of Georgia, as listed in the Table of Contents, as of and for the year ended June 30, 1995. These general purpose financial statements are the responsibility of the State's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We did not audit the financial statements of certain organizations which, combined, represent less than 1% ofthe assets and revenues ofthe general fund, 100% ofthe assets and revenues of the capital projects funds, 60% of the assets and 17% of the revenues of the internal service funds, 60% of the assets ofthe fiduciary funds and less than 1% of the expendable trust funds revenues and 99% of the pension trust funds revenues, less than 1% of the assets and revenues and other additions of the college and university funds and 10% of the assets and less than 1% of the liabilities of the general fixed assets and general long-term debt account groups, respectively. In addition, we did not audit certain discretely presented component units which represent 80% of the assets and 52% of the revenues of the component unit governmental fund types, 79% ofthe assets and 93% of the revenues of the component unit proprietary fund types and 97% ofthe assets and 98% ofthe revenues ofthe component unit fiduciary fund types. The financial statements of these organizations and component units were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those financial statements, is based solely upon the reports of the other auditors.
Except as discussed in the following paragraphs, we conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.

The State of Georgia's accounting system is decentralized in nature. The management ofeach organizational unit is responsible for maintaining accounting records pertinent to its operations and each retains complete responsibility and ,control over their operations, including revenue collections and disbursements. The State's principal accounting system, the Fiscal Accounting and Control System (FACS), is utilized by 59 state organizations. This accounting system allows for the accumulation of financial data, by state organization, on a basis of accounting prescribed or permitted by the budgetary statutes and regulations of the State of Georgia. Constitutional and statutory provisions of the State of Georgia do not provide for a position or organizational unit responsible for the preparation of statewide financial statements. It was necessary for staff of the Department ofAudits and Accounts to consolidate financial information presented in individual organization financial statements and to prepare adjusting journal entries necessary for the production of the general purpose financial statements. We are therefore not independent with regard to the preparation of accounting entries required to convert the consolidated budgetary financial statements to general purpose financial statements prepared in accordance with generally accepted accounting principles.
As discussed in Note 1 to the general purpose financial statements, the State of Georgia did not recognize as revenue and accounts receivable certain patient fees earned before June 30, 1995. This failure to accrue patient fees relates to the College and University Funds. We were unable to determine the effect of these limitations on the general purpose financial statements.
As discussed in Note 1 to the general purpose financial statements, the State of Georgia did not maintain adequate systems to account for or to depreciate (when required) fixed assets in conformity with generally accepted accounting principles. We were unable to determine the effect of these limitations on the general purpose financial statements.
As discussed in Note I to the general purpose financial statements, the accounting systems of the State of Georgia did not facilitate recording encumbrances in conformity with generally accepted accounting principles. Contractual obligations for services performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. The recognition of encumbrances as expenditures and liabilities is not consistent with generally accepted accounting principles. We were unable to determine the effect of these limitations on the general purpose financial statements.
As discussed in Note I to the general purpose financial statements, revenues for certain expenditure-driven programs were accrued based on the unexecuted portion of contracts for goods and services. These accruals primarily affected the Intergovernmental and Sales and Services revenue categories. We were unable to determine the effect of this departure from generally accepted accounting principles on the general purpose financial statements.
As discussed in Notes 9 and 10 to the general purpose financial statements, the State of Georgia did not maintain adequate systems to identify, classify, and report leases as operating or capital leases in conformity with generally accepted accounting principles. We were unable to determine the effect of these limitations on the general purpose financial statements.
As discussed in Note 1 to the general purpose financial statements, the State of Georgia maintained certain risk management funds and certain pension trust funds on essentially the cash basis ofaccounting. This basis of accounting is not in conformity with generally accepted accounting principles. We were unable to determine the effect of this departure from generally accepted accounting principles on the general purpose financial statements.
B -4

As discussed in Note 1 to the general purpose financial statements, the State's accounting system has limitations in identifying transactions between organizations whose financial activity is included within an individual fund. State accounting policies and procedures allow the recording of revenues, receivables, expenses and payables for such transactions. All such intrafund transactions have not been eliminated as required by generally accepted accounting principles. We were unable to determine the effect of these overstatements on the general purpose financial statements.
The State of Georgia did not maintain adequate systems to effect the timely detection of either duplicate claim payments or claim overpayments of the Workers' Compensation Fund. We were unable to determine the accuracy and completeness of the transactions and balances that comprise the Workers' Compensation Fund, which is included in the Internal Service Fund.
The State of Georgia did not maintain adequate systems to determine the accuracy of the amounts of salesbased taxes collected by the Department of Revenue on behalf of local governments and the disbursements of those taxes to local governments. State statutes require that these amounts be collected and distributed to the local government jurisdiction imposing the sales-based tax. The Fiduciary Fund Type - Trust and Agency fund reflects approximately $98.5 million in such sales-based taxes as assets and liabilities at June 30, 1995. We were unable to determine the accuracy of the amounts collected on behalf of local governments and subsequently disbursed to local governments for sales-based taxes.
In our opinion, based on our audit and the reports of other auditors, except for the effects of the matters discussed in the preceding paragraphs, the general purpose financial statements referred to in the first paragraph present fairly, in all material respects, the financial position ofthe State of Georgia as of June 30, 1995, and the results of its operations, the cash flows of its proprietary fund types and its nonexpendable trust funds, and the changes in fund balances of the State's colleges and universities, for the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, reports, dated May 14, 1996, on the State's internal control structure and compliance with laws and regulations, will be issued under separate cover in our Single Audit Report in June, 1996.
Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining financial statements identified in the Table of Contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the State of Georgia. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, except for the effects of the matters noted above, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. The Introductory and Statistical Sections, identified in the Table of Contents, were not audited by us and, accordingly, we express no opinion on such information.

May 14, 1996

a:~
Claude L. Vickers State Auditor
B-5

(THIS PAGE INTENTIONALLY LEFT BLANK)

GENERAL PURPOSE FINANCIAL STATEMENTS

STATE OF GEORGIA
COMBINED BALANCE SHEET ALL FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS

June 30, 1995
Assets and Other Debits
Assets: Cash and Cash Equivalents Cash and Cash Equivalents in Nonexpendable Trust Funds Investments Receivables (Net of Allowances for Uncollectibles) Intergovernmental - Federal Interest and Dividends Notes and Loans Taxes Other Due from Other Funds Due from Primary Government Due from Component Units Inventories Prepaid Items Restricted Assets Cash and Cash Equivalents Investments Receivables Interest and Dividends Loans Advances to Other Funds Advances to Component Units Deferred Compensation Plan Assets Fixed Assets (Net, Where Applicable, of Accumulated Depreciation) Deferred Charges Other Assets
Other Debits: Amount Available in Debt Service Fund Amount to be Provided for Retirement of General Long-Term Debt
Total Assets and Other Debits
Liabilities, Equity and Other Credits
Liabilities: Cash Overdraft Accounts Payable and Other Accruals Compensated Absences Payable Claims and Judgments Payable Contracts Payable SalarieslWithholdings Payable Benefits Payable Due to Other Funds Due to Primary Government Due to Component Units Accrued Interest Payable Deferred Revenue Capital Leases/Installment Purchases Payable Mortgage Loans under Repurchase Agreements Funds Held for Others Other Liabilities Deposits and Overpayments Advances from Other Funds Advances from Primary Govemment Long-Term Debt Payable (Net of Unamortized Discounts)
Total Liabilities

General

Governmental Fund Types

Special Revenue

Debt Service

Capital Projects

Primary Government

Proprietary Fund Types

Enterprise

Internal Service

s 1,927,780,560
555,639,538
1,429,985,459 12,602,439
595,948,851 171,933,292
8,525 41,113,333 62,383,736

712,180 387,542
1,797,022

s 106,705,157

s
964,256,068

29,076,409 233,670,358

1,065

13,536,073

845,862

616,015

15,874,938

112,370,831 414,714,571
6,614,577 31,501,098
239,058 12,294,699
647,635

6,925 268,750

102,348

373,126,079

s s 4,797,671,408

s s 2,896,744 s 106,706,222

978,408,156

279,569,915 s 951,508,548

s

s

1,228,918,280

1,312,134,184 14,860,593 11,389,570 21,433,248

s
210,449
12,122

40,534,216
80,824,487 378,843

s 2,710,473,421 s

222,571 s

s 8,734,748

s

813

25,441,400

1,323,232

14,169,465

131,400

7,223,782

78,334

25,138,730

849,078

18,127,838

109,710

157,898,978

36,483

12,415,835

792,508 122,761

3,032,150 1,647,210

988,718

813 s

64,030,721

172,618,523 s

1,200,000 42,813,117

The notes to the financial statements are an integral part ofthis statement.

B- 8

Fiduciary Fuud Type
Trust and Agency

College and University

Account Groups

General

General

Fixed

Long-Term

Assets

Debt

Totals (Memorandum
Only)
Primary Government

Component Units

Governmental Fuud Types

Proprietary Fuud Types

Fiduciary Fuud Types

Totals (Memorandum
Only)
Reporting Entity

S 2,520,092,175 S 337,263,306 S

S

S 5,034,000,618 S

14,576

14,576

6,179,980,556

159,900,579

8,508,549,212

326,535 57,738,193
3,870,760 99,032,225 41,601,136

33,673,175 47,838,081 71,499,021

22,178

24,696,526 26,298,562

1,463,985,169 84,723,632 51,708,841
694,981,076 309,936,001 31,501,098
0 247,583 78,104,558 89,352,111

0 0

209,063,063

0 0 6,925 268,750 209,063,063

3,378,556,458

2,316,796,355

6,068,581,240 0 0

106,705,409

106,705,409

4,249,283,427

4,249,283,427

29,716,923 S 14,492,409
493,332 302,493,614
1,835,163 159,154 65,230
50,746,197
28,150,001

205,975,279 151,193,569 70,766,372
6,335,503 448,392,663
53,464,489
36,484 5,170,902 3,876,478
141,561,435 257,865,997
6,343,738 549,637,768
734,378,758 18,512,411 78,245,320

28,001,663 S 5,297,694,483

14,576

16,304,639,421

24,978,874,611

153,868,701 173,684,809
30,400

1,535,244,873 244,927,836 802,595,118 694,981,076 538,920,462 31,501,098 36,484 247,583 83,434,614 93,324,219

141,561,435 257,865,997

6,343,738 549,637,768
6,925 268,750 209,063,063

469,413

6,854,175,608 18,512,411 78,245,320

106,705,409

4,277,433,428

S 9,111,741,397 S 4,079,725,708 S 2,316,796,355 S 4,355,988,836 S 26,981,013,289 S 428,152,023 S 2,731,757,166 S 16,660,694,407 S 46,801,616,885

s

s

1,689,698

181,700,289

88,821,523

4,462 3,766,782

4,159,929 25,480,000
6,288,946

2,085,909,932 6,925

56,019,025 10,164,769
46,538,420 151,220
1,591,072

S 2,091,377,799 S

27,000 420,942,193 S

s

S

8,734,748

1,453,453,626

189,303,709

285,480,414

115,197,979

115,276,313

1,356,249,830

19,134,694

194,768,548

31,501,098

0

36,484

0

109,761,584

1,241,803

11,529,333

0

2,213,272,839

3,562,213

4,227,000

6,925

0

4,050,245,345

4,051,472,345

0 S 4,355,988,836 S 9,858,467,994 S

S 6,673,678
764,200
515

S 80,217,836
2,731,997
2,439,583 438,735

155,191

61,234

4,230 7,065,565
251,108,859

19,754,583 38,714,503
848,574 49,241,181
289,187 8,448,043 15,473,625

268,750

20,320,236

1,302,121,036

286,092,474 S 1,521,048,867 S

S 1,429,290
9,184 31,158

8,734,748 1,541,774,430
288,976,611 115,276,313 1,358,689,413
19,583,128 194,768,548 31,501,098
247,583 36,484
19,754,583 148,480,317
19,443,472 49,241,181 2,464,670,885 12,010,256 19,700,625
6,925 268,750

5,373,913,617

1,469,632

11,667,078,967

(continued)

B-9

STATE OF GEORGIA
COMBINED BALANCE SHEET ALL FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS (continued)

June 30, 1995

Primary Government

General

Equity and Other Credits: Other Credits: Investment in General Fixed Assets

s

-s

Equity:

Net Investment in Plant

Colleges and Universities

Contributed Capital

Retained Earnings

Reserved

Unreserved

Fund Balances

Reserved forEncumbrances

4,267,997

Reserved for Advances

275,675

Reservedfor Inventories

32,542,551

Reserved for Debt Service

Reserved for Disaster Assislance

23,160,553

Reserved for Distance Learning and Telemedicine

44,483,610

Reservedfor Guaranteed RevenueDebt CommonReserveFund

19,036,201

Reserved for Hazardous Waste Trust Fund

14,739,994

Reserved for Lottery for Education

201,008,187

Reserved for Pension Benefits

Reserved for Midyear Adjustment

96,256,585

Reserved for Motor Fuel Tax Funds

927,742,009

Reserved for-Revenue Shortfall

288,769,754

Reserved for Underground Storage Trust Fund

26,129,898

Reserved for Other Specific Purposes

41,200,254

Unreserved, Designated

Designated for Liability Trust Fund

8,697,793

Designated for Future Capital Outlay

Designated for Other Specific Purposes

112,000

Unreserved, Undesignated Total Equity

358,774,926
s s 2,087,197,987

Total Equity and Other Credits

s 2,087,197,987

Governmental Fund Types

Special Revenue

Debt Service

Capital Projects

Proprietary Fund Types

Enterprise

Internal Service

-s s

-s s

-s

-s

s

s

258,293,016

106,951,392

342,331,734 308,070,681

106,705,409

1,548,541

2,674,173
s 2,674,173
s 2,674,173

s 106,705,409 s 106,705,409

909,910,139
2,918,755
s 914,377,435 s 914,377,435

s 106,951,392 s 106,951,392

908,695,431 908,695,431

Total Liabilities, Equity and Other Credits

s 4,797,671,408

s s s s 2,896,744

106,706,222

978,408,156

279,569,915

951,508,548

The notes to the financial statements are an integral part of this statement.

B - 10

Fiduciary Fund Type
Trust and
Agency

College and University

Account Groups

General

General

Fixed

Long-Term

Assets

Debt

Totals (Memorandum
Only)
Primary Government

Governmental Fund Types

Component Units
Proprietary Fund Types

Fiduciary Fund Types

Totals (Memorandum
Only)
Reporting Entity

s

-$

s - $ 2,316,796,355

s - $ 2,316,796,355

50,746,197 :s

175,062 s

- s 2,367,717,614

s

s 3,367,622,124

s

291,161,391

5,492,913,659

1,511,558,132

15,891,807

s s s 7,020,363,598

3,658,783,515

s

s s s 7,020,363,598 s 3,658,783,515

2,316,796,355

s 3,367,622,124 s
291,161,391 258,293,016
449,283,126 308,070,681
4,267,997 275,675
32,542,551 106,705,409 23,160,553 44,483,610
19,036,201 14,739,994 201,008,187 5,492,913,659 96,256,585 927,742,009 288,769,754 26,129,898 1,554,306,927
8,697,793 909,910,139
112,000 380,259,661
0 s 14,805,748,940 s
s 0 17,122,545,295

s
782,576,296

s 3,367,622,124
291,161,391
1,040,869,312

47,396,724 364,115,942

496,679,850 672,186,623

89,445,905

7,716,633

16,659,224,775

4,267,997 275,675
32,542,551 106,705,409 23,160,553 44,483,610
19,036,201 14,739,994 201,008,187 22,152,138,434 96,256,585 927,742,009 288,769,754 26,129,898 1,651,469,465

1,867,447 91,313,352

8,727,642
s 1,210,533,237

s 16,659,224,775

8,697,793 909,910,139
112,000 390,854,750 32,766,820,304

s s s 142,059,549

1,210,708,299

16,659,224,775

35,134,537,918

s s s s s s s s s 9,111,741,397

4,079,725,708

2,316,796,355

4,355,988,836 26,981,013,289

428,152,023

2,731,757,166

16,660,694,407

46,801,616,885

B-ll

STATE OF GEORGIA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES, EXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS
For the Year Ended June 30, 1995

Revenues: Taxes Licenses and Permits Intergovernmental Federal Other Sales and Services Fines and Forfeits Interest and Other Investment Income Rents and Royalties Contributions and Donations Penalties and Interest on Taxes Unclaimed Property Other
Total Revenues
Expenditures: Current: General Government Education Health and Welfare Transportation Public Safety Economic Development and Assistance Culture and Recreation Conservation Capital Outlay Debt Service: Principal Interest Other Debt Service Charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures

General
$ 9,068,979,799 $ 335,061,015
4,829,396,384 8,232,588
323,138,785 34,043,976 123,913,293 17,550,947 170,464,588 8,282,630 19,815,272 24,528,410
$ 14,963,407,687 $

$

536,849,914 $

4,625,591,699

5,693,088,331

1,401,010,780

1,030,957,652

190,029,084

156,234,675

45,875,856

$ 13,679,637,991 $ $ 1,283,769,696 $

Primary Government

Governmental Fund Types

Special

Debt

Revenue

Service

$

16,241,667 157,888

16,399,555 $

0

2,788,359 $

350,385,000 186,826,275

2,788,359 $

537,211,275

13,611,196 $ (537,211,275)

The notes to the financial statements are an integral part ofthis statement.

B -12

Capital Projects

Fiduciary Fund Type
Expendable Trust

Totals (Memorandum
Only) Primary Government

Component Units Governmental Fund Type

Totals (Memorandum
Only) Reporting
Entity

$

$

440,970,581 $ 9,509,950,380 $

$ 9,509,950,380

335,061,015

335,061,015

60,615,790 182,700
304,662

17,422,378 122,973 46,950
87,546,279 110,581
334,913

4,846,818,762 8,232,588
339,503,425 34,090,926
272,233,250 17,733,647
170,575,169 8,282,630 19,815,272
25,167,985

4,156,041 11,745,642 4,655,553
462,731 10,140,053
29,921

4,850,974,803 8,232,588
351,249,067 34,090,926
276,888,803 18,196,378
180,715,222 8,282,630 19,815,272
25,197,906

$

61,103,152 $

546,554,655 $ 15,587,465,049 $

31,189,941 $ 15,618,654,990

$

124,245 $

47,720 $

539,810,238 $

200,679

4,625,792,378

58,589,608

5,751,677,939

1,401,010,780

1,030,957,652

275,126,254

465,155,338

138,021

156,372,696

45,875,856

493,326,267

493,326,267

$ 44,315,413
29,001,066

539,810,238 4,670,107,791 5,751,677,939 1,401,010,780 1,030,957,652
465,155,338 185,373,762 45,875,856 493,326,267

20,160 76,083 493,457

350,405,160 186,902,358
493,457

114,847,354 1,087,315

465,252,514 187,989,673
493,457

$

494,040,212 $

334,102,282 $ 15,047,780,119 $

189,251,148 $ 15,237,031,267

$ (432,937,060) $

212,452,373 $

539,684,930 $ (158,061,207) $

381,623,723 (continued)

B -13

STATE OF GEORGIA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES, EXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS (continued)
FortheYear Endedlune30, 1995

Other Financing Sources (Uses): Operating Transfers In Operating Transfers from Primary Government Operating Transfers from Component Units Operating Transfers Out Operating Transfers to Component Units Proceeds of General Fixed Asset Dispositions Proceeds from Promissory Note General Obligation Bond Proceeds Proceeds of Loan
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses
Fund Balances, July 1 Adjustments (Net) Residual Equity Transfers In Residual Equity Transfers from Component Units Residual Equity Transfers Out Residual Equity Transfers to Component Units Increase in Inventories

General

$

360,457,515 $

501,597,869 (l,796,346,050)
(41,761,568) 4,184,316

$ (971,867,918) $

$

311,901,778 $

1,863,471,589 173,009,535

11,195,450

(274,138,989) 1,758,624

Primary Government

Governmental Fund Types

Special

Debt

Revenue

Service

$

547,286,165

(13,500,000)

(13,500,000) $ _ _5-4-7,'2-8_6,'1-6-5_

111,196 $ 2,562,977

10,074,890 96,643,343

(12,824)

Fund Balances, June 30

$ 2,087,197,987 $

2,674,173 $ ====10=6=,70=5=,4=09=

The notes to the financial statements are an integral part ofthis statement.

B-14

Capital Projects

Fiduciary Fund Type Expendable
Trust

Totals (Memorandum
Only) Primary Government

Component Units Governmental Fund Type

Totals (Memorandum
Only) Reporting
Entity

$

$

(393,108,902)

727,775,339 3,000,000

$

337,666,437 $

3,425,000 $

911,168,680 $ 0
501,597,869 (2,202,954,952)
(41,761,568) 4,184,316 0
727,775,339 3,000,000

3,425,000 $

(96,990,316) $

$ 78,069,573
350,000
109,759,328

911,168,680 78,069,573
501,947,869 (2,202,954,952)
(41,761,568) 4,184,316
109,759,328 727,775,339
3,000,000

188,178,901 $

91,188,585

$

(95,270,623) $

215,877,373 $

442,694,614 $

1,043,627,941
12,824
(2,180,322) (31,812,385)

1,237,002,708 74,363,034

4,243,308,558 247,372,569 12,824 11,195,450 (2,193,146) (305,951,374) 1,758,624

30,117,694 $

472,812,308

61,195,658

4,304,504,216 247,372,569 12,824 11,195,450 (2,193,146) (305,951,374) 1,758,624

$

914,377,435 $ 1,527,243,115 $ 4,638,198,119 $

91,313,352 $ 4,729,511,471

B -15

STAlE OF GEORGIA
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND

For the Fiscal Year Ended June 30, 1995
Funds Available
Revenues: State Appropriation Lottery Proceeds Federal Revenues Other Revenues Retained
Total Revenues
Carry-Over from Prior Year: Transfer from Fund Balance
Total Funds Available
Expenditures
Administrative Services, Department of Agricultural Exposition Authority Agriculture, Department of Agrirama Development Authority Audits and Accounts, Department of Banking and Finance, Department of Building Authority Children and Youth Services, Department of Community Affairs, Department of Corrections, Department of Defense, Department of Education, Department of Employees' Retirement System Administrative Expense Fund Forestry Commission General Assembly General Obligation Debt Sinking Fund Governor, Office of the Guaranteed Revenue Debt Common Reserve Fund Human Resources, Department of Industry, Trade and Tourism, Department of Insurance, Department of Investigation, Georgia Bureau of Judicial System Continuing Judicial Education, Institute of Court of Appeals Courts Automation Commission Indigent Defense Council Judicial Council

Original Appropriation

Final Budget

Actual

Variance Favorable (Unfavorable)

$ 9,530,937,133 $ 9,784,653,500 $ 9,772,055,904 $

249,973,298

475,231,137

471,949,238

4,535,686,303

5,349,564,633

4,875,290,761

2,597,800,878

3,887,446,529

3,447,270,302

$ 16,914,397,612 $ 19,496,895,799 $ 18,566,566,205 $

(12,597,596) (3,281,899) (474,273,872) (440,176,227)
(930,329,594)

1,629,130,136

1,292,338,702

(336,791,434)

$ 16,914,397,612 $ 21,126,025,935 $ 19,858,904,907 $ (1,267,121,028)

$

163,978,956 $

265,037,500 $

249,807,424 $

4,341,025

5,008,230

5,176,736

47,249,920

48,976,958

48,908,474

1,283,437

1,456,509

1,339,341

16,988,425

17,463,512

17,387,704

8,614,966

8,614,966

8,488,903

36,134,234

47,000,991

45,009,482

92,228,068

117,619,158

113,363,018

61,574,868

133,161,386

90,131,694

637,823,693

665,709,662

662,370,843

12,466,127

25,790,391

25,040,873

4,067,005,709

4,461,085,561

4,289,296,571

6,783,865 39,704,079 24,203,650 404,008,338 64,705,760
0 2,251,463,043
20,500,902 15,808,410 41,358,201

7,162,176 43,286,049 25,987,012 481,730,435 229,736,327
0 2,510,546,574
36,132,611 16,988,635 48,978,739

3,990,132 42,848,736 21,499,773 481,730,435 184,101,302
0 2,407,202,247
21,131,542 16,684,826 47,964,369

652,490 6,319,416 1,244,331 2,000,000 1,802,442

870,343 6,339,167 1,352,331 3,560,624 1,835,374

875,491 6,247,310 1,351,472 3,564,754 1,834,165

15,230,076 (168,506) 68,484 117,168 75,808 126,063 1,991,509 4,256,140
43,029,692 3,338,819 749,518
171,788,990
3,172,044 437,313
4,487,239 0
45,635,025 0
103,344,327 15,001,069 303,809 1,014,370
(5,148) 91,857
859 (4,130) 1,209

The notes to the fmancial statements are an integral part of this statement.

B -16

STATE OF GEORGIA
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND

For the Fiscal Year Ended June 30, 1995

Original Appropriation

Final Budget

Actual

Variance Favorable (Unfavorable)

Judicial Qualifications Commission

$

Juvenile Court Judges, Council of

Superior Courts

Supreme Court

Labor, Department of

Law, Department of

Medical Assistance, Department of

Natural Resources, Department of

Pardons and Paroles, State Board of

Personnel Board, State - Merit System of

Personnel Administration

Public Safety, Department of

Public School Employees' Retirement System-Expense Fund

Public Service Commission

Public Telecommunications Commission

Regents of the University System ofGeorgia, Board of

Removal of Hazardous Materials, Agency for

Revenue, Department of

Secretary of State

Soil and Water Conservation Commission

Student Finance Commission

Teachers' Retirement System - Expense Fund

Technical and Adult Education, Department of

Transportation, Department of

Veterans Service, Department of

Workers' Compensation, State Board of

148,808 $ 1,023,530 53,354,939 6,079,638 161,534,366 11,226,873 3,676,437,854 121,935,858 37,933,656
989,564,762 112,910,432
9,640,000 10,233,234 16,577,026 2,175,917,186
111,759 91,310,716 29,321,304
2,488,843 120,784,767
9,894,265 197,650,216 1,007,582,783 30,157,557
10,332,885

188,838 $ 1,204,753 52,385,158 6,260,103 183,164,625 12,453,034 4,075,901,548 216,125,699 39,292,020
990,522,913 121,458,594
9,640,000 10,411,092 57,712,564 2,720,646,402 5,467,238 95,626,258 30,208,162 2,308,132 116,900,797 10,196,389 269,374,498 2,846,194,711 30,418,301 10,532,885

188,836 $ 1,166,350 53,585,371 6,038,545 163,455,471 12,050,565 3,549,292,928 202,903,002 38,701,503
892,555,964 119,483,065
9,640,000 9,973,461 29,142,494 2,513,497,557 3,108,490 95,309,145 30,161,605 2,215,770 1l0,351,025 9,676,117 248,007,326 1,433,903,930 30,314,275 9,669,922

2 38,403 (1,200,213) 221,558 19,709,154 402,469 526,608,620 13,222,697 590,517
97,966,949 1,975,529 0 437,631
28,570,070 207,148,845
2,358,748 317,113 46,557 92,362
6,549,772 520,272
21,367,172 1,412,290,781
104,026 862,963

Total Expenditures

$ 16,914,397,612 $ 21,126,025,935 $ 18,371,740,334 $ 2,754,285,601

Excess of Funds Available over Expenditures

$ 1,487,164,573 $ 1,487,164,573

The notes to the fmancial statements are an integral part of this statement.

B -17

STATE OF GEORGIA

Fund Types Pension Trust

Totals (Memorandum
Only) Primary Government

Component Units

Proprietary Fund Types

Fiduciary Fund Types

Totals (Memorandum
Only)
Reporting Entity

$ 328,196,332 $ 1,359,481,653 $

$

815,934,655 $ 2,175,416,308

0

12,807,702

12,807,702

472,673,628

523,039,463

78,516,072

1,476,253,177

2,077,808,712

0

15,766,575

15,766,575

30,974,145

63,217,544

94,191,689

240,395,496

1,545,209,027

1,379,520

1,786,984,043

0

1,548,598

9,815,409

11,364,007

24,886,573

11,159,434

148,202

36,194,209

$ 800,869,960 $ 2,178,777,330 $ 1,715,417,250 $ 2,316,338,665 $ 6,210,533,245

$

3,239,541 $ 286,690,469 $ 132,547,216 $

139,433,467

242,494,334

0

58,286,401

263,727,566

1,028,661,047

95,507,443

0

694,179,000

13,979,040

13,979,040

1,385

1,323,020

31,428,587

932

24,529,144

7,892,207 $ 623,716,327
31,756,757

427,129,892 381,927,801
58,286,401 1,652,377,374
95,507,443 694,179,000
45,735,797 1,385
32,751,607 24,530,076

$ 280,946,147 $ 1,565,596,803 $ 1,183,464,682 $ 663,365,291 $ 3,412,426,776

$ 519,923,813 $ 613,180,527 $ 531,952,568 $ 1,652,973,374 $ 2,798,106,469

$

$

0$

144,905 $

$

144,905

535,956

19,854,885

20,390,841

0

32,957

32,957

0

14,101,260

14,101,260

(25,070)

(34,287,026)

(41,536)

(34,353,632)

0

(3,568,500)

(3,568,500)

(4,458,637)

5,746,130

1,287,493

$

0$

(3,947,751) $

2,024,611 $

(41,536) $

(1,964,676)

$ 519,923,813 $ 609,232,776 $ 533,977,179 $ 1,652,931,838 $ 2,796,141,793

B - 19

(continued)

STATE OF GEORGIA
COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND EQIDTYIFUND BALANCES ALL PROPRIETARY FUND TYPES, SIMILAR TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS (continued)
FortheFiscal Year Ended June 30. 1995

Primary Government

Proprietary Fund Types

Enterprise

Internal Service

Fiduciary Nonexpendable
Trust

Operating Transfers: Transfers In Transfers from Primary Government Transfers Out Transfers to Primary Government Transfers to Component Unit
Net Operating Transfers
Net Income

$

$

37,190,001 $

(21,220,064)

$

o$

15,969,937 $ - - - - - - -o-

$

21,883,614 $

83,393,416 $

1,870

Deficiency of Revenues under Expenditures from Governmental Operations and Expendable Trust Funds

Fund EquityfFund Balances, July 1 Adjustments (Net) Contributed Capital Contributed Capital from Primary Government Contributed Capital from Federal Government Contributed Capital from Other Sources Transfer of Contributed Capital to Primary Government Transfer of Equity from Primary Government Increase (Decrease) in Inventories

85,067,778

818,605,648 107,057
2,180,322
4,577,000
(168,012)

204,954

Fund EquityfFund Balances, June 30

$ 106,951,392 $ 908,695,431 $

206,824

The notes to the financial statements are an integral part of this statement. B- 20

Fund Types Pension Trust

Totals (Memorandum
Only) Primary Government

Component Units

Proprietary Fund Types

Fiduciary Fund Types

Totals (Memorandum
Only) Reporting
Entity

$

2,880,000 $

40,070,001 $

$

(21,220,064)

4,710,310



(501,453,016) (350,000)

$

2,880,000 $

18,849,937 $ (497,092,706) $

$ 3,820,000 (144,853)
3,675,147 $

40,070,001 8,530,310
(21,220,064) (501,597,869)
(350,000)
(474,567,622)

$ 522,803,813 $ 628,082,713 $

36,884,473 $ 1,656,606,985 $ 2,321,574,171

4,970,109,846


5,873,988,226 107,057
2,180,322
4,577,000 (168,012)

(5,397,085) 786,528,772

15,002,617,790

45,918,371 47,459,355 50,239,940 (11,195,450) 260,033,003
61,858

(5,397,085)
21,663,134,788 107,057
2,180,322 45,918,371 47,459,355 54,816,940 (11,195,450) 260,033,003
(106,154)

$ 5,492,913,659 $ 6,508,767,306 $ 1,210,533,237 $ 16,659,224,775 $ 24,378,525,318

8 - 21

STATE OF GEORGIA
COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES, NONEXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS

For the Fiscal Year Ended June 30, 1995

Cash Flows from Operating Activities: Cash Received from Customers Cash Received from Required Contributions Cash Received from Insurance Proceeds Principal Payments Received on Program Loans InterestReceived on Program Loans Cash Paid to Vendors Cash Paid to Employees Cash Paid for Benefits Cash Paid for Claims and Judgments Cash Paid for Lottery Prizes Cash Paid for Scholarships Origination of Program Loans Governmenta! and Fiduciary Fund Type Activity (Net) Other Operating Items (Net)
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Noncapita! Financing Activities: Operating Transfers In Operating Transfers from Primary Government Cash Grants Received Proceeds from Assigrunent of Program Loans Under Repurchase Agreements Issuance ofBondsILoanslNotes Contributed Capita! HotellMotel Tax (Net) Operating Transfers Out Operating Transfers to Primary Government Operating Transfers to Component Unit Repayment of Advances Principal Paid on Bonds/Loans/Notes Interest Paid on Bonds/Loans/Notes Return of Contributed Capital Other Debt Service Payments Other Noncapita! Items (Net)
Net Cash Provided by (Used in) Noncapita! Financing Activities
Cash Flows from Capita! and Related Financing Activities: Issuance ofBondslLoanslNotes HotellMotel Tax Received Contributed Capital Acquisition and Construction of Capital Assets Sale of Capital Assets Principal Paid on BondsILoanslNotes Interest Paid on BondsILoanslNotes Other Debt Service Payments Other Capital and Related Items (Net)
Net Cash Used in Capita! and Related Financing Activities
Cash Flows from Investing Activities: Purchase of Investments (Net) Intereston Investments Gain on Sale of Investments Other Investing Items (Net)
Net Cash Provided by (Used In) Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, July I

Primary Government

Fiduciary

Proprietary Fund Types

Fund Type

Internal

Nonexpendable

Enterprise

Service

Trust

Totals (Memorandum
Only) Primary Government

Component Units Proprietary Fund Types

Totals (Memorandum
Only) Reporting
Entity

s

s s 33,894

270,108,830

902,961,931

125,396,748

24,719,883

(137,495,317) (2,054,367)
(730,169,050)

(206,663,448) (76,485,692) (12,613,000) (95,582,918)

49,608

-$
(932) (5,188) (1,385)

s 270,142,724
1,028,358,679 24,719,883 0 0
(344,159,697) (78,545,247) (742,782,050) (95,582,918) 0 (1,385) 0 0 49,608

1,653,113,757
83,334,377 60,599,188 (333,149,166) (80,438,245)
(599,803,000)
(181,491,975) 5,365,397 321,371

1,923,256,481 1,028,358,679
24,719,883 83,334,377 60,599,188 (677,308,863) (158,983,492) (742,782,050) (95,582,918) (599,803,000)
(1,385) (181,491,975)
5,365,397 370,979

s $ 33,277,091 $ 28,930,011

s s s (7,505)

62,199,597

607,851,704

670,051,301

s

s - $ 37,190,001

s - $ 37,190,001

37,190,001

0

4,710,310

4,710,310

0

143,602

143,602

(21,220,064) 1,193,153

0 0 0 0 (21,220,064) 0 0 0 0 0 0 0 1,193,153

7,694,898 137,402,755 42,287,599
2,573,744
(504,294,016) (350,000) (53,750)
(80,081,429) (45,556,038) (11,195,450)
(2,648,820) 26,858,143

7,694,898 137,402,755 42,287,599
2,573,744 (21,220,064) (504,294,016)
(350,000) (53,750)
(80,081,429) (45,556,038) (11,195,450)
(2,648,820) 28,051,296

s

s 0

s 17,163,090

s s 0

17,163,090 s (422,508,452)

(405,345,362)

s

-$

600,000 s

(5,442)

3,411,874 (28,592,813)

(25,069)

s

s s (5,442)

(24,606,008)

-$
0s

s 600,000
0 3,411,874 (28,598,255)
0 0 (25,069) 0 0
s (24,611 ,450)

s 2,000,000
11,227,181 66,403,061 (76,421,498)
7,579,001 (4,198,741) (39,788,213) (2,124,927) 1,240,195

2,600,000 11,227,181 69,814,935 (105,019,753) 7,579,001 (4,198,741) (39,813,282) (2,124,927) 1,240,195

s (34,083,941)

(58,695,391)

s s (33,736,343) $ (61,402,265)

14,396,976

29,139,334

9,799,680

s s s (19,339,367)

(22,463,251)

s s 13,932,282

s (976,158)

15,144,127

113,346,989

-$ 2,888
2,888 s (4,617) s

(95,138,608) $ 43,539,198
9,799,680 0

s (116,100,661)
35,761,414
205,158

(211,239,269) 79,300,612 9,799,680 205,158

s s (41,799,730)

(80,134,089)

(121,933,819)

s s 12,951,507

71,125,222

84,076,729

19,193

128,510,309

276,411,492

404,921,801

Cash and Cash Equivalents, June 30

s s $ 29,076,409

112,370,831

s s s 14,576

141,461,816

347,536,714

488,998,530

The notes to the financial statementsare an integral part of this statement. B-22

STATE OF GEORGIA
COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES, NONEXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS

For the Fiscal Year Ended June 30, 1995

Operating Income
Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities:
Depreciation!Amortization Interest Other Changes in Assets and Liabilities:
Decrease in Intergovernmental Receivables Increase in Interest and Dividends Receivable Increase in Notes and Loans Receivable Decrease (Increase) in Other Receivables Increase in Due from Other Funds Increase in Due from Primary Government Increase in Due from Component Units Increase in Inventories Increase in Prepaid Items Decrease in Deferred Charges Increase in Other Assets Increase in Accounts Payable and Other Accruals Increase in Compensated Absences Payable Decrease in Claims and Judgments Payable Increase (Decrease) in Contracts Payable Increase (Decrease) in Salaries/Withholdings Payable Increase in Benefits Payable Decrease in Due to Other Funds Decrease in Due to Primary Government Increase (Decrease) in Deferred Revenue Decrease in Funds Held for Others Increase in Other Liabilities Increase in Deposits and Overpayments Increase in Grand Prizes Payable
Total Adjustments

Primary Government

Proprietary Fund Types

Internal

Enterprise

Service

Fiduciary Fund Type Nonexpendable
Trust

Totals (Memorandum
Only) Primary Govermnent

Component Units Proprietary Fund Types

Totals (Memorandum
Only) Reporting
Entity

21,884,751 $ 71,370,093

1,870 $ 93,256,714 $ 531,952,568 $ 625,209,282

$

-$

1,323,020 $

(11,953,402)

(28,603,378)

(9,799,680)

(806,726)

1,968,884 (7,540,707)
(73,271) (1,235,326)
(39,188)

56,800 14,716 209,148 22,765,431
1,106,373

5,694,489 351,268 (75,475)
(4,299,429) (1,166)
(997,683)
730,796

156,764

$ 11,392,340 $ (42,440,082) $

-$ (9,375)

1,323,020 $ (40,566,155)
(9,799,680)

0 0 0 1,162,158 (7,540,707 ) 0 (73,271 ) (1,235,326) (39,188) 0 0 5,751,289 365,984 (75,475) (4,090,281) (1,166) 22,765,431 (997,683) 0 1,837,169 0 0 156,764 0

(9,375) $ (31,057,117) $

30,727,083 $ 42,529,632
8,595,380
1,023,989 (1,574,737) (98,157,598) (5,086,087)
(I)
(805,412) (119,949)
34,440 (3,902,919) 34,871,561
35,327
1,321,511 105,387
(55,564) (129,353) (261,744) 193,000
34,190 66,521,000
75,899,136

32,050,103 1,963,477 (1,204,300)
1,023,989 (1,574,737) (98,157,598) (3,923,929) (7,540,707)
(I) (73,271 ) (2,040,738) (159,137) 34,440 (3,902,919) 40,622,850 401,311 (75,475) (2,768,770) 104,221 22,765,431 (997,683) (55,564) 1,707,816 (261,744) 193,000 190,954 66,521,000
44,842,019

Net Cash Provided by (Used in) Operating Activities

$ 33,277,091 $ 28,930,011 $

(7,505) $ 62,199,597 $ 607,851,704 $ 670,051,301

Noncash Investing, Capital, and Financing Activities:

Acquisition of Fixed Assets through Contributions

$

Acquisition of Fixed Assets through Installment Purchases

Disposal of Fixed Assets

Donation of Fixed Assets

Equipment Receivable from Sale of

Radio Frequency Rights

Interest Earned on Grand Prize Investments and

Grand Prizes Payable

Receivables Resulting from Nonoperating Income

$

-$ (1,137)

1,827,857 $ 96,632
(5,664,627) 366,165

(1,137) $ (3,373,973) $

-$

1,827,857 $ 96,632
(5,665,764) 366,165
0
0 0

-$ 70,000 (924,332) 95,240
795,311
8,242,000 68,404,404

1,827,857 166,632
(6,590,096) 461,405
795,311
8,242,000 68,404,404

0 $ (3,375,110) $ 76,682,623 $ 73,307,513

The notes to the fmancial statements are an integral part of this statement. B-23

STATE OF GEORGIA
COMBINED STATEMENT OF CHANGES IN FUND BALANCES COLLEGE AND UNNERSITY FUNDS

For the Fiscal Year Ended June 30, 1995
Revenues and Other Additions: Unrestricted Revenues Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants and Contracts Investment Income Endowment Other Sales and Services Net Gain/(Loss) on Investments Interest on Loans Receivable Expended for Plant Facilities Current Funds Plant Funds Unexpended Renewals and Replacements Agency Funds Georgia State Financing and Investment Commission Other Additions (Net) Insurance Recoveries Other Recovery of Prior Year's Cancelled Loans and Collection Costs
Total Revenues and Other Additions
Expenditures and Other Deductions: Education and General Expenditures Auxiliary Enterprises Expenditures Hospital Expenditures Indirect Cost Recoveries Loans Assigned to Federal Government Loan Cancellations and Write-offs Administrative and Collection Costs Expended for Plant Facilities Capitalized Non-Capitalized Other Deductions (Net) Disposals/Deletions/Adjustments Interest on Indebtedness
Total Expenditures and Other Deductions

Current Funds

Unrestricted

Restricted

Loan Funds

$ 909,578,276 $

$

357,118,523

104,210,710

5,443,519

125,952,819

8,024,954

5,051,385

452,203 10,920
288,838
408,027 10,342
1,225,242

2,364,135 $ 911,942,411 $ 605,801,910 $

71,699 2,467,271

$ 1,733,446,024 $ 140,040,092 183,715,567

540,689,531 $
7,006,325 46,247,721

41,601

104,195 423,709 303,434

142,631

73,620

$ 2,057,201,683 $ 594,127,809 $

904,958

The notes to the fmancial statementsare an integral part of this statement. B -24

Endowment and Similar
Funds

Unexpended

Plant Funds Renewals and Replacements

Investment in Plant

Total (Memorandum
Only)

$

$

$

2,883,199

3,937,662

961,843

3,933,405

12,260,901

586,637

7,126,886

595,826

27,681,023 451,799

$

5,115,868 $

55,303,313 $

$ 41,338

3,015 $ 10,783,685

909,581,291 360,495,263 108,148,372
6,416,282 153,219,648

547,925

8,611,591 8,082,838 5,051,385
606,168 1,225,242

150,463,601

150,463,601

114,739,276 18,124,476 6,308
253,172,172

114,739,276 18,124,476 6,308
253,172,172

96,304 102,246

27,777,327 2,918,180

71,699

787,813 $ 547,292,533 $ 2,128,711,119

$

10,018 $

2,465 $

$

$ 2,274,148,038

140,040,092

190,721,892

46,247,721

104,195

423,709

345,035

114,739,276 23,530,221

18,124,476 2,728,317

44,461,469 5,009

132,863,752 26,258,538
216,251 44,461,469
5,009

$

10,018 $ 138,271,962 $

20,852,793 $

44,466,478 $ 2,855,835,701

(continued)

B-25

STATE OF GEORGIA
COMBINED STATEMENT OF CHANGES IN FUND BALANCES COLLEGE AND UNIVERSITY FUNDS (continued)

For the Fiscal Year Ended June 30, 1995
Transfers Between Funds, Net In (Out) Mandatory Nonmandatory Total Transfers Between Funds
Operating Transfers: Transfers In Transfers Out Transfers to Component Units
Total Operating Transfers Net Increase (Decrease) in Fund Balances Fund Balances, July 1 Adjustments (Net)
Fund Balances, June 30

Current Funds

Unrestricted

Restricted

Loan Funds

$

(96,418) $

(22,076,939)

$ (22,173,357) $

(392,125) $ (6,539,951)
(6,932,076) $

23,700 4,243
27,943

$ 1,193,535,033 $ (1,933,789)
(44,838,315)
$ 1,146,762,929 .s
$ (20,669,700) $
87,314,772 (33,648,634)

$
0$ 4,742,025 $ 54,701,352 (11,701,149)

0 1,590,256 55,932,940

$

32,996,438 $

47,742,228 $

57,523,196

The notesto the fmancialstatements are an integralpart of this statement. B-26

Endowment and Similar
Funds

Unexpended

Plant Funds Renewals and Replacements

Investment in Plant

Total (Memorandum
Only)

$

368,424 $

$

$

96,419 $

0

(1,834,824)

17,974,429

11,243,567

1,229,475

0

$

(l,466,400) $

17,974,429 $

11,243,567 $

1,325,894 $

0

$

$

73,151,923 $

8,016,658 $

$ 1,274,703,614

166,511

(1)

(1,767,279)

(44,838,315)

$

0$

73,318,434 $

8,016,657 $

0 $ 1,228,098,020

$

3,639,450 $

8,324,214 $

(804,756) $ 504,151,949 $ 500,973,438

66,944,108

47,389,637 (19,208)

27,426,084

2,863,470,175

3,203,179,068 (45,368,991)

$

70,583,558 $

55,694,643 $

26,621,328 $ 3,367,622,124 $ 3,658,783,515

B-2?

(THIS PAGE INTENTIONALLY LEFT BLANK)

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

Index

Page

Note 1 Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Note 2 Other Accounting Disclosures

43

Note 3 Budgetary Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Note 4 Deposits and Investments

48

Note 5 Receivables

53

Note 6 Fixed Assets

55

Note 7 Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Note 8 Construction and Other Significant Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Note 9 Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Note 10 Capital Leases and Installment Purchases

59

Note 11 Long-Term Debt

61

Note 12 Interfund Balances

67

Note 13 Contributed Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Note 14 Contingencies

70

Note 15 Subsequent Events

72

Note 16 Deferred Compensation Plan

72

Note 17 Retirement Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Note 18 Nonmonetary Transactions

93

Note 19 Postemployment Benefits

. . . . . . . . . . . . 94

Note 20 Fund Deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Note 21 Major Discretely Presented Component Unit Condensed Financial Statements

95

B -29

(THIS PAGE INTENTIONALLY LEFT BLANK)

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies
With the exception of the departures from generally accepted accounting principles (GAAP) disclosed in the following paragraphs, the fmancial statements of the State of Georgia have been prepared in conformity with GAAP as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and fmancial reporting principles. The fmancial statements of the College and University Funds have been prepared in conformity with GAAP as promulgated by the provisions of the American Institute of Certified Public Accountants' "Industry Audit Guide - Audits of Colleges and Universities."
The more significant of the State's accounting policies are described below:
A. Reporting Entity
In evaluating how to defme the government for fmancial reporting purposes, management has considered both the organizations which compose the primary government and potential component units. The primary government consists of all the organizations that compose the legal entity of the State of Georgia. All agencies, departments, authorities, commissions, courts, councils, boards, universities, colleges, retirement funds, associations and other funds that are not legally separate are, for fmancial reporting purposes, considered part of the primary government. In addition, included within the primary government are organizations which are legally separate but so intertwined with the primary government that they are, in substance, part of the primary government.
The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in Section 2100 ofthe GASB Codification of Governmental Accounting and Financial Reporting Standards. This Section defmes a component unit as a legally separate organization for which the primary government is fmancially accountable and other organizations for which the primary government is not accountable, but for which the nature and the significance of the relationship with the primary government are such that exclusion would cause the fmancial statements to be misleading or incomplete.
Financial accountability is the ability to appoint a voting

majonty of an organization's governing board and to impose will upon the organization or to have exist the potential for the organization to provide specific fmancial benefits or impose specific financial burdens on the primary government. In addition, organizations which are fiscally dependent upon the primary government were considered as potential component units.
As required by GAAP, these financial statements present the government and its component units, entities for which the government is considered to be fmancially accountable. Blended component units, although legally separate entities, are, in substance, part of the government's operations and therefore data from these units are combined with that of the primary government. The blended component units are as follows:
GeorgiaNet Authority (Special Revenue Fund) is an instrumentality of the State of Georgia and a public corporation. The authority is responsible for the centralized marketing of certain information maintained in electronic format to the public. Three of the five members of the Board are appointed by the Governor. Any funds in excess of those needed for the corporate purposes of the authority are required to be transferred to the General Fund.
Georgia Building Authority (Hospital) (Debt Service/Capital Projects Funds) is a body corporate and politic. The authority is responsible for the construction and management of hospitals, health care facilities, dormitories and housing accommodations for the use of patients, officers and employees under the control of any State agency. The Board consists of four State officials designated by statute and one member appointed by the Governor.
Georgia Building Authority (Markets) (Capital Projects Funds) is a body corporate and politic. The authority is responsible for the construction and management of farmers'markets. The Board consists offour State officials designated by statute and one member appointed by the Governor.
Georgia Building Authority (Penal) (Capital Projects Funds) is a body corporate and politic. The authority was created for the purpose of constructing and managing penal institutions, penitentiaries, prisons and prison institutes, detention and corrections institutions, rehabilitation institutions and facilities and county correctional institutions. The Board consists of four State officials designated by statute and one member appointed by the Governor.

B - 31

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30. 1995
Note 1. Summary of Significant Accounting Policies (continued)
Georgia Education Authority (University) (Capital Projects Fund) is a body corporate and politic. The authority is charged with the overall responsibility of the construction and management of housing accommodations, classrooms, laboratories, libraries, dormitories and instructional, administrative and recreational facilities for students, faculty, officers and employees of any institution under control of the Board of Regents. The Board consists offive State officials designated by statute and one member appointed by the Governor.
Georgia Building Authority (Internal Service Fund) is a body politic. The purpose of this authority is to construct and manage buildings and facilities intended for use as office space, public parks and public parking facilities, the executive mansion and laboratories. The Board consists of four State officials designated by statute and one member appointed by the Governor.
Georgia Correctional Industries Administration (Internal Service Fund) is a public corporation which utilizes inmates in the manufacturing of products for sale to State agencies and others. The Governor appoints one Board member from each congressional district in the State, as well as appointing five additional members from the State at large.
District Attorneys' Retirement System (Pension Trust Fund) is a single-employer, defmed benefit pension plan established for the purpose of paying retirement benefits to the district attorneys ofthe State. The Board consists of two State officials designated by statute and one member appointed by the Governor. A substantial amount of funding is provided by the State in the form of employer contributions and administrative expenses.
Employees' Retirement System of Georgia (Pension Trust Fund) is a single-employer, public employee retirement system established to provide benefits for employees of the State. The system is governed by a seven member Board of Trustees,.three of which are State officials designated by statute, and one of which is appointed by the Governor. The system administers three blended defined benefit pension plans: the Employees' Retirement System Fund, the Legislative Retirement System and the Trial Judges and Solicitors Retirement Fund. The State provides a substantial amount of funding for these retirement systems in the form of employer contributions and administrative expenses.

Superior Court Judges Retirement System (Pension Trust Fund) is a single-employer, defmed benefit pension plan established for the purpose of paying retirement benefits to the Superior Court Judges of the State of Georgia. The Board consists of two State officials designated by statute and one member appointed by the Governor. A substantial amount of funding is provided by the State in the form of employer contributions and administrative expenses.
Georgia Military College (College and University Funds) is a body corporate and politic. This institution is dedicated to providing a high-quality military education to the youth of the State. State statutes require one trustee to be elected to the Board from each ofthe six municipal voting districts ofthe City of Milledgeville, as well as one trustee appointed by the Governor from each of the nine congressional district in the State and two from the State at large.
Discrete presentation entails reporting component unit fmancial data in columns separate from the fmancial data of the primary government. The discretely presented component units are as follows:
Georgia Education Authority (Schools) (Governmental Fund Type) is a body corporate and politic. The authority is responsible for the construction of buildings and facilities intended for use as school buildings, classrooms, laboratories, libraries and instructional, administrative and recreational facilities for students, faculty, officers and employees of any institution under control of a county or city board of education or governing body of any independent district or system. The Board consists of six State officials designated by statute and one member appointed by the Governor.
Georgia Public Telecommunications Commission (Governmental Fund Type) is a body corporate and politic. This commission is a public charitable organization created for the purpose of providing educational, instructional and public broadcasting services to citizens of Georgia. The budget of the commission must be approved by the State. The Board consists of three State officials designated by statute and six members appointed by the Governor.
Georgia Student Finance Authority (Governmental Fund Type) is a body corporate and politic. This authority was created for the purpose of improving higher educational opportunities by providing educational scholarship, grant and loan assistance. A substantial amount of funding is provided to the authority by the State. The Board consists

B - 32

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30. 1995
Note 1. Summary of Significant Accounting Policies (continued)
of fifteen members, four of whom are State officials and the remaining eleven are appointed by the Governor.
Georgia Agricultural Exposition Authority (Proprietary Fund Type) is a body corporate and politic. This authority is responsible for provision of a facility for the agricultural community, for public events, exhibits and other activities and for promotion and staging of a statewide fair. The nine Board members are appointed by the Governor.
Georgia Agrlrama Development Authority (Proprietary Fund Type) is a body corporate and politic. The purpose of this authority is to utilize all funds accrued for the sole purpose ofbeautifying, improving, developing, maintaining, administering, managing and promoting an agricultural museum in or around Tifton, Georgia; this museum is designated as the State Museum of Agriculture. Of the fourteen members of the Board, four are State officials designated by statute and seven members are appointed by the Governor.
Georgia Development Authority (Proprietary Fund Type) is a body corporate and politic. The authority was created to assist agricultural and industrial interests by providing credit and servicing functions to better enable the farmers and businessmen to obtain needed capital funds. The Board consists of three State officials designated by statute and four members appointed by the Governor.
Georgia Environmental Facilities Authority (Proprietary Fund Type) is a body corporate and politic. The authority provides assistance to local governments in constructing, extending, rehabilitating, repairing, replacing and renewing environmental facilities by providing fmancial and technical assistance. The Board consists of three State officials designated by statute and eight members appointed by the Governor.
Georgia Higher Education Assistance Corporation (Proprietary Fund Type) is a public authority, body corporate and politic. The corporation was created to improve the higher educational opportunities of eligible students by guaranteeing educational loan credit to students and to parents of students. The corporation is governed by the Board of Commissioners ofthe Georgia Student Finance Commission. The Board consists of five State officials designated by statute and eleven members appointed by the Governor.

Georgia Highway Authority (Proprietary Fund Type) is a body corporate and politic. This authority was created to build, rebuild, relocate, construct, reconstruct, surface, resurface, layout, grade, repair, improve, widen, straighten, operate, own, maintain, lease and manage roads, bridges and approaches. The Board consists of three State officials designated by statute.
Georgia Housing and Finance Authority (Proprietary Fund Type) is a body corporate and politic. The authority is responsible for facilitating economic development, housing and housing fmance, and fmancing for health facilities and health care services throughout the State. The Board consists of two State officials designated by statute and ten members appointed by the Governor.
Georgia Lottery Corporation (Proprietary Fund Type) is a public body, corporate and politic. The corporation operates lottery games to provide continuing entertainment to the public and maximize revenues, the net proceeds of which are utilized to support improvements and enhancements for educational purposes. The corporation is governed by a board of directors composed of seven members, all of which are appointed by the Governor. The State is legally entitled to residual resources of the corporation.
Georgia Music Hall ofFame Authority (Proprietary Fund Type) is a body corporate and politic whose purpose is to construct, operate and maintain the Music Hall of Fame, as well as promoting music events at the facility and throughout the State. All nine members of the Board are appointed by the Governor.
Georgia Ports Authority (Proprietary Fund Type) is a body corporate and politic. The purpose of the authority is to develop and improve the harbors or seaports of the State for the handling of waterborne commerce and to acquire, construct, equip, maintain, develop and improve said harbors, seaports and their facilities. The Board consists of nine members, all of which are appointed by the Governor.
Georgia Rail Passenger Authority (Proprietary Fund Type) is a body corporate and politic. This authority is responsible for construction, fmancing, operation and development of rail passenger service and other public transportation projects. The Board includes one member appointed by the Governor from each congressional district, as well as two appointed members from the State at large.
Georgia Seed Development Commission (Proprietary Fund Type) is a body corporate and politic and an instrumentality

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STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
and public corporation of the State whose purpose is to purchase, process, and resell breeders' and foundation seeds. The commission consists of ten members who are accountable as trustees. Of the ten members serving on the Board, six members are State officials or are appointed by State officials.
Geo. L. Smith II Georgia World Congress Center Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State. Die authority is responsible for acquiring, constructing, equipping, maintaining and operating the World Congress Center to promote trade shows, conventions and political, musical, educational, entertainment, recreational, athletic or other events. The eleven members of the Board are appointed by the Governor.
Georgia Sports Hall ofFame Authority (Proprietary Fund Type) is a body corporate and politic. This authority was created to construct and maintain a facility to house the Georgia Sports Hall of Fame to honor those who have made outstanding and lasting contributions to sports and athletics, and to operate, advertise and promote the Sports Hall of Fame. The thirteen members of the Board are appointed by State officials. The issuance of bonds must be approved by the Georgia State Financing and Investment Commission.
Jekyll Island State Park Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State. The authority was created to operate and manage resort recreational facilities on Jekyll Island. The Board consists of one State official designated by statute and eight members appointed by the Governor.
Lake Lanier Islands Development Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State. The purpose of the authority is to operate and manage projects on Lake Lanier Islands. The Board consists of one State official designated by statute and eight members appointed by the Governor.
North Georgia Mountains Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State responsible for the construction and management ofrecreation, accommodation

and tourist facilities and services. The nine members of the Board are appointed by the Governor.
Sapelo Island Heritage Authority (Proprietary Fund Type) is a body corporate and politic. The purpose of the authority is the preservation of the cultural and historic values of Hog Hammock Community located on Greater Sapelo Island. The three members serving on the Board are State officials. The State has assumed the obligation to provide fmanciaI support for real property acquisition.
State Tollway Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State. The authority was created to construct, operate and manage a system of roads, bridges and tunnels and facilities related thereto. The three Board members are State officials; therefore, the State can impose its will on the authority.
Stone Mountain Memorial Association (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State. The authority is responsible for the proper development management, preservation and protection of Stone Mountain as a Confederate memorial and public recreational area. The Board consists of one State official designated by statute and eight members appointed by the Governor.
Superior Court Clerks' Cooperative Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation of the State created to provide a cooperative for the development, acquisition and distribution of record management systems, information, services, supplies and materials for superior court clerks of the State. Of the seven members of the Board, three are appointed by the Governor. The nature of this organization is such that it would be misleading to exclude it from the reporting entity.
Georgia Firemen's Pension Fund (Fiduciary Fund Type) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the firemen of the State of Georgia. The Board of Trustees consists of two State officials designated by statute and three members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Judges ofthe Probate Courts Retirement Fund ofGeorgia (Fiduciary Fund Type) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the judges of the

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STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
Probate Courts of the State of Georgia. The Board consists of one State official designated by statute and six members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Peace Officers' Annuity and Benefit Fund of Georgia (Fiduciary Fund Type) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the peace officers ofthe State of Georgia. The Board of Commissioners of the Annuity and Benefit Fund consists of two State officials designated by statute and four members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Public School Employees Retirement System (Fiduciary Fund Type) is a single-employer, defmed benefit pension plan established for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. This retirement fund is administered by the Employees' Retirement System Board of Trustees and two other Governor's appointees not on the Employees Retirement System Board.
Sheriffs' Retirement Fund of Georgia (Fiduciary Fund Type) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the sheriffs of the State of Georgia. The Board consists of one State official designated by statute and five members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Superior Court Clerks' Retirement Fund of Georgia (Fiduciary Fund Type) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the Superior Court Clerks of the State of Georgia. The Board consists of one State official designated by statute and six members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Teachers Retirement System of Georgia (Fiduciary Fund Type) is a cost-sharing multiple-employer plan created by an act of the Georgia General Assembly to provide retirement, service, disability and survivors' benefits for qualifying teachers. The Board of Trustees is comprised of

ten members, eight of which are State officials or are appointed by State officials. The State provides a substantial amount of funding to this retirement system in the form of employer contributions.
Complete fmancial statements for the above-listed component units may be obtained from the individual organizations or from the Georgia Department of Audits and Accounts.
B. Fund Accounting
The State of Georgia uses funds and account groups to report on its fmancial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid fmancial management by segregating transactions related to certain government functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a fmancial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available fmancial resources.
Primary Government - The fmancial statements of the primary government are divided into four fund categories (further divided by fund type) and two account groups, all of which are described below. The four fund categories include governmental, proprietary, fiduciary and college and university funds. The two account groups presented are the general fixed assets account group and the general long-term debt account group.
Governmental Fund Types are used to account for all or most of a state's general activities. Governmental fund types include:
General Fund - The General Fund is used to account for all fmancial transactions not required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a state government.
Special Revenue Funds - Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for specified purposes.
The primary government special revenue fund is the GeorgiaNet Authority. The GeorgiaNet Authority is responsible for centralized marketing, sales, leasing and licensing of certain public information.

B -35

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30. 1995
Note 1. Summary of Significant Accounting Policies (continued)
Debt Service Funds - Debt Service Funds are used to account for the payment of principal and interest on general long-term debt.
Capital Projects Funds - Capital Projects Funds are used to account for the acquisition or construction of capital facilities.
Proprietary Fund Types are used to account for activities similar to those found in the private sector, where cost recovery and the determination of net income is necessary or useful for sound fmancial administration.
Enterprise Funds - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be fmanced or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes.
The primary government enterprise fund is the State Employees' Health Benefit Plan, which is administered by the State Personnel Board, Merit System of Personnel Administration. The State Employees' Health Benefit Plan is a self-insured program of health benefits for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State of Georgia.
Internal Service Funds - Internal Service Funds are used to account for the fmancing of goods or services provided by one department or agency to other State departments or agencies, or to other governmental entities, on a cost-reimbursement basis.
Fiduciary Fund Types are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the State. These fund types include:
Expendable Trust Funds - Expendable Trust Funds are used to account for the activities of trusts in which both

principal and income may be used for the purposes of the trust.
Nonexpendable Trust Funds - Nonexpendable Trust Funds are used to account for the activities of trusts when the government is under an obligation to maintain the trust principal.
Pension Trust Funds - Pension Trust Funds are used to account for State-administered retirement systems.
Agency Funds - Agency Funds are used to account for assets that the State holds on behalf of others as their agent.
College and University Funds are used to account for the operations of State colleges and universities in accordance with existing authoritative accounting and reporting principles applicable to government-operated colleges and universities. Accordingly, college and university funds are an aggregation of the following funds.
Current Funds - Current Funds are used to account for current operating expenditures and related resources and include (1) unrestricted funds over which the college or university retains full control in achieving the institutions' purposes, and (2) restricted funds which may be utilized only in accordance with externally-restricted purposes.
Loan Funds - Loan Funds are used to account for transactions ofrelated resources obtained and used for loans to students.
Endowment and Similar Funds - Endowment and Similar Funds are used to account for resources held by the institutions that must be administered in accordance with trust agreements.
Plant Funds - Plant Funds are used to account for institutional property acquisition, renewal and replacement, debt retirement and investment.
Agency Funds - Agency Funds are used to account for amounts held in custody for students, university-related organizations and others.
The General Fixed Assets Account Group is used to account for all fixed assets acquired or constructed for use by the State, other than those accounted for in the proprietary, fiduciary, and college and university funds.
The General Long-Term Debt Account Group is used to account for general obligation bonds outstanding, accrued

B -36

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30. 1995
Note 1. Summary of Significant Accounting Policies (continued)
annual and compensatory leave, capital lease obligations and other long-term liabilities not otherwise recorded in proprietary, fiduciary, and college and university funds.
Discretely Presented Component Units - The fmancial statements of the component units, other than the component units whose fmancial statements were blended with the fmancial statements of the primary government due to their relationship with the primary government, are presented in separate columns. The three columns presented reflect financial activity for the following fund types:
Governmental Fund Types are used to account for component unit general activities.
Proprietary Fund Types are used to account for activities similar to those found in the private sector, where the determination ofnet income is necessary or useful for sound fmancial management.
Fiduciary Fund Types are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the State.
The fmancial data presented in these columns are discretely presented with the balances and transactions for each component unit being aggregated within the component unit's predominant fund type.
C. Basis of Accounting
The accounting and fmancial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds and expendable trust funds are accounted for using a current fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other fmancing sources) and decreases (i.e., expenditures and other fmancing uses) in net current assets.
All proprietary funds, nonexpendable trust funds and pension trust funds are accounted for on a flow of economic resources measurement focus. With this measurement

focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
The modified accrual basis of accounting is used by all governmental fund types, expendable trust funds and agency funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Principal revenue sources which are susceptible to accrual include income taxes, sales and use taxes, and federal grants and shared revenues. Revenues applicable to expendituredriven programs, however, may be accrued based on the unexecuted portion of contracts for goods and services. Expenditures are recorded when the related fund liability is incurred, as required by GAAP, with the exception of year-end encumbrances which are recorded as expenditures rather than as a reservation of fund balance. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the subsequent fiscal year.
The accrual basis of accounting, as required by GAAP, is utilized by proprietary fund types, nonexpendable trust funds and pension trust funds with the exception of the following individual pension trust funds and internal service funds (risk management funds) which are reported essentially on the cash basis:
Primary Government Internal Service Funds (Risk Management) Authorities Liability Reserve Fund Hazard and Insurance Reserve Fund Liability Self-Insurance Reserve Fund State Tort Claims Trust Fund Unemployment Compensation Fund University System of Georgia Liability Insurance Fund Workers' Compensation Fund
Pension Trust Funds District Attorneys' Retirement System Superior Court Judges Retirement System

B - 37

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
Discretely Presented Component Units Fiduciary Fund Types Firemen's Pension Fund Judges of the Probate Court Retirement Fund Peace Officers' Annuity and Benefit Fund of Georgia Sheriffs' Retirement Fund of Georgia Superior Court Clerks' Retirement Fund of Georgia
Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Depreciation of fixed assets has not been reported for all funds included within the proprietary fund types as required by GAAP.
The College and University Funds are reported using the modified accrual basis of accounting (which is materially the same as the accrual basis of accounting applicable to colleges and universities), with the following exceptions:
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements.
Patient revenues of the Medical College of Georgia are recorded on the cash basis.
As permitted by generally accepted accounting principles for colleges and universities, no depreciation is provided for the physical properties.
D. Budgets
The annual budget ofthe State of Georgia is prepared on the modified accrual basis utilizing encumbrance accounting with the following exceptions: federal and certain other revenues are accrued based on the unexecuted portion of long-term contracts; and intrafund transactions are disclosed as revenue and expenditures. The budget represents departmental appropriations recommended by the Governor and adopted by the General Assembly prior to the beginning ofthe fiscal year. Annual appropriated budgets are adopted at the departmental level. The appropriated budget covers most governmental funds included in the State reporting entity but excludes the special revenue fund, capital projects funds and certain debt service funds which are not subject

to appropriation. The budget includes certain proprietary

funds, the college and university funds, and the

administrative costs of operating certain public employee

retirement systems.

All unencumbered annual

appropriations lapse at fiscal year end unless otherwise

specified by constitutional or statutory provisions.

Supplementary and amended appropriations may be enacted

during the next legislative session by the same process used

for original appropriations. Encumbrances are used to

indicate the intent to purchase goods or services. Liabilities

and expenditures are recorded upon issuance of completed

purchase orders. Goods or services need not have been

received for liabilities and expenditures to be recorded.

Because the budgetary basis differs from GAAP, budget and actual amounts in the accompanying Statement of Funds Available and Expenditures Compared to Budget - Budget Fund are presented on the budgetary basis. A reconciliation of the excess of funds available over expenditures on the budgetary basis at June 30, 1995, to the excess of revenues over expenditures and other fmancing sources (uses)/net income (loss)/net increase in fund balances - current funds presented in conformity with GAAP is set forth in Note 3.

E. Deposits and Investments
Cash and Cash Equivalents Cash and cash equivalents include currency on hand and demand deposits with banks and other fmancial institutions. Cash and cash equivalents also include short-term, highly liquid investments with maturity dates within three months of the date acquired, with the exception ofthe college and university funds, which report all time deposits as cash.
Investments Investments are defmed as those fmancial instruments with terms in excess of three months from the date of purchase and certain other securities held for the production of revenue.
The investment policy of the State of Georgia is to maximize the protection of State funds on deposit while accruing an advantageous yield on those funds in excess of those required for current operating expenses (Official Code of Georgia Annotated [OCGA] 50-17-51). The State Depository Board may permit any department, board, bureau or other agency to invest funds collected directly by such organization in short term time deposit agreements, provided that the interest income of those funds is remitted to the Director of the Office of Treasury and Fiscal Services as revenues ofthe State of Georgia. As a matter of general

B - 38

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
practice, however, demand funds of any department, board, bureau or other agency in excess of current operating expenses are required to be deposited with the Director of the Office of Treasury and Fiscal Services for the purpose of pooled investment (OCGA 50-17-63). Such cash is managed in a pooled investment fund to maximize interest earnings. Investments are stated at cost. Authorized pool investments are limited to the following (OCGA 36-83-4 and 36-83-8):
1) Obligations of the State of Georgia or of other states; 2) Obligations issued by the United States government; 3) Obligations fully insured or guaranteed by the United
States government or a United States government agency; 4) Obligations of any corporation of the United States government; 5) Prime banker's acceptances; 6) Repurchase agreements; and 7) Obligations of other political subdivisions ofthe State.
Other organizations of the State of Georgia reporting entity invest in a variety offmancial activities. These investments may include brokered certificates of deposit, commercial paper, convertible bonds, corporate bonds, notes and obligations, foreign bonds, investment agreements, mortgages, municipal bonds, mutual funds, real estate, real estate mortgages and notes, real estate investment trust limited partnerships, repurchase agreements, short-term investments, stocks, and U. S. Treasury bonds, notes, and bills. Investments are stated at cost or amortized cost at June 30, 1995, with the exception of deferred compensation plan assets which are stated at market value (See Note 16).
In accordance with State statutes and investment policy and guidelines adopted by the State Depository Board, the State of Georgia invests a portion of the assets of the various portfolios in certain structured notes and certain mortgagebacked securities, such as collateralized mortgage obligations and adjustable rate mortgages. These securities are reported as U. S. Government Securities in the disclosure of custodial credit risk (See Note 4).
As of June 30, 1995, the State had $3,000,000 invested in a structured note paying interest that varies based on the yield often-year U. S. Treasury Bonds with a minimum coupon rate of 4.65% and a maturity date of March 2, 1998.

As of June 30, 1995, the State had $78,103,761 in two portfolios invested in U. S. agency mortgage and assetbacked securities. Investments in these two portfolios are transacted by external investment management firms under direction of investment advisory agreements executed between the State and the investment management firms. These agreements direct the investment firms to utilize the Merrill Lynch 1-3 year Index in managing the average duration of the overall portfolios, excluding cash, to within plus or minus six months duration of the Index. The average investment duration ofthese portfolios on June 30, 1995, was 1.19 years.
The Commissioner of the Department of Agriculture is directed by statute to require dealers in certain agricultural products and livestock to make and deliver to the Department a surety or cash bond to secure the faithful accounting for and payment to producers of the proceeds of agricultural products or livestock handled or sold by the dealer. Cash bonds are required to designate the Department as trustee ofthe funds and may take the form of certificates of deposit, letters of credit, money orders or cashiers' checks. At June 30, 1995, the Department held surety bonds in the amount of$15,445,000 and cash bonds in the amount of $10,715,598. These bonds are not recorded on the Combined Balance Sheet.
Securities are held pursuant to statutes which require licensed insurance companies to deposit securities with the Department of Insurance prior to issuance ofa certificate of authority to transact insurance by the Commissioner of Insurance. These securities remain in the name of the licensed insurance company as long as the company has a pending claim in the State of Georgia or until a proper order of a court of competent jurisdiction has been issued to the receiver, conservator, rehabilitator, or liquidator of the insurer or to any other properly designated official or officials who succeed to the management and control of the insurer's assets. The purchase and redemption of such securities is allowed as long as the required levels of deposits are maintained. At June 30, 1995, securities in the amount of $190,843,394 were held by the Department of Insurance. These securities are not recorded on the Combined Balance Sheet.
Construction contracts awarded by the Department of Transportation (Primary Government) and the State Tollway Authority (Discretely Presented Component Units) usually include provisions to withhold a percentage of the payments until the project reaches a specified state of completion. Georgia law requires that these funds be

B -39

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
deposited in a state or national bank chartered within this State. The State controls only the release of these funds; the assets in the accounts are considered to be the property of the contractor. Therefore, no assets and liabilities for these escrow accounts have been included in these fmancial statements. At June 30, 1995, $39,003,502 in escrow deposits were administered by the Department of Transportation and $97,442 by the State Tollway Authority.
F. Receivables
Receivables in the State's governmental funds pertain primarily to Federal revenues and revenues applicable to charges for services. Receivables in all other funds have arisen in the ordinary course of business. Receivables are recorded when either the asset or revenue recognition criteria (See Note I-C) have been met. Estimates of allowances for uncollectible receivables have not been made for the majority of receivables included within the financial statements.
G. Due TolFrom Other Funds
Equally offsetting asset and liability accounts are used to account for amounts owed to a particular fund by another fund for short term obligations on goods sold or services rendered.
H. Advances to Other Funds
Noncurrent portions oflong-term interfund loans receivable are reported as advances and are offset equally by a fund balance reserve account which indicates that they do not constitute expendable available fmancial resources and therefore are not available for appropriation.
I. Inventories
Inventories of supplies and materials are determined by physical count and/or perpetual inventory records and are valued at cost, current purchase price, fair market value, lower of cost or market using the first-in/first-out (FIFO)

method, moving average cost, specific identification using FIFO, standard cost, or weighted average cost, depending on the individual organization's preference. The costs of governmental fund-type inventories are recorded as expenditures when consumed rather than when purchased for larger agencies and agencies with material inventories. Other agencies may use either the purchase or consumption method.
Under the purchase method, a portion of the fund balance is reserved for inventories to indicate that it is not available for appropriation. Organizations under the consumption method normally reserve a portion of fund balance equal to the average monthly inventories on hand for the fiscal year.
USDA Donated Food Inventories are shown at a value established by the U. S. Department of Agriculture. Donated food inventories are equally offset by an amount to indicate that they do not constitute "available expendable resources" even though they are a component of net current assets. The fund balance reserve is based on values established by the U. S. Department of Agriculture.
J. Prepaid Items
Payments made to vendors and local government organizations for services that will benefit periods beyond June 30,1995, are recorded as prepaid items.
K. Restricted Assets
Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants.
L. Fixed Assets
General fixed assets of governmental fund types are reflected as expenditures in the funds used to acquire or construct them and the related assets are reported in the general fixed assets account group. Proprietary and trust fund fixed assets are capitalized in their respective funds, except for trust fund fixed assets, which are reported in the general fixed assets account group. College and university funds report expenditures for fixed assets in the funds used to acquire or construct them and the related assets are reported within the plant funds.

B -40

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995

Note 1. Summary of Significant Accounting Policies (continued)
Due to the lack of complete and accurate inventory records applicable to State-owned land and buildings and the lack of historical cost values for certain parcels of land and buildings, the general fixed assets account group does not represent a comprehensive valuation of the assets owned by the State of Georgia.
All purchased fixed assets are valued at cost or at estimated historical cost if historical cost is not practically determinable. Certain fixed assets acquired through capital leases in prior years have not been recorded on the financial statements at the net present value of the minimum lease payments as is required by GAAP. Donated fixed assets are valued at their estimated fair market value on the date received.
Costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Material improvements adding to the value of assets are capitalized. Interest costs during construction are not capitalized for construction or acquisition of assets funded by governmental fund types and college and university funds. Interest costs during construction for proprietary fund types are not capitalized with the exception of construction projects funded through the Stone Mountain Memorial Association (discretely presented component unit).
With the exception of the college and university funds, public domain ("infrastructure") fixed assets consisting of such assets as roads, bridges, curbs, streets and sidewalks, drainage systems and lighting systems are not generally reported, as these assets are immovable and of value only to the State of Georgia.
Assets in the general fixed assets account group and the college and university funds are not depreciated. The majority of proprietary funds do not record depreciation on fixed assets as required by GAAP.
M. Compensated Absences
The State's liability for accumulated unpaid annual and compensatory time is reported in the accompanying general long-term debt account group for governmental fund types. These amounts are not shown as a liability in the funds but are recorded as expenditures when paid. In the proprietary

fund types and the college and university funds this obligation is reported as a liability in the respective funds.
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. Funds are provided in the appropriation of funds each fiscal year to cover the cost of annual leave of terminated employees.
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Sick leave does not vest with the employee. Unused accumulated sick leave is forfeited upon retirement or termination of employment. However, certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. No liability is recorded for nonvesting accumulating rights to receive sick pay benefits.
N. Deferred Revenue
The State reports deferred revenue on the combined balance sheet. Deferred revenues arise when a potential revenue does not meet the "available" criterion for recognition in the current period. Deferred revenues also arise when resources are received by the State before it has a legal claim to them, as when grant monies are received prior to qualifying expenditures being incurred. In subsequent periods, when the revenue recognition criterion is met, or when the State has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized.
o. Mortgage Loans Under Repurchase
Agreements
At June 30, 1995, mortgage loans totaling $49,241,181 have been transferred and assigned to lenders under repurchase agreements by the Georgia Development Authority (Discretely Presented Component Units). The agreements give the lenders the option to have the Authority repurchase the mortgage loans for an amount equal to the then outstanding balance of principal and interest due during a specified period of time.
In addition, the Authority guarantees the principal and interest payment by the borrower to the lender within thirty

8 - 41

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
(30) days of the due date. Any payment not received within thirty (30) days is considered advanced to the borrower and paid to the lender by the Authority. The Authority then charges the borrower interest on these advances for the period outstanding at a penalty rate agreed upon at the loan origination date. Fund balance in the amount of fifteen percent (15%) of the principal balances outstanding of mortgage loans under repurchase agreements is reserved.
p . Long-Term Obligations
Long-term debt and other long-term obligations are recognized as a liability of a governmental fund when due, or when resources have been accumulated in the debt service fund for payment early in the subsequent fiscal year. Other long-term obligations, with the exception of the long-term portion of some capital leases, are reported in the general long-term debt account group.
Long-term debt expected to be financed from proprietary fund operations are accounted for in those funds.
Q. Fund Equity
Contributed capital is recorded in proprietary funds that have received capital or contributions from developers, customers or other funds. Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of fmancial resources.
R. Bond DiscountslPremiumslIssuance Costs
In governmental fund types, bond discounts, premiums and issuance costs are recognized in the current period. Bond discounts, premiums and issuance costs for proprietary fund types are deferred and amortized over the term of the bonds using a method which approximates the effective interest method or the straight-line method. Bond premiums (discounts) are presented as increases (reductions) in the face amount of bonds payable whereas issuance costs are recorded as deferred charges.

s. Interfund Transactions
The State has the following types of interfund transactions:
Quasi-external transactions for services rendered by one fund to another are accounted for as revenues by the recipient fund and expenditures or expenses by the disbursing fund.
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity.
Operating transfers are recorded for all other interfund transactions.
T. Intrafund Transactions
State accounting policies and procedures allow for the recording of revenues, receivables, expenses and liabilities for transactions between State organizations whose fmancial activity is included within a single fund. State accounting systems do not facilitate the identification of all such transactions. Adjustments have been made for material transactions and balances which have been identified during the preparation of the State's general purpose financial statements; however, all such intrafund transactions and balances were not identifiable and, accordingly, revenues, receivables, expenses and liabilities are overstated, primarily in the general and college and university funds.
u. Memorandum Only - Total Columns
Total columns on the general purpose fmancial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with GAAP. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

B -42

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 1. Summary of Significant Accounting Policies (continued)
v. Fiscal Reporting Periods
The fmancial statements include fmancial activity for the Stone Mountain Memorial Association whose fiscal reporting period differs from that of the State of Georgia (July 1, 1994 through June 30, 1995). The applicable fiscal reporting period for the Stone Mountain Memorial Association is based on a fifty-two/fifty-three week period ending on the last Sunday of each calendar year. Financial activity is reported for the period December 27, 1993 through December 25, 1994.
Note 2. Other Accounting Disclosures
Change in Accounting Policy and Restatements
In fiscal year 1995, the State implemented accounting principles for recognition of taxpayer-assessed revenues on a modified accrual basis as required by GASB Statement 22, "Accounting for Taxpayer-Assessed Tax Revenues in Governmental Funds." The State now recognizes revenue for sales tax, individual income taxes, corporate income taxes and unemployment insurance tax that are collected by merchants on or before June 30 (sales tax), or are applicable to income earned (corporate and individual income taxes) or assessments demanded (unemployment insurance tax) on or before June 30, and are due and payable to the State by July 31. This change is reflected as a fund balance adjustment in the applicable funds.
The State's share of teachers' summer salary payments earned during the fiscal year were previously reported in the general long-term debt account group because they were not expected to be paid from expendable available fmancial resources. Due to the accrual of taxpayer-assessed revenues mentioned above, resources were available to fund these salary payments. In fiscal year 1995, the State recorded a

liability for the teachers' summer salary payments. This change is reflected as a fund balance adjustment in the general fund.
The State implemented accounting principles for recognition of the escheat revenue from unclaimed property as required by GASB Statement 21, "Accounting for Escheat Property." Estimates of payments to owners of unclaimed property have been recorded as a reduction of revenue and a liability in the general fund, which is the fund to which the property ultimately escheats. This change is reflected as a fund balance adjustment in the general fund.
In fiscal year 1995, the State recorded a liability for accumulated unpaid annual and compensatory time in the college and university funds. This change is reflected as a fund balance adjustment in the college and university funds.
In fiscal year 1995, the State reflected the risk financing activities of the college and university funds in the unrestricted current fund, in accordance with Section Co5 ofthe GASB Codification of Governmental Accounting and Financial Reporting Standards. This change is reflected as a fund balance adjustment in the college and university funds.
In fiscal year 1995, legislation transferred the responsibility for the statewide energy conservation program and for loans to local government wastewater treatment facilities funded by federal capitalization grants from the general fund to the Environmental Facilities Authority (Discretely Presented Component Units). The prior year balance of these programs is shown as a residual equity transfer in the general fund and as a transfer of equity in the discretely presented component units - proprietary fund types.
In fiscal year 1995, the State recorded the long-term liability for compensated absences of the Department of Family and Children Services offices in the general long-term debt account group. This change is shown as a "Retroactive Restatement of Prior Year Balance" in Note 11.
Fund balances and retained earnings at July 1, 1994, have been adjusted as follows:

B -43

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30. 1995
Note 2. Other Accounting Disclosures (continued)

Primary Government

General Fund

Accrual of Taxpayer-Assessed Revenues

$560,531,925

Accrual of Teachers' Summer Salary Payments

(386,330,523)

Liability for Unclaimed Property (Net)

(1,191.867)

$173,009,535

Internal Service Funds Other (Georgia Building Authority)

$ 107,057

Expendable Trust Funds Accrual of Unemployment Insurance Tax

$ 74,363,034

College and University Funds Compensated Absences Risk Financing Activities

$(78,719,812) 33.350,821
$(45.368,991)

Discretely Presented Component Units

Proprietary Fund Types

Transfer of Equity

$260,033,003

In fiscal year 1995, expenditures for Hospital Support in the college and university funds were shown as a separate expenditure category. Previously, these expenditures were shown as part of the Education and General expenditures. This change in accounting policy had no effect on fund balance.
Note 3. Budgetary Accounting
The Official Code of Georgia Annotated (OCGA), Title 45, Chapter 12, Article 4 sets forth the process for the development and monitoring of an appropriated budget for the State of Georgia. Not later than September 1 of each year, the head of each executive branch budget unit must submit estimates of the fmancial requirements for the subsequent fiscal year to the Office of Planning and Budget, which operates under the direction ofthe Governor. Budget estimates relative to the legislative and judicial branches of State government are provided to the Office of Planning and Budget for the purpose of estimating the total fmancial needs of the State, but are not subject to revision or review by the Office of Planning and Budget.

B -44

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 3. Budgetary Accounting (continued)
The Governor, through the Office of Planning and Budget, examines the estimates and may investigate and revise executive branch submissions as necessary. Upon the completion and revisions of the estimates, the Governor must prepare and submit a budget report to the General Assembly within five days of the date on which the General Assembly convenes. The Governor possesses the responsibility and authority to establish the revenue estimate for the corresponding fiscal year.
The General Assembly, after adopting such modifications to the Governor's budget report as it deems necessary, enacts the General Appropriations Act for the subsequent fiscal year. Each General Appropriations Act enacted, along with amendments as are adopted, continues in force and effect for the next fiscal year after adoption. In accordance with the Constitution of the State of Georgia, Article III, Section IX, Paragraph 4, the General Assembly is prohibited from appropriating funds for any given fiscal year which, in the aggregate, exceeds the amount of unappropriated surplus funds expected to have accrued at the beginning ofthe subsequent fiscal year together with the total estimated amount of receipts from existing revenue sources, less refunds, anticipated to be collected in the subsequent fiscal year. The Constitution further authorizes the passage of additional Supplementary Appropriation Acts for specific purposes, provided sufficient unappropriated funds are available or additional revenue measures have been enacted. Federal funds received by the State are continually appropriated in the exact amounts and for the purposes authorized and directed by the awarding federal agency. Internal transfers within a budget unit and between objects of functional or activity budget units are subject to the condition that no State funds shall be transferred for the purpose of initiating a new program area not currently having a State funds appropriation.

The Governor, through the Office of Planning and Budget, requires each budget unit, other than those of the legislative and judicial branches, to submit an annual operating budget based on the activities and functions set forth in the Appropriations Act. Budget units submit quarterly allotment requests which must be approved in conjunction with quarterly work programs prior to release of appropriated funds. Further monitoring of budget unit activities is accomplished by review of expenditure reports which are submitted quarterly to the Office of Planning and Budget.
Budget units (i.e., agencies, commissions) of the State are responsible for budgetary control of their respective portion of the total State appropriated budget. The legal level of budgetary control is at the departmental level. Due to the complex nature of the State appropriated budget, a separate budgetary report entitled, "Report of the State Auditor of Georgia," is published each year. This report includes a listing of State organizations (appropriation units) which incurred expenditures in excess of amounts budgeted by object class.
The appropriated budget covers the majority of the governmental funds included within the State of Georgia reporting entity, but excludes the special revenue fund, capital projects funds and certain debt service funds which are not subject to appropriation. The budget does include certain proprietary funds, the college and university funds, and the administrative costs of operating various public employee retirement systems. The accompanying Statement of Funds Available and Expenditures Compared to Budget - Budget Fund presents comparisons of the legally adopted budget with actual data prepared on the budgetary basis of accounting utilized by the State. Because the budgetary and GAAP presentations for actual data differ, a reconciliation of "Excess of Funds Available Over Expenditures - Budget Fund (Budgetary Method)" and "Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses/Net Income (Loss)/Net Increase (Decrease) in Fund Balances Current Funds - GAAP Fund Types" appears below.

B -45

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 3. Budgetary Accounting (continued)

Excess of FundsAvailableOver Expenditures - Budget Fund Budgetary Method
Entity and PerspectiveDifferences:
Reclassification of Budgetary Funds to GAAPFinancial Statement FundTypes
Add Non-Budgeted Funds
Deduct Budgeted Non-Current Funds
Basis Differences:
Net AccruedRevenues, Related Receivables andDeferred Revenues
Net Accrued ExpenditureslExpenses and RelatedLiabilities
TimingDifferences:
Revenues
ExpendituresIExpenses
Excess of RevenuesandOther FinancingSourcesOver (Under) Expenditures andOtherFinancing UseslNet Income (Loss)/Net Increase(Decrease)in Fund Balancea- Current FundsGAAP Fund Types

Budgetary Fund
Budget $ 1,487,164,573
(1,487,164,573)

General
1,305,720,767 536,776,765
(1,608,492,171) 63,030,481 6,433,944 8431992
311901778

Special Revenue

Financial Statement Fund Types

Primary Government

Debt Service

Capital Projects

Enterprise

111,196

10,074,890

(95,270,623)

118,246,638

----

(85,086,419) (11,276,605)

$ 111196

$10 074 890

$(95 270 623)

$ 21 883614

Internal Service
6,739,967 71,009,518
(9,252,369) 20,016,364 (5 (20064)
83393416

B -46

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995

Excess of Funds Available Over Expenditures . Budget Fund Budgetary Method
EntityandPerspective Differences:
Reclassification of Budgetary Fundsto GAAPFinancial StatementFund Types
Add Non-Budgeted Funds
Deduct BudgetedNon-Current Funds
Basis Differences:
Net AccruedRevenues,Related Receivables and Deferred Revenues
Net Accrued ExpenditureslExpenses andRelatedLiabilities
Timing Differences:
Revenues
Expenditures/Expenses
Excess of RevenuesandOther FinancingSourcesOver(Under) Expendituresand OtherFinancing UseslNet Income (Loss)lNet Increase (Decrease)in Fund Balances- Current FundsGAAP Fund Types

Expendable Trust

Financial Statement Fund Types

Primary Government

None:s:pendable Trust

Pension Trust

College and University

DiscretelyPresented Component Units

Governmental

Proprietary

Fiduciary

215,877,373

1,870

200 522,803,613

24,922,378 (12,018,890)
(23,284,187)

30,376,620 (122,879)

1,011,150 31,162,508

146,853 1,656,606,985

13,766,326 (19,145,847)
(6,231) (61224)

(277,475) 141,428

(1,285,259) 598,989

(2,000) (44853)

$215877 373

$ 1870

$522803813 $ (I5 927 675)

$30 117694

$31 487388

$1 656606985

B -47

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 4. Deposits and Investments
Deposits - Funds belonging to the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more of the following securities as enumerated in OCGA 50-17-59:
1) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia.
2) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia.
3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
5) Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association.

6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in OCGA 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia the option of exempting demand deposits from the collateral requirements.
Primary Government
At year end, the carrying amounts of the State's deposits were $337,540,313, and the bank balances were $840,380,385. The amounts of these bank balances are classified into three categories of credit risk: (1) cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the State or by its agent in the State's name, (2) cash collateralized with securities held by the pledging fmancial institution's trust department or agent in the State's name and (3) uncollateralized bank accounts. The State's deposits were classified as follows at June 30, 1995:

Risk Category
2 3

Bank Balance $ 294,468,671
122,252,719 423.658995 $ 840.380,385

B -48

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
June 30. 1995
Note 4. Deposits and Investments (continued)
Significant Discretely Presented Component Units
At year end, the significant discretely presented component units' deposits were classified as follows:

Investments - Investments are stated at cost or amortized cost, with the exception of deferred compensation plan assets which are stated at market value, and are summarized and classified as to risk in the following three categories: (I) insured or registered, or securities held by the State or

its agent in the State's name, (2) uninsured or unregistered, with securities held by the counterparty's trust department or agent in the State's name or (3) uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the State's name.

B -49

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 4. Deposits and Investments (continued)
Primary Government
The carrying amounts, risk categories and market value applicable to the State's investments are listed below:

Type of Investment Commercial Paper Corporate Bonds Foreign Bonds MunicipalBonds Repurchase Agreements Stocks U.S. Government
Securitiesand Corporate Obligations
Unclassified Loans (lnterfund) Mortgages MutualFunds Unemployment
Compensation Funds Pooled with the U.S. Treasury Total Investments

Risk Categories

1,490,563 2,853,619
10,000 15,130,605 3,591,721,987 2,867,186,126
4806302389 11 284 695 289

6,798,569 371,262
948,716,433 18,212,093
94409184 1068507541

9,000,000 47,447

Carrying Amount 1,490,563 9,652,188 381,262 15,130,605
4,549,438,420 2,885,445,666

Market Value 1,562,094 9,578,059 340,765
15,130,590 4,533,394,993 3,858,692,930

229730 9277 177

4900941303 12,362,480,007

5283840243 13,702,539,674

151,220 4,918,804 25,462,170

151,220 4,971,126 25,773,529

1 408483201 13 801 495402

1408483201 IS 141 918750

B - 50

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 4. Deposits and Investments (continued)
Significant Discretely Presented Component Units
The carrying amounts, risk categories and market value of the investments of the State's significant discretely presented component units are listed below:
Proprietary Fund Types

Proprietary Fund Types
Georgia Housing and Finance Authority

Type of Investment
Mutual Funds Repurchase Agreements U.S. Government
Securities and Corporate Obligations

Unclasslfied Mortgages

Geo. L. Smith II Georgia World Congress Center Authority

Repurchase Agreements
U.S. Government Securities and Corporate Obligations

Unclassified Mutual Funds

Lottery Corporation

U.S. Government Securities and Corporate Obligations

All Other ComponentUnits

Repurchase Agreements
U.S. Government Securities and Corporate Obligations

Unclassified Mutual Funds

Risk Categories
4,762,169 479,642
107096861 112338672

9,538,816
27124541 36663 357

69837000 6,444,858
14051982 20496840

13,892,928
1470931 15363 859

3

Carrying Amount

Market Value

28,245,121 28245 121
56726000 2806355 2806355

4,762,169 479,642
107096861 112,338,672
9406751 121745423
37,783,937
27124541 64,908,478
2853202 67761680
126563000 20,337,786
18329268 38,667,054
5667524 44334578

4,762,169 479,642
109939966 115,181,777
9406751 124588 528
37,783,937
27124541 64,908,478
2853202 67761680
131 695000 20,337,786
18514815 38,852,601
5667524 44520125

B - 51

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 4. Deposits and Investments (continued)
Fiduciary Fund Types

Risk Categories

Type of Investment

3

Fiduciary Fund Types

TeachersRetirement System of Georgia

RepurchaseAgreements

478,296,000

Stocks

7,255,139,000

U.S. Government Securities and Corporate Obligations

7766961000

15500396000

Unclassified

Real Estate

All OtherComponentUnits

Bonds and Debentures
Investment Accounts
Notes
Stocks
U.S. Government Securities and Corporate Obligations

Unclassified MutualFunds Real Estate

23,965,516 742,073
35,626,614 163,170,391
201 810 719 425315313

Carrying Amount

Market Value

478,296,000 7,255,139,000
7766961000 15,500,396,000
8672 000 15 509068000
23,965,516 742,073
35,626,614 163,170,391
201 810 719 425,315,313
16,358,644 1311371 442985328

478,296,000 10,033,833,000
8723 703 000 19,235,832,000
8672 000 19 244 504 000
24,085,693 742,073
36,815,989 206,205,086
209184787 477,033,628
16,358,644
493392272

B - 52

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 5. Receivables
Primary Government
Receivables by fund type as of June 30,1995, consist of the following:

Governmental Fund Types General Special Revenue Debt Service Capital Projects
Proprietary Fund Types Enterprise Internal Service
Fiduciary Fund Types Expendable Trust Nonexpendable Trust Pension Trust Agency
College and University Funds

Gross Receivables
$ 2,210,470,041 1,797,022 1,065
14,152,088
18,541,708 6,614,577
122,326,719 6,522
85,889,000 8,246,608
154,932,569
$ 2,622,977.919

Allowance for Uncollectibles $
(l,820,908) (13,900,000)
(1,922,292) $ 07,643,200)

Net Total Receivables
$ 2,210,470,041 1,797,022 1,065
14,152,088
16,720,800 6,614,577
108,426,719 6,522
85,889,000 8,246,608
153,0 I 0,277
$ 2,605.334,719

B - 53

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 5. Receivables (continued)
Significant Discretely Presented Component Units
Receivables of the significant discretely presented component units as of June 30, 1995, consist of the following:

Gross Receivables

Governmental Fund Types Georgia Student Finance Authority All Other Component Units
Proprietary Fund Types Georgia Environmental Facilities Authority Georgia Housing and Finance Authority All Other Component Units
Fiduciary Fund Types Teachers Retirement System of Georgia All Other Component Units

$ 303,085,330 1,736,779
420,935,007 582,775,457 133,741,766
323,129,809 4.423,701

$ 1.769,827,849

Allowance for Uncollectibles
$
(2,271,323)
s (2,271.323)

Deferred Loan Fees

Net Total Receivables

$

$ 303,085,330

1,736,779

(240,374)

420,935,007
582,775,457 131,230,069

$ (240,374)

323,129,809 4.423,701
$ 1.767.316,152

B -54

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 6. Fixed Assets
Primary Government
The following is a summary of changes in the general fixed assets account group during the fiscal year:

Land and Buildings Machinery and Equipment
Total General Fixed Assets

Balance July 1.1994 $ 1,466,116,015
647,895,662
$ 2.114,011.677

Additions $ 135,942,678
104,117,393 $ 240,060,071

Retirements $
<37.275,393) $ <37,275.393)

Balance June 30. 1995 $ 1,602,058,693
714,737,662
$ 2,316,796.355

The following is a summary of the proprietary fund types and college and university funds fixed assets at June 30, 1995.

Land and Buildings Improvements Other Than Buildings Machinery and Equipment Less: Accumulated Depreciation Construction in Progress Net Fixed Assets

Proprietary Fund Types

Enterprise Funds

Internal Service Funds

$

$ 232,220,840

102,348

149,501,856 (8,596,617)

$

102348

$ 373.126,079

College and Universitv Funds $ 2,018,231,490
130,749,184 1,175,658,523
53,917,261 $ 3 378.556.458

B - 55

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 6. Fixed Assets (continued)
Significant Discretely Presented Component Units
The following is a summary of the significant discretely presented component units' fixed assets at June 30, 1995:

Land and Buildings Improvements Other Than Buildings Machinery and Equipment Less: Accumulated Depreciation Construction in Progress Net Fixed Assets

Governmental Fund Types

Georgia Public Telecommunications
Commission

All Other Component
Units
4,041,366

46,161,578

543,253

$

46 161 578

4584619

Georgia Ports
Authority
183,417,790 181,614,015 90,598,321 (160,148,657) 24744833 320226302

Proprietary Fund Types

Stone Mountain Memorial Association

Geo. L. Smith IT Georgia World
Congress Center

44,553,851 18,752,819 20,290,141

$ 209,402,736 9,777,095

(33,825,700) 6024849
55795960

(19,129,001) 29787720
229838550

All Other Component
Units 88,335,166 2,622,612 24,518,206
(8,947,704) 21989666 128517946

Land and Buildings Machinery and Equipment Net Fixed Assets

Fiduciary Fund Types

Firemen's Pension Fund $ 124,545
118,030 $ 242,575

Peace Officers' Annuity and Benefit Fund

$

55,961

143,428

$

199.389

AlI Other Component
Units
$
27,449
$ 27,449

B - 56

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 7. Risk Management
A. Public Entity Risk Pool
The State Personnel Board, Merit System of Personnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations by the General Assembly of Georgia. The State Personnel Board, Merit System of Personnel Administration has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board.
A reconciliation oftotal claims liabilities for the fiscal year ended June 30, 1995, is shown below:

Unpaid Claims and Claim Adjustments July I, 1994

$135,133,547

Incurred Claims and Claims Adjustment Expenses - Provisions for Insured Events of the Current Year

752,934,481

Payments - Claims and Claim Adjustment Expenses Attributable to Insured Events of the Current Year and of Prior Years

<730169,050)

Unpaid Claims and Claim Adjustments June30, 1995

$157,898,978

B. Board of Regents Employee Health Benefits Plan
The Board of Regents of the University System of Georgia maintains a program of health and dental benefits for its

employees and retirees. This plan is funded jointly through premiums paid by participants covered under the plan and employer contributions paid by the Board of Regents and its organizational units. All units of the University System of Georgia share the risk of loss for claims of the plan.
The Board of Regents has contracted with Blue Cross Blue Shield to process all claims in accordance with medical coverage guidelines as established by the Board of Regents.
A reconciliation of total claims liabilities for the fiscal year ended June 30, 1995, is shown below:

Unpaid Claims and Claim Adjustments July 1, 1994 (Restated)
Incurred Claims and Claims Adjustment Expenses - Provisions for Insured Events of the Current Year
Payments - Claims and Claim Adjustment Expenses Attributable to Insured Events of the Current Year and of Prior Years
Unpaid Claims and Claim Adjustments June 30, 1995

$ 21,330,000 150,098,798 (145.948,798) $ 25.480,000

C. Other Risk Management
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS services claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance is purchased applicable to property, employee and automobile liability, fidelity and certain other risks. Premiums for the risk management program are charged to the State agencies by DOAS to provide claims servicing and claims payment.

B - 57

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 8. Construction and Other Significant Commitments
Primary Government
The Georgia State Financing and Investment Commission has entered into agreements with various State departments and agencies for the expenditure of bond sale proceeds and cash supplements (provided by the department or agency involved) to acquire and construct capital projects. At June 30, 1995, the undisbursed balance remaining on these agreements approximates $1,329,000,000.
Significant Discretely Presented Component Units
Proprietary Fund Types
At June 30, 1995, the Georgia Ports Authority had commitments for construction projects of approximately $4,000,000.
Note 9. Operating Leases
A. Lessee
The State leases land, office facilities, office and computer equipment, and other assets. These leases are considered for accounting purposes to be operating leases. Although lease terms vary, many leases are subject to appropriation from the General Assembly to continue the obligation. Other leases generally contain provisions that, at the expiration date of the original term of the lease, the State has the option of renewing the lease on a year-to-year basis. Certain organizations within the State's reporting entity do not maintain adequate systems for recording lease commitments.
Future minimum commitments for operating leases as of June 30, 1995, are listed below. Amounts are included for renewable leases for which the option to renew for the subsequent fiscal year has been exercised.

Primary Government
Fiscal Year Ended June 30, 1996 1997 1998 1999 2000 2001 and Subsequent
Total Minimum Commitments

$ 38,995,755 1,084,600 788,679 130,735 118,460 429.660
$ 41.547,889

Expenditures for rental of real property and equipment for the year ended June 30, 1995, totaled $38,768,733.
Significant Discretely Presented Component Units
Proprietary Fund Types

Georgia Lottery Corporation

Fiscal Year Ended June 30,

1996

$ 1,617,000

1997

1,991,000

1998

1,991,000

1999

1,656,000

2000

1,656,000

2001 and Subsequent

4969,000

$ 13,880,000

Less: Sublease Revenues

(2.564.000)

Total

$ 11.316,000

Expenditures for rental of real property and equipment for the year ended June 30, 1995, totaled $1,573,000.

B - 58

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 9. Operating Leases (continued)

All Other Component Units

Fiscal Year Ended June 30.

1996

$ 950,717

1997

400,615

1998

329,782

1999

108,968

2000

4,456

2001 and Subsequent

Total Minimum Commitments

$ 1.794,538

Expenditures for rental of real property and equipment for the year ended June 30, 1995, totaled $1,564,622,
B. Lessor
The State leases certain of its facilities for use by others for terms varying from I to 65 years, with the majority ofleases controlled by the State Properties Commission, These leases are accounted for as operating leases; revenues for services provided and for use of facilities are recorded when earned, Minimum future revenues and rentals to be received under operating leases as of June 30, 1995, are as follows:
Primary Government

Fiscal Year Ended June 30. 1996 1997 1998 1999 2000 2001 and Subsequent
Total

$ 6,571,973 6,782,331 6,900,005 7,017,786 7,132,575
187,069,777 $ 221.474,447

Significant Discretely Presented Component Units
Proprietary Fund Types

Georgia Ports Authority Fiscal Year Ended June 30.
1996 1997 1998 1999 2000 2001 and Subsequent Total

$ 3,318,995 2,680,390 2,463,097 1,833,336 1,099,528 6,728,634
$18.123,980

Note 10. Capital Leases and Installment Purchases
The State acquires certain property and equipment through multi-year installment purchases or capital leases with varying terms and options, The majority of these agreements contain fiscal funding clauses in accordance with OCGA 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available, If renewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly are considered noncancellable for financial reporting purposes,
Capital leases for the proprietary funds and the college and university funds are reported as a long-term obligation in those funds along with the related assets, Capital leases for the governmental funds are reported in the general long-term debt account group and the related assets are reported in the general fixed assets account group,
As noted in the Summary of Significant Accounting Policies (Note I), capital lease transactions have not been consistently recorded in conformity with GAAP. Fixed assets in prior years have not been recorded in the general fixed assets account group at the net present value of

B - 59

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1995
Note 10. Capital Leases and Installment Purchases (continued)
the mmimum payments nor has the long-term liability applicable to capital leases been consistently recorded in the general long-term debt account group. Also, the State does not record expenditures and other fmancing sources in the governmental fund types when capitalized leases are entered into as required by GAAP. At June 30, 1995, future commitments under installment purchases and capital leases were as follows:
Primary Government

Fiscal Year Ended June 30. 1996 1997 1998 1999 2000 200 I and Subsequent
Total Capital Lease and InstaIIment Purchase Payments
Less: Interest Present Value of Capital Lease and
Installment Purchase Payments
Installment Purchases Capital Leases

$5,955,611 3,555,868 1,649,017
716,837 184,850
$12,062,183 (532850)
$ 781,468

Significant Discretely Presented Component Units
Governmental Fund Types

Georgia Public Telecommunications Commission

Fiscal Year Ended June 30.

1996

1,240,324

1997

1,240,324

1998

1,240,324

1999

1,240,324

2000

799,897

2001 and Subsequent

2399692

Total Installment Purchase Payments

8,160,885

Less: Interest

(I 095320)

Present Value of Installment Purchase Payments

7065,565

Proprietary Fund Types
Georgia Ports Authority Fiscal Year Ended June 3D.
1996 1997 1998 1999 2000 2001 and Subsequent Total Capital Leases Less: Interest Present Value of Capital Leases

$ 260,076 183,330 23,648
$ 467,054

B - 60

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 10. Capital Leases and Installment Purchases (continued)

Geo. L. Smith II Georgia World Congress Center Authority Fiscal Year Ended June 30. 1996 1997 1998 1999 2000
200 1 and Subsequent
Total Capital Lease and Installment Purchase Payments
Less: Interest Present Value of Capital Leases and
Installment Purchases

$ 191,125 145,329 28,508
$ 364.962

Installment Purchases Capital Leases

$ 80,848

Note 11. Long-Term Debt
Primary Government
General Obligation Bonds. The State issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. General obligation

bonds have been issued for both general State and proprietary activities, to provide loans to local governments for water and sewer systems, to construct educational facilities for local school systems, and to refund general obligation bonds.
General obligation bonds are direct obligations and pledge the full faith and credit of the State. General obligation bonds currently outstanding are as follows:

Purpose General Government General Government - Refunding

Interest Rates 2.00% - 10.40% 2.40% - 6.75%

Amount $ 3,139,930,000
907.320.000 $ 4,047,250,000

B -61

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 11. Long-Term Debt (continued)
Annual debt service requirements to maturity for general obligation bonds are as follows:

Fiscal Year Ending June 30 1996 1997 1998 1999 2000 Thereafter

Principal $ 245,725,000
244,930,000 253,380,000 253,285,000 249,845,000 2,800,085,000 $ 4,047.250,000

Interest $ 236,616,805
220,811,673 205,313,891 189,655,388 174,186,817 1,063.440,234 $ 2,090,024,808

Total $ 482,341,805
465,741,673 458,693,891 442,940,388 424,031,817 3,863.525,234 $ 6,137.274,808

General State Bonds, All General State Bonds of the State of Georgia are past due, but have not been presented for redemption, This obligation will be liquidated if and when the past due outstanding bonds and coupons are presented. Unredeemed General State Bonds at June 30, 1995, were $15,505 with accumulated interest of$II,475,

Revenue Bonds. Revenue bonds have been issued by the organizational units listed below, Income derived from acquired or constructed assets is pledged to fund the debt service requirements of these issues, The College and University fund is responsible for repayment of Georgia Military College bonds, Revenue bonds outstanding at June 30, 1995, are as follows:

Purpose
Georgia Military College - Library Building

Interest Rates 3,00%

Amount $ 27.000

B -62

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 11. Long-Term Debt (continued)
Revenue bond debt service requirements to maturity are as follows:

Fiscal Year Ending June 30 1996 1997 1998 1999 2000 Thereafter

Georgia Military College

Principal

Interest

$

6,000

$

720

7,000

525

7,000

420

7,000

210

$ 27,000

$

1.875

Total $ 6,720
7,525 7,420 7,210
0 0 $ 28,875

At June 30, 1995, $608,475,000 of outstanding general obligation bonds (including prior years' refundings), $460,000 of outstanding Georgia Building Authority (Markets) revenue bonds and $7,923,000 of outstanding Georgia Education Authority (University) revenue bonds (including prior years' defeasances) are considered defeased,

Changes in Long-Term Liabilities. During the year ended June 30, 1995, the following changes occurred in liabilities reported in the general long-term debt account group:

CompensatedAbsences Claims and Judgements Capital Leases and Installment Purchases Deferred Teachers' Salaries General Obligation Debt Generat State Bond Debt Long-Term Notes

Balance July 1 159,453,759 111,995,926 958,965 386,330,523
3,670,250,000 15,505 0
$ 4 329 004 678

Retroactive Restatement of
Prior Year Balance 19,642,655
19642655

Additions

Reductions

4,500,000 874,226
727,385,000

(1,297,947) (591,388)
(386,330,523) (350,385,000)

3000000 735759226

1201601
s 17386250181

Earned and Utilized INetl
10,207,295
10207295

Balance June 30 189,303,709 115,197,979 1,241,803 0
4,047,250,000 15,505
2979840 $ 4355988836

B63

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 11. Long-Term Debt (continued)
Significant Discretely Presented Component Units
Governmental Fund Types
Long-term Operating Debt. Long-term operating debt has been issued by the Georgia Student Finance Authority. This debt consists offmancing agreements with the Student Loan Marketing Association and a multiple disbursement revolving note with Trust Company Bank with outstanding balances at June 30,1995, of$8,763,565 and $11,556,671, respectively.

Purpose
Georgia Student Finance Authority

Interest Rates
Varies Based on
U.S. Treasury Bill Rates

Amount $ 20,320.236

Defeased Debt. At June 30, 1995, $8,215,000 of outstanding Georgia Education Authority (Schools) revenue bonds (including prior year's defeasances) are considered defeased.
Proprietary Fund Types
Revenue Bonds. Revenue bonds have been issued by the significant discretely presented component units listed below. Income derived from acquired or constructed assets is pledged to fund the debt service requirements of these issues. Significant discretely presented component unit revenue bonds outstanding, net of unamortized discounts, of $745,834,642 and $199,465,148 at the Georgia Housing and Finance Authority and the Geo. L. Smith II Georgia World Congress Center Authority, respectively, at June 30, 1995, are as follows:

Long-term operating debt requirements to maturity are as follows:

Fiscal Year Ending June 30

Georgia Student Finance Authority

Principal

Interest

Total

1996 1997 1998

$ 11,556,671 $

$ 11,556,671

8.763.565 - -

8,763,565

$ 20.320.236 $ -

$ 20,320,236

Interestvaries basedon U.S. TreasuryBill rates and thereforeis not availablefor this schedule.

B -64

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 11. Long-Term Debt (continued)
Purpose Georgia Housing and Finance Authority
- Financing the Purchase of Single Family Mortgage Loans for Eligible Persons and Families of Low and Moderate Income within the State of Georgia
- Financing the Purchase of Hospital Equipment and Facilities by Eligible Hospitals
Geo. L. Smith II Georgia World Congress Center Authority - Construction of the Georgia Dome Stadium
Revenue bond debt service requirements to maturity are as follows:

Interest Rates 2.95% - 9.50% 6.45% -7.875%

Amount
$ 735,694,086 $ 10,140,556 $ 199,465,148

Georgia Housing and Finance Authority

Fiscal Year Ending June 30

Principal

Interest

Total

1996

$

6,490,000

$ 47,667,000

$

54,157,000

1997

9,615,000

46,333,000

55,948,000

1998

9,945,000

45,743,000

55,688,000

1999

10,575,000

45,107,000

55,682,000

2000

11,250,000

44,412,000

55,662,000

Thereafter

870,673,000

608,490,000

1,479,163,000

Unamortized Discount

(1,809,294)

1,809,294

Future Accretion of Capital Appreciation Bonds

<I81 044,620)

181.044,620

$ 735,694,086

$ 1.020,605,914

$ 1.756.300,000

Various series of bonds issued under Resolution 1 and 3 include capital appreciation bonds which require no payments of principal or interest until maturity, Capital appreciation bonds accrete to their maturity values at effective yields ranging from 7.10% to 11.25%.

B - 65

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 11. Long-Term Debt (continued)
In addition to the above listed revenue bonds, the Georgia Housing and Finance Authority maintains revenue bonds originally issued by the Hospital Financing Authority. The balance at June 30, 1995, was $10,140,556, net of unamortized discounts (net of premiums) of$17,443. The bonds bear interest at an adjustable daily rate with interest

payable on a monthly basis. The interest rate basis is subject to change, at the election of the Authority, to a weekly, monthly, semiannual, or fixed rate. The bond indenture limits the interest rate on the bonds to 20% per annum. The bonds are limited obligations of the Authority, repayable solely from revenues provided from loans and other specific property pledged under the bond debenture, and are not an obligation of the State of Georgia or any political subdivision thereof.

Geo. L. Smith II Georgia World Congress Center Authority

Fiscal Year Ending June 30

Principal

Interest

1996

$

750,000

$

15,443,015

$

1997

1,500,000

15,368,952

1998

3,150,000

15,234,703

1999

3,485,000

15,042,440

2000

3,745,000

14,813,449

Thereafter

187,370,000

200,073,074

Unamortized Discount

(534.852)

534,852

$

199.465,148

$

276,510.485

$

Total 16,193,015 16,868,952 18,384,703 18,527,440 18,558,449
387,443,074
475.975,633

Defeased Debt. At June 30, 1995, $17,390,000 of outstanding Georgia Highway Authority revenue bonds (including prior years' defeasances) are considered defeased.

B - 66

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 12. Interfund Balances
Interfund assets and liabilities at June 30, 1995, consist of the following:
Due From/To Other Funds:

Receivable Fund General Fund
Internal Service Funds Internal Service Funds Internal Service Funds Internal Service Funds Internal Service Funds
Internal Service Funds
Internal Service Funds
Proprietary Fund Types - Discretely Presented Component Units
Proprietary Fund Types - Discretely Presented Component Units Total

Payable Fund Proprietary Fund Types - Discretely
Presented Component Units General Fund Special Revenue Fund Pension Trust Funds College and University Funds Governmental Fund Types - Discretely
Presented Component Units Proprietary Fund Types - Discretely
Presented Component Units Fiduciary Fund Types - Discretely Presented Component Units
Capital Projects Funds
Internal Service Funds

Due From

$

8,525

21,433,248

12,122

3,766,782

6,288,946

155,191

52,709

31,158

36,483

DueTo

$

8,525

21,433,248

12,122

3,766,782

6,288,946

155,191

52,709

31,158

36,483

$ 31.785.165

$ 31,785,165

Advances Fromffo Other Funds:

Receivable Fund General Fund General Fund
Total

Payable Fund
Agency Funds
Proprietary Fund Types - Discretely Presented Component Units

Advance To

$

6,925

Advance From

$

6,925

268750 $ 275,675

268,750 $ 275,675

B - 67

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 13. Contributed Capital
During the year, contributed capital increased by the following amounts:
Primary Government

Source General Obligation Bond Proceeds/
Fixed Assets Contributed by Primary Government Fixed Assets Contributed by Other Sources
Total Additions Contributed Capital July I, 1994 Contributed Capital June 30, 1995

Internal Service Funds

Department of Administrative
Services

Georgia Building Authority (Regular)

Georgia Correctional Industries Administration

Total

$ 352,465 $ 1,827,857 $

$ 2,180,322

4,577.000

4,577,000

$ 352,465 42,086.474
$ 42.438,939

$ 6,404,857 208,139,272
$ 214,544.129

$

$ 6,757,322

1.309,948 251 535,694

$ 1.309,948 $ 258.293,016

B - 68

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
June 30, 1995
Note 13. Contributed Capital (continued)
Significant Discretely Presented Component Units
Proprietary Fund Types

Source General Obligation Bond Proceeds/Capital Outlay Contributed by Primary Government Transfer of Equity in State Revolving Loan Fund from Primary Government (Beginning Balance) Contributions from Federal Government Contributions from Other Sources General Obligation Bond Proceeds/Capital Outlay Returned to Primary Government Total Additions (Deletions) Contributed Capital July I, 1994 Contributed Capital June 30, 1995

Contributed Capital/Residual Equity Transfers /Transfer of Equity for the fiscal year ended June 30, 1995, are as follows:

General Fund

Receiving Fund

Capital Projects Funds
Internal Service Funds
Proprietary Fund Types - Discretely Presented Component Units
Proprietary Fund Types - Discretely Presented Component Units

Contributing Fund Proprietary Fund Types - Discretely Presented Component Units Debt Service Funds Capital Projects Funds
General Fund
Capital Projects Funds

Internal Service Funds
Proprietary Fund Types - Discretely Presented Component Units

Other Sources Other Sources

Received
$ 11,195,450 12,824
2,180,322
274,138,989
31812.385 $ 319,339,970
4,577,000
97,699295 $ 421,616,265

Contributed $ 11,195,450 12,824 2,180,322 274,138,989 31,812,385 $ 319,339,970
$ 319,339,970

B -69

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 14. Contingencies
Amounts received or receivable from grantor agencies are subject to audit and review by grantor agencies, principally the Federal government. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The State believes that such disallowances, if any, will be immaterial to its overall fmancial position.
The State is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine governmental operations. The ultimate disposition of these proceedings is not presently determinable. However, the ultimate disposition of these proceedings should not have a material adverse effect on the fmancial condition of the State, with the following exceptions:
Primary Government
Estimated unpaid reported claims for the Self-Insurance Funds administered by the Department of Administrative Services were approximately $168,700,000. Actuarial data reflecting claims incurred but not reported was not available atJune 30, 1995.
On December 6, 1994, the U. S. Supreme Court reversed the Georgia Supreme Court decision regarding federal retirees' entitlements to a refund of State taxes paid on federal retirement pension benefits for tax years before 1989. On February 1, 1995, the Governor signed H.B. 90, which provides for the payment of refunds to federal retirees who timely file claims for any of the tax years 1985 through 1988, inclusive. The total amount payable is estimated at approximately $114,500,000, and this amount has been included within the State's general long-term debt account group. Payments will be made in four roughly equal annual installments beginning on or before October 15, 1995. Based on this legislation it is anticipated that there will be no further litigation involving this matter.
Three suits (two for refund and one for declaratory and injunctive relief) have been filed against the State of Georgia by out-of-state producers of alcoholic beverages. The first suit seeks $96,000,000 in refunds of alcohol import taxes imposed under OCGA Section 3-4-60. These claims constitute 99% of all such taxes paid during the three years preceding these claims. In addition, the claimants have filed a second suit for refund of alcohol import taxes in the amount of $23,000,000 applicable to subsequent

periods. The two refund cases are still pending in the trial court. The declaratory/injunctive relief case was dismissed by the District Court. The Eleventh Circuit Court of Appeals affirmed dismissal, and plaintiffs have filed a petition for rehearing which is pending.
Litigation involving local school boards claim that the State should fmance a major portion ofthe cost of desegregation programs. The Board of Public Education for Savannah/Chatham County originally requested restitution in the amount of $30,000,000, but the Federal District Court set forth a formula that would require a State payment of approximately $8,900,000 computed through June 30, 1994. Plaintiffs, dissatisfied with the apportionment of desegregation costs between State and county, and an adverse ruling on the State funding formula for transportation costs, have appealed to the Eleventh Circuit Court of Appeals. The State has filed a responsive crossappeal on the ground that there is no basis for any liability. Subsequently, the parties agreed to a settlement, which they have submitted to the Court for approval. The proposed settlement calls for the State to pay the amount awarded to the plaintiff and to offer an option regarding future funding methodology for pupil transportation. Because interest was accruing under the terms of the settlement, in March 1995, the State paid $8,925,000 to the plaintiff in partial satisfaction of the settlement agreement. The fmal settlement figure has yet to be calculated, due to costs which accrued during the pendency of the settlement proposal. those cost calculations will be fmalized in the next several months but are not expected to exceed a total of $10,000,000, including the money already paid. DeKalb County has filed a similar complaint. The plaintiffs sought approximately $67,500,000 in restitution. The Federal District Court ruled that the State's funding formula for pupil transportation was contrary to State law. This ruling would require State payment of a funding entitlement in the amount of approximately $34,000,000 computed through June 30, 1994. Motions to reconsider and amend the Court's judgement were filed by both parties. The Court granted the State's motion, in part, which reduced the required State payment to approximately $28,000,000. Notices of appeal to the Eleventh Circuit Court of Appeals have been filed. Five other school districts could file similar claims.
During fiscal year 1993, a lawsuit arose challenging the constitutionality of Georgia's motor vehicle transfer fee ("impact fee") provided by OCGA Section 40-3-21.1. The lawsuit asserts that the fee violates the commerce clause, due process, equal protection and immunities provisions of

B -70

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 14. Contingencies (continued)
the U. S. Constitution. The action seeks to prohibit the State from further collections and to require the State to return to plaintiff, and those similarly situated, all fees previously collected. From May of 1992 to June 7, 1995, the State collected approximately $24,170,000. All amounts collected after June 7, 1995, have been paid into an escrow account. As of February 12, 1996, the escrow account contained approximately $3,800,000. Pursuant to the General Assembly's repeal of OCGA Section 40-3-21.1, effective February 9,1996, no further collections will occur. All amounts collected before the repeal will be added to the escrow account.
On September 1, 1994, a civil action case was filed challenging the freeze on salary increases during fiscal years 1992 through 1995 for classified employees of the State of Georgia. Presently pending before the court are the parties' cross motions for summary judgement. The trial court granted the State's motion to dismiss and for summary judgment, which completely resolved the case in the State's favor. Plaintiffs have filed a notice of appeal to the Georgia Supreme Court.

Significant Discretely Presented Component Units
Proprietary Fund Types
The Federal Government, through the Guaranteed Student Loan Programs of the U.S. Department of Education, fully reinsured loans guaranteed through September 30, 1993, until the Corporation's rate of annual losses (defaults) exceeded five percent (5%). In the event of future adverse loss experience, the Corporation could be liable for up to (1) twenty percent (20%) ofthe outstanding balance of loans in repayment status at the beginning of each year which were disbursed prior to October 1, 1993, and (2) twenty two percent (22%) of the outstanding balance of loans in repayment status at the beginning of each year which were disbursed on or after October 1, 1993.

B -71

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 15. Subsequent Events
Primary Government
The State issued General Obligation Bonds in the amounts of $303,215,000 on July 1, 1995 (Series 1995 C), and $227,285,000 on September 1, 1995 (Series 1995 D). Proceeds from these bonds will be used for the purpose of financing various projects.
Note 16. Deferred Compensation Plan
The State of Georgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. This plan is administered by a third party. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participants' rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account of each participant. In the equity funds, the market value may be either greater or less than the participants' contributions.

It is the opinion of the Attorney General that the State has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. It is unlikely that the State will use the assets of the plan to satisfy the claims of general creditors in the future.
Market values, which approximate cost, of investments at June 30, 1995, by plan type are as follows:

Guaranteed InvestmentContracts Federal Portfolio
TheVanguard Group of Investment Companies Index Trust 500 Portfolio The Vanguard Groupof InvestmentCompanies Magellan Fund
FidelityInstitutional Retirement ServicesCompany Over-The-Counter Portfolio
FidelityInstitutional Retirement ServicesCompany PrimePortfolio
The Vanguard Groupof InvestmentCompanies UnitedInternational Growth Fund
Waddell and Reed Asset Management Company WellesleyIncomeFund
TheVanguard Group of Investment Companies Windsor II The Vanguard Group of Investment Companies
Participants Accounts Reservefor Administration of Plan

$ 110,798,565 94,409
15,684,374 37,977,499 10,890,819
2,874,962 3,270,398 17,805,542 9666495 $ 209 063063 $ 204,603,986 4459077 $ 209 063063

8 -72

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems
Primary Government
Georgia Defined Contribution Plan
Plan Description
Georgia Defined Contribution Plan ("GDCP") is a singleemployer defined contribution plan established by the Georgia General Assembly in July 1993 for the purpose of providing retirement allowances for State employees who are not members of a public retirement or pension system. GDCP is administered by the Employees' Retirement System Board of Trustees.
Membership As of June 30, 1995, membership data related to GDCP is as follows:

Active Plan Participants Inactive

37,064 30236 67.300

Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $3,500 credit to his/her account, the Board has the option of requiring a lump sum distribution to the member. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings will be credited to each member's account as adopted by the Board. Upon termination of employment, the amount of the member's account is refundable upon request by the member.

District Attorneys' Retirement System
Plan Description
Organization and Purpose The District Attorneys' Retirement System ("DARS") is a single-employer, defmed benefit pension plan established in 1978 by the General Assembly of Georgia for the purpose of paying retirement benefits to the district attorneys of the State of Georgia.
Membership in DARS is restricted to those individuals who have served or are serving as district attorneys within the State of Georgia. DARS is funded through a combination of employee contributions paid by or on behalf of the affected district attorneys and employer contributions paid by the Superior Courts of Georgia.
Benefits DARS provides retirement as well as death and disability benefits. All benefits vest after ten (10) years of credited service. Benefit provisions are established by statute and may be amended only by the General Assembly of the State of Georgia. A description of plan benefits follows:
A) Retirement Conditions: A member who has obtained at least ten (10) years of creditable service and who has attained the age of sixty (60) shall be eligible to retire and receive a retirement benefit. After obtaining at least ten (10) years of creditable service, a member may cease to hold office before attaining the age of sixty (60) and may begin receiving retirement benefits upon reaching age sixty (60).
B) Retirement Benefits: The accrued monthly benefit at normal retirement age or other termination of employment, except disablement, is equal to four percent (4%) of the average monthly compensation multiplied by the years of credited service if a member retires with sixteen (16) years of credited service or less. If a member retires with more than sixteen (16) years of service, the member's annual retirement benefit is computed on the basis of sixty-four percent (64%) plus one percent (1%) per year for each year served after sixteen (16) years of service of the member's total number of years of creditable service, not to exceed twenty-four (24) years.

B -73

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
C) Disability Benefits: Subject to the approval of the Board of Trustees, and after obtaining a minimum of ten (10) years of creditable service, any member, regardless of age, who becomes permanently and totally disabled to the extent that he/she is unable to perform the duties of his/her office, shall be entitled to receive a disability retirement benefit. The accrued monthly benefit in the event of such a disability retirement shall be computed in the same manner as the accrued benefit for other termination of employment except that such benefits cannot be less than fifty percent (50%) of the maximum retirement benefit based on sixteen (16) years of credited service.
Any member, regardless of age, after obtaining a minimum of four (4) years of credited service, who becomes totally and permanently disabled as a result of an act of external violence incurred in or as a result of the performance of the member's official duties, shall also be entitled to receive a disability benefit. The accrued monthly benefit in the event of such a disability retirement shall be computed in the same manner as the accrued benefit for other termination of employment except that such benefits cannot be less than fifty percent (50%) of the maximum retirement benefit based on sixteen (16) years of credited service.
D) Death Benefits: In order to receive the death benefits provided under the Plan, a participant must elect such coverage and must contribute an additional amount each month. The benefit provided by such an election is an annuity provided to the surviving spouse of the participant, for life or until remarriage, in the amount of fifty percent (50%) of the monthly benefit being paid to the member to the time of death, if retired, or fifty percent (50%) of the monthly benefit which would be payable if the member had retired on the date of death. In the event the member dies prior to the attainment of the age of sixty (60), the monthly benefit would be computed based on his/her years of credited service as of the date of death, and the death benefit would become payable immediately to the surviving spouse regardless of the member's age. In the event that death occurs as a result of an act of external violence incurred

as a result of the performance of the participant's official duties, the monthly benefit is computed as if the participant worked to age sixty (60) and retired. The additional employee contribution required for this benefit must be paid at least ten (10) years prior to death in order for the surviving spouse to receive the death benefits provided in the Plan.
Participants who do not elect to participate in this aspect of the Plan, and those who die before they have paid the additional employee contribution required for this benefit for a minimum of ten (10) years, receive no death benefits. Survivors of the deceased member are entitled to the return of prior employee contributions plus interest at the rate offour percent (4%) per annum.
E) Vesting ofAccrued Benefits: 1) One hundred percent (100%) for normal retirement at age sixty (60) with ten (10) years of credited service.
2) One hundred percent (100%) in the event of total and permanent disability after ten (10) years of credited service, or after four (4) years of credited service if the disability should occur due to an act of external violence incurred as a result of the performance of official duties.
3) For other termination of employment, except death, the vesting percentage is equal to one hundred percent (100%) after ten (10) years of credited service.
Credited Service Credited service includes years of service after January 1, 1979, during which a participant holds office as a district attorney and makes the required contributions for the Plan, plus years of prior service through December 31, 1978, if any, which were transferred from the Trial Judges and Solicitors Retirement Fund. Credited service may not exceed sixteen (16) years.
Funding Requirements Member contribution provisions are established by statute and may be amended only by the General Assembly of the State ofGeorgia. Employer contributions are established by the Board of Trustees ofDARS based on minimum annual employer contributions established by statute.

B -74

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
A) Members' Contributions: 1) Members' contributions are calculated as seven and one-half percent (7.5%) of the salary paid by the State of Georgia. Of this amount, the State of Georgia contributes five percent (5%) less $7 monthly on behalf of each participant. The participant is responsible for the remainder of the required member contributions.
2) Each participant who elects to be covered by the death benefit provision of the Plan must contribute. an additional two and one-half percent (2.5%) of his/her salary paid by the State of Georgia to the Plan.
3) If a participant leaves covered employment or dies before ten (10) years of credited service, accumulated contributions and interest are refunded to the participant or designated beneficiary.
B) State of Georgia Contributions: The employer's contribution is currently calculated as five percent (5%) of the salaries paid by the State of Georgia.
Current Membership The following analysis compares the membership of DARS at June 30, 1995, to that of the prior year:

Number Receiving Benefits for Retirement and Terminated Employees Entitled to Benefits but Not Yet Receiving Them

June 30, June 30,
J22L 1994

7

6

Number of Active Members Vested Nonvested

29 --1Q
49

23
~ 51

Basis of Accounting DARS prepares its fmancial statements on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are: recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.
Generally accepted accounting principles applicable to retirement funds require that the actuarial present value of credited projected benefits be computed at the balance sheet date and reflected within the appropriate fmancial statements. This information is not presented within the fmancial statements ofDARS at June 30, 1995, as it is the policy of the System to prepare its fmancial statements on a basis of accounting other than generally accepted accounting principles.
Funding Status and Progress
Pension Benefit Obligation Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards requires the use of a standardized measure of the pension obligation in order to help users assess funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems. The standardized pension obligation measure is the actuarial present value of credited projected benefits, which is defmed as the present value of benefits estimated to be payable in the future as a result of employee service to date, computed by attributing an equal benefit amount (including the effects of both projected salary increases and any step-rate benefits) to each year of credited and expected future employee service, using assumptions that reflect the best judgement of future events affecting the actuarial present value. GASB further requires the use of the term pension benefit obligation when referring to the standardized measure. The standardized measure is independent of the actuarial funding method, if any, used to determine contributions to the affected public employees retirement system.
In accordance with policies prescribed or permitted by statutes of the State of Georgia, DARS does not calculate the pension obligation in the manner prescribed by GASB. The actuary engaged by DARS utilized the aggregate actuarial cost method to calculate the actuarial present value

B -75

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1995
Note 17. Retirement Systems (continued)
of accumulated plan benefits at the valuation date of July 1, 1993. The aggregate actuarial cost method computes each year's normal cost as a level percentage of covered compensation. Significant assumptions and valuation results are shown below:

D) Disability Rates: The disability assumptions have been based upon the 1965 Railroad Retirement Board Totally Disabled Life Mortality Table.
E) Retirement Age: Age at normal retirement.
F) Termination Rates: The rates of turnover from causes other than disability or death for included employees are shown in the table below for sample ages:

Valuation Results:
Present Value of Benefits
Active Members
Pensioners, Future Survivors and Beneficiaries
Fonner Members Eligible for Deferred Vested Benefits
Total
Valuation Assets (Market Value)
Unfunded Actuarial Present Value of Accumulated Plan Benefits

$14,360,392
1,625,239 19.454
$16,005,085 13,958683
$ 2,046.402

Percentage

~

Male

Female

30

3.702%

4.895%

35

2.349%

3.692%

40

1.128%

2.319%

45

.265%

1.038%

50

.000%

.065%

55

.000%

.000%

60

.000%

.000%

Actuarial Assumptions The most recent actuarial valuation of the Retirement System was performed by the consulting actuary engaged by the DARS using census data as of July I, 1993. Significant actuarial assumptions used include:
A) Interest Rate: All cost estimates have been based on an interest rate of seven and one-half percent (7.5%) per annum. This rate serves as an estimate of the average yield which the assets of the Retirement System may reasonably be expected to earn over an extended period.
B) Valuation ofAssets: Market value.
C) Mortality Rates: The 1971 Group Annuity Mortality Tables for males with a five (5) year setback for females.

G) Contribution Levels: It has been assumed that all contribution levels will increase at an annual rate of five and one-half percent (5.5%).
Contributions Required and Contributions Made
Funding Policy Minimum annual employer contribution requirements are set forth in OCGA Section 47-20-10. This statute further prohibits any action to grant a benefit increase until such time as the minimum annual contribution requirements meet or exceed legislative requirements. The actuarial valuation as of July 1, 1993, indicated that the minimum employer contribution level was being met. Member contribution requirements are set forth in OCGA Section 47-13-50.
Actual contributions for the year ended June 30, 1995, were as follows:

B -76

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)

Member Contributions Regular Reinstatement of Membership
Employer Contributions

$127,556 73,587
$526,909

Trend Information
Additional historical trend information presenting the DARS' progress in accumulating sufficient assets to pay benefits when due is presented in the DARS June 30, 1995, fmancial report which may be obtained from the DARS.
Employees' Retirement System of Georgia
Plan Description
Employees' Retirement System of Georgia ("ERS") is a single-employer, defmed benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions.
Membership As of June 30, 1995, membership data relating to ERS is as follows:

Retirees and Beneficiaries Currently Receiving Benefits
Active Plan Participants
Inactive

18,901 73,298 24,925 117,124

Benefits The benefit structure ofERS was significantly modified on July 1, 1982, Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provision in effect prior to July 1, 1982, All other members are "new plan" members subject to the modified plan provisions,
Under both the old and new plans, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless of age.
Retirement benefits paid to members are based upon the monthly average of the member's highest eight consecutive calendar quarters multiplied by the number of years of creditable service. Post-retirement cost-of-living adjustments are also made to members' benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS,
Contributions and Vesting Member contributions under the old and new plans are four percent (4%) of annual compensation up to $4,200 plus six percent (6%) of annual compensation in excess of $4,200. Under the old and new plans, the State pays member contributions in excess of one and one-quarter percent (1.25%) of annual compensation. Under the old plan, these State contributions are included in the members' accounts for refund purposes. The State is required to contribute at a specified percentage of active member payroll determined armually by actuarial valuation.
Members become vested after 10 years of creditable service, Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member, However, if an otherwise vested member terminates and withdraws his/her contributions, the member forfeits all rights to retirement benefits,
The employer contributions are projected to liquidate the unfunded actuarial accrued liability within 20 years based upon the actuarial valuation at June 30, 1994,

B -77

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
Funding Status and Progress
Pension Benefit Obligation Presented below is the pension benefit obligation for ERS. The amount of the pension benefit obligation is based on a standardized measurement established by Section POO of the GASB Codification of Governmental Accounting and Financial Reporting Standards that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of member services performed to date and is adjusted for the effects ofprojected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of the financial statements to (a) assess the System's funding status on a going-concern basis, (b) assess progress made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons among similar retirement systems.
Because the standardized measure is used only for disclosure purposes by the System, the measurement is independent ofthe actuarial computation made to determine contributions to the System. The actuarial funding method used to determine contributions to the System is explained under the next heading, Contributions Required and Contributions Made.
A variety of significant actuarial assumptions are used to determine the standardized measure of the pension benefit obligation; these assumptions are summarized below.
Significant actuarial assumptions used to calculate the ERS pension benefit obligation include the following:
A) The present value of future pension benefits paid was computed using a discounted rate of seven and one-half percent (7.5%). This rate is also the same rate assumed to be earned on investments in the plan in future years.
B) Future pension payments reflect the following assumed salary increases as a result of inflation and merit increases:

~ 20 25 30 35 40 to 65

Annual Rate 9.5% 8.5% 6.5% 6.0% 5.7%

C) The System has the authority to grant cost-of-living adjustments by State statute. As of June 30, 1994, costof-living adjustments have been included in the pension benefit obligation.
The standardized measure of the ERS unfunded pension benefit obligation as of June 30, 1994, (the latest annual actuarial valuation) is as follows (in thousands):

Pension Benefit Obligation:
Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits
Current Employees:
Accumulated Contributions
Employer-Financed Vested
Employer-Financed Nonvested
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Unfunded Pension Benefit Obligation

$2,227,653
648,516 1,085,190 1,206.805 $5,168,164
4.858,015 $ 310.149

Contributions Required and Contributions Made
Funding Policy ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual payroll, are sufficient to accumulate sufficient assets to pay benefits when due.

B -78

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date.
Total contributions to the System in 1995 amounted to (in thousands) $315,079 of which $258,145 and $56,934 were made by the employer and members, respectively. The contribution amounts were actuarially determined as described above and were based on an actuarial valuation as of June 30, 1994. The pension contributions represent funding for normal cost ($838,343 in 1994) and the amortization of the unfunded actuarial accrued liability ($896,073 in 1994). Contributions made by the employer and members approximate fourteen percent (14.0%) and three and one-tenth percent (3.1%), respectively, of covered payroll for the year.
Significant actuarial assumptions used to compute contribution requirements are the same as those used to compute the standardized measure of the pension obligation.
Trend Information

Net Assets Available for Benefits as a Percentage of the Pension Benefit Obligation
Unfunded Pension Benefit Obligation as a Percentage of Annual Covered Payroll
Employers Contributions to the Pension Plan as a Percentage of Annual Covered Payroll

Fiscal Year
1994 1993 1992
94.0% 91.0% 93.6% 17.6% 25.8% 17.2% 14.1% 13.9% 15.5%

Actuarial valuations for the fiscal year ended June 30, 1995, are currently in process and are not available for this analysis.
Additional historical trend information presenting the ERS' progress in accumulating sufficient assets to pay benefits when due is presented in the ERS June 30, 1995, financial report which may be obtained from the ERS.
Legislative Retirement System
Plan Description
Legislative Retirement System ("LRS") is a singleemployer defmed benefit plan established by the Georgia General Assembly in 1979 for the purpose of providing retirement allowances for all members of the General Assembly. LRS is administered by the ERS Board of Trustees.
Membership As of June 30, 1995, membership data related to LRS is as follows:

Retirees and Beneficiaries

Currently Receiving Benefits

160

Active Plan Participants

199

Inactive

331

690

Benefits A member's normal retirement is after 8 years of creditable service and attainment of age 65 or 8 years of membership service (4 legislative terms) and attainment of age 62. A member may retire early and elect to receive a monthly retirement benefit after completion of 8 years of membership service and attainment of age 60; however, the retirement benefit is reduced by five percent (5%) for each year the member is under age 62.
Upon retirement, the member will receive a monthly service retirement allowance of $28 multiplied by the number of

B -79

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
years of creditable service reduced by age reduction factors, if applicable. Death, disability, and spousal benefits are also available through the plan.
Contributions and Vesting Member contributions are eight and one-halfpercent (8.5%) of annual salary. The State pays member contributions in excess of four percent (4%) of annual compensation. Employer contributions are actuarially determined and approved and certified by the Board.
Members become vested after 8 years of creditable service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws hislher member contributions, the member forfeits all rights to retirement benefits.
Based on the June 30, 1993, actuarial valuation ofLRS, the employer contributions are projected to liquidate the unfunded actuarial accrued liability within 20 years.
Funding Status and Progress
Pension Benefit Obligation The pension benefit obligation for LRS is summarized below. The amount of the pension benefit obligation is based on a standardized measurement established by Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of member services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of the financial statements to (a) assess the System's funding status on a going-concern basis, (b) assess progress made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons among similar retirement systems.
Because the standardized measure is used only for disclosure purposes by the System, the measurement is

independent ofthe actuarial computation made to determine contributions to the System. The actuarial funding method used to determine contributions to the System is explained under the next heading, Contributions Required and Contributions Made.
A variety of significant actuarial assumptions are used to determine the standardized measure of the pension benefit obligation; these assumptions are summarized below.
Significant actuarial assumptions used to calculate the LRS pension benefit obligation include the following:
A) A discount rate of seven and one-half percent (7.5%) for the present value of future pension benefits paid.
B) A seven and one-half percent (7.5%) rate of return on investments in the plan in future years.
The standardized measure of the LRS unfunded pension benefit obligation as of June 30, 1993, (the latest actuarial valuation; present Board policy requires a biennial valuation) is as follows (in thousands):

Pension Benefit Obligation:
Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits
Current Employees:
Accumulated Contributions
Employer-Financed Vested
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Unfunded Pension Benefit Obligation

$ 8,843
1,321
$12,389 11.140
$ 1,249

Contributions Required and Contributions Made
Funding Policy Employer and member contributions to the System are determined on an actuarial basis using the unit credit actuarial cost method. Normal cost is funded on a current

B - 80

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
basis and is calculated on a level dollar basis. The accrued liability contribution has been established as the level annual amount which will be sufficient to amortize the unfunded actuarial accrued liability within approximately 20 years following the valuation date.
Total contributions to the System in 1995 amounted to (in thousands) $399 ofwhich $196 and $203 were made by the employer and members, respectively. The contribution amounts were actuarially determined as described above and were based on an actuarial valuation as of June 30, 1993. The pension contributions represent funding for normal cost ($1,043 in 1993) and the amortization of the unfunded actuarial accrued liability ($1,249 in 1993). Contributions made by the employer and members approximate eight and nine tenths percent (8.9%) and nine and three tenths percent (9.3%) of covered payroll, respectively.
Significant actuarial assumptions used to compute contribution requirements are the same as those used to compute the standardized measure of the pension obligation.
Trend Information

Net Assets Available for Benefits as a Percentage of the Pension Benefit Obligation
Unfunded Pension Benefit Obligation as a Percentage of Annual Covered Payroll
Employers Contributions to the Pension Plan as a Percentage of Annual Covered Payroll

Fiscal Year

1993 1991

1989

89.9% 94.3% 103.1%

61.9% 26.1% (10.9%)

6.1%

6.3%

1.3%

Actuarial valuations for the fiscal year ended June 30,1995, are currently in process and are not available for this analysis (actuarial valuations are performed biennially).
Additional historical trend information presenting the LRS' progress in accumulating sufficient assets to pay benefits when due is presented in the LRS June 30, 1995, fmancial report which may be obtained from the LRS.
Superior Court Judges Retirement System
Plan Description
Organization and Purpose The Superior Court Judges Retirement System ("SCJRS") is a single-employer, defmed benefit pension plan established in 1976 by the General Assembly of Georgia for the purpose of paying retirement benefits to the Superior Court Judges of the State of Georgia.
Membership in SCJRS is restricted to those individuals who have served or are serving as judges of the superior courts. SCJRS is funded through a combination of employee contributions paid by or on behalf of the affected superior court judges and employer contributions paid by the Superior Courts of Georgia.
Benefits SCJRS provides retirement as well as death and disability benefits. All benefits vest after ten (10) years of credited service. Benefit provisions are established by statute and may be amended only by the General Assembly of the State of Georgia. A description of plan benefits follows:
A) Retirement Conditions: A member who has obtained at least sixteen (16) years of creditable service and who has attained the age of sixty-five (65) shall be eligible to retire and receive a normal retirement benefit. A member who has obtained at least ten (10) years of creditable service and who has attained the age of sixty (60) shall be eligible to retire and receive a reduced early retirement benefit.
B) Retirement Benefits: I) The accrued monthly benefit for participants with less than sixteen (16) years of credited service as of November I, 1982, and for participants entering the

B - 81

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
Retirement System after November I, 1982, is equal to two-thirds (2/3) of the monthly salary being paid to the participant by the State of Georgia at the time of actual retirement.
2) The accrued monthly benefit for other participants is equal to two-thirds (2/3) of the monthly salary being paid to the participant by the State of Georgia at the completion of sixteen (16) years of credited service. Such participants may elect to utilize the salary at actual retirement as a basis for calculation of monthly retirement benefits by paying the required employee contributions for years of service in excess of sixteen (16) years of credited service plus interest accrued at the rate of six percent (6%) per annum.
3) The accrued monthly benefit at early retirement age or other termination of employment, except disability retirement, is equal to a pro rata portion, based on credited service not in excess of sixteen (16) years, of the monthly benefit at normal retirement age. A reduction of one quarter of one percent (.25%) is applied for each month of service less than sixteen (16) years, or for each month prior to the attainment of age sixty-five (65), whichever is greater, by which the benefit commencement date precedes normal retirement age.
For participants in the Retirement System at November I, 1982, the accrued monthly benefit at early retirement age or other termination of employment, except disability retirement, is equal to a pro rata portion, based on credited service not in excess of sixteen (16) years, of the monthly benefit at normal retirement age, but such benefit cannot exceed seventy-five percent (75%) of the projected normal retirement benefit. Such participants receive the larger of the differing calculations.
C) Disability Benefits: The accrued monthly benefit in the event of total and permanent disability is equal to fifty percent (50%) of the projected normal retirement benefit. If the participant is eligible for early retirement

benefits at the time of disablement, and such benefits would exceed the benefits provided by the disability provisions of the Plan, then the larger of the two benefits would be paid.
D) Death Benefits: In order to receive the death benefits provided under the Plan, a participant must elect such coverage and must contribute an additional amount each month. The benefit provided by such an election is an annuity provided to the surviving spouse of the participant, for life or until remarriage, in the amount of fifty percent (50%) of the monthly benefit being paid to the member at the time of death, if retired, or fifty percent (50%) of the monthly benefit which would be payable if the member had retired on the date of death. In the event the member dies prior to the attainment of the age of sixty (60), the monthly benefit would be computed based on his/her years of credited service as of the date of death, and the death benefit would become payable immediately to the surviving spouse regardless of the member's age, The additional employee contributions required for this benefit must be paid at least ten (10) years prior to death in order for the surviving spouse to receive the death benefits provided in the Plan. Participants who do not elect to participate in this aspect of the Plan, and those who die before they have paid the additional employee contribution required for this benefit for a minimum of ten (10) years, receive no death benefits. Survivors of the deceased member are entitled to the return of prior employee contributions plus interest at the rate of six percent (6%) per annum.
A participant may elect to extend coverage ofthe death benefit provided under the Plan by paying an additional employee contribution. The benefit provided by such an election is equal to the benefit described above, but is payable for the life of the spouse, without regard to any subsequent remarriage. The additional employee contribution required for this benefit must be paid for at least ten (10) years prior to death in order for the participant's spouse to receive the death benefit.
Certain participants who are covered by other retirement systems may elect to be covered by the death benefits of SCJRS. Such participants must contribute an additional two and one-half percent (2.5%) of the monthly salary paid to them by the State of Georgia. The benefit provided by such an election is an annuity provided to the surviving spouse of the

B - 82

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
participant, for life or until remarriage, in the amount of fifty percent (50%) of the monthly benefit due to the participant from the other retirement system at the time of death.
E) Vesting ofAccrued Benefits: 1) One hundred percent (100%) for normal retirement at age sixty-five (65) with sixteen (16) years of credited service.
2) One hundred percent (100%) for early retirement at age sixty (60) with ten (10) years of credited service.
3) One hundred percent (100%) in the event of total and permanent disability after four (4) years of credited service.
4) For other termination of employment, except death, the vesting percentage is one hundred percent (100%) after ten (10) years of credited service.
Credited Service Credited service includes years of service after December 31, 1976, during which a participant holds office as a Superior Court Judge and makes the required contributions for the Plan, plus years of prior service through December 3I, 1976, if any, which were transferred from the Trial Judges and Solicitors Retirement Fund. Credited service may not exceed sixteen (16) years.
Funding Requirements Member contribution provisions are established by statute and may be amended only by the General Assembly of the State ofGeorgia. Employer contributions are established by the Board of Trustees of SCJRS based on minimum annual employer contributions established by statute.
A) Members' Contributions: I) Members' contributions are calculated as seven and one-half percent (7.5%) of the salary paid by the State of Georgia. Of this amount, the State of

Georgia contributes five percent (5%) less $7 monthly on behalf of each participant. The participant is responsible for the remainder of the required member contributions.
2) Each participant who elects to be covered by the death benefit provision of the Plan must contribute an additional two and one-half percent (2.5%) of his/her salary paid by the State of Georgia to the Plan. Each participant may elect a death benefit payable for the surviving spouse's lifetime rather than for life or until remarriage. If this option is selected, the participant must contribute an additional one-quarter of one percent (.25%) of the salary paid by the State of Georgia.
3) Each participant who is covered by other retirement plans and who elects to be covered by the death benefit provision of the Plan must contribute an additional two and one-half percent (2.5%) of his/her salary paid by the State of Georgia to the Plan. Each participant may elect a death benefit payable for the surviving spouse's lifetime rather than for life or until remarriage. If this option is selected, the participant must contribute an additional one-quarter of one percent (.25%) of the salary paid by the State of Georgia.
4) Participants may elect to contribute an additional one percent (1%) of their salary to the Retirement System to become eligible for post retirement cost of living benefit adjustments as provided in OCGA 47-9-76.
5) If a participant leaves covered employment or dies before ten (10) years of credited service, accumulated contributions plus interest are refunded to the participant or designated beneficiary.
B) State of Georgia Contributions: The employer's contribution is currently calculated as eight percent (8%) of the salaries paid by the State of Georgia.
Current Membership The following analysis compares the membership of SCJRS at June 30, 1995, to that of the prior year:

B - 83

STATE OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)

Number Receiving Benefits for Retirement and Terminated Employees Entitled to Benefits but Not Yet Receiving Them

June 30, June 30,
--illL 1994

43

37

Number of Active Members Vested Nonvested

88 ~
= 136

77 ------.QQ
137

Basis of Accounting SCJRS prepares its fmancial statements on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. This basis of accounting is defmed as that method of accounting in which certain revenue and related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.
Generally accepted accounting principles applicable to retirement funds require that the actuarial present value of credited projected benefits be computed at the balance sheet date and reflected within the appropriate fmancial statements. This information is not presented within the financial statements at June 30, 1995, as it is the policy of SCJRS to prepare its financial statements on a basis of accounting other than generally accepted accounting principles.
Funding Status and Progress
Pension Benefit Obligation Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards requires the use of a standardized measure of the pension obligation in order to help users assess funding status on a going-concern

basis, assess progress made in accumulation of sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems. The standardized pension obligation measure is the actuarial present value of credited projected benefits, which is defmed as the present value of benefits estimated to be payable in the future as a result of employee service to date, computed by attributing an equal benefit amount (including the effects of both projected salary increases and any steprate benefits) to each year of credited and expected future events affecting the actuarial present value. GASB further requires the use of the term pension benefit obligation when referring to the standardized measure. The standardized measure is independent of the actuarial funding method, if any, used to determine contributions to the affected public employees retirement system.
In accordance with policies prescribed or permitted by statutes of the State of Georgia, SCJRS does not calculate the pension obligation in the manner prescribed by the GASB. The actuary engaged by SCJRS utilized the aggregate actuarial cost method to calculate the actuarial present value of accumulated plan benefits at the valuation date of July 1, 1993. The aggregate actuarial cost method computes each year's normal cost as a level percentage of covered compensation. Significant assumptions and valuation results are shown below:

Valuation Results:
Actuarial Present Value of Accumulated Plan Benefits
Active Members
Pensioners, Future Survivors and Beneficiaries
Former Members Eligible for Deferred Vested Benefits
Total
Valuation Assets (Market Value)
Unfunded Actuarial Present Value of Accumulated Plan Benefits

$44,805,584
9,267,667 90,963
$54,164,214 53.523.968
$ 640.246

Actuarial Assumptions The most recent actuarial valuation of the Retirement System was performed by the consulting actuary engaged

B - 84

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
by SCJRS using census data as of July 1, 1993. Significant actuarial assumptions used include:
A) Interest Rate: All cost estimates have been based on an interest rate of seven and one-half percent (7.5%) per annum. This rate serves as an estimate of the average yield which the assets of the Retirement System may reasonably be expected to earn over an extended period.
B) Valuation Assets: Market value reduced by the balance ofthe employee contributions for post-retirement costof-living benefit adjustments.
C) Mortality Rates: The 1971 Group Annuity Mortality Tables for males with a 5 year setback for females.
D) Disability Rates: The disability assumptions have been based upon the 1965 Railroad Retirement Board Totally Disabled Life Mortality Table.
E) Retirement Age: Age at normal retirement.
F) Termination Rates: The rates oftumover from causes other than disability or death for included employees are shown in the table below for sample ages:

Percentage

~

Male

Female

30

3.702%

4.895%

35

2.349%

3.692%

40

1.128%

2.319%

45

.265%

1.038%

50

.000%

.065%

55

.000%

.000%

60

.000%

.000%

G) Contribution Levels: It has been assumed that all contribution levels will increase at an annual rate of five and one-half percent (5.5%).
H) Cost ofLiving Adjustments: Benefits for participants covered by spouses only death benefits are assumed to increase at the rate offive and one-half percent (5.5%) per annum.
Contributions Required and Contributions Made
Funding Policy Minimum annual employer contribution requirements are set forth in OCGA Section 47-20-10. This statute further prohibits any action to grant a benefit increase until such time as the minimum annual contribution requirements meet or exceed legislative requirements. The actuarial valuation as of July 1, 1993, indicated that the minimum employer contribution level was being met. Member contribution requirements are set forth in OCGA Section 47-9-42.
Actual contributions for the year ended June 30, 1995, were as follows:

Member Contributions Regular Reinstatement of Membership Employer Contributions

$ 424,772 152,217
1.322.959 $1.899.948

Trend Information
Additional historical trend information presenting the SCJRS' progress in accumulating sufficient assets to pay benefits when due is presented in the SCJRS June 30, 1995, financial report which may be obtained from the SCJRS.

B - 85

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1995
Note 17. Retirement Systems (continued)
Trial Judges and Solicitors Retirement Fund
Plan Description
Trial Judges and Solicitors Retirement Fund ("TJSRF") is a multiple-employer cost-sharing defined benefit plan established by the Georgia General Assembly in 1968 for the purpose of providing retirement allowances for trial judges and solicitors of certain courts of Georgia, and their survivors and other beneficiaries. TJSRF is administered by the ERS Board of Trustees and three other trustees not on the ERS Board.
Membership As of June 30, 1995, membership data related to TJSRF is as follows:

Retirees and Beneficiaries

Currently Receiving Benefits

34

Active Plan Participants

149

Inactive

147

330

Benefits The normal retirement for TJSRF is age 60 with 16 years of creditable service; however, a member may retire at age 60 with a minimum of 10 years creditable service. Additionally, a member must retire at age 70 or forfeit all retirement and disability benefits. Members holding office on July 1, 1980, are exempt from this provision.
Retirement benefits paid to members are computed as four percent (4%) ofthe average annual compensation multiplied by the total years of creditable service not to exceed 16 years. The average annual compensation is the average salary of a member during the two consecutive years of creditable service producing the highest such average but excluding any salary increases exceeding five percent (5%) over the previous year during the two-year period. Death, disability and spousal benefits are also available.

Contributions and Vesting Members are required to contribute seven and one-half percent (7.5%) of their salary plus an additional two and one-half percent (2.5%) if spousal benefit is elected. Employer contributions are actuarially determined and approved and certified by the Board.
Members become vested after 10 years of creditable service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions, the member forfeits all rights to retirement benefits.
Based on the June 30, 1993, actuarial valuation, TJSRF does not have an unfunded accrued liability.
Funding Status and Progress
Pension Benefit Obligation The pension benefit for TJSRF is summarized below. The amount of the pension benefit obligation is based on a standardized measurement established by Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of member services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of the fmancial statements to (a) assess the System's funding status on a going-concern basis, (b) assess progress made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons among similar retirement systems.
Because the standardized measure is used only for disclosure purposes by the Fund, the measurement is independent of the actuarial computation made to determine contributions to the Fund. The actuarial funding method used to determine contributions to the Fund is explained under the next heading, Contributions Required and Contributions Made.
A variety of significant actuarial assumptions are used to determine the standardized measure of the pension benefit obligation; these assumptions are summarized below.

B - 86

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
Significant actuarial assumptions used to calculate the TJSRF pension benefit obligation include the following:
A) The present value of future pension benefits paid was computed using a discounted rate of seven and one-half percent (7.5%). This rate is also the rate assumed to be earned on investments in the plan in future years.
B) Salary increases are assumed to be six percent (6%) per year.
The standardized measure of the TJSRF assets in excess of the pension benefit obligation as of June 30, 1993, (the latest annual actuarial valuation; present Board policy requires a biennial valuation) is as follows (in thousands):

Total contributions to the System in 1995 amounted to (in thousands) $1,043 of which $548 and $495 were made by the employer and members, respectively. The contribution amounts were actuarially determined as described above and were based on an actuarial valuation as of June 30, 1993. The pension contributions represent funding for normal cost ($9,109 in 1993) and the amortization of the unfunded actuarial accrued surplus ($2,739 in 1993). Contributions made by the employer and members approximate nine and seven tenths percent (9.7%) and eight and eight tenths percent (8.8%), respectively, of covered payroll for the year.
Significant actuarial assumptions used to compute contribution requirements are the same as those used to compute the standardized measure of the pension obligation.
Trend Information

Pension Benefit Obligation:
Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits
Current Employees:
Accumulated Contributions
Employer-Financed Vested
Employer-Financed Nonvested
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Assets in Excess of Pension Benefit Obligation

$ 6,507
2,921 3,465 4.906 $17,799 20.063
$ 2.264

Net Assets Available for Benefits as a Percentage of the Pension Benefit Obligation
Unfunded Pension Benefit Obligation as a Percentage of Annual Covered Payroll
Employers Contributions to the Pension Plan as a Percentage of Annual Covered Payroll

Fiscal Year

1993

1991

1989

112.7% 114.6% 125.7%

(44.9%) (43.1%) (61.9%)

8.6%

7.1%

7.9%

Contributions Required and Contributions Made
Funding Policy Employer contributions to TJSRF are determined by the Board. Future contributions will be determined on an actuarial basis using the entry age actuarial cost method. Normal cost will be funded on a current basis and calculated on a level percentage basis. Based on the actuarial valuation as of June 30, 1993, there is no unfunded actuarial liability.

Actuarial valuations for the fiscal year ended June 30, 1994, are currently in process and are not available for this analysis (actuarial valuations are performed biennially).
Additional historical trend information, for the years available, presenting the TJSRF's progress in accumulating sufficient assets to pay benefits when due is presented in the TJSRF June 30, 1994, financial report which may be obtained from the TJSRF.

B - 87

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1995
Note 17. Retirement Systems (continued)
Regents Retirement Plan
Plan Description
The Regents Retirement Plan, a single-employer defmed contribution plan, is an optional retirement plan established and administered by the Board of Regents of the University System of Georgia (College and University Funds), under which it may purchase annuity contracts for the purpose of providing retirement and death benefits for eligible faculty and principal administrators.
Benefits Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts.
Contributions and Vesting Member contribution requirements are established by the Board of Trustees of the Teachers Retirement System. Employer contributions are established by statute and may be amended only by the General Assembly of the State of Georgia.
A) Members' Contributions: Members' contributions are calculated as five percent (5%) of the earnable compensation.
B) State ofGeorgia Contributions: The employer's contribution is calculated as four percent (4%) of the earnable compensation.
Amounts attributable to all plan contributions are fully vested and non-forfeitable.
Contributions Required and Contributions Made
The College and University Funds payroll for employees covered by the Regents Retirement Plan for the fiscal year ended June 30, 1995, was $228,204,204, and the total payroll of the College and University Funds was $1,288,792,363. The required contributions, which matched those actually made, were $11,466,691 by members and $9,356,736 by the employer, representing five

percent (5%) and four percent (4%) of covered payroll, respectively.
Significant Discretely Presented Component Units
Georgia Ports Authority Retirement Plan
Plan Description
The Georgia Ports Authority Retirement Plan ("Plan") is a single-employer defmed benefit plan covering all full-time employees.
Benefits The Plan provides pension benefits that are based on years of service and compensation earned during years of employment.
Contributions and Vesting Members contribute one percent (1%) oftheir earnings each month for the first $9,000 earned during the plan year and one and one-half percent (1.5%) after earnings reach $9,000. The employer's contributions are two and onequarter percent (2.25%) of the employee's first $9,000 of annual earnings for the plan year plus three and one-quarter percent (3.25%) of the employee's annual earnings for the plan year in excess of $9,000.
Members become vested after reaching age 55 or after completing five (5) or more years of service.
Funding Status and Progress
Pension Benefit Obligation Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards requires the use of a standardized measure of the pension obligation in order to help users assess funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems. The standardized pension obligation measure is the actuarial present value of credited projected benefits, which is defmed as the present value of benefits estimated to be payable in the future as a result of employee service to date, computed by attributing an equal benefit amount (including the effects of both projected salary increases and any step-rate benefits) to

B - 88

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
each year of credited and expected future employee service, using assumptions that reflect the best judgement of future events affecting the actuarial present value. GASB further requires the use of the term pension benefit obligation when referring to the standardized measure. The standardized measure is independent of the actuarial funding method, if any, used to determine contributions to the affected public employees retirement system.
The Plan's funded status at June 30, 1995, is as follows:

Actuarial Present Value of Pension Obligations: Vested Nonvested
Projected Benefit Obligation Plan Assets at Fair Value Plan Assets less than Projected Benefit
Obligation Unrecognized Net Loss Unrecognized Prior Service Cost Unrecognized Net Transition Asset
Existing atJuly 1, 1987 Prepaid Pension Cost at June 30, 1995

$ 29,051,981 235.884
$ 29.287,865 $ (35,431,235)
34.118.752
$ (1,312,483) 2,899,831 246,551
(141 156) $ 1.692.743

Contributions Required and Contributions Made
The Authority's payroll for employees covered by the Plan for the fiscal year ended June 30, 1995, was $19,233,373, and the Authority's total payroll was $26,738,445. The required contributions, which matched those actually made, were $256,370 by members and $3,357,097 by the employer, representing one and three-tenths percent (1.3%) and one and seven-tenths percent (1.7%) of covered payroll, respectively.

Teachers Retirement System of Georgia
Plan Description
The Teachers Retirement System of Georgia ("TRS") was created in 1943 by an act of the Georgia Legislature to provide retirement benefits for qualifying employees in educational service. TRS is administered as a cost-sharing multiple-employer plan as defined in Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards.
Membership All teachers in the State public schools, the University System of Georgia (except those professors and principal administrators electing to participate in an optional retirement plan), and certain other designated employees in educational-related work qualify for membership.
As of June 30, 1995, membership data related to TRS is as follows:

Retirees and Beneficiaries Currently Receiving Benefits Active Plan Participants
Vested Nonvested

35,714
67,526 102.967 206.207

Benefits A) RetirementBenefits: TRS provides service retirement,
disability retirement and survivor's benefits. A member is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55.
Normal retirement (pension) benefits paid to members are equal to two percent (2%) of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced

B - 89

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
by the lesser of one-twelfth (1112) of seven percent (7%) for each month the member is below age 60, or by seven percent (7%) for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-Iiving adjustments, based on the CPI, will be made in future years. Retirement benefits are payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
B) Death and Disability Benefits: Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability.
The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the date of death.
Contributions and Vesting TRS is funded by member contributions and employer (local boards of education and Regents of the University System) matching funds.
Contributions required by the annual actuarial valuation are as follows:

Members
Employer: Normal Unfunded Accrued Liability Expenses

6.06% 5.60%

Members become fully vested after 10 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
The employer contributions to the unfunded accrued liability will liquidate the accrued liability within a period of 20 years on the assumption that the aggregate accrued liability contribution will increase by four and one-half percent (4.5%) each year.
Funding Status and Progress
Pension Benefit Obligation Presented below is the total pension benefit obligation for TRS. The amount ofthe total pension benefit obligation is based on a standardized measurement established by Section Pe6 of the GASB Codification of Governmental Accounting and Financial Reporting Standards that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of member services performed to date and is adjusted for the effects of projected

B -90

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of the fmancial statements to (a) assess the System's funding status on a going-concern basis, (b) assess progress made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons among similar retirement systems.
Because the standardized measure is used only for disclosure purposes by TRS, the measurement is independent ofthe actuarial computation made to determine contributions to TRS. The actuarial funding method used to determine contributions to TRS is explained in the next section, Contributions Required and Contributions Made.
A variety of significant actuarial assumptions are used to determine the standardized measure of the pension benefit obligation; these assumptions are summarized below:
A) The present value of future pension payments was computed by using a discounted rate of seven and onehalf percent (7.5%). This discount rate is equal to the estimated long-term rate of return on current and future investments of the pension plan.
B) Future pension payments reflect an assumption of a range of salary increases as a result of inflation:

~

Annual Rate

20

7.00%

25

7.00%

30

7.50%

35

6.75%

40

6.25%

45

6.00%

50

5.75%

55

5.25%

60

4.75%

C) Future pension payments reflect post-retirement increases of three percent (3%); however, TRS is not obligated to make any post-retirement increases.
The standardized measure of the unfunded pension benefit obligation as of June 30, 1994, (the latest annual actuarial valuation) is as follows (in thousands):

Pension Benefit Obligation:
Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits
Active Members:
Accumulated Contributions, Including Allocated Investment Income
Employer-Financed Vested
Employer-Financed Nonvested
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Unfunded Pension Benefit Obligation

$ 6,077,733
2,746,891 3,836,047 2,653,072 $15,313,743 14.254.785 $ 1,058.958

Contributions Required and Contributions Made
Funding Policy Employer and member contributions to TRS are determined on an actuarial basis using the entry age normal actuarial cost method. Normal cost is funded on a current basis. The unfunded actuarial accrued liability is funded over a 20-year period. Periodic contributions for both normal cost and the amortization of the unfunded actuarial accrued liability are based on the level percentage of payroll method. The funding strategy for normal cost and the unfunded actuarial accrued liability should provide sufficient resources to pay member pension benefits on a timely basis.
Total contributions to TRS in 1995 amounted to (in thousands) $802,556, of which $561,443 and $241,113 were made by the employers and members, respectively. The contribution amounts were actuarially determined as described above and were based on an actuarial valuation as

B - 91

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 17. Retirement Systems (continued)
of June 30, 1994. The pension contributions consisted of $561,790 normal cost, $233,572 amortization of the unfunded actuarial accrued liability and $7,194 expenses of administering TRS. Contributions made by the employers and members approximate eleven and eight-tenths percent (11.8%) and five percent (5%), respectively, of covered payroll for the year ended June 30, 1995.
Significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standardized measure of the pension obligation.
The present value of actuarially determined unfunded accrued liability, based on unaudited data provided the actuary by TRS, was approximately $3.2 billion at June 30, 1994.

Trend In/ormation

Net Assets Available for Benefits as a Percentage of the Pension Benefit Obligation
Unfunded Pension Benefit Obligation as a Percentage of Annual Covered Payroll
Employers Contributions to the Pension Plan as a Percentage of Annual Covered Payroll

Fiscal Year 1994 1993 1992
93.1% 92.2% 90.9% 24.4% 26.5% 30.2% 11.8% 11.8% 11.8%

Actuarial valuations for the fiscal year ended June 30, 1995, are currently in process and are not available for this analysis.
Additional historical trend information, for the years available, presenting the TRS' progress in accumulating sufficient assets to pay benefits when due is presented in the TRS June 30, 1995, fmancial report which may be obtained from the TRS.

B -92

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 18. Nonmonetary Transactions
Primary Government
The State of Georgia received donated goods for its use and for distribution to other qualifying organizations outside

the State reporting entity under the following programs:

Program
Agriculture, U. S. Department of Food Distribution Program Temporary Emergency Food Assistance Program
Health and Human Services, U. S. Department of Acquired Immunodeficiency Syndrome
Childhood Immunization Grant
Preventive Health Services - Sexually Transmitted Disease Control Grants
mv Prevention Activities - Health
Department Based
Preventive Health and Health Services Block Grant
Project Grants and Cooperative Agreements for Tuberculosis Control Programs

Value of Inventory Received

Value of Inventory Reported at June 30. 1995

$

28,079,521

$

2,445,654

$

25,475

$

37,239,277

$

1,664,834

$

23,160

$

425,184

$

116,178

$

1,191,192

$ $

$

$

$

$

214,872

$

The value of donated commodities received and distributed is not reported as revenues and expenses on the combined statement of revenues, expenditures and changes in fund balances. Information is not available to determine the items used within the State and the items distributed to (or held for) other qualifying organizations outside the State reporting entity.
In addition, the Georgia Department of Administrative Services operates the Donation of Federal Surplus Personal

Property program for the purpose of distributing surplus properties made available by the General Services Administration to eligible institutions, organizations and agencies. The value of surplus property received and distributed is not reported as revenues and expenses on the combined statement of revenues, expenditures and changes in fund balances, and the inventory on hand at June 30, 1995, is not reported on the combined balance sheet. The changes in Federal surplus personal property inventory during the fiscal year ended June 30, 1995, were as follows:

B -93

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 18. Nonmonetary Transactions (continued)

Balance July I, 1994 Additions
Property Received
Deductions Property Donated and Other Distributions Balance June 30, 1995

$ 10,976,081 27,692,014
$ 38,668,095
21,870,243 $ 16,797,852

The Federal government provides food stamps to low-income households, The amount of food stamps a household receives depends on the household's size and financial circumstances, The Georgia Department of Human Resources is responsible for determining eligibility for participation in the food stamp program within the State, During the year under review, the total value offood stamps distributed as approved by the Department was $710,682,708,
Significant Discretely Presented Component Units
Governmental Fund Types
Donated support of volunteer services and other sources totaling $3,629,750 was provided to the Georgia Public Telecommunications Commission during the year ended June 30, 1995, The value of these services and other sources are not reported as revenue on the Combining Statement of Revenues, Expenditures and Changes in Fund Balances,

Note 19. Postemployment Benefits
In addition to the pension benefits described in Note 17, the State of Georgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to Title 45, Chapter 18 of the OCGA. An individual eligible for these benefits must have been a full time employee at the time of retirement of either the State of Georgia or a county social service agency and must be receiving monthly retirement benefits from either the Employees' Retirement System of Georgia or a county employees' retirement system, The State Health Benefit Plan is a public entity risk pool funded by employee and employer contributions, Employees and retirees subject to the Plan contribute amounts determined by the State Personnel Board for various health insurance plans. The various agencies of the State contribute to the health insurance fund based upon amounts recommended by the State Personnel Board and set forth in the Appropriations Act. The State Health Benefit Plan is funded on a "pay-as-you-go" basis. Expenses of the Plan include provisions for incurred but not reported claims. As of June 30, 1995, there were 45,129 employees who had retired and were receiving postretirement health care benefits through the State Health Benefit Plan. For the fiscal year ended June 30, 1995, the State recognized expenditures of $106,339,150, which was net of retiree contributions of $34,366,660.
Pursuant to the general powers conferred by OCGA Section 20-3-31, the Board of Regents of the University System of Georgia (college and university funds) has established group health and life insurance programs for regular employees of the University System. It is the policy of the Board of Regents to permit career employees of the University System eligible for retirement to continue as members of the group health and life insurance programs. Employees who are eligible for retirement under the criteria established by the Teachers Retirement System and who have at least ten years of service with the University System are eligible for these postemployment health and life insurance benefits. The University System pays the employer portion for group insurance for affected individuals. For the fiscal year ended June 30, 1995, the University System recognized expenditures of$14,834,826, which was net of participant contributions of $4,367,064.

B -94

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 20. Fund Deficits
The following organizations had deficit balances at June 30, 1995.
Governmental Fund Types - Discretely Presented Component Units
Georgia Public Telecommunications Commission - At June 30, 1995, the Commission had an unreserved, undesignated fund balance deficit of$154,71O.
Proprietary Fund Types - Discretely Presented Component Units
North Georgia Mountains Authority - At June 30, 1995, the Authority had an unreserved retained earnings deficit of $2,494,673.

Note 21. Major Discretely Presented Component Unit Condensed Financial Statements
The condensed financial statements of the major discretely presented component units of the State of Georgia reporting entity are presented below. "Major" component units, for purposes of this presentation, have been determined by giving consideration to each component units' significance relative to the other component units and the nature and significance of its relationship to the primary government. Condensed fmancial statements for all nonmajor discretely presented component units are presented in the aggregate.

B - 95

(THIS PAGE INTENTIONALLY LEFT BLANK)

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 21. Major Discretely Presented Component Unit Condensed Financial Statements (continued)

ASSETS AND OTHER DEBITS Other Assets Property, Plant and Equipment (Net) Amount to be Provided for Retirement of General Long-Term Debt
Total Assets and Other Debits
LIABILITIES Due to Primary Government Other Liabilities Bonds and Other Long-Term Liabilities Total Liabilities
EQUITY AND OTHER CREDITS Investment in Fixed Assets Fund Balances
Reserved Unreserved Total Equity and Other Credits
Total Liabilities, Equity and Other Credits

Georgia Education Authority (Schools)

Governmental Fund Types

Georgia Public Telecommunications Commission

Georgia Student Finance Authority

Total

$

509,822 $

34,120,608 $ 314,625,395 $ 349,255,825

46,161,578

4,584,619

50,746,197

7,829,765

20,320,236

28,150,001

$

509,822 $

88,111,951 $ 339,530,250 $ 428,152,023

$

$

155,191 $

$

155,191

4,128,686

253,658,596

257,787,282

7,829,765

20,320,236

28,150,001

$

0$

12,113,642 $ 273,978,832 $ 286,092,474

$

$

46,161,578 $

4,584,619 $

50,746,197

29,991,441

59,454,464

89,445,905

509,822

(154,710)

1,512,335

1,867,447

$

509,822 $

75,998,309 $

65,551,418 $

142,059,549

$

509,822 $

88,111,951 $ 339,530,250 $ 428,152,023

REVENUES

$

EXPENDITURES

Operating and Other Expenditures

$

Debt Service

Total Expenditures

$

EXCESS (DEFICIENCY) OF REVENUES

OVER (UNDER) EXPENDITURES

$

OPERATING TRANSFERS FROM PRIMARY GOVERNMENT OPERATING TRANSFERS FROM COMPONENT UNIT OTHER FINANCING SOURCES

EXCESS (DEFICIENCY) OF REVENUES AND

OTHER FINANCING SOURCES OVER

(UNDER) EXPENDITURES

$

FUND BALANCES, JULY 1

FUND BALANCES, JUNE 30

$

26,537 $

15,003,324 $

16,160,080 $

31,189,941

$

29,001,066 $

44,315,413 $

73,316,479

115,934,669

115,934,669

0$

29,001,066 $

160,250,082 $

189,251,148

26,537 $

(13,997,742) $ 44,238,315

(144,090,002) $
33,831,258 350,000
109,759,328

(158,061,207)
78,069,573 350,000
109,759,328

26,537 $ 483,285 509,822 $

30,240,573 $ (403,842)
29,836,731 $

(149,416) $ 61,116,215 60,966,799 $

30,117,694 61,195,658 91,313,352

B-97

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995

Note 21. Major Discretely Presented Component Unit Condensed Financial Statements (continued)

Proprietary Fund Types

ASSETS Due from Primary Government Other Assets Restricted Assets Property, Plant and Equipment (Net)
Total Assets

Environmental Facilities Authority

$

s

579,210,876

175,062

s

s 579,385,938

Housing and Finance Authority
s
98,744,596 753,910,474
5,289,905
s 857,944,975

Lottery Corporation
$ 64,366,000 126,857,000 4,502,000
195,725,000 s

Ports Authority
35,624,679 1,417,472
320,226,302 357,268,453

LIABIUTIES Due to Primary Government Other Liabilities Bonds and Other Long-Term Liabilities Total Liabilities

$

s 1,130

8,405 $

16,244 $

10,362

3,656,000

29,867,340

56,799,756

7,131,090

95,810,000

761,922,397

127,020,000

17,222,924

$

s 99,467,130

s 791,798,142

s 183,836,000

24,364,376

EQUITY AND OTHER CREDITS Investment in Fixed Assets Contributed Capital Retained Earnings Reserved Unreserved Fund Balances Reserved Unreserved Total Equity and Other Credits
Total Liabilities, Equity and Other Credits

s

s 175,062

384,754,095

2,001,696 76,543,680

7,716,633

8,727,642

s

s 479,918,808

s

579,385,938 $

$
19,531,048 46,615,785
s 66,146,833 s 857,944,975

s
294,000 11,595,000

231,158,466 101,745,611

s 11,889,000 s 195,725,000

332,904,077 357,268,453

OPERATING REVENUES Sales and Services Operating Grants Taxes Other Total Operating Revenues

$

s

s 7,683,831

1,378,893,000 $

75,585,735

15,363,408

$

15,363,408 $

65,331,737
s 73,015,568

1,378,893,000 $

75,585,735

OPERATING EXPENSES Depreciation Other Total Operating Expenses
OPERATING INCOME (LOSS)

$

$

s 374,444

s 3,806,000

14,004,691

6,637,703

68,736,787

878,437,984

57,256,293

s

s 6,637,703

s 69,111,231

882,243,984 $

71,260,984

s

s 8,725,705

3,904,337 $

s 496,649,016

4,324,751

NONOPERATING REVENUESIEXPENSES (NET) OPERATING TRANSFERS TOIFROM
PRIMARY GOVERNMENT (NET) COMPONENT UNIT (NET) NET INCOME (LOSS)

6,424,799

1,346,895

s

s 16,497,399

(1,287,568) 2,616,769 $

5,630,000 (500,628,016)
s 1,651,000

(1,345,109) (825,000) 2,154,642

EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FROM GOVERNMENTAL OPERATIONS AND EXPENDABLE TRUST FUNDS

(5,594,704)

197,619

FUND EQUITY, JUL Y 1 CURRENT CAPITAL CONTRIBUTIONS (NET) TRANSFER OF EQUITY INCREASE IN INVENTORIES
FUND EQUITY, JUNE 30

148,198,693 60,609,355 260,033,003

s

s 479,743,746

B -98

63,332,445
s 66,146,833

10,238,000

327,011,235 3,738,200

s 11,889,000

332,904,077

World Congress Center
Authority

All Other Discretely Presented
Proprietary Fund Types

s

$

s 36,484

41,725,126

222,874,340

58,400,460

14,823,532

229,838,550

174,346,939

$

s 329,964,136

s 412,081,295

Total
36,484 1,042,545,617
955,408,938 734,378,758
2,732,369,797

$

11,892 $

13,201 $

61,234

33,390,165

14,065,517

144,909,868

219,024,418

155,690,657

1,376,690,396

$

252,426,475 $

s 169,769,375

1,521,661,498

s

s

$

175,062

50,000,000

116,663,735

782,576,296

4,541,888 22,995,773

21,028,092 104,620,093

47,396,724 364,115,942

7,716,633

8,727,642

$

77,537,661 $

242,311,920 s 1,210,708,299

$

329,964,136 $

s 412,081,295

2,732,369,797

s

s 15,128,444

s 67,918,017

1,545,209,027

15,766,575

15,766,575

1,548,598

1,548,598

31,388,434

40,809,471

152,893,050

$

s 46,516,878

126,042,661 $ 1,715,417,250

s

8,619,308 $

4,624,144 $

31,428,587

39,168,222

101,799,106

1,152,036,095

s

47,787,530 $

106,423,250 $ 1,183,464,682

$

(1,270,652) $

19,619,411 $

531,952,568

(1,165,307)

(6,232,204)

2,024,611

3,363,415

(496,742,706)

(350,000)

(350,000)

$

(2,435,959) $

16,400,622 $

36,884,473

(5,397,085)

29,951,396 50,000,000
22,224

207,797,003 18,074,661
39,634

786,528,m 132,422,216 260,033,003
61,858

s

s 77,537,661

242,311,920 $ 1,210,533,237

B -99

STATE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS

June 30, 1995
Note 21. Major Discretely Presented Component Unit Condensed Financial Statements (continued)

ASSETS Other Assets Property, Plant and Equipment (Net)

Fiduciary Fund Types

All Other

Teachers

Discretely Presented

Retirement

Fiduciary

System

Fund Types

Total

$ 15,858,400,032 $

802,060,962 $ 16,660,460,994

469,413

469,413

Total Assets
LIABILITIES Due to Primary Government Other Liabilities Total Liabilities
EQUITY Fund Balances Reserved

$ 15,858,400,032 $

802,530,375 $ 16,660,930,407

$

31,158 $

1,270,474

$

1,301,632 $

---'---"---

$ 404,000 404,000 $

31,158 1,674,474 1',-70-.5...,..6...3_2

$ 15,857,098,400 $

802,126,375 $ 16,659,224,775

Total Liabilities and Equity

$ 15,858,400,032 $

802,530,375 $ 16,660,930,407

OPERATING REVENUES OPERATING EXPENSES OPERATING INCOME
NONOPERATING EXPENSES OPERATING TRANSFERS TOIFROM
PRIMARY GOVERNMENT (NET) NET INCOME FUND BALANCES, JULY 1 FUND BALANCES, JUNE 30

$ 2,219,160,853 $

$

620,548,885 $

$ 1,598,611,968 $

3,675,147 $ 1,602,287,115 $
14,254,811,285 $ 15,857,098,400 $
B-lOO

97,177,812 $ 2,316,338,665

42,816,406 $

663,365,291

54,361,406 $ 1,652,973,374

(41,536)

(41,536)

3,675,147

54,319,870 $ 1,656,606,985

747,806,505

15,002,617,790

802,126,375 $ 16,659,224,775

Georgia
Site of the 1996 Olympic Games
The first modern Games consisted of42 events in 9 sports. The number ofathletes participating in those games was 285 representing 13 countries.
The Centennial Olympic Games will be made up of26 sports and 37 disciplines. A discipline is a group ofrelated events within a particular sport. A total of1933 medals will be awarded in 271 events. An event is a sport competition, qualifying or medal awarding rounds, in which an Olympic medal may be awarded More than 16,500 athletes, coaches and officials from 200 countries are expected to participate.

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

REPORT ON SUPPLEMENTARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

The Honorable Zell Miller Governor OfGeorgia
and Members of the General Assembly of the State of Georgia
We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1995, and have issued our report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles. These general purpose financial statements are the responsibility of the State of Georgia's management. Ourresponsibility is to express an opinion on these general purpose financial statements based on our audit.
Certain portions of the statements and the related Scheduleof Federal Financial Assistance accompanying this report were not prepared by us, but were prepared by other auditors; these include the Federal financial assistance programs administered by the Georgia Environmental Facilities Authority, the Georgia Higher Education Assistance Corporation, the Georgia Housing and Finance Authority, Georgia Military College, the Georgia Student Finance Authority, and the University of Georgia. These Federal financial assistance programs reflect total activity and the Federal government's risk in their outstanding loan balances of $1,650,571,191, which comprise approximately 21 percent of total assistance
activity and theFederal government's risk in outstanding loan balances for the State as of and for the year ended June 30,
1995. Those schedules of Federal financial assistance have been furnished to us, and our assurance, insofar as it relates to the amounts included for the above mentioned organizations, is based solely upon the reports of the other auditors.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General ofthe United States, and the provisions of Office of Management and Budget (OMB) Circular A-128,Audits ofState and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provides a reasonable basis for our opinion.
Our audit was made for the purpose of forming an opinion on the general purpose financial statements of the State of Georgia taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our

opinion, based on our audit and the reports of other auditors, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.

May 14,1996

Respectfully submitted,
(:f'~~
Claude L. Vickers
State Auditor

C-4

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

(THIS PAGE INTENTIONALLY LEFT BLANK)

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of
Agricultural Research - Basic and Applied Research Through: University of Georgia Research Foundation University of Georgia
Plant and Animal Disease, Pest Control, and Animal Care Direct Agriculture, Department of Forestry Commission, State Fort Valley State College University of Georgia
Agricultural Conservation Program Direct Forestry Commission, State
Forestry Incentives Program Direct Forestry Commission, State
Conservation Reserve Program Direct Forestry Commission, State Soil and Water Conservation Commission, State
Special Emphasis Outreach Programs Grants Direct Fort Valley State College
Market News Direct Agriculture, Department of
Inspection Grading and Standardization Direct Agriculture, Department of
Grants for Agricultural Research, Special Research Grants Direct University of Georgia Through: University of Georgia Research Foundation University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

10.001 $
10.025 $
$ 10.063
$ 10.064
$ 10.069
$
$ 10.140
$ 10.153
$ 10.162
$ 10.200
$
$

102,743.23
303,184.22 94,760.73 40,281.34
350,161.71 788,388.00
75,000.00
51,000.00
2,648.45 11,289.84 13,938.29
2,478.43
24,667.11
2,263,179.52
12,729.14 2,072,038.54 2,084,767.68

NONMONETARY EXPENDITURES

C -7

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of
Cooperative Forestry Research Direct University of Georgia Through: University of Georgia Research Foundation University of Georgia
Payments to Agricultural Experiment Stations Under Hatch Act
Direct University of Georgia
Payments to 1890 Land-Grant Colleges and Tuskegee University Direct Fort Valley State College
Grants for Agricultural Research Competitive Research Grants
Through: University of Georgia Research Foundation University of Georgia
Small Business Innovation Research Direct University of Georgia
Sustainable Agriculture Research and Education Through: University of Georgia Research Foundation University of Georgia
1890 Institution Capacity Building Grants Direct Fort Valley State College
Higher Education Challenge Grants Direct University of Georgia
Buildings and Facilities Program Direct Savannah State College
Biotechnology Risk Assessment Research Through: University of Georgia Research Foundation University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

10.202 $
$ 10.203
$ 10.205
$ 10.206
$ 10.212
$ 10.215
$ 10.216
$ 10.217
$ 10.218
$ 10.219
$

808,756.13 46,678.01 855,434.14
4,285,336.86
2,031,180.55
1,558,502.30 218,919.32 15,251.32 187,136.18 70,073.15 500.00 50,258.07

NONMONETARY EXPENDITURES

C8

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of
Agricultural and Rural Economic Research Through: The Economic Research Service Fort Valley State College
Rural Self-Help Housing Technical Assistance Through: Farmers Home Administration Fort Valley State College
Cooperative Agreements with States for Intrastate Meat and Poultry Inspection
Direct Agriculture, Department of
Cooperative Extension Service Direct Fort Valley State College University of Georgia
Food Distribution (4) Direct Education, Department of Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.250 $
10.420 $
10.475
$ 10.500
$
$
10.550 *
$

430.00 220,913.44

3,094,654.02

1,679,589.32 11,140,301.08
12,819,890.40

9,590.65

$

28,215,398.86 383,106.85

Food Stamps (4) Direct Human Resources, Department of
School Breakfast Program Direct Education, Department of
National School Lunch Program Direct Education, Department of

$ 10.551
10.553 $

9,590.65

$

30,587,639.49

$

710,682,708.00

42,583,911.42

$ 10.555
$

43,143,272.37 159,462,159.90

$

160,494,210.55

C-9

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of
Special Milk Program for Children Direct Education, Department of
Special Supplemental Food Program for Women, Infants, and Children (9) Direct Human Resources, Department of
Child and Adult Care Food Program Direct Education, Department of
.:. l!i.mtV&m!tSlat~C&I~ ::::::?:..::.:::. ::. :: :. .
Summer Food Service Program for Children Direct Abraham Baldwin Agricultural College Atlanta Metropolitan College Fort Valley State College Georgia Southern University Georgia Southwestern College Savannah State College
State Administrative Expenses for Child Nutrition Direct Education, Department of
State Administrative Matching Grants for Food Stamp Program Direct Human Res:ources, Department

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.556

10.557

$ - - - - -2'2,-467-.38*

$ - _ - -1-3:1.,6-5-4,-83:5.._33 -

10.558 *

$

30,342,262.21

IIIII!

.;.;.:.:.:.;.:.:.:.:.:.:.;:::::::=:::::.=::::::=:::::=::::::;::::::;:.::.:.,:.;:.,:i0f8;'1M;:;A:,;,::S0=.::::::.}; }:.}:.:\.::;::;::::.;:;:::::::}::;;:::::;:::::::.::.:::::::::::..;.;.:.: .

$

30,476,020.67

10.559

$

7,443.04

17,556.29

35,208.68

12,543.53

3,369.02

41,638.42

10.560

$ - - _ - -1-17:,75.8_.98-

10.561

$ - - - " '2-,4-17-,7'0-2.-17-

$

53,499,311.02

C - 10

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of
Nutrition Education and Training Program Direct Education, Department of Human Resources, Department of University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.564 $

235,825.21 4,189.15 -28.14

Commodity Supplemental Food Program Through: University of Georgia Research Foundation University of Georgia
Emergency Food Assistance Program (Administrative Costs) Direct Education, Department of
Emergency Food Assistance Program (Food Commodities)
Direct Education, Department of
Nutrition Program for the Elderly (Commodities) Direct Human Resources, Department of
Forestry Research Direct Forestry Commission, State Fort Valley State College Georgia Southern University Through: University of Georgia Research Foundation University of Georgia
Cooperative Forestry Assistance Direct Forestry Commission, State Public Safety, Department of

$ 10.565
$ 10.568
$ 10.569
10.570 $
10.652 $
$ 10.664
$

244,743.82
723.16
881,108.46
$
2,697,591.00
68,530.60 1,584.68 3,529.75
1,223,711.39 1,297,356.42

2,388,230.00

University of Georgia

C - 11

21,247.99 2,727,715.95

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of
Water and Waste Disposal Systems for Rural Communities Through: Virginia Water Project, Incorporated Community Affairs, Department of
Technical Assistance and Training Grants Through: Rural Development Administration Fort Valley State College
Rural Development Grants Through: Rural Development Administration Fort Valley State College
Resource Conservation and Development Direct Forestry Commission, State
Agricultural Statistics Reports Direct Agriculture, Department of
International Agricultural Research Program Through: University of Georgia Research Foundation University of Georgia
Scientific and Technical Cooperation Through: University of Georgia Research Foundation University of Georgia
Other Federal Assistance Direct Fort Valley State College Georgia Institute ofTechnology Georgia Southern University Investigation, Georgia Bureau of University of Georgia West Georgia College Through: Georgia Tech Research Corporation Georgia Institute ofTechnology Through: Langston University Fort Valley State College Through: Natural Resource Conservation Service North Metro Technical Institute Through: Sokoine University of Agriculture Fort Valley State College Through: University of Georgia Research Foundation Fort Valley State College University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.760 $
10.761 $
10.769 $
10.901 $
10.950 $
10.961 $
10.963 $
OFA $
$

26,376.57
164,370.49
111,859.50
15,000.00
32,540.45
127,580.33
7,538.11
61,047.36 -2,622.26 4,875.00 86,807.25 369,207.72
467.26 -2,770.74 1,972.00 7,1 18.00 4,494.30 4,003.38 2,960,706.14 3,495,305.41

C-12

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Agriculture, U. S. Department of AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

$

464,479,620.80

$

743,658,577 .49

NET TOTAL AGENCY
Appalachian Regional Commission
Appalachian Regional Development Direct North Georgia Technical Institute
Appalachian Housing Project Planning Loan, Technical Assistance Grant and Site Development and Off-Site Improvement Grant: State Appalachian Housing Programs Direct Housing and Finance Authority, Georgia
Appalachian State Research, Technical Assistance, and Demonstration Projects (3) Direct Community Affairs, Department of
Appalachian Vocational and Other Education Facilities and Operations Direct Coosa Valley Technical Institute
AGENCY TOTAL
Commerce, U. S. Department of
Economic Development - Technical Assistance Through: Georgia Tech Research Corporation Georgia Institute of Technology
Research and Evaluation Program Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology

$

461,628,026.14

$

741,669,443.71

23.001 $
23.005

29,497.48

$ 23.011
$ 23.012
$ $

333,906.00

281,852.23

$

1,494,932.93

54,352.54

699,608.25

$

1,494,932.93

11.303 $
11.312 $
$
C - 13

88,876.97
15,058.12 7,989.01 23,047.13

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Commerce, U. S. Department of
Trade Adjustment Assistance Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Minority Business Development Savannah State College
Anadromous Fish Conservation Act Program Direct Natural Resources, Department of
Interjurisdictional Fisheries Act of 1986 Direct Natural Resources, Department of
Sea Grant Support Through: University of Georgia Research Foundation University of Georgia
Coastal Zone Management Administration Awards Direct Natural Resources, Department of
Coastal Zone Management Estuarine Research Reserves Direct Natural Resources, Department of
Climate and Atmospheric Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Marine Fisheries Initiative Direct Natural Resources, Department of University of Georgia
Cooperative Fishery Statistics Direct Natural Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

11.313 $
$ 11.405
$ 11.407
$ 11.417
$ 11.419
$ 11.420
$ 11.431
$
$ 11.433
$
$ 11.434
$

609,470.38 36,152.97
645,623.35
18,046.00
62,794.53
1,249,877.25
72,903.00
96,938.00
115,330.19 2,306.37
I 17,636.56
21,261.00 50,425.57 71,686.57
115,386.00

C-14

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Commerce, U. S. Department of
Atlantic Coastal Fisheries Cooperative Management Act Direct Natural Resources, Department of
Telecommunications and Information Infrastructure Assistance Program Direct Human Resources, Department of Through: Georgia Tech Research Corporation Georgia Institute of Technology
Calibration Program Direct Georgia Southern University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

11.474 11.552

$ - - - - -1'1,-072-.00-

11.601

$

660,000.00

35,837.59

$ - - - - -69'5,-837-.59-

$ - - - - -4'2,-717-.36-

Georgia Institute of Technology
Other Federal Assistance Direct Georgia Institute of Technology Natural Resources, Department of Public Telecommunications Commission, Georgia Skidaway Institute of Oceanography University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: National Bureau of Standards Southern College of Technology Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

$ OFA
$
$ $

2,498,026.43 2,550,533.47
46,880.02 76,191.00 92,787.00 23,890.86 27,438.93 1,958,905.83 7,852.58
175.89 2,234,122.11
8,097,097.89

NET TOTAL AGENCY

$-_......:.8..,0.4..4.,.5.9:0...8._5 C - 15

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Consumer Product Safety Commission, U. S.
Other Federal Assistance Direct Governor, Office of the
AGENCY TOTAL
Corporation for National and Community Service
National Models Program Direct Community Affairs, Department of
Learn and Serve AmericaSchool and Community Based Programs Direct Education, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA
$ - - - - - ' - - - - 3,214.73
$ - - - - - ' - - - - 3,214.73

94.001 $
$ 94.004
$

1,705,125.56 1,757,428.56
358,371.99

...:..:...:.-..:.-.:...'...; .

Learn and Serve America ..Higher Education Direct Kennesaw State College
AmeriCorps Direct Community Affairs, Department of
Training and Technical Assistance Direct Community Affairs, Department of
Foster Grandparent Program Direct Human Resources, Department of
Senior Companion Program Direct Georgia Southern University Human Resources, Department of
-~~.--C"~~~~---

94.005 94.006 94.009 94.011 94.016

$----358~,55-3.2-9
$ - - - - - - - 333.26
2,149,928.00

$----317~,46-2.6-0

$ - - - - - ' - - - - 3,791.78

$

129,093.73

3,120.59

$----132~,21-4.3-2

C-16

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Corporation for National and Community Service AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

$

4,719,711.81

NONMONETARY EXPENDITURES

NET TOTAL AGENCY
Defense, U. S. Department of (7)
Procurement Technical Assistance for Business Firms Through: Defense Logistics Agency Columbus College Through: Georgia Tech Research COrporation Georgia Institute of Technology
Aquatic Plant Control Direct Natural Resources, Department of
Navigation Projects Direct Natural Resources, Department of
Basic and Applied Scientific Research Direct Georgia Institute of Technology Through: Georgia Tech Research Corporation Georgia Institute of Technology
Basic Scientific Research Through: Georgia Tech Research Corporation Georgia Institute of Technology
Air Force Defense Research Sciences Program Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Research and Development Laboratories Columbus College

$

4,667,227.51

12.002 $
$ 12.100
$ 12.107
$ 12.300
$
$ 12.431
$ 12.800
$
$

90,443.21 75,560.35 166,003.56
50,254.00
348,549.00
2,000.00 3,580,906.63 3,582,906.63
14,127.64
1,222,428.57 12,367.25
1,234,795.82

C -17

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Defense, U. S. Department of (7)
Mathematical Sciences Grants Program Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology
Research and Technology Development Through: Georgia Tech Research Corporation Georgia Institute of Technology
Other Federal Assistance (5) Direct East Georgia College Fort Valley State College Georgia Institute of Technology Georgia Southern University Georgia State University Macon College Military College, Georgia North Georgia College Skidaway Institute of Oceanography Southern College of Technology University of Georgia

12.901
12.910 OFA

$

13,641.24

17,64I.lI

$ - - - - - "3'1",28-2.3-5-

$ - - - _ . . .4:0,.7.18.._77-

$

6,000.00

126,576.97

287,215.82

25,981.96

16,980.39

2,590.26

1,138,165.00 (8)

1,413.27

146,162.64

19,300.92

75,671.36

Threugh: GeorgiaTechResearch Corpomtloll Georgia Institute of Technology
Through: Medical College of Georgia Research Institute Medical College of Georgia
Through: National Guard Bureau Defense, Department of
Through: U. S. Army Medical Research and Material Command North Georgia College
Through: United States Marine Corps Public Safety, Department of
Through: University of Georgia Research Foundation University of Georgia

83,263,828.80

79,389.29

13,614,004.98

62,939.40

680.00

786,126.05

$

99,718,362.11

AGENCY TOTAL

$

105,186,999.88

NET TOTAL AGENCY

C - 18

$ - - - -1'0-5,1-2-1,6'6-4.-88-

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Adult Education - State-Administered Basic Grant Program Direct Technical and Adult Education, Department of Through: Appalachian Regional Commission West Georgia Technical Institute Through: Bibb County Board of Education Macon Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.002 $

7,163,670.42 27,260.24 63,547.22

Desegregation Assistance, Civil Rights Training, and Advisory Services Direct Education, Department of

$ 84.004

11,054,537.53

$ - - - - - ' - - - 235,261.33

C - 19

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995
Education, U. S. Department of
Federal Supplemental Educational Opportunity Grants Direct Abraham Baldwin Agricultural College Albany State College Armstrong State College Athens Area Technical Institute Atlanta Metropolitan College Augusta College Augusta Technical Institute Bainbridge College Brunswick College Carroll Technical Institute Chattahoochee Technical Institute Clayton State College Columbus College Dalton College Darton College DeKalb College East Georgia College Flint River Technical Institute Floyd College Fort Valley State College Gainesville College Georgia College Georgia Institute of Technology Georgia Southern University Georgia Southwestern Col!ege Georgia State University Gordon College Griffin Technical Institute Kennesaw State College Macon College Medical College of Georgia Middle Georgia College Military College, Georgia Moultrie Area Technical Institute North Georgia College North Georgia Technical Institute North Metro Technical Institute Ogeechee Technical Institute Savannah State College South Georgia College Southern College of Technology Swainsboro Technical Institute Thomas Technical Institute University of Georgia Valdosta State University

CFDA NUMBER

MONETARY EXPENDITURES

84.007 $

148,776.25 551,409.72 27,784.05
8,300.00 101,970.64 169,968.20 46,149.32 41,463.43 54,106.00 26,448.00
7,425.00 45,925.50 69,312.00 25,000.00 73,804.75 309,707.00 8,961.00 21,100.00 43,960.48 358,133.95 37,149.65 56,213.33 368,970.00 217,730.90 71,015.00 430,534.47 30,633.27 22,548.00 87,383.55 87,061.00 43,259.00 90,298.93 15,600.00 31,000.00 63,250.00 32,479.00 8,680.00 18,000.00 139,160.96 107,552.00 48,954.67 4,999.50 9,600.00 412,700.00 344,924.53

NONMONETARY EXPENDITURES

C -20

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Federal Supplemental Educational Opportunity Grants Direct Valdosta Technical Institute Waycross College West Georgia College West Georgia Technical Institute
Education of Children with Disabilities in State Operated or Supported Schools Direct Education, Department of

CFDA NUMBER

MONETARY EXPENDITURES

84.007 $
$ 84.009
$

41,334.00 27,393.55 137,030.34 18,600.00 5,143,760.94
785,578.05

NONMONETARY EXPENDITURES

Chapter 1 Programs - Local Educational Agencies Direct Education, Department
Migrant Education - Basic State Grant Program Direct Education, Department of Through: Southern Pine Migrant Educational Agency Abraham Baldwin Agricultural College
Educationally Deprived Children - State Administration Direct Education, Department of
Title 1 Program for Neglected and Delinquent Children Direct Education, Department

84.010

$ - - - - -95'5,3-59-.75-

84.011
84.012 84.013

$

150,619,636.40

$

3,844,208.45

21,800.00

$

3,866,008.45

$--_..:..1.,1.4.5.,.0:5.3-.5_2 -

$----,;.;.;.;.9..6:1..,0;9.:8,.,8;7...

C-21

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Follow Through Direct University of Georgia
Undergraduate International Studies and Foreign Language Programs Direct Columbus College Through: Georgia Tech Research Corporation Georgia Institute of Technology
International Research and Studies Through: University of Georgia Research Foundation University of Georgia
International: Overseas - Group Projects Abroad Direct Georgia State University Valdosta State University
Special Education - Innovation and Development Direct Georgia State University Through: University of Georgia Research Foundation University of Georgia
Early Education for Children with Disabilities Direct Human Resources, Department of University of Georgia
Services for Children with Deaf-Blindness Direct Education, Department of Georgia State University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.014 $
84.016
$
$ 84.017
$ 84.021
$
$ 84.023
$
$ 84.024
$
$ 84.025
$
$

180.530.73
96,420.93 27,919.49 124,340.42
68,538.04
25,750.62 6,463.85
32,214.47
50,842.98 82,303.96 133,146.94
214,927.30 215,591.85 430,519.15
252,947.86 60,167.84
313,115.70

C - 22

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Special Education - Grants to States Direct Education, Department of
Special Education - Personnel Development and Parent Training Direct Education, Department of Georgia State University University of Georgia Valdosta State University
Higher Education - Institutional Aid Direct Albany State College Atlanta Metropolitan College Chattahoochee Technical Institute Fort Valley State College Macon College Middle Georgia College Savannah State College
Federal Family Education Loans (3) Direct Higher Education Assistance Corporation, Georgia
Federal Work-Study Program Direct Abraham Baldwin Agricultural College Albany State College Armstrong State College Athens Area Technical Institute Atlanta Metropolitan College Augusta College Augusta Technical Institute Bainbridge College Brunswick College Carroll Technical Institute Chattahoochee Technical Institute Clayton State College Columbus College Dalton College Darton College DeKalb College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.027 84.029

$ ---""5'2",2'9-7-,1'5-6-.6-7-

$

147,916.10

51,559.54

900,664.70

56,134.92

$

1,156,275.26

84.031

$

1,231 ,264.43

59,540.96

379,345.15

1,295,823.72

366,394.98

433,650.34

1,196,464.24

$
84.032 *

4,962,483.82

84.033

$ ---""2'2",2'3-3-,6'3-3-.0-0-

$

173,744.43

542,019.26

51,344.12

18,636.35

108,492.93

141,001.08

21,896.09

29,103.26

46,103.00

11,610.00

8,687.57

7,925.07

134,640.15

31,615.00

66,436.53

185,585.00

$

1,467,738,509.00

--'--'--'----

C - 23

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Federal Work-Study Program Direct East Georgia College Floyd College Fort Valley State College Gainesville College Georgia College Georgia Institute ofTechnology Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Griffin Technical Institute Kennesaw State College Macon College Medical College of Georgia Middle Georgia College Military College, Georgia Moultrie Area Technical Institute North Georgia College North Georgia Technical Institute North Metro Technical Institute Ogeechee Technical Institute Okefenokee Technical Institute Savannah State College South Georgia College South Georgia Technical Institute Southern College of Technology Swainsboro Technical Institute Thomas Technical Institute University of Georgia Valdosta State University Valdosta Technical Institute Walker Technical Institute Waycross College West Georgia College West Georgia Technical Institute Through: Georgia Tech Research Corporation Georgia Institute of Technology
Public Library Services Direct Education, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.033 $
$ 84.034
$

10,231.98 32,307.32 501,238.04 46,992.69 123,532.00 188,064.22 337,808.14 104,276.00 287,956.81 28,507.17 10,940.00 54,378.03 61,660.00 133,459.00 59,637.32
1,952.00 14,626.00 82,590.18 80,597.00 11,806.91 15,040.00 9,344.00 397,089.49 179,513.29 12,989.00 47,772.73 6,981.51 9,068.20 546,466.12 386,928.77 14,939.00 10,000.00 30,903.31 217,529.61 13,189.23
4,628.85
5,653,783.76
1,919,201.56

$

1,935,697.98

C -24

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Interlibrary Cooperation and Resource Sharing Direct Education, Department of
Federal Perkins Loan Program Federal Capital Contributions (3)
Direct Abraham Baldwin Agricultural College Albany State College Armstrong State College Augusta College Clayton State College Columbus College Fort Valley State College Georgia College Georgia Institute of Technology Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Kennesaw State College Macon College Medical College of Georgia Middle Georgia College North Georgia College Savannah State College South Georgia College Southern College of Technology University of Georgia Valdosta State University West Georgia College
Student Support Services Direct Abraham Baldwin Agricultural College Albany State College Atlanta Metropolitan College Georgia Southwestern College Georgia State University Macon College Savannah State College South Georgia College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.035 $
84.038 $
$ 84.042
$
$

405,236.87

-78,117.42 (I) $ 2,436.37 (I)

35,163.37 (I) -7,671.17 (I)
45,139.58 (I) 100,640.34 (I)
151,197.30 (I)
4,972.77 (I)
28,979.13 (1)
63,820.85 (I) 149,525.60 (I)

28,163.01 (I)

62,859.00 (I) 1,430.25 (I) 8,163.94 (I) 3,827.53 (I)
-49,489.05 (I) 79,508.97 (I) 53,426.90 (I) 6,757.80 (I)
19,561.59 (1)

710,296.66

$

1,679,006.63 (I)
408,358.92 (I) 6,595.28 (I)
761,819.39 (I) 17,355.30 (I) 590,837.91 (I)
2,434,300.85 (I) 1,925,032.28 (I) 6,120,005.36 (I) 3,320,620.11 (I)
1,157,900.12 (1)
5,185,201.17 (I) 9,435.26 (I)
361,057.41 (1) 4,356.11 (1)
2,517,455.94 (I)
183,238.87 (I)
794,270.67 (I)
796,604.36 (1) 1,130,023.47 (1)
1,012,931.65 (I) 9,160,171.93 (I)
1,234,938.61 (1)
2,034,438.35 (I)
42,845,955.95

136,001.88 1,377.00
198,363.01 154,835.30 169,241.47 163,750.43 170,527.96 179,957.30
1,174,054.35

C - 25

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Talent Search Direct Fort Valley State College Georgia Southern University Georgia State University Savannah State College University of Georgia
Upward Bound Direct Abraham Baldwin Agricultural College Atlanta Metropolitan College Fort Valley State College Georgia Southern University Georgia Southwestern College Georgia State University Savannah State College University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

84.044 $
$ 84.047
$
$
84.048 *
$

221,914.53 233,304.95
41,450.26 294,902.79
20,007.87
811,580.40
188,317.84 272,581.90 211,793.40 187,149.83 221,271.93 273,207.93 423,614.21 147,716.57
1,925,653.61
29,194,614.65

NONMONETARY EXPENDITURES

9,932.98
134,320.54 4,769.64

C -26

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995 Education, U. S. Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Vocational Education - Consumer and Homemaking Education Direct Education, Department of Swainsboro Technical Institute

$ 84.049
$

54,828,121.28
1,403,766.85 15,669.04

Vocational Education - State Councils Direct Governor, Office oftbe

84.053

$

1,928,606.05

$

225,157.35

----~--

C -27

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Higher Education - Cooperative Education Direct Atlanta Metropolitan College Georgia State University
Federal Pell Grant Program Direct Abraham Baldwin Agricultural College Albany State College Albany Technical Institute Altamaha Technical Institute Armstrong State College Athens Area Technical Institute Atlanta Metropolitan College Augusta College Augusta Technical Institute Bainbridge College Ben Hill-Irwin Technical Institute Brunswick College Carroll Technical Institute Chattahoochee Technical Institute Clayton State College Columbus College Columbus Technical Institute Coosa Valley Technical Institute Dalton College Darton College DeKalb College East Georgia College Flint River Technical Institute Floyd College Fort Valley State College Gainesville College Georgia College Georgia Institute of Technology Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Griffin Technical Institute Heart of Georgia Technical Institute Kennesaw State College Lanier Technical Institute Macon College Macon Technical Institute Medical College of Georgia Middle Georgia College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.055

$

-0.02

144,164.24

$ ----""14'4-,16-4.-22-
84.063 *

$

1,426,742.87

3,449,275.21

842,674.52

297,780.00

2,114,525.41

318,526.00

1,303,291.80

2,363,826.86

888,755.12

785,985.55

456,532.00

1,027,980.00

404,465.00

670,588.50

1,237,192.97

2,406,750.10

939,539.03

525,287.00

892,493.83

1,165,517.76

3,887,913.81

383,909.70

303,962.52

1,056,854.45

3,860,774.82

682,054.80

1,658,897.98

1,894,930.32

5,275,013.00

1,280,469.01

4,311,150.39

952,155.26

472,960.00

276,878.00

1,555,738.79

264,467.00

1,622,869.55

1,117,107.07

257,473.00

1,236,771.53

C -28

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Federal Pell Grant Program Direct Middle Georgia Technical Institute Military College, Georgia Moultrie Area Technical Institute North Georgia College North Georgia Technical Institute North Metro Technical Institute Ogeechee Technical Institute Okefenokee Technical Institute Pickens Technical Institute Savannah State College South Georgia College South Georgia Technical Institute Southeastern Technical Institute Southern College of Technology Swainsboro Technical Institute Thomas Technical Institute University of Georgia Valdosta State University Valdosta Technical Institute Walker Technical Institute Waycross College West Georgia College West Georgia Technical Institute
Educational Opportunity Centers Direct Fort Valley State College University of Georgia
Grants to States for State Student Incentives Direct Student Finance Authority, Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.063 $
$ 84.066
$ $ 84.069 $

563,592.72 994,700.00 430,650.49 604,087.97 357,782.00 226,187.49 235,962.32 368,523.00 237,877.00 3,446,776.31 926,781.99 559,680.15 350,052.04 801,557.40 360,735.90 447,518.36 4,748,364.76 4,649,330.64 629,781.06 346,327.00 461,930.89 2,536,766.00 395,091.00
80,550,137.02
262,099.59 364,425.08
626,524.67
1,257,359.00 (2)

University of Georgia
National Diffusion Network Direct University of Georgia

84.073

503,075.50 1,829,333.50
$--_....:...:.:..;.1;0.;5.:,7..7.:2...:1..5...

C -29

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, 1995
Education, U. S. Department of
Special Education - Postsecondary Education Programs for Persons with Disabilities
Through: University of Tennessee DeKalb College
Indian Education - Fellowships for Indian Students Direct Georgia Institute of Technology
Harris Fellowships Direct Georgia Institute of Technology Georgia Southern University Georgia State University University of Georgia
Law School Clinical Experience Program Direct Georgia State University
Fund for the Improvement of Postsecondary Education Direct Fort Valley State College Through: Georgia Tech Research Corporation Georgia Institute of Technology
Educational Research and Development Direct Education, Department of Through: University of Georgia Research Foundation University of Georgia
Minority Science Improvement Direct Albany State College Georgia Southern University Savannah State College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.078 $
84.087 $
84.094 $
$ 84.097
$ 84.116
$
$ 84.117
$
$ 84.120
$
$

48,948.26
11,595.00
59,758.49 29,735.61 34,274.06 122,613.09 246;381.25
76,787.06
12,017.59 32,032.70 44,050.29
14,270.65 1,595,131.62 1,609,402.27
183,235.37 1,377.00
26,021.83 210,634.20

C -30

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Rehabilitation Services - Vocational Rehabilitation of State Grants Direct Human Resources, Department of Through: Health and Human Services, U. S. Department of Human Resources, Department

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.126 $

58,893,417.78

North Carolina Department of Pickens Technical Institute

1,084.00

$

59,229,804.99

Rehabilitation Services - Service Projects Direct Human Resources, Department of

84.128 $

85,508.06

Rehabilitation Long-Term Training Direct Fort Valley State College Georgia State University University of Georgia

84.129 $

130,825.31 21,219.95 453,001.17

$

605,046.43

National Institute on Disability and Rehabilitation Research Direct Human Resources, Department of University of Georgia Through: University of Georgia Research Foundation University of Georgia

84.133 $

151,731.99 312,080.97
134,626.99

$

598,439.95

Chapter 2 - State Block Grants

84.151

Direct

Education, Department of

$

9,180,196.77

~l_!Wl:_:II::I:[::II:IJmm[:::t::[:mJImf:~mlmmlf::iI:f:fi:I:f:lf::mfif:fI:fI:f:ff:f:f:f:f:f:f:::f:f'If'If:fiiifif:fif:f:f:[:[:[ii:I[I:::[:[::IifIIIII:If:IIIIIJI:f:I:::::fm[[:IJIII:IK:I

Public Library Construction and Technology Enhancement Direct Education, Department of

84.154

$

9,226,188.99

$ - - - _ . .1.8:,28-2_.33-

C - 31

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Training Interpreters for Individuals who are Deaf and Individuals who are Deaf-Blind
Through: University of Tennessee DeKalb College
Rehabilitation Services - Client Assistance Program Direct Human Resources, Department of
Immigrant Education Direct Education, Department of
Eisenhower Mathematics and Science Education State Grants

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.160

84.161 84.162 84.164

$

4,697.99

----~--

$ - - - - - '17:4.,8.2.5.-11-

-------- $

298,991.88

$

4,677,292.12

936,72769

8,363.50 6,874.53 9,718.07

s

6,186,912.98

C-32

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Magnet Schools Assistance Through: The Board of Public Education for the City of Savannah and the County of Chatham Savannah State College
Independent Living - State Grants Direct Human Resources, Department of
Javits Fellowships Direct University of Georgia
Special Education - Preschool Grants Direct Education, Department of
Vocational Education - Community Based Organizations Direct Education, Department of South Georgia Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

84.165
$ 84.169
$ 84.170
$ 84.173
$ 84.174
$

38,824.30 333,590.94
11,613.03 8,157,113.19
385,390.71 9,483.06

NONMONETARY EXPENDITURES

Douglas Teacher Scholarships Direct Student Finance Authority, Georgia
Rehabilitation Services - Independent Living Services for Order Individuals Who are Blind
Direct Human Resources, Department of

$ 84.176
$ 84.177
$

602,292.58 405,002.00 (2) 118,412.59

C - 33

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Technology, Educational Media and Materials for Individuals with Disabilities Direct Valdosta State University
Special Education - Grants for Infants and Families with Disabilities Direct Human Resources, Department of
Drug-Free Schools and Communities - National Programs Direct Macon College Middle Georgia College
Byrd Honors Scholarships Direct Education, Department of
Safe and Drug-Free Schools - State Grants Direct Education, Department of Governor, Office of the Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.180

84.181

$ ----_.1.8:4,.61-6_.44-

84.184
84.185 84.186

4,775,446.10

$

47,560.62

12,779.13

$--_--.:.....:.:6..0;,.3.3;9...;7.5..-

$---~,;",;.;5;1.3;,.0:0.0..;0.0..

$

7,180,728.53

28,172.37

3,077,314.06

Supported Employment Services for Individuals with Severe Disabilities Direct Human Resources, Department of
Christa McAuliffe Fellowships Direct Education, Department of
Bilingual Education Support Services Direct Education, Department of
Bilingual Education Training Grants Direct Georgia State University

$ 84.187

10,354,463.10

84.190 84.194

$---..:;,;;.;8.;3"0;,,7,4.6;..0.3:~ $---....:;;.2:9;,;5.0;9..0:0.~

84.195

$ --_--.:..;..:.:..7;,7,;,0.;8.:3...2.;4...

C - 34

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Education for Homeless Children and Youth Direct Education, Department of
Graduate Assistance in Areas of National Need Through: Georgia Tech Research Corporation Georgia Institute of Technology
Women an~ Minority Participation in Graduate Education Direct Albany State College Georgia State University
Even Start - State Educational Agencies Direct Education, Department of Swainsboro Technical Institute
Capital Expenses Direct Education, Department of
McNair Post-Baccalaureate Achievement Direct Georgia State University
State Program Improvement Grants Direct Education, Department of
Student Literacy Corps and Student Mentoring Corps Direct Darton College Valdosta State University
Centers for International Business Education Through: Georgia Tech Research Corporation Georgia Institute of Technology
State Grants for Assistive Technology Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

84.196 $
84.200 $
84.202 $
$ 84.213
$
$ 84.216
$ 84.217
$ 84.218
$ 84.219
$
$ 84.220
$ 84.224
$

646,620.28
178,868.35
85,171.54 48,594.39 133,765.93
1,845,179.90 151,149.73
1,996,329.63
6,048.00
150,193.14
586,744.65
195.43 2,698.08 2,893.51
160,749.88
717,362.83

NONMONETARY EXPENDITURES

C - 35

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Education, U. S. Department of
Income Contingent Loan Program (3) Direct Abraham Baldwin Agricultural College
National Science Scholars Direct South Georgia College
Tech-Prep Education Direct Education, Department of Through: Carroll County Board of Education Carroll Technical Institute Through: Catoosa County Board of Education Walker Technical Institute Through: Chattooga County Board of Education Walker Technical Institute Through: City of Carrollton Board of Education Carroll Technical Institute Through: City of Chickamauga Board of Education Walker Technical Institute Through: Clayton County Board of Education Griffin Technical Institute Through: Coweta County Board of Education Carroll Technical Institute Through: Crawford County Board of Education FlintRiver Technical Institute Through: Douglas County Board of Education Carroll Technical Institute Through: Habersham County Board of Education North Georgia Technical Institute Through: Meriwether County Board of Education FlintRiver Technical Institute Through: Talbot County Board of Education FIint River Technical Institute Through: Taylor County Board of Education FlintRiver Technical Institute
Foreign Languages Assistance Direct Education, Department of
State Literacy Resource Centers Direct Technical and Adult Education, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.226 $
84.242 $
84.243 $
$ 84.249
$ 84.254
$

-49,605.82

$

446.00

2,577,792.01 1,800.00 7,950.50 7,949.50 800.00 7,899.48 2,024.07 800.00
23,800.00 800.00
35,000.00 27,498.26 16,500.00
8,000.00 2,718,613.82

543,955.74

243,742.18

193,582.04

C -36

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, J995
Education, U. S. Department of
Rehabilitation Training - Continuing Education Direct Georgia State University
State Postsecondary Review Direct Student Finance Commission, Georgia
Federal Direct Student Loan Direct Columbus College Georgia State University Valdosta State University
Goals 2000 - State and Local Education Systemic Improvement Grants Direct Education, Department of
Eisenhower Professional Development State Grants

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.264 $
84.267 $
84.268 $
$ 84.276
$ 84.281

489,650.47
168,898.38
317,694.00 27,461,427.90
859,325.00 28,638,446.90
56,000.00

Other Federal Assistance Direct Georgia College Georgia Institute of Technology Georgia State University Kennesaw State College Savannah State College University of Georgia Through: First District Regional Educational Service Agency Armstrong State College Through: Georgia Tech Research Corporation Georgia Institute of Technology

OFA $

1,377.00 96,416.21 521,332.00 45,892.72 37,192.40 1,323,382.48
13,000.00
131,411.33

Georgia State University Through: National Writing Project Corporation
Kennesaw State College Through: North Georgia Regional Educational
Service Agency Fort Valley State College

906.45 14,966.34
2,636.59

C - 37

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Education, U. S. Department of

Other Federal Assistance

OFA

_~4r"'.I.'II~

Columbus College

5,577.85

$

2,214,241.25

AGENCY TOTAL

$

553,646,168.24

$

1,510,778,046.99

NET TOTAL AGENCY

522,069,543.27

1,510,778,046.99

Energy, U. S. Department of

State Energy Conservation

81.041

Direct

Bainbridge College

$

7,328.00

Environmental Facilities Authority, Georgia

1,128,726.00 (2)

Natural Resources, Department of

242,110.00

~",~e:~f"'

Weatherization Assistance for Low-Income Persons Direct Environmental Facilities Authority, Georgia
Basic Energy Sciences - University and Science Education Direct Georgia Institute of Technology Georgia State University North Georgia College Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia

$ 81.042
$ 81.049
$
$

1,658,381.37
3,591,160.00 (2)
4,016.94 129,188.10
6,383.81 888,384.56 1,533,178.78 2,561,152.19

C - 38

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Energy, U. S. Department of
Energy Extension Service

CFDA NUMBER

MONETARY EXPENDITURES

81.050

NONMONETARY EXPENDITURES

$ ----....;73.,0.6.5..2-6-

Energy Conservation for Institutional Buildings

81.052

Direct

Environmental Facilities Authority, Georgia

$

1,043,091.00 (2)

Georgia State University

4,556.62

Human Resources, Department of

12,651.14

University of Georgia

13,833.00

Valdosta Technical Institute

7,182.00

West Georgia Technical Institute

6,149.00

!lmijF'fi~&mmt:om&:jtiti':::':'::::::::::::'~~::m~~':~::::::::::::::::'::::::::::::::'::::..:::::]::":":::g:::::::::?:?:~:r::~:'~:::~:~r:~:III:ffffffff:U:::I:~rf:::i:::rrf:::r:::KT:K:::::t::::::::::{::::

University Coal Research Through: Georgia Tech Research Corporation Georgia Institute of Technology
Environmental Restoration Through: Georgia Tech Research Corporation Georgia Institute of Technology
Nuclear Energy, Reactor Systems, Development, and Technology Direct Governor, Office of the
National Industrial Competitiveness through Energy, Environment, and Economics Direct Natural Resources, Department of

81.057 81.092 81.095

$

1,134,743.76

$ ----....;68.,5.9.5..0-6-
$ - - _ -1-7-3,9:85_.58-

81.105

$ ----....61;8.,3.1.4..9-1-

$ ----....1;08.,5.6.2..0-0-

C - 39

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, 1995
Energy, U. S. Department of
Other Federal Assistance (5) Direct Flint River Technical Institute Fort Val1ey State Col1ege Georgia Institute of Technology Georgia Southern University Georgia State University Savannah State Col1ege Skidaway Institute of Oceanography Valdosta State University West Georgia Col1ege Through: Georgia Power Company Georgia Southern University Through: Georgia Tech Research Corporation Georgia Institute of Technology
Thl'0'<lgk Med'lcal C6Hege ofGOOf-graR'eseart:h Institure Medical Col1ege of Georgia
Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA $

3,404.00 557,623.62 167,759.98 41,338.00 61,458.45 109,862.59 640,169.42
17,210.72 16,419.57
10,768.76
3,088,741.95

51,556.52

13,440,765.95

$

18,239,398.84

$

28,227,358.97

NET TOTAL AGENCY
Environmental Protection Agency
Air Pollution Control Program Support Direct Natural Resources, Department of
State Indoor Radon Grants Direct Human Resources, Department of
Water Pol1ution Control - State and Interstate Program Support Direct Natural Resources, Department of

$

27,794,476.03

---~~--

66.001 $
66.032 $
66.419
$

2,154,396.00 41,906.81
2,325,944.00

C-40

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Environmental Protection Agency
State Public Water System Supervision Direct Natural Resources, Department of
State Underground Water Source Protection Direct Natural Resources, Department of
Water Pollution Control - Lake Restoration Cooperative Agreements Direct Kennesaw State College Natural Resources, Department of
Construction Management Assistance Direct Natural Resources, Department of
Water Quality Management Planning Direct Natural Resources, Department

CFDA NUMBER

MONETARY EXPENDITURES

66.432 $
66.433 $
66.435
$
$ 66.438
$ 66.454

1,432,206.00
82,473.00
26,582.08 99,196.00 125,778.08
403,433.00

NONMONETARY EXPENDITURES

Capitalization Grants for State Revolving Funds (3) Direct Environmental Facilities Authority, Georgia Natural Resources, Department of
Nonpoint Source Implementation Grants Direct Natural Resources, Department of
Wetlands Protection - State Development Grants Direct Natural Resources, Department of Through: University of Georgia Research Foundation University of Georgia

$ 66.458
$
$ 66.460
$ 66.461
$
$

577,741.56

158,028.00

22,123,395.11

$

22,281,423.11

$

1,197,584.00

164,465.00 93,399.91 257,864.91

97,306,580.20 97,306,580.20

C - 41

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Environmental Protection Agency
National Pollutant Discharge Elimination System Related State Program Grants Direct Natural Resources, Department of
Near Coastal Waters Direct Natural Resources, Department of
Air Pollution Control Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Solid Waste Disposal Research Through: University ofGeorgia Research Foundation University of Georgia
Water Pollution Control - Research, Development, and Demonstration Direct Skidaway Institute of Oceanography Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Safe Drinking Water Research and Demonstration Direct Natural Resources, Department of Through: University of Georgia Research Foundation University of Georgia
Toxic Substances Research Through: University ofGeorgia Research Foundation University of Georgia
Consolidated Pesticide Compliance Monitoring and Program Cooperative Agreements Direct Agriculture, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

66.463 $
66.464 $
66.501 $
$ 66.504
$ 66.505
$
$ 66.506
$
$ 66.507
$ 66.700
$

181,470.00
23,000.00
1,068,630.78 510,889.75
1,579,520.53
58,291.70
420,936.18 121,154.81 96,202.49 638,293.48
48,737.00 837.20
49,574.20
152,234.73
564,042.28

C - 42

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Environmental Protection Agency

TSCA Title IV State Lead Grants - Certification of LeadBased Paint Professionals Direct Human Resources, Department of Natural Resources, Department of

66.707 $

98,788.45 74,005.00

$- - - - -17'2,-793-.45-

PollutionPrevention Grants Program Direct Natural Resources, Department of
Hazardous Waste Management State Program Support Direct Natural Resources, Department of

66.708 66.801

$ - - - - -5'1,-574-.00-
$ -_---:2.,1-5-3,-6:19.._00-

Superfund State Site - Specific Cooperative Agreements Direct Natural Resources, Department of

66.802

$-----8-29-,73'2.~00-

State Underground Storage Tanks Program Direct Natural Resources, Department of

66.804

$-----1-34-,02'3.~00-

Leaking Underground Storage Tank Trust Fund Program Direct Natural Resources, Department of

66.805

$ ------1:,3-4-6-,7-59'.0~0-

Environmental Education Grants Direct Georgia State University

66.951

$ - - - - -8'2,-701-.42-

Other Federal Assistance

OFA

Direct

Georgia Institute of Technology

$

825.00

Kennesaw State College

44,497.57

Natural Resources, Department of

310,378.00

University of Georgia

1,319.60

Through: Citizens Water Quality

Kennesaw State College

574.24

Through: Georgia Tech Research Corporation

Georgia Institute of Technology

2,965,091.92

:.~ :.~:.:~.:=:;.:.:~:":N.:~.: :mu~:.:v:.~:._~:.:~.:;.:~il:.::~.:I~:.":~. :~~:~. .:.:~ i:li.ill:iiiilil::::::::?":@*~:: t.fui.:I :'..::.i:::....:.:.:..:;:.: .... -

..:

- ,~W~' ~~Vl-~ y~ ..

111

!!.!!.!!.!!.l .lt: Jill :'.:::::::1.::.::.:'.:.::.::.11.11.11.11.1: .::.':...:.....:.::: .:.:...:. ..::.:.:.:!.:.:..::..::.;."..:j:..;'.:.:'..;:i.:i..::.:j.::;.i..::.:j.:.:.:.:.j:..:.::.:'.:..:.:.:.

!I!I!I!I!I! :!: : : : : I:I:I:I:I:I.:I:I.:I:I.:I:I.:I:1.:1:1.:1:1.:1:1.:1:1

111111111111111!1!11!1!!llillll :1:I:I:1:.:.1 :1:1:1:1:1:1:.:.:.':.1::1:::.:.\:1:\

::::::::::::::::::::::::::::::::::::::::::::::::::::::::11111:li:::lll.i.I.::::::i:::.::::::::::::::::::::::::::::::!1iii:!!:: ::il:.::i::...il.:.::I:::I\III:;;:I:I;II:I;;:IIIII\I\11111\111111111111111111111:1\1:::::::::::::::i:':::'::::::::::::::::.I:.:I.:i:ili:i::::::

. tt:r:t.t#.!H~*m.#.lg .:t::t:::t::t::tt:::r:t:r:::::: :::.::::::::::t)::::::::::::.. tt::::::m::::::::::::::::I::m:::::m::::n~~:f.tMr\::::l:::i:::: . :::::::::::::::::::m:m:::::I::m::::::

C -43

STATE OF GEORGIA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Environmental Protection Agency
Other Federal Assistance Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA

-----'--- $

114,811.1 I

$

3,560,609.33

$

42,458,988.59

$

97,306,580.20

NET TOTAL AGENCY
Equal Employment Opportunity Commission
Employment Discrimination - Title VII of the Civil Rights Act of 1964
Direct Governor, Office of the
AGENCY TOTAL
Federal Emergency Management Agency
National Fire Academy Educational Program Direct Insurance, Department of
Hazardous Materials Training Program for Implementation of the Superfund Amendment and Reauthorization Act (SARA) of 1986 Direct Governor, Office of the
Flood Insurance Direct Albany State College Natural Resources, Department of
Community Assistance Program - State Support Services Element (CAP-SSSE)
Direct Governor, Office of the

$ ---"'42-,0-26-,8'9-4.-14-

$ - - _ . . : 9. -7,.3.0.6.,:5.8.0..2_0-

30.001

$ - - - - - ' - - - 45,651.85

$

45,651.85

83.010 $
83.011

16,490.43

83.100 83.105

$ - - - - - ' - - - 94,806.49

$

36,945.76

13,083.00

-----'--- $

50,028.76

$- - - - - ' - - - 60,000.00

C -44

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Federal Emergency Management Agency Civil Defense - State and Local Emergency Management Assistance Direct Governor, Office of the State Disaster Preparedness Grants Direct Governor, Office of the Disaster Assistance Direct Governor, Office of the Natural Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

83.503

$ 83.505
$ 83.516
$

1,687,986.13
37,679.06
115,610,624.82 3,933,119.00

NONMONETARY EXPENDITURES

Hazard Mitigation Assistance Direct Governor, Office of the
Hurricane Program Direct Governor, Office of the
Earthquake Hazards Reduction Grants Direct Governor, Office of the
Emergency Management Institute - Field Training Program Direct Governor, Office of the
State and Local Emergency Management Assistance Other Assistance
Direct Governor, Office of the
Facilities and Equipment Direct Governor, Office of the

$ 83.519
$ 83.520
$ 83.521
$ 83.528
$ 83.531

163,581,648.33 1,549,649.36 89,534.95 26,527.37 121,746.76

$ 83.532
$

511,650.46 8,999.99

C - 45

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Federal Emergency Management Agency
Other Federal Assistance

CFDA NUMBER

MONETARY EXPENDITURES

OFA

NONMONETARY EXPENDITURES

AGENCY TOTAL

$

167,843,986.09

NET TOTAL AGENCY
General Services Administration
Donation of Federal Surplus Personal Property (4) Direct Administrative Services, Department of
AGENCY TOTAL
Health and Human Services, U. S. Department of
Special Programs for the Aging - Title VII, Chapter 3 Programs for Prevention of Elder Abuse, Neglect,
and Exploitation Through: Morehouse College Savannah State College
Special Programs for the Aging - Title III, Part F - Disease Prevention and Health Promotion Services
Direct Human Resources, Department of
Special Programs for the Aging - Title III, Part B Grants for Supportive Services and Senior Centers Direct Human Resources, Department of
Special Programs for the Aging - Title III, Part C Nutrition Services
Direct Human Resources, Department of

$ ----'-12-3.,7.9.8.,;8.4.3..5-8-

39.003

$ ----'-2-6.,6.9.2.,;0.14...0-0-
$ ----'-2-6.,6.9.2.,;0.1.4..0-0-

93.041

$ 93.043
$ 93.044
$ 93.045
$

19,470.69 625,207.62 6,817,836.79 10,638,413.73

C -46

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Special Programs for the Aging - Title III, Part D - In-Home Services for Frail Older Individuals Direct Human Resources, Department of
Special Programs for the Aging - Title IV - Training, Research and Discretionary Projects and Programs Direct Human Resources, Department of
Special Programs for the Aging - Title II - Preconference Programs for the White House Conference on Aging Direct Human Resources, Department of
Demonstration Grants for Residential Treatment for Women and Their Children
Through: Thomas County MHMRSA Area Services Valdosta State University
Food and Drug Administration - Research Direct Agriculture, Department of
Minority International Research Training Grant in the Biomedical and Behavioral Sciences Direct Albany State College
Maternal and Child Health Federal Consolidated Programs Direct Georgia State University Human Resources, Department of
Biological Response to Environmental Health Hazards Through: Medical College of Georgia Research Institute Medical College of Georgia
Applied Toxicological Research and Testing Direct Georgia State University
Project Grants and Cooperative Agreements for Tuberculosis Control Programs Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.046
$ 93.048
$ 93.050
$ 93.102
$ 93.103
$ 93.106
$ 93.110
$
$ 93.113
$ 93.114
$ 93.116
$

I17,7IO.12

22,223.65

10,000.00

75,430.48 60,760.68

73,591.25
98,960.90 277,623.29 376,584.19
69,131.98
190,924.37

1,780,369.09

$

214,872.35

C -47

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Grants for Preventive Medicine and Dental Public Health Through: Georgia Tech Research Corporation Georgia Institute of Technology
Acquired Immunodeficiency Syndrome (AIDS) Activity Direct Education, Department of Georgia State University Human Resources, Department of Through: AID Atlanta Georgia State University
Grants for Technical Assistance Activities Related to the Block Grant for Community Mental Health Services - Technical Assistance Centers for Evaluation Direct Human Resources, Department of
Oral Diseases and Disorders Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Mental Health Planning and Demonstration Projects Direct Human Resources, Department of
Emergency Medical Services for Children Direct Human Resources, Department of
Primary Care Services - Resource Coordination and Development Primary Care Offices Direct Human Resources, Department of
Financial Assistance for Disadvantaged Health Professions Students (FADHPS) Direct Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.117 $
93.118 $
$ 93.119

18,947.41

-1,105.46

126,000.18

6,905,618.25

$

34,075.37

7,064,588.34

$

$ 93.121
$
$ 93.125
$ 93.127
$ 93.130
$ 93.139
$

27,747.18 115,802.99 961,226.14 178,461.73 1,255,490.86 406,418.00 222,587.19
185,264.36
31,207.00

25,474.96 25,474.96

C-48

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Projects for Assistance in Transition from Homelessness (PATH) Direct Human Resources, Department of
mv Demonstration Program for Children, Adolescents,
and Women Direct Human Resources, Department of
Health Program for Toxic Substances and Disease Registry Through: Georgia Tech Research Corporation Georgia Institute of Technology
Grants for State Loan Repayment Direct Regents of the University System of Georgia, Board of
Research Facilities Improvement Through: University of Georgia Research Foundation University of Georgia
Human Genome Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Research Related to Deafness and Communication Disorders Direct Georgia State University Through: Medical College of Georgia Research Institute Medical College of Georgia
Disabilities Prevention Direct Human Resources, Department of
National Research Services Awards Direct Georgia State University University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

93.150
$ 93.153
$ 93.161
$ 93.165
$ 93.167
$ 93.172
$
$ 93.173
$
$ 93.184
$ 93.186
$
$

459,236.69
417,439.75
168,810.90
135,950.00
57,356.95
104,581.84 22,449.08 127,030.92
173,853.60 44,653.13 218,506.73
273,754.95
530.33 109,496.56 110,026.89

NONMONETARY EXPENDITURES

C -49

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Special Project Grants to Schools of Public Health Direct Georgia State University
Allied Health Project Grants Direct Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.188 93.191

$

205,389.05

----~--

$

108,619.40

Interdisciplinary Training for Health Care for Rural Areas Direct Medical College of Georgia
Childhood Lead Poisoning Prevention Projects - State and Community-Based Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children Direct Human Resources, Department of
Family Planning - Services Direct Human Resources, Department of
Community Health Centers Direct Georgia Southern University
National Research Service Awards - Health Services Research Training Direct Georgia State University
Health Services Research and Development Grants Direct Human Resources, Department of Through: University of Georgia Research Foundation University of Georgia

93.192 93.197

$ - - - _ . . .13.3:,3.9-1._09$ - - - - - '23-,2-73-.15-

93.217 93.224 93.225

$

426,440.04

----~--

$

6,223,354.00

--_.:....-~--

$

37,349.24

----~--

93.226

$ - - - - - '8-,9-79-.89-

$

328,594.46

110,660.40

s

439,254.86

----~--

C - 50

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Mental Health Research Grants Direct Georgia State University Human Resources, Department of Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Migrant Health Centers Grants Direct Human Resources, Department of
Childhood Immunization Grants (4) Direct Human Resources, Department of
Alcohol National Research Service Awards for Research Training Through: University of Georgia Research Foundation University of Georgia
Alcohol Research Programs Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Drug Abuse Research Programs Direct Georgia State University Kennesaw State College Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.242 $
$ 93.246
$ 93.268
$ 93.272
$ 93.273
$
$ 93.279
$
$

356,112.38 11,044.26
160,194.94 130,566.19 657,917.77

730,459.06

5,977,702.79

$

37,239,276.94

91,876.63
244,175.94 528,669.26 772,845.20
33,571.70 45,038.94 557,681.59 110,116.74 746,408.97

C- 51

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Scientist Development Award (SDA), Research Scientist Development Award (RSDA), Scientist Development Award for Clinicians(SDAC), and Research Scientist Award (RSA) Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Centers for Disease Control and Prevention - Investigations and Technical Assistance
Direct Human Resources, Department of
Through: Medical College of Georgia Research Institute Medical College of Georgia
Nurse Practitioner and Nurse-Midwifery Education Programs Direct Albany State College Georgia Southern University
Comparative Medicine Program Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University ofGeorgia
Biomedical Research Support Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia
Health Professions Student Loans, Including Primary Care Loans/Loans for Disadvantaged Students (3)
Direct Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.281

$
$ 93.283
$
$ 93.298
$ $ 93.306 $
$ 93.337
$
$ 93.342
$

4,240.68 100,915.48 105,156.16

1,856,777 .50 -8,549.53
1,848,227.97
199,477.23 202,258.82 401,736.05
-678.40 144,573.88 143,895.48
5,845.68 34,914.65 34,807.37 75,567.70

26,765.00

$

4,696,427.58

C - 52

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Professional Nurse Traineeships Direct Albany State College Georgia Southern University Georgia State University Medical College of Georgia Valdosta State University
Nurse Training Improvement - Special Projects Direct Georgia Southern University Medical College of Georgia
Nursing Research Direct Georgia State University Medical College of Georgia
Nursing Student Loans (3) Direct Abraham Baldwin Agricultural College Albany State College Armstrong State College Augusta College Brunswick College Clayton State College Columbus College DeKalb College Georgia College Georgia Southwestern College Georgia State University Gordon College Kennesaw State College Macon College Medical College of Georgia South Georgia College Valdosta State University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.358 $
$ 93.359
$ $ 93.361 $ $ 93.364 $
$

21,871.00 49,648.00 144,213.13 25,079.97 27,868.00
268,680.10

176,580.23 28,038.52
204,618.75

-1,634.19 23,704.13
22,069.94

$ -3.98 (I)
-105.00 (I) 540.00 (I)
29.31 (I)
-51.20 (I)
-22.41 (I)

-14,202.33 (1 ) -12,956.81 (I)

-26,772.42

$

120,408.79 (I)
29,358.98 (I)
5,665.46 (1)
-0.20 (I) 3,864.74 (I) 35,645.56 (I) 6,005.62 (I) 55,951.56 (I) 5,370.88 (I) 52,536.83 (I)
1,716.05 (1)
8,138.28 (I) 2,905.81 (I) 828,611.07 (I)
39,527.98 (I)
11,934.58 (I)
1,207,641.99

C - 53

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Biomedical Research Technology Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Minority Biomedical Research Support Direct Albany State College
Grants for Graduate Training in Family Medicine Direct Medical College of Georgia
Academic Research Enhancement Award Direct West Georgia College Through: University of Georgia Research Foundation University of Georgia
Cancer Cause and Prevention Research Direct Georgia State University Through: Medical College of Georgia Research Institute Medical College of Georgia
Cancer Treatment Research Direct Georgia State University
Cancer Research Manpower Through: Georgia Tech Research Corporation Georgia Institute of Technology
Cancer Control Direct Human Resources, Department of Through: Medical College of Georgia Research Institute Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.371 $
$ 93.375
$ 93.379
$ 93.390
$
$ 93.393
$
$ 93.395
$ 93.398
$ 93.399
$
$

28,728.03 855,166.77 883,894.80
259,289.91
144,079.77
44,593.34 35,853.11 80,446.45
160,045.03 8,224.26
168,269.29
11,435.23
34,897.94
8,203.77 77,029.94 85,233.71

C - 54

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Abandoned Infants Direct Human Resources, Department of
Emergency Protection Grants - Substance Abuse Direct Human Resources, Department of
Family Preservation and Support Services Direct Human Resources, Department of
Family Support Payments to States - Assistance Payments Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

93.551

$

309,207.89

93.554

$

2,931.12

93.556

$

523,811.40

93.560

$

338,284,283.38

93.561 *
$

23,424,755.61

28,132.31
: .........
. : .....:

NONMONETARY EXPENDITURES

C - 55

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Job Opportunities and Basic Skills Training Through: Jenkins County DFACS Swainsboro Technical Institute Through: Washington County DFACS Swainsboro Technical Institute
Assistance Payments - Research Direct Human Resources, Department of
Child Support Enforcement Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.561

$

27,206.84

454.15

$

24,762,621.01

93.562

$ - - - - - ' - - - 15,437.99
93.563 *

$

43,657,732.12

State Legalization Impact Assistance Grants Direct Human Resources, Department of

$ 93.565
$

44,469,503.1 0 1,176,576.31

Refugee and Entrant Assistance - State Administered Programs Direct Georgia State University Human Resources, Department of

$ 93.566
$

1,176,705.85
87,821.41 7,1I9,528.48

Low-Income Home Energy Assistance Direct Environmental Facilities Authority, Georgia Human Resources, Department of
Community Services Block Grant Direct Human Resources, Department of

$ 93.568
$
$ 93.569
$

9,600,612.95
2,262,487.00 (2) 13,640,815.26 15,903,302.26
10,891,872.19

C - 56

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Community Services Block Grant - Discretionary Awards Through: National Collegiate Athletic Association Fort Valley State College Georgia College Savannah State College
Community Services Block Grant Discretionary Awards Community Food and Nutrition Direct Human Resources, Department of
Emergency Community Services for the Homeless Direct Human Resources, Department of
Payments to States for Child Care Assistance Direct Abraham Baldwin Agricultural College Gainesville College Human Resources, Department of Valdosta State University Through: Georgia Child Care Council Macon Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.570 $
$ 93.571
$ 93.572
$ 93.575
$

56,308.67 59,327.74 20,674.31 136,310.72
114,584.00
530,682.00
571.00 43,334.52 23,676,096.47 52,638.58 17,246.79

State Court Improvement Program Direct Judicial Council and Administrative Office of the Courts

$ 93.586

24,214,173.49

$ ---_....:31.,.30.8.._82-

C - 57

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Head Start Direct Education, Department of Georgia College Through: Ninth District Opportunity, Incorporated Gainesville College Through: University of Georgia Research Foundation University of Georgia
Child Welfare Research and Demonstration Direct University of Georgia
Child Development Associate Scholarships Direct Georgia State University
Developmental Disabilities Basic Support and Advocacy Grants Direct Human Resources, Department of University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.600
93.608 93.614 93.630

$

138,139.30

22,094.99

15,158.75

85,806.06

$ - - - _ . .2:6.1,.1.9.9._10-

$ - - - - - '78-,7-13-.99$ - - - - - '54-,0-96-.42-

$

1,714,095.21

203,238.09

Developmental Disabilities Projects ofNational Significance Direct University of Georgia
Developmental Disabilities University Affiliated Programs Direct University of Georgia
Children's Justice Grants to States Direct Human Resources, Department of
Child Welfare Services - State Grants Direct Human Resources, Department of
Adoption Opportunities Direct Human Resources, Department of

93.631 93.632 93.643 93.645 93.652

$

1,925,213.92

$ - - _ . . . .10.5.,8:0.0._14$ - - - _ . .3:7.6,.8.2.5._16-
$- - - -26-5,68-0.1-9
$ ---"'-8,-02-3',5-62-.0-0$ - - - - - '42-,1-72-.40-

C - 58

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Sen-ices, U. S. Department of Temporary Child Care and Crisis Nurseries Direct Human Resources, Department of Foster Care - Title IV-E Direct Human Resources, Department

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.656 93.658

$ ----...3;95.,0.0-0.-00-

Adoption Assistance Direct Human Resources, Department of
Social Services Block Grant Direct Human Resources, Department of
Child Abuse and Neglect State Grants Direct Human Resources, Department of
Family Violence Prevention and Services Grants to States and Indian Tribes
Direct Human Resources, Department of
Community-Based Prevention Program Direct Human Resources, Department of
Grants to States for Planning and Development of Dependent Care Programs Direct Human Resources, Department of
Independent Living Direct Human Resources, Department of

$ 93.659
$
93.667 *
$ 93.669
$ 93.671
$ 93.672
$ 93.673
$

23,546,1 79.55 4,047,609.65 72,248,867.99
471,470.13 513,879.59 118,626.00 348,003.17

93.674

$-----3-54-,69'9.~12-
$ - - _ . . : . 1. ,-0.8.2.,1;4.6..-4-2 -

C - 59

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of Medicare - Hospital Insurance Direct Human Resources, Department

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.773

State Medicaid Fraud Control Units Direct Investigation, Georgia Bureau of
State Survey and Certification of Health Care Providers and Suppliers
Direct Human Resources, Department of Medical Assistance, Department of
Medical AssistanceProgram Direct Education, Department of Medical Assistance, Department of

93.775 93.777

$

3,404,651.73

$--_..:..1..,1.4.4.:,2.3.1..-2_5 -

93.778

$

591,000.73

2,067,552.34

$

2,658,553.07

$

50,745.85

2,215,414,942.79

Health Care Financing Research, Demonstrations and Evaluations Direct Human Resources, Department of Through: Medical College of Georgia Research Institute Medical College of Georgia
Social Security - Disability Insurance Direct Human Resources, Department of
Scholarships for Students of Exceptional Financial Need Direct Medical College of Georgia

93.779

$

2,261,778,932.67

$

205,257.24

71,517.70

$ ---_..:2.76.,.7.74.._94-
93.802 *

93.820

$ --_..:..3.3.,.1.2.0:,.0.4.6...3_2 -

$ ---_..:.45.,.5.09.._00-

C- 60

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of Cell Biology and Biophysics Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Health Careers Opportunity Program Direct Medical College elfGeorgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.821 93.822

$

40,331.81

160,067.72

$ ---_....20:0.,3.9.9..5_3-

Heart and Vascular Diseases Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Lung Diseases Research Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Blood Diseases and Resources Research Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia
Arthritis, Musculoskeletal and Skin Diseases Research Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia

$ 93.837
$
$ 93.838
$
$ 93.839
$
$ 93.846
$
$

56,142.61
339,022.71 1,228,951.60
542,336.95 2,110,311.26
965,416.44 139,610.59 1,105,027.03
293,019.68 2,941,544.91 3,234,564.59
512,403.07 94,260.88 606,663.95

C - 61

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Diabetes, Endocrinology and Metabolism Research Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Digestive Diseases and Nutrition Research Direct Georgia State University Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Kidney Diseases, Urology and Hematology Research Through: University of Georgia Research Foundation University of Georgia
Clinical Research Related to Neurological Disorders Through: Medical College of Georgia Research Institute Medical College of Georgia
Biological Basis Research in the Neurosciences Direct Georgia State University Through: Medical College ofGeorgia Research Institute Medical College of Georgia
Allergy, Immunology and Transplantation Research Direct Georgia State University Through: University of Georgia Research Foundation University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

93.847 $
$ 93.848
$
$ 93.849
$ 93.853
$ 93.854
$
$ 93.855
$
$

423,816.66 256,515.40 680,332.06
136,935.06 685,584.42
56,493.32 879,012.80
285,743.18
142.08
222,661.22 556,013.00 778,674.22
531,877.14 73,273.41
605,150.55

NONMONETARY EXPENDITURES

C - 62

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995
Health and Human Services, U. S. Department of
Microbiology and Infectious Diseases Research Direct Georgia Southern University Georgia State University Valdosta State University Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Pharmacology, Physiology, and Biorelated Chemistry Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Genetics and Development Biology Research Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Cellular and Molecular Basis of Disease Research Direct Georgia State University Through: University of Georgia Research Foundation University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.856 $
$ 93.859
$
$ 93.862
$
$ 93.863
$ $

249,231.00 532,799.79
269.42 53,221.28 19,812.09 2,086,687.72 2,942,021.30
310,050.39 111,403.26 305,989.61 727,443.26
152,097.46 17,286.58
588,666.47 758,050.51
262,658.52 1,442,138.37 1,704,796.89

C - 63

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Population Research Through: Medical College of Georgia Research Institute Medical College of Georgia Through: National Institute of Health Savannah State College Through: University of Georgia Research Foundation University of Georgia
Research for Mothers and Children Direct Georgia State University Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Aging Research Direct Georgia State University Medical College of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Vision Research Direct Georgia Institute of Technology Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Medical Library Assistance Through: Georgia Tech Research Corporation Georgia Institute of Technology

CFDA NUMBER

MONETARY EXPENDITURES

93.864 $
$ 93.865
$
$ 93.866
$
$ 93.867
$
$ 93.879
$

494,610.42 25,387.78 71,626.63
591,624.83
622,753.56 457,459.86 674,954.11 1,755,167.53
219,471.50 1,293.88
463,527.00 958,059.77 1,642,352.15
10,853.62 89,069.31 1,379,459.20 38,425.85 1,517,807.98
237,473.41

NONMONETARY EXPENDITURES

C - 64

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Minority Access to Research Careers Direct Albany State College Savannah State College
Grants for Physician Assistant Training Program Direct Medical College of Georgia
Grants for Faculty Development in Family Medicine Direct Medical College of Georgia
Model Comprehensive Drug Abuse Treatment Programs for Critical Populations Direct Children and Youth Services, Department of Human Resources, Department of
Grants to States for Operation of Offices of Rural Health Direct Human Resources, Department of
Nurse Anesthetist Education Programs Direct Medical College of Georgia
my Care Formula Grants
Direct Human Resources, Department of
Cooperative Agreements for State-Based Comprehensive Breast and Cervical Cancer Early Detection Programs
Direct Human Resources, Department of
Scholarships for Health Professions Students from Disadvantaged Backgrounds Direct Albany State College Armstrong State College Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

93.880 $
$ 93.886
$ 93.895
$ 93.902
$
$ 93.913
$ 93.916
$ 93.917
$ 93.919
$ 93.925
$
$

154,215.79 145,404.23 299,620.02
230,027.79
88,415.83
611,241.44 346,371.00 957,612.44
31,672.21
33,598.24
4,222,407.65
1,577,649.42
34,806.00 108,755.00 87,233.00 230,794.00

NONMONETARY EXPENDITURES

C - 65

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995
Health and Human Services, U. S. Department of
Fogarty International Research Collaboration Award Direct Georgia Southern University Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University of Georgia
Comprehensive Residential Drug Prevention and Treatment Projects for Substance-Using Women and Their Children Direct Children and Youth Services, Department of
Cooperative Agreements to Support Comprehensive School Health Programs to Prevent the Spread ofHIV and Other Important Health Problems Direct Education, Department of
HIV Prevention Activities - Health Department Based Direct Human Resources, Department of
HIV Demonstartion, Research, Public and Professional Education Projects Direct Human Resources, Department of
Research, Treatment and Education Programs on Lyme Disease in the United States
Direct Georgia Southern University
Epidemiologic Research Studies of Acquired Immunodeficiency Syndrome (AIDS) and Human
Immunodeficiency Virus (HIV) Infection in Selected Population Groups
Through: University of Georgia Research Foundation University of Georgia
Assistance Program for Chronic Disease Prevention and Control Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.934 $
$ 93.937
$ 93.938

15,402.50 33,810.70 25,656.70 74,869.90
1,206,723.25

$ 93.940
93.941 $
93.942 $
93.943

367,759.48 $
15,659.00 105,458.28

23,160.00

$ 93.945
$

481,093.67 12,816.02

C - 66

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
IllY/AIDS and Related Diseases Among Substance Abusers: Community - Based Outreach and Intervention Demonstration Program Direct Medical College of Georgia
Demonstration Grants to States with Respect to Alzheimer's Disease
Direct Human Resources, Department of
Modification of Trauma Care Component of State EMS Plan Direct Human Resources, Department of
Centers for Agricultural Research, Education and Disease and Injury Prevention and Occupational Respiratory Disease Musculoskeletal Disorders Evaluation and Rehabilitation Direct Human Resources, Department of
Block Grants for Community Mental Health Services Direct Human Resources, Department of
Block Grants for Prevention and Treatment of Substance Abuse Direct Human Resources, Department of
Special Minority Initiatives Direct Georgia State University
Health Administration Traineeships and Special Projects Program Direct Georgia State University
Preventive Health Services - Sexually Transmitted Diseases Control Grants Direct Human Resources, Department of
Mental Health Disaster Assistance and Emergency Mental Health Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.949

$ 93.951
$ 93.953
$ 93.956

27,869.40 175,964.04 155,310.23

$ 93.958
$
93.959 *
$ 93.960
$ 93.962
$ 93.977
$ 93.982
$

304,263.91 6,605,260.63

26,086,502.80 151,766.68

22,791.27

2,350,228. I I

$

588,206.45

1,664,834.46

C - 67

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995
Health and Human Services, U. S. Department of
Grants for Establ ishment of Departments of Family Medicine Direct Medical College of Georgia
Health Programs for Refugees Direct Human Resources, Department of
Cooperative Agreements for State-Based Diabetes Control Programs and Evaluation of Surveillance Systems
Direct Human Resources, Department of
Senior International Fellowships Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University ofGeorgia
National Health Promotion Direct Human Resources, Department of
Preventive Health and Health Services Block Grant Direct Human Resources, Department of
Maternal and Child Health Services Block Grant to the States (11) Direct Human Resources, Department of Medical College of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.984

$ 93.987
$ 93.988

101,795.62 59,486.10

93.989
93.990 93.991

$

118,843.21

$

15,712.50

28,279.97

$ -----'---- 43,992.47

$ - - - - - ' - - - - 28,592.98

$

4,639,680.85

$

425,183.88

$ - - - - ' -4-,86-4',0-1-9.8-5-
93.994 *

$ ---_...4:25.,.18-3_.88-

$

17,693,990.76

75,404.55

$

17,769,395.31

C -68

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Health and Human Services, U. S. Department of
Other Federal Assistance (3) Direct Albany State College Georgia State University Human Resources, Department of Medical College of Georgia Savannah State College University of Georgia Through: Georgia Association for Primary Health Care Fort Valley State College Through: Georgia Tech Research Corporation Institute of Technology

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA $

165,386.81

61,003.00

19,504.94

424.87

229,427.86

200,160.40

$

322.50

2,080,994.92

Albany State College Through: Morehouse School of Medicine
Fort Valley State College Through: National Association for
Equal Opportunity in Higher Education Fort Valley State College Savannah State College
Through: National Collegiate Athletic Association Albany State College Savannah State College
Through: University of Connecticut Kennesaw State College
Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

7,059.24 15,063.69

158.55 514.45

32,263.05 20,557.38

9,919.88

1,415,995.41

$

3,276,328.81

$

$

3,035,663,638.04

$

2,080,994.92 47,577,867.08

NET TOTAL AGENCY
Helen Keller National Center
Other Federal Assistance Direct Human Resources, Department of
AGENCY TOTAL

$

2,983,893,896.40

$

47,577,867.08

OFA $ $
C - 69

21,210.82 21,210.82

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Housing and Urban Development, U. S. Department of
Manufactured Home Construction and Safety Standards Direct Insurance, Department of Through: National Conference of States on Building Codes Insurance, Department of Through: Various Mobile Home Manufacturers Insurance, Department of
Community Development Block Grants/State's Program Direct Community Affairs, Department of
Rental Housing Rehabilitation Direct Housing and Finance Authority, Georgia
Emergency Shelter Grants Program Direct Housing and Finance Authority, Georgia
Supportive Housing Program Direct Human Resources, Department of
Historically Black Colleges and Universities Program Direct Fort Valley State College
HOME Investment Partnerships Program Direct Housing and Finance Authority, Georgia
Fair Housing Assistance Program - State and Local Direct Governor, Office ofthe
Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation Direct Housing and Finance Authority, Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

14.171 $

446,321.50

$ 14.228
$ 14.230
$ 14.231
$ 14.235
$ 14.237
$ 14.239
$ 14.401
$ 14.856

6,707.42 833,849.30 1,286,878.22 51,972,326.49
2,970.00 1,236,297.00
535,684.00 10,569.40
11,372,916.00 (2) 74,890.93

$

35,841,300.00

C -70

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Housing and Urban Development, U. S. Department of
Other Federal Assistance Direct Albany State College Savannah State College Through: Georgia Tech Research Corporation Georgia Institute of Technology
AGENCY TOTAL
Interior, U. S. Department of the
Fishery Research - Information Direct Georgia Southern University
Sport Fish Restoration Direct Natural Resources, Department of Through: University of Georgia Research Foundation University of Georgia
Migratory Bird Banding and Data Analysis Direct Georgia Southern University
Wildlife Restoration Direct Natural Resources, Department of
Endangered Species Conservation Direct Natural Resources, Department of
Clean Vessel Act Direct Natural Resources, Department of
Assistance to State Water Resources Research Institutes Direct Georgia Institute of Technology

CFDA NUMBER

MONETARY EXPENDITURES

OFA $
$

22,238.23 22,700.16
4,402.20
49,340.59

$

102,383,172.63

15.604 $
15.605 $
$ 15.606
$ 15.611
$ 15.612
$ 15.616
$ 15.805
$

766.32 3,266,959.00
8,556.37 3,275,515.37
74,420.74 3,584,663.00
169,067.00 10,954.00 92,419.83

NONMONETARY EXPENDITURES

C -71

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Interior, U. S. Department of the

National Water Resources Research Program Through: Georgia Tech Research Corporation Georgia Institute of Technology
Earthquake Hazards Reduction Program Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University ofGeorgia

15.806 15.807

$ - - - - - - - 88.78

$

95,260.24

0.05

Geological Survey - Research and Data Acquisition Direct Fort Valley State College Natural Resources, Department of

$ ----...;9.5,.2.60..-29-
15.808

$

19,838.14

28,898.00

$ ----...;4.8,.73.6..1-4-

Historic Preservation Fund Grants-In-Aid

15.904

Direct

Georgia State University

$

2,993.07

_ E ; ; : : 2 J J ] ; ; ; ; ; ; ; Natural Resources, Departmentof

2,536,181.00

Technical Preservation Services Through: University of Georgia Research Foundation University of Georgia
Outdoor Recreation - Acquisition, Development and Planning Direct Natural Resources, Department of
Through: Uni\>crllity of Geotgill Reseai-ch Poundation
University of Georgia
Rivers, Trails and Conservation Assistance Direct Natural Resources, Department of

15.915 15.916

$

2,546,291.33

$ ---_....:-_- 6,336.80

$

382,263.22

33,312.04

- - - - - - - - $

416,621.79

15.921

$---_...2.,:50-0._00-

C-72

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Interior, U. S. Department of the
Migratory Bird Banding and Data Analysis Direct Natural Resources, Department of
Other Federal Assistance Direct Atlanta Metropolitan College Fort Valley State College Georgia Institute of Technology Natural Resources, Department of Soil and Water Conservation Commission, State University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

15.976 OFA

$ -----"18-,5-63-.00-

$

851.24

51,697.76

-0.01

12,329.00

14,146.77

270,163.36

57,270.25

University of Georgia AGENCY TOTAL

1,092,351.04 $ ---..:.-1.,.5.0.0:,9..0.2..1_9-

$

11,843,106.58

NET TOTAL AGENCY
International Development, U. S. Agency of
Other Federal Assistance Direct Fort Valley State College
AGENCY TOTAL
Japan-U. S. Friendship Commission
Other Federal Assistance Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

$

11,832,850.01

OFA $
$

32,091.58 32,091.58

OFA $
$

35,328.47 35,328.47

C -73

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Justice, U. S. Department of
Juvenile Justice and Delinquency Prevention Allocation to States Direct Governor, Office of the Medical College of Georgia Through: Children and Youth Council of Georgia Brunswick College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

16.540 $

1,215,777.73 32,192.18
15,261.43

Criminal Justice Statistics Development Direct Governor, Office ofthe
Justice Research, Development and Evaluation Project Grants Direct Governor, Office of the
Crime Victim Assistance Direct Governor, Office of the
Crime Victim Compensation Direct Governor, Office of the
Drug Control and System Improvement - Formula Grant Direct Courts Automation Commission, Georgia Defense, Department of Governor, Office of the Investigation, Georgia Bureau of Pardons and Paroles, State Board of Through: City of Conyers Investigation, Georgia Bureau of

16.550 16.560

$

1,717,487.99

$

50,000.00

----~--

$

320,586.09

$ 16.575
$ 16.576
$ 16.579
$

418,812.65
1,639,149.17
72,372.43
48,000.00 6,630.52
8,805,587.78 65,565.97 386.20 7,418.80

C-74

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Justice, U. S. Department of Drug Control and System Improvement - Formula Grant

CFDA NUMBER

MONETARY EXPENDITURES

16.579

NONMONETARY EXPENDITURES

Drug Control and System Improvement Discretionary Grant Direct Governor, Office of the Through: City of Conyers Investigation, Georgia Bureau of
Corrections - Training and Staff Development Direct Altamaha Technical Institute
Other Federal Assistance Direct Corrections, Department of Investigation, Georgia Bureau of Public Safety, Department of Secretary of State Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL
NET TOTAL AGENCY

$ 16.580

11,861,004.02

16.601 OFA

$

38,462.00

159,410.36

$ - - _ . . . .1.9:7,.8.72.._36-

$ - - - _ . .4.9:,95-0_ .00-

$

64,346.41

490,263.09

3,663.72

53,996.22

14,504.10

$ ---_..62.6:,7-73_.54-

$

16,633,422.16

$ - _ - - .1:3.,1-5-3,.52:4..2_0 -

C -75

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995
Labor, U. S. Department of
Labor Force Statistics Direct Labor, Department of
Compensation and Working Conditions Data Direct Labor, Department of
Apprenticeship Training Direct Middle Georgia Technical Institute
Employment Service Direct Labor, Department of
Unemployment Insurance Direct Labor, Department of
Senior Community Service Employment Program Direct Human Resources, Department of
Trade Adjustment Assistance - Workers Direct Labor,

CFDA NUMBER

MONETARY EXPENDITURES

17.002 $
17.005 $
17.201 $
17.207 $
17.225 $
17.235 $
17.245

1,630,996.72 125,945.44 161,928.83
21,187,419.22 60,244,701.23
1,803,995.07

NONMONETARY EXPENDITURES

Employment and Training Assistance Dislocated Workers (II) Direct Labor, Department of Technical and Adult Education, Department of
Employment and Training Research and Development Projects
Direct Labor, Department of

$ 17.246
$ $ 17.248 $

279,724.60
18,239,383.70 226,288.00
18,465,671.70
1,086.16

C -76

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Labor, U. S. Department of
Employment Services and Job Training - Pilot and Demonstration Programs
Direct Labor, Department of
Job Training Partnership Act Direct Governor, Office of the Labor, Department of Savannah State College Through: Altamaha Regional Development Center Ben Hill-Irwin Technical Institute Swainsboro Technical Institute Through: Altamaha-Georgia Southern University Regional Development Center Ogeechee Technical Institute Through: Atlanta Regional Commission Carroll Technical Institute Chattahoochee Technical Institute Griffin Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

17.249

17.250

$ ----..:70.9.,8.3.7._31-

$

208,466.82

55,127,064.04

5,275.00

596.56 60,608.44

158,336.63
147,265.31 71,613.00 242,466.00

and Training Consortium Augusta College
Through: City of Atlanta Private Industry Council Human Resources, Department of
Through: City of Columbus Consolidated Government Columbus Technical Institute West Georgia Technical Institute
Through: City of McDonough Griffin Technical Institute
Through: Cobb County Board of Commissioners Chattahoochee Technical Institute North Metro Technical Institute
Through: Coosa Valley Regional Development Center Carroll Technical Institute Coosa Valley Technical Institute Floyd College North Metro Technical Institute Pickens Technical Institute Walker Technical Institute
Through: East Central Georgia Employment and Training Consortium Athens Area Technical Institute Augusta Technical Institute Ogeechee Technical Institute Swainsboro Technical Institute

67,353.92
178,285.43
124,513.85 1,233.11
5,789.34
120,149.18 12,780.47
84,785.69 155,409.23 48,581.86 92,701.78 33,794.71 205,551.40
90,767.33 41,801.33 51,047.42 110,582.86

C -77

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995
Labor, U. S. Department of
Job Training Partnership Act Through: Georgia Mountains Regional Development Center Athens Area Technical Institute North Georgia Technical Institute Through: Green Thumb, Incorporated Columbus Technical Institute Georgia College Griffin Technical Institute Macon Technical Institute Okefenokee Technical Institute Through: Griffin Regional Educational Service Agency Carroll Technical Institute Flint River Technical Institute Griffin Technical Institute West Georgia Technical Institute Through: Heart of Georgia Regional Development Center Ben Hill-Irwin Technical Institute Heart of Georgia Technical Institute Middle Georgia College Middle Georgia Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

17.250 $

3,239.50 21,444.41
8,109.29 165.24
2,410.29 4,719.49 4,343.88
74,281.53 3,952.76
32,018.08
7,319.39 15,339.15 46,079.46 83,261.94

Through: Lower Chattalll)l>l:hee Private Industry Council Georgia Southwestern College
Through: Middle Flint Regional Development Center Columbus Technical Institute Flint River Technical Institute Middle Georgia Technical Institute South Georgia Technical Institute
Through: Middle Georgia Consortium, Incorporated Flint River Technical Institute Macon Technical Institute Middle Georgia Technical Institute
Through: North Georgia Private Industry Council Pickens Technical Institute
Through: North Georgia Regional Development Center Valdosta Technical Institute
Through: Northeast Georgia Regional Development Center
Athens Area Technical Institute
C-78

103,177.42
12,914.27 794.00
20,094.46 221,241.68
49,136.99 62,536.16 39,882.96
170,119.82
4,970.11
221,690.10

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995 Labor, U. S. Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

17.250 $

152,789.83
0.38 723.82
187,218.95
34,367.06 104,496.94 50,195.19 33,333.83
30,986.41 229,250.78
85,242.10
72,668.45 203,169.46
83,990.83 27,672.61 123,194.98 203,074.23

C -79

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Labor, U. S. Department of Job Training Partnership Act

CFDA NUMBER

MONETARY EXPENDITURES

17.250 *
;:;:::::::::::::::::::::::::::::.:

NONMONETARY EXPENDITURES

through: West Central Gwrg}ilN!vate Industry Council Griffin Technical Institute
Mine Health and Safety Grants Direct Technical and Adult Education, Department of
Women's Special Employment Assistance Direct Labor, Department of
Disabled Veterans' Outreach Program (DVOP) 'Direct Labor, Department of
Veterans' Employment Program Direct
Labo~Departmentof
Local Veterans' Employment Representative Program Direct Labor, Department of

$ 17.600
$

15,550.13 66,115,522.73
153,287.66

17.700 17.801 17.802 17.804

$

306,575.66

$ ---_..1.4:7,-95.2_.00-

$

2,398,246.44

$

541,256.64

$

1,584,667.90

::

.

~rt:~t~~:~:~:::~:::::~:::::::::::::::::::::":":":"

:.::::::::.:.:.:.:.:.:.:.:-:.:.:-

.

C - 80

STATE OF GEORGIA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Labor, U. S. Department of Other Federal Assistance Direct Labor, Department of Medical College of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

OFA $
$

176,305.13 5,600.00
982,268.41
1,164,173.54

$

176,869,701.19

NONMONETARY EXPENDITURES

NET TOTAL AGENCY
National Aeronautics and Space Administration
Aerospace Education Services Program Direct Georgia State University Through: Space Telescope Science Institute Georgia Southern University Through: Universities Space Research Association Georgia Southwestern College
Technology Transfer Direct Georgia Southern University Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology

$

171,127,440.59

43.001 $
$ 43.002
$
$

1,880.98 52,003.07 24,311.74 78,195.79
19,907.01 14,614.67 3,961,633.22 3,996,154.90

C - 81

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
National Aeronautics and Space Administration Other Federal Assistance Direct Georgia State University
ThtougkGeorgia Tech ResearchC6tp6illtioll Georgia Institute of Technology
Through: Lewis Research Center Savannah State College
Through: Universities Space Research Association Kennesaw State College
Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA $

251,829.98

2,010,741.16

1,608.89

16,913.25

336,178.87

$

2,627,272.15

$

6,701,622.84

NET TOTAL AGENCY
National Archives and Records Administration National Historical Publications and Records Grants Direct Secretary of State Through: Georgia Tech Research Corporation Georgia Institute of Technology
AGENCY TOTAL
National Foundation on the Arts and the Humanities Promotion of the Arts - Design Arts Through: Georgia Tech Research Corporation Georgia Institute of Technology Promotion of the Arts - Arts in Education Direct Governor, Office of the

$ --_.:..6-,"69"1,"62'2-.-8-4-

89.003

$

24,552.68

4,592.05

$ ----"""29',1-44-.7-3-

$ ----"""29',1-44-.7-3-

45.001 45.003

$ ----"""36',3-18-.4-2$ - - - - " " "58',1-00-.0-0-

C - 82

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
National Foundation on the Arts and the Humanities
Promotion of the Arts - State and Regional Program Direct Governor, Office of the

CFDA NUMBER

MONETARY EXPENDITURES

45.007 $

595,454.48

NONMONETARY EXPENDITURES

Promotion of the Arts - Folk and Traditional Arts Direct Governor, Office of the Through: National Endowment for the Arts Columbus College
Promotion of the Humanities - Elementary and Secondary Education in the Humanities
Direct Kennesaw State College
Through: University of California Georgia Southwestern College
Promotion of the Humanities - Federal-State Partnership Direct Kennesaw State College Through: Georgia Council for the Arts North Georgia College Through: Georgia Humanities Council East Georgia College Georgia College Georgia Southern University Jekyll Island State Park Authority Middle Georgia College West Georgia College
Promotion of the Humanities - Scholarly Publications Direct University of Georgia
Promotion of the HumanitiesInterpretive Research Program
Direct Georgia State University

$ 45.015
$
$ 45.127
$
$ 45.129
$
$ 45.132
$ 45.140
$
C - 83

665,131.26
31,000.00 25,849.65 56,849.65
11,887.34 2,805.46 14,692.80
1,500.00 230.80 450.00 289.06
4,463.70 797.73 399.31
7,842.65 15,973.25
14,000.00
59,733.13

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
National Foundation on the Arts and the Humanities
Promotion of the Humanities - Reference Materials Through: University of Georgia Research Foundation University of Georgia
Promotion of the HumanitiesHigher Education in the Humanities
Direct University of Georgia
Promotion of the Humanities - Summer Seminars for School Teachers
Through: University of Georgia Research Foundation University of Georgia
Institute of Museum Services Direct Secretary of State
Other Federal Assistance Direct Gainesville College University of Georgia Through: Georgia Endowment for the Humanities Brunswick College Through: Georgia Humanities Council Macon College Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

45.145 $
45.150

-389.61

$ 45.151

3,340.63

45.301 OFA

$

18,866.97

$

619.77

$

26,000.00

11,658.09

1,225.99

1,292.50

-0.12

29,232.00

$ ---_....69:,4.0-8._46-

$

1,012,644.73

NET TOTAL AGENCY
National Science Foundation Engineering Grants Through: Georgia Tech Research Corporation Georgia Institute of Technology

$

942,967.95

47.041

$ --_.:..4.,.9-9.0;,3.2.4...8-8-

C - 84

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
National Science Foundation Mathematical and Physical Sciences Direct Georgia Institute of Technology Georgia Southern University Georgia State University Valdosta State University Through: Georgia Tech Research Corporation Institute of Technology

CFDA NUMBER

MONETARY EXPENDITURES

47,049 $

-3,127,13 10,161.50 424,812,95 80,826,83

University of Georgia
Geosciences Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Biological, Behavioral, and Social Sciences Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Computer and Information Science and Engineering Direct Georgia Southern University Through: Georgia Tech Research Corporation Georgia Institute of Technology

$ 47,050
$
$ 47,051
$
$ 47.070
$
$

23,316.56 2,156,143,11
22,447.86 615,187,86
70,963.30 708,599,02
94,131.98 274,887.47 369,019.45
7,280,00 2,041,464.39 2,048,744.39

NONMONETARY EXPENDITURES

C - 85

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
National Science Foundation
Biological Sciences Direct Clayton State College Georgia Southern University Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology
Social, Behavioral, and Economic Sciences Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Education and Human Resources Direct Atlanta Metropolitan College DeKalb College Georgia State University University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Other Federal Assistance Direct Fort Valley State College Georgia Institute of Technology Georgia State University Kennesaw State College Regents of the University System of Georgia, Board of Savannah State College Skidaway Institute of Oceanography University of Georgia West Georgia College Through: Florida Agricultural and Mechanical University Albany State College

CFDA NUMBER

MONETARY EXPENDITURES

47.074 $
$ 47.075
$
$ 47.076
$
$ OFA
$

5,406.81 17,986.29 194,514.17
106,527.73
324,435.00
50,791.06
71,618.15
10,575.67
132,984.88
35,455.42 18,904.00 231,067.67 34,720.80
502,057.41
311,152.54
1,133,357.84
108,158.82 1,254,036.25
840,936.40 110,551.23 62,906.08 32,761.02 1,294,053.19 408,189.54 85,471.81
40,030.64

NONMONETARY EXPENDITURES

C - 86

STATE OF GEORGIA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
National Science Foundation Other Federal Assistance Through: Georgia Tech Research Corporation Institute of Technology

CFDA NUMBER

MONETARY EXPENDITURES

OFA

NONMONETARY EXPENDITURES

University of Georgia AGENCY TOTAL

8,030,870.00

$

14,279,103.75

$

26,142,712.32

NET TOTAL AGENCY
National Security Agency Other Federal Assistance Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL
Nuclear Regulatory Commission Enhance Technology Transfer and Dissemination of Nuclear Energy Process and Safety Information Direct Natural Resources, Department of
AGENCY TOTAL

$

25,879,985.66

OFA $
$

38,572.59 38,572.59

77.003 $ $

36,600.00 36,600.00

C - 87

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Postal Service, U. S. Other Federal Assistance Direct Agriculture, Department of Georgia Southwestern College Georgia State University University of Georgia Through: Georgia Tech Research Corporation Georgia Instituteof Technology Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL
Selective Service System Other Federal Assistance Direct Public Safety, Department of
AGENCY TOTAL
Small Business Administration Business Development Assistance to Small Business Direct Georgia College Georgia Southern University Georgia State University Kennesaw State College Macon College University of Georgia
Procurement Assistanceto Small Businesses Direct Forestry Commission, State

CFDA NUMBER

MONETARY EXPENDITURES

OFA $
$ $

4,700.00 6,000.00 2,045.24 2,817.78
40,449.22
214,659.03
270,671.27
270,671.27

OFA $
$

700.00 700.00

59.005 $
$ 59.009
$

2,763.04 5,338.07 13,338.57 9,176.64 1,882.09 4,387.31
36,885.72
444,154.25

NONMONETARY EXPENDITURES

C - 88

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Small Business Administration
Small Business Development Center Direct Georgia State University

CFDA NUMBER

MONETARY EXPENDITURES

59.037 $

NONMONETARY EXPENDITURES

Other Federal Assistance Direct University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology
AGENCY TOTAL
NET TOTAL AGENCY
Smithsonian Institute
Other Federal Assistance Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

$ OFA
$
$ $

2,428,886.12
989.85 112,544.28 113,534.13 3,023,460.22

$ ---"-2",7'1;5,"18"4.2-3-
OFA
$ - - - - . . . ; .8,.8.46..7-4$ - - - - . . . ; .8,.8.46..7-4-

C - 89

STATE OF GEORGIA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
State Justice Institute Other Federal Assistance Direct Supreme Court, Georgia University of Georgia Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL
Tennessee Valley Authority Tennessee Valley Region - Valley Agricultural Institute Direct University of Georgia Through: University of Georgia Research Foundation University of Georgia
Other Federal Assistance Direct Forestry Commission, State North Georgia College University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL
Transportation, U. S. Department of Boating Safety Financial Assistance Direct Natural Resources, Department of Airport Improvement Program Direct Transportation, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA $
$ $

1,931.86 419,572.83 4,473,328.00 4,894,832.69
4,894,832.69

62.006 $ $
OFA $
$ $

18.22 0.25 18.47
16,129.42 4,754.91 106,113.92 4,249.85 4,075.13 135,323.23
135,341.70

20.005 $
20.106 $

797,031.00 402,000.00

C - 90

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Transportation, U. S. Department of
Aviation Research Grants Through: Georgia Tech Research Corporation Georgia Institute of Technology
Highway Planning and Construction Direct Revenue, Department of Transportation, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

20.108

$ ---_....:22.,3.4.4.._59-

20.205 $

34,151.09 605,022,285.46

Motor Carrier Safety Assistance Program (6) Direct Public Service Commission Revenue, Department of
National Recreational Trails Funding Program Direct Natural Resources, Department of
Railroad Safety Direct Transportation, Department of
Federal Transit Capital Improvement Grants Direct Transportation, Department of
Federal Transit Technical Studies Grants Direct Transportation, Department of
Federal Transit Capital and Operating Assistance Formula Grants
Direct Transportation, Department of

$ 20.218
$
$ 20.219
$ 20.301
$ 20.500
$ 20.505
$ 20.507

605,142,750.59
1,911,123.71 69,630.98
1,980,754.69
49,070.00
-3,351.19
495,088.61
768,097.57

$

4,492,014.42

C - 91

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Transportation, U. S. Department of

Public Transportation for Nonurbanized Areas
Direct
Transportation, Department of :~U ,,\~!;_~:"..::":~=iK>.;~...~~~~~:~~~i:<=~:wi.:m<~+>:.>".:,tm':::. '~.,.

20.509

$

2,951,089.28

:::-:::':::'::-::::-:::':::-:::"::. .}::: .:..:..::..:.:::..::.::..:. ::-:/.:.\:.-i:.::-\:.: .:::.: :i:::::::::.:.:-:.:.:.:. :::::"}:'''/'':i':: :::::: :.:.:.:.:: :.'::':':::: """'" ,,,""''m:':-::.:.:.:-:.:-:-:-:.:.:-:.:-:-:.:-:.:.:-:-: ::::::::::::::: ::::::::::::: :":"::':"::

{-}: ..,.

Capital Assistance Program for Elderly Persons and Persons With Disabilities
Direct Human Resources, Department of
State and Community Highway Safety Direct Governor, Office of the Public Safety, Department of
Through: National A~S0Ciatill!l uJ Prosecutor Coordinators Superior Courts, Georgia
Pipeline Safety (6) Direct Public Service Commission

$ 20.513

2,969,184.67

20.600

$

1,265,571.22

---..;........;.....--

$

126,610.99

3,690,609.62

8,040.07
~J:i~~i

20.700

$

4,339,877.57

$ - - - - . . . ;19.9.,4.3.0..9-9-

C -92

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
Transportation, U. S. Department of Other Federal Assistance Direct Georgia Institute of Technology Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Kentucky State University Albany State College Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA $
$

47,454.43 2,935,167.53
3,799.55 2,189.02 2,988,610.53

$

625,908,475.26

NET TOTAL AGENCY
Treasury, U. S. Department of the
Other Federal Assistance Direct Investigation, Georgia Bureau of Public Safety, Department of Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL

$

625,289,448.94

OFA $
$ $

18,469.95 12,569.32 114,355.63 39,432.77 184,827.67
184,827.67

C-93

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995
United States Information Agency
Educational Exchange - Graduate Students Direct Georgia State University
Educational Exchange - University Lecturers (Professors) and Research Scholars Direct Columbus College Georgia State University
Other Federal Assistance Direct Georgia Southern University University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology
AGENCY TOTAL
Veterans Affairs, U. S. Department of
Veterans State Domiciliary Care Direct Veterans Service, State Department of
Veterans State Nursing Home Care Direct Veterans Service, State Department of
Vocational Rehabilitation for Disabled Veterans Direct Athens Area Technical Institute Pickens Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

82.001 $
82.002 $ $
OFA $
$ $

2,995.11
14,095.67 87,701.63 101,797.30
10,900.58 76,821.18
158.63 87,880.39
192,672.80

64.014 $
64.015 $
64.116 $
$

392,208.60
6,348,154.55
3,679.00 3,778.83 7,457.83

C -94

STATE OF GEORGIA SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1995

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Veterans Affairs, U. S. Department of
Other Federal Assistance Direct Georgia Institute of Technology Georgia State University Medical College of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology

OFA $
$

-17,498.23 33,297.06 1,140,473.12
8,215.30
1,164,487.25

AGENCY TOTAL GRAND TOTAL FEDERAL FINANCIAL ASSISTANCE EXPENDITURES

$ ----'-7-,91-2',3-08-.2-3-

$

5,395,383,512.36

$

2,427,508,018.69

NET TOTAL FEDERAL FINANCIAL ASSISTANCE EXPENDITURES
MAJOR PROGRAM
"n:::!iOENOTES INTER-REPORTING ENTITYACTIVITY

=============== 5,253,602,983.97
$

$

2,425,518,884.91

======

C - 95

STATE OF GEORGIA NOTES TO THE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

PURPOSE OF THE SCHEDULE

Office of Management and Budget (OMB) Circular A-l28, Audits of State and Local Governments, requires a Schedule of Federal Financial Assistance reflecting total expenditures for each Federal fmancial assistance program as identified in the Catalog ofFederal Domestic Assistance (CFDA). Significant Federal fmancial assistance programs which have not been assigned a CFDA number have been identified as Other Federal Assistance (OFA).

SIGNIFICANT ACCOUNTING POLICIES

Reportin~ Entity -The accompanying schedule includes all Federal fmancial assistance programs administered by the State of Georgia for the fiscal year ended June 30, 1995. Refer to Appendix "A" for a comprehensive listing of organizational units comprising the reporting entity.

Basis of Presentation - The accompanying Schedule of Federal Financial Assistance is presented in accordance with OMB Circular A - 128.

A.

Federal Financial Assistance - Pursuant to the Single Audit Act of 1984 and OMB Circular A-l28,

Federal fmancial assistance is defmed as monetary or nonmonetary assistance provided by a Federal

agency, either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans, loan

guarantees, property, interest subsidies, insurance, direct appropriations, food stamps, or food

commodities. Federal fmancial assistance does not include direct Federal cash assistance to individuals.

B.

Major and Non-major Programs - The Single Audit Act of 1984 and OMB Circular A-l28 established

levels of expenditures or expenses used for defming major and non-major Federal fmancial assistance

programs. Major programs for the State of Georgia are those which exceeded $19,000,000.00 in

expenditures/disbursements/issuances for the fiscal year ended June 30, 1995.

Basis of Accountin~- The Schedule of Federal Financial Assistance is prepared using the basis of accounting as described in .Note 1 of the Notes to the Financial Statements of the General Purpose Financial Statements (See Section B of this Report).

Expenditures andExpenseS - When a state organization receives Federal monies and redistributes such monies to another state organization, (i.e., pass-through funds from the primary recipient to a subrecipient), the Federal assistance is reported in both the primary recipient's and the subrecipient's accounts. This method of reporting expenditures/expenses results in an overstatement of the aggregate level of Federal expenditures/expenses. Therefore, inter-reporting activity is deducted to determine net Federal fmancial assistance expenditures/expenses.

OTHER

The following Notes provide additional pertinent information regarding Federal financial assistance, and accordingly, are referenced to specific programs within the body ofthe Schedule.

(1)

Represents total expenditures for program. Matching expenditures were not segregated in the accounting records.

(2)

The amount denoted for this program was audited by other auditors and was considered a major program based on

threshold calculations for that organization's Federal fmancial expenditures.

C -96

STATE OF GEORGIA NOTES TO THE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

(3)

Federally funded loan programs incurred the following current fiscal year monetary and nonmonetary expenditures:

CFDA NUMBER

GRANT PROGRAM

NEW FEDERAL CAPITAL

MONETARY

FEDERAL REIMBURSEMENT

ADMINISTRATIVE COSTS

NONMONETARY

LOANS OUTSTANDING
FYE 06/30/95

LOANS MADE DURING YEAR

23.011 66.458 84.032 84.038 84.226 93.342
93.364 93.0FA 93.0FA
(4)

Appalachian Stale Research, Technical Assistance, and Demonstration Projects

178,526.02

Capitalization Grants for State Revolving Funds

$ 21,527,885.56

Federal Family Education Loans

$

0.00

Federal Perkins Loan Program Federal Capital Contributions

429,157.79

Income Contingent Loan Program

$

-49,639.82 $

Health Professions Student Loans, Including Primary Care Loans/Loans for Disadvantaged Studenls

26,765.00

Nursing Student Loans

$

-30,236.09 $

Pharmacy Loans

0.00

Veterinary Medicine Loans

0.00 $

0.00
0.00 19,129,871.00 $
1,337.00 0.00
0.00 $ -105.00
0.00 0.00

103,326.21

1,316,406.91 $

178,526.02

753,537.55 3,103,762.00

$

97,306,580.20

$ 1,268,000,000.00

$

0.00

$ 199,738,509.00

279,801.87 34.00

37,262,420.91 $ 193,582.04

5,583,535.04 0.00

0.00 3,568.67 -381.02 $
0.00

4,241,282.58 1,110,889.68 $
860,357.43 883,923.49 $

455,145.00 96,752.31 171,119.00 165,595.00

Certain programs administered by the Federal government provide goods and services to organizational units of the State in lieu of monetary assistance. An analysis, for major programs, of nonmonetary assistance and the values assigned by the Federal government during the year under review is reflected below:

CFDA NO.

10.550 10.551 39.003 93.268

The reported amounts incurred by the four organizational units of the State represent the U. S. Department of Agriculture assigned value of the donated commodities for the Food Distribution Program.
The Federal government provides food stamps to low-income households. The amount of food stamps a household receives depends on the household's size and fmancial circumstances. The Georgia Department of Human Resources is responsible for determining eligibility for participation in the Food Stamp Program. For the year under review, the total value offood stamps distributed as approved by the Department was $710,682,708.00.
The Department of Administrative Services acts as an administrative agent for the General Services Administration (GSA) in the distribution of Federal surplus personal property. The reported amount of $26,692,0 14.00 represents the value of Federal surplus tangible personal property received during the fiscal year ended June 30, 1995. The value of such property is based at the Federal government's reported original acquisition cost.
The amount reported represents the U. S. Department of Health and Human Services assigned value of immunizations for vaccine-preventable diseases to eligible individuals.

C - 97

STATE OF GEORGIA NOTES TO THE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1995

(5)

This item does not constitute a major Federal fmancial assistance program. Numerous grants and contracts

identified as "Other Federal Assistance" have been combined for reporting purposes.

(6)

This program includes both state and federal expenditures.

(7)

The U. S. Departments ofthe Air Force, Army and Navy are divisions of the U. S. Department of Defense and are

reported as such. An analysis of federal fmancial expenditures for these divisions has been provided starting on

page C-106.

(8)

The Georgia Military College received $60,490.00 of Reserve Officer Training Corps (R.O.T.C.) income which

is not included in the Schedule of Federal Financial Assistance.

(9)

During the fiscal year ended June 30, 1995, the Georgia Department of Human Resources received $24,873,804.39

in cash rebates from infant formula manufacturers on sales of formula to participants in the Special Supplemental

Food Program for Women, Infants, and Children (Wle) (CFDA NO. 10.557). Rebate contracts with infant formula

manufacturers are authorized by 7 CFR 246.16(m) as a cost containment measure. Rebates represent a reduction

of expenditures previously incurred for WlC benefit costs. The rebate contract allowed the Department to serve

approximately 52,400 additional persons per month during fiscal year 1995.

(10)

Expenditures for this program at the Department of Corrections were not maintained by fund source. Amounts

reflected are revenue amounts.

(11)

These programs were audited as major programs based on the planning threshold calculation of 16 million.

C -98

SUMMARY OF FEDERAL EXPENDITURES BY ORGANIZATIONAL UNIT

(THIS PAGE INTENTIONALLY LEFT BLANK)

STATE OF GEORGIA SUMMARY OF FEDERAL EXPENDITURES BY ORGANIZATIONAL UNIT

For the Fiscal Year Ended June 30, 1995
Administrative Services, Department of Agriculture, Department of Agrirama Development Authority, Georgia Children and Youth Services, Department of Community Affairs, Department of Corrections, Department of Defense, Department of Education, Department of Environmental Facilities Authority, Georgia Forestry Commission, State Governor's Commission on Health Care Reform Governor, Office of the Higher Education Assistance Corporation, Georgia Housing and Finance Authority, Georgia Human Resources, Department of Insurance, Department of Investigation, Georgia Bureau of Jekyll Island State Park Authority Judicial System
Courts Automation Commission, Georgia Indigent Defense Council Institute of Continuing Judicial Education of Georgia Judicial Council and Administrative Office of the Courts Juvenile Court Judges, Council of Superior Courts, Georgia Supreme Court, Georgia Labor, Department of Medical Assistance, Department of Natural Resources, Department of Pardons and Paroles, State Board of Public Safety, Department of Public Service Commission Public Telecommunications Commission, Georgia Regents of the University System of Georgia, Board of Colleges and Universities Graduate Institutions Georgia Institute of Technology Georgia Southern University Georgia State University Medical College of Georgia University of Georgia Valdosta State University Four Year Colleges Albany State College Armstrong State College Augusta College Clayton State College Columbus College Fort Valley State College Georgia College Georgia Southwestern College
C -101

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

$

26,692,014.00

$

6,407,974.92

86,314.04

2,908,764.78

113,442.55

56,603,590.87

1,494,932.93

2,552,028.06

1,870,691.23

19,459, I76.46

516,313,337.6 I

30,603,628.86

8, I 83,492.00

3,286,147.90

267,510.86

133,956, I75.02

22,233,633.00

1,467,738,509.00

48,787,389.00

1,067,317,398.27

750,658,617.44

1,510,855.59

4,158,982.27

797.73

108,000.00 60,000.00
8,006.32 93,124.35 181,220.58 1,974,222.32 31,403.32 162,377,775.38 2,219,875,758.19 51,786,600.86 416,093.81 6,242,099.25 2, II 0,554. 70 92,787.00 245,307.71

97,306,580.20

133,069,194.37 8,051,804.75
42,254,959.43 14,510,831.44 88,521,920.20 6,826,462.71
7,508,417.77 2,413,235.61 2,787,747.71 2,099,110.31 3,331,665.85 12,604,602.97 2,110,461.59 2,071,300.96

6,120,005.36 3,320,620.11 5,185,201.17 8,042,494.59 11,241,166.85 1,246,873.19
437,717.90 12,260.74
761,819.19 53,000.86
596,843.53 2,434,300.85 1,930,403.16 1,210,436.95

STATE OF GEORGIA SUMMARY OF FEDERAL EXPENDITURES BY ORGANIZATIONAL UNIT

For the Fiscal Year Ended June 30, 1995
Colleges and Universities Four Year Colleges Kennesaw State College North Georgia College Savannah State College Southern College ofTechnology West Georgia College Two Year Colleges Abraham Baldwin Agricultural College Atlanta Metropolitan College Bainbridge College Brunswick College Dalton College Darton College DeKaib College East Georgia College Floyd College Gainesville College Gordon College Macon College Middle Georgia College South Georgia College Waycross College Other Military College, Georgia Skidaway Institute of Oceanography
Revenue, Department of Secretary of State Soil and Water Conservation Commission, State Student Finance Authority, Georgia Student Finance Commission, Georgia Technical and Adult Education, Department of
State Technical Institutes Albany Technical Institute Altamaha Technical Institute Athens Area Technical Institute Augusta Technical Institute Ben Hill-Irwin Technical Institute Carroll Technical Institute Chattahoochee Technical Institute Columbus Technical Institute Coosa Valley Technical Institute Flint River Technical Institute Griffin Technical Institute Heart of Georgia Technical Institute Lanier Technical Institute Macon Technical Institute Middle Georgia Technical Institute Moultrie Area Technical Institute North Georgia Technical Institute

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

$

2,297,901.66 $

927,332.40

6,944,629.70

1,070,282.27 3,157,408.30

2,033,147.17 2,098,104.17 1,323,597.64 1,309,275.30 1,371,280.55 1,305,954.47
4,455,704.86 409,552.68
1,290,699.72 850,690.41
1,011,295.70 2,356,659.79 1,881,046.27 1,330,559.20
520,227.75

2,150,417.00 2,525,212.29
103,782.07 79,168.67 375,730.31 1,714,664.00 168,898.38 25,246,292.22

1,722,443.37 569,261.78
1,438,440.93 2,626,308.43 1,221,078.26 1,532,944.51 1,732,932.48 2,068,479.29 1,296,879.15 1,038,749.3 I 1,556,582.22
677,513.70 790,144.51 2,324,888.07 1,550,331.95 1,139,557.66 1,122,460.64

369,195.69 794,270.67 796,604.36 1,012,931.65 2,034,438.35 1,992,997.46
3,864.74
55,951.56
11,151.31 7,261.92 183,238.87 1,169,551.45

C -102

STATE OF GEORGIA SUMMARY OF FEDERAL EXPENDITURES BY ORGANIZATIONAL UNIT

For the Fiscal Year Ended June 30, 1995
State Technical Institutes North Metro Technical Institute Ogeechee Technical Institute Okefenokee Technical Institute Pickens Technical Institute South Georgia Technical Institute Southeastern Technical Institute Swainsboro Technical Institute Thomas Technical Institute Valdosta Technical Institute Walker Technical Institute West Georgia Technical Institute
Transportation, Department of Veterans Service, State Department of
GRAND TOTAL ALL ORGANIZATIONAL UNITS

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

$

584,719.54

869,752.20

1,092,042.47

917,405.36

1,300,461.21

857,230.79

1,316,665.26

1,309,092.04

1,521,209.60

1,169,792.98

1,060,804.56

614,127,224.15

6,740,363.15

$

_...............- 5,395,383,512.36 $

2,427,508,018.69

C - 103

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DETAIL OF U.S. DEPARTMENT OF DEFENSE

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STATE OF GEORGIA DETAIL OF U. S. DEPARTMENT OF DEFENSE

For the Fiscal Year EnaedJune 30,1995
Air Force, U. S. Department of the
Air Force Defense Research Sciences Program Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Research and Development Laboratories Columbus College
Research and Technology Development Through: Georgia Tech Research Corporation Georgia Institute of Technology
Other Federal Assistance Direct Georgia Institute of Technology University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
AGENCY TOTAL
Army, U. S. Department ofthe
Basic Scientific Research Through: Georgia Tech Research Corporation Georgia Institute of Technology
Other Federal Assistance Direct East Georgia College Georgia Institute of Technology Georgia Southern University Georgia State University Military College, Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

12.800 $
$ 12.910
$ OFA
$
$ $

1,222,428.57 12,367.25
1,234,795.82
40,718.77
5,166.66 54,704.94 36,675,630.32 257,604.48 36,993,106.40
38,268,620.99

12.431 $
OFA $
$ $

14,127.64
6,000.00 246,693.84
25,981.96 16,980.39 1,138,165.00 28,568,547.92 30,002,369.11
30,016,496.75

C -107

STATE OF GEORGIA
DETAIL OF U. S. DEPARTMENT OF DEFENSE

For the Fiscal Year Ended June 30. 1995

CFDA NUMBER

MONETARY EXPENDITURES

Defense, U. S. Department of
Procurement Technical Assistance for Business Firms Through: Defense Logistics Agency Columbus College Through: Georgia Tech Research Corporation Georgia Institute of Technology
Aquatic Plant Control Direct Natural Resources, Department of
Navigation Projects Direct Natural Resources, Department of
Mathematical Sciences Grants Program Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute ofTechnology
Other Federal Assistance Direct Fort Valley State College Georgia Institute of Technology Macon College North Georgia College Skidaway Institute ofOceanography Southern College ofTechnology Through: Georgia Institute of Technology Southern College of Technology Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: National Guard Bureau Defense, Department of Through: U. S. Army Medical Research and Material North Georgia College Through: United States Marine Corps Public Safety, Department of

12.002
12.100 12.107

$

90,443.21

75,560.35

$ - - - - - " - - - 166,003.56

$ - - - - -5"0,2-54-.00-

$ ----...3.4;8,.54.9..0-0-

12.901 OFA

$

13,641.24

17,641.11

$ - - - - . . .3.1;,2.8.2..3-5-

$

126,576.97

23,209.66

2,590.26

1,413.27

12,200.87

19,300.92

65,335.00

10,829,304.77

79,389.29

13,614,004.98

62,939.40

680.00

$

24,836,945.39

AGENCY TOTAL

C -108

$

25,433,034.30

---~....;...--

NONMONETARY EXPENDITURES

STATE OF GEORGIA DETAIL OF U. S. DEPARTMENT OF DEFENSE

For the Fiscal Year Ended June 30. 1995
Navy, U. S. Department of the
Basic and Applied Scientific Research Direct Georgia Institute of Technology Through: Georgia Tech Research Corporation Georgia Institute of Technology
Other Federal Assistance Direct Georgia Institute of Technology Skidaway Institute of Oceanography University of Georgia Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: University of Georgia Research Foundation University ofGeorgia
AGENCY TOTAL
GRAND TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

12.300 $ $
OFA $
$

2,000.00 3,580,906.63 3,582,906.63
12,145.66 133,961.77 20,966.42 7,190,345.79 528,521.57 7,885,941.21

$ ---""11-,4-68',8-4-7.8-4-
$ ====1=0=5,1=8=6,=99=9.=88=

C -109

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Georgia
Site of the 1996 Olympic Games
The Olympic Games open with a ceremony featuring a parade ofathletes from all participating countries. In honor ofthe founding ofthe Olympic Games, the Greek team leads the parade with the host nation marching in last. The Olympic Hymn is played and the official Olympic flag is raised The highlight ofthe opening ceremony is the entrance ofthe Olympic torch and the lighting ofthe Olympic flame.

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1995,and have issuedour report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles. We did not audit the financial statements of certain organizations which, combined, representless than 1% of the assets and revenues of the general fund, 100% of the assets and revenues of the capitalprojects funds, 60% of the assets and 17% of the revenues of the internal service funds, 60% of the assets of the fiduciary funds and less than 1%ofthe expendable trust funds revenues and 99% of the pension trust funds revenues, less than 1% of the assets and revenues and other additions of the college and university funds and 10% of the assets and less than 1%ofthe liabilities of the general fixedassets and general long-term debt account groups, respectively. In addition, we did not auditcertain discretely presentedcomponent units which represent 80% of the assets and 52% of the revenues of the component unit governmental fund types, 79% of the assets and 93% of the revenues of the component unit proprietary fund types and 97% of the assets and 98% of the revenues of the component unit fiduciary fund types. The financial statements of these organizations and component units were audited by other auditors whose reports have been furnished to us, and our report,insofaras it relates to the amounts included for those financial statements, is based solely upon the reports of the other auditors.
We conducted our auditin accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
The management of the State of Georgia is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properlyto permitthe preparation ofgeneral purposefinancial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occurand not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

In planning and performing our audit ofthe general purpose fmancial statements of the State of Georgia for the year ended June 30, 1995, we and other auditors obtained an understanding of the internal control structure. With respect to the internal control structure, we and other auditors obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We and other auditors noted certain matters involving the internal control structure and its operation that we consider to bereportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report fmancial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule of Findings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(1) Cash and Cash Equivalents Inadequate Bank Reconciliation Procedures Office of Treasury and Fiscal Services Department of Medical Assistance
(2) General Fixed AssetslProperty Management Inadequacies in Operation of Property Management System
(3) Expenditures/Liabilities/Disbursements Inadequacies in Operation of Workers' Compensation Program
(4) Electronic Data Processing Controls Inadequacies in the Operations and Control Procedures of Various Organizations
A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, as described in the Schedule of Findings and Improper or Questioned Costs, we and other auditors noted the following matter involving the internal control structure and its operation that we consider to bematerial weaknesses as defined above. These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the financial statements of the State of Georgia for the year ended June 30, 1995.
(1) General Fixed Assets/Property Management Inadequacies in Operation of Property Management System
D-4

Individual management letters noting other matters involving the internal control structure and its operation were issued, as necessary, to themanagement of the individual organizations comprising the State of Georgia reporting entity during the course of the audit. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Z~
Claude L. Vickers State Auditor May 14, 1996
0- 5

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DEPARTMENT OF AUDITS

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

REPORT ON INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30,1995, and have issued our report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles. We have also audited the compliance of the State of Georgia with requirements applicable to major Federal financial assistance programs and have issued our report thereon dated May 14, 1996, which is based in part on the reports of other auditors.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A-128, Audits ofState and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform
the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the State of Georgia complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program. We did not consider the internal control structure, including applicable internal administrative controls used in administering Federal financial assistance programs of the Georgia Environmental Facilities Authority, the Georgia Higher Education Assistance Corporation, the Georgia Housing
andFinance Authority, Georgia Military College, the Georgia Student Finance Authority, and the University of Georgia. Theschedules of Federal financial assistance for those organizations reflect total activity and the Federal government's
risk in their outstanding loan balances of $1 ,650,571,191, which comprise approximately 21 percent of total assistance activity and the Federal government's risk in outstanding loan balances for the State as of and for the year ended June 30, 1995. Those internal control structures, including applicable internal administrative controls, were considered
by otherauditors whose reports have been furnished to us. Our report, insofar as it relates to the internal control structures
used in administering Federal financial assistance programs of the organizations mentioned previously, is based solely upon the reports of the other auditors.
In planning and performing our audit for the year ended June 30, 1995, we and other auditors considered the internal control structure of the State of Georgia in order to determine our auditing procedures for the purpose of expressing our
opinion on the general purpose fmancial statements of the State of Georgia and on the compliance of the State of Georgia
with requirements applicable to major programs, and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated May 14, 1996.

The managementofthe State of Georgia is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recordedproperly to permit the preparation ofgeneralpurpose financial statements in accordance with generally accepted accountingprinciples,andthat Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For thepurposes of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

ACCOUNTING CONTROLS

1. Budget Preparation/Execution 2. Cash and Cash Equivalents 3. Investments 4. Inventories 5. Revenue/Receivables/Receipts 6. Expenditures/Liabilities/Disbursements 7. Employee Compensation 8. Fund Equities 9. General Ledger 10. General Fixed Assets/Property Management

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

1. Political Activity 2. Davis-Bacon Act 3. Civil Rights 4. Cash Management 5. Relocation Assistance/
Real Property Acquisition 6. Federal Financial Reports 7. Allowable Costs/Cost Principles 8. Drug-Free Workplace Act 9. Administrative Requirements 10. Monitoring Subrecipients 11. Audit Distribution/Resolution

1. Types of Services Allowed or Unallowed
2. Eligibility 3. Matching, Level of Effort,
and/or Earmarking 4. Special Reporting 5. Special Tests and Provisions

OTHER REQUIREMENTS

1. Claims for Advances and Reimbursements 2. Amounts Claimed and Used for Matching

o .s

For all of the internal control structure categories listed above, we and other auditors obtained an understanding of the design ofrelevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.
Because ofthe large nwnber ofnonmajor programs and thedecentralized administration of these programs, we performed procedures to obtain an understanding of the internal control structure policies and procedures relevant to nonmajor programs on a cyclicalbasis. Ourprocedures during thecurrent year covered 91% of the nonmajor program expenditures administeredby the State of Georgia as a whole. The nonmajor programs not covered at various organizations of the State during the current year have been or are expected to be subject to such procedures at least once during the three year cycle.
During the year ended June 30,1995, the State of Georgia expended 92% of its total Federal financial assistance under major Federal fmancial assistance programs.
We and other auditors performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detectingmaterial noncompliancewith specific requirements,general requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to each of the State of Georgia's major Federal financial assistance programs, which are identified in the accompanying Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We and other auditors noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgement, could adversely affect the State of Georgia's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule of Findings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(1) General Fixed Assets/Property Management - Administrative Requirements Inadequacies in Operation of Property Management System
(2) Cash and Cash Equivalents - Administrative Requirements Inadequate Bank Reconciliation Procedures for the Medical Assistance Program
(3) Cash Management Inadequacies in the Implementation of the Cash Management Improvement Act Agreement
(4) Electronic Data Processing Controls Inadequacies in the Operations and Control procedures of various organizations
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
D-9

Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might bereportable conditions and, accordinglywould not necessarilydisclose all reportable conditions that are also considered to bematerial weaknesses as defined above. However, as described in the Schedule of Findings and Improper or Questioned Costs, we and other auditors noted the following matter involving the internal control structure and its operation that we consider to be a material weakness as defined above. This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit of compliance of the State of Georgia, with requirements applicable to its major Federal financial assistance programs for the year ended June 30, 1995, and this report does not affect our report thereon dated May 14, 1996.
(1) General Fixed Assets/Property Management - Administrative Requirements Inadequacies in Operation of Property Management System
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Res~~lly submitted,
~~
Claude L. Vickers State Auditor May 14, 1996
D-IO

Georgia
Site of the 1996 Olympic Games
The Olympic torch is lit by rays ofthe sun in Olympia, Greece and carried by a relay of runners to the opening ceremony.
The 1996 Olympic Torch Relay began with the lighting ofthe torch on March 30, 1996. It arrived in the United States at Los Angeles on April 27, 84 days before the Olympic Games are to begin. During the relay, the torch will travel through 42 states and 26 capitals. Before reaching Atlanta, the torch will travel 15,000 miles and be carried by
more than 10,000 us. residents.

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

REPORT ON COMPLIANCE BASED ON AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30,1995, and have issued our report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles. We did not audit the financial statements of certain organizations which, combined, represent less than 1% of the assets and revenues of the general fund, 100% of the assets and revenues of the capital projects funds, 60% of the assets and 17% of the revenues of the internal service funds, 60% of the assets of the fiduciary funds and less than 1% ofthe expendable trust funds revenues and 99% of the pension trust funds revenues, less than 1% of the assets and revenues and other additions of the college and university funds and 10% of the assets and less than 1% ofthe liabilities of the general fixed assets and general long-term debt account groups, respectively. In addition, we did not audit certain discretely presented component units which represent 80% of the assets and 52% of the revenues of the component unit governmental fund types, 79% of the assets and 93% of the revenues of the component unit proprietary fund types and 97% of the assets and 98% of the revenues of the component unit fiduciary fund types. The fmancial statements of these organizations and component units were audited by other auditors whose reports have been furnished to us, and our report, insofar as it relates to the amounts included for those financial statements, is based solely upon the reports of the other auditors.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to the State of Georgia is the responsibility of the State's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we and other auditors performed tests of the State's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the general purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opmion.

The results ofour tests disclosed no instances ofnoncompliance that are required to be reported herein under Government Auditing Standards. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
t?'~~
Claude L. Vickers State Auditor May 14,1996
E-4

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia

We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1995, and have issued our report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles.

We have applied procedures to test the State of Georgia's compliance with the following requirements applicable to its Federalfmancial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended June 30,1995:

1. Political Activity 2. Davis-Bacon Act 3. Civil Rights 4. Cash Management 5. Relocation Assistance/
Real Property Acquisition

6. Federal Financial Reports 7. Allowable Costs/Cost Principles 8. Drug-Free Workplace Act 9. Administrative Requirements 10. Monitoring Subrecipients 11. Audit DistributionlResolution

We did not apply procedures to test compliance with the general requirements for the Georgia Environmental Facilities Authority,the Georgia Higher Education Assistance Corporation, the Georgia Housing and Finance Authority, Georgia Military College, the Georgia Student Finance Authority, and the University of Georgia. The schedules of Federal financial assistance for those organizations reflect total activity and the Federal government's risk in their outstanding loan balances of$I,650,571,191, which comprise approximately 21 percent of total assistance activity and the Federal government's risk in outstanding loan balances for the State as of and for the year ended June 30, 1995. Compliance with the requirementsby the organizations mentioned above were tested by other auditors whose reports have been furnished to us. Our report, insofar as it relates to compliance with the requirements referred to above by these organizations, is based soley upon the reports of the other auditors.

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's (OMB) Compliance Supplementfor SingleAudits ofState and Local Governments, except for procedures relating to Monitoring Subrecipients and Audit Distribution/Resolution which are described in OMB Circular A-128. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the State of Georgia's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. Material instances ofnoncompliance consist offailures to follow the general requirements that caused us to conclude that the misstatements resulting from those failures are material to certain Federal financial assistance programs of the State ofGeorgia. The results of our tests of compliance disclosed the following material instances of noncompliance that are described in the accompanying Schedule of Findings and Improper or Questioned Costs.
(l) Cash Management Inadequacies in the Implementation of the Cash Management Improvement Act Agreement
(2) Monitoring Subrecipients Subrecipient Audit Reports and/or Corrective Action Plans Not Received Within Required Time Period
We considered these material instances ofnoncompliance in forming our opinion on whether the State of Georgia's 1995 general purpose fmancial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated May 14, 1996, on those financial statements. Except as described above, the results of our procedures and the procedures of other auditors to determine compliance indicate that, with respect to the items tested, the State ofGeorgia complied, in all material respects, with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the State of Georgia had not complied, in all material respects, with those requirements. However, the results of our procedures also disclosed immaterial instances of noncompliance with those requirements, which are described in the accompanying Schedule of Findings and Improper or Questioned Costs. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
~~:4=
Claude L. Vickers State Auditor May 14,1996
E-6

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia

We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1995, andhave issued our report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles as identified in the auditor's report on the general purpose financial statements.

We have also audited the State of Georgia's compliance with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, and/or earmarking; special reporting; and special tests and provisions; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to each of its major Federal financial assistance programs, which are identified in the accompanying Schedule of Federal Financial Assistance, for the year ended June 30, 1995. The management of the State is responsible for the State of Georgia's compliancewith those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit. We did not audit the following major Federal financial assistance programs:

CFDANo. PROGRAM NAME

MONETARY

NONMONETARY

EXPENDITURES EXPENDITURES

14.856 84.032

Lower Income Housing Assistance Program Federal Family Education Loans

$35,841,300 $22,233,633

$0 $1,467,738,509

In addition, we did not audit 21% of the Federal Perkins Loan Program, CFDA No. 84.038, (monetary expenditures of $53,426 and nonmonetary expenditures of$9,160,171) and 6% of the Federal Pell Grant Program, CFDA No. 84.063, (monetaryexpenditures of $4,748,364). These programs and the programs listed above were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to compliance requirements for these programs, is based solely on the reports of the other auditors.

We conducted our audit ofcompliancewith the above listed requirements in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget Circular A-128,Audits ofState and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the State of Georgia's compliancewith those requirements. We believe that our audit provides a reasonable basis for our opinion.

I

I

I

I

I The results of our audit procedures disclosed immaterial instances of noncompliance with the requirements referred to
above, which are described in the accompanyingScheduleofFindings and Improper or Questioned Costs. We considered

theseinstances of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph.
I

In our opinion, based on our audit and the reports of other auditors, the State of Georgia complied, in all material

respects, with the requirements as disclosed in the second paragraph that are applicable to each of its major federal financial assistance programs for the year ended June 30, 1995.

I

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor

I

agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.

I

~~b~

I

Claude L. Vickers State Auditor

I

May 14, 1996

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

E-8

I

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

SINGLE AUDIT REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

The Honorable Zell Miller Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1995, and have issued our report thereon dated May 14, 1996. This report was qualified for various departures from generally accepted accounting principles.
In connection with our audit ofthe fiscal year 1995 general purpose financial statements of the State of Georgia, and with
our consideration of the State of Georgia's control structure used to administer federal financial assistance programs, as required by Office of Management and Budget Circular A-128, Audits ofState and Local Governments, we selected certain transactions applicable to certainnonmajor federal fmancial assistance programs for the year ended June 30, 1995.
As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed, allowable costs/cost principles, and eligibility that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the State of Georgia's compliance with these requirements. Accordingly, we do not express such an opinion. We did not apply procedures to test compliance with these requirements for the Georgia Environmental Facilities Authority, the Georgia Higher Education Assistance Corporation, the Georgia Housing and Finance Authority, Georgia Military College, the Georgia Student Finance Authority, and the University of Georgia. The schedules of Federal financial assistance for those organizations reflect total activity and the Federal government's risk in their outstanding loan balances of$I,650,571,191, which comprise approximately 21 percent of total assistance activity and the Federal
government's risk in outstanding loan balances for the State as of and for the year ended June 30, 1995. Compliance with therequirements by the organizations mentioned above were tested by other auditors whose reports have been furnished
to us. Our report, insofar as it relates to compliance with the requirements referred to above by these organizations, is based soley upon the reports of the other auditors.
With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the State of Georgia had not complied, in all material respects, with those requirements. However, the results of our procedures and the procedures of other auditors disclosed immaterial instances of noncompliance with those requirements, which are described in the accompanying Schedule of Findings and Improper or Questioned Costs.

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor May 14,1996
-10

Georgia
Site of the 1996 Olympic Games
The Olympic Cauldron is the structure that will house the Olympic flame during the games. The cauldron is supported by a 132 foot tower and a bridge connecting it to the Olympic Stadium. Every spectator in the stadium will be able to see the Cauldron from their seat. It is constructed of interwoven steel forming the letter "A". The Olympic Cauldron will remain as a permanent legacy for the people ofGeorgia after the Games are complete.

SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS (INCLUDING MANAGEMENT RESPONSES SUBMITTED BY ORGANIZATIONAL UNITS)

(THIS PAGE INTENTIONALLY LEFT BLANK)

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS TABLE OF CONTENTS

For the Fiscal Year Ended June 30, 1995

ENTITY CODE

ORGANIZATIONAL UNIT

PAGE NUMBERS

401 401a 408 411 414 415 419 420 422 427 431 436 440 442 460 461 466 467 471 472 472a 474 476 478 484 486 489 490 492
503 503a 509 509a 512 512a 518 518a 521 524 527 533 533a 536 539 539a 542 543 545

Administrative Services, Department of

F- 7

Administrative Services, Department of-Computer Services Division

F- 15

Insurance,Departmentof

F-24

Defense, Department of

0 0 0

F- 26

Education, Department of

0 0 0 0 0 0 0 0 0 0

F- 28

Technical and Adult Education, Department of

F- 36 0

Medical Assistance, Department of . F- 39 0

Forestry Commission, State . F- 42 0 0 0 0 0

Governor, Office of the . . F- 43 0 0 0 0

Human Resources, Department of . F- 47 0 0 0

Juvenile Court Judges, Council of

F- 52

Superior Courts, Georgia F- 53 0 0 0

Labor, Department of . . . . F- 57 0 0 0 0

Law, Department of . . F- 62 0 0 0 0

Personnel Board, State - Merit System of Personnel Administration

F- 63

Children and Youth Services, Department of.

0 0

F- 64

Public Safety, Department of

0 0 0 0 0 0

F- 68

Corrections, Department of . F- 70 0 0 0

Investigation, Georgia Bureau o f F- 73 0 0 0 0

Regents of the University System of Georgia, Board of

.0

0



0

0

0



F- 74

Regents of the University System of Georgia, Board of - EDP Controls

F- 75

Revenue, Department o f . F- 83 0 0 0 0 0 0 0

Student Finance Commission, Georgia

0 0 0 0 0 0 0

F- 84

Secretary of State

0 0

F- 85

Transportation, Department of . F- 86 0 0 0 0 0 0

Treasury and Fiscal Services, Office of

0

F- 87

SubsequentInjury Trust Fund Board of Trustees

0 0 0

F- 89

Workers' Compensation, State Board of . . . . F- 90 0 0 0 0 0 0

Indigent Defense Council

0 0 0 0 0 0 0

F- 91

Colleges and Universities

Georgia Institute of Technology

0 0 0

F- 92

Georgia Institute of Technology - EDP Controls

0

F- 94

Georgia State University

0 0 0

F-l13

Georgia State University - EDP Controls F-116 0 0 0

Medical College of Georgia

0 0 0 0

F-125

Medical College of Georgia - EDP Controls

" F-128

University of Georgia

0 0 0 0 0

F-135

University of Georgia - EDP Controls

F-137

Albany State College

0 0 0 0 0 0 0

F-145

Armstrong State College

0 0 0 0 0

F-149

Augusta College F-154 0 0 0 0 0 0 0 0 0

Fort Valley State College

0 0 0

0 "

F-155

Fort Valley State College - EDP Controls

0 0 0 0 0

F-173

Georgia College. F-182 0 0 0 0 0 0

Georgia Southern University . . . . F-183 0 0 0 0 0 0 0 0 0

Georgia Southern University - EDP Controls

F-185 0 0

Georgia Southwestern College . . F-191 00 0 0

Kennesaw State College F-195 00 00 0 0 0

North Georgia College

0 0 0 0 0 0 0 0

F-196

F-5

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS TABLE OF CONTENTS

For the Fiscal Year Ended June 30, 1995

ENTITY CODE

ORGANIZATIONAL UNIT

Colleges and Universities (continued)

548

Savannah State College

551

Valdosta State University

554

West Georgia College

557

Abraham Baldwin Agricultural College

561

Atlanta Metropolitan College

571

DeKalb College

573

Floyd College

581

Macon College

584

Middle Georgia College

587

South Georgia College

590

Military College, Georgia

593

Skidaway Institute of Oceanography

State Technical Institutes

818

Okefenokee Technical Institute

819

West Georgia Technical Institute

820

Albany Technical Institute

822

Athens Area Technical Institute

824

Augusta Technical Institute

825

Ben Hill-Irwin Technical Institute

826

Carroll Technical Institute

827

Chattahoochee Technical Institute

828

Columbus Technical Institute

829

Coosa Valley Technical Institute

834

Lanier Technical Institute

835

Macon Technical Institute

836

Middle Georgia Technical Institute

837

Moultrie Area Technical Institute

838

North Georgia Technical Institute

840

Pickens Technical Institute

842

South Georgia Technical Institute

846

Thomas Technical Institute

847

Flint River Technical Institute

849

Walker Technical Institute

910

Jekyll Island State Park Authority

912

North Georgia Mountain Authority

917

Student Finance Authority, Georgia

918

Higher Education Assistance Corporation, Georgia

923

Housing and Finance Authority, Georgia

926

Agricultural Exposition Authority, Georgia

927

Tollway Authority, State

928

Environmental Facilities Authority, Georgia

945

Superior Court Judges Retirement System

946

District Attorneys' Retirement System

947

Peace Officers' Annuity and Benefit Fund of Georgia

950

Georgia Firemen's Pension Fund

958

Golf Hall of Fame, Georgia

;

977

Public Telecommunications Commission, Georgia

F-6

PAGE NUMBERS
F-198 F-201 F-209 F-2IO F-211 F-213 F-214 F-215 F-220 F-223 " F-224 F-226
F-228 F-230 F-232 F-238 F-239 F-241 F-242 F-244 F-249 F-250 F-251 F-252 " F-253 " F-257 F-261 F-263 " F-265 F-266 F-268 F-269 F-270 F-279 , F-280 , F-283 F-284 , F-296 F-298 F-299 F-300 , F-301 , F-302 F-303 F-304 , F-305

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEPARTMENT OF ADMINISTRATIVE SERVICES STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findings

401-94-01 401-94-02 401-94-03 401-94-04 401-94-05 401-94-06 401-94-07

Corrective Action Implemented See Audit Control Number 401-95-01 Corrective Action Implemented See Audit Control Number 401-95-02 See Audit Control Number 401-95-03 See Audit Control Number 401-95-04 See Audit Control Number 401-95-05

PRIOR YEAR/CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequacies in Operation of Workers' Compensation Program Financial Statements Reportable Condition Audit Control Number 401-95-01
The audit report for the year ended June 30, 1994, noted deficiencies in the internal controls over the Workers' Compensation Fund. For the year under review, our examination again included a review of the internal accounting controls utilized by the Department of Administrative Services in maintaining the Workers' Compensation Fund. This examination consisted of testing the system for compliance with workers' compensation rules and regulations. In addition, procedures were completed to verify the accuracy of payments from the Workers' Compensation Fund.
A review of voided workers' compensation checks, refunds from claimants and vendors, and 50 workers' compensation claims revealed the following deficiencies:
(1) 984 checks totaling approximately $440,000.00 were received by the Workers' Compensation Section from claimants and vendors as reimbursement of overpayment of claims.
(2) Checks written and issued from the Workers' Compensation Fund to claimants and vendors were subsequently voided for the following reasons:
(a) 202 duplicate payments to claimants and vendors. (b) 111 overpayments to vendors. (Included in (1) above). (c) 96 issued to wrong claimant or vendor. (d) 30 issued for the wrong amount. (e) 45 for unknown reasons.
(3) Documentation could not be located in files to substantiate $16,322.97 in payments made to claimants and vendors.

F-7

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEAR/CURRENT YEAR
Tests of the internal control structure of the Self-Insurance Funds revealed that the Department did not have an adequate system of internal control for detecting either claim duplicate payments or overpayments of the Workers' Compensation Fund. The Department relied on the claimant or vendor to notify the Workers' Compensation Section that it was either paid more than once for the same claim or was overpaid. Further analysis of the duplicate payments and overpayments referred to above indicated that these excessive payments were processed and subsequently credited to the proper accounts; however, we were unable to determine the extent of duplicate payments and other overpayments remaining unidentified.
As a result of the discrepancies identified above, we were unable to determine the accuracy and completeness of the transactions and balances that comprise the Workers' Compensation Fund.
The Department of Administrative Services should establish the necessary internal controls to ensure that transactions and balances relating to the Workers' Compensation Fund are accurate and complete.
Manqwment Response
Implementation of the Claims Management System began in March 1996. This program has been in the planning and development stage since Fiscal Year 1994. The implementation process is still in process with minor program debugging underway. The results are expected to provide electronic images of each check with all supporting invoices eliminating the audit fmding of unsubstantiated payments by Fiscal Year 1997. Note that substantial improvement was made during Fiscal Year 1995 in that supporting documentation could not be located for only $16,322.97 of the audit sample, down from $34,621.31 in Fiscal Year 1994.
During Fiscal Year 1995, a new Workers' Compensation team was allocated. The additional staff is in training stages to bring them to the expected performance level which will help to provide the necessary resources needed to administer claims.
Many refunds collected during Fiscal Year 1995 were a result of the Workers' Compensation Unit identifying overpayments and requesting refunds from vendors. Refunds are expected to increase in Fiscal Year 1996 as a result of these internal auditing efforts. Every effort is being made to identify the reasons for duplicate payments through intense analysis of refunds in order to take corrective action.
Planning is in the advance stages to restructure the check issuing process. The expected results will accelerate the payment processing time for many medical payments by combining the fee schedule benefits information and patient references on a laserprinted check stub eliminating delays caused by the off-sight printing, delivery, collating, and stuffmg of the currently used Explanation of Benefits letters. This time saver should reduce second billings from vendors which may result in fewer duplicate payments.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 401-95-02
The audit report for the year ended June 30, 1994, noted deficiencies in the controls over general fixed assets. For the year under review, our examination included a review of the internal accounting controls utilized by the Department of Administrative Services in maintaining their State Property System. This review consisted of testing the system for compliance with State equipment laws and regulations. Procedures were also completed to verify the accuracy of total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.
F-8

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF ADMINISTRATIVE SERVICES PRIOR YEAR/CURRENT YEAR

The results of our examination revealed the following:

I)

The Department was unable to produce documentation to demonstrate that a physical inventory had

been taken at least once every two years as required by the State Property System Manual.

2)

A sample of equipment items was selected to test the accuracy of the Department's general fixed

assets records. Of the 1,144 equipment items selected for physical inspection, the following

deficiencies were noted:

(a) 142 items were located in locations other than the location indicated in the property inventory system.
(b) 163 items could not be located. (c) 4 items did not have decal numbers attached. Items were identified by serial numbers or
descriptions. (d) 5 items were surplused but were not removed from the inventory records.

Also, during the physical inspection sample, 17 items of equipment were located which were not included in the equipment inventory records.

The Department is required to maintain equipment inventories in accordance with provisions of the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories.

As a result of the discrepancies identified above, we were unable to determine the validity of the total equipment inventory contained in the inventory records, which comprises the General Fixed Assets Account Group.

The Department of Administrative Services should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.

Mana'lement Response

The Department of Administrative Services is unique in that it controls three different inventory systems; Standard Property and Equipment, EDP Equipment, and Telecommunications Equipment. Due to the nature of EDP and Telecommunications equipment it is necessary to process it on a specialized inventory system which also carries maintenance and billing information.

Annual physical inventories have been conducted on Standard Property and Equipment which are maintained on the State Property System. There was a 10% error factor in this sample mostly based on location. There is some lag time in notification and data entry. Errors in location are usually identified and corrected during the physical inventory. In addition, the department is implementing a bar code system for all equipment costing more than $1,000.00. This will be completed in Fiscal Year 1997 and should insure that equipment is recorded in the correct location.

All audit errors for the EDP inventory have been reviewed and corrected where possible. An annual physical inventory will be conducted on EDP equipment in Fiscal Year 1997. EDP inventory custodians will be further educated to provide timely information about relocation of equipment.

F-9

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF ADMINISTRATIVE SERVICES

PRIOR YEARICURRENT YEAR

The Telecommunications Division is in the process of developing a new billing and inventory system, Telecommunications Information System (TIMS). The Telecommunications Inventory will convert to this new system at the end of Fiscal Year 1996. The implementation ofTIMS will allow for greater efficiencies in matching, controlling and updating the inventory. Inventory responsibilities are being reassigned to the Support Services Team which will be responsible for insuring that effective procedures are established and implemented and that necessary internal controls are in place to insure that the inventory is current and correct. All audit errors have been reviewed and corrected where possible.

The importance of accurate biannual physical inventories has been reemphasized to the individuals responsible for this equipment. Procedures are being reviewed to insure the appropriate method of entering and maintaining the information in the various inventory systems.

ELIGIBILITY Improper Documentation of Donee Eligibility Federal Financial Assistance Donation of Federal Surplus Personal Property [CFDA 39.003] Audit Control Number 401-95-03

The audit report for the year ended June 30, 1994, indicated that the Department of Administrative Services did not monitor donee eligibility in accordance with Federal regulation 41 CFRlOl-44.207 and Part X of the State Plan of Operation. This plan was developed to ensure fair and equitable distribution of property to donees. For the year under review, an examination of 50 eligibility files was made and the results are as follows:

(1)

1 file could not be located.

(2)

11 files did not include a resolution designating an official.

(3)

11 files did not include a nondiscrimination statement.

(4)

2 files did not include certification of approval, accreditation or licensing.

(5) 10 files had not been updated within the required three year period.

Failure to follow provisions of the State Plan of Operation may result in distribution of eligible equipment to donees on an unequitable basis.

Procedures should be established to ensure that the Department is in compliance with all eligibility requirements as outlined in Federal regulation 41 CFRIOl-44.207 and Part X of the State Plan of Operation.

Manq~ment Response

This Agency concurs with the fmding. In the past, donees who have not provided updated or missing documents and who were subsequently suspended, were not pulled from the eligibility file. These donees are being purged from the active files. Measures have been taken to preclude this from recurring. Additional training on eligibility was provided by the Federal General Services Administration for Surplus Property Personnel in December of 1995. Donee files will be updated in the following sequence: Non-Profit Education, Non-Profit Health, Cities, Counties and other political subdivisions, State Agencies and Authorities. All documents that have expiration dates will be identified and updated prior to their expiration. Donees who have missing documents or expired documents will be given 30 days to provide this Agency with requested updates. At the end of the 30-day notification period, an additional notification will be sent requiring organizations to respond within two weeks or they will be suspended from the program in accordance with Federal Property Management Regulations 41CFR 101-44.207(1). All property under restriction as prescribed by the Federal Property Management Regulations 41 CFR 101-44.208(e) will be recovered from donees who are not in compliance. This action will be completed by November 15, 1996.

F - 10

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEAR/CURRENT YEAR
SPECIAL TEST AND PROVISIONS Excess Service Charges Assessed to Recipients Federal Financial Assistance Donation of Federal Surplus Personal Property [CFDA 39.003] Audit Control Number 401-95-04
The audit report for the year ended June 30, 1994, indicated that the Department of Administrative Services assessed excessive service charges on certain property items distributed through the Donation of Federal Surplus Personal Property Program. Federal regulation 41 CFRIOI-44.202(5) and Part VI of the State Plan of Operation states that such charges will be fair and equitable in relation to the service performed and the direct and indirect costs for operation. However, in any case, the service charge is not to exceed 35% ofthe acquisition cost ofthe property. Surplus property is distributed to recipients through warehouses located in Atlanta, Americus and Swainsboro. A review of 150 invoices (50 at each warehouse location) to recipients of donated property revealed 3 instances at the Atlanta warehouse, 5 instances at the Americus warehouse and 2 instances at the Swainsboro warehouse in which the service charges assessed to the recipient of surplus property were in excess of35% of the acquisition cost of the property. These excess charges occurred because of clerical errors which were immaterial.
Procedures should be established to ensure that the Department is in compliance with all fmancing and service charges as outlined in Federal regulation 41 CFR 101-44.202(5) and Part VI of the State Plan of Operation.
Mana~ement Response
It is the opinion of this Agency that the items listed on invoice numbers A00700, A00952, B03319, B00243, B00291, B00544, B00580, C00386, COl103 had incorrect acquisition costs assessed. The State Plan of Operation (exhibit 16, page 40) allows this agency to obtain permission from the General Services Administration to adjust acquisition costs. Permission was not obtained as outlined in the State Plan of Operation.
Receiving personnel have been instructed to identify property that may reflect the incorrect acquisition cost. This will be brought to the attention of the section supervisor who will decide if GSA should be contacted to adjust the cost prior to making commodities available to eligible donee organizations.
The item listed on invoice no. A00319 (1976 Dodge 4x4 pick-up) was part of an overseas shipment. Shipping costs to this agency were approximately $6,000.00 for the container the item was shipped in (this container included other items). In addition, unloading, receiving and storage costs were incurred by this agency for this item. These charges should have been added to the acquisition cost in accordance with the provision for overseas shipments in the State Plan of Operation (Exhibit 16, page 40). The original acquisition cost ofthis item was $7,305.00. The maximum service charge allowed without the addition of shipping and handling charges is $2,556.75. If this charge was assessed to the customer, this Agency would not recover handling and shipping expenses. Charges were not properly documented in the receiving file to substantiate $4,000.00 service charge.
The automated inventory program will include a provision to alert warehouse personnel entering service charges that exceed 35% of original acquisition cost. Personnel will be required to document service charges that exceeded 35%.
F - 11

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEAR/CURRENT YEAR
SPECIAL TEST AND PROVISIONS Inadequate Property Control Records Federal Financial Assistance Donation of Federal Surplus Personal Property [CFDA 39.003] Audit Control Number 401-95-05
The audit report for the year ended June 30, 1994, noted that adequate property inventory control records were not maintained by the Department of Administrative Services in administration of the Donation of Federal Surplus Personal Property program. Federal regulation 41 CFRIOI-44.202(3) and Part IV of the State Plan of Operation states that the Department shall maintain accurate accounting records of all donable property that has been allocated, received, warehoused and distributed by the Department. Surplus property items are maintained at warehouse locations in Atlanta, Americus and Swainsboro. Of the 120 items selected for physical inspection, (40 items at each warehouse location), 5 items could not be located at the Swainsboro warehouse. The assigned value of these items amounted to $1,073.78.
Procedures should be established to ensure that the Department is in compliance with all inventory control and property accounting systems as outlined in Federal regulation 41 CFRIOI-44.202(3) and Part IV of the State Plan of Operation.
Mana~ement Response
The vertical files, GA 8A-94-1 (two each) and the storage cabinets, GA 24A-95-2 (two each) were located and the inventory records have been updated. It was discovered that the sofa sleeper, GA 24A-95-1 (one each) was scrapped. This scrap was not properly documented. These errors were the result of untimely processing of updates to the inventory record. Personnel have been instructed to process updates in a timely manner. All five items have been accounted for and documented. The following actions have been taken to avoid recurrence.
Perpetual inventory checks are routinely performed to ensure property is accounted for at all times. Inventory verification is periodically performed by personnel external to the warehouse.
CURRENT YEAR
GENERAL LEDGER Subsidiary Ledger for Inventories Not Balancing to the General Ledger Financial Statements Audit Control Number 401-95-06
For the year under review, it was noted that the Department of Administrative Services' subsidiary records for inventories did not balance to the general ledger. Inventory items are maintained for Central Supply, Motor Vehicle and Telecommunications. The Telecommunications' subsidiary ledger did not balance to the general ledger due to data entry and clerical errors. Extensive audit procedures were necessary to reconcile the subsidiary ledger for Telecommunications inventory to the general ledger.
The Department should establish controls to ensure that subsidiary records are reconciled to the general ledger and that needed adjustments are recorded in a timely manner.
Mana~ement Response
The variance between the subsidiary ledger was an immaterial amount of $.16. Efforts will be made to insure that the year-end subsidiary ledger is easier to decipher prior to the annual audit.
F - 12

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES
CURRENT YEAR
TYPES OF SERVICES/ALLOWED OR UNALLOWED Improper Distribution of Special Request Letters Federal Financial Assistance Donation of Federal Surplus Personal Property [CFDA 39.003] Audit Control Number 401-95-07
For the year under review, the Department of Administrative Services did not distribute all special request letters from donees to all warehouses in the administration of the Donation of Federal Surplus Personal Property program. Federal regulation 41 CFR101-44.203 and Part IX of the State Plan of Operation states that the distribution of property will be based on an expression of interest by eligible donees for specific items of property. This expression of interest is in the form of a special request letter that is filed by eligible donees. Each warehouse (Atlanta, Americus and Swainsboro) should receive each letter. An examination of special request letters revealed that of 22 requests selected for review, the Americus warehouse did not have on file 1 letter and the Swainsboro warehouse did not have on file 4 letters required to be maintained.
Failure to follow provisions of the State Plan of Operation may result in distribution of eligible equipment to donees on an unequitable basis.
Procedures should be established to ensure that the Department is in compliance with all property distribution requirements as outlined in Federal regulation 41 CFR101-44.203 and Part IX of the State Plan of Operation.
Mana~ement Response
Under the current distribution method, clerical errors are likely to occur. It is this Agency's opinion that this was the case. Request letters will be reformatted with pertinent information and placed on our computer network. This will allow all staff and distribution centers to have access to pending request letters. The original letters will be kept on file at the Atlanta office. This action will be completed by June 1, 1996.
FEDERAL FINANCIAL REPORTS Errors in Reporting Inventory Balance on Quarterly Financial Reports Federal Financial Assistance Donation of Federal Surplus Personal Property [CFDA 39.003] Audit Control Number 401-95-08
For the year under review, it was noted that errors were made by the Department of Administrative Services in the preparation of General Services Administration (GSA) Form 3040, State Agency Monthly Donation Report of Surplus Personal Property, which is a required report in the administration ofthe Donation of Federal Surplus Personal Property program. Federal regulation 41 CFRlOl-44.4902-3040 and Part IV of the State Plan of Operation states that Form 3040 shall be signed and dated by an approving official. The Federal surplus personal property inventory balance as reported to the GSA on Form 3040 was understated by $1,018,936.78 due to clerical errors. (This error was corrected for Note 11 in the Notes to the Financial Statements which reflects the fmancial activity of the surplus property program.)
Procedures should be established to ensure that the Department accurately reports the balance of Federal surplus property inventory as outlined in Federal regulation 41 CFRlOl-44.4902-3040 and Part IV of the State Plan of Operation.
F - 13

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30. 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES CURRENT YEAR
A1ana~ementResponse
This Agency concurs with the fmding. Future reports will be reviewed more closely to avoid errors. Periodic checks will be performed to ensure correct posting of data. Automation of this report should be complete by October 1996. This will eliminate calculation errors.
F - 14

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the EDP Review Report of outside auditors dated January 28, 1994, is summarized below:

Audit Control Number

Status of Findin&

401a-93-01 401a-93-02 40 1a-93-03 401a-93-04 40 1a-93-05 401a-93-06 401a-93-07 401a-93-08 401a-93-09 401a-93-1O 401a-93-11 401a-93-12 401a-93-13 401a-93-14 401a-93-15 401a-93-16 401a-93-17 401a-93-18 401a-93-19

See audit control number 401a-95-01 See audit control number 401a-95-02 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See audit control number 401 a-95-03 Corrective Action Implemented See audit control number 401a-95-04 Corrective Action Implemented Corrective Action Implemented See audit control number 401 a-95-05 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

BACKUP AND DISASTER RECOVERY
Disaster Recovery Planning Reportable Condition Audit Control Number 401a-95-01
The State of Georgia's Centralized Computer Center (CCC) has no formal, documented, or tested Disaster Recovery Plans or procedures.
In 1987 a consulting firm was engaged to perform a disaster preparedness study evaluating the risk and potential impact on State agencies of a loss of information technology support. The study indicated that 50% of data processing capacity needed to be restored within 5 to 10 days and 100% within 30 days. While this study is 6 years old, it is likely that current needs are no less time sensitive than at that time. However, in the current environment, it is not reasonable to expect that the recovery requirements as identified in 1987 could be met if an incident occurred today.
Should an incident render either the CCC inoperable or seriously damaged data communication access to the CCC, there are no documented plans or formal strategies in place to restore information technology capacity within identified time frames. The State of Georgia, and the services it provides to its citizens, would be seriously disrupted for a significant period of time. Based upon our experience with comparable organizations and given that there is currently no formal recovery plan, we feel that it is reasonable to expect that recovery and restoration of the State's electronic support services could take months, with total recovery of State business operations possibly requiring years.

F - 15

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION
PRIOR YEAR/CURRENT YEAR
We recommend that the 1987 study be updated to reflect today's environment, including both information systems and user department operations. We further recommend that strategies be identified, budgeted, developed, documented and regularly tested to assure that the State of Georgia can meet its information technology responsibilities. Without documented, and regularly tested, Disaster Recovery strategies and plans, a serious disruptive incident at the CCC could immeasurably affect supported statewide operations.
Mana~ement Response (June 2. 1994)
Concur. Disaster recovery is a priority of DOAS. A "Disaster Recovery Project Manager" has been appointed. He is gathering information (including that from other states) to provide a basis for an RFP for a vendor to develop a "plan," as well as to identify a "hot site" to furnish DOAS a disaster recovery capability. Issuance ofthe RFP, award of a contract and having a plan in place should be accomplished by end of 1st quarter, FY 1996.
As everyone must understand, disaster recovery can and will have significant budget impacts. Estimates range from $200,000 to $40 million. The State must decide how much disaster recovery it can afford. To date, only agency funds have been allocated. Priorities will have to be established among maintaining operations, performing enhancements, and disaster recovery.
Current Status
Negotiations are in process to contract with a hot-site vendor for adequate processing equipment and space in the event of a disaster.
Backup and Disaster Recovery Planning Reportable Condition Audit Control Number 401a-95-02
Adequate recovery planning must include continual review and update of critical application file backups to ensure that adequate backup will be available should the need arise.
Although the CSD has procedures for regularly creating copies ofprograms and data files, procedures have not been established to periodically test or review application file backup procedures to ensure the ability to recover.
Procedures should be established to document and periodically confirm backup requirements for significant applications to ensure that provisions are adequate in the event a need to recover occurs.
Manq~ement Response (June 2. 1994)
Concur. It is agreed that the State of Georgia Centralized Computer Center (CCe) has no formal, documented, or tested disaster recovery plan. However, it is noted that informal plans and procedures are in place and are being executed. Disk volumes at the CCC and district offices are backed up weekly and stored at separate locations. These backups provide a starting point for recovering the data portions of facilities, and we are exploring our ability to update the files to current status. The CCC can back up anyone of the district offices, but a back-up site for the CCC is needed. Such a site must be able to accommodate the inexcess-of-one-terabyte of DASD now in the CCC.
F - 16

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION PRIOR YEAR/CURRENT YEAR
Current Status As part of the hot-site vendor contract there will be a risk assessment performed of all applications to assure most critical applications are recovered first and other applications are recovered in an orderly manner. Reference also Current Year Finding Audit Control Number 40 Ia-95-09.
COMPUTER OPERATIONS AND OPERATIONAL SUPPORT
Reporting and Tracking of Application Software Incidents Reportable Condition Audit Control Number 40 Ia-95-03 There is no formal reporting or tracking ofapplication software incidents by Computer Operations to Application Support staff. A reporting mechanism which records application incidents and ensures their subsequent resolution provides the opportunity to proactively identify and address significant and recurring problems. Such problems may result in excessive consumption of computer resources if they are not appropriately reported and regularly reviewed by management. Procedures should be developed for formal reporting of application-related incidents. These procedures should cover the reporting of all system failures and include a tracking mechanism which would report unresolved problems. Mana~ement Re'iponse (June 2, 1994) Concur in part. Each operational shift of the CCC, RCC, and TCC recaps that shift's activities with on-line "Site Manager's Turnover" reports. They identify production job problems (hardware, software, or operator error), the person notified, time of the notification and problem disposition. For PACS, FACS, GEMS and for Revenue systems, the information is furnished via e-mail. Finally, a software package ($AVRS) captures all production job information including run times, completion codes, JCL listing and message codes in a historical data base that is available on-line for review for Application Systems personnel to determine ifjob re-run was completed. Application Systems management is developing a policy for consistent utilization of information available. Policy will include the reporting of incidents/problems to the appropriate level ofmanagement. The policy is expected to be completed by end-FY 1994. Current Status Procedures to better track application level processing problems are being developed. This is being done as part of a major reorganization of Information Systems Solutions and the adoption of a methodology to develop consistent policies and procedures scheduled for implementation in January 1996.
F - 17

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION PRIOR YEAR/CURRENT YEAR

CHANGE CONTROL

Update of Production Application Source Code Reportable Condition Audit Control Number 401 a-95-04

Controls surrounding the update ofproduction programs do notprovide adequate assurance thatproduction source and object code are at the same maintenance level.

The update of production source code is performed by personnel in the Applications Systems area while the update of production object code is performed by Operations Support personnel. Coordinated procedures over the implementation of program source and the respective objects are necessary to assure that the components remain in sync. Lack of agreement between source and object code may result in:



unauthorized (and potentially destructive) changes being introduced into programs; and



significant delays and costly recovery, should the need arise to modify the application.

Current change control procedures should be modified to assure the coordinated installation of program source and objects into the respective libraries. These procedures should also assure that the same version of any production program is always available and is used as the basis for future changes. Correspondingly, programmers should be restricted to READ access over production source code libraries.

Mana",ement Response (June 2. 19941

Concur. Effort is on-going to determine how best to accomplish these recommendations. Policies and procedures are currently being developed to implement the recommendations and should be in place by the end ofFY 1994.

Current Status

Procedures to better track program changes are being developed. This is being done as part of a major reorganization of Information Systems Solutions and the adoption of a methodology to develop consistent policies and procedures scheduled for implementation in January 1996.

BILLING
Policies Regarding CSD Billing and Use of Revenues Reportable Condition Audit Control Number 40 1a-95-05
Formal policies are needed regarding CSD Billing and revenues in excess of costs.
The CSD operates as a service organization, serving most State departments and agencies. The CSD is required by legislation to recover its costs by allocating them to its client agencies. Accordingly, CSD management has developed procedures to perform the recovery of its costs. In general, this process involves identifying actual CSD costs and allocating them to clients based upon their usage of various CSD facilities, services and supplies. The possibility exists that, while its costs remain at approximately
F - 18

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION
PRIOR YEAR/CURRENT YEAR
the same level, significant fluctuations in client usage will result in CSD allocations which also fluctuate significantly. However, much of the CSD cost structure is ofa fixed nature, and does not directly fluctuate with usage.
Significant increases by clients in the use of the CSD may result in a windfall ofrevenues, well in excess of actual cost. However, a significant reduction in client use of the CSD can cause the CSD to experience a shortfall in funds to cover its expenses. Due to this possibility of a shortfall in CSD revenue, some additional recovery margin over estimated actual costs is necessary to assure that such a shortfall does not occur.
Additional formal policies should be established regarding CSD billing. These policies should acknowledge the necessity of recovering a margin above its standard cost and should also define how any excess funds, resulting from net recovery in excess of actual costs, will be used. These policies may, for example, define a percentage or margin amount which will be used to calculate the recovery target in setting the CSD's standard costs and recovery rates. Such a margin would then provide assurance against a shortfall resulting from unforeseen circumstances, such as a significant reduction in client activity. Accordingly, the management of the CSD should formally plan for the potential receipt of revenues in excess of the annual operating costs and should budget the use of those funds as part of its annual budget process. Additionally, these policies should specify how recovered' funds beyond the defined margin and budget should be utilized.
Mana'lement Response (June 2. 199'0
Concur in part. DOAS/CSD Fiscal Committee, with guidance from Deputy Commissioner, CSD, will make recommendations on revenue over costs and how it should be used. Deputy Commissioner will establish percentage for DOAS Commissioner approval for each fiscal year, beginning with FY 1995. The annual budget process should not formally plan for the use of revenues in excess of operating costs. Instead, a policy and prioritized list of potential opportunities will be maintained by CSD management in case excess revenues should occur. Budget amendments, to capitalize on prioritized opportunities realized should be the vehicle used.
Current Status
An outside consultant was hired to evaluate DOAS-CSD billing procedures. The initial phase of this evaluation is complete and includes advantages and disadvantages of the various options regarding accounting for revenues in excess of costs. Internal auditors also are in process of reviewing and recommending the option that best accounts for revenues in excess of costs.
CURRENT YEAR
PHYSICAL SECURITY Reportable Condition Audit Control Number 40Ia-95-06
There is a needfor increased security in Archives Building Parking Lots.
The Central Computer Center (Ccq is located in the basement of the Archives Building. In most respects, security procedures for restricting access to the Central Computer Center (CCC) are in place and are effective; however, there is a weakness in physical security for the parking decks which extend under the computer center. By 4:00 P.M. each day the gates at parking levels 2B, 3B and 4B are opened. There are no parking lot attendants on duty in the parking decks at this time to monitor inlout traffic. Unauthorized vehicles have easy access to space directly under the CCC.
F - 19

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION

CURRENT YEAR

Mana~ementResvonse (Devuty Director, Geor~iCi BUildin~ Authority Police and Security)
We are aware of the weakness in Security at the Archives 2,3, & 4-B. This concern will be discussed at the next staff meeting by the Executive Director, GBA. Corrective steps will be taken when personnel are available.
COMPUTER SERVICES DIVISION POLICIES AND PROCEDURES Reportable Condition Audit Control Number 40 I a-95-07
There is a need to update Computer Services Division's (CSD) Policies and Procedures Administration ManuaL
We reviewed CSD's Policies and Procedures Administration Manual. Although the policies and procedures are essentially correct, there is a need to review the manual and update it to reflect current changes in organization, administrative procedures or systems.
Mana~ement Response
CSD Policies and Procedures Administration manual was last updated in August 1993. Current status of contents and projected actions are listed below.

Section I Section II

Content Introduction Organization and Functions

Section III

Personnel

Section IV Section V Section VI
Section VII -

Travel Property Administrative Operations
Electronic Data Processing Operations

Section VIII - Security

Section IX

Publications

Valid; no changes indicated.
In need of major revision. In light of major organizational changes immediately anticipated in Information Systems Solutions Section (formerly Application Systems Section) and near-future changes resulting from the Division's on-going strategic planning initiative, it is probable content revision will be held in abeyance until end-FY 96.
Valid for the most part; Training content needs only organization title changes; no other major changes are envisioned until implementation of GeorgiaGain, at which time significant changes will be required, especially in the performance reporting arena; anticipate end-FY 96 action.
Valid; requirements for major changes not foreseen.
Valid; requirements for major changes not foreseen.
Valid; requirements for major changes not foreseen.
Valid; requirements for major changes not foreseen, except as may be required by organizational/procedural impacts of strategic planning process; anticipate end-FY 96 action.
Valid; requirements for major changes not foreseen.
Significant reduction, perhaps elimination, foreseen as a result of drastic decrease in scope of function (essentially only publication of quarterly technical bulletin) and change in emphasis of Publications officer's duties to those of supporting strategic planning process and Deputy Commissioner's ad hoc requirements.

F -20

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION
CURRENT YEAR
PHYSICAL ACCESS SECURITY Reportable Condition Audit Control Number 40 Ia-95-08
There is a need to review accuracy ofissued ID/key cards.
We reviewed the issuance and control listing ofID/key cards maintained by the Director of the Computer Operations Section. These cards provide main access control to the Central Computer Center (CCC) and Remote Computer Centers (RCe). Three of the 316 (1%) ID/key cards listed had minor errors:
(1) A retired employee was still listed as having an ID/key card. The card was not returned when the employee retired.
(2) There was no active employee on file for one of the cards issued. (3) An employee who is married is still listed on the ID/key card listing under her maiden name.
Afana~ementReSDQnSe
ID/key cards will be inventoried periodically by management. The errors have been corrected as follows:
(1) The retired employee was removed from the list. Her card number has been inactivated. (2) The card in question was issued to an employee who worked in the RCC several years ago. She left work one
night to go to Kentucky and never returned. This card number has been inactivated. (3) The name of the card holder has been changed in the file.
BACKUP PROCEDURES Reportable Condition Audit Control Number 401a-95-09
There is a need to assure data for critical applications is backed up adequately.
We reviewed the backup procedures for critical data sets for several applications.
(1) In the following cases tape data set backup and retention schedules appeared to be excessive. Reasonable care should be taken to provide adequate backups for restarts and recovery, but avoid generating excessive tapes to inventory and move offsite.
(A) Critical data sets tested for the business information and services system are copied to tape daily and kept in the library for 16 cycles, moved to the vault for 3 cycles and returned for scratch.
(B) Critical data sets tested for the voter registration system are copied to tape daily and kept in the library for 16 cycles, moved to the vault for 3 cycles and returned for scratch.
(C) Critical data sets for the drivers' licensing system are copied to tape daily and kept in the library for 25 cycles. (D) Critical data sets for statewide purchasing information network (SPIN) are copied to tape and kept in the library
for 32 cycles. (E) Critical data sets for state health systems (MEMS) are copied to tape and kept in the library for 20 cycles. (F) Critical data sets for the cost accounting system (CAMS) are copied to tape and kept in the library for 24
cycles.
F - 21

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION
CURRENT YEAR
(2) The following applications' critical data sets are copied to tape and retained in the tape library. No backup tapes are rotated offsite to the vault.
(A) the drivers' licensing system (B) the workers' compensation system (C) the commissioner of insurance system (D) the human resourceslDFCS tape data set HRPP.PARSDB.OFFSITE.BACK-UP25 containing the case master
data
(3) Critical data sets for the uniform accounting system are backed up automatically through Hierarchical System Management (HSM). HSM copies data sets to tape but does not designate tapes for offsite rotation. The uniform accounting system data sets however, are rotated offsite when the entire system is backed up weekly. As a worst case, a week's data could be lost if the central computer center's disk storage and tape library are destroyed at weekend before system backup.
Mana"ement Response
(1) Project coordinators reviewed the backup schedules in question and justified current procedures as adequate and not excessive.
(2) Backup procedures have been modified to rotate critical data sets in question offsite. (3) Project coordinator for the uniform accounting system reviewed the backup procedures and feels they are adequate, but
has agreed to share with the customer the option and associated costs of having additional daily offsite tape backups made.
ORGANIZA nON AND PERSONNEL Reportable Condition Audit Control Number 40Ia-95-10
There is a needfor Personnel Upgrades in Control Area.
We reviewed the functions of the control area in the remote computer center (RCe). Control area personnel schedule jobs daily for critical state government applications. They also help research job problems. These functions require a great deal of expertise due to the increasing volume of work and complex teleprocessing environment in the Central Computer Center. The pay grades of the personnel in the control area are lower and not in line with comparable positions in other operations areas.
Mana"ement Res(2onse
Although management concurs with the need to rewrite job titles and descriptions for the control area in an effort to upgrade positions, the issue cannot be addressed at this time. The Personnel Office has indicated they are too involved with Georgia Gain to address any out of the ordinary position and salary requests. We will pursue this when time permits.
F -22

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF ADMINISTRATIVE SERVICES - COMPUTER SERVICES DIVISION CURRENT YEAR
COMPUTER OPERATIONS/JOB SCHEDULING Reportable Condition Audit Control Number 401 a-95-11 There is a needfor automatic job scheduling software. We reviewed the procedures for the scheduling of jobs and the functions of the control area in the remote computer center (RCC). For many major applications, jobs are scheduled manually from job request sheets (which must be couriered to the control area) and phone calls. This mode of operation is very inefficient given the state's complex computer environment. The result is a paper intensive, time consuming process with a high risk of errors if not done accurately every day. Efforts to convert to automated scheduling software are beginning with pilot programs for the Department of Revenue and Division of Family and Children Services. Manaument Response Management concurs with the fmding and as noted, has initiated implementation of automated scheduling software. The pilot projects with Department of Revenue and Division of Family and Children Services are progressing on schedule. Management will continue to strongly encourage all users to convert to automatic scheduling ofjobs where feasible.
COMPUTER OPERATIONS/INPUT CONTROL PROCEDURES Reportable Condition Audit Control Number 40Ia-95-12 There is a needfor Control Area procedures and standards. We reviewed the functions of the control area in the remote computer center (RCC). Control area personnel perform many critical tasks as they schedule jobs daily for critical state government applications and research job problems. There are no written general procedures or standards. Mana~ement Response Control Area management wrote procedures during the audit and has submitted them to management for review.
F -23

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

DEPARTMENT OF INSURANCE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findings

408-94-01 408-94-02 408-94-03 408-94-04 408-94-05 408-94-06

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 408-95-01

The total approved budget for the Department ofInsurance provided for expenditures totaling $16,988,635.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the Per Diem, Fees and Contracts object class was overspent by $9,458.31. In addition, expenditures for the following "common object classes" exceeded the authorized expenditure level of 102% of the budgeted amount for each common object class by the amounts identified below:

Regular Operating Expenses

$ 58,322.69

Motor Vehicle Purchases

$ 38,919.00

Computer Charges

$ 3,093.65

Telecommunications

$ 21,449.83

These overexpenditures are in violation of Section 80 ofthe Amended Appropriations Act of 1994-1995. These overexpenditures were caused by the Department's failure to monitor the expenditure of funds against the budgeted expenditures by object class.

The Department should review its internal control procedures over budget operations, design procedures which would prohibit the expenditure of funds in excess of budget approval, and implement those procedures to strengthen the controls over budget function.

Mana~ement Response

The Department has established controls to ensure that budget operations are maintained in accordance with Section 80 of the Amended Appropriations Act of 1994-1995. Procedures which prohibit the expenditure of funds in excess of budget approval have been developed and implemented. A copy of these procedures is available for review.

F -24

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
DEPARTMENT OF INSURANCE CURRENT YEAR
FEDERAL FINANCIAL REPORTS Reimbursement Requests Do Not Agree With Recorded Expenditures Federal Financial Assistance Medicare-Hospital Insurance [CFDA 93.773] Medical Assistance Program [CFDA 93.778] Audit Control Number 408-95-02 For the year under review, an examination of the Requests for Reimbursement submitted to the Georgia Department of Human Resources, for the Medicare-Hospital Insurance and Medical Assistance Program disclosed that the reports were not supported by the accounting records. The fund source trial balance (FACS report 2411) is the Fiscal Accounting and Control System report which provides revenue and expenditure data for each source of funds received. For the year under review, the FACS report 2411 for fund source 34-32, "Health and Human Services", does not agree with Requests for Reimbursement submitted to the Georgia Department of Human Resources. The Department of Insurance was unable to reconcile the differences. These differences were caused by the Department's failure to reconcile the Requests for Reimbursement with the appropriate accounting records before submission. The Department of Insurance should implement procedures to ensure that Requests for Reimbursement submitted to the Georgia Department of Human Resources are accurate and agree with accounting records. Mana'/ement Response The Department has implemented procedures to ensure that Requests for Reimbursement submitted to the Georgia Department of Human Resources are accurate and agree with accounting records. Before reports are submitted, financial information is reconciled to the appropriate accounting records including the FACS report 2411 for fund source 34-32. Differences, if any, are corrected before the report is submitted. A copy of the procedures is available for review.
F -25

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF DEFENSE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

411-94-01

See Audit Control Number 411-95-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 411-95-01

The review report for the year ended June 30, 1994, noted that internal accounting control procedures of the Department of Defense did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures. For the year under review, a limited review ofthese procedures revealed that the Department had made no significant changes that would provide for an adequate separation of duties in the following control categories:

(1) Cash and Cash Equivalents

(2) Revenues/Receivables/Receipts

(3) General Ledger

(4) General Fixed AssetslProperty Management

The Department should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories, and implement those procedures to strengthen the internal controls over the accounting function.

Federal Financial Assistance Prowams Affected:

16.579 Drug Control and System Improvement - Formula Grant 83.516 Disaster Assistance N/A National Guard Bureau

Mana'lement Response

We concur with this fmding; however, the operations of this department do not warrant sufficient staff to adequately provide for the separation of duties in the performance of accounting functions and related procedures. The duties of the Accounting Office will be reviewed to determine if any duties can be reassigned to provide better separation of duties. Cross-approval of statements will also be used wherever possible.

F -26

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

DEPARTMENT OF DEFENSE

CURRENT YEAR

CASH AND CASH EQUIVALENTS Inadequate Bank Reconciliation Procedures Financial Statements Audit Control Number 411-95-02

For the year ended June 30, 1995, the Department of Defense's accounting procedures were insufficient to provide for adequate control over the bank reconciliation process for armory bank accounts. The following deficiencies were noted:

1.

Certain bank accounts were not properly reconciled to the armory's subsidiary ledger or the

Department's general ledger.

2.

Certain bank statements were not available for examination.

3.

One armory's bank account was closed during the year under review, but a cash balance remained

on the Department's general ledger as of June 30, 1995.

The Department of Defense should establish the necessary procedures to ensure that armory bank accounts are properly reconciled on a monthly basis and agree with subsidiary ledgers and the Department's general ledger.

Manaument Response

The Department of Defense is in the process of centralizing the accounting of armory funds. All armory funds will be held in a centralized account at state headquarters.

GENERAL LEDGER Deficiencies in Accounting Procedures Financial Statements Audit Control Number 411-95-03

For the year ended June 30, 1995, certain armory subsidiary ledgers did not balance to the Department's general ledger. The Accounting Procedures and Instructions manual, as published by the State Auditor, states that at the end of each accounting period all subsidiary ledger amounts should be reconciled with the general ledger control account. The above situation occurred because the Department's accounting procedures were insufficient to provide for adequate controls over the balancing of armory subsidiary ledgers to the Department's general ledger.

The Department of Defense should establish the necessary procedures to ensure that armory subsidiary ledgers are accurately and timely balanced to the Department's general ledger.

Mana'iement Response

The Department of Defense is in the process of centralizing the accounting of armory funds. All armory funds will be maintained in a centralized bank account to be managed at state headquarters.

F - 27

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF EDUCATION

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

414-94-01 414-94-02 414-94-03 414-94-04 414-94-05 414-94-06 414-94-07 414-94-08

See Audit Control Number 414-95-02 See Audit Control Number 414-95-03 See Audit Control Number 414-95-04 See Audit Control Number 414-95-05 Corrective Action Implemented Corrective Action Implemented See Audit Control Number 414-95-01 Corrective Action Implemented

PRIOR YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Instructions to Boards of Education Not Consistent With the Official Code of Georgia Financial Statements Audit Control Number 414-95-01
The audit report for the year ended June 30, 1994, noted that the Department of Education issued written instructions for the 1993 and 1994 fiscal years to boards of education regarding expenditure requirements relative to Staff Development - Cost of Instruction (CIS) and Professional Development Stipend (PDS) funds that were not consistent with the Official Code of Georgia (OCGA) 20-2-182.
The guidance provided in the above reference memorandums has resulted in the various boards of education inappropriately expending PDS funds of approximately $2,114,000.00 and $4,315,000.00 for the fiscal years ending 1993 and 1994, respectively.
As of June 30, 1995, the Department of Education had not requested refunds from affected boards of education. The Department should develop procedures whereby instructions given to subrecipients are consistent with laws and regulations. The Department of Education should request appropriate refunds from affected boards of education.
AfanagementResponse
The Department of Education has developed procedures whereby instructions given to subrecipients are consistent with laws and regulations. The finding for 1993 and 1994 involving various local boards of education regarding expenditure requirements relative to staff development - cost of instruction and professional development funds have been resolved by increasing the local fair share of the affected systems in 1996 and 1997.

F - 28

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEPARTMENT OF EDUCATION PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS EXPENDITURESILIABILITIESIDISBURSEMENTS Agency Funds - Deficiencies in Accounting Procedures Financial Statements Audit Control Number 414-95-02

The audit report for the year ended June 30, 1994, noted several deficiencies concerning agency fund cash accounts. For the year under review, certain of these deficiencies were corrected. However, an examination of current year accounting procedures disclosed the following deficiencies in accounting procedures and internal controls which are in need of corrective action:

(1) Certain disbursements were not supported by adequate documentation. All disbursements should be supported by adequate documentation to demonstrate proper disbursement and accounting of funds.

(2)

Certain disbursements did not appear to be in compliance with the intent of the fund. Steps should

be taken to ensure that records of a fund include documentation stating specific disbursements which

are allowable for the fund. A listing of approved allowable disbursements would reduce the

likelihood of questionable disbursements.

(3) Checks were issued to certain individuals for services rendered; however, there were no corresponding W-2's or 1099's issued. Procedures should be implemented to issue W-2's or 1099's to individuals as is appropriate.

(4) Certain deposits for the Vocational Education Accounts, Georgia Association American Industrial Arts Student Association, Incorporated and Georgia Association of Future Farmers of America, District III, Vocational Agriculture Teacher's Fund accounts were not made on a timely basis. Procedures should be implemented to ensure that all funds received are deposited promptly.

(5) A check issued from the Georgia Academy for the Blind, Student Activities Account included one check made payable to, signed, and endorsed by the custodian of the account. Although documentation was available for the disbursement; measures should be taken to prevent this practice.

Although the accounting department sent instructions to the custodians of the agency funds during fiscal year 1995, deficiencies continued to exist. The Department should continue efforts to ensure that proper accounting procedures are utilized in maintaining agency funds.

Management Response

The deficiencies in the management of trust fund accounts involved the Vocational Education Club Accounts and the Academy for the Blind Accounts. Although there were fewer fmdings than in previous years, there should not be any deficiencies in the management of the trust accounts. Information was requested from Vocational Education and the Academy for the Blind staff, so that Accounting Services personnel could determine the appropriate corrective action. A follow-up letter was sent to division level personnel outlining the corrective action needed. A meeting was also held with division level personnel to go over the deficiencies.

Some of the deficiencies involving the Vocational Club Accounts were questionable. A number of accounts were cited for expenditures that were not within the intent ofthe funds. All ofthe expenditures were reviewed and determined to be appropriate. The club accounts have a very broad range of activities that require many different type of expenditures.

F -29

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF EDUCATION

PRIOR YEAR/CURRENT YEAR

Some of the accounts were also cited for inadequate supporting documentation for payment of services. The supporting documentation for services provided by speakers, photographers, and other individuals often consisted of a single page invoice. Most of the individuals are one person companies and have simple billing and accounting procedures. They do not use multipage preprinted invoices. The Vocational Club Accounts have advisory committees that help ensure the funds are being disbursed properly.

We appreciate the assistance the Department of Audits has provided in helping the department resolve the agency funds audit fmdings. A review of all the agency fund accounts is in process to see if some of the accounts can be either closed or combined with other agency fund accounts. Additional instructions is also being provided to custodians of the funds to help prevent future audit fmdings.

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Audit Control Number 414-95-03

The audit report for the year ended June 30, 1994, noted deficiencies in the controls over general fixed assets. For the year under review, our examination included a review of the internal accounting controls utilized by the Department of Education in maintaining their State Property System. This review consisted of testing the system for compliance with Federal and State equipment laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The following conditions relating to inappropriate accounting practices were found to exist:

(a) Equipment additions were not properly updated on the inventory system.

(b)

1 capital lease equipment item was not properly recorded on the inventory system.

In addition, a sample of equipment items was selected to test the accuracy of the Department's general fixed assets records. Of the 123 equipment items selected for physical inspection, the following deficiencies were noted:

(1)

1 item was located in a location other than the location indicated in the property inventory system.

(2) 4 items could not be located.

(3) 3 items of equipment were located during the physical inspection sample which were not included in the equipment inventory records.

The Department of Education is required to maintain equipment inventories in accordance with provisions of OMB Circular A102 and the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories. As a result of these discrepancies, we were unable to determine the validity of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.

The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions ofOMB Circular A-102 and the State Property System Manual.

F - 30

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF EDUCATION

PRIOR YEAR/CURRENT YEAR

Federal Grantor A~encies Affected:

U. S. Department of Agriculture U. S. Department of Education U. S. Department of Health and Human Services

Mana~ement Response

(a)

We concur with this item. All Field Purchase Orders (FPOs) are reviewed by Department of Education (DOE) Property

Control for proper SCOA coding. DE Form 0513, School Receipt of Equipment Form, is generated with the use of the

completed FPO and sent to the originating unit for use in capturing the DOE decal number, serial number, and location

of the incoming equipment. This form is also sent to Computer Services if the equipment is to be delivered to them.

It is the responsibility of the originating unit head and/or computer services unit head to gather the required information

and return to DOE property control for proper processing of the FPO into the DOE property system. In some instances,

this is not being done.

All equipment invoices submitted to Accounting Services should be copied to property control to ensure that the correct acquired costs are reflected on the DOE property system. At present, this is not being done.

DOE Property Control has completed all inventory procedures to capture data from originating units. The breakdown lies in the originating unit's failure to provide the requested information and return it in a timely manner to the property control office.

(b)

We concur with this item. Capital lease equipment is normally copy machines. This was a copy machine purchased

for the Professional Practices Commission. A misunderstanding on submittal of paperwork occurred causing this

equipment to enter the property system later than usual.

(1)

We concur with this item. This has always been a problem in the Department. Units move equipment to and from each

other but fail to communicate this movement to the Department's property office. In July 1994, property managers were

assigned by each division per the Deputy Superintendent's directive, trained by the Department's property officer, and

then in 1995 produced a new administration which resulted in property managers being moved from their designated

unit to other units causing a breakdown in communications to the Department's property office.

In January 1996, property managers were assigned to each unit of this Department per the Deputy Superintendent's directive and these property managers will be trained in September 1996 on DOE property control procedures.

(2)

We concur with this item. An intense search was performed by the Department's property officer and an auditor from

the Department of Audits with a directive by the Deputy Superintendent to Executive Directors to earnestly try to locate

this equipment. This equipment has not been found.

(3)

We concur with this item. Documentation was not received from unit indicating that equipment had been received.

Until such information is received, equipment cannot be added to the inventory. (See agency response to item number

one.)

We disagree with this fmding. The Department's property control office has been very effective in establishing controls to ensure that equipment inventories are maintained in accordance with provisions of OMB Circular A-I 02 and the State Property System.

F - 31

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30.1995
DEPARTMENT OF EDUCATION
PRIOR YEAR/CURRENT YEAR
DOE property control has exhausted all inventory procedures in trying to capture equipment information from originating units and/or computer services. Without the cooperation of all units in the DOE, this cannot be accomplished.
MONITORING SUBRECIPIENTS Subrecipient Audit Reports Not Received Within the Required Time Period Federal Financial Assistance Audit Control Number 414-95-04
The audit report for the year ended June 30, 1994, noted that a substantial number of subrecipient audit reports had not been submitted within the time period required by OMB Circulars A-128 and A-133. The Circulars state that subrecipients subject to the reporting requirements should submit audit reports no later than thirteen months after the end of the audited period.
As part of our examination for the year under review, we examined tracking documents used by the Department of Education to determine the status of subrecipient audit reports for the year ended June 30, 1994. Ofthe 445 subrecipients identified on the tracking documents, 135 had not submitted their audits within the thirteen month period as required by OMB Circulars A-128 and A-133. This noncompliance is due to subrecipient audits not being performed in a timely manner and/or not being submitted from the Department of Audits on a timely basis.
A subsequent review of the status of the 135 audits not submitted by the due date, indicated that 119 of the reports had been submitted by December 10, 1995. It was noted during our examination that the Department of Education utilized a program review staff for interim compliance reviews of all subrecipients in accordance with the foregoing provisions ofOMB Circulars A-128 and A-133.
Federal Grantor A~encies A(kcted:
Corporation For National and Community Service U. S. Department of Agriculture U. S. Department of Education U. S. Environmental Protection Agency U. S. Department of Health and Human Services U. S. Department of Labor
ManafJement Res[Jonse
Although the Department of Education is responsible for tracking and reviewing the audits on local units of administration (LUAs), the Department ofAudits is required by state law to audit the LUAs, because LUAs receive the majority of the funding from the state. In addition to the LUA audits, the Department of Audits have the responsibility to audit all state agencies, commissions, etc. The LUAs are audited after the state agencies, commissions, etc. Because the LUAs are audited last and the large number ofLUAs to be audited, the Department ofAudits cannot complete the audits in the thirteen month period required by OMB Circulars A-128 and A-133. The U.S. Department of Education is aware of the problem, and realizes there is not a viable solution to the fmding. The LUA audits are normally completed within a 15-18 month time period. The department has a six month resolution period to resolve fmdings in the LUA audits after being received from the Department of Audits.
F -32

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF EDUCATION
PRIOR YEAR/CURRENT YEAR
MONITORING SUBRECIPIENTS Subrecipient Reviews Not Performed Within the Required Time Period Federal Financial Assistance Emergency Food Assistance Program (Food Commodities) [CFDA 10.569] Audit Control Number 414-95-05
The audit report for the year ended June 30, 1994, noted that four subrecipient reviews conducted by the Department of Education had not been performed within the allotted time period as required by Federal regulation 7 CFR, Chapter 11, Section 251.1 o(e)(2) which states, in part, as follows:
"(2) Unless specific exceptions are approved in writing by the FNS Regional Office, the State monitoring system shall include (l) an annual review ofall emergencyfeeding organizations within the State ... "
As part of our examination for the fiscal year ended June 30, 1995, we reviewed tracking documents used by the Department of Education to monitor the status of subrecipient reviews for the Federal fiscal year ended September 30, 1994. Of the 24 subrecipients identified on the tracking documents, 10 had not been reviewed within the allotted time period. This noncompliance was caused by the Department's failure to follow regulations for monitoring subrecipients. The Department should establish appropriate internal control structure policies and procedures to ensure that all subrecipients are reviewed in accordance with Federal regulations.
Mana"ement Response
We have reviewed our records for the period October 1, 1993 through September 30, 1994 for the Emergency Food Assistance Program (TEFAP). In FY 94 we had contracts with 22 emergency feeding organizations (EFOs) to distribute TEFAP foods to needy households and six food banks (two of these are also included in the 22 EFOs distributing TEFAP foods) to distribute soup kitchen foods to congregate feeding programs. One of the EFO's, Northwest Georgia Services, was dissolved in December 1993. Another EFO, McIntosh Trail, did not receive any foods during that fiscal year.
Fourteen EFO reviews were completed and no food bank reviews were done during FY 94.
We are aware that federal regulation, at that time, required an annual review of EFOs. However, USDA treats soup kitchen/food banks as a separate entity from TEFAP EFOs and soup kitchen/food banks are not currently covered under 7 CFR, Part 251.1 O(e)(2).
The soup kitchen/food bank congregate feeding foods were added to the Food Distribution program in recent years. As yet, no instrument and no instructions exist as to what elements would be included to review the soup kitchen/food bank outlets, and USDA has no module covering these outlets to use during management evaluations of our programs.
Federal regulations require that reviews be conducted simultaneously with actual distribution and/or eligibility determinations. EFOs are scheduled to distribute four times each year; however, some of them do not distribute that often. It was not possible for our one consultant (the other consultant retired December 31, 1993) to review all agencies.
Since September 30, 1994, the Federal regulation changed the State's monitoring system to include review of"... at least 25 percent of all emergency feeding organization '" annually with all such organizations reviewed at least once every four years ...". This should assist us as we endeavor to meet the review requirement with only one filled review position and one vacant position frozen.
F - 33

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, J995

DEPARTMENT OF EDUCATION CURRENT YEAR

BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 414-95-06
The total approved budget for the Department of Education - "A" Budget Unit provided for expenditures totaling $4,227,414,788.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the object class QBE Formula Grants - Indirect Cost was overspent in the amount of $10,000.00. This overexpenditure is in violation of Section 80 of the Amended Appropriations Act of 1994-1995. The overexpenditure was caused by the Department's failure to monitor the expenditure offunds against the budgeted expenditures by object class.
The Department should review its internal control procedures over budget operations, design procedures which would prohibit the expenditure of funds in excess of budget approval, and implement those procedures to strengthen the controls over the budget function.
A1ana~ementResponse
The object class QBE Formula Grants - indirect cost was overspent in the amount of $10,000.00. The overexpenditure was caused by an incorrect amount being used in the request for a fiscal affairs transfer. The amount to be transferred to indirect cost was understated by $10,000.00.
CURRENT YEAR/SUBSEQUENT YEAR

CASH AND CASH EQUIVALENTS EXPENDITURESILIABILITIESIDISBURSEMENTS Agency Funds - Deficiencies in Accounting Procedures Financial Statements "State Board of Education's Fund" "Council of Chief State School Officers" "Superintendent's Fund" Audit Control Number 414-95-07

As a part of our examination, we reviewed, in detail, the operations of various agency funds administered by the Department of Education as follows:

The operations of the "State Board of Education's Fund" formerly known as "Superintendent's Orientation" were reviewed. This activity included all receipts for fiscal year 1989 through November 1995 and disbursements for fiscal year 1990 through November 1995. The following items were noted:

1.

Most of the individual receipts deposited to the fund are from numerous individuals in the form of

registration fees for conferences, meetings, retreats or donations for plaques, awards or retirement

functions. The notable exception is two receipts totaling $25,019.53 deposited in August 1991 and

December 1993 which were derived from the dissolution of the "Southeastern Education

Improvement Laboratory" located in North Carolina. The proceeds derived from the dissolution of

this non-profit corporation were divided among several southeastern states because it was operated

for the benefit of these states. Since these funds were donated to the State of Georgia with no strings

F - 34

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEPARTMENT OF EDUCATION CURRENT YEAR/SUBSEQUENT YEAR

attached, they should have been reported as revenue collections and deposited in the state treasury. Total receipts into the "State Board of Education's Fund", including the proceeds from the above mentioned dissolution, since fiscal year 1989 were approximately $35,000.00.

2.

The disbursements contain numerous items consistent with expected conference, seminar or meeting

expenses. There were also various disbursements for plaques or awards for individuals, some of

which had no apparent revenue source. In addition to these, however, there were several other

disbursement items which are improper or questionable. They include the following:

A. Meal expenses for dinner guests of the previous State Superintendent. B. Meal expenses for staff while not on travel status. C. Beverages for Board members. D. Meal expenses for guests of Board members. E. A transfer of $13, 131.81 to another agency account entitled "Council of Chief State School Officers". F. A transfer of$750.00 to a newly created agency account entitled "Superintendent's Fund".

As a result of the transfers from the fund discussed above, we reviewed the transactions in the "Council of Chief State School Officers" fund. This fund was established for the annual conference of this national association held in Atlanta in 1991. Other than the transfers from the "State Board of Education's Fund" all of the receipts were donations from various corporations. All of the disbursements are consistent with those expected for such a conference. This account was closed in fiscal year 1993.
The transfer into the newly created "Superintendent's Fund" in the amount of $750.00 occurred in May 1995. The disbursements to date either were not supported by adequate documentation or did not appear to be in compliance with the intent of the fund.
The Department of Education should implement procedures to ensure that receipts and disbursements of agency funds are in compliance with all laws and regulations. The Department should implement procedures to ensure that disbursements are supported by adequate documentation to demonstrate proper disbursement and accounting of funds. Such procedures should include written documentation stating specific disbursements which are allowable from each fund.
Mana'lement Response
The State Board of Education and Superintendent's Funds have both been closed. Refunds were made by board members and other individuals for expenditures involving meals and beverages, even though at the time the expenditures were made, it was felt the expenditures were an appropriate use of funds. Expenditures from the funds were consistent with expenditures from prior years where the audits found no problems with receipts and disbursements.
With the receipt ofa copy of the attorney general's letter to the state auditor, dated February 19, 1996, trust fund procedures have been revised to include additional instructions to custodians involving the receipt and disbursement of agency funds. The use of agency funds to purchase gifts or other items that are not strictly within the intent of the fund have been eliminated. The use of agency funds for meals and refreshments for departmental meetings have also been eliminated.

F - 35

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF TECHNICAL AND ADULT EDUCATION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

415-94-01 415-94-02 415-94-03 415-94-04 415-94-05 415-94-06

See Audit Control Number 415-95-01 See Audit Control Number 415-95-02 Corrective Action Implemented Corrective Action Implemented Finding Deleted See Audit Control Number 415-95-03

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRA TIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 415-95-01
The review report for the year ended June 30, 1994, disclosed that the Administrative Central Office did not provide for adequate separation of duties in the performance of accounting functions and related procedures in the area of General Fixed Assets/Property Management. For the year under review, the Administrative Central Office again did not achieve an adequate degree of internal control in this area. The responsibilities for physical inventories, maintenance of property records and custodial functions were assigned to the same individual.
Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance the accounting data and financial statements are accurate and complete.
The Administrative Central Office should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the General Fixed Assets/Property Management control category, and implement those procedures to strengthen the internal controls over the accounting function.
Federal Financial Assistance Prowams Affected:
84.002 Adult Education - State Administered Basic Grant Program 84.048 Vocational Education - Basic Grants to States 17.250 Job Training Partnership Act
Mana~ement Response
The agency acknowledges this frnding. In FY 96, the following duties will be assigned to current personnel in order to achieve adequate separation of duties. The Property and Supply Supervisor II will be responsible for receiving inventory items and the assignment and placement ofthe inventory decals on appropriate equipment. The responsibility for the data entry into the PROPS system, the reconciliation of FACS to PROPS and the responsibility for the actual physical inventory will be assigned to separate individuals.

F -36

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Vocational Education - Basic Grants to States [CFDA 84.048] Audit Control Number 415-95-02
The review report for the year ended June 30, 1994, disclosed that the equipment inventory records for the general fixed assets ofthe Administrative Central Office were deficient. For the year under review, our examination included a review of the internal accounting controls utilized by the Administrative Central Office in maintaining their State Property System for compliance with Federal and State laws and regulations. In addition, procedures were performed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The deficiencies noted are as follows:
(I) Title to equipment located at various colleges and technical institutes operated by local boards of education vests with the Department of Technical and Adult Education; however, the Administrative Central Office does not monitor or account for this equipment.
(2) A sample of twenty equipment items selected from the Administrative Central Offices's inventory records for physical examination revealed that one item could not be located.
The deficiencies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories. The Administrative Central Office should follow established procedures to ensure that equipment inventories are maintained in accordance with Federal Regulations (34 CFR 80.32) and the State Property System Manual.
Mana~ement Response
The agency acknowledges this fmding. As stated in last year's response to this same fmding, the agency has hired an additional employee in the Institutional Accounting and Systems section whose duties have included sending copies of existing inventory listings to the affected parties and reconciling the balances reported earlier to current balances. It is anticipated that this process will be completed by June 30, 1996.
MONITORING SUBRECIPIENTS Inadequate Subrecipient Monitoring Procedures Federal Financial Assistance Vocational Education - Basic Grants to States [CFDA 84.048] Audit Control Number 415-95-03 The review report for the year ended June 30, 1994, noted deficiencies in the procedures used by the Administrative Central Office in monitoring subrecipients. For the year under review, some improvements were made, however, deficiencies remained in the subrecipient monitoring procedures for the Vocational Education - Basic Grants to States program. Subrecipient applications for this program were reviewed to determine if applications were approved before funding was provided. Our examination revealed that three applications for the grant period of July 1994 through June 1995 were approved in the month of December 1994 after funds were disbursed. This deficiency was caused by the Department's failure to establish appropriate internal controls to ensure that local applications are approved before granting funds to subrecipients. The Administrative Central Office should establish and implement internal controls to ensure that grants are approved prior to disbursing funds to subrecipients.
F - 37

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION PRIOR YEAR/CURRENT YEAR
Afana~ementReSDOnse
The agency acknowledges this fmding. In FY 96 no funds were disbursed by the accounting unit until written acknowledgment was issued by the appropriate program staffresponsible for reviewing subrecipient applications to ensure applications for funds were approved in advance of cash disbursements.
F38

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF MEDICAL ASSISTANCE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

419-94-01 419-94-02 419-94-03 419-94-04 419-94-05

Corrective Action Implemented See Audit Control Number 419-95-0 I See Audit Control Number 419-95-02 See Audit Control Number 419-95-03 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Medical Assistance Program [CFDA 93.778] Audit Control Number 419-95-01
The audit report for the year ended June 30, 1994, disclosed that a cash shortage of approximately $85,000.00 was noted in the "Refund Holding Account III" because checks were written to individuals not eligible to receive these funds. This shortage occurred in fiscal years 1993, 1994 and 1995. The employee who wrote these checks was not required to obtain approval or verification of the checks prior to release. The employee involved has resigned and currently the case is awaiting trial.
The above situation occurred because internal accounting control procedures of the Department of Medical Assistance did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures in the Cash and Cash Equivalents control category.
Departmental personnel discovered the misappropriation of funds and subsequently implemented procedures and restructured duties in an effort to prevent this type of occurrence in the future.
Mana"emenf Response
We concur with this recommendation. Controls were inadequate and unauthorized transactions occurred near the beginning of fiscal year 1995. The audit report's discussion of the audit fmding acknowledges that the Department has implemented procedures and restructured duties to correct the conditions identified in the fmding. These changes were made during fiscal year 1995.
CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Bank Reconciliation Procedures Reportable Condition Medical Assistance Program [CFDA 93.778] Audit Control Number 419-95-02
The audit report for the year ended June 30, 1994, noted that necessary book adjustments identified as a result of the bank reconciliation process were not corrected on the general ledger on a timely basis. Our examination for the year under review noted no improvement in this problem. As a result, $869,247.05 of net uncorrected reconciling items remained at June 30, 1995.

F - 39

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF MEDICAL ASSISTANCE
PRIOR YEAR/CURRENT YEAR
The above situation occurred because the Department's control procedures did not ensure that necessary adjustments identified during the bank reconciliation process were recorded in the Department's formal accounting records.
The Department of Medical Assistance should establish the necessary internal controls to ensure that needed adjustments are posted to the general ledger in a timely manner and the general ledger reflects current fmancial information.
A1ana~mentResvonse
We concur with this recommendation. In February 1996, the Department engaged the Georgia Department of Audits to conduct a review of the bank reconciliation process. Performance Audit Operations auditors are requested to identify specific controls to provide the appropriate assurances described in the audit fmdings.
INVENTORIES Perpetual Inventory System not Properly Maintained Financial Statements Audit Control Number 419-95-03
The audit report for the year ended June 30, 1994, noted deficiencies in the Department of Medical Assistance's perpetual inventory system for supply inventories. For the year under review, our examination disclosed that the supply inventory records were not updated nor maintained properly. A physical inventory count was not taken at June 30, 1995; therefore, no comparison could be made between the general ledger and the physical inventory on hand.
The above situation occurred because the Department of Medical Assistance's accounting procedures were insufficient to provide for adequate internal controls over supply inventories.
The Department ofMedical Assistance should establish the necessary internal controls to ensure that inventory records are correct and updated on a timely basis and that physical inventory counts are taken and reconciled to the general ledger at regular intervals.
A1ana~ement Response
We concur with this recommendation. For supply items reported as inventory assets on the Department's fiscal year 1996 Combined Balance Sheet and held as central supply inventories, physical inventory counts will be taken and reconciled to the general ledger. Supply items issued to functional units outside central supply will be removed from the general ledger and Combined Balance Sheet.
CURRENT YEAR
REVENUEIRECEIVABLESIRECEIPTS State Revenue Collections Not Remitted on a Timely Basis Financial Statements Audit Control Number 419-95-04
Our examination of State Revenue Collection procedures disclosed that the Department of Medical Assistance failed to transfer monthly receipts of its state revenue collections to the Office of Treasury and Fiscal Services on a timely basis. Official Code of Georgia Annotated Section 45-12-92 states, in part:
F -40

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF MEDICAL ASSISTANCE
CURRENT YEAR
''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, shall pay all revenues collected by them into the state treasury on a monthly basis... "
The failure to remit state revenue collections to the Office of Treasury and Fiscal Services in a timely manner results in a loss of investment income to the State of Georgia. The Department should implement procedures to ensure that state revenue collections are remitted in a timely manner.
Manaument Response
We concur with this recommendation. Since the end of fiscal year 1995, the Department has implemented procedures to achieve a daily ending balance of zero in its bank account used to process state revenue collections. The Department nets these collections against the daily draw. The Department draws only the additional state funds necessary to pay those checks presented to the bank for payment each day. By reducing its draw in the amount of the collection deposit, the Department now effectively remits these collections to the Office of Treasury and Fiscal Services on a timely basis. Our "Daily Draw Process Procedure" booklet includes a copy of the written procedures.
CASH MANAGEMENT Failure to Adhere to Terms of the Cash Management Improvement Act Federal Financial Assistance Reportable Condition Medical Assistance Program [CFDA 93.778] Audit Control Number 419-95-05
For the year under review, our examination disclosed that the Department of Medical Assistance did not follow the U. S. Department of Treasury's regulations implementing the Cash Management Improvement Act regarding State interest liabilities. The Department failed to net refunds and rebates against the daily draw on a timely basis which is in violation of 31 CFR Part 205. 12(b).
The above situation occurred because the Department did not have procedures in place to ensure that refunds and rebates were netted against the Federal draws on a timely basis.
Interest should be calculated for the fiscal year under review and remitted to the Federal government. Procedures should be placed in operation to ensure that the refunds and rebates are netted against Federal draws on a timely basis.
Manaument Response
We concur with this recommendation. The Department calculated interest for the fiscal year under review. In its letter to the Department dated February 28, 1996, the Office of Treasury and Fiscal Services stated its intent to remit the payment of interest liability to the Federal government by March 1, 1996. The Department has implemented procedures to ensure that refunds and rebates are netted against Federal draws on a timely basis. Our "Daily Draw Process Procedure" booklet includes a copy of the written procedures.
F41

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA FORESTRY COMMISSION

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

420-94-01

Corrective Action Implemented

F -42

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

OFFICE OF THE GOVERNOR STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

422-94-01 422-94-02
422-94-03

Corrective Action Implemented Office of Energy Resources Transferred to
Georgia Environmental Facilities Authority Corrective Action Implemented

CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Inadequate Monitoring of Reimbursements Financial Statements Audit Control Number 422-95-01
The Professional Standards Commission is attached to the Office of the Governor for administrative purposes only. The Commission has entered into grant and contract agreements with certain colleges and universities of the University System of Georgia and private institutions with the intent of improving the level of skills of future teachers. The grants were funded with Lottery for Education funds and the contracts with general State funds appropriated by the General Assembly of Georgia. As the grantor/contractor agency, the Commission has certain responsibilities which include, but are not limited to, ensuring that all grant/contract funds are expended according to the stipulations in the grant/contract agreement and that Lottery for Education funds are expended in accordance with Official Code of Georgia Annotated Section 50-27-13.
In the year under review, the Commission awarded $2,000,000.00 to certain units of the University System of Georgia in Lottery for Education grants, which, in accordance with the grant agreements, were required to be paid to recipients on a reimbursement basis. These grants also stipulated specific grantee matching and in-kind contribution requirements. Based on our review of the Commission's control procedures, recipients were not required to submit invoices or other documentation to show that matching funds had been provided and that funds had been spent in accordance with the grant agreement and applicable laws prior to the issuance of checks by the Commission to the institutions.
In addition the Commission entered into separate agreements with both units of the University System and private institutions to provide State funds to purchase hardware and software to be used for the purpose of improvement of the student's ability to integrate computers and related technology in the classroom. These contracts also stipulated specific matching, in-kind contribution requirements and that funding be on a reimbursement basis. Based on our review of the Commission's control procedures, the Commission did not require submission of documentation to show compliance with contract provisions and applicable laws prior to the issuance of checks by the Commission to the institutions.
In order to meet the responsibilities of a grantor/contractor agency, the Commission should develop and implement policies and procedures to ensure that expenditures are in accordance with State laws and that all terms of the grant and contract agreements are met and documented before checks are issued to the recipients of the funds.

F - 43

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
OFFICE OF THE GOVERNOR
CURRENT YEAR
Mana~ement Response
The agency concurs with the finding. The Commission has never been staffed or trained in grants administration and most of the experience in that field was gained in another state with somewhat different fiscal procedures and legal requirements. This lack of detailed knowledge of this State's procedures when contracting within the umbrella of state government resulted in assumptions being made that fiduciary relationships existed among all state units and that subsequent audits of university system institutions would reveal any lack of compliance with the agreements. The audit then would be proof of non-compliance and the basis for subsequent actions. The prevailing attitude centered around the assumption that improvement in teacher education is a collaborative effort, desired by all parties, supported by the Governor and that details would be worked out among Commission staff and the college.
Immediate steps were taken by the agency to ensure that appropriate controls are in place for all contracts. Meetings with Board of Regents fiscal staff produced a coordinated system to produce reports needed to assure compliance with contract provisions. A parallel system was installed for other contractors.
To show good faith, the Commission is requiring documentation on all Fiscal Year 1995 contracts which should establish that all expenses complied with contract provisions. This in unison with on-site reviews by a third party evaluator will fmnly affix in place the procedures to be used for all future contracts.
During the current fiscal year (1995-96) funds which had been contracted have been returned to the Commission and will lapse at year end.
EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Budgeting of Expenditures Financial Statements Audit Control Number 422-95-02
The Professional Standards Commission is attached to the Office of the Governor for administrative purposes only. In the year under review, the Commission expended $847,814.53 in State funds under the Object Class - Per Diem, Fees and Contracts. Of this amount, $622,052.82 consisted of contracts with public and private colleges to purchase hardware and software for use in the colleges' school of education. Funds budgeted under Object Class - Per Diem, Fees and Contracts normally contemplate that goods and/or services will be received by the State agency under such contracts. However, under terms of the aforementioned contracts, the Professional Standards Commission simply provided funds to public and private colleges and received no goods or services in return.
The above expenditures of $622,052.82 appear to be grants to the colleges instead of contracts for goods and services. If the Professional Standards Commission intended for these expenditures to be grants, funds should have been budgeted and expended undet the Object Class - Regular Operating Expenses, Grants to Counties, Cities and Civil Divisions instead of Per Diem, Fees and Contracts. In the future, funds should be budgeted and accounted for in the appropriate Object Class.
In addition, attention of the Commission is called to Opinion 87-15 of the Attorney General of the State of Georgia. This opinion relates to whether a State agency may make a grant to a nonstate entity and states, in part, as follows:
"...It isfundamental to the checks and balances ofthis government that an expenditure ofstate funds by an agency requires not only an appropriation to the agency but also a clear general law power for the agency to make the expenditure. An appropriation may not supply the statutory power... "
F -44

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
OFFICE OF THE GOVERNOR
CURRENT YEAR
The opinion further states:
''In the recent words ofthe Supreme Court ofGeorgia:
Regardless ofthe worthiness ofthe cause, absent a clear state constitutional or statutory authority providingfor the expenditure ofstate funds, suchfunds cannot be disbursed .."
Official Code of Georgia Annotated Sections 20-2-981 through 20-2-989.1, created the Commission and provides for the Commission to set the standards for certification and for the preparation of prospective educators in Georgia. These laws do not provide the Commission with the statutory authority to provide "grants" to private colleges in the State of Georgia.
The Commission should consult with the Attorney General of Georgia prior to providing future "grants" to private colleges.
Mana~ement Response
The agency cannot disagree with the fmding. It appears that the role this Commission should play in teacher education has not been well defmed and accepted by the education community. Some current year agreements, involving a relatively small amount of funds have been rescinded and all funds will be returned. They will become surplus on June 30, 1996.
It appears that this agency will not receive funding for this purpose in Fiscal Year 1997.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Audit Control Number 422-95-03
For the year under review, our examination included a review of the procedures utilized by the Office of the Governor in maintaining their State Property System. This review consisted of testing the system for compliance with Federal and State equipment laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.
Of the 68 equipment items selected for physical inspection to test the accuracy of the Office's general fixed asset records, the following deficiencies were noted at the Georgia Emergency Management Agency, which is administratively attached to the Office of the Governor:
(1) 5 items could not be located.
(2) 2 items had no serial number or other identifiable number in the inventory listing to aid in locating the items.
The Office of the Governor is required to maintain equipment inventories in accordance with provisions of OMB Circular A-I 02 and the State Property System Manual. The discrepancies identified above were caused by the Office's failure to follow guidelines for maintaining equipment inventories.
The Office should establish the necessary procedures to ensure that equipment inventories are maintained in accordance with provisions of OMB Circular A-I 02 and the State Property System Manual.
F -45

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
OFFICE OF THE GOVERNOR CURRENT YEAR
Federal Financial Assistance Prow-ams Afftcted: 84.053 Vocational Education - State Councils 81.095 Nuclear Energy, Reactor Systems Development and Technology 83.011 Hazardous Materials Training Program for the Implementation of the Superfund Amendment and Reauthorization Act
(SARA) of 1986 83.516 Disaster Assistance 83.531 State and Local Management Assistance - Other Assistance 16.540 Juvenile Justice and Delinquency Prevention - Allocation to States 16.560 Justice Research, Development, and Evaluation Project Grants Manaument Response The agency concurs in the finding. GEMA has assigned responsibility for property control to the budget officer. Corrective action procedures have been instituted which have already removed the cause of this fmding. The items in question have been located and subsequently shown to the auditors. Effective property control efforts are a constant struggle because so much depends upon the individuals with direct responsibility. The agency recognized it had a problem and has moved the assignment up in the hierarchy and fully intends to give the appropriated emphasis so that this fmding is not repeated.
F -46

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF HUMAN RESOURCES STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

427-94-01 427-94-02 427-94-03 427-94-04 427-94-05 427-94-06 427-94-07

See Audit Control Number 427-95-01 See Audit Control Number 427-95-02 Corrective Action Implemented See Audit Control Number 427-95-03 Corrective Action Implemented See Audit Control Number 427-95-04 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

INVESTMENTS Understatement of Agency Fund Balances Financial Statements Audit Control Number 427-95-01
The audit report for the year ended June 30, 1994, noted that the Department of Human Resources did not record and report interest earned on investments which matured and were automatically renewed in Agency Fund investment balances. For the year under review, the Department made some improvements regarding the recording and reporting of interest earned on investments, but still did not record all renewed investments at their correct balance. These investments were located at one institution operated by the Department and amounted to $12,743.45. The Department should follow established procedures to record interest at maturity and increase the asset account when the investment is automatically renewed.
Mana~ement Response
In FY 1995 Gracewood posted and reported interest earned at date of maturity. The discrepancy between what we reported and what was provided by the bank to the State Department of Audits is interim posting data. Gracewood does not routinely receive interim posting data from the bank. We receive interest information from the bank only at the time ofmaturity for our investment accounts.
The Cashier's Office will increase their efforts to follow the procedures which were established in June, 1994 to record interest at maturity and increase the asset account when the investment is automatically renewed. The interest will be recorded on each certificate as it matures and will be reported on the Cash Reconciliation Report, DHR Form 5136 in SCOA 117.226.

F -47

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF HUMAN RESOURCES PRIOR YEARJCURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Audit Control Number 427-95-02

The audit report for the year ended June 30, 1994, noted deficiencies in the controls over general fixed assets. For the year under review, our examination included a review of the internal accounting controls utilized by the Department of Human Resources in maintaining their State Property System. This review consisted of testing the system for compliance with Federal and State equipment laws and regulations. Procedures were also completed to verify the accuracy ofthe total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The following condition relating to inappropriate accounting practices was found to exist:

(1) Equipment additions were not adequately reconciled to the general ledger expenditures accounts.

In addition, a sample of equipment items was selected to test the accuracy of the Department's general fixed asset records. Of the 454 equipment items selected for physical inspection, the following deficiencies were noted:

(1) 8 items were located in locations other than the location indicated in the property inventory system.

(2)

10 items could not be located.

The Department is required to maintain equipment inventories in accordance with provisions ofOMB Circular A-102 and the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories.

As a result of the discrepancies identified above, we were unable to determine the validity of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.

The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions ofOMB Circular A-102 and the State Property System Manual.

Federal Grantor A~ncies Affected:
u. S. Department of Agriculture
U. S. Department of Education U.S. Department of Health and Human Services

Mana'lement Response

The Property Management Unit follows the Department of Administrative Services PROP procedures for Reconciliation, Part 1.F.3. Monthly, exception reports are reviewed. Property coordinators are required to provide appropriate documentation to satisfy the exceptions. The Department has re-doubled efforts to increase responsiveness on the part of coordinators to provide the appropriate documentation. Exceptions are reconciled monthly. We believe the procedures we have in place are adequate for reconciling to the general ledger expenditures accounts.

F -48

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEPARTMENT OF HUMAN RESOURCES PRIOR YEAR/CURRENT YEAR

The latest audit figures show a great improvement on the Department's part of maintaining equipment inventories. The FY 94 fmdings show that out of the 430 pieces of equipment selected, 70 items located were in incorrect locations and 26 not found. The FY 95 shows that out of the 454 pieces of equipment selected, only 8 were located in locations other than the location indicated in the property inventory system and 10 items could not be located. All of the "missing" items, except for I, have been located. We have implemented procedures to identify movable property that, by its nature, is normally used in several locations. We believe the physical inventory exceptions have improved and we will continue to work toward better property management.

The Office of Technology and Support is committed to assuring that the Department's inventory records are correct. DHR's Office of Audits continues to sample equipment inventories in conjunction with their audit program, providing our office with copies of fmdings for follow-up when deficiencies are noted.

TYPES OF SERVICES ALLOWED OR UNALLOWED Child Support Recovery Sample Federal Financial Assistance Child Support Enforcement [CFDA 93.563] Audit Control Number 427-95-03

In prior years, the Office of Audits of the Department of Human Resources has conducted audit procedures of the Child Support Recovery system which identified errors and/or deficiencies within the system. For fiscal year 1995, the Office of Audits sampled 189 case files located in thirty-four (34) of the thirty-nine (39) Judicial Circuits throughout the State from a population of 433,868 case files. The clients selected represented only those cases maintained through the Cooperative Agreement State Staff Program. The following fmdings were disclosed by the Office of Audits:

(1) Unlocated Client File One (1) case file could not be located for examination.

(2) Case File Not Established Within 20 Days After Referral Two (2) cases were noted where case files were not established within 20 days after the referral. Office of Child Support Recovery policy and procedures effective October 1990 states that a file should be established within 20 days after a new case is referred.

(3) Dormant Case Files Three (3) cases were noted where no action had been taken to locate absent parents. Title 45 CFR, Part 303.3 states that diligent efforts to serve process and locate absent parents must be made. This includes periodically repeating service of process attempts in cases where previous attempts to serve process have failed, and repeating location attempts in cases where previous attempts have failed.

(4) No Court Action Within Ninety Days Federal Regulations require in Title 45 CFR, Part 303.4 that the IV-D agency establish an order of support within ninety (90) days oflocating an absent parent or of establishing paternity. One (1) case was noted that failed to meet the ninety (90) day requirement.

A1ana~ementResponse

Finding #1:

Unlocated Case Files



Case file has been created. The local office is now using the STARS case tracking to ensure compliance.

F -49

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF HUMAN RESOURCES

PRIOR YEAR/CURRENT YEAR

Finding #2:

Case File Not Established Within 20 Days of Referral



The local office has resolved this issue by utilizing the new system which prompts the secretary to register the case

within 15 days. If it exceeds 15 days the supervisor gets a prompt and he instructs the secretary to register the case

immediately.

Finding #3:

Dormant Case File



The STARS system now prompts staff to remind them ofthe time frames for handling case activities. Cases are also

referred to the G.C. Services collection Agency and IRS tax offset automatically by the STARS system when cases

become delinquent.

Finding #4:

No Court Action Within 90 Days



The local office has implemented some safety precautions for incoming URESA cases. They are logged in by the

URESA clerk indicating date of receipt and agent handling the case. If deficiencies in case information are found, a

notice is mailed to the initiating state. Cases will be forwarded to the Attorney within 60 days of receipt of file from

the Central Registry for a court case if a consent order cannot be established.

The Office of Child Support Enforcement has researched each case and taken the appropriate action. Procedures have been strengthened in some areas to reduce future occurrences. A listing of cases and action taken has been provided to the Office of Audits.

The child support offices are consistently making changes and improvements in order to stay in compliance with the provisions of Federal laws and regulations. Support staff in most offices are limited and perform a wide variety of duties. New procedures and training are being implemented statewide in all aspects of the Child Support Enforcement Program.

FEDERAL FINANCIAL REPORTS Failure to Submit Required Reports in Timely Manner Federal Financial Assistance Audit Control Number 427-95-04

A review of Federal fmancial reports submitted by the Department of Human Resources for the Special Supplemental Food Program for Women, Infants, and Children program (CFDA 10.557), the Rehabilitation Services - Vocational Rehabilitation program (CFDA 84.126), and the Child Support Enforcement program (CFDA 93.563) disclosed that several required reports were not submitted by the due date as listed below:

CFDA

Report

Due Date

Date Submitted

10.557

WIC Monthly Financial and Program Status Report (FNS-498) - January

February 28

March 7

10.557

WIC Monthly Financial and Program Status Report (FNS-498) - February

March 31

April 5

10.557

WIC Monthly Financial and Program Status Report (FNS-498) - March

April 30

May 8

F - 50

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEPARTMENT OF HUMAN RESOURCES PRIOR YEAR/CURRENT YEAR

10.557

WIC Monthly Financial and Program Status Report (FNS-498) - April

May 31

June 5

84.126

Quarterly Case Services Report (SF-269) - Quarter Ended 9-30-94

October 30

December 2

84.126

Quarterly Case Services Report (SF-269) - Quarter Ended 12-31-94

January 30

February 14

84.126

Quarterly Case Services Report (SF-269) - Quarter Ended 3-31-95

April 30

May 11

84.126

Quarterly Case Services Report (SF-269) - Quarter Ended 6-30-95

July 30

August 29

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 9-30-94

October 30

November 29

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 12-31-94

January 30

February 14

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-13I) Quarter Ended 3-31-95

April 30

May 5

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 6-30-95

July 30

August 11

Appropriate procedures should be established and implemented by the Department to ensure that each program report is submitted by the due date.

Mana~ement Response

At present, system constraints requiring the closing of subsystems only on Fridays almost render impossible the ability to submit all Federal fmancial reports by the due dates. At the end of each quarter, we close the expense subsystem on the second Friday of the following month. During this two week period, we are receiving and recording large, material expenses such as the counties' Monthly Income Expenditure Reports (MIERs), and DOAS computer and telecommunication bills. Cost allocation is the next step in the process, and although we can usually accomplish this in two days, again we must wait until Friday to close this subsystem. On the next Friday, revenue and general accounting are closed. Depending on the particular dates, this means that we may only have a day or two to complete all Federal reports and review for accuracy. Since DHR has over 200 reports to complete, it is inevitable that some are late.

DHR is continuing to look for ways to reduce the time needed at quarterly close. We are hopeful that improvement automation (GIFS) will assist us in this endeavor.

F - 51

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

COUNCIL OF JUVENILE COURT JUDGES

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin&

431-94-01

Corrective Action Implemented

F - 52

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SUPERIOR COURTS OF GEORGIA

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

436-94-01 436-94-02

Corrective Action Implemented See Audit Control Number 436-95-01

PRIOR YEAR/CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Disbursements on Behalf of District Attorneys Financial Statements Audit Control Number 436-95-01
The audit report for the year ended June 30, 1990, called attention to the fact that the Prosecuting Attorneys' Council has entered into a contractual agreement with the Department of Human Resources, Office of Fraud and Abuse (OFA), whereby, OFA pays a fee to the Prosecuting Attorneys' Council for adjudication of guilt in food stamp suspected fraud cases. As part of this agreement, a memorandum ofunderstanding is signed by those district attorneys who wish to participate in the agreement. Those district attorneys who elect to sign the memorandum of understanding earn a percentage of the funding received by the Prosecuting Attorneys' Council for those cases that are prosecuted.
Each district attorney has a choice of how payment from the Prosecuting Attorneys' Council is made. Payment can be made directly to district attorney's office or the payment can go into an "agency fund" account maintained by the Prosecuting Attorneys' Council. Disbursements from this account are made as directed by written instruction from the individual district attorney. These payments can go to the district attorney individually or to third parties for expenses that include, but are not limited to, office supplies and equipment, salaries, and travel reimbursements.
In regard to the aforementioned arrangements, attention of the Prosecuting Attorneys' Council is called to the Official Code of Georgia Annotated Section 15-18-10 (c) which provides:
"All fees, fines, forfeitures, costs and commissions formerly allowed district attorneys for their services as district attorney or as solicitor ofany court shall become the property ofthe county in which the services ofthe district attorney were rendered The clerk ofcourt shall collect any such fees, fines, forfeitures, costs and emoluments and remit the same to the county treasury by the fifteenth day ofeach month. "
Further, the Official Code of Georgia Annotated Section 15-18-23 states:
"The governing authority ofthe county or counties comprising each judicial circuit shall provide all offices, utilities, telephone expenses, materials and supplies as may be necessary to equip, maintain, andfurnish the office or offices ofthe district attorney in an orderly and efficient manner. "

F53

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
SUPERIOR COURTS OF GEORGIA
PRIOR YEAR/CURRENT YEAR
It IS our conclusion that the aforementioned statutes require that all fees and related expenses of the district attorneys' offices
should be subject to the fmancial and budgetary control ofthe governing authority ofthe counties comprising the judicial circuits. It is the position of the Prosecuting Attorneys' Council that these statutes do not govern the retention and expenditure of funds derived under the terms ofthe food stamp agreement. In as much as this difference of opinion has not been adequately resolved, the State Auditor has requested a legal opinion ofthe Attorney General with regard to the proper disposition of these funds. As of the date of this report, no response has been received from the Attorney General's Office.
Afana~ementResponse
This finding has appeared in the audit reports since 1990. It indicates that a legal opinion has been sought from the Attorney General. For at least five years no opinion has been forthcoming. Therefore, the Council respectfully requests that the fmding be deleted.
The fmding indicates a possible violation of OCGA 15-18-1O(c) in the management of food stamp funds. It concludes that these funds should be forwarded to county treasuries. The management of this program was given careful thought when the contract was initially entered into with the Department of Human Resources in 1984. At that time the Council concluded that OCGA did not apply to the Food Stamp Fraud Program for the reasons which are enumerated below.
The "fees, fmes and forfeiture costs and commissions" formerly allowed district attorneys had been the law ofthis state governing their compensation since at least 1865. A Constitutional revision in 1976 gave the legislature the power to abolish the fees which were the salary of the district attorney and on July 1, 1977, all district attorneys were placed on state salary. (Ga. Law 1977, p. 1259). OCGA 15-18-10 was also passed and became effective on that date.
The federal regulations originally implementing the Food Stamp Fraud Prosecution Reimbursement Program were effective December 29, 1980. The program did not exist under previous statutes which specified the manner in which district attorneys were to be compensated. Applying the long-accepted principle of statutory interpretation of "inclusion unius est exclusio alterius", the inclusion of one is the exclusion of another, to OCGA 18-18-1O(c), the only reasonable interpretation in the Council's opinion is that only those items which were formerly considered "fees, fmes, forfeitures, costs and commissions" come within the statute. Therefore, there could be no "violation" of OCGA 15-18-1O(c).
Second, the "fees, fines, forfeiture costs and commissions" outlined in the Code were payment for duties which the district attorney was legally obligated to perform. He could not ignore them. The Food Stamp Program differs in that it is strictly voluntary. There is no statutory duty requiring the district attorney prosecute the kinds of cases this program generates, although he would be required to prosecute cases where an indictment had been returned by a grand jury. Under the former law, ifno duty existed, there was no payment contemplated. The voluntariness of the program distinguishes it.
Third, the Food Stamp Program is primarily administrative. It requires limited legal oversight and is handled for the most part by administrative staff, most of whom are state paid. These are the "costs" that are being recouped under the program and certainly were not contemplated by OCGA 15-18-IO(c). In reality, there is very little county cost involved in processing these claims.
For the reasons stated herein, the Council feels this audit comment is inaccurate and inappropriate and should be omitted.
Note: As referenced in the uudltfinding (Audit Control Number 436-95-01), the State Auditor requested the legal opinion of the Attorney General ofthe State of Georgia with regard to this matter on May 5, 1992. On November 13, 1995, the State Auditor submitted another requestfor a legal opinion on this matter. As ofthe date ofthis report, the Attorney General had not rendered an opinion. Resolution ofthis matter will be included in subsequent reports.
F - 54

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
SUPERIOR COURTS OF GEORGIA
CURRENT YEAR
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Audit Control Number 436-95-02
For the year under review, our examination included a review of the procedures utilized by the Superior Courts of Georgia Prosecuting Attorneys' Council in maintaining their State Property System. This review consisted of testing the system for compliance with Federal and State equipment laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The following condition relating to inappropriate accounting practices was found to exist:
Equipment deletions were not properly updated on the inventory system.
In addition, equipment items were selected to test the accuracy of the Council's general fixed assets records. Ofthe 30 equipment items selected for physical inspection, the following deficiencies were noted:
(I) 27 items did not have a decal number attached. Items were identified by serial numbers or descriptions.
(2) 2 items were surplused but were not removed from the inventory.
The Council is required to maintain equipment inventories in accordance with provisions ofOMB Circular A-I02 and the State PropertY System Manual. The discrepancies identified above were caused by the Council's failure to follow guidelines for maintaining equipment inventories.
The Council should establish the necessary procedures to ensure that equipment inventories are maintained in accordance with provisions ofOMB Circular A-102 and the State Property System Manual.
Federal Financial Assistance PrOftramS Affected:
10.561 State Administrative Matching Grants for the Food Stamp Program 16.579 Drug Control and System Improvement - Formula Grant 20.600 State and Community Highway Safety
AfanaftementResvonse
In response to the General Fixed AssetslProperty Management fmding referring to Inventory matters, please be advised of the following:
(a) "Equipment deletions were not properly updated on the inventory system." Procedures are in place and will be followed which will allow us, in a timely manner, to remove items which are returned to Surplus Properties, or otherwise disposed of, from our inventory database and list.
F - 55

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
SUPERIOR COURTS OF GEORGIA CURRENT YEAR
(b) "27 items did not have a decal number attached. Items were identified by serial numbers or descriptions." Items, in addition to being identified by serial number and description, are assigned an inventory number; on some items, these inventory numbers are engraved. A procedure has been established, and steps are being taken, to apply polyester labels stamped with the appropriate inventory number to each item of property.
(c) "2 items were surplused but were not removed from the inventory listing." As set forth above, we will follow procedures which are in place to ensure that surplused items are removed from our inventory database and listing.
F - 56

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF LABOR STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

440-94-01 440-94-02

See Audit Control Number 440-95-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

MONITORING SUBRECIPIENTS Inadequate Monitoring of Status of Subrecipient Audits Federal Financial Assistance Employment and Training Assistance - Dislocated Workers [CFDA 17.246] Job Training Partnership Act [CFDA 17.250] Audit Control Number 440-95-0 I

Our audit tests of the Department's significant internal control structure policies and procedures applicable to the Employment and Training Assistance - Dislocated Workers and the Job Training Partnership Act included a review ofthe Department's system for monitoring subrecipients as required by OMB Circular A-128, which states, in part, as follows:

"9. Subrecipients. State or local governments that receive Federal financial assistance and provide $25,000 or more ofit in a fiscal year to a subrecipient shall:

b. determine whether the subrecipient spent Federal assistancefunds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subrecipient made in accordance with this Circular, OMB Circular A-I 10, or through other means (e.g., program reviews) ifthe subrecipient has not yet had such an audit;... "

The Circular further states that subrecipients subject to the foregoing requirements should submit audit reports no later than one year after the end of the audit period. In addition, the Circular requires that corrective action be taken within six months after receipt of subrecipient audit reports which disclosed instances of noncompliance with Federal laws and regulations.

The audit report for the year ended June 30, 1994, reported that certain deficiencies existed in this area. A review of subrecipient audit tracking documents utilized by the Job Training Division ofthe Department of Labor during the year under review indicated that deficiencies continued to exist. The results of the current year's audit tests revealed the following:

(1) Of twenty-five (25) subrecipient audits identified as due during the year under review, two (2) had not been submitted within the allotted time period.

(2)

Of nineteen (19) subrecipient audits disclosing instances of noncompliance which were to be

resolved, corrective action had not been taken within the allotted time period for five (5) audits.

The Department is not in compliance with the subrecipient monitoring requirements of OMB Circular A-128. These requirements provide assurance that the subrecipients have adequate internal controls and are complying with applicable laws and regulations pertaining to Federal fmancial assistance. The Department should take action to ensure that subrecipient audit reports and corrective action plans are submitted within the required time limits.

F - 57

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF LABOR PRIOR YEARJCURRENT YEAR
Mana~ementResponse The two audits that had not been submitted during the allotted time were: Griffm RESA, SDA #5
This audit is conducted by the State Department of Audits. We are advised that it will not be conducted until June 1996. Private Industry Company, SDA #14
This audit was received by the Department during the middle of April 1996. Based on the above, the Department considers this fmding resolved.
CURRENT YEAR
BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 440-95-02 The total approved budget for the Department of Labor provided for expenditures totaling $183,164,625.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the Department expended $404,892.33 more than was appropriated for Capital Outlay in Section 80 of the Amended Appropriations Act of 1994-1995. This expenditure in excess of budget resulted from the purchase ofreal property by the Department which occurred subsequent to the fmal meeting of the Fiscal Affairs Subcommittee in fiscal year 1995; however, the acquisition was approved in advance by the State Properties Commission. The Department should ensure all expenditures made are in compliance with the budget as amended by the Governor's Office of Planning and Budget. Mana~ement Response The Department purchased property in Brunswick, Georgia which caused the overexpenditure. This action was approved in advance by the State Properties Commission, however, it was too late to do a budget amendment for the year ending June 30, 1995 through the State Office of Planning and Budget (OPB). Based on the above, the Department considers this finding resolved.
F - 58

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF LABOR
CURRENT YEAR
EMPLOYEE COMPENSAnON - Financial Statements ALLOWABLE COSTS/COST PRINCIPLES - Federal Financial Assistance Undocumented Salary Employment Service [CFDA 17.207] Unemployment Insurance [CFDA 17.225] Amount: $963.00 Audit Control Number 440-95-03
A review of personnel files disclosed that one (1) individual's file did not contain a current record of personnel action form; therefore, the salary paid could not be properly verified for the period under review. As a result, one employee received $963.00 more than could be documented from information contained in the personnel file. This situation was caused by the Department's failure to disburse payroll expenditures consistent with the documentation contained in the individual's personnel file. Personnel files should contain current documents to ensure accuracy and completeness of payroll transactions.
The Department should implement procedures to ensure that personnel files are accurate and complete.
Mana'lement RespQnse
The employee's personnel file in question did not contain a copy of the most recent Personnel Action Request (PAR). This form was completed for the individual at the proper time, however, it was misfiled. A copy of the form is now in his personnel folder.
Based on the above, the Department considers this finding resolved.
FEDERAL FINANCIAL REPORTS Failure to Submit Required Reports in Timely Manner Federal Financial Assistance Job Training Partnership Act [CFDA 17.250] Audit Control Number 440-95-04
A review of Federal fmancial reports submitted by the Department of Labor for the Job Training Partnership Act disclosed that
fmal close-out fmancial reports for the 1992 program year grant agreement had not been submitted as of the date of this audit report. This resulted in the Department's failure to submit such reports within a "timely period", as indicated in 20 CFR 627.485, which states, in part:
"(a) General. The Grant Officer shall close out each annual grant agreement within a timely period after the funding period covered by the award has expired"
"(b) Revisions to the reported expenditures for a program year Qffunds may be made until 90 days after the time limitation for expenditure ofJTPA funds... "
The Department should implement procedures to ensure that all fmal close-out documents are submitted in a timely manner.
F - 59

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF LABOR

CURRENT YEAR

Afana~ementResponse

The Department was prepared to complete JTPA PY-92 close-outs in a timely manner. However, some Service Delivery Areas (SDAs) were late which caused the Department to be late. All JTPA PY-92 close-outs were submitted by the Department to the U.S. Department of Labor March 18, 1996.

Based on the above, the Department considers this finding resolved.

ELIGIBILITY Inadequate Documentation to Support Eligibility Determination Federal Financial Assistance Employment and Training Assistance - Dislocated Workers [CFDA 17.246] Job Training Partnership [CFDA 17.250] Amount: $120.00 Audit Control Number 440-95-05

The responsibility for eligibility determination for the Employment and Training Assistance - Dislocated Workers and Job Training Partnership Act rests with the administrative agents of each of the twenty-two (22) Service Delivery Areas (SDA) within the State of Georgia and the Department of Labor's Field Service Offices. The eligibility determination process is administered in accordance with guidelines established by the Job Training Division of the Department of Labor. Utilizing a numerical precision sample, the files of those participants enrolled during the period May I, 1994 through April 30, 1995 were examined to determine if established eligibility criteria had been met. From a total of 26,790 newly enrolled participants, an examination of 403 files disclosed the following:

Employment and Training Assistance - Dislocated Workers

(I) One (I) file did not contain adequate documentation to verify draft compliance of participant.

$,----"'''0'''.'0'-0'''

Job Training Partnership Act

(1) Three (3) files could not be located for review.

$ 120.00

Afana'lement Response

Title three (3), dislocated worker participant was ineligible because draft compliance was not met. The Department reviewed this file and found that although an enrollment was entered into the MIS, the participant never received any services.

Since no services were rendered and no costs incurred for this participant, the Department considers this finding resolved.

Title II participant at Oconee JTPA, SDA-8, Milledgeville, was not picked up by the newly redesignated SDA. Participant files were stored at the Overview Administrative Entity office in Milledgeville. A search of their files did not locate the participant folder, also, original SDA staff involved with the program could not be located to determine ifthere were other file locations. Total cost for this participant was $120.00 and was charged to Grant # 20-C4-00-1-1-08 under the Direct Training Cost category. The Department has since picked up and stored all of the JTPA participant files for this SDA, however, the Department has been unable to locate the folder for this participant.

F - 60

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF LABOR CURRENT YEAR
Title II, SDA 14, participant files for two participants could not be located. These participants were automatically enrolled in objective assessment for Title II B, however, neither was enrolled into any other activity and no costs were incurred. Since no services were rendered and no costs incurred for these two participants, the Department considers their finding resolved.
F - 61

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF LAW CURRENT YEAR
GENERAL LEDGER Deficiencies in Accounting Procedures Financial Statements Audit Control Number 442-95-01 For the year under review, the general ledger as presented for examination was not in balance and subsidiary ledgers for receivables, payables and payroll could not be reconciled to the general ledger. This condition resulted from the Department's failure to correctly post monthly subsidiary amounts to the appropriate general ledger accounts on a monthly basis. Extensive analysis was required to identify amounts which were not posted or recorded correctly. After these corrections were made, an unidentified amount of $650.77 remained outstanding. Appropriate action should be taken by the Department of Law to ensure that all subsidiary ledger amounts are correctly posted to the general ledger on a monthly basis. Manaument Rewonse We concur with the statements made in your schedule of fmdings that at the time of your review the general ledger as presented for examination was not in balance and that the subsidiary ledgers for receivables, and payroll were not reconciled to the general ledger. Management has made a review of the accounting control procedures and implemented appropriate additional procedures to ensure the general ledger is balanced monthly and account balances reconcile with subsidiary ledger accounts. Changes in duties of accounting staff personnel have been made and certain procedures have been revised to ensure more timely postings to the general ledger and reconciliations of account balances to subsidiary records. In addition, we have retained the services of an accounting consultant who, on a monthly basis, reviews the general ledger trial balances, subsidiary ledgers and journal. We have consulted with management of the Statewide Systems Office, Department of Administrative Services, relative to the advisability of converting from our present accounting system to their "Fiscal Accounting Control System" (FACS). Preparatory procedures are underway to implement FACS beginning in Fiscal Year 98. In addition some systems development is planned for maintaining management information to supplement information provided through "FACS". We are also studying the feasibility of reallocating a portion of existing personnel resources so that we might restructure our staff to include a professional accountant.
F - 62

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

STATE PERSONNEL BOARD - MERIT SYSTEM OF PERSONNEL ADMINISTRATION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

460-94-01

Corrective Action Implemented

F - 63

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF CHILDREN AND YOUTH SERVICES STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

461-94-01 461-94-02 461-94-03

See Audit Control Number 461-95-02 See Audit Control Number 461-95-01 See Audit Control Number 461-95-03

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 461-95-01

The audit report for the year ended June 30, 1994, noted that internal accounting control procedures of the Department of Children and Youth Services did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures. For the year under review, a limited review of these procedures revealed that the Department had made no significant changes that would provide for an adequate separation of duties in the following control categories:

(1) Accounting Controls (Overall) (2) Cash and Cash Equivalents (3) RevenueslReceivableslReceipts

(4) General Ledger (5) Inventories

The Department should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories, and implement those procedures to strengthen the controls over the accounting function.

Federal Financial Assistance Prowams Affected:

10.553 National School Breakfast Program 10.555 National School Lunch Program 10.564 Nutrition Education and Training Program 16.540 Juvenile Justice and Delinquency Prevention - Allocation to States 84.009 Education of Children with Disabilities in State Operated or Supported Schools 84.013 Title 1 Program for Neglected and Delinquent Children 84.048 Vocational Education - Basic Grants to States 84.151 Chapter 2 - State Block Grants 84.164 Eisenhower Mathematics and Science Education - State Grants 84.186 Safe and Drug-Free Schools - State Grants 93.902 Model Comprehensive Drug Abuse Treatment Programs for Critical Populations 93.937 Comprehensive Residential Drug Prevention and Treatment Projects for Substance-Using Women and Their Children

F - 64

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF CHILDREN AND YOUTH SERVICES PRIOR YEAR/CURRENT YEAR

Mana'iement Response

We concur with the recommendation. Duties have been segregated to enhance internal controls as follows:

(1) The Accounting Officer I and the Section Director jointly prepare the bank reconciliation.

(2) The Fiscal Analyst, Sr. has been trained in the Revenue/Cash Management areas and has been given the responsibilities for stop payments, maintaining the check log and preparing the bank analysis statement.

(3) The Clerk Transcriber is responsible for the data entry of manual journal vouchers. The Accountant, Sr. was responsible for all of the functions listed above.

(4) The approval by the Financial Services Section Director or Accounting Officer I of all manual journal vouchers will remain intact.

We believe the implementation of the revised procedures increases the segregation of duties especially in relation to the cash management functions and results in adequate internal controls.

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Bank Reconciliation Procedures Audit Control Number 461-95-02

The audit report for the year ended June 30, 1994, reported that the Department's accounting procedures were insufficient to provide for adequate control over the bank reconciliation process. For the year ended June 30, 1995, deficiencies in bank reconciliation procedures continued as follows:

(1) The monthly bank statements for the Department's cash accounts were not reconciled to the general ledger on a timely basis.

(2) Adjustments were not made to the general ledger on a timely basis for items appearing on the bank reconciliations needing correction on the accounting records.

(3) The bank reconciliations contained unidentified reconciling items.

The Department should establish the necessary procedures to ensure that bank accounts are properly reconciled on a monthly basis, needed adjustments are posted to the general ledger in a timely manner and the general ledger reflects current fmancial information.

Federal Financial Assistance Pr0'irams Affected:

10.553 10.555 10.564 16.540

National School Breakfast Program National School Lunch Program Nutrition Education and Training Program Juvenile Justice and Delinquency Prevention - Allocation to States

F - 65

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF CHILDREN AND YOUTH SERVICES

PRIOR YEAR/CURRENT YEAR

84.009 Education of Children with Disabilities in State Operated or Supported Schools 84.013 Title 1 Program for Neglected and Delinquent Children 84.048 Vocational Education - Basic Grants to States 84.151 Chapter 2 - State Block Grants 84. 164 Eisenhower Mathematics and Science Education - State Grants 84.186 Safe and Drug-Free Schools - State Grants 93.902 Model Comprehensive Drug Abuse Treatment Programs for Critical Populations 93.937 Comprehensive Residential Drug Prevention and Treatment Projects for Substance-Using Women and their Children

Management ResIJonse

We concur with the recommendations. Procedures were established to reconcile the Department's bank accounts to the general ledger within 15 work days after the information becomes available. However, due to vacancies this was not always done. The procedures will be closely followed.

The Department will make adjustments to the general ledger on a timely basis after the adjustments have been identified.

The Department has identified the reconciling items and they are being corrected.

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Vocational Education - Basic Grants to States [84.048] Safe and Drug-Free Schools - State Grant [84.186] Audit Control Number 461-95-03

The audit report for the year ended June 30, 1994, noted deficiencies in the procedures used to account for general fixed assets. For the year under review, our examination included a review of the accounting system utilized by the Department of Children and Youth Services in maintaining their State Property System. This review consisted of testing the system for compliance with Federal and State equipment laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The following conditions relating to inappropriate accounting practices were found to exist:

(I) Equipment inventory records were not updated for all additions.

(2) Equipment inventory records were not updated for equipment obtained through lease/purchase commitments.

In addition, equipment items were selected to test the accuracy of the Department's general fixed asset records. Of the 80 equipment items selected from the records for physical inspection, the following deficiencies were noted:

(1)

8 items could not be located.

(2)

10 items did not have decal numbers attached. Items were identified by serial numbers or

descriptions.

F - 66

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF CHILDREN AND YOUTH SERVICES PRIOR YEAR/CURRENT YEAR
(3) 6 items were surplused but were not removed from the inventory records. The Department of Children and Youth Services is required to maintain equipment inventories in accordance with provisions of OMB Circular A-102 and the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories. The Department should establish the necessary procedures to ensure that equipment inventories are maintained in accordance with provisions ofOMB Circular A-102 and the State Property System Manual.
Afanq~ementResponse
We concur with the recommendation. The Department has implemented procedures to obtain the necessary forms from field staff to add equipment purchases, transfer and lease purchases to the Department's inventory. The Department has inventory policies in place that all units should follow.
CURRENT YEAR
INVENTORIES Inadequate Inventory Procedures Financial Statements Audit Control Number 46 I-95-04 For the year ended June 30, 1995, a review of supply inventory accounting records revealed that the Department of Children and Youth Services had not fully counted nor valued the supply inventories maintained at all Youth Development Centers. The value of certain inventories could not be determined through alternative review procedures, resulting in a less than complete value of supply inventories as reflected on the Department's fmancial statements. This condition was a result of the Department's failure to conduct a year-end physical count of all supply inventories on hand. The Department should establish the necessary procedures to ensure that all supply inventories are counted, accurately valued and recorded on the accounting records. Afanaument Response We concur with the recommendation. The Department will instruct staffthat year-end supply inventory counts at the State Youth Development Campuses should include all supplies. The Department will record these values on the accounting records at year end.
F - 67

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF PUBLIC SAFETY CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Inadequate Documentation Financial Statements Audit Control Number 466-95-01

The Peace Officers Standards and Training Council (POSTC) is attached to the Department of Public Safety for administrative purposes only. The Council contracts with various police academies throughout the State to provide training to law enforcement officers. Our examination of expenditures made by the Council to reimburse police academies for training related expenditures revealed the following deficiencies:

1.

Reimbursements were made to police academies without proper or adequate documentation to support

expenditures claimed.

2.

Reimbursements were made to police academies without approvals by appropriate Council personnel.

The above deficiencies occurred because POSTC's accounting procedures did not include adequate internal controls over the reimbursement process for payments made to police academies.

The Peace Officers Standards and Training Council should establish the necessary internal controls to ensure all expenditures are properly approved and evidenced by complete and adequate documentation.

Mana~ement Response

We concur with this recommendation. Several internal control processes have been established that addresses the concerns cited. Substantial work needs to be completed in this area once a permanent finance director is appointed, including but not limited to a current internal accounting manual for use at POSTC and the agencies.

EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Expenditure Financial Statements Amount: $19,369.00 Audit Control Number 466-95-02

In the year under review, the Peace Officers Standards and Training Council (pOSTC), which is administratively attached to the Department of Public Safety, made a payment to the North Central Georgia Law Enforcement Academy for a classroom facility that the academy never purchased. Payments by POSTC to academies should be made on a reimbursement basis for actual expenses incurred that are supported by proper documentation.

The above situation occurred because POSTC's accounting procedures did not provide for adequate controls over the expenditure process.

The Peace Officers Standards and Training Council should review its accounting procedures to ensure that only claims with proper documentation are paid. Appropriate action should be taken by the Peace Officers Standards and Training Council to secure reimbursement of$19,369.00 for this undocumented claim.

F - 68

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
DEPARTMENT OF PUBLIC SAFETY CURRENT YEAR
Mana~ement Response We concur with this recommendation. Academies have been instructed to submit reimbursement requests for actual expenditures, not accrued items. Additional supporting documentation is now being requested from the academies. Once a permanent fmance director is appointed, this issue will receive close scrutiny. The $19,369.00 has been returned from North Central Georgia Law Enforcement Academy to POSTC.
F - 69

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF CORRECTIONS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

467-94-01 467-94-02

Corrective Action Implemented See Audit Control Number 467-95-01

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 467-95-01

The review report for the year ended June 30, 1994, noted deficiencies in the procedures used to account for general fixed assets. For the year under review, our examination included a review of the accounting system utilized by the Department of Corrections in maintaining their State Property System. This review consisted oftesting the system for compliance with State equipment laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The following conditions relating to inappropriate practices were found to exist:

(l) Equipment inventory records were not updated for all additions.

(2) 21 items acquired through installment purchases were not included on the inventory records.

In addition, equipment items were selected to test the accuracy of the Department's general fixed asset records. Of the 293 items selected for physical inspection, the following deficiencies were noted:

(a) 6 items were located in locations other than the location indicated in the property inventory system.

(b) 32 items could not be located.

(c)

I item was surplused but was not removed from the inventory records.

The Department is required to maintain equipment inventories in accordance with provisions of the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow established procedures for maintaining equipment inventories.

The Department of Corrections should follow established procedures to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.

F -70

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF CORRECTIONS PRIOR YEAR/CURRENT YEAR

Manaument Response

The Department concurs with this fmding and recommendation.

The Standard Operating Procedures (SOP's) for property control have been thoroughly reviewed and are in the process of being updated to allow for greater control. It is anticipated that the revised procedures will be published by the later part of August 1996. It will be the responsibility of the Property Audit Section to ensure that all corrective actions are performed in a timely manner.

At the time of this report, the following corrective actions had been initiated:

I.

Equipment inventory records have been corrected for the eight (8) additions not updated on the system at the time of

the audit. It should be noted that there were approximately 40,000 additions to the department's inventory system in

FY 1995.

2.

Equipment inventory records have been entered for the twenty-one (21) items acquired through installation purchases

during FY 1995.

3.

Inventory records have been corrected for the six (6) items cited as being located in areas other than indicated on the

property inventory system.

4.

Efforts are currently underway to locate or reconcile the thirty-two (32) items that could not be located during the audit,

and appropriate action will be taken to update the inventory accordingly.

5.

The one (1) item surplused but not removed from the property control system has been removed.

CURRENT YEAR

CASH AND CASH EQUIVALENTS Uncollateralized Time Deposits Financial Statements Audit Control Number 467-95-02
At June 30, 1995, the Department of Corrections failed to have its time deposits fully collateralized as provided for by the Official Code of Georgia Annotated Section 50-17-59. The following time deposits were not fully collateralized:
First Federal Savings Bank Certificates of Deposit Amount: $125,000.00
NationsBank of Georgia Certificates of Deposit Amount: $198,000.00
This condition resulted from the Department's failure to ensure that the banks had provided collateral for the balance of the time deposits in excess of the federal depository insurance amount of$IOO,OOO.OO.

F -71

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEPARTMENT OF CORRECTIONS

CURRENT YEAR

The Department should establish the necessary controls to ensure that all time deposits are fully collateralized in compliance with state laws governing deposits and investments.

Manq~ement Response

The Department concurs with this fmding and recommendation.

On February 2, 1996, instructions were sent from Accounting to all units to have all funds in excess of $ 100,000.00 collateralized. A new standard operating procedure is being developed to codify this process which will provide necessary safeguards to ensure that state laws governing deposits and investments are followed.

SPECIAL TESTS AND PROVISIONS Failure to Submit Certificate of Eligibility Federal Financial Assistance Food Distribution Program (CFDA 10.550) Audit Control Number 467-95-03

During the year under review, the Department of Corrections did not provide the Georgia Department of Education with a Certificate of Eligibility documenting that its rehabilitation programs have been made available to a majority of its inmates for a minimum of ten hours weekly per inmate. The agreement with the Georgia Department of Education required that the Certificate ofEligibility be provided each six months or as requested by Georgia Department of Education. Although Department of Correction officials indicated that the Georgia Department of Education had not requested the Certificate of Eligibility, there was no documentation that Georgia Department of Education waived the six month requirement or requested another submission date. In order to receive United States Department ofAgriculture donated foods, Department of Corrections was required to meet this rehabilitative program requirement which is contained in United States Department of Agriculture - Food and Nutrition Service Instruction 706-3. This Federal policy also requires that rehabilitative programs and activities conducted by the Department of Corrections meet standards prescribed by the American Correctional Association and that burden of proof as to whether or not a given program or activity is rehabilitative must be on the institution itself.

The Department of Corrections should implement measures to satisfactorily document and certify to Georgia Department of Education that its institutions conduct rehabilitative programs and activities that meet American Correctional Association requirements and that such a certification be submitted to Georgia Department of Education each six months.

Manq'lement Response

The Department concurs with the fmding and recommendation as stated in the FY 1995 review report.

On February 19, 1996, the GDC State Director of Food and Farm Services sent out instructions to appropriate GDC facilities fully explaining the need for certification and providing them with forms to be completed and signed if all conditions were in fact met at the facility. All certifications have been received and sent to the State Department of Education. A schedule will be established to prompt the review of overall certification status twice annually. To ensure future compliance with eligibility requirements, the State Director of Food and Farm Services will review the schedule, monitor all actions taken by staff, and take any corrective actions necessary to keep the Department in compliance with State Department of Education policy and procedure and USDA Food and Nutrition Service Instruction 706-3.

Reference:

Memorandum dated 2-19-96, from the State Director to all GDC state institutions, detention centers, diversion centers, and transitional centers.

F -72

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA BUREAU OF INVESTIGATION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

471-94-01

Corrective Action Implemented

F - 73

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

472-94-01

Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARA TIONIEXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 472-95-01

The total approved budget for budget units "A" and "B" of the Board of Regents of the University System of Georgia provided for expenditures of$1,974,930,469.00 and $625,974,933.00, respectively. The total amended budget for these budget units were not overexpended. However, a comparison by budget unit of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the following object classes were overspent by the amounts indicated below:

Budget Unit "A" - Resident Instruction Research Consortium

$7,024.65

Budget Unit "B" - Regents Central Office and Other Agricultural Research

$3,835.07

These overexpenditures are in violation of Section 80 ofthe Amended Appropriations Act of 1994-1995. The overexpenditures were caused by the Board's failure to monitor the expenditure of funds against the budgeted expenditures by object class.

The Board of Regents of the University System of Georgia should review its internal control procedures over budget operations, design procedures which would prohibit the expenditure of funds in excess of budget approval, and implement those procedures to strengthen the internal. controls over the budget function.

A1ana~ementResQonse

Overexpenditures in the two object classes were not monitored for deficits. The following procedures have been implemented to prevent over-spending and provide the necessary controls to stay within budgeted amounts for all funding sources:

1.

Encumbering purchase requests after ensuring a free balance exists.

2.

Monitoring monthly and year-end reports for negative free balance.

3.

Inquiring as to available free balances before processing check requests and requests for authority to travel.

F -74

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMAnON TECHNOLOGY PLANNING
Strategic Planning Reportable Condition Audit Control Number 472a-95-01
Efforts are currently underway by the Office of Information and Instructional Technology ("alIT") to develop a more responsive information technology strategic plan. The three year information technology plan used by Business and Finance Systems (BFS) for the supported institutions is not a strategic plan and it has not been integrated and implemented with overall university systemwide functional and technical plans.
To sufficiently plan for the university system needs and those of the Board of Regents, communication modes are necessary for sufficient quality input. There presently is an advisory body to the Vice Chancellor for Information Technology called ACIT (Administrative Committee on Information Technology), This committee, represented by all institutions, is a technical advisory committee that does not address functional specific needs. Functional committees are intended to lead planning efforts "systemwide".
We understand that Oll'T is participating in the planning efforts with various user groups and Oll'T has a number of initiatives underway to address immediate needs. Academic Administration is in the process of implementing a new student information system to provide for consistent processing of fmancial aid and student data for the participating institutions in the university system. Also, a system-wide committee led by functional areas has been formed to select an integrated fmancial application system utilizing more current technology. We recommend that consideration be given to the functional and technical requirements associated with these initiatives that will have support issues for BFS. With an effective strategic plan in place, priorities can then be developed for BFS and resource plans can be developed to support those goals. Resource planning should consider the appropriate mix of technology, people, and the corresponding organizational structure that will best serve the identified goals and priorities of the university system.
Manaf:ement Response
We concur with this recommendation. Current and future planning efforts by Oll'T will continue to include the ACIT representatives and will be influenced by two other ongoing strategic planning efforts: the University System of Georgia's overall strategic plan, "Access to Academic Excellence for the New Millennium", and the State Information Technology Policy Council's planning efforts. Additionally, Oll'T, led by the Vice Chancellor for Information and Instructional Technology, is currently preparing an enterprise wide organizational plan of objectives due for completion by June 30, 1996.
The previous strategic plan will be updated to incorporate a process for defming functional and technical requirements associated with the current initiative of selecting fmancial systems software. Under the direction of the Director of Business and Finance Systems, the procedure to update the strategic plan will be attached to the Business Systems acquisition process with the intent of updating our overall technology/strategic plan. Anticipated completion date is 3/1/97.
F -75

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR

INFORMATION SECURITY

Information Security Policy Reportable Condition Audit Control Number 472a-95-02

The Board ofRegents has a university system-wide information security policy initially drafted by the ACIT committee; however, this policy consists primarily of a general statement regarding the need for security and assigns complete responsibility for security policies and procedures to the institutions. Training and guidance in establishing awareness and implementation of security procedures has not been developed by the Board of Regents/OlfT, nor has it been developed to supplement institution specific policies.

In the absence of an effective policy, individuals may not understand the potential risks to Oll'T or their institutions. Additionally, since skills, personnel and other resources vary widely by institution, the sufficiency and effectiveness of security policies may be inconsistent.

We believe the following observations can be attributed to an ineffective university system-wide policy and a corresponding overall lack of security awareness within much of the university system:



Written standards are not in place that specify the appropriate access levels job responsibilities for

system users and information technology personnel, either located within Oll'I' or at the examined

institutions.



We observed that procedures are either nonexistent or are inadequate to communicate employee

terminations or transfers for appropriate and timely security changes to be made.



Responsibility for developing and enforcing formal security policies and standards at the institution

level has not been specially assigned to accountable personnel. Although all parties have some

manner of informal security procedures, neither Oll'l' nor the tow examined schools had adequate

formal documentation of security policies and procedures.



For BFS and Fort Valley State College, system security monitoring for unauthorized or inappropriate

access is not performed for the various platforms that support the fmancial application systems,

although monitoring capabilities exist.

We recommend the Board of Regents/Oll'I' enhance the information security policy and promote system and user training for Oll'I' management and appropriate institution personnel. The need for a policy that addresses ownership, accountability, and responsibility for protecting information resources is not an issue to be solely owned by OlfT, It is a university system-wide issue that requires buy-in and participation by all institutions. Each institution may need to expand the policy for organization specific issues that differ from others. We recommend OlfT take a leadership position in developing training and other assistance regarding the implementation of security at the institutions.

F -76

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMAnON SECURITY
Mana~ement ResJlonse
Regarding the observation about appropriate access levels (a), we concur with this observation. In conjunction with the development of Oll'I' Security Policy, and under the direction of the Director of Business and Finance Systems, written standards will be developed to specify the appropriate access levels according to job responsibilities for information technology personnel. Anticipated completion date is 1/15/97.
Regarding the observation about removal of terminated/transferred employees (b), we concur with this observation. Terminated/transferred employees have been removed from our systems. Under the direction of the Director of Business and Finance Systems, a process is being implemented to ensure that terminated/transferred employees are removed from our systems in a timely manner. Anticipated completion date is 5/15/96.
Regarding the observation about monitoring access attempts (d), we concur with this observation. Under the direction of the Director of Business and Finance Systems, the UNIX utility "lastb" has been activated to monitor access attempts on the HP 9000 UNIX system. A report is delivered daily to the system administrator. The "lastb" utility will not work on the TIl 500 UNIX system, and, to date, we have been unable to locate any similar utility that will function on the TIl 500 system. Suggestions or further assistance in this regard will be appreciated.
In conjunction with the further development of Oll'T Security Policy, Oll'T will recommend that each institution running standard financial systems utilize this access monitoring tool on their HP9000 systems.
Regarding (c), (e), and (t), we concur with the recommendation for OlfT to enhance the process and promote awareness of the Security Policy and its implications. Under the direction of the Director of Technical Support Services, the Oll'I' will develop a process by which the institutions will be asked to respond to a specifically formatted planning/reporting document indicating their internal security policies and procedures. The institutions will be required to update this document annually, at which time it will be reviewed by the appropriate Central Office and institutional personnel. The Oll'T will develop guidelines for this document in such a time frame to allow the first submission requirement to be in the first quarter of calendar year 1997.
We concur with recommendation for Oll'I to take a leadership position in developing a training program to enhance awareness of the need for the implementation of a security program at the institution level. Under the direction of the Director of Technical Support Services, the addition of training courses and/or discussion groups offered through the Oll'I' Athens facility and over GSAMS for this issue will be considered for FY '97.
Information System Security - Platform Specific Observations Reportable Condition Audit Control Number 472a-95-03
It should be noted that the financial application systems are afforded two layers of protection; system level security and application level security. Our review was limited to the overall system level security. It is possible that in some cases, the system level security risks identified may be somewhat mitigated by the application level security controls in place. We observed several opportunities to improve security controls as follows:
F -77

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR

INFORMATION SECURITY

Texas Instruments model 1500 - Unix Security



The security features incorporated into the Unix operating system provide the capability to group

users according to job functionality and as such grant users similar access capabilities. We noted that

some system users belonged to the same group that did not necessarily share the same job functions.

For example: programers and certain administrative personnel are assigned to the same Unix group,

and accordingly all have similar access capabilities on the TI-1500. A test of access capabilities to

fmancial application program revealed that this Unix group and its members have the capability to

update the programs for the fmancial applications.



The BFS programers have update capabilities to the fmancial application system programs. We were

advised that this is needed to be responsive to any system problems that may require quick action by

programming personnel. Normally, changes are approved and implemented through a change control

process. However, if changes are made outside of the process, this activity is not monitored or

reviewed to ensure changes have been authorized by BFS management.



Programmers and other BFS staff can activate ROOT access. The ROOT ID provides the user with

powerful access capabilities that can circumvent normal security and also allows the user to change

security settings on the system.

As noted previously, we strongly recommend the Board of Regents/Oll'I' enhance the information system security policy as it applies to Oll'T and the university system. The enhancement of the policy should be a joint effort of users, Oll'I', and representatives from each institution. The first step in enhancing or developing a security policy is a risk assessment of information resources to determine the criticality and sensitivity of data and appropriate levels of access. We recommend decisions to grant access to an information resource should be made based on a risk assessment and/or according to job function as defmed by the policy.

Additionally, we recommend that Oll'I' consider establishing responsibilities and accountabilities to administer and monitor system security training and awareness programs that will communicate security responsibilities to the institutions.

Management Response

Regarding the observation about users within an access group without related job functions (a), we concur with this observation. The Director of Business and Finance Systems will ensure that users without related job functions will be removed from the TI 1500 development machine by May 1, 1996. They are currently using this machine only as a mail server. Steps will be implemented to provide mail service from another machine without making them a part of the access group for financial applications.

Regarding the observation about fmding changes to source code that happen outside of the change control process (b), we concur with this observation. Under the direction of the Director of Business and Finance Systems, a UNIX script has been developed and implemented to provide an automatic comparison of the source code files. This comparison alerts the supervisor of every file change within the previous 24 hours. File changes not matching the change control documents will be investigated, with appropriate corrective action to be initiated.

F -78

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMATION SECURITY
Regarding the observation about programmers having access to the Root password (c), we concur with this observation. Under the direction of the Director of Business and Finance Systems, by May, 1996, new procedures will be implemented so that the root password will be known only to the assigned system administrator. The system administrator will record the password and store it in a sealed envelope in a location available to the BFS staff supervisor, in case of an emergency. The administrator will check the envelope daily, and will reassign the root password ifthe seal on the envelope has been broken. This method will allow the supervisor emergency access to the root userid when the system administrator is away from the work location.
Regarding recommendation (d), refer to the previous response to Security Policy, Audit Control Number 472a-95-02.
Regarding the observation about granting access based upon risk assessment/job function (e), we concur with these recommendations. Reference the previous response to Security Policy. Under the direction of the Director of Business and Finance Systems, decisions to grant access to an information resource will be made on a job function basis as defmed by the policy.
Regarding the observation of system security (e), we concur with these recommendations. The UNIX system administrator for each machine operated by BFS is responsible for administering and monitoring system security. Formal development of security training and awareness will be a part of the new security policy being developed by OIlT.

Disaster Recovery Reportable Condition Audit Control Number 472a-95-04

BFS has recently developed a disaster recovery plan for centrally supported fmancial systems. However, this plan still required fmal testing and assignment of responsibilities for institutions during our review. (There are some components of the plan that have been tested due to the nature of central support provided by OIlT). Responses from the institutions regarding the plan were pending as each institution is unique in its recovery needs. In addition, the plan addresses the short term processing of the four standard financial applications, as defmed in our scope of review, at an alternate institution in the event ofloss of information services. Currently, there are no institution plans or procedures for the recovery of other applications or hardware platforms with the exception of certain payroll functions.

Training and guidance has not been available for the institutions that could assist in obtaining an awareness of disaster recovery issues and in developing disaster recovery and business continuity plans for local hardware platforms and applications not included n the system-wide plan. While performing our reviews, we consistently noted an overall lack of awareness of the significance and potential impact of disaster recovery related issues.

We recommend that the Board of Regents and OIlT in cooperation with key user management address the following:



Initiate a disaster recovery awareness program to educate internal management and participating

institutions regarding the potential impact of the loss of computer services for a specified period of

time.

F -79

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR

INFORMAnON SECURITY



Perform a risk assessment of the application systems and business processes to identify those that are

mission critical, at a minimum to include the applications under the scope of this review. Then

determine the impact a disruption in computer processing would have on the critical application

systems and identify the resources needed for recovery. This assessment will validate efforts

performed to date in developing disaster recovery plans and guide development of long-term plans

in addition to short-term plans.



In connection with the above, perform a cost/benefit analysis to assist in decision making and then

develop and document any document any additional recovery procedures required to restore the

critical application systems and processes in an organized manner within an accepted period of time.



Plan, once implemented, should be periodically tested and maintained with the changing information

technology environment. Personnel responsible for the implementation of plans should be informed

and trained for their responsibilities.

A consideration in disaster recovery planning should be the adequacy of the current environmental controls within the computer facility. The environmental controls for the BFS computing facility may not be adequate to prevent damage to computer equipment. We observed significant combustible material in the facility. There are no smoke detectors or water sprinklers in the facility and the room has not been inspected for compliance with applicable fire regulations. We also noted severe space limitations in the computer room. We recommend the BFS management perform a risk assessment of the environmental risks and exposures to the computer room and incorporate the results in connection with disaster recovery planning efforts.

Also critical to recovery efforts are the availability of current backups of programs and data that are retained offsite. BFS backups are currently being stored at the home of a BFS employee. This storage area may not be secure or environmentally safe for the storage of such information resources. We recommend that management consult with other state organizations to locate a more appropriate off site location.

Management Response

We concur with the observations in (a). The education of internal management and participating institutions regarding the need for disaster recovery will be accomplished over the next year in conjunction with the redevelopment of the new security policy. During this next year, under the direction of the Director of Technical Support Services, we will educate the institutions and the institutional management about the potential impact of the loss of computer services for a period of time.

Regarding the performance of a risk assessment and cost/benefit analysis of the applications under the scope of this review in (b), (c), and (d), management has already conducted a "worst case" risk analysis for the support of these systems. The current disaster recovery plan addresses these risks. Under the direction of the Director of Business and Finance Systems, the current plan will be reassessed, and testing will be conducted, where required. Assignment of responsibilities from within BFS and from the participating institutions will be fmalized. Anticipated completion date is September I, 1996.

F - 80

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMAnON SECURITY
Regarding the environmental controls in the BFS Computing area (e), we concur with the observation and recommendation; however, the environmental controls available in our current location are not within our control. New space in another GBA facility is now being constructed for the entire Board of Regents' organization. We anticipate moving to the new space before the end of this calendar year. A consultant is being hired to assist in planning the computing and training rooms for our new facility. We will have adequate environmental controls in our new facility. Under the direction of the Director of Business and Finance Systems, we will do all that is possible to remove combustible material from the current facility, with an anticipated completion date of May 15, 1996.
Regarding off site tape storage (f), we concur with the observation and recommendation. For a short term solution, BFS management, under the direction of the Director of Business and Finance Systems, will seek a more secure off-site location for tape storage. Anticipated completion date is May 15, 1996. A more long term solution will be sought utilizing an automated backup scheme running via Peachnet such that the backup material is stored on magnetic media located in our site in Athens, Georgia. Anticipated completion date is December 31, 1996.

Application Change Management Reportable Condition Audit Control Number 472a-95-05

Application change management procedures for the four financial applications maintained on the TI-1500 are informal and undocumented. We specially observed the following:



Although procedures for application changes appear to be well-designed, the procedures have not

been formalized to require documentation of authorization, prioritization, and approval of

programming changes to the financial systems. Also, procedures have not been formalized to require

documentation supporting the migration of changes into the production environment.



Security or library management control procedures are not in place to ensure a programming change

that is tested and approved by the user and BFS management is the same program version that is

implemented into the production environment.



The individuals responsible for making programming changes to the financial applications are also

responsible for migrating programming changes into the production environment and no audit trail

is available as evidence of the changes.

We recommend that management consider formalizing and documenting change management policies and procedures. Without specific accountabilities and audit trails, management cannot be assured that changes are authorized and in accordance with specified objectives. We also recommend that monitoring be performed of update activity if programmers will continue to maintain current access levels. We suggest consideration be given to establishing and utilizing emergency IDS for "quick fix" changes to establish an audit trail of activity. These emergency IDs will be granted the access needed for quick changes and usage of the IDs will be restricted. All activity will be logged to provide the audit trail for management review.

F - 81

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR WFORMATIONSECUIDTY
Mana'jJement Response We concur with these observations and recommendations. Under the direction ofthe Director of Business and Finance Systems, the change control procedure for BFS is being documented, and supports the authorization, prioritization, approval, and migration of changes into the production environment. Anticipated completion date is June 30, 1996. An automated log is currently maintained of all migrations of software into the production environment. In addition, a daily comparison of source code libraries is now accomplished to alert the supervisor of any changes to source code not currently covered by change control documents.
F - 82

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF REVENUE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

474-94-01 474-94-02

Corrective Action Implemented Corrective Action Implemented

CURRENT YEAR

CASH AND CASH EQUIVALENTS Uncollateralized Time Deposit Financial Statements Audit Control Number 474-95-01
At June 30, 1995, the Department of Revenue failed to have the following time deposit fully collateralized as provided for by the Official Code of Georgia Annotated Section 50-17-59:
First Union National Bank, Macon, Georgia Certificate of Deposit Amount: $320,353.44
This condition resulted from the Department's failure to ensure that the bank had provided collateral for the amount of the time deposit in excess of the Federal depository insurance amount of $100,000.00. This resulted in $220,353.44 of the time deposit being uncollateralized.
The Department should establish the necessary controls to ensure that all time deposits are fully collateralized in compliance with state laws governing deposits and investments.
Afana~ementReSDQnSe
In February, 1996, the Department contacted and requested First Union to pledge collateral for the Certificate of Deposit we have with the Bank. We have been assured by Bank Officials the collateral will be pledged as requested.

F - 83

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

GEORGIA STUDENT FINANCE COMMISSION CURRENT YEAR

BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Classes Financial Statements Audit Control Number 476-95-01

The total approved budget for budget unit "B" Lottery for Education of the Georgia Student Finance Commission provided for expenditures totaling $77,401,941.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the following object classes were overspent by the amounts identified below:

Hope Financial Aid - Books Hope Financial Aid - Fees Tuition Equalization Grants

$ 1,365,173.53 $ 757,416.28 $ 302,594.27

These overexpenditures are in violation of Section 80 ofthe Amended Appropriations Act of 1994-1995. The overexpenditures were caused by the Commission's failure to monitor the expenditure of funds against the budgeted expenditures by object class.

The Georgia Student Finance Commission should review its internal control procedures over budget operations, design procedures which would prohibit the expenditure of funds in excess of budget approval, and implement those procedures to strengthen the internal controls over the budget function.

Manau;ment Response

The overexpenditures noted in the audit report were a result of systemic problems associated with timely reconciliations of the actual application ofH.O.P.E. fund requested by the various schools to the amounts drawn down.

A new reconciliation process has been installed for this coming year.

Based on this new process it is anticipated that these problems will not recur.

F - 84

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SECRETARY OF STATE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

478-94-01

Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARA TIONIEXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 478-95-01
The total approved budget for the "A" Secretary of State budget unit for the Secretary of State provided for expenditures totaling $28,239,943.00. Although the total amended budget was not overexpended, a comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the common object classes were overspent in the amount of$133,944.29. This overexpenditure is in violation of Section 80 of the Amended Appropriations Act of 1994-1995. The overexpenditure was caused because the Secretary of State's office did not monitor the aggregate expenditure of funds against the aggregate budgeted expenditures by common object classes.
The Secretary of State should design procedures that will ensure compliance with the Agency's budgetary authority.
Management Response
With reference to Section 80 of the Amended Appropriations Act of 1994-1995, this agency did use some flexibility in the management of expenditures within certain common object classes. However, a review revealed this agency did not exceed the 102 percent of the budget amount for any of the common object classes nor was the total budget overexpended. The fmding is a result of the Agency's interpretation of the flex language. It is now understood that the focus should be on the monitoring of total expenditures by total common object classes as well as total budget. Our existing procedures will be amended to reflect this interpretation.
Additional procedures will be setup for approval oflarge expenditures requested in the last quarter of the fiscal year. This action will ensure correct projections and that the Agency remains within the budget guidelines.

F - 85

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DEPARTMENT OF TRANSPORTATION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

484-94-01 484-94-02

Corrective Action Implemented See Audit Control Number 484-95-01

PRIOR YEAR/CURRENT YEAR

CASH MANAGEMENT Failure to Adhere to Terms of the Cash Management Improvement Act Agreement Federal Financial Assistance Reportable Condition Highway Planning and Construction [CFDA 20.205] Audit Control Number 484-95-01
The audit report for the year ended June 30, 1994, noted that the Department of Transportation did not adhere to terms of the Cash Management Improvement Act Agreement between the State of Georgia and the U. S. Department of Treasury. During the year under review, the Department received Federal funds prior to the dollar-weighted average number of days required for funds to be paid out after a disbursement which is a violation of 31 CFR 205.7(c)(3). The Department of Transportation incorrectly included the day checks were issued to contractors as part of the dollar-weighted average number of days.
The Department of Transportation should implement internal control procedures to ensure compliance with terms of the Cash Management Improvement Act Agreement as required in 31 CFR 205.7(c)(3).
Mana'lement Response
We concur with the fmding concerning the Cash Management Improvement Act Agreement. In December 1995, the Department established procedures whereby funds will be received from FHWA on the Monday following the week billed rather than the Friday of the billing week. This will change the dollar-weighted average number of days required for funds to be paid out and put the Department in compliance with the terms of the Cash Management Improvement Act Agreement as required in 31 CFR 205.7(c)(3).

F - 86

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

OFFICE OF TREASURY AND FISCAL SERVICES STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

486-94-01 486-94-02 486-94-03

Corrective Action Implemented See Audit Control Number 486-95-01 Corrective Action Implemented

PRIOR YEAR

ALLOWABLE COSTS/COST PRINCIPLES Inadequate Documentation of Direct Cost Claim Reimbursement Federal Financial Assistance Cash Management Improvement Act Questioned Costs: $36,320.57 Audit Control Number 486-95-01
The audit report for the year ended June 30, 1994 noted that the Office of Treasury and Fiscal Services claimed direct costs in the amount of $36,320.57 in its Direct Cost Recovery Report (Report) for the period July 1, 1993 to June 30, 1994. Upon submission of this report by the Office, the Director certified that documentation would be maintained to substantiate this claim and made available upon request. Federal requirements included in 31 CFR 205 .l4(b) provide that a State must maintain documentation to substantiate its claim for direct costs; however, the Office was unable to provide documentation to support (1) $27,366.56 of personnel costs claimed for actual time spent by two personnel who were involved in part with the implementation of the CMIA and (2) $8,954.01 of nonpersonnel costs claimed for the acquisition and use ofa computer and related software for CMIA activities. Provisions of 31 CFR 205.14(c) further provide that direct costs incurred by a State in implementing the CMIA are subject to the requirements of OMB Circular A-87.
The Office advised us that it received verbal assurance from U.S. Treasury that no documentation of personnel costs was required and, in its view, Federal regulations indicate that direct costs associated with CMIA implementation were not governed by OMB A-87. Also, the Office received a letter from the U.S. Treasury dated February 14, 1995, stating that the direct costs claimed by the State of Georgia in its report for the period ended June 30, 1994 have been determined to be consistent with 31 CFR 205.14 and have been deemed reasonable by the U.S. Treasury. The Office considered this letter written documentation that the Office complied with relevant CMIA regulations and that OMB Circular A-87 is not applicable to such costs.
The Department of Audits continues to believe that the Federal regulations are clear in that direct costs must be documented and such costs should conform to the cost principles ofOMB Circular A-87. It is the position of the Department of Audits that the aforementioned U.S. Treasury letter simply clarified that the amount of costs claimed for reimbursement was reasonable and consistent with regulations. However, the issue of documentation, including the underlying support for the $36,320.57 claim, was not addressed. Resolution of this matter is awaiting review by the U.S. Treasury.
Mana~ement Response
We concur with the conclusion reached in this fmding which states that the resolution of this matter is awaiting review by the U.S. Treasury. As you are aware, in response to the initial fiscal year 1994 fmding, the Office has established procedures to ensure that all claims for direct costs reimbursement are adequately documented in accordance with OMB Circular A-87 and 31 CFR 205.14. For all claims subsequent to the one in question, adequate documentation is on file and available for review.

F - 87

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
OFFICE OF TREASURY AND FISCAL SERVICES
CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Bank Reconciliation Procedures Financial Statements Reportable Condition Audit Control Number 486-95-02
For the year ended June 30, 1995, the Office of Treasury and Fiscal Services' accounting procedures were insufficient to provide for adequate control over the bank reconciliation process. It was noted that monthly bank statements were not reconciled to the general ledger in a timely manner. Also, it was noted that there was no administrative review to determine that bank reconciliations were completed and that all required adjustments, if any, had been made to the general ledger.
The Office should establish the necessary procedures to ensure that bank statements are properly reconciled on a monthly basis and that there is an administrative review of these reconciliations.
Mana~ement Response
Accounting procedures have been established to ensure that bank statements are properly reconciled on a monthly basis and that an administrative review of these reconciliations is performed. On February 1, 1996, an internal auditor position, which is independent ofthe accounting function, was created and staffed within the Office. Included in the duties of the internal auditor will be bank statement reconciliation. In addition, on February 1, 1996, an accounting director position was created and staffed. Included in the duties of the accounting director will be an administrative review and approval of all monthly bank statement reconciliations.
GENERAL LEDGER Subsidiary Ledgers Not Balancing to the General Ledger Financial Statements Audit Control Number 486-95-03
For the year under review, it was noted that the Office of Treasury and Fiscal Services' subsidiary records for revenue collections, appropriation allotments and the Local Government Investment Pool did not balance to the general ledger. This condition was due to data entry errors and recording certain transactions retroactively without adequate documentation and approvals. Extensive audit procedures were necessary to reconcile these subsidiary ledgers to the general ledger and to prepare fmancial statements.
The Office should establish controls to ensure that subsidiary records are reconciled to the general ledger and that needed adjustments are recorded in a timely manner. The practice of recording transactions retroactively should either be discontinued or controls should be implemented to ensure that any transaction recorded retroactively is documented, approved and has an adequate audit trail.
Manaument Response
In September, 1995, procedures were established to ensure that all subsidiary records are reconciled to the general ledger and that the needed adjustments are recorded in a timely manner. The practice of recording transactions retroactively has been discontinued, except in rare cases. These rare cases will be documented, approved, and have an adequate audit trail.
F - 88

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SUBSEQUENT INJURY TRUST FUND STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

489-94-01

See Audit Control Number 489-95-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Financial Statements Audit Control Number 489-95-01

The review report for the year ended June 30, 1994, noted that the internal accounting control procedures of the Subsequent Injury Trust Fund did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures. For the year under review, a limited review of these procedures revealed that the Trust Fund had made no significant changes that would provide for an adequate separation of duties in the following control categories:

(1) Cash and Cash Equivalents

(4) Employee Compensation

(2) Revenue/Receivables/Receipts

(5) General Ledger

(3) ExpenditureslLiabilitieslDisbursements

(6) General Fixed Assets/Property Management

Management should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories, and implement those procedures to strengthen the controls over the accounting function.

Mana~ement Response

Our agency consists of only 23 positions and employing additional personnel in order to "Separate accounting functions" is not cost effective.

F - 89

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

STATE BOARD OF WORKERS' COMPENSATION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

490-94-01 490-94-02

Corrective Action Implemented Corrective Action Implemented

F - 90

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INDIGENT DEFENSE COUNCIL CURRENT YEAR
ALLOWABLE COST/COST PRINCIPLES Time and Attendance Records Not Utilized Federal Financial Assistance Drug Control and System Improvement [16.579] Questioned Cost: $36,309.92 Audit Control Number 492-95-0 I A review of salaries charged to the Drug Control and System Improvement - Formula Grant for the year under review revealed that salaries for two individuals were not supported by time and attendance records as required by Office of Management and Budget Circular A-87. Salary charges to Federal programs should be based on actual time worked by employees and supported by time and attendance records. This condition resulted from management's failure to maintain time and attendance records for salary charges of employees involved in multiple Federal and State projects. Total salaries charged to the Drug Control and System Improvement program for these individuals amount to $36,309.92. The Council should establish the necessary internal controls to ensure that salaries charged to a Federal program are maintained in accordance with provisions of Office of Management and Budget Circular A-87. Mana~ement Response We concur with this recommendation. Steps have been established to ensure that salaries charged to a Federal program are maintained in accordance with provisions of Office of Management and Budget Circular A-87. A copy of the written procedures are incorporated in our Policy Manual and are available for examination during normal business hours. Additionally, at the end of each month, time and attendance records for salary charges of all employees, whether involved in multiple Federal and State projects or solely State projects, are reviewed by the Executive Director, Division Head, and Human Resources Coordinator.
F - 91

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA INSTITUTE OF TECHNOLOGY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

503-94-01 503-94-02 503-94-03 503-94-04 503-94-05 503-94-06 503-94-07 503-94-08 503-94-09 503-94-10 503-94-11

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See Audit Control Number 503-95-01 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented No Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

Management Response

Audit Control Number 503-94-09

We concur with the recommendation. The Institute revised the language in its policy to try to conform with the Board of Regents Policy Manual during 1994-95. Changing circumstances in Continuing Education, however, require either further revisions of the policy or that the policy be submitted to the Board of Regents for approval. The Institute will make the necessary changes or submit the Institute policy for approval as recommended in the audit.

PRIOR YEAR/CURRENT YEAR

ELIGIBILITY Deficiencies in AwardinglDisbursing Student Financial Aid Federal Financial Assistance Federal Perkins Loan Program [CFDA 84.038] Federal Pell Grant Program [CFDA 84.063] Questioned Cost: $659.00/$-94.00 Audit Control Number 503-95-01
The audit report for the year ended June 30, 1994, disclosed deficiencies in awarding and disbursing fmancial aid which resulted in an overpayment of $659.00 from the Federal Perkins Loan Program. This overpayment occurred due to an error in the calculation ofthe expected family contribution. The Institute has contacted the grantor agency; however, no response has been received as of the date of this audit.
For the year under review, 50 student files were examined to determine ifthe Institute was awarding fmancial aid in accordance with students' eligibility for Student Financial Aid Programs. Our examination revealed that one student was underpaid $94.00 from the Federal Pell Grant Program. This underpayment occurred due to a change in the expected family contribution as a result of verification procedures performed by the Institute. The Institute should contact the Federal grantor agency regarding the resolution of these questioned costs.

F - 92

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY PRIOR YEAR/CURRENT YEAR
Mana"ement Response We concur with this recommendation. The Institute will contact the Federal grantor agency regarding the resolution ofthe $94.00 underpayment.
CURRENT YEAR
SPECIAL TESTS AND PROVISIONS Entrance Counseling Federal Financial Assistance Federal Family Education Loans [CFDA 84.032] Audit Control Number 503-95-02 Federal regulations (34 CFR 682.604) require institutions to conduct in-person entrance conferences with Stafford Loan recipients before disbursement of the loan. The Federal regulations also require institutions to document that the entrance conference was held. For the year under review, our examination of twelve Stafford Loan recipients revealed that Georgia Institute of Technology could not document that entrance counseling was conducted for one recipient. The Institute should conduct in-person entrance counseling with Stafford Loan recipients and should document the counseling sessions in the students' files. The Institute should contact the grantor agency regarding resolution of this matter. Mana'lement ResDonse We concur with this recommendation. The Institute will contact the Department of Education regarding resolution ofthis fmding.
F - 93

STATE OF GEORGIA
.FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Strategic Planning Reportable Condition Audit Control Number 503a-95-01
Efforts are currently underway by the Office oflnformation Technology (OIT) to develop an information technology strategic plan that will be responsive to the needs of its many diverse customers. OIT is having discussions with various users in an attempt to understand business needs so that those needs can be translated into action plans within the strategic plan. Clearly the previous three year information technology plan was not responsive to the needs and requirements of users and was not coordinated/linked to any overall Institute-wide plan as referenced in the background summary of this report. This issue is evidenced by the aging fmancial application systems and technical platforms in addition to poor user perceptions. Specific examples include:
Failure of the Oracle Financials project.
Users feel compelled to seek their own technology solutions instead of utilizing OfT. The Financial Data Management ("FDM") and the FDT departments within the Office of Planning, Budgets and Finance have expanded personnel and information technology services provided to users in some traditional areas OIT would serve. For example, FDA, within FDM, was created in order to perform end-user tasks and other tasks requiring functional expertise. FDA serves users by generating special service reports from the fmancial application systems to supplement unfilled needs from the baseline production reports.
We recommend planning efforts be continued by OIT but they must be done in cooperation with overall Institute planning. Consideration should be given to the appropriate alignment of resources and the corresponding organizational structure that will best serve identified needs. Anticipated organizational changes within OIT should address the appropriate relationships with FDM and FDT before fmalizing them. Also, we recommend that consideration be given to any new systems that may introduce changes to the current technology in place resulting in OIT support issues.
Manar:ement Response
We concur with the recommendations above. OIT was closely involved in preparation ofthe latest Institute strategic plan (dated September 13, 1995), particularly sections IV.D (Taking Fullest Advantage of Educational and Information Technology) and IV.E (Improving the Infrastructure). OIT is a key participant in the development of the Georgia Institute of Technology Administrative Systems Plan (fmal draft: September 11, 1995). OIT also now participates in the development and review of plans from the academic colleges and service units.
A consultant firm (KPMG Peat Marwick and Associates) has been engaged to perform an organizational review of the Institute's Administration and Finance structure which includes OIT. This study began in June 1995 and is scheduled to be completed in October 1995. The Senior Vice President for Administration and Finance will review the resulting recommendations and determine appropriate actions.
F - 94

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Resource Planning Reportable Condition Audit Control Number 503a-95-02
Without an effective strategic plan for information technology in place, planning for adequate resources and the associated budgeting for those resources becomes a guessing game. At its best, the plan would be a conservative and restrictive one that does not necessarily substantiate or support true needs. Often times, there are several other useful inputs to the resource planning process in addition to the strategic plan such as established service level agreements for users. These are not in place, but they would not be expected in the absence of effective overall planning.
We did note that OIT uses a system called MAGIC that tracks and reports on certain system resources utilized by user personnel. Reports generated from this system have determined resource usage for OIT in the past; however, we noted that the system is using 1992 cost values to allocate overhead charges to services. It does appear that this reporting is useful for purposes of tracking and billing for third party activity.
The need for improved resource planning in tandem with strategic planning is evidenced by the following:
A backlog of requests for changes to the current financial application systems has been accumulating. These requests have been delayed because of expectations associated with the ORACLE project. However, the ORACLE project was canceled in October 1994 which necessitates that OIT and FDM reevaluate the needs and requirements of the users of the fmancial application systems.
There are numerous requests by users for the FDM department to create "ad-hoc" special service programs (i.e., production-type programs using fourth generation language) to meet their reporting needs. This could indicate that current "production" reports generated are not meeting the needs of the users and/or users may not fully trained and aware of the available features of the fmancial application systems.
(a) We recommend that OIT continue efforts to develop more detailed understandings of the needs of their users. Using this knowledge and dovetailing off of the strategic plan, management should be better prepared to develop more effective resource plans. (b) We suggest management consider the value of establishing service level agreements with users as these agreements will demonstrate commitment by OIT. They will also assist in providing some valuable input to the resource planning process. (c) We recommend that the usefulness of MAGIC be evaluated and consider if it has value beyond third party billing.
Afana~ementResponse
(a) We concur that OIT should continue efforts to develop more detailed understandings of the needs of their users. This is an important part of a number of programs, including the customer on-site support program (known as CSS) and the recent Customer Service Process Improvement Team. By the OIT reorganization that was effective July 1, 1995, the customer support function now reports directly to the Associate Vice Provost and Associate Vice President for Information Technology.
OIT has implemented new processes and tools that provide management information on customer responsiveness, customer satisfaction, usage trends, and objective data to support new service offerings. This management information is reviewed routinely at all levels of management. In addition, OIT management continues to participate in regular discussions with campus academic and management customers to improve service offerings.
F - 95

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
(b) We concur that management should consider the value of Service Level Agreements (SLAs). SLAs are now a part of some programs, such as the on-site customer support program (known as CSS). Additional SLAs will be implemented where appropriate.
(c) We concur with the recommendation to evaluate the value of MAGIC beyond third party billing. OIT has conducted an informal evaluation and identified a number of additional functions of value in the operations, customer service, and planning areas.
Interim Planning for Financial Applications Reportable Condition Audit Control Number 503a-95-03
As a result of the cancellation of the Oracle project, there is heightened concern within OIT and FDM related to the risks associated with the aging CYBER system and IBM ES-9000. Specifically, the CYBER NOS operating system has no standard support provided by the vendor and the applications complicate OIT from updating the operating system. The version of CICS running on the IS-9000 will not have standard IBM support after December 3 I, 1996. Special arrangements must be made for continued support of CICS and the CYBER NOS operating system.
Clearly, all the affected parties are aware of this issue and have action items to address this problem. However, there remains the need to defme an interim plan for addressing support and recovery concerns. Because of the timing issues for year-end implementation, it is important that development of a plan receive high priority.
AJana~ementResponse
We concur with the need for an interim plan addressing CYBER support and recovery concerns. A plan to replace the CYBER 990 with a newer, more supportable CYBER 960, to replace the disk drives with newer technology, and to upgrade the system software to the current release has been developed. Testing of applications to determine migration impact has been performed. A cost/benefit presentation seeking funding for this initiative will be scheduled with senior management during October 1995. Responsible official: Director of OIT Operations & Engineering.
We concur with the need for an interim plan addressing ES9000 CICS support and recovery concerns. A plan has been developed to upgrade and stabilize the software well in advance ofthe support end date. Projected completion date: July 1996. Responsible official: Director of OIT Operations & Engineering.
Organizational Structure Reportable Condition Audit Control Number 503a-95-04
The current fmancial applications are supported by a combination of several departments under separate management structures. Because of the multiple management structures, there is opportunity for inconsistent control practices. Therefore this may be an opportune time to examine the organizational structure needed to provide optimal service to the users of technology and ultimately add value to Institute functions. As a result of the management changes in OIT, there currently are initiatives
underway to restructure on and redefme/align OIT responsibilities to be more responsive to its constituents. Functional
positions will need to be redefmed and their associated job descriptions rewritten. The current job descriptions were outdated anyway so this creates an opportunity to update them.
F -96

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
As OIT continues with its restructuring efforts, we recommend that consideration be given to related activities and functions within FDM as well as the impact that changing technology will have in connection with the strategic direction. We also suggest consideration be given to other control issues such as segregation of duties for security responsibilities and production migration responsibilities. Upon completion of the restructuring, management should formalize positions with updated job descriptions and ensure the changes are broadly communicated.
Management Response
We concur with the recommendation to consider restructuring issues regarding related functions within the Office of Information Technology (OIT) and Financial Data Management (FDM). A consultant finn (KPMG Peat Marwick and Associates) has been engaged to perform an organizational review of the Institute's Administration and Finance structure which includes both OIT and FDM. This study began in June 1995 and is scheduled to be completed in October 1995. The Senior Vice President for Administration and Finance will review the resulting recommendations and determine appropriate organizational changes.
We concur with the recommendation to consider the impact that changing technology will have in connection with the strategic direction, and we did so in the OIT restructuring efforts completed in July 1995. For example, the consolidation of Technical and Network Services (into Operations and Engineering) provides for better coordination and flexibility with respect to technology advances. In addition, a new Educational Technologies directorate was formed.
Updated job descriptions are one expected outcome of a campus-wide project known as EQUITECH. Projected completion date for updated job descriptions: first quarter 1996. Responsible official: Associate Vice President for Human Resources.
The OIT restructuring completed in July 1995 was communicated in a campus-wide memorandum from the Senior Vice Presidents, and in an article in the Whistle (the weekly faculty/staff newsletter).
Segregation of Duties Reportable Condition Audit Control Number 503a-95-05
During our review of the job responsibilities within the OIT and FDM organizations, we observed the following:
Information Systems and Services ("ISS") personnel are responsible for making changes to fmancial applications and implementing those changes into the production environment for the CYBER platform, The ISS person making the change is not always the same person implementing the change, however, both parties have programming responsibilities. In addition, FDA personnel maintain and create production program code using a fourth generation language ("EasyTrieve") and the same personnel have the responsibility of implementing changes into the IBM ES9000 production environment.
OIT technical support personnel have the responsibility of providing support to the various operating platforms for the fmancial application systems in addition to providing technical RACF support.
In both cases, the lack of segregation of duties increases the risk of unauthorized changes without evidence of an audit trail. (a} We recommend OIT management, as part of the restructuring the OIT organization, consider the implications of the proper segregation of duties within the OIT organization and FDM to reduce the risk of unauthorized changes to programs or data.
F - 97

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
(b) We recommend a separate security administration function be established and security responsibilities that are currently performed by technical support be reassigned to the security function. (c) We also recommend that consideration be given to establishing a separate production control function for migrating changes to production for the CYBER platform.
Mana'iement ReslJonse
(a) Concur. The implications of the proper segregation of duties within the OIT organization to reduce the risk of unauthorized changes to programs or data was considered as part of the restructuring the OIT organization, which was implemented July 1,1995.
Some Financial Data Applications (FDA) personnel have the capability to both create production Easytrieve "programs" and migrate these processes into production. Initially, this was necessary due to the complex production control cycles subject to tight scheduling constraints. It is imperative that the production cycles be completed by 7:00 a.m. every morning to provide on-line access to the applications by the functional community. During the past 10 years, this has remained an expeditious way of addressing both user needs and optimization of production processes given the small size of the production support staff. However, there are risks inherent in the current situation even after so many years of stability. Therefore, in October 1995, Financial Data Management (FDM) transferred all production program migration responsibilities on the IBM ES9000 to Financial Data Processing (FDP). Reference: Financial Data Management's Policies and Procedures.
(b) Concur. At the time of the OIT reorganization, we established a position (and function) with the responsibility to develop and manage a comprehensive security program. While primarily a policy function, the position has some operational security responsibilities, as well.
Current staffmg limitations do not give us the latitude to place technical staff in sufficient numbers to address the variety of operating environments we manage into a separate security function (where it is likely they would be underutilized). Rather, the security function referred to above will, with the assistance of the Director of OIT Operations and Engineering (O&E), develop a security management plan and procedure that strictly guides the Operations personnel in their security management functions. Particular attention will be placed on the strict management of access to platform security functions across all systems operated by O&E. This will allow us to maximize the use of our technical personnel resources, while providing satisfactory control over security of individual platforms and applications. Projected completion date: March 1996. Responsible official: Director of OIT Planning and Programs.
(c) We concur with the recommendation to consider establishing a separate production control function for migrating changes to production for the CYBER platform. Projected completion date: January 1996. Responsible Official: Associate Vice Provost and Associate Vice President for Information Technology.
Information System Security Policy Reportable Condition Audit Control Number 503a-95-06
Georgia Tech has an Institute-Wide Computer and Network Usage Policy; however, this policy has not been fully communicated or implemented within Georgia Tech's administrative user community. Additionally, a data access policy is in draft form and is currently being reviewed by the AIMS Senior Advisory Group. Because the draft is in its initial development stages we did not evaluate its content to determine if our observations below have been addressed. We believe the following observations can be attributed to the lack of communication and enforcement of such a policy.
F -98

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Ownership of system resources has been defmed but not formally communicated.
Written standards are not in place that specify the appropriate access levels according to job responsibilities for system users and OIT personnel.
There are no effective procedures between Human Resources and OIT and FDT to communicate that employees have terminated or transferred. We observed that an automated system, MAGIC, is in place to automatically delete users; however, through our testing, we found the system does not always work as expected. Additionally, MAGIC may present a "false sense of security" to system personnel and users if they do not fully understand its limitations in administering system security.
Responsibility for developing and enforcing formal security policies and standards has not been assigned to anyone specific person. Currently, security administration responsibilities is shared within the technical services support department for each of the fmancial application platform systems. Also, there is some responsibility in Internal Services (i.e., a department of OIT) for administration of passwords and user accounts.
Responsibility for monitoring system security is not performed for all of the various platforms that process financial application systems. Technical support personnel that support the IBM ES9000 system security software package ("RACF") do perform limited weekly reviews of system monitoring reports; however, the reports are limited in scope. In addition, a report of invalid login attempts is generated daily for the CYBER system and this report is reviewed daily by OIT Operations. For the other platforms, capabilities exist for monitoring, but is not performed.
(a) We recommend the Institute enhance the information system security policy with system and user training. (b) The need for a policy that addresses ownership, accountability, and responsibility for protecting information resources is not an issue to be owned by OIT nor is it a platform or application specific issue. This is an Institute-wide issue that requires buy-in and participation at the most senior levels of leadership. (c) Once the policy has been enhanced and formally communicated and there are appropriate personnel in place to ensure the policy will be adhered to, OIT can contribute by providing the necessary tools such as security software, systems to delete terminated users, and security monitoring services. OIT should be viewed as custodians of the information resources and not the decision makers with regard to determining access capabilities.
Mana'i;ement Response
(a) We concur with the need for security training. However, we do not currently have personnel to allocate to preparation, administration, and teaching of such a program. Personnel will be requested for this function in the next budget cycle. Projected completion date: June 1996. Responsible official: Director of OIT Planning & Programs.
(b) We concur with the need for policy addressing the indicated items. This is a requirement of the Administrative Systems Plan, the final draft of which was issued September 11, 1995.
(c) We concur that once policy has been enhanced and formally communicated and there are appropriate personnel in place, OIT can contribute by providing the necessary tools.
F - 99

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Information System Security - Platform Specific Observations Reportable Condition Audit Control Number 503a-95-07
We have identified numerous issues associated with weaknesses in Georgia Tech's information system security policy and dedicated resources for the platforms that process fmancial application systems on the IBM ES9000, IBM RS6000, CYBER, and Novell. They are identified below according to platform system.
It should be noted that the fmancial application systems are afforded two layers of protection; system level security and application level security. Our review was limited to the overall system level security for the various processing platforms. It is possible that in some cases, the system level security risks identified may be somewhat mitigated by the application level security controls in place.
IBM ES9000 - RACF
(a) RACF provides the capability to group users according to job functionality and as such grant users similar access capabilities. We noted that many system users belonged to the same group that did not necessarily share the same job functions. For example: internal audit, purchasing, fmancial data management, fiscal affairs, accounts payable all belong to the same RACF group, and accordingly all have similar access capabilities on the IBM ES9000. A test of access capabilities to accounts payable data files revealed that this RACF group and its members have the capability to update accounts payable data files.
(b) RACF protect-All has not been activated. This is a RACF system parameter that, when activated, will automatically protect all resources on the IBM ES9000. Without the activation of RACF Protect-All, there may be fmancial application programs and data files that are not afforded any RACF protection.
(c) Data on tape media is not currently protected by RACF. Instead, manual procedures for identifying tape access which would be circumvented, are employed. Written tape labels on the tape reels have a list of user IDS that have been designated to write to that particular tape reel. Computer operators that are responding to a request to mount a tape reel are required to review the tape label to determine whether this requesting user ID is authorized. A user ID could be written on the tape label without owners of the data being made aware.
(d) As noted in a related issue in segregation of duties, technical support personnel within OIT have the capability to change security settings and alter production fmancial application systems and they also have other system responsibilities.
(e) Two OIT programmers have update capabilities to the production fmancial application system programs and data files. Supposedly, this is needed to be responsive to any system problems that may require quick action by programming personnel. However, this type of activity is not monitored or reviewed to ensure all such activity has been authorized by user management.
(t) We identified a number of employees that still had access to the ES9000 system that have been terminated.
(g) User IDs are not automatically revoked after a certain amount of time of not logging onto the system. This is a common control technique used to reduce the risk of a user no longer requiring access to the IBM ES9000 (i.e., a terminated employee) from accessing the system.
F -100

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
ManafJement Response
(a) We concur that the RACF structure and related access privileges should be thoroughly reviewed. An in-depth RACF analysis will be conducted regarding user access, job function, group defmition, and production data set naming standards. Further, access profiles for every production data set will be reviewed. Corrective actions will be taken and documented wherever necessary. Projected completion date: January 1996. Responsible official: Director of Financial Data Management.
(b) We concur that activation of RACF protect-all is desirable. For transition, RACF protect-all has been activated in WARNING mode, which logs access exceptions but does not prevent the access. As expected, existing tape data sets produce an exception unless RACF profiles have been manually created. During the transition period, secure procedures for creating these profiles will be formulated.
In January 1996, we will review OIT and Financial Data Management experience and determine a schedule for activating protect-all in FAILURE mode. Responsible official: Director ofOIT Operations and Engineering.
(c) We concur that data on tape media should be protected by RACF. RACF protection for newly-created tape media was activated in September 1995. Protection for existing data on tape media will be phased in as described in (b) above.
(d) Concur. See the responses to 503a-95-05(b) and 503a-95-07(a).
(e) We concur that two OIT programmers have update capabilities to some production fmancial application programs and data files. These programs and data files will be included in the activities mentioned in response (a) above. Update capabilities are included in the access profiles scheduled for review.
(f) Clarification: Accounts registered in the names of terminated employees were found on the system, but it was not found that terminated employees actually had access to sensitive systems. There were several situations: (1) the employee inheriting the duties was using the account after changing the password; (2) the account was disabled and unusable, but being kept pending disposition of the former employee's files; (3) the account was retained for purposes of E-mail communication with the former employee, but the access privileges had been appropriately adjusted.
Nevertheless, we concur that an improved process is required to assure synchronization between changes in employee status/responsibilities and associated changes in data access privileges. In October 1995 a "re-certification" process was implemented whereby every 6 months responsible officials are provided lists of currently active financial-related operating system accounts and access privileges for employees within their department(s) for review and written approval. Reference: Financial Data Management's Policies and Procedures.
(g) Concur. Effective September 1995, IBM ES9000-RACF user IDs are automatically revoked after a certain amount of time of not logging onto the system.
SUN-UNIX
(a) Passwords can be one character and never have to be changed.
F - 101

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
(b) The ROOT password is used by 13 technical support staff. The ROOT password provides the user with powerful access capabilities that circumvent normal security and also allows the user to change security settings on the system.
(c) We identified a number of employees that still had access to the SUN system that had been terminated.
Mana~ement Response
(a) We concur with the observation that passwords can be one character and never have to be changed. Password length requirement is not a function under administrative control on SunOS, but we have enabled password aging on that system. Furthermore, we have migrated the Capital Assets Accounting server application from a SunOS platform to a Solaris platform where passwords must be at least six characters and password aging is enabled.
(b) We concur that ROOT passwords are currently available to the members of the OIT Technical Support staff. We will revise ROOT password management for the fmancial-related UNIX platforms so that each ROOT password is available only to those few individuals who require it for daily system administration duties, and their manager. Projected completion date: November 1995. Responsible official: Manager ofOIT Technical Support.
(c) We concur with the observation that a number of accounts in the names of terminated employees were defmed on the system. However, these accounts were set as "NP" (i.e. no password) and could not have been accessed by the former employees; the accounts had remained defmed pending disposition ofthe former employees' files. Procedures will be revised so that ownership of a terminating employee's files will be transferred and his or her accounts removed. Projected completion date: November 1995. Responsible official: Manager ofOIT Technical Support.
RS6000-AIX
(a) Passwords are required to be changed by the system after 36 weeks have elapsed.
(b) Consistent with the SUN security, the ROOT user ID is shared by all of the technical support staff.
(c) We identified a number of employees that still had access to the RS6000 system that had been terminated.
Mana~ement Response
(a) We concur with the observation. We do not infer a recommendation.
(b) We concur that ROOT passwords are currently available to the members of the OIT Technical Support staff. We will revise ROOT password management for the fmancial-related UNIX platforms so that each ROOT password is available only to those few individuals who require it for daily system administration duties, and their manager. Projected completion date: November 1995. Responsible official: Manager ofOIT Technical Support.
(c) We concur with the observation that a number of accounts in the names of terminated employees were defmed on the system. However, these accounts were set as "NP" (i.e. no password) and could not have been accessed by the former employees; the accounts had remained defmed pending disposition of the former employees' files. Procedures will be revised so that ownership of a terminating employee's files will be transferred and his or her accounts removed. Projected completion date: November 1995. Responsible official: Manager ofOIT Technical Support.
F -102

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS CURRENT YEAR
CYBER-NOS (a) We identified a number of employees that still had access to the CYBER system that had been terminated. Mana'lement Response (a) Reference the response to IBM ES9000 - RACF, (t). NOVELL NETWORK (a) A software consultant has unlimited access rights to the Solomon Accounts Receivable programs and data files and also
the Novell System directory. Additionally, any time the consultant makes changes to the system, the user ID that is used is not logged or monitored to ensure that only authorized changes have been made. (b) We identified a number of employees that still had access to the Novell Network (Apogee and Solomon) that had been terminated. (c) There is no terminal time-out feature for user inactivity on the Novell Network which could be used to reduce the risk of an unauthorized user accessing an unattended terminal session. Mana'lement Response (a) Concur. The consultant's network user ID was disabled by Financial Data Technology (FDT) in February 1995. If access is required by the consultant in the future, activity will be closely monitored by FDT. (b) Concur. Novell Network accounts for terminated employees were disabled in February 1995. In September 1995 a process was implemented whereby Financial Data Technology (FDT) verifies users and associated groups and directory rights on a monthly basis. Further, the Bursar has been requested to notify FDT immediately when an employee's status changes that requires associated changes in access privileges. (c) We concur that there is no terminal time-out feature on the Novell network. However, in October 1995, Financial Data Technology (FDT) discussed with the Bursar the pro's and con's of implementing a terminal time-out feature for those users still using Novell. (A new, Unix-based Student Accounts application was implemented in May 1995 which does not reside on the Novell Network server.) In the Bursar's opinion, the environment is secure and implementation is not warranted. However, the Bursar does want to investigate using hardware passwords and screen saver passwords for the machines in use during registration. This will be implemented during Winter Quarter 1996 registration. Responsible official: Manager of Financial Data Technology. NOVELL-APOGEE ACCOUNTS RECEIVABLE SYSTEM (a) Employees have update capabilities on the Apogee application system that are beyond their current job responsibilities. (b) Additionally, employees have access to a program utility that can be used to alter data files.
F -103

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Mana~ement Response
(a) Concur. A new, Unix-based Student Accounts application was implemented in May 1995 which does not reside on the Novell Network server. This has significantly reduced the Institute's risks associated with the Apogee system since the time of the audit. Production activity on Apogee is limited to historical data inquiry. In October 1995, all Apogee executables not related to the currently used functions were removed from the server. Blue Lance audit software is now installed on the production server. Maintenance of user access privileges is covered in the response to Novell Network, (b).
(b) Concur. The program utility referred to is BW Editor. The executable file for this editor was deleted from the application server in September 1995.
As noted previously, we strongly recommend the Institute enhance the information system security policy. The enhancement of the policy should be a joint effort ofusers, OIT, and any IT support departments (i.e., FDM). Executive approval and support should be obtained. Additionally, we recommend that Georgia Tech consider establishing an Institute-wide security administration function to administer and monitor system security, develop system security training and awareness programs that will communicate security responsibilities, and ensure adherence to the policy. Additionally, this function should be responsible for measuring the effectiveness of security procedures that support the information system security policy.
Mana~ement Response
Concur. Oversight for these responsibilities has been assigned to the reconstituted OIT Planning and Programs directorate. Activities include the preparation and maintenance of the "Georgia Tech Information Resources Security" World-Wide-Web pages; incident tracking; promoting security awareness at appropriate opportunities; and development of improved policies and guidelines.
Disaster Recovery Reportable Condition Audit Control Number 503a-95-08
Georgia Tech has developed a formal disaster recovery plan; however, the plan only includes system recovery of the payroll and other application systems residing on the CDC CYBER processing platform. The plan does not include the recovery of the IBM E89000 , UNIX platforms, or the Novell Network processing platforms which processes the fmancial application systems. Nor does the plan address the Institute's business issues faced by users. In addition, there are recovery issues with the aging CYBER and IBM ES9000 as previously described.
We recommend OIT management in cooperation with key user management address the following:
Perform a risk assessment of the Institute's application systems and business processes to identify those that are mission critical. Then determine the impact a disruption in computer processing would have on the critical application systems identify the resources needed for recovery.
In connection with the above, perform a costlbenefit analysis to assist in decision making and then develop the recovery procedures and business process procedures required to recover the critical application systems and restore processes in an organized manner and within an accepted period of time.
F -104

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
The plan should be periodically tested and maintained with the Institute's changing information technology environment. Personnel responsible for the implementation of the plan should be informed and trained oftheir responsibilities.
Mana~ement Response
A similar methodology was used in the preparation, selection of platforms, maintenance, and yearly review of the current OIT plan. This plan was adopted in May 1992, tested and updated in May 1993 and May 1994; the test/update cycle for 1995 is currently underway.
We concur that disaster recovery planning should be reexamined.
Work is underway to make the current OIT plan more comprehensive in terms of systems, applications, and platforms. One component of this, identification of critical applications and corresponding platforms, has been completed. Projected completion date: May 1996. Responsible official: Director of OIT Operations and Engineering.
Financial Data Processing (FDP) is developing a comprehensive Disaster Recovery Plan for the fmancial operations area which will include a risk assessment and recovery needs for the Novell servers. Projected completion date: May 1996. Responsible official: Department Manager of Financial Data Processing.
Facilities Reportable Condition Audit Control Number 503a-95-09
During a review of the environmental controls for the OIT computer rooms in the Rich Building and the Novell Network Server room which is located in the Lyman Hall building, we observed the following:
(a) There are no uninterruptible power supply systems to operate fmancial-related computer equipment other than the IBM RS6000 950 in the Rich Building. This increases the risk of data loss during power surges, spikes, or complete loss of power which would leave OIT unable to provide support.
(b) Due to the age of the Rich Building's infrastructure, the computer room has experienced water leakage during heavy rains. In addition, $10,000 worth of damage to CDC equipment was caused by aging water pipes that burst.
(c) The on computer rooms are highly visible to the Georgia Tech campus. There are back doors to the Rich Building that are
kept unlocked during business hours which encourages heavy traffic outside the computer rooms. We observed that there are surveillance cameras in place that are monitored by computer operations staff.
(d) The room containing both of the Novell Network servers does not have temperature controls (i.e., other than the overall building temperature controls). This could lead to possible equipment damage or failure due to extreme temperatures. We were advised that FDT is taking action to move the equipment to an environmentally secured location.
We recommend management consider performing a risk assessment of the environmental risks and exposures to the on
computer rooms and Novell Network Servers and use the results in connection with disaster recovery planning efforts.
F - 105

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Afana~ementResponse
(a) We concur that uninterruptible power supply systems to operate at least all the fmancial-related computer equipment is needed. OIT Operations and Engineering has made a formal recommendation and is seeking funding.
(b) We concur that the age of the Rich Building's infrastructure poses a risk of water damage to computer systems. An architectural study has been completed that addresses leakage problems. A funding request has been placed on the Institute's Major Renovation and Repair Fund (MRRF) priority list.
(c) We concur that the OIT computer rooms are highly visible and that the back doors to the Rich Building are kept unlocked during business hours. The back doors are required to be open for fire code compliance, and for wheelchair access to the lower level and the Rich Mac/Sun cluster level. We believe the surveillance cameras in place that are monitored by computer operations staff reasonably ameliorate the risk.
(d) We concur that the room that contained the Novell Network servers did not have temperature controls. In August 1995, the Novell Network servers were moved into room having proper environmental controls.
We concur with the recommendation that environmental risks and exposures be assessed in connection with disaster recovery planning. This will be done in conjunction with the planning described in the response to 503a-95-08.
Application Change Management Reportable Condition Audit Control Number 503a-95-10
Application change management procedures for systems residing on the IBM ES9000, IBM RS6000, CYBER, SUN, and Novell processing platforms varied in terms of formality and are applied at times inconsistently from one platform to another, particularly with the older systems. However, we observed that improved control procedures are in place for the newer UNIX-based systems. It should be noted that OIT's programming group, ISS, is not the only organization currently supporting the fmancial applications. Financial data management has a support group, FDA, that develops production-type programs using a fourth generation language and the same control practices should be applied.
We observed the following during our testing:
IBM ES9000 - ISS
(a) Procedures have not been formalized to require documentation of authorization, prioritization, and approval of programming changes to the fmancial systems.
(b) Also, procedures have not been formalized to require documentation supporting the migration of changes into the production environment by members of the FDA group.
(c) There are no security or library management control procedures to ensure that a programming change that is tested and approved by the user is the same version that is implemented in the production environment.
F -106

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
Mana~ementResponse (a) Clarification: Formal documentation of fmancial application software change authorization, in the form of service
requests submitted by authorized functional users, has been required for a number of years.
We concur with the recommendation to formalize procedures for documentation of prioritization and approval of fmancial application programming changes. Projected completion date: February 1996. Responsible official: Director of OIT Enterprise Information Systems, with assistance from Director of Financial Data Management.
We concur with the recommendation to reassess overall change control procedures. Projected completion date: February 1996. Responsible official: Director ofOIT Enterprise Information Systems, with assistance from Director of Financial Data Management.
(b) Clarification: Documented procedures do exist in Financial Data Management (FDM) for the migration of programs developed in OIT Enterprise Information Systems into the production environment. We interpret this observation to be a recommendation that migration of any Easytrieve modules developed by FDM for use in production be subject to the same controls, and concur. In October 1995, this was addressed in conjunction with the revised production migration procedures mentioned in the response to 503a-95-05(a).
(c) We concur with the need to ensure that a programming change that is tested and approved by the user is the same version that is implemented in the production environment. OIT Enterprise Information Systems (EIS) is currently working with Financial Data Management (FDM) to develop a common configuration management process that will address this issue. Projected completion date: February 1996. Responsible official: Director of OIT Enterprise Information Systems, with assistance from Director of Financial Data Management.
IBM ES9000-FDA
(a) The process for requesting, implementing, and executing ad-hoc programs (i.e., production-type programs using a fourth generation language) is largely informal and the procedures that do exist may not be consistently followed.
(b) There is no formal coordination of the type of system documentation that should be provided for ad-hoc programs that are turned over to user libraries. System-related documentation could provide the users with information on determining the nature and extent of balancing controls that should be performed, Also, this could provide users with the knowledge to make subsequent changes to the ad-hoc programs for their own purposes.
(c) As noted in a related issue regarding segregation of duties, FDA programmers are also responsible for implementing programs into the production environment.
(d) We observed an opportunity to improve the efficiency of the ad-hoc reporting process. Currently, there is no library or master list of all the ad-hoc report programs that have been created. This list may be beneficial for a report request that requires a slight modification to an existing program instead of recreating a similar program.
F -107

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS
CURRENT YEAR
A1ana~ementResponse
(a) Clarification: Procedures do exist for ad-hoc requests which require documentation by the analyst as to requester name, nature of the request, status history of actions taken to complete the request, and level of effort. However, we concur that some additional formalization of the process will be helpful. In September 1995, Financial Data Management (FDM) enhanced the ad-hoc procedure to require at least an E-mail confirmation by the requester formalizing the request. Reference: Financial Data Management's Policies and Procedures.
(b) We concur with the need for standard-format documentation of ad-hoc programs turned over to user libraries. This was implemented in September 1995. Reference: Financial Data Management's Policies and Procedures.
(c) Concur. In October 1995 the program migration responsibility was transferred to Financial Data Processing (FDP). Reference the response to 503a-95-05(a).
(d) We concur that a master list will be helpful as the number of ad-hoc requests increases. Financial Data Applications (FDA) maintains a master list of all ad-hoc projects. In October 1995, a report identifier was added to that list and the list was made available on the departmental file server. A copy of the list will also be attached to the monthly departmental status report.
CYBER
(a) One programmer is primarily responsible for making program changes to the fmancial applications processing on the CYBER. Informal documentation procedures are used and the applications are written in COBOL. However, due to the age of the system, documentation may not be adequate to permit another programmer to make the necessary changes efficiently in the absence of the primary programmer.
(b) The individual responsible for making the programming changes is also responsible for migrating programming changes into the production environment.
A1ana~ement Response
(a) We concur with the need for documentation adequate to permit another programmer to make necessary changes to the CYBER fmancial applications processing. Projected completion date: April 1996. Responsible official: Director of OIT Enterprise Systems.
(b) Concur. Refer to item 503a-95-05(d) above.
SUN UNIX and RS6000-AIX
(a) Although program change controls appear to be well-designed for the SUN-UNIX and RS6000-AIX processing platform, we observed that procedures were lacking to provide an audit trail (e.g., the project number could be documented on the request, test approval, and migration documents) of documentation supporting the programming change. Such documentation would be helpful in researching change-related problems.
F -108

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS CURRENT YEAR
Mana~ement Response (a) We concur with the recommendation to provide an audit trail of documentation supporting programming changes.
Change control numbers are already assigned to Service Requests, and are generally included in E-mail migration messages. We will enhance procedures to ensure the control number is added to testing and migration documentation. Projected completion date: November 1995. Responsible official: Director ofOIT Enterprise Information Systems. We recommend management reassess the overall change control procedures to identify control practices that can be consistently applied independent of the platform. Consideration to the above observations should be made when developing change management policies and procedures. The computing environment will certainly continue to be volatile as users demand more from their applications and the odds of successful changes being implemented the first time will be greatly enhanced if such controls are consistently applied. In addition, customer satisfaction should also increase. Mana~ement Response Reference the response to IBM ES9000 - ISS, (a). Computer Operations Reportable Condition Audit Control Number 503a-95-l1 During our review, we conducted walk-throughs of the computer rooms and performed various tests with our observations as follows: FDT (a) Daily incremental back-up tapes (i.e., only data that has changed is backed up) are stored next to the Novell server which is not located in an environmentally safe location. However, we are aware that FDT management is taking action to secure the equipment in another area that has environmental controls in place. (b) Back-up tapes are rotated off-site to an FDT employee's home. Mana~ement Response (a) We concur with the recommendation for environmentally safe storage of daily incremental back-up tapes. In August 1995 the Novell server was moved to an environmentally safe location in Financial Data Processing (FDP). Reference the response to 503a-95-09. (b) We concur with the recommendation to formalize procedures for the off-site storage of backup tapes for the Novell Networks. In October 1995 a back-up procedure to store weekly and monthly backup tapes in the vault in Grants and Contracts Accounting was implemented.
F -109

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS CURRENT YEAR
OIT (a) As noted in a related issue on system security, data stored on tape media is not currently protected by RACF. Instead,
manual procedures, which could be circumvented, are employed. Written tape labels on the tape reels have a list of user IDS that have been designated to write to that particular tape reel. Computer operators, responding to a request to mount a tape reel, are required to review the tape label to determine if the requesting user ID is authorized. A user ID could be written on the tape label without owners of the data being made aware. (b) We observed that backup data residing on tape media is rotated off-site on a weekly basis. This increases the risk of lost data (up to one week) in the event of a disaster situation that impacts the computer room and tape media. Mana~ement Response (a) We concur with the recommendation to develop procedures to protect fmancial data residing on tape media. See response to 503a-95-07, IBM ES9000-RACF, (c). (b) We concur with the recommendation that management consider rotating backup tapes off-site on a daily (rather than weekly) basis, and have done so. Backup tapes are used, of course, not only for disaster recovery but also for recovery from media failures, program malfunctions, user errors, and the like. When a reload is required, it is most often from the previous night's backup. If that tape were not on-site, it would extend recovery time for each incident by approximately two hours for tape retrieval. Thus, we believe that the benefit (reducing exposure for lost data from one week to one day), given the risk (an unlikely disaster situation that impacts both the computer room and tape media), does not justify the cost (extending each interruption of service due to a routine recovery procedure by two hours). We have also considered making duplicate backups (one for off-site, one for on-site), but we do not have the tape drive capacity nor the backup time window to accomplish this. Also, modifications to the backup software would be required. We recommend that management formalize procedures for the off-site storage of backup tapes for the Novell Networks. These procedures should address environmental storage issues. We also recommend that management develop procedures to protect fmancial data residing on tape media. In addition, we recommend management consider rotating tapes off-site on a daily basis to facilitate recovery efforts. Mana~ement Response Reference responses to FDT(b), OIT(a), and OIT(b).
F - 110

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS CURRENT YEAR
Run Sheets Reportable Condition Audit Control Number 503a-95-12 The table of contents listing of FDP's computerized run sheets (i.e., instruction sheet for production processing - grouped by processing cycles) is not in sufficient detail that would inable an unfamiliar person to determine which run sheet should be utilized for any given processing day. We recommend that FDP management develop documentation for the run sheets to assist in staff cross-training and to ensure production jobs are consistently run in accordance with management's intentions. Mana'lement Response We concur that such documentation might be of value. In March 1995, Financial Data Processing (FDP) created run sheet templates for various processing scenarios based upon processing cycles and various possible sources of data input. This information is electronically available to the operations staff in case supervisory personnel are not available to create the needed run sheets. Problem Management Reportable Condition Audit Control Number 503a-95-13 We observed that OIT's help desk may not be providing the most effective support possible to all users. In addition, a historical trend analysis of system related problems and their resolution is not available. We understand that OIT has a project underway to redefine the help desk function. We recommend OIT management consider enhancing help desk procedures to provide for a historical trend analysis of system related problems and their resolution. This information could be used to proactively address system related problems. Mana'lement Response Concur. Graphs and reports showing trends in (1) problem resolution time, (2) a customer satisfaction index, and (3) availability and loading of the major production systems are now prepared and presented to management and staff weekly. A Customer Service Process Improvement Team submitted its report in March 1995, and many of its recommendations have been implemented. A software package with enhanced functionality (REMEDY) is being installed (initial implementation: October 1995; full implementation: June 1996). What was previously the Helpdesk function has been elevated to the OIT Customer Support Center directorate. Responsible official: Director of OIT Customer Support Center.
F - 111

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS CURRENT YEAR
Naming Convention Standards Reportable Condition Audit Control Number 503a-95- 14 Naming convention standards are not consistently applied to the fmancial application systems, particularly the older systems residing on the IBM ES9000. As naming convention standards can play an important role in the efficiency of system security administration, we recommend OIT management develop such standards.
A1ana~ementResponse
We concur that naming standards are important. Naming standards for production applications on the IBM ES9000 are well defined but, over time, some production data sets have been created outside of the naming standards. In conjunction with the RACF clean-up (reference the response to 503a-95-07, IBM ES9000, (a)), production data sets that are not named with a high level qualifier that identifies them with a particular production group will be renamed. In addition, the RACF access profile for each production data set will be examined to ensure proper group-level access privileges are defmed. Projected completion date: January 1996. Responsible official: Director of Financial Data Management. System Software-Change Control Reportable Condition Audit Control Number 503a-95-15 OIT has developed high-level guidelines for testing, approval and implementation of system software changes and installations for all of the platforms in the scope of this review. However, these procedures may not be sufficient to provide assurances that changes and installations have been thoroughly tested and authorized by management. We recommend management consider developing additional procedures in support of the high-level guidelines that exist in regards to the testing, approval and implementation of system software changes and installations.
A1ana~ementResponse
We concur with the recommendation to develop additional procedures regarding the testing, approval, and implementation of system software changes and installations. Projected completion date: November 1995. Responsible official: Manager ofOIT Technical Support.
F -112

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

509-94-01 509-94-02 509-94-03 509-94-04

See Audit Control Number 509-95-02 Corrective Action Plan Implemented See Audit Control Number 509-95-01 Corrective Action Plan Implemented

PRIOR YEAR

ELIGIBILITY Ineligible Student Receiving Student Aid Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Costs: $1,175.00 Audit Control Number 509-95-01
The audit report for the year ended June 30, 1994, noted that an ineligible student had received $5,450.00 for student fmancial aid. During the year under review, the University received reimbursement of$3,525.00 for the Pell Grant Program and $750.00 for the Federal Supplemental Educational Opportunity Grant Program. Reimbursement for the remaining balance of $1,175.00 should be secured from the student involved for refund to the Pell Grant Program.
Mana~ement Response
We concur with this recommendation. Georgia State University is continuing our efforts to secure total reimbursement from the student. The balance of$I,175.00 will be reimbursed to the Pell Grant Program upon receipt.
PRIOR YEAR/CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Excessive Fee Waivers Financial Statements Audit Control Number 509-95-02
The audit report for the year ended June 30, 1994, disclosed that fee waivers by Georgia State University for international students exceeded limits established by the Board of Regents' Policy Manual. For the year under review, fee waivers by Georgia State University for international students again exceeded limits established by the Board of Regents' Policy Manual. Guidelines as set forth in Section 704.03(b) state that the number of waivers for international students in effect at any time should not exceed one percent of the equivalent full-time students enrolled at the institution in the fall quarter immediately preceding the quarter for which the out-of-state tuition is to be waived. The number of fee waivers for international students granted by the University that exceeded the allowable limit for each quarter are as follows:

F - 113

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
GEORGIA STATE UNIVERSITY PRIOR YEAR/CURRENT YEAR

OUARTER

LIMIT OF FEE WAIVERS
ALLOWED

ACTUAL FEE WAIVERS
GRANTED

FEE WAIVERS IN EXCESS OF LIMIT

Summer Quarter 1994 Fall Quarter 1994 Winter Quarter 1995 Spring Quarter 1995

164

185

21

164

200

36

167

236

69

167

228

61

Management acknowledges that fee waivers have exceeded the established limits and has requested an exception to the Policy
.Mi!mlill from the Chancellor's office of the Board of Regents.

The University should implement procedures to ensure that student fee waivers for out-of-state tuition of international students do not exceed limits established by the Board of Regents' Policy Manual.

A1ana~entResponse

We concur with this recommendation. The University had requested the Board of Regents to grant a variance to the Policy Manual for the period of the audit. As a result of a comprehensive review of university system tuition and fee policies, the Regents recently approved a new policy. The new policy provides that colleges and universities may grant non-resident fee waivers for up to 2% of the EFT enrollment. The University's number of fee waivers will comply with the Board of Regents policy.

CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Equipment Inventory Records Reportable Condition - Material Weakness Audit Control Number 509-95~03
For the year under review, the equipment inventory records of Georgia State University were not maintained in accordance with OMB Circular A-110, subpart C and the State PrQPert,y System Manual. A complete physical inventory of equipment had not been conducted by the University in the prior three fiscal years. Regulations require that a complete physical inventory of equipment be conducted at least once every two years.
The University should take a complete physical inventory of equipment to comply with Federal regulations and the State Property System Manual.
Federal Grantor A~encies Affected:
U. S. Department of Education U. S. Department of Energy U. S. Department of Health and Human Services National Aeronautics and Space Administration National Science Foundation U. S. Postal Service

F - 1I4

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
GEORGIA STATE UNIVERSITY CURRENT YEAR
Manq~ement Response We concur with this recommendation. The University has implemented changes to our policies and procedures to ensure compliance with the Federal regulations and the State Property System Manual. All appropriate personnel have been apprised ofthe requirements associated with the regulations. We are currently completing the physical inventory for the University and will maintain compliance with all requirements.
F - 115

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS CURRENT YEAR

Information Systems Strategic Planning Reportable Condition Audit Control Number 509a-95-01

GSU has historically never had an overall university-wide strategic plan. Only recently, has a university-wide strategic plan been developed which was approved by the University Senate on March 2, 1995. Accordingly, strategic planning for information systems could not be linked to the university and resource planning for information technology was not effective. This has resulted in the following situations:



The inherent nature of the University budget process creates a motivation for budget centers to utilize

remaining funds toward the end of the year for technology requests to ensure adequate or similar

funding in the following years. A bottleneck is often created with technology requests toward the end

of the year when funds are still available. For example, many departments have the tendency to

request all of their network connections during the last few months of the fiscal year. Resource

planning for the WCC becomes complicated during crisis or reactionary mode of operation. The

preferred approach is to align resources with the appropriate advance planning done by users.



Since users, almost entirely, have been charged with determining their own technology and

requirements, there are complications and frustrations in planning resources in the WCC and Financial

Systems programming support area. The tendency is to be more reactionary in nature rather than

aligning resources consistent to the benefit of the respective user communities. Additionally, there

is a tendency for some departments to create their own "pockets" of technology support. There is also

an increased belief by users that the university is not capitalizing on newer technology to provide

more "user friendly" tools and better accessibility to data to serve information needs.

An effective strategic plan for the deployment of information technology is imperative to adequately plan for resource needs. The establishment of the Chief Information Officer ("CIO") position is an important step by the university in recognizing the role information technology will play in its overall strategic plan. We recommend that the university continue with its initial joint planning efforts and strive to successfully integrate a strategic plan for information systems with the university's strategic plan.

Mana~ement Response

We concur with this recommendation. The university has hired a new Chief Information Officer who will playa major role in further developing the strategic plan for information system and assuring that it is integrated with the university's strategic plan and that it is consistent with the strategic plans of the University System of Georgia. This process is expected to be completed by June 30, 1996.

F - 116

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS

CURRENT YEAR

Information Systems Security Policy Reportable Condition Audit Control Number 509a-95-02

Georgia State has not developed an overall comprehensive security policy. The university does have a computer ethics policy that was distributed to system users in early 1995; however, this policy is predominately directed toward GSU students access and does not provide for the following:



Defmed ownership of critical fmancial applications and associated information resources that require

protection.



Written standards that specify the appropriate access levels according to job responsibilities for

system users and procedures for communicating changes in job responsibilities.



Central accountability for developing, monitoring, and enforcing information security procedures.

The lack of a security policy will perpetuate inconsistent procedures when administering security access capabilities. This inconsistency increases the risk of unauthorized access to systems and applications.

We recommend GSU management develop a university-wide information system security policy that extends beyond the ethics policy. This policy should address ownership, accountability, and responsibility for protecting information resources. Policy development will require the support and participation at the most senior levels of leadership. Once the policy is established and there are appropriate personnel in place to ensure the policy will be adhered to, the Wells Computer Center ("WCC") personnel and the Financial Systems group can assist as custodians of the information resources versus decision makers in granting access capabilities.

Mana~ement Response

We concur with this recommendation. Currently, the university is undertaking a business process re-engineering project for all of its administrative information systems. Key components of this project will be addressing ownership, accountability, and responsibility for protecting information resources. This project has the support of the senior levels of leadership. Virtually all areas of the university are represented on this project with many serving as leaders on a full time basis. The ChiefInformation Officer has charged the project team with completing the planning stages of the project prior to June 30, 1996. Implementing the plan for all systems is expected to take approximately three years which coincides with the expected implementation of purchased administrative software packages.

F - 117

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS

CURRENT YEAR

Information Systems Security-Technology Specific Observations Reportable Condition Audit Control Number 509a-95-03

It should be noted that the financial application systems are afforded two layers of protection; system level security and application level security. Our review was limited to the overall system level security.

We observed several opportunities to improve information system security controls. We believe these observations could be directly or indirectly attributed to the lack of a university-wide information system security policy as described earlier. Our observations are organized into the following areas: RACF, IDMS and overall security.

RACF

Minimal RACF monitoring is performed.



Database administrators have the RACF SPECIAL attribute (i.e., the capability to change system

security settings) but do not require this access on a day to day basis. This increases the lack of

accountability over changes to RACF security settings.

Combined with minimal RACF system security monitoring, there is an increased risk of individuals making unauthorized changes to RACF security settings.



Two RACF options do not appear appropriate:

a.

Inactive User IDs option - user IDs are not automatically "revoked" after a period of system inactivity.

b.

Password syntax rules-passwords can be a minimum of three characters. This increases the risk of passwords

being compromised.



All financial systems programmers have update access to production JCL which should not be

needed.

IDMS



Programmers have the capability to make changes to production data via the online fmancial systems.

This presents a risk of unauthorized changes to production data unless mitigated through some other

means of review. In addition, programmers also have update access to production programs. The

capability to provide automated audit trails of changes is available; however, at this time, these system

features are not fully utilized.



Currently, the Amdahl is running version 10.2 of IDMS (e.g., GSU's database management system)

which has limited security features as follows:

a.

Passwords never have to be changed and can be a minimum of one character. Our testing of "default"

passwords, revealed that many users are not changing their passwords periodically.

F - ll8

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS

CURRENT YEAR

b.

Monitoring of security is not available which increases the risk of unauthorized activity for the online fmancial

applications going undetected.

c.

Application level security is not available. When users are granted update capabilities to an on-line fmancial

application; by default they will be given update capabilities to all data for that application. This increases the

likelihood that appropriate segregation of duties is not maintained.

d.

It is our understanding that version 12 ofIDMS has enhanced security features and offers "hooks" to RACF

which could provide for additional security at an application level, thereby facilitating proper segregation of

duties.

Overall Security



Programmers, Data Base Administrators, and systems programmers administer different aspects of

RACF and IDMS system security. This creates a challenge in identifying potential security exposures

from an overall system level due to system dependencies and relationships.

For example, changes to network security could impact RACF security which could then have an impact on IDMS resources. Additionally, there is an increased lack of accountability and responsibility overall for the protection of information resources.

As noted previously, we recommended GSU develop a university-wide information system security policy. The development of this policy should be ajoint effort of users, Wells Computer Center, and any support departments (i.e., Financial Systems). Additionally, we recommend that GSU consider establishing a university-wide security administration function to administer and monitor system security, develop system security training and awareness programs that will communicate security responsibilities, and ensure adherence to the policy. This function should be responsible for measuring the effectiveness of security procedures that support the information system security policy. We also recommend that management review the above technology specific issues in connection with the security policy and develop an action plan for strengthening security controls.

Mana'{Jement Response
Information System Security-Technology Specific Observations. We concur with this recommendation. As noted previously, the university is undertaking a business process re-engineering project for all of its administrative information systems. Key components of this project will be addressing ownership, accountability, and responsibility for protecting information resources in both current legacy systems and future Client/Server systems. The Chief Information Officer has charged the project team with completing the planning stages of the project prior to June 30, 1996.
Information System Security Administration. We concur with this recommendation. The university recently has formed an Information Systems and Technology Advisory Committee with the responsibility of providing a management review mechanism for technology issues. This committee will consider the establishment of a university-wide security administration function to administer and monitor system security, develop system security training and awareness programs that will communicate security responsibilities, and ensure adherence to the policy. Before June 30, 1996, the ChiefInformation Officer will review security issues with the committee and develop an action plan for strengthening security controls.

F - 119

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS

CURRENT YEAR

Program Change Management Controls Reportable Condition Audit Control Number 509a-95-04

Financial Systems programmers are responsible for making programming changes to financial applications and migrating them into production. Currently, security controls and audit trails are not in place to prevent unauthorized or untested programming changes from being implemented into GSU's production environment. There are no formal programming, testing and documentation standards in place for the Financial Systems group. (It is our understanding that the Financial Systems group is in the process of developing these procedures.)

Based on our interviews with various users of the fmancial application systems, there appears to be high level of satisfaction in terms of system support due in part to GSU's fmancial application systems being stable and not many changes being made with the exception of regulatory and "must have" changes. Accordingly, the risks associated with the lack of formal procedures may not be as high. However, GSU may be considering significant changes in the future, such as implementing a client server environment, which may increase system development and maintenance activity. We believe change will necessitate an increased formalization of programming standards and control procedures to ensure only authorized activities take place.

Looking forward, we recommend GSU evaluate the overall design and structure ofthe programming support process to determine the best organization that will deliver high-quality service to university application system users. We recommend the university consider the following:



Establish a quality control function responsible for monitoring and reviewing the programming

changes and development efforts to ensure programming changes are made in accordance with

management's objectives. Such a control function could also be responsible for independently

implementing programming changes into the production environment. Additionally, this control

function could participate in new systems development projects to ensure effective controls are

designed into new systems and testing is satisfactorily performed.



Establish an emergency program change process which provides temporary "free and open"

controlled access to a production environment that is monitored and reviewed by management. This

process would also require programmers to perform the same level of documentation for normal

programming changes.

Mana"ement Response
We concur with this recommendation. The Chief Information Officer has been charged with evaluating the design and structure of the Information Systems and Technology functions, including programming support, to determine the best organizational structure that will deliver high-quality service to all university users. A re-organization is expected to be implemented in July 1996. The re-organized Information Systems and Technology division will include the establishment of a quality control function for programming changes which will include an emergency program change process and appropriate review.

F -120

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS

CURRENT YEAR

Disaster Recovery Reportable Condition Audit Control Number 509a-95-05

There is no overall business continuity plan for computer system recovery in the event of an extended interruption in computer processing. Depending on the timing and criticality of certain applications, the university could be vulnerable to disruptions at the central WCC location.

We recommend that WCC management in cooperation with university management consider the following actions:



Perform a risk assessment of GSU's application systems and business processes to identify those that

are mission critical. Then determine the impact a disruption in computer processing will have on the

critical application systems to identify the resources needed for recovery.



In connection with the above, perform a costlbenefit analysis to assist in decision making and then

develop the recovery procedures and business process procedures required to recover the critical

application systems and restore processes in an organized manner and within an accepted period of

time.



The plan should be periodically tested and maintained with GSU's changing information technology

environment. Personnel responsible for the implementation of the plan should be informed and

trained of their responsibilities.

Mana~ement Response

We concur with this recommendation. Under the direction of the Chief Information Officer, the university is undertaking a business process re-engineering project for all of its administrative information systems. Key components of this project will be identifying and performing a risk assessment of the mission critical business processes both for the existing legacy system and future Client/Server system. Prior to December 31, 1996 a complete disaster recovery plan will be developed, including backup and recovery procedures, training, review and testing.

Problem Management Reportable Condition Audit Control Number 509a-95-06
In response to the EDUCOM Consulting report, WCC is developing a comprehensive Help Center which is expected to be in operation within the next few months. The design of Help Center procedures should address the current issues which include the need for: (1) a centralized program management facility where GSU's user community can obtain help with computer related problems, (2) sufficient capacity and accessibility to handle the influx of problem requests.
We recommend the centralized Help Center provide a centralized and efficient means of logging and referring problem requests which will enable WCC to track the solution response time and use satisfaction via periodic reports and trend analysis.

F - 121

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. J995
GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS
CURRENT YEAR
A1ana~ementResponse
We concur with this recommendation. The Help Center has been created and is currently using new software to provide a centralized and efficient means oflogging and referring problem requests. With this software we can track the solution response time and user satisfaction via periodic reports and trend analysis.

Wells Computer Center Facilities Reportable Condition Audit Control Number 509a-95-07

During our tour of the Wells Computer Center computer room facilities we observed the following environmental risks:



The computer room is susceptible to fire damage since there is no sprinkler system and there appears

to be significant printer paper, software manuals, and other combustible material residing in and

around the computer room.



The computer equipment (Amdahl mainframe) is susceptible to an extended interruption of power

since there is only one main power supply and there is no backup power supply such as a diesel

generator (see also related item regarding Disaster Recovery). Also, there is some risk of data loss

since there is no uninterruptible power supply or other power conditioning system in place.



Because the WCC is located on the basement level and there are not water detectors in the computer

room, there is also a risk of water damage to computer equipment.

We also noted other areas in which control improvements could be achieved:



Maintenance performed on computer equipment is not consistently recorded or analyzed. Data which

is recorded is not summarized periodically to determine if certain equipment is causing production

processing problems. This data could be used to support equipment upgrades and possible

preventative maintenance contracts.



There are no formal procedures to notify operations management of an employee's termination or

transfer. A formal process could reduce the risk of unauthorized individuals gaining access to the

computer room. Also, operations could supplement this by periodically reviewing badge access

records to determine appropriateness and access need.

We recommend Facilities management in conjunction with WCC management perform a risk assessment of the environmental concerns for the computer center. Considering costs vs. benefits, prioritization and funding should be obtained for the environmental concerns that present unacceptable risks. Additionally, WCC management should consider tracking the maintenance that is occurring on the computer equipment to provide a historical analysis of maintenance required. Also, we recommend WCC management enhance the existing controls that ensure only authorized personnel are granted physical access to the computer room.

F - 122

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS
CURRENT YEAR
Mana"emenl Response
We concur with this recommendation. A new sprinkler system will be operational in the first quarter of 1996. The Chief Information Officer will request that the Facilities management in conjunction with the WCC management perform a risk assessment of the environmental concerns for the computer center. Funding will be requested for correcting unacceptable risks. The Director of the WCC will consider tracking the maintenance that is occurring on the computer equipment to provide a historical analysis of maintenance required. A card entry system to control access to the computer room has been purchased and is being installed. These activities are expected to be completed prior to June 30, 1996.
Computer Operations Reportable Condition Audit Control Number 509a-95-08
Full system back-ups are removed from the computer room, however the backups are stored in close proximity to the computer room. In the event of a disaster affecting the WCC, there is a risk that the off-site tapes could also be adversely affected due to their close proximity.
WCC management should consider storing the tapes in an environmentally secured location that is not in such close proximity to the computer room.
Mana"emenl Response
We concur with this recommendation. The Wells Computer Center has implemented a new back-up tape storage procedure. Back-up tapes are being stored in a facility not adjacent to Library South.

System Software Change Control Reportable Condition Audit Control Number 509a-95-09

Issues related to system software change control procedures for the Amdahl mainframe are as follows:



IBM will soon discontinue standard support for the operating system version ofMVS (2.3.3) that is

currently being used by GSU. In the event of a new system error that has not been previously

addressed by IBM, the MVS environment could be adversely impacted with downtime. This could

result in the inability to perform day-to-day operations and may result in future incompatibilities with

desired upgrades to hardware and software. It is our understanding that the decision to not upgrade

the MVS version was a factor of cost versus the current benefit to be provided.



System support personnel for IDMS and MVS support are responsible for making system changes

and implementing these changes into production. In addition, there are no documented change

procedures for the IDMS system. Without formal control procedures in place, there is an increased

risk of unauthorized or untested system software changes being implemented into GSU's production

environment.

F - 123

I

I
o lATE OF GEORGIA
I
FINDINGS AND IMPROPER OR QUESTIONED COSTS
I

For the Fiscal Year Ended June 30, 1995
GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS
CURRENT YEAR
We recommend GSU management reevaluate the MVS version that is currently in production on the Amdahl mainframe considering the timeframes for system replacements. In addition, we recommend that management consider developing standards and procedures for IDMS system software changes. With the new version of IDMS expected in the next few months, this may present an opportune time to develop these procedures. Also, we recommend GSU management consider reducing the number ofsystem support staffthat have the capability of implementing system changes into the production environment to ensure control of changes and facilitate segregation of duties.
A1ana~ementResponse
We concur with this recommendation. The Director of the weewill reevaluate the MVS version that is currently in production
on the Amdahl mainframe considering the time frames for system replacements. The Director will also consider developing standards and procedures for IDMS system software changes. Furthermore, it will be taken under advisement to reduce the number of system support staff that have the capability of implementing system changes. These activities will be accomplished prior to June 30, 1996.

I I I I I I
I I I I I

I

I

I

I

I

I

I

I

I

I

I

I

I

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I
F - 124

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MEDICAL COLLEGE OF GEORGIA STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

512-94-01

See Audit Control Number 512-95-01

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 512-95-01
The audit report for the year ended June 30, 1994, disclosed deficiencies in Medical College of Georgia's equipment inventory records. For the year under review, an equipment inventory sample of 102 randomly selected items was utilized to test the accuracy and validity of the equipment inventory records. The results of our testing procedures disclosed the following exceptions:
(1) Eighteen (18) items, with a total cost of $66,429.09 were not located.
(2) Eleven (11) items were surplused, with a total cost of $66,338.65 and remained on the inventory records.
(3) Two (2) items, with a total cost of$18,054.00 were traded-in on new equipment and remained on the inventory records.
In addition to the exceptions listed above, additional audit procedures disclosed the following deficiencies:
(1) Equipment inventory items in use with a cost of $3,849,298.68 did not have decals and were not on the inventory records.
(2) Equipment inventory items in storage at the College with a cost of $942,591.48 did not have decals and were not on the inventory records.
(3) Equipment inventory items with a cost of $286,800.14 were identified as received by College personnel, but were not on the equipment inventory records.
(4) Three (3) items, with inventory decals, carrying a total cost of$24,980.00 were not on the inventory records.
(5) Equipment inventory items with a cost of $381,945.48 were identified as paid for by College personnel, but were not on the equipment inventory records.
(6) A variance of $651,695.19 remained unidentified between the College's general ledger and the subsidiary equipment inventory records.

F - 125

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MEDICAL COLLEGE OF GEORGIA
PIDORYEMVCURRENTYBAR
The College should take a complete physical inventory of equipment. In addition, the College should establish appropriate procedures to strengthen internal accounting controls over the property management system to ensure that decals are affixed to all equipment inventory items, inventory items are entered on the records in a timely manner and subsidiary equipment inventory records are accurately reflected in the accounting records.
Management feels that these discrepancies were a result of the vast number of equipment transactions and the limited number of staff within the Property Management division to process them. As of the date of our audit, the College has contracted with a consulting firm to address the deficiencies in the Property Management records.
As a result of the discrepancies identified above, we were unable to determine the validity of the total equipment inventory valuation contained in the equipment inventory records, which is a component of the College's Investment in Plant.
A1ana~ementResQQnse
The variance in "some assets not being located where they were noted on the Property Ledger or not having the property record number affixed" is the same discrepancy noted in our prior audit report. As part of Plan of Correction, a consulting firm was hired to complete a campus wide inventory and formalize recommendations to resolve this problem. Facilities Development, Inc. was engaged for this project.
Facilities Development, Inc. completed a campus wide inventory in August of 1995 after the state auditor's report was fmalized. A preliminary report was presented in November and is currently being reconciled.
CURRENT YEAR
DRUG-FREE WORKPLACE ACT Failure to Include Required Provision in Drug-Free Workplace Policy Federal Financial Assistance Audit Control Number 512-95-02
The Federal Drug-Free Workplace Act of 1988 required institutions which receive a direct Federal grant on or after March 18, 1989, to develop a drug-free policy which contains the following requirements:
(1) A statement notifying employees that the manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition.
(2) Notification to the employee in the statement that as a condition of employment under the grant the employee will:
(a) Abide by the terms of the statement.
(b) Notify the employer in writing of any criminal drug statute conviction for a violation occurring in a workplace no later than five calendar days after such conviction.
Although the College received direct Federal funds during the year under review, the College's drug-free workplace policy did not contain the requirement that employees notify the employer in writing of any criminal drug statute conviction for a violation occurring in a workplace no later than five calendar days after such conviction.
F -126

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
MEDICAL COLLEGE OF GEORGIA CURRENT YEAR
This noncompliance occurred because of Management's decision to rely on notification from the Public Safety Department. However, this requirement should be included in the College's drug-free workplace policy. Federal Grantor A~encies Affected: U.S. Department of Defense U.S. Department of Education U.S. Department of Health and Human Services U.S. Department of Labor U.S. Department of Veterans Affairs Mana~ement Response The present Drug-Free Work Place policy has been amended to include language requiring classified staff to notify the Public Safety Office of any drug conviction for a violation occurring in the workplace within five days of conviction. The Public Safety Division routinely provided this notification in the past. The amendment has been forwarded to the Vice President for Business Operation for incorporation in the present Drug-Free Work Place Policy.
F - 127

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS CURRENT YEAR

Information Security Framework Reportable Condition Audit Control Number 512a-95-01

The information systems technological environment at Medical College of Georgia is becoming increasingly diverse and decentralized as the institution moves toward client/server based systems that will provide more flexibility and control for the end-users. As such, the primary responsibility for protection of critical information assets rests with the owners of that information, supported by some form of security administration (central and/or local) that will provide tools, expertise, and education. As traditional roles for security administration are redefined at MCG, there is a need for the development of an overall information security framework that will ensure management's responsibilities for protection of critical information assets are addressed. Specifically, we observed the following issues:



While MCG has defmed policy statements regarding ownership of information assets for functional

areas throughout the institution, an overall security policy has not been formally developed to defme

and communicate accountability and responsibility for the protection of critical or sensitive

information.



Information security administration functions are shared by numerous personnel in the Information

Services Division and user areas. However, there is no central security role at MCG to ensure

implementation and compliance with security policies, provision of security awareness training, and

monitoring of long-term effectiveness of the security framework.

We believe these issues undermine the long-term effectiveness of information security controls. Ultimately there is an increasing risk of unauthorized or inappropriate use of critical information resources. As the primary responsibility for the protection of information assets should be with the users (owners) of that information, we recommend users assume a significant role in assessing risks and identifying information to be protected. A formal institution-wide information systems security policy should then be developed to communicate accountability and responsibility for the protection of critical or sensitive information. This policy statement will form the basis for an information security framework that is supported by MCG management.

In addition, once such a framework is established, we recommend appropriate roles be defined that will perform the following: monitor compliance to policies, provide training to data owners and security administration personnel in developing and implementing standards and procedures, provide security awareness to system users, and monitor the long-term effectiveness of the overall security framework.

Mana'lement Response

MCG is developing a formal institution-wide information systems security policy. It will address the issues identified in this area. The policy will become the basis for an information security framework that will be supported by MCG management.

MCG will review the policy under development with the intent to communicate accountability and responsibility for the protection of critical or sensitive information. We do not think a central security function can adequately address the diverse environment at the Medical College of Georgia. We believe the formal institution-wide information systems security policy is the best approach in our campus environment.

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STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS

CURRENT YEAR

Information Systems Security--Platfonn Specific Observations Reportable Condition Audit Control Number 512a-95-02

We reviewed logical security for the IBM mainframe as it relates to the fmancial application systems that reside in the VSE environment. We reviewed primary access level security for the fmancial systems and also certain other system software controls to the extent that they restrict access of ISD personnel to production programs and data. We did not review application level security for the fmancial systems. ISD is currently in the process of converting all mainframe users for both the VSE and the MVS environments to NetView Access, which works as a front end to provide system access control through RACF (Resources Access Control Facility) security software for both environments.

RACF



Several user profiles have powerful RACF privileges including SYSTEM SPECIAL and, in many

cases, SYSTEM AUDITOR. These user profiles include four technical support personnel, the data

base administrator, and the computer operations manager, and 26 other user profiles including generic

user ID's (IBMUSER, GEMINI2, etc.) and production ID's. These powerful privileges allow users

the ability to create and change user profiles and make changes to RACF security settings.



Inactive user ID's are not automatically "revoked" after a period of time.



Passwords for console commands (RVARY passwords) that can be used to switch RACF from the

primary RACF rules database to the secondary rules database, or even disable RACF, have not been

changed from the installation default passwords supplied by IBM. These default passwords can

readily be found in IBM RACF reference materials. Unauthorized use of these commands could

allow users unrestricted access to all data sets, programs and system resources.

VSE Security



While VSE programmers are restricted by CONDOR from update access to production source code,

other ISD employees, including technical support, operations and some help desk personnel, do have

update access to production source code through CONDOR. While some of these employees may

have a business need to have such access, management does not regularly review CONDOR access

to ensure that it is appropriate and required based on an employee's current job responsibilities. In

addition, CONDOR security codes are not required to be changed on a regular basis.

As noted previously, we have recommended the establishment of an overall security policy statement for MCG and the defmition of various roles for the administration of security throughout the institution.
Based on the security policy and framework that is developed for MCG, we recommend ISD develop formal technology-specific policies and procedures that defme how the various security components and tools are to be used to provide the overall level of security desired. Once developed and implemented, management should consider performing a periodic review of security controls and associated procedures and tools to ensure that management's goals and objectives are being met.

F - 129

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS CURRENT YEAR
ManafJement Response The RACF software is currently being restructured to eliminate most of the SYSTEM SPECIAL user ids. The implementation of various groups for user areas and technical functions will significantly reduce the need for SYSTEM SPECIAL user ids. These are changes which have been planned for some time. Inactive user ids are revoked when an individual leaves the employment of the Medical College of Georgia. This revocation is initiated by the outprocessing paperwork for terminating employees. The installation default passwords for the console commands (RVARY passwords) have been changed. Help Desk staffno longer have update access to the production library. Access by technical support and operations is being re-evaluated in light ofthese fmdings. Management has reviewed access privileges for CONDOR user ids and will continue to do so on a periodic basis. CONDOR passwords are not changed regularly because the CONDOR system is behind the NetView Access system which requires the user to regularly change passwords. We feel this is adequate protection.
Physical Security Reportable Condition Audit Control Number 512a-95-03 The data center is located on the second floor of the MCG Annex Building, which also houses the Personnel and Patient Accounting departments on the first floor. While access to the building is restricted via a card key system at night, it is open to public access during business hours. There is substantial traffic in and out of the building during the day ofMCG employees and non-MCG personnel visiting Personnel or Patient Accounting. While access to the computer room is restricted at all times by a card key system, access to ISD office areas for programming, data base administration, network support and help desk, is not monitored or controlled during business hours. This situation increases the risk of unauthorized access to systems via unattended work stations, and risk of loss of equipment and supplies by theft. ISD has already proposed security measures restricting public traffic to one building entrance that would be monitored by an MCG employee. We recommend that these measures be implemented to minimize the risk of asset loss or unauthorized use of information systems resources. ManafJement Response The proposal to restrict building access to one entrance is being reviewed by MCG management. Management is aware of the need to limit access to the open office areas on the second floor of the MCG Annex Building.
F - 130

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS CURRENT YEAR

Application Development and Maintenance Reportable Condition Audit Control Number 512a-95-04

During our review of the application program change control process for VSE applications, we noted existing procedures are informal and are not documented. Specifically, we noted that:



There is no requirement for changes to be reviewed and approved by ISD management and users prior

to implementation into production. User Services Representatives (USR) are supposed to notify users

when a change is to be implemented, however this practice appears to be inconsistently followed.



Testing standards and procedures are informal. Programmers are responsible for performing testing

of their own work, however, testing plans and results are not documented or required to be reviewed

by management or users requesting changes.



Programmers are required to document program changes within the source code and in the job

scheduler, but our testing indicates that these procedures are not adhered to, and management does

not review for compliance.

The lack of formal, documented policies and procedures increases the risk that unauthorized, inadequately tested, or poorly documented program modifications may be placed into production. These risks are somewhat mitigated by the fact that the fmancial applications are supported in a maintenance mode only, and current change activity is low. However, consideration should be given to implementing or strengthening supervisory controls in this area if future plans include an increased level of development or maintenance activity.

Manar:ement Response

The USR function is supposed to coordinate the implementation of changes with the respective users. The director responsible for the USR function has been made aware of this issue and will follow-up to ensure the proper communications occur.

We recognize this as a shortcoming in the VSEIESA host based legacy systems. New host based applications are being developed under the MVSIESA operating system. In this environment, we have established development, testing, and training scenarios which adequately address this issue.

Applications management has been made aware of this shortcoming and will initiate a process to ensure compliance.

Problem Management Reportable Condition Audit Control Number 512a-95-05
The ISD Help Desk is responsible for providing assistance and support to over 7,000 users at MCG. An automated tracking system is used by the Help Desk to log problem calls and route them to the appropriate departments within ISD for resolution. During our review of the Help Desk function, we noted the following:

F131

I

~TATE OF GEORGIA

I

I
FINDINGS AND IMPROPER OR QUESTIONED COSTS

I

For the Fiscal Year Ended June 30, 1995

MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS

CURRENT YEAR



Policies and procedures do not define what types of calls are to be logged to the problem tracking

system, or define specific service goals for response and resolution of user calls.



Problem tracking reports are not analyzed to determine trends, pinpoint problem areas or measure

actual performance. Financial systems users indicated that questions and problems are often not

resolved in a timely manner.

We were advised by ISD management that alternatives are being considered for a different approach to problem management. We recommend that any approach under consideration ensure that policies and procedures clarify the type of calls to be logged and tracked by a help desk system. Specific service goals for response and resolution of user calls should be established. Once performance goals are established, tracking reports should be developed to analyze trends, identify problems areas and measure performance against goals.

Manaftement Response

The help desk function is currently being evaluated for co-sourcing (joint management, as opposed to outsourcing). The help desk area was reorganized just after the conclusion of the EDP Audit to address a number of issues including responsiveness.

I I I I I I
I I I I I I

Business Continuity Planning

I

Reportable Condition

Audit Control Number 512a-95-06

I

MCG has not yet performed a formal risk assessment of application systems and business processes to identify those that are

I

mission critical, and to determine the impact that a disruption in computer processing would have on these critical areas.

However, MCG is currently investigating possible alternative processing sites. Without having performed an initial formal risk

I

assessment or cost/benefit analysis, it is challenging to determine the resources needed for some defined level of recovery and

restoration. While the temporary loss of financial and student systems may not pose an immediate risk to the institution, hospital systems that process data on the IBM mainframe, are critical for patient care.

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Currently, some disaster recovery procedures are in place for backup and off-site storage of critical programs and data, but these

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have not been formally documented or fully tested. Backups of critical applications and data are performed on a daily basis,

however, the most current backup tapes are kept on site, while the previous day's tapes are rotated to an off-site vault. This could

I

result in loss of critical data when recovering from a backup that is dated up to 72 hours. In addition, the off-site vault is located

only two miles from the data center, and could be vulnerable to the same risk exposures as the data center.

I

The location of the college is vulnerable to flooding, however this exposure is somewhat mitigated by the location of the data

I

center on the second floor of the annex facility. While this mitigates the risk of damage to the data center itself, operations could

still be affected due to problems with transportation of employees, supplies and services to the facility, and damage to telecommunications facilities.

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F- 132

I

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS

CURRENT YEAR

We recommend that MCG ISD management and key user management consider the following:



Perform a risk assessment ofMCG's application systems and business processes to identify those that

are mission critical, then determine the impact a disruption in computer processing would have on the

critical application systems to identify resources needed for recovery and restoration. Perform a

costlbenefit analysis to assist in determining processes to be included in the recovery plan.



Develop and fully document the procedures required to recover the critical systems and restore

processes in an organized manner and within an acceptable period of time.



The plan should be tested periodically and updated as the business and information systems

environment changes. Personnel responsible for the implementation of the plan should receive

training on their responsibilities and participate in periodic testing of the plan.

Mana~ement Response
ISD management is aware of the need for a documented Business Continuity Plan and associated documentation and testing. ISD management will evaluate the costs of developing such a plan and forward this information to the appropriate institutional management.
The institution as a whole is looking at the issues associated with disaster preparedness. Alternatives being considered include MCG providing its own hot site using a P/390 based system.

User Services Representatives Reportable Condition Audit Control Number 512a-95-07
The User Services Group was created about two years ago to serve as a liaison between ISD and the user departments in assisting the user departments in defming, planning, budgeting and acquiring computer resources and coordinating all user requests for program development and enhancement.
During interviews with fmancial systems users, several expressed concerns regarding the USR program. Users indicated that, for the fmancial systems, USRs were not effective in handling their requests for program changes and enhancements. A common perception was that USRs did not have sufficient "clout" or dedicated resources to expedite requests.
We recommend management evaluate the USR program and the roles of the USRs as they relate to the fmancial systems applications. Management should consider redefming and/or restructuring the USRs' roles and responsibilities, with appropriate "buy-in" from the users to validate their needs for the USR function and to improve the effectiveness of the USR program.

F - 133

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS CURRENT YEAR
Mana'j{.ement Response The observations regarding the effectiveness of the USR function were based on the individual supporting the financial systems. We don't believe this is an accurate assessment of the overall USR function. These observations are not true of the overall USR function. As in any job category, an individual's effectiveness varies depending on the skills and experience brought with that person to the job. The EDP audit started approximately six weeks after the 'go-live' of a major hospital application which had required an inordinate amount of ISD and campus resources, this undoubtedly affected the division's responsiveness to other user areas. With the successful implementation of this system behind us, the allocation of resources has become more evenly distributed. This should improve the overall effectiveness the USR function. ISD management is evaluating the organizational structure on an ongoing basis to adapt to overall changes in the academic health care environment.
F -134

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

UNIVERSITY OF GEORGIA (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized as follows:

Audit Control Number

Status of Finding

518-94-01 518-94-02 518-94-03 518-94-04

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

CURRENT YEAR

FEDERAL FINANCIAL REPORTS Failure to Submit Required Reports in a Timely Manner Federal Financial Assistance National Research Services Awards [CFDA 93.186] Other Federal Financial Assistance Programs Audit Control Number 518-95-01

Condition: Approximately 8% of the reports relating to grants selected for testing were not filed timely. This percentage represents 2 of the 25 technical reports related to grants selected for review.

The following table lists the technical reports filed improperly:

Date Due

Date Submitted

1O-11-RH093-039 25-21-RD319-063

12-1-94 4-30-95

3-10-95 6-8-95

Criteria: Attachment H of OMB Circular A-II 0 establishes requirements for monitoring and reporting program performance.

Effective: Certain principal investigators failed to comply with the applicable program performance reporting requirements, which could result in loss of federal funds.

Cause: The cause of this fmding appears to be noncompliance with existing internal control features as opposed to the absence of such controls.

Recommendation: The University should continue its efforts to ensure that the improved internal controls for the monitoring of technical reports, which were established during fiscal year 1992, are being adhered to. This should be accomplished by contacting the faculty members whose reports were delinquent and reminding them of proper procedures. The University should consider developing a monthly report which lists all delinquent technical reports. This list should be submitted to the Vice President of Research so that he can monitor the timeliness of technical reporting.

The University's Response: These technical reports were submitted late. The principal investigators have been notified that reports should be submitted timely.

(*) FEDERAL COMPLIANCE REQUIREMENTS OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS
F - 135

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

UNIVERSITY OF GEORGIA (*)

CURRENT YEAR

As noted by the dates, two reports were submitted late. A system is in place to remind and follow up with principal investigators to submit reports timely.

FEDERAL FINANCIAL REPORTS Failure to Submit Required Reports in a Timely Manner Federal Financial Assistance Other Federal Financial Assistance Programs Audit Control Number 518-95-02

Condition: Approximately 8% of the reports relating to grants selected for testing were not filed timely. This percentage represents 2 of the 25 technical reports related to grants selected for review.

The following table lists the technical reports filed improperly:

Bud2et Number

Type of Report

Date Due

Date Submitted

25-21-RD319-063 25-21-RD319-063 25-21-RD319-063 1O-31-RE344-112

Quarterly Quarterly Quarterly Monthly

10-94 1-95 7-95 First working day of the month

12-8-94 4-4-95 8-4-95 Tenth working day of the month

Criteria: Attachment H of OMB Circular A- I 10 establishes requirements for monitoring and reporting program performance.

Effect: The University's business office failed to comply with the applicable program performance reporting requirements, which could result in loss of federal funds.

Cause: The grant agreements for these awards have a unique reporting requirement which stipulates that quarterly or monthly fmancial reports are to be submitted by the business office. Financial reports of this kind traditionally are not prepared quarterly or monthly. Therefore, the cause of this fmding appears to be due to a lack of knowledge of the required reports for these particular grants.

Recommendation: The University should strive to ensure that the required reports are submitted on a timely basis.

The University's Response: The fmartcial reports were submitted late. The business office is aware that reports should be submitted timely.

(*) FEDERAL COMPLIANCE REQUIREMENTS OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS
F -136

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS

CURRENT YEAR

Program Change Management Controls Reportable Condition Audit Control Number 518a-95-01
There is a process in place for programmers in the Financial Information Systems Group to make changes to application programs; however, the overall process and related procedures are informal and inconsistent. During our review of the change management process, we observed the following:



There are no formal standards for initiating changes to production programs. Requests for modifications and

enhancements to the existing fmancial applications are in the form of a written memo or an E-mail communication and

minor change requests are in the form of notes taken during a telephone conversation. There are no formal guidelines

for determining the significance of a change for consideration of user involvement, testing, and required documentation.



There are no formal programming, testing and documentation standards in place for the Financial Information Systems

group.



There is no formal communication to users of the status of requested changes.



Financial Information Systems programmers are responsible for migrating programming changes to fmancial

applications into production, therefore they have update capabilities to production programs. However, no software

change management tools are used to provide audit trails of such activity for subsequent review.

We believe the lack of formal standards and procedures may increase the risk of changes made to production programs that are not in accordance with management objectives, and unauthorized or inadvertent changes made to production programs.

We recognize that these risks may be lessened by mitigating factors such as the informal, close working relationships that have been established between Financial Information Systems and the various user departments, the maturity of UGA's fmancial systems, and the nature of changes (mostly minor maintenance).

We recommend the university consider establishing formalized program change management procedures for monitoring and reviewing maintenance and development efforts to ensure programming changes are authorized and are made in accordance with management's objectives. These procedures should include:



Required level of user involvement and approval



Guidelines for testing of changes



Required documentation standards supporting the change



Logging of update activity to programs and/or libraries

Manar:ement Response

All original requests for program modification are documented and tracked via the preparation of a Project Overview form (which includes work effort estimates) and assignment of a unique Project Request Number. This Request Log is used by management and team leaders to address load balancing issues and to monitor work progress. Completion dates are recorded for the major phases of each project's life from initial analytical work through fmal implementation.

F - 137

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
Subsequent, related requests for minor corrections or adjustments, which may be received via formal or informal means, may or may not be identified by a unique request number (depending on the significance of the endeavor), but they are reflected in each developer's personal log and included in each developer's contribution to the monthly progress report. The decision of whether or not to separately itemize these requests is delegated to the analyst assigned to each application system. The general guideline holds that high priority requests that must be addressed within four hours of receipt will be completed before the standard request paperwork can be routed through the appropriate channels. For these requests, emphasis is placed on after-thefact reporting.
As collaborators in the development of data processing solutions, FIS's primary clients are extremely knowledgeable ofthe status of outstanding requests. Some end-users with extraordinarily long and volatile lists of requests are kept informed via ongoing "status memos" prepared from the Request Log reports and routed to all affected parties for discussion and further prioritization. In accordance with the recommendations ofthe audit team, a client notification check box has been added to the Project Overview form to ensure communication with the end-user at the end of a project.
The diversity of programming languages and development platforms used over the course of some twenty-five years of application development have discouraged the acquisition and use of automated change management tools. Of the predominant languages used in FIS today, only NATURAL is adaptable to an automated approach in the form of Software AG's PREDICT Application Control, a product that is already scheduled for installation.
With minor course corrections over the years, these procedures have provided an appropriate degree of control given our computing environment, staff resources, and funding limitations.

Logical Security Reportable Condition Audit Control Number 518a-92-02

Application programmers have update access to production data in addition to production programs noted above. With respect to programs for most applications, the current library structure does not provide for restricting access to production applications based on programmer responsibilities. However, we understand that with the development ofNATURAL based applications, libraries may be more controlled such that access to production programs may be restricted based upon programmer responsibilities. It should be noted that this will not address access to production data.

The current access capabilities for programmers present the following risks:



Access capabilities are not based on specific job responsibilities.



Changes made to production programs and data may not be in accordance with management objectives.



Unauthorized or inadvertent changes may be made to production programs and/or data.

F - 138

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
We recommend management perform a risk analysis to determine the appropriateness of programmer access to production data and application programs. We encourage further segregation ofthe programs into separate libraries to manage access capabilities. At a minimum, management should consider system logging of all programmer updates to production data. These logs should be reviewed by management and the appropriate data owners on a regular basis. We also suggest utilizing emergency IDs on an as-needed basis to manage production updates.
Management Response
FIS programmers do not routinely update production data. They only update "live" data 1) when they act on behalfofthe Control & Data Entry Department, usually during non-business hours and in concert with that unit's Systems Scheduler personnel who log every problem call, and 2) when acting to correct problems identified by and at the behest of the end-user.
All updates of production data stored in IMS and DB2 databases are captured by the logging facilities inherent in those database management systems. The log data identifies the data being changed and the source of the change.
A small data processing organization like FIS cannot adequately serve its clientele without significantly emphasizing not only the cross-training of its personnel, but also the use of a multi-layered approach to application system support. While it would be preferable.from a risk perspective to totally isolate functions and narrowly restrict individual developer's access to application programs, it would dramatically decrease our responsiveness and ultimately the level of service that our clients require and have grown to expect and depend upon.
In accordance with the recommendations of the audit team, the FIS log of problem calls handled during non-business hours will be expanded to include entries for the entire staff rather than just hourly (non-exempt) personnel. The expanded FIS problem log will be reconciled with its Control & Data Entry counterpart and appropriately included in monthly status reports to management.

Disaster Recovery Reportable Condition Audit Control Number 518a-95-03

There is no overall business continuity plan for the restoration of computing resources in the event of an extended interruption in computer processing. Depending on the timing and criticality of certain applications, the loss of computer resources could cause significant problems related to service disruption.

We recommend that UCNS management in cooperation with university management consider the following actions:



Perform a risk assessment of UGA's application systems and business processes to identify those that are mission

critical. Then determine the impact a disruption in computer processing will have on the critical application systems

to identify the resources needed for recovery.



In connection with the above, perform a cost/benefit analysis to assist in decision making and then develop the recovery

procedures and business process procedures required to recover the critical application systems within an accepted

period of time.

F - 139

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS

CURRENT YEAR



UGA should consider establishing cooperative processing agreements with other state institutions to provide back-up

processing capabilities in case of prolonged system unavailability.

Management Response

The University seeks the assistance, both technical and fmancial, of the State Department of Audits in carrying out the recommended risk assessment and costlbenefit analysis. If another state office or commercial supplier of these services would be appropriate, we request that the Department of Audits advise us of such an organization. We believe that performance of the requested analyses by external specialists is necessary in order to insure that the results will be found credible in future EDP control reviews carried out by the State. In addition, the expected cost for such services is beyond the University to afford at this time.

With respect to establishing cooperative processing agreements with other state institutions to provide back-up processing capabilities, the University will continue to explore these possibilities. It should be noted that similar discussions and planning efforts have been carried out in the past with GIT with respect to providing back-up batch processing capabilities for critical applications processing on the CYBER NOS platforms installed at each institution.

Problem Management Reportable Condition Audit Control Number 518a-95-04
UGA does not utilize a centralized problem management system for the reporting or tracking of problems related to fmancial applications. Instead, problems are recorded at the departmental level and communicated by management through informal networks. As a result, trend analysis cannot be performed and management may not always be assured that problems are adequatley and timely addressed.
The University has recently established a team to address problem management for information systems. The team is evaluating methods and tools for use in formalizing the problem management function.
We recommend that UGA management continue to promote the current initiative. In addition, management should consider applying procedures and tools as appropriate for the tracking and communication of problems at the Business and Finance departmental level.
Management Response
The University will continue the cited initiative with a goal of implementing suitable problem management facilities within twelve months.

F -140

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
University Computing and Networking Services' Facilities Reportable Condition Audit Control Number 518a-95-05
During our tour of the UCNS Computer Center facilities we observed risks associated with availability of power and physical access to the computer room as described below:
Facilities
The computer equipment (IBM ES9000 mainframe) is susceptible to an extended interruption of service during a power outage since there is only one main power supply and no backup power such as a diesel generator. During such time there is some risk of data loss since there is no Uninterruptible Power Supply to allow for an orderly shut down of the system.
Physical Security
Access codes to enter the UCNS computer center are assigned to departments at a group level instead of on an individual basis. In addition, the University does not have a formal policy for changing access codes on a regular basis.
There are no formal procedures to notify operations management of an employee's termination or transfer.
We recognize that the computer room is staffed 24 hours, seven days a week; however, without individual accountability, there is a higher risk of unauthorized access to the computer facility.
We recommend UCNS management install a UPS system for the mainframe. Also, we recommend UCNS management enhance the existing controls to ensure only authorized personnel are granted physical access to the computer room.
Mana~ement Response
The University will explore again the operational and fmancial feasibility of implementing the recommended UPS facilities. Numerous similar assessments have been carried out in the past. The most recent assessment was completed in fiscal year 1991 by COM-SITE, International. The estimated cost of the recommended UPS facilities resulting from this study was $815,000. Because no long duration electrical outages greater than 8 hours (excepting planned outages), have been experienced historically and because the frequency of less disruptive power outages to the central computing facility typically are not greater than one occurrence per year, the substantial funding necessary to install UPS facilities has not been previously sought. It should be noted that this decision has also been taken in an environment where no application has been deemed sufficiently time critical that the substantial expense of insuring continuous availability in a networked access setting was considered imperative given historical power outage profiles.
The University has, nonetheless, expended considerable effort and resources to insure that many sources of realistic service disruptions can be avoided. Examples of the proactive problem avoidance approach at the data center include: temperature and humidity charts placed at strategic locations around the computer room. These charts constantly record temperature and humidity both under and above the floor and are monitored by Operations personnel several times per day. Any deviation from the normal ranges are reported to supervisory personnel and passed along to the Facilities Engineer who requests an investigation from Physical Plant personnel. The cause ofthe variation is eliminated and the temperature and humidity are returned to normal levels.
F -141

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
Monitors are located on the chilled water input lines to those systems requiring chilled water. These monitors indicate the temperature of the chilled water and sound an alarm when the temperature ofthe water exceeds acceptable limits. This is usually our first indication that there is a problem with either the chillers or cooling towers which provide the chilled water. This monitor and alarm provide several minutes of early notification so that Physical Plant personnel can be summoned to correct any malfunction with the cooling system. The time afforded us by the alarm in many instances makes the difference between being able to correct the problem before we experience any downtime, and having to take the systems down due to insufficient cooling.
Smoke detectors are installed under the raised floor to give advanced warning of fire or overheated electrical circuitry. These are connected to a panel on the computer room wall which visually indicates the monitors which are sensing smoke. An audible alarm sounds when these detectors are triggered.
There are water sensors installed under the raised floor which will sound an audible and visual alarm in the event that water is detected. These sensors are installed in the areas which are vulnerable to water leakage from the chilled water system.
Extensive work has been completed on the interior and exterior of the computer room wall which is under ground level. There was a history of water leakage into the room during periods of unusually heavy rains. An investigation revealed that the drainage system on the exterior of the building was inadequate to remove the water quickly enough at times. Physical Plant personnel renovated the drainage system and corrected problems on the exterior of the building, then resealed the entire underground portion ofthe rear wall ofthe computer room so that no water leaks into the room. These efforts will prevent premature corrosion of any lines under the floor, and greatly reduce the risk of electrical shock to personnel.
In general, the Boyd Building, and consequently the central site computer room, receive very "clean" electricity. In the past we have had some problem with lightening causing spikes, or electrical surges, which would in turn cause problems with the systems. In 1990 capacitors were installed on the main electrical circuits coming into the computer room to help minimize the surges. This preventive action has almost completely stopped our incidents of problems caused by thunderstorms.
In addition, there are many preventive maintenance schedules in effect for the various equipment in and around the computer room. Physical Plant periodically maintains the cooling, air handling and electrical supply equipment which affects the environment. Scheduled, periodic preventive maintenance is performed by all major vendors who provide service for the computers and related peripheral equipment. This periodic maintenance is a key factor in the high availability of the equipment to the user community.
The devices, modifications, and policies mentioned above have greatly reduced the amount of downtime we might have experienced had we not had them. The process of addressing potential problems in a proactive manner is an on-going responsibility which will continue to pay dividends in increased computer availability and personnel safety.
With respect to access controls, entry to the UCNS central computer room is controlled by an electro-mechanical key locking system which has no capability to record the combination used to enter the facility. This security system is provided by the University Public Safety division and is the same system used to limit access to other protected campus buildings. Because of the limitations inherent in this system, it is reasonable to assign the access codes on a departmental level.
To insure that only authorized individuals are permitted access to the central computer room, UCNS has now instituted the following management controls: 1) access codes are changed on a six (6) month basis for all groups, 2) the UCNS personnel office notifies the UCNS Operations Department Manager whenever a UCNS employee changes his/her status so that access codes can be modified as necessary, and 3) special picture id badges are issued to those staff whose normal duties do not require
F - 142

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS
CURRENT YEAR
access to the central computer room but who have occasional work related needs to enter this area. The decision to authorize the creation of such an id rests with the Operations Department Manager. Access is provided by Operations Department staff after presentation of the badge. As noted above, if changes in employee status dictate, the badge is reclaimed by Operations and destroyed.
It should also be emphasized that the central computer facility is staffed 24 hours per day and 7 days per week, which, in our environment, is itself a deterrent to unauthorized access.
Computer Operations Reportable Condition Audit Control Number 518a-95-06
Incremental application data back-ups are not performed by FIS nor does UCNS provide incremental back-ups for any user data. UCNS incremental back-ups are performed only on operating system files that are dynamic, and these incremental back-ups are not stored off-site. There are multiple levels ofback-ups performed on FIS application data and some ofthese back-ups are stored off-site. In the event of a disaster, daily production data may be lost. Risk of data loss related to the fmancial systems is largely mitigated due to the off-site storage of daily production data entry backups as this data could be used to re-process the production systems; however, this option is much less efficient than restoring from the incremental backups.
We recommend that management store the incremental application data back-up tapes off-site in an environmentally secured location.
Manar:ement Response
Comprehensive backups of both IMS and DB2 database management system files are created with appropriate frequencies within each application system based on the volatility of the data and the complexity and time criticality of the recovery process. Additional backups of the same files are created independently as a function ofFSIS Technical Support's weekly processing. These weekly backups are copied and stored off site.
The frequency of creation of IMS and DB2 log files (on cartridge tape) have made their off site storage a cumbersome task which has been considered from time to time, but has not yet been determined to be justifiable in support of current application systems. The criticality of the systems when viewed in conjunction with the time to recover using the procedures for back-up and recovery in place, in our opinion do not warrant the complexity and level of effort that would have to be expended in order to provide off site copies of all the incremental application back-ups.
System Software Change Control Reportable Condition Audit Control Number 518a-95-07
System support personnel are responsible for making system software changes and implementing these changes into production. Adequate practices are in place, however there are no formalized procedures supporting these practices. Without formal change control procedures in place, there is an increased risk of unauthorized or untested system software changes being implemented into UGA's production environment.
F - 143

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS CURRENT YEAR
We recommend UCNS management consider developing standards and procedures for system software change management. Management Response According to the Arthur Anderson review, the current practices are considered adequate. What is claimed to be lacking are formal descriptions of the practices which have evolved and served the University for over 25 years with no incidents of unauthorized or untested changes. While the past does not guarantee the future, it certainly is an indicator of what most probably will occur. Nonetheless, the UCNS will work towards developing formal descriptions detailing the existing practices and, where possible, improve upon them.
Improvement Idea Reportable Condition Audit Control Number 518a-95-08 Campus users are charged a monthly fee of $0.25 per tape for the storage of tapes in the UCNS computer center. The cost of performing a monthly billing may not justify the benefit of additional nominal revenue received from the storage of the tapes. We recommend UCNS management evaluate whether the billing for the storage of user tapes is a value-added activity. Management Response The intent of the nominal rate charged back to users for magnetic tape storage is not to recover the cost of providing this service. Instead its purpose is to provide a regularly distributed inventory report to clients itemizing the reels which they have deposited with the central data facility. The purpose for assessing a charge for this storage service and including it on the monthly billing statement provided to account managers is to insure that the inventory report not be ignored. A more compelling consideration is to evaluate our current tape storage procedures as a consequence of the general migration that is occurring to cartridge tape media and the use of robotic storage and mounting devices. This assessment is currently underway.
F -144

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

ALBANY STATE COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

521-91-04 521-92-04 521-94-01 521-94-02 521-94-03 521-94-04 521-94-05 521-94-06 521-94-07 521-94-08 521-94-09

Corrective Action Implemented Corrective Action Implemented See Audit Control Number 521-95-01 See Audit Control Number 521-95-03 Corrective Action Implemented See Audit Control Number 521-95-02 Corrective Action Implemented See Audit Control Number 521-95-04 See Audit Control Number 521-95-05 See Audit Control Number 521-95-06 Corrective Action Implemented

PRIOR YEAR

ELIGIBILITY Pell Grant Awards Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 521-95-0 I
The review report for the year ended June 30, 1992, noted a comparison of the annual FISAP report to the accounting records revealed that two students were overpaid $33.00 and $800.00, respectively. During the year under review, additional documentation was provided by Albany State College which revealed that these overpayments did not involve Federal funds. Funding was secured and deposited in the Restricted Fund to cover these overpayments.
The review report for the year ended June 30, 1993, noted a comparison of the annual FISAP report to the accounting records revealed that twelve students were overpaid in the aggregate of $3,207.00. During the year under review, additional documentation was provided by Albany State College which revealed that Federal funds were not involved in the overpayments. These overpayments are included in the fmding for Student Accounts Receivable Not Supported by Financial Aid, Audit Control Number 521-95-03. This fmding (521-95-01) will be deleted from reports for subsequent periods.
Mana~ement Response
The institution appreciates the corrective action of the Audit Department and the deletion of this fmding from reports for subsequent periods.

F - 145

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30,1995
ALBANY STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Control Procedures Financial Statements Audit Control Number 521-95-02
The review report for the year ended June 30, 1994, noted several deficiencies in regard to the operating and payroll bank accounts maintained by Albany State College. During the year under review, it was noted that items requiring general ledger adjustments identified on the College's reconciliations for both the College's operating and payroll accounts were not made in a timely manner.
This deficiency was caused by management's failure to ensure that adjustments were made in a timely manner. Procedures should be monitored by College officials to ensure all reconciling items requiring general ledger adjustments are made in a timely manner.
Mana~ement Response
The responsibility for the reconciliation for both the College's Operating and Payroll Accounts was assigned to a different employee, along with all other related responsibilities, during the Fall of 1995. This change in the Business Office resulted in reconciliations, adjustments and other corrections being made in a timely manner.
REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 521-95-03
The review report for the year ended June 30, 1994, revealed student accounts receivable balances which were not supported by approved fmancial aid in the amount of $351,413.82. On June 30, 1995, the balance had increased to $418,424.91. This condition occurred because of management's failure to obtain approved documentation to support fmancial aid before disbursement of funds. There is no provision in the policies ofthe Board of Regents for deferments of student accounts without the student having approved fmancial aid at the time of registration.
Collections of student accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved fmancial aid. It is recommended that legal means be taken to collect all accounts receivable, if necessary.
Mana~ement Response
The Business Office is reviewing the procedures used by the Financial Aid Office to assign aid to students, along with the required support documentation. This review and revised procedure, which should eliminate aid being given to students who have not completed all necessary documents, will be completed prior to June 15, 1996.
The Business Office will begin to process accounts receivables to forward to collection agencies prior to June 1, 1996.
F - 146

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
ALBANY STATE COLLEGE PRIOR YEAR/CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Inadequate Control Procedures Financial Statements Audit Control Number 521-95-04 The review report for the year ended June 30, 1994, noted deficiencies in procedures related to ExpenditureslLiabilitieslDisbursements. For the year under review, the deficiencies noted were as follows:
(1) Five of eleven missing vouchers noted in the prior year review report totaling $8,200.00 remained unlocated at June 30, 1995.
(2) Three of six missing petty cash vouchers noted in the prior year review report totaling $2,950.65 remained unlocated at June 30, 1995.
(3) Twelve vouchers totaling $1,075.73 were selected for examination during the year under review and could not be located by the College.
(4) The College did not provide adequate supporting documentation for all disbursements. Purchase orders and/or other internally generated documents in many cases are not properly supported by external documents verifying actual performance of services provided.
(5) Incentive payments were made to ARA Food Service employees based on a verbal agreement between the College and Aramark Corporation.
The conditions noted above were the result of management's failure to follow established procedures required to document expenditures. The College should locate the missing vouchers noted above for subsequent review, establish a voucher filing system which documents the location of expenditure vouchers not in the file, establish procedures to properly document all expenditures, and establish a formal agreement to support incentive payments disbursed to ARA Food Service employees.
A1ana~mentRespQnse
The Business Office is continuing to look for missing documents, per audits of prior periods and will share those fmdings with the State Auditor during subsequent visits. Procedures for acquiring documentation for disbursements have been improved and all disbursements must have external documents, verifying services provided, as well as any other supportive documents available. This procedure was implemented prior to October 1, 1995. The Vice President for Fiscal Affairs will secure a formal agreement with Aramark (ARA Food Service), prior to any future disbursement of any incentive payment to Aramark employees.
F147

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
ALBANY STATE COLLEGE
PIDORYEAWCURRENTYEAR
FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 521-95-05 The review report for the year ended June 30, 1994, noted Intercollegiate Athletics had a deficit fund balance of $179,035.12. At June 30, 1995, a deficit of $175,235.28 continued to exist. This deficit is the result of the College's lack of sufficient funds to meet obligations on a current basis. The Board of Regents' Policy Manual Section 702.02 states that Auxiliary Enterprises "shall be placed on a self-supporting basis, and the State will not make an appropriation to fmance its operation." The College should take steps to fund this deficit. Mana~ement Response The Athletic Director, the Business Office and the Vice President for Fiscal Affairs will develop a plan of action to control the operations of the Athletic Program, so as to operate within funds available prior to June 30, 1996. Additionally, a plan to reduce the current deficit will be a part of the fmal plan. GENERAL LEDGER Improper Agency Fund Activity Financial Statements Audit Control Number 521-95-06 The review report for the year ended June 30, 1994, noted that Albany State College's records of the Gospel Choir Fund, the Chipmour Fund, and the Enrichment Fund I reflected improper loans to employees and that on occasions the Gospel Choir Fund had a deficit balance. During the year under review, the College ceased making loans from these accounts. The outstanding loan balance of $780.60 at June 30, 1995, was subsequently collected and deposited in the College's Agency Funds.
Manq~entRe~onse
The Business Office has implemented procedures to comply with the Board of Regents' Policy in the operation of all Agency Funds. This will prevent any future improper use of Agency Funds.
F - 148

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

ARMSTRONG STATE COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin&

524-91-01 524-91-03 524-91-08 524-91-14 524-94-01 524-94-02 524-94-03 524-94-04 524-94-05 524-94-06

No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 524-95-01 See Audit Control Number 524-95-03 Corrective Action Implemented See Audit Control Number 524-95-04 See Audit Control Number 524-95-02 Corrective Action Implemented

Management Response

Audit Control Number 524-91-01 and Audit Control Number 524-91-03

The College still has not received directives from the grantor agency to resolve these fmdings.

Audit Control Number 524-91-08

The College still has not received a response from the grantor agency regarding this fmding.

Audit Control Number 524-91-14

The College still has not received any directive from the grantor agency regarding this fmding.

PRIOR YEAR

REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 524-95-01
The review report for the year ended June 30, 1994, disclosed that Armstrong State College had $25,714.65 in student accounts receivable which were not supported by approved fmancial aid. This balance decreased to $25,121.70 as ofJune 30, 1995. There is no provision in the policies of the Board of Regents for deferments of student accounts receivable without the student having approved financial aid at the time of registration.
Collections of student accounts receivable should be made at least on a quarterly basis, and no student should be granted a deferment without having approved fmancial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.

F - 149

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

ARMSTRONG STATE COLLEGE

PRIQRYBAR

Mana~ementResponse

This fmding refers to Fiscal Year 1994 auxiliary enterprises student receivables which were not supported by approved fmancial aid. The college has turned these accounts over to a collection agency.

ADMINISTRATIVE REQUIREMENTS Funds Not Expended in Grant Period Financial StatementslFederal Financial Assistance Questioned Cost: $13,000.00 Audit Control Number 524-95-02

Federal and State regulations require that grant funds be expended within the grant period and requisitioned according to the grant agreement. For the year ended June 30, 1994, Armstrong State College requisitioned funds from the following programs that were not expended within the grant period:

CFDA No. 84.0FA

U. S. Department of Education - Title VI, B First District Regional Educational Service Agency Summer Plus Program in Speech Pathology

$ 26,000.00

State Funds

Georgia Professional Standards Commission Distant Learning Outcome-Based Program Planning

40,000.00 4.400.00

$ 70.400.00

During the year under review, the College requested and received $57,400.00 of contract extensions through September 30, 1995, from the appropriate grantor agencies. However, $13,000.00 of the questioned cost for the Federal grant from First District Regional Educational Service Agency was not adequately addressed by the grantor.

The College should refund $13,000.00 of the Summer Plus Program in Speech Pathology to First District Regional Educational Service Agency.

Manq~ement Response

This fmding refers to a Federal grant from the First District Regional Educational Service Agency that was not expended within the grant period. The college was not aware that this grant was federal funds because it was "passed through" a state agency. The program funded by the grant, "Summer Plus Program in Speech Pathology," was not completed within the grant period. However, these funds were subsequently expended for the program and cannot be refunded to the First District Regional Educational Service Agency. This agency has not requested a refund because the grant was expended for the purposes intended.

F - 150

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
ARMSTRONG STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
GENERAL LEDGER Unsupported Financial Statements - Investment in Plant Financial Statements Audit Control Number 524-95-03
The review report for the year ended June 30, 1994, disclosed that the fmancial statements of Armstrong State College's Investment in Plant Fund were not supported by the general ledger. This condition continued to exist for the year ended June 30, 1995. Extensive procedures were necessary to reconcile and identify the changes in equipment inventory records which occurred in fiscal year 1995. Additions, deductions, and adjustments were reflected in aggregate amount on the College's fmancial statements.
Appropriate accounting procedures should be implemented by the College to ensure that the fmancial statements are prepared from the accounting records and that all additions, deletions, and adjustments are properly documented. It is recommended that individual funds be reconciled to the Investment in Plant Fund on a periodic basis.
Manq'iement Response
This fmding refers to deficiencies in equipment inventory records. These records are reconciled manually to the general ledger monthly. The present accounting system does not provide for an equipment inventory ledger that is subsidiary to the general ledger; consequently, it is difficult and time consuming to manually reconcile these two records. This fmding does not mention that all equipment items in the auditor's test sample were found or that the equipment inventory reconciles to the general ledger. The fmding refers to the difficulty of identifying and reconciling additions, deletions, and transfers of equipment items.
FUND EQUITIES Deficit to be Funded from Subsequent Year's Operations Financial Statements Audit Control Number 524-95-04
The review report for the year ended June 30, 1994, disclosed that Armstrong State College had a deficit fund balance in Intercollegiate Athletics. At June 30, 1995, Intercollegiate Athletics had a deficit fund balance of $12,795.15. This deficit has a direct relation to the lack of sufficient funds to meet obligations on a current basis. The Board of Regents' Policy Manual, Section 702.02, states that auxiliary enterprises "shall be placed on a self-supporting basis, and the State will not make an appropriation to fmance its operations."
The College should budget and provide for adequate funds to cover this deficit.
Mqnawment Response
This fmding refers to a deficit fund balance in intercollegiate athletics. The college has budgeted and will provide for adequate funds to cover this deficit.
F - 151

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

ARMSTRONG STATE COLLEGE

CURRENT YEAR

DRUG-FREE WORKPLACE ACT Failure to Include Required Provision in Drug-Free Workplace Policy Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 524-95-05

According to provisions of P. L. 100-690, all grantees that have been approved or awarded a direct Federal grant are required to certify that a drug-free workplace is maintained. Such certification is a precondition of receiving a direct Federal grant. A provision of certifying a drug-free workplace is to establish a drug-free workplace policy which contains the following requirements:

(l)

Statement notifying employees that the manufacture, distribution, dispensing, possession or use of

a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be

taken against employees for violation of such prohibition.

(2)

Notifying the employee in the statement that as a condition of employment under the grant the

employee will:

(a) Abide by the terms of the statement.

(b) Notify the employer in writing of any criminal drug statute conviction for a violation occurring in the workplace no later than five calendar days after such conviction.

The College was awarded a grant from the U. S. Department of Education during the year under review in support of the Pell Grant Program (CFDA 84.063). The College submitted a drug-free certification; however, the College's drug-free workplace policy did not contain the requirement that employees notify the employer in writing of any criminal drug statute conviction for a violation occurring in the workplace no later than five calendar days after such conviction. The College should amend its drugfree workplace policy to ensure that all compliance requirements are included within the policy.

Mana'lement Resvonse

This finding refers to the requirement to certify that a drug free workplace is maintained as a condition to award federal fmancial aid. The college had not met all of the provisions of this requirement. This condition has been corrected and all provisions are not met.

ELIGIBILITY Overpayment of Student Financial Aid Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Cost: $191.00 Audit Control Number 524-95-06

For the year under review, an examination of student fmancial aid files for the Pell Grant Program (CFDA 84.063) revealed an overpayment of$191.00 to one student. The error was caused by the student's change in enrollment status, miscalculation of the quarterly Pell grant awards, and management's failure to review all grant awards received by the student before disbursement is made. The College should contact the U. S. Department of Education regarding resolution of the $191.00 questioned cost.

F -152

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
ARMSTRONG STATE COLLEGE CURRENT YEAR
Mana'lf!menf Response
This finding refers to a Pell grant overpayment to one student resulting from the student's change in enrollment status. The overpayment has been resolved with the U.S. Department of Education.
F - 153

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

AUGUSTA COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

527-94-01 527-94-02 527-94-03 527-94-04

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

F - 154

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

533-92-01 533-93-02 533-93-04 533-93-12 533-93-13 533-94-01 533-94-02 533-94-03 533-94-04 533-94-05 533-94-06 533-94-07 533-94-08 533-94-09 533-94-10 533-94-11 533-94-12 533-94-13 533-94-14 533-94-15 533-94-16 533-94-17 533-94-18 533-94-19

No Corrective Action Implemented Corrective Action Implemented See Audit Control Number 533-95-05 No Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 533-95-03 See Audit Control Number 533-95-04 Corrective Action Implemented Corrective Action Implemented See Audit Control Number 533-95-07 See Audit Control Number 533-95-08 See Audit Control Number 533-95-09 See Audit Control Number 533-95-10 See Audit Control Number 533-95-01 See Audit Control Number 533-95-02 See Audit Control Number 533-95-06 Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented Corrective Action Implemented See Audit Control Number 533-95-11

Mana'iement Response

Audit Control Number 533-92-01

A fmal audit determination on the fmding has been made by the U. S. Department of Education. We have deposited $910.53 into the Federal Work-Study account. The corrective action to resolve this audit fmding has been taken. The documentation is available at the College.

Audit Control Number 533-93-12

We are awaiting a response from the U. S. Department of Education for a replacement copy of the Eligibility Certification. We concur with this fmding. The College has not been able to locate the original copy of the Eligibility Certification. We have written the Department of Education requesting a copy of the certification.

F - 155

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS
Audit Control Number 533-93-13
A fmal audit determination on this fmding has been made by the U. S. Department of Education in their letter on February 29, 1996. We have resolved the fmding by contacting the grantor agency and reimbursing the grantor agency - USA funds $830.00 for the excess award. Procedures were in place that were felt to safeguard against such violation. However, it is now apparent that greater safeguards are needed. As a result, our monitoring procedures have been revamped to assure that this does not happen again. Award over-rides are no longer allowed under any circumstances. This creates a greater magnitude of protection from over awards. Situations of this nature will come under special review from the Director of Financial Aid for budget adjustments where applicable.
Audit Control Number 533-94-13
We have contacted the U. S. Department of Education. The fmding will be reviewed as part of the State of Georgia Single Audit review. We are awaiting a fmal determination on this fmding from the Federal government. A review of one student's record indicated that a mistake was made in keying information for her voucher. Thus, the student erroneously received a total of $2,300.00 Pell Grant, with an award of $1,850.00, an overpayment of$450.00. This occurrence will be eliminated under our new computer system. We will no longer key information for vouchers and will credit student's accounts directly, eliminating the voucher system entirely, for the 1995-96 school year.
Audit Control Number 533-94-14
We have contacted the U. S. Department of Education. The fmding will be reviewed as part of the State of Georgia Single Audit review. We are awaiting a fmal determination on this fmding from the Federal government. We do not concur with the fmding. The auditors have cited six instances ofIFC adjustments made by the fmancial aid director as having inadequate documentation. While some ofthe legislation relating to this procedure has been quoted, exception is taken to the interpretation of this legislation, and this fmding.
The special circumstances cited by the auditors as reasons for making EFC changes are examples and not be limited to those listed. Thus, by no means is it the rule that these are the only circumstances in which such changes may be made.
In exercising professional judgement, it is the judgement of the fmancial aid officer that is used within the prescribed Federal regulations. These regulations were adhered to in making the decisions. No legislation has been written, that states specifically to the aid officer what documentation should be required. The law only specifies that the reason must be documented in the student's file, it must relate to the student's special circumstances, and may only be made on a "case by case" basis. The nature of documentation needed for decision making is left up to the discretion of the aid officer.
We contend that in each case, documentation of changes were present, (i.e. the mitigating circumstances form signed and dated by the aid officer and line item recalculation form), documentation of the reason for the changes (i.e. hardship letters, copies of documents supporting need from parents, and hardship forms), and each case was reviewed on an individual basis.
All rules and regulations as prescribed by Federal guidelines were followed. Each case was documented and included supplementary material, denoting each student's special circumstance. In accordance with the responsibilities delegated to the fmancial aid officer, professional judgement was exercised for each adjustment and change made.
F -156

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
FORT VALLEY STATE COLLEGE
STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS
Audit Control Number 533-94-15
We have contacted the grantor agency and requested a review of the additional documentation. We are awaiting a response. Documentation is available to support the student's housing status for 1993-94. The College will take appropriate action based on the grantor agency's review of the acceptability of the documentation provided.
Audit Control Number 533-94-16
We have contacted the U. S. Department of Education. The fmding will be reviewed as part of the State of Georgia Single Audit review. We are awaiting a fmal determination on this fmding from the Federal government.
Audit Control Number 533-94-17
We have contacted the U. S. Department of Education. The fmding will be reviewed as part of the State of Georgia Single Audit review. We are awaiting a fmal determination on this fmding from the U. S. Department of Education. We do not concur with the audit fmding. The auditors have cited two instances where Federal refund percentages were felt to be incorrectly calculated for students who had withdrawn from school. A review of the records of the two students involved has revealed the following:
(1) Institutional refund policy dictates an 80% refund for the first week of withdrawal (0-7 days); 60% refund for the second week of withdrawal (8-14 days); 40% refund for the third week of withdrawal (15-21 days); 20% refund during the fourth week ofwithdrawal (22-28 days); and no refund for withdrawals after the fourth week.
(2) Both students withdrew during the third week of the respective quarters. One student withdrew after twentyone days of enrollment during Spring 94 and the other student withdrew after twenty days of enrollment during Fall 93.
(3) Refund percentages were correctly calculated for 20% for third week withdrawals, with 60% institutional charges.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL)-Financial Statements ADMINISTRATIVE REQUIREMENTS-Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 533-95-01
The audit report for the year ended June 30, 1994, reported that the College did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures in the Cash and Cash Equivalents control category. During the year under review, no improvement was noted.
Segregation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and financial statements are accurate and complete.
F - 157

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE

PRIOR YEAR/CURRENT YEAR

This deficiency was a result of management not assigning employee duties in a manner to adequately safeguard assets and/or promote efficiency and accuracy in key accounting functions. The College should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control category, and implement those procedures to strengthen the internal controls over the accounting function.

Federal Grantor A~encies Affected:

National Science Foundation U.S. Agency of International Development U.S. Department of Agriculture U.S. Department of Defense U.S. Department of Education U.S. Department of Energy U.S. Department of Health and Human Services U.S. Department ofInterior U.S. Department of Labor

Mana~ementResponse

We concur with the recommendation. We have reassigned and realigned various functions to improve accountabilit,: and transaction flows in the Accounting Services Department. Duties have been segregated to enhance internal controls. The Grants Accountant I has been assigned the responsibilities for making bank deposits. The Staff Assistant has been assigned bank reconciliation responsibilities for the payroll and student refund accounts. The Staff Assistant and Office Assistant have been assigned responsibility for data entry of Journal Vouchers. The Accounting Supervisor previously was responsible for a number ofthese functions. The approval of all manual Journal Voucher is required. The GJ form has been revised to include approval by the Director of Accounting or the Accounting Supervisor. The Grants and Contract Officer is being trained in the Revenue/Cash Management areas. On completion ofher training, she will be given responsibilities that will strengthen internal controls. We believe the implementation of the revised procedures increases the segregation of duties as it relates to the cash management functions and results in adequate internal controls. A copy of the revised procedures and GFJ forms is available for review.

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 533-95-02

The audit report for the year ended June 30, 1994, stated that the College's accounting procedures did not provide for adequate internal control over the bank reconciliation process. During the year under review, some attempts were made by the college to strengthen the accounting procedures over the bank accounts; however, the following deficiencies were noted:

1)

The monthly bank reconciliations were not performed in a timely manner.

2)

Book errors disclosed through the bank reconciliation process were carried as reconciling items for

extended periods of time.

3)

Several wire transfers were shown on the bank statements, but could not be found recorded on the

general ledger.

F - 158

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE PRIOR YEAR/CURRENT YEAR

4)

A single wire transfer of $20,000.00 was recorded twice to the general ledger, but the correction of

this misposting could not be identified by College personnel.

These deficiencies were a result of management's disregard of proper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard and report the cash operations of the College. The College should implement appropriate procedures and controls to ensure that bank statements are reconciled with the accounting records monthly and that needed adjustments are recorded on a timely basis.

Manq~ement Response

We have taken the necessary action to establish better internal control procedures over cash and bank reconciliations. All bank reconciliations are now being performed on a monthly basis. The Staff Assistant has been trained and assigned responsibility for reconciliation of the Student and Payroll accounts. Reconciling items have been corrected and recorded. Errors that are revealed through the Bank Reconciliation process will also be corrected on a monthly basis.

A procedure has been put in place to ensure that all wire transfers are tracked and recorded in the Accounting records in a timely manner. Wire transfers are now logged and totaled; then added to all other credits to the bank statement to ensure that the grand total equals to the grand total of credits shown on the statement. This ensures that no wire transfer has been overlooked. Each wire is then identified as to its source. Using the log as a guide, the accounts are reviewed to ensure that all wire transfers are posted. This documentation is on file and available for review.

REVENUESIRECEIVABLESIRECEIPTS Improper Postings to Student Accounts Receivable Financial Statements Audit Control Number 533-95-03

The audit report for the year ended June 30, 1994, reported that an examination ofthe student accounts receivable disclosed that the College had posted payments on student accounts to a fund other than the fund where the receivable was incurred. In the year under review, corrections were made to many of the student accounts by the College; however, a review of the student account receivable balances at June 30, 1995, revealed 172 instances where payments were posted to wrong accounts and had not been corrected at fiscal year end. The Resident Instruction Fund's accounts receivable were understated by $4,972.27 and Auxiliary Enterprises Fund's and Student Activities Fund's accounts receivable were overstated by $145.46 and $4,826.81, respectively.

This deficiency occurred because of management's failure to adequately monitor the student accounts receivable and their failure to ensure that receipts were accurately posted. Procedures should be implemented by the College to correct and accurately record the student accounts receivable balances.

Mqnqument Response

In February 1996, a procedure was implemented to monitor student accounts receivables on a monthly basis. A history of all Student Accounts Receivable is printed. The Accounting Supervisor reviews the history and to verify that payments on student accounts are posted to the proper fund. If the payment has been applied to a fund other than where the receivable was incurred, a General Journal will be made to correct entry. Procedures will also be implemented at the Cashier's station to ensure that receipts are accurately posted.

F - 159

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
REVENUESIRECEIVABLESIRECEIPTS Improper Student Accounts Receivable Financial Statements Audit Control Number 533-95-04
The audit report for the year ended June 30, 1994, disclosed that the College had material receivable balances which were accumulated prior to the Summer Quarter 1994. A review of the student accounts receivable at June 30, 1995, of$676,214.60 revealed that $547,864.87 was accumulated prior to the Summer Quarter 1995.
The $547,864.87 consisted ofreceivables of $450,551.37 incurred during the fiscal years 1969 to 1994 and $97,313.50 of current year receivables for Fall Quarter 1994, Winter Quarter 1995 and Spring Quarter 1995 fees. There is no provision in the policies ofthe Board of Regents for deferments of student accounts without the student having approved documentation of fmancial aid at the time of registration.
The College could not provide a reasonable estimate of the collectibility of accounts receivable. The accounts receivables resulted largely from the extension of credit to students with no approved fmancial aid and from the failure of the College to properly post the receipt of the fmancial aid to the outstanding balances before disbursing the funds to the students. Although instructed in prior years of the necessity to properly monitor and age the student receivables, the College made no attempt to strengthen their controls over the student accounts.
Procedures should be implemented by the College to comply with the policies of the Board of Regents. Collections of student accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved fmancial aid. The outstanding student receivables should be aged and all balances should be verified. Outstanding receivables incurred by current students should be collected and correctly posted prior to the award of any additional aid. The College should consider placing all receivables incurred by former students with a collection agency, and legal means should be used to collect all student receivables, if necessary.
A1ana~ement~DQnse
We concur with this fmding. We have implemented procedures to review the accounts receivables on a quarterly basis. The College has significantly reduced the number of deferments issued through fmancial aid and strengthens its collections procedures. The College will develop a program to age the receivables and use it to manage the accounts. The College has contracted with a Collection Agency. We still comply with Federal fair credit regulations notification requirements and will place the Accounts Receivable incurred by former students with this Agency for Collection by the end of the year.
EXPENDITURESILIABILITIESIDISBURSEMENTS-Financial Statements ADMINISTRATIVE REQUIREMENTS-Federal Financial Assistance Overpayment of Student Awards Federal Family Education Loan Program [CFDA 84.032] Questioned Cost:$4,392.32 Audit Control Number 533-95-05
The audit report for the year ended June 30, 1993, reported the Agency Funds had a deficit balance of $2,259.01 for the Departmental Federal Assistance Financing System due to disbursing fmancial aid prior to receipt of the funds for the Federal Family Education Loan Program (CFDA 84.032). This deficit was not corrected as of June 30, 1994. During the year under review, this deficit increased to $4,392.32.
F - 160

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
This deficit is a result of disbursing fmancial aid to students prior to receipt from lending institutions.
The College should implement procedures to correct the Departmental Federal Assistance Financing System's clearing account and to determine the student payments involved in the deficit. Reimbursements should be obtained from the students who were disbursed funds in excess of the fmancial aid received. Also, procedures should be implemented to prevent the disbursement of fmancial aid prior to receipt of funds from the lending institutions.
Manaument Response
The College concurs with this fmding. We have assigned responsibility for reconciliation ofthe Departmental Federal Assistance Financing System clearing account to the Cashier Assistant. Every effort is being made to identify the student payments involved in the deficit. Once identified a reimbursement will be requested from the student. In Fall 1995, the College implemented the Federal direct loan program. The College has implemented procedures to insure that this account reconciles to zero.
GENERAL LEDGER General Ledger Not in Balance with Subsidiary Inventory Records Financial Statements Audit Control Number 533-95-06
The audit report for the year ended June 30, 1994, disclosed a difference of $6,827.72 between the central stores inventory balance on the general ledger and the inventory amount reflected on the subsidiary inventory records. For the year under review, an examination of internal control procedures relative to inventories disclosed that the College did not provide for adequate controls pertaining to reconciling the general ledger and subsidiary inventory records. The College should implement procedures to ensure that the accounting records are reconciled to and supported by the subsidiary inventory records.
Manaument Response
At June 30, 1995, we had reconciled this account to a difference of $70.00 between the central stores inventory balance on the general ledger and the inventory amount reflected on the subsidiary inventory records. A procedure is in place to ensure that the records are reconciled. The procedure requires that the Stores Manager submit to the Business and Finance Office a physical count of the Stores inventory on a quarterly basis. This list is accompanied by a list of the Purchase Orders numbers of items purchased during that particular quarter. A comparison of the list to the General Ledger will be made. If there is a discrepancy, further examination of the two records will be made to determine the source of the difference. This will include a review of the Accounting records to ensure that all purchases have been paid. If this procedure fails to reveal the source of the error, the proper adjustment will be made.
GENERAL LEDGER-Financial Statements ADMINISTRATIVE REQUIREMENTS-Federal Financial Assistance Unsupported Financial Statements Perkins Loan Program [CFDA 84.038] Audit Control Number 533-95-07
The audit report for the year ended June 30, 1994, reported that the general ledger for the Perkins Loan Program was not reconciled to the College's billing agency's statements. Federal Regulations (34 CFR 674.19) require institutions to establish, maintain and reconcile at least monthly program and fiscal records that correctly identify each student's account and status. For the year under review, the College's accounting records were not reconciled and were found to be inadequate. The following deficiencies were noted:
F - 161

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE
PIDORYEAWCUBRENTYEAR

1)

Interest and other income was improperly recorded to the principal collections account thereby

incorrectly reducing the actual loan amounts outstanding on the general ledger.

2)

Interest and other income was posted to the principal loan cancellations and write-off accounts further

incorrectly reducing the outstanding notes receivable balance on the general ledger.

3)

Monthly service charges were posted to the principal collections account instead of as a deduction

to the Perkins Loan Program fund balance.

4)

Wire Transfers ofstudent payments were deposited into the College's operating account by the billing

and collection agency, but could not be found posted to the Loan Fund's accounting records.

5)

Loans made to students during the fiscal year were not reconciled to either the billing agency's

statements or records in the College's fmancial aid office.

6)

Payments received on loans previously assigned to the Federal government were incorrectly recorded

as a further reduction to the outstanding notes receivable instead of being remitted to the Federal

government as required.

7)

The June 1995 collections of principal repayments were posted to the accounting records twice,

understating the loans outstanding by approximately $24,000.00. This error went undetected by the

College personnel.

8)

Several other adjustments were improperly posted to the accounting records and never corrected by

the College.

These deficiencies occurred because ofmanagement's failure to maintain accurate and complete accounting records ofthe Perkins Loan Program as required by Federal Regulations. Additionally, the College failed to reconcile the general ledger to the monthly accounting statements provided by the College's billing agency, which summarizes the program activities. To correct the accounting records, each day's activity had to be traced by the auditors from the billing agency's daily records to the College's recording in the general ledger to determine the validity of the posting. Numerous audit adjustments were required to correct the College's accounting records and to properly reflect the program's activity and the outstanding loan balances.

The deficiencies in the accounting procedures and internal controls were discussed with management. In addition, the accounting personnel of the College were given instructions in the proper accounting procedures including the necessity of promptly reconciling the general ledger to the monthly accounting statements and determining the proper status of each student's account. Appropriate controls should be immediately implemented to ensure that the accounting records are reconciled to and supported by the subsidiary statements.

Mana"ement ResDonse

The control measures that is now being implemented to ensure that the Accounting records are reconciled to the subsidiary statements (Eduserv). The Perkins loan accountant has been assigned responsibility for reconciling the accounting records and subsidiary statement. General Journal Adjustment entries are made on a monthly basis and posted to the Accounting records. This is done on a monthly basis rather than an Annual Basis. The actual subsidiary statements are attached to the Journal Entries to support that the entries do in fact adjust to the statements.

F - 162

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
The entries are monitored and approved by the Director of Accounting Services for accuracy and correctness. The Perkins Loan Accountant is responsible for a monthly reconciliation of the accounting records and subsidiary statement. The accounting procedures and internal controls have been strengthened through the implementation of these procedures.
FEDERAL FINANCIAL REPORTS Reports Not Reconciled to Accounting Records Federal Financial Assistance Audit Control Number 533-95-08
The audit report for the year ended June 30, 1994, disclosed that expenditures reported on the Fiscal Operations and Applications to Participate (FISAP) Report submitted by Fort Valley State College to the U.S. Department of Education did not reconcile with the accounting records. For the year under review, the FISAP Report submitted October 1, 1995, for the fiscal year ending June 30, 1995, was reviewed and this report again did not reconcile with the accounting records as indicated below:

FISAP Report Item

FISAP
.R.em!rt

Accounting Records

Difference

FEDERAL WORK STUDY PROGRAM (CFDA 84.033) Institutional Share of Wages
PERKINS LOAN PROGRAM (CFDA 84.038) Loan Principal Adjustments - Other Canceled Cost-Principal and Interest Other Income Institutional Capital Contribution Other Costs or Losses Total Principal and Interest Repaid By Borrowers

$ 164,631.00 $ 158,087.14 $ 6,543.86

$ 10,559.00

$

0.00

$ 16,904.00

$ 491,363.00

$ 45,950.00

$ 205,520.00

$ 9,933.39 $ 412.06 $ 21,435.99 $ 491,576.65 $ 50,848.81 $ 206,560.11

$

625.61

$ -412.06

$ -4,531.99

$ -213.65

$ -4,898.81

$ -1,040.11

Federal Regulations (34 CFR 674.19 and 675.19) require the College to ensure that the information is accurate and reconciled to the accounting records.
These differences between the accounting records and the FlSAP Report were not reconciled. The College should implement procedures to ensure that the FISAP Report is accurately completed and supported by the accounting records. Detailed reconciliations should be prepared for any adjusted amounts and maintained as a part of the supporting documentation.
A1ana~ementResDQnSe
Based on the College's records, there was no difference between the institutional share of wages and the amount reported on the FISAP. The matching funds paid by external organizations are recorded as revenue on the College's books. Documentation is on file and available for review. The College has contacted the U. S. Department of Education regarding the discrepancy. The Department is working with the College to identify and correct prior year errors. This documentation will be used to make adjusting entries to the Accounting Records. The documentation and entries will be on file and available at the College. Once corrected, the discrepancy between the FISAP report and the Accounting Records will be eliminated.

F - 163

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
PIDOR YEAWCURRBNT YEAR
SPECIAL TESTS AND PROVISIONS Inadequate Controls Over Disbursing Loans Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Audit Control Number 533-95-09
The audit report for the year ended June 30, 1994, noted that a systematic list of students receiving loans from the College's Federal Family Education Loan Program was maintained, however, the list was not utilized to document receipt of loan checks by eligible students. During the year under review, the list was again not utilized to document receipt of loan checks by students. Federal Regulations (34 CFR 668.14 and 682.610) require institutions to maintain an adequate system of controls over the administration of Title IV (Student Financial Assistance) programs with adequate checks and balances in its system ofintemal controls including the dates and amounts of transmittal of the loan proceeds by the College to the student.
This act of noncompliance resulted from management's failure to use a systematic listing of students to document receipt of checks by eligible students that would enable tracing the receipt of the loans to the actual payment to the student. The College should implement procedures to ensure that controls are maintained over the disbursement of Federal Family Education Loans and that each receipt can be easily traced to the disbursement to the student.
Manaument Response
Fall 1995 is the first quarter the College participated in the Federal Direct Lending Program. Procedures were established to document the receipt and disbursement of Federal Family Education Loans to the students. The student fees are applied to the student's fee assessments account. A print out showing the distribution to the student's account is maintained. Each student receiving loans from the College's Federal Family Educational Loan Program signs an alphabetical listing that shows the amount ofthe loan check and other aid disbursed and the amount ofthe refund. This procedure insures that controls are maintained over the disbursement of Federal Direct Loans.
SPECIAL TESTS AND PROVISIONS In-Person Entrance and Exit Counseling not Conducted Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Audit Control Number 533-95-10
The audit report for the year ended June 30, 1994, reported that an examination of Federal Family Education Loan recipients revealed one instance where a student's file did not contain the required entrance interview documentation and four instances where the students had either graduated, left school or were enrolled at less than half-time status and had not received in-person exit counseling about the borrower's rights and obligations. Federal Regulations (34 CFR 682.604) require institutions to conduct in-person entrance counseling prior to the release of the first disbursement ofthe proceeds of the first Stafford or SLS loan made to the borrower for attendance at the school. This initial counseling must emphasize to the borrower the seriousness and importance ofthe repayment obligation the borrower is assuming and the likely consequence of default. The Federal Regulations require the College to conduct in-person exit counseling with each Stafford and SLS borrower shortly before the student graduates or ceases at least half-time study at the institution. Federal Regulations also require institutions to document the required counseling in the student's fmancial aid file.
F -164

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
For the year under review, an examination of fifty-one Federal Family Education Loan recipients revealed that one student's file did not contain the required entrance interview documentation and fifteen students' files did not contain the required exit interview documentation. Federal Regulations allow institutions to mail exit counseling information to Stafford and SLS recipients only in cases in which the students do not attend the exit conference or the students withdrew from school without the College's prior knowledge. The College could not document that the required counseling materials had been mailed to the students.
This noncompliance occurred because management failed to properly monitor the enrollment status of the Federal Family Education Loan recipients. The College should implement the necessary controls to ensure that each recipient obtains the required counseling and that this counseling is documented in the student's file. The College should mail the fifteen students who withdrew the necessary materials and review the College's files to ensure that all students who either left the institution or were enrolled at less than half-time status have received the counseling materials. The College should contact the grantor agency regarding the resolution of this fmding.
Mana~ement ResDonse
We concur with the recommendation. Although we were sure that most of the students cited in this fmding were mailed Exit Interview Material, due to relocation of the Financial Aid Office to a new location, we are currently unable to fmd the material to substantiate this. At the very least, many should have been filed in the respective students' folders before we moved. The required exit interview materials were mailed to the students in question and one student's exit interview was completed in the office. Copies of letters and documents mailed is on file and available for review.
Although one student insisted that she had completed her Entrance Interview Fall 1994, she agreed to complete another one for us since we have no documentation to this effect. The student was out of school only Fall 1995, and reenrolled Winter 1996.
All of the students involved in this fmding did not return to school, with one exception noted. As a result, our procedure calls for mailing this exit interview material. Our new computerized system as well as two additional staff members should allow us to be in complete compliance in the future.
SPECIAL TESTS AND PROVISIONS Refunds Not Credited in a Timely Manner Federal Financial Assistance Perkins Loan Program [CFDA 84.038] Pell Grant Program [CFDA 84.063] Audit Control Number 533-95-11
The audit report for the year ended June 30, 1994, reported that the College was not crediting program refunds of the institutional costs paid from Title IV, Higher Education Act Programs within thirty days as required by Federal Regulations (34 CFR 668.22). For the year under review, an examination of the College's refund procedures disclosed that program refunds, again, were not credited to the respective accounts within thirty days as required.
The College's current policy is to refund the proceeds at the end of each academic quarter. Five refunds were reviewed and two were not credited within the thirty day limit.
This act of noncompliance resulted from management's policy of refunding programs at the end of the quarter, instead of as soon as the withdrawal is complete. The College should ensure that refunds of institutional costs paid from Federal student fmancial aid are credited to the Federal accounts within the required time frames.
F - 165

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
Manar:ement Response
We concur with the fmding. A procedure has been put in place whereby a "Pro-rate Refund Worksheet" is completed by the Financial Aid Office. This form shows the amounts that are computed to be returned to the various program accounts. Each form is forwarded to the Business Office to be used as a supporting document for a General Journal entry to the particular accounts. These forms have been held for several days after they reach the Business Office so that one Journal can be prepared to cover a number of worksheets. We have revised our procedures to require the Journal entry to be prepared and posted to the Accounting Records as they are received.
CURRENT YEAR
FUND EQUITIES Deficit Restricted Funds Financial Statements Audit Control Number 533-95-12
At June 30, 1995, various Restricted Funds had deficit balances totaling $513,362.54 for which documentation of funds available to cover the deficits was not provided. Funds should not be spent in projects that do not have funds available.
These deficit balances are a result of management's failure to establish controls to ensure that grants are available and that reimbursement requests are made in a timely manner. Funds were spent for projects where the grant period had expired or where all available funding had already been requested. The College should implement procedures to ensure that all grants are current, that funds are available to cover expenditures and that reimbursement requests are made in a timely manner. The College should review the individual Restricted Funds to determine if all available funding was requested, if the receipts were correctly posted to the funds, and if any other source of funding can be used to fund the deficits.
Manar:ement Response
The College Grant and Contracts Accountant has now been employed. All grants and contracts post-closing fmancial responsibilities have been assigned to her. This employee has conducted a very thorough analysis of the Grants and Contracts. We have contacted all granting sources and taken action to collect the funds. We have collected seventy-seven percent of the funds. We have filed reimbursement requests and should collect the funds in question. Funding has been received for some grants that displayed deficit balances at the time ofthe audit. A procedure for monitoring grants and contract and making timely reimbursement request is now in place.
GENERAL LEDGER Agency Fund Deficits Financial Statements Audit Control Number 533-95-13
At June 30, 1995, there were several agency funds, other than the Departmental Federal Assistance Financing System, that had deficit balances totaling $4,106.29. These deficit balances were a result of the College disbursing funds prior to or in excess of the receipt of funds. Several of the funds have been in deficits for over eight years.
The College should implement procedures to monitor the individual agency funds and to ensure that all funds are received prior to disbursement. The College should seek reimbursement of the deficit balances from the organizations involved.
F - 166

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
CURRENT YEAR
Mana'lement Response
We concur with this fmding. The Agency Fund Accounts that have deficit balances have been identified and steps are being taken to recover the funds from the organization involved. We have assigned an employee the specific duty of monitoring the Agency Fund Accounts to prevent a recurrence of deficit situations.
GENERAL LEDGER-Financial Statements ADMINISTRATIVE REQUIREMENTS-Federal Financial Assistance Dormant Restricted Funds Audit Control Number 533-95-14
At June 30, 1995, there were sixty-four projects in the Restricted Funds that had no activity during the fiscal year. These sixtyfour projects consisted of fifty-one Federally funded projects, three state funded projects and ten privately funded projects with a net fund balance of$79,538.16. It was noted that the grant period had ended for twenty-six of the sixty-four projects. OMB Circular A-I 10 (Subpart D) states that all obligations are to be liquidated within ninety days of the completion of the project and the recipient must refund any unobligated cash that the federal agency advanced or paid that is not necessary for the program.
These dormant accounts are a result of management's failure to monitor the activity occurring in the Restricted Funds and failure to return excess funds promptly to the grantor when the project is complete. The College should implement procedures that will provide proper monitoring of the Restricted Funds and grant periods to ensure that funds are returned to the Federal grantor when the project is complete. The College should contact the grantors to determine if the dormant accounts are to be returned to the appropriate agencies.
Federal Grantor A~enciesAtfected:
National Science Foundation U.S. Agency ofInternational Development U.S. Department of Agriculture U.S. Department of Education U.S. Department of Energy U.S. Department of Health and Human Services U.S. Department of Labor U.S. Department of Transportation
Mqna'lement Response
We have completed an analysis of all grants and contracts. The Grantors have been contacted and it was found that extensions had been given many cases. This documentation has been placed in the individual grant file and they have been updated. In those cases where the Federal, state or private grantor regulations require, the funds will be returned or deposed of as designated by the terms of the grant. The Grants and Contracts Officer's duties include monitoring the grants for expiration dates and compliance with OMB Circular A-l1O requirements. A computerized system for monitoring the grants more closely will also be developed.
F -167

I

I
...Hfill:, OF VEORGIA
I
FINDINGS AND IMPROPER OR QUESTIONED COSTS
I

I

For the Fiscal Year Ended June 30, 1995
I

FORT VALLEY STATE COLLEGE

I

CURRENT YEAR

I

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT

I

General Ledger Not Supported by Subsidiary Records

Financial Statements

I

Reportable Condition - Material Weakness

Audit Control Number 533-95-15

I

At June 30, 1995, a review of the subsidiary equipment inventory records revealed that an unidentified difference of$47,366.75

I

existed between the subsidiary equipment inventory records and the general ledger. The College was unable to provide a

reconciliation to account for the difference.

I

This difference was a result of management's failure to properly record the inventory transactions on the subsidiary records and

I

their failure to reconcile the subsidiary equipment inventory records to the general ledger. The College should implement

procedures to ensure that the accounting records are reconciled to and supported by the subsidiary equipment inventory records.

I

Afana~ementResponse

I

We concur with the finding, The College has reconciled the difference identified between the subsidiary equipment inventory

I

records and the general ledger. The College has a procedure for ensuring that the accounting records are reconciled to and

supported by the subsidiary equipment inventory records. This problem was created in part because the inventory clerk resigned

I

within a week of the close of the books. The College has replaced the clerk and is properly recording inventory transactions

monthly.

I

TYPES OF SERVICES/ALLOWED OR UNALLOWED

I

Inadequate Documentation of Expected Family Contribution Adjustments

Federal Financial Assistance

I

Federal Family Education Loan Program [CFDA 84.032]

Pell Grant Program [CFDA 84.063]

I

Questioned Cost:$11,140.00

Audit Control Number 533-95-16

I

For the year under review, an examination offifty student fmancial aid files of students receiving Pell Grants identified thirteen

I

instances where the student's expected family contribution or dependency status had been adjusted due to special circumstances

as determined by the fmancial aid administrator. The Higher Education Act Amendments of 1992 allow for the adjustment of

I

a specific data element to change a Student's expected family contribution or to change the dependency status. This legislation

specifies that the reason for the adjustment must relate to a student's special circumstance on an individual basis, and must be

I

documented in the student's fmancial aid file. Also, Chapter Two of The Federal Student Financial Aid Handbook defmes special

circumstances as conditions that differentiate an individual student, not conditions that exist for a whole class of students. Federal

I

Regulations (34 CFR 690.32) provide examples of special circumstances, such as; the death of a parent, loss ofjob, a disability,

a natural disaster and unusual medical expenses.

I

Ofthe thirteen instances identified where the student's expected family contribution or dependency status had been adjusted, three

I

were found to be questionable. It was noted that the fmancial aid administrator adjusted the household income to reduce the

expected family contribution; however, the documentation contained in the student's file did not appear to warrant the amount

I

of changes to the household income or to indicate special circumstances or hardships that would differentiate these students from

the general population. The documentation contained in the student's files indicated the following:

I

I

F -168

I

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

FORT VALLEY STATE COLLEGE CURRENT YEAR

1)

For one student, the original expected family contribution was determined to be $0.00 due to the fact

that the Student Aid Report (SAR) submitted electronically by the College reported that the student

had not filed a U.S. Income Tax Return and had no taxable income. However, included in the

student's file was a copy ofthe student's tax return showing adjusted gross income of $17,669.00 that

was submitted to the College with the Free Application for Federal Student Aid (FAFSA), which is

used to generate the SAR. The student had been an employee of the College for several years and

continued to be during the year under review. Using the Student's actual income of$17,669.00 to

determine the student's need results in a calculated expected family contribution of$5,433.00, which

would make the student ineligible for Pell Grants and reduce the amount eligible to be received from

a Federal Family Education Loan.

2)

Another student's original SAR reported an expected family contribution of $8,425.00, parents'

income of $48,633.00 and the student's income of$18,725.00. After a request by the student for a

recalculation of need due to an inability to meet current bills, a second SAR was obtained which

reported the parents' income as $18,633.00 and the student's income as $1,750.00, resulting in a new

expected family contribution of $0.00. No documentation was included to indicate how these

amounts were determined. In addition, the tax returns included in the file supporting the fiscal year

1996 request for fmancial aid indicate that the household income increased significantly over the prior

year.

3)

For the third student, the original SAR reported an expected family contribution of $4,803.00,

parents' income of $45,474.00 and the students income as $2,536.00. After a request by the family

for a recalculation of need, a second SAR was obtained which reported the parents' income as

$24,275.00 and the student's income as $1,500.00, resulting in a new expected family contribution

of $0.00. Again, no documentation was included to indicate how the new amounts were determined,

and the income documented in the file supporting the fiscal year 1996 request for fmancial aid

revealed virtually no change in the household income.

As a result ofthe fmancial aid administrator's adjustments to the expected family contribution formula, these students became eligible for Pell Grants and received a total of$6,708.00. Also, as a result of the adjustments, two of the students were able to obtain additional Federal Family Education Loans totaling $4,432.00 on the basis of the increased need.

The College should implement procedures to ensure that all adjustments to expected family contribution for special circumstances are clearly identified and meet the criteria and defmition for special circumstances as required by the Higher Education Act Amendments 0 f 1992. The documentation provided should be concise and easily quantifiable when adjusting the expected family contribution. The College should contact the grantor agency regarding the resolution of this fmding and the identified questioned cost of$II,140.00.

Mana~ementResponse

For one student, Case #1, we are certain that at the time of the adjustment, adequate documentation was received and acted upon, to be placed in the student's folder. However, a review of the student's file did not reveal the documentation other than a copy of the letter to the Registrar attesting to her circumstances from the Vice President for Student Affairs. The student's father was ill in Germany and she had no resources other than personal to get there. The cost was very high and along with lost weeks of employment, she experienced severe fmancial hardship and was not able to meet her expected family contribution. (Copy ofletter on file.) We can only conclude that in the process of moving from one building to another, the documentation yet to be filed was misplaced. The college will contact the grantor agency to resolve this fmding and respond to the fmal determination action by

F - 169

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE
CURRENT YEAR
the agency. A review of the cases cited by the auditors for this fmding has revealed that in CASE #2 Our records indicate that this student's EFC was reduced due to a request from her mother, citing the step-father's unwillingness to contribute to her daughter's education, and stating that they (the mother and step-father) were presently at a military station in Germany. The documentation included: ) Mitigating circumstances form, with the nature of the action taken, the reason for the change and signed and dated by the Financial Aid Officer; The mitigating Circumstances Recalculation Form indicating line item changes eliminating the step-father and his income; and A copy of the letter from the parent. Our contention in this case is that, in the opinion of the aid officer, sufficient documentation and reason existed to make the changes made. In that Federal regulations for such adjustments refer only to the professional judgement of the fmancial aid administrator and not that of the auditors, we take exception to this fmding. Especially is this true in that the student's parents were out of the United States, adding to the "Special Circumstances" clause as stipulated in Federal regulations in this regard. In CASE #3 Our records reflect that sufficient documentation was present, in the opinion ofthe aid officer, to make the EFC Adjustment for this particular student. As in ~
til, the fmancial aid officer professional judgement was exercised. Present for documentation in the files were: The Mitigating
Circumstances Form citing the nature of the change made, an explanation for the change, and signed and dated by the aid officer. Further investigation revealed that two parental consultations took place verifying family deaths and unemployment, as stipulated. The EFC Recalculation Form listed line item changes made; and Letters certifying circumstances from parent and student. We contend that (l) Special circumstances were determined to exist and action taken was in accord with that required and allowed by Federal regulations. Therefore, we do not accept the auditors fmdings in this case.
We feel the documentation is adequate in these cases. We have strengthened our policies and procedures in this area in order to provide auditors with the needed clarification of our actions.
ELIGIBILITY Funds Disbursed While Enrolled in Excess Remedial Hours Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Cost: $1,332.36 Audit Control Number 533-95-17
For the year under review, an examination of the fmancial aid records and class schedules of fifty students receiving Pell Grants revealed four students who were awarded and disbursed $1,332.36 of Pell Grants in excess of allowable limits. Federal Regulations (34 CFR 668.20) and The Federal Student Financial Aid Handbook state that only forty-five quarter hours of remedial course work may be included in a student's enrollment status and cost of attendance determination for a student attending an institution using the quarter system.
In the four instances identified, the students were disbursed the maximum amount allowable for a full-time student. However, the students were only eligible for less than full-time grants when the remedial hours in excess of allowable limits were excluded.
This questioned cost and act of noncompliance resulted from managements's failure to properly monitor the number of remedial hours taken by fmancial aid recipients. The College should implement procedures to ensure that the course work of financial aid recipients is monitored to prevent disbursement of Title IV funds to those students who have exceeded the forty-five quarter hours limitation. The College should contact the grantor agency regarding the resolution of this fmding and the identified questioned cost of$I,332.36.
F - 170

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE CURRENT YEAR
Mana~ement Response Due to the institution's lack of a complete computerized student records management system, the monitoring of remedial hours limits has been almost a manual procedure, with screening based on information on computer print-out sheets. As a result, mistakes were made through oversight. The institution is currently implementing a new campus wide computer system under BANNER, which will interface with all areas, including the Financial Aid Office and the Registrar's Office. Therefore, we do not expect such fmdings of this nature in the future. The Banner computer program will be implemented in Fall 1996. During the Summer '96 period, the Satisfactory Academic Progress: component for fmancial aid administration will be fmalized to include the monitoring of remedial hours per financial aid recipient, with an automatic block in place for 45 hours limit violators. The system is designed to interface with Registrar's Office records and provide instant notification for this monitoring activity, as well as all other components of the satisfactory academic progress defmition. The institution concedes this fmding and will reimburse the Pell Grant program accordingly. FEDERAL FINANCIAL REPORTING Failure to Return Reports in a Timely Manner Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Audit Control Number 533-95-18 For the year under review, an examination of Student Status Confirmation Reports disclosed that the College failed to return Student Status Confirmation Reports to the appropriate agency within thirty days of receipt of the report as required by Federal Regulations (34 CFR 682.610). This act of noncompliance resulted from management's failure to verify that Student Status Confirmation Reports were returned within 30 days of receipt. The College should implement procedures to verify that the Student Status Confirmation Reports are returned within 30 days of receipt by College personnel as required. Mana~ement Response The responsibility of completing Student Status Confirmation Reports at present is that of the Registrar's Office. In that this office apparently is experiencing difficulty in completing the data by prescribed deadlines, procedures are being implemented for this task to be completed by the Financial Aid Office, using the Banner computer system's interface activities for the necessary information. The institution concedes this fmding and will make every effort for complete compliance in the future.
F171

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE CURRENT YEAR
SPECIAL TESTS AND PROVISIONS Incorrect Calculation of Program Refunds Federal Financial Assistance Questioned Cost: $396.00 Audit Control Number 533-95-19 For the year under review, an examination of the College's fmancial aid refund procedures for students who withdraw from school during a payment period revealed that for three students the College used the wrong percentages to calculate the Federal program fund. Federal Regulations (34 CFR 668.22) require institutions to refund to the individual programs the portion of an award that remains after a student withdraws from the institution based on the institution's refund policy. In the three instances cited, incorrect percentages were used to calculate the program refunds based on the total aid awarded the students as stated in the College's refund policy, which resulted in the Federal Programs receiving the incorrect refund amount or no refund at all. These questioned costs resulted from management's miscalculation of the percentages used to calculate the refunds and failure to verify that refunds were correct. The College should implement the necessary procedures to ensure that all refunds are correctly calculated and returned to the appropriate programs. Reimbursement of the questioned cost of $396.00 should be returned to the programs by the appropriate funds that incorrectly retained the grants. The College should contact the U.S. Department of Education regarding resolution of this questioned cost. Federal Financial Assistance Prorpams Affected and CFDA Numbers: 84.007 Supplemental Educational Opportunity Grant Program 84.032 Perkins Loan Program 84.063 Pell Grant Program Manq~ement RespQnse The institution incorrectly calculated program refunds for the three students due to a lack of clear understanding of procedure changes for the year under review. Corrections have been made to our forms and fmancial aid counselors have been trained to handle the charges. The institution concedes this fmding and will make the appropriate program refund adjustments as well as amend all accounting records.
F - 172

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

INFORMAnON TECHNOLOGY PLANNING

Strategic and Resource Planning Reportable Condition Audit Control Number 533a-95-01

Strategic use of information technology does not appear to be a significant priority at Fort Valley State College. While Fort Valley has established an information technology advisory committee called ARPEC (Automated Resources Planning and Evaluation Committee), participation by committee members is minimal. As a result, the Computer Center receives little direction from the college to set priorities. As a result, the previous three-year information technology plans have not been responsive to the needs and requirements of users, nor have they been coordinated or otherwise linked to any overall strategic plan.

Lack of overall planning is evidenced by the absence of policies and procedures, performance measurements, and ongoing technical problems, and poor user perceptions. Specific examples include:



There are ongoing operational problems with some applications on the Tl-1500 computer. It is not

an uncommon occurrence for the Fee Payment or Registration systems to be loaded and processed

on the Tl-990 because they would not function properly on the Tl-1500. This problem appears to

have continued for some time and has not been resolved. In another instance, the Computer Center

Director must occasionally lend a powerful system ID to a user, whose application would not function

correctly using a less powerful system ID. These issues have not been made a priority for the

Computer Center and as a result, have not been addressed.



Users are motivated to seek technology solutions from other departments instead of utilizing the

Computer Center. For hardware or software problems and system setup, users will sometimes turn

to the Mathematics department for assistance. Users have stated that the response is more timely than

from the Computer Center.

Without an effective strategic plan for information technology in place, planning for adequate resources and the associated budgeting for those resources becomes difficult at best. A resource plan that effectively serves the college should flow directly from the information technology plan, which in tum coordinated with the strategic plan for Fort Valley.

We recommend the college consider the following actions:



Reassess the value and contribution of ARPEC in its current form. Establish specific goals and

objectives of the committee and solicit support from the committee members to ensure participation

at the level required. Determine priorities and responsibilities of the Computer Center personnel

based on college needs.



Perform planning efforts in cooperation with overall college planning.



Develop policies and procedures with controls to monitor compliance which will provide a formalized

means to achieve college and Computer Center objectives and provide a benchmark with which to

measure performance.

F - 173

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

INFORMATION TECHNOLOGY PLANNING



Determine the appropriate mix of technology and human resources needed and the corresponding

organizational structure and job functions that will best serve the identified goals and priorities of the

college and the Computer Center.

Afana~ementResDonse

We concur with the recommendation as stated in your May 1995 review. We have restructured Computing and Information Technology Services and are planning to hire new personnel in order to better serve the campus community. In March, 1996, the College hired an Acting Director of Computing and Information Technology Services (CITS), along with key campus personnel, is in the process of analyzing services, needs, equipment and personnel. Based on these analyses recommendations will be made and policies and procedures will be developed and implemented to improve services. Improved services also will be realized by organizational restructuring and identifying and redistributing responsibility coupled with acquiring new personnel.

The Automated Resources Planning and Evaluation Committee (ARPEC) will be restructured by June 15, 1996. The Director of Institutional Research, Planning and Services has been given the responsibility for this restructuring coupled with the recently hired Director of CITS serving as its Chair. Further, the CITS planning will be linked to the College's strategic plan via associating CITS's goals with the appropriate College's goals by February 15, 1997. These plans will be evaluated, combined and used as the central instrument for guiding data processing. Services, equipment and software acquisitions and priorities will all be governed by this document and the ARPEC Committee.

Policies and procedures with controls to monitor compliance will be completed by February 15, 1997. The ARPEC Committee and CITS will enforce compliance with policies and procedures. Moreover, we will document the policies and procedures governing these groups in the College's Policy and Procedure Manual and Pennanent Committee Book.

The appropriate mix of technology and human resources are currently under review and by March 15, 1997, this appropriate mix will be determined with organizational structure and job functions that will best serve the identified goals and priorities of the College and the CITS.

INFORMATION SYSTEM SECURITY

Information System Security Policy Reportable Condition Audit Control Number 533a-95-02

Fort Valley has an Information Security Policy, however it is a broad, high-level statement that has not been customized to tailor the policy to Fort Valley's specific needs, both in terms of security administration and in specific access rules to system resources. It is not a policy that has been approved for implementation.

We believe the following observations can be attributed to the lack of an adequate policy:



Ownership of system resources has not been specifically defmed and/or formally communicated to

users.

F174

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

INFORMATION SYSTEM SECURITY



Written standards are not in place that specify the appropriate access levels to system resources

according to job responsibilities for system users and Computer Center personnel.



There are no established procedures between Human Resources and the Computer Center to

communicate employee terminations or transfers.



Responsibility for developing and enforcing formal security policies and standards has not been

formally assigned to accountable personnel. Security administration is not included in the job

descriptions of any Computer Center employee, although the Computer Center Director also functions

as a security administrator.



System security monitoring is not performed for the various computing platforms used at Fort Valley.

The capabilities exist for the tracking and review of potential unauthorized access attempts or the use

of powerful Ids and system utilities, but none are currently utilized.

We recommend Fort Valley develop an information security policy which will address the above observations and mitigate the risk of unauthorized or inappropriate access. This policy statement should include input from the information technology steering committee and its development should be a joint effort with the Computer Center and key information system users.

The goals of the policy statement should be written in generic, non-platform or application specific terms which address the following key areas:



Confidentiality - assuring that sensitive data is read only by authorized individuals.



Integrity - protecting data and software from improper modifications.



Availability - ensuring that systems are accessible when authorized users need them.

The need for a policy that addresses ownership, accountability, and responsibility for protecting information resources is not an issue to be owned by the Computer Center nor is it a platform or application specific issue. This is a college-wide issue that requires buy-in and participation at the most senior levels of leadership.

Once a policy has been developed and formally communicated, the Computer Center can contribute by providing the necessary tools and support to help administer security.

Mana'lement Response

We concur with the recommendation. In November 1995, in its first step of simplifying system security, CUFA system and parts of the Student Record System were moved from the TIl 500 to the HP9000. Further, all new applications will be installed on the HP9000 by June 15, 1996.

F175

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMAnON SYSTEM SECURITY
By July 15, 1996, an information security policy will be developed by the ARPEC Committee. The information security policy will address confidentiality, integrity and availability coupled with ownership of system resources, standards for appropriate access levels to system resources, establish procedures between human resources and the Computer Center to communicate employee terminations/resignations or transfers, enforce formal security policies and standards, and monitor system security for the various computer platforms. Once developed the policy will be made available upon request and distributed to current and new users.
We are currently installing the BANNER Student Information System. BANNER is based on non-Computer Center ownership of resources. BANNER provides application level, module level and form level security along with system level security provided by Computer Center personnel. The steps, once implemented will more than adequately address information system security.

Information System Security - Platform Specific Observations Reportable Condition Audit Control Number 533a-95-03

It should be noted that the fmancial application systems are afforded two layers of protection; system level security and application level security. Our review was limited to the overall system level security for the platform that processes the fmancial applications, the TI-1500. It is possible that in some instances, the system level security risks identified here may be somewhat mitigated by the application level security controls in place.

We observed opportunities to improve security controls as follows:

Texas Instruments model 1500 - UNIX



Employees of the Computer Center group know the superuser password. This level of access will

permit individuals to circumvent normal system security, change security settings and gain access to

any system resource, including fmancial data.

(Note: Fort Valley programmers cannot make changes to the four centrally-supported fmancial applications; changes to these programs can only be made at the Board of Regents since the supported Institutions are provided only the object code of the applications.)

As noted previously, we strongly recommend that Fort Valley enhance the information system security policy to determine appropriate levels of access and establish a formal security administration process within the Computer Center to administer and monitor system security, develop security training to communicate security responsibilities, and ensure adherence to the policy.

F - 176

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995
FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMATION SYSTEM SECURITY
A1ana~ementResponse
In November 1995, the College moved the CUFA system from the TI1500 to the HP9000. The Banner Student Information System also operates on the HP9000. By the end of May 1996, all systems will be migrated to the HP9000. A new director of the CITS was hired in March 1996. A number ofthe information system security (platform specific) observations associated with the TI1500, were eliminated with this migration.
The new director is in the process of enhancing the information system security policy that will cover the Computer Center personnel and superuser password access and establish a formal security administration process within the Computer Center that administers and monitors system security. CITS personnel will develop security training and distribute security policy and other pertinent information to the users. These measures will ensure security compliance by the users. Copies of the policies and procedures will be on hand and available for review by July 15, 1996.

DISASTER RECOVERY

Disaster Recovery Planning Reportable Condition Audit Control Number 533a-95-04

Fort Valley has not developed a plan to recover the processing platforms for the four centrally supported fmancial applications or any other application system operated at the college in the event of a disaster. Should there be a disaster or other event significantly affecting computer operations, there may be a direct impact upon the activities and operations of the college, especially during registration or other periods of increased use of information technology.

Presently, certain payroll functions can be assumed by the Board of Regents in the event of a disaster. However, no other Computer Center functions are currently addressed in a recovery plan either by the Board of Regents or Fort Valley.

Key to restoration of systems are adequate backup procedures. However, backups of Fort Valley's critical programs and data are not always made and are not consistently taken offsite by Computer Center personnel. This may have a significant impact on the recovery of critical programs and data in the event of a disaster, regardless of the existence or adequacy of recovery procedures and whether performed by Fort Valley or the Board of Regents.

The Board of Regents is developing a university system-wide recovery plan for the four Regents-supported fmancial applications processed at each participating institution. In conjunction with this effort, we recommend Computer Center management in cooperation with key user management address the following:



Perform a risk assessment of the local college's application systems and business processes to identify

those that are mission critical. Then determine the impact a disruption in computer processing would

have on the critical application systems and identify the resources needed for recovery.

F - 177

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

DISASTER RECOVERY



In connection with the above, perform a costlbenefit analysis to assist in decision making. Develop

the recovery procedures and business process procedures required to recover the critical application

systems and restore processes in an organized manner and within an accepted period of time. This

initiative should take into account the recovery plan for the four fmancial applications as being

developed by the Board of Regents.



The recovery plan, once implemented, should be periodically tested and maintained to accommodate

the college's changing information technology environment. Personnel responsible for the

implementation of the plan should be informed and trained for their responsibilities.

Computing Facilities

During our tour of the computer room facilities, we observed the following environmental risks:



The layout of the Computer Center is not well-designed. Although the current facility is large enough

to house the computing equipment, the room is very cluttered with cables and wires running above

the floor. Employees cannot move freely about the facility because it does not have a raised floor.



Smoke, heat and water detectors have not been installed in the present facility. This presents the risk

that environmental threats to computing equipment will not be recognized and addressed in a timely

manner.

Management is very aware of these issues and risks and will move the Computer Center to a new facility with significantly improved environmental controls in June, 1995.

We recommend that any environmental risks and exposures to the new computer facility be considered during disaster recovery plan development.

Mana'lement Response

We concur with the recommendations. In conjunction with the Board of Regents, system-wide recovery plan for the Regents-
supported fmancial applications, the review committee of the College has established the Fort Valley State College internal disaster recovery procedures. The procedures, limited to fmancial and payroll applications, are under review and will incorporate
recovery plans for all other system applications by June 1996. Further, cns will develop recovery procedures that will
incorporate the fmdings/recommendations of the Business and Finance areas study. The recovery plan for the four fmancial
applications being developed by the Board of Regents will be taken into account and will be completed within three (3) months ofthe review by Business and Finance.

With respect to the computing facilities, in July 1995, the Computer Center was relocated to the Computer Technology and Mathematics Building. This new facility is designed to minimize disaster. It has raised floors, smoke and fire detectors, air conditioner sensors and keycard accessible doors. The facility also has a vault for added protection. Moreover, central to any recovery plans are accurate and timely backups. Backups are being done on a daily basis. Financial data, the SIRSI library system, partial student record data and databases are backed up each night Monday through Friday. Other systems, those not listed above, are backed up on Mondays, Wednesdays and Friday during the day. Tapes containing backup data, will be transferred weekly to a local vault in order to satisfy off-site backup data storage.

F - 178

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

PROBLEM MANAGEMENT AND APPLICAnON CHANGE MANAGEMENT

Problem Management Reportable Condition Audit Control Number 533a-95-05

The Computer Center does not follow a formal process to manage problems reported by users. This includes notification, prioritization, and disposition reporting of problems. As a result, many user-reported problems are not addressed prompting the user to identify a solution or to seek assistance from academic or other departments.

During our review of the problem management function of the Computer Center, we observed the following:



There is no formal record made of a problem when reported nor is there a method of prioritizing the

problem. There is no means to determine whether a problem has been closed or remains open and

there is no documentation of the solution.



Some users noted that Computer Center personnel spend time on such tasks as installing

microcomputer software while significant operational issues are pending for the Fee Payment System

to run properly on the TI-1500 computer.



There is no centralized point of contact for problem reporting. Currently, the Computer Center

Director or Programmer receives calls directly from users which is disruptive.

We recommend that the Computer Center defme and implement problem management policies and procedures. The tracking and prioritization of problems is a key issue impacting the effectiveness and efficiency of Computer Center personnel. A centralized point of contact for problem reporting will free Computer Center employees to concentrate on their current tasks and help ensure that all problems are addressed on a consistent basis.

Manar;:ement Response

An informal management and tracking system has been established and manned by the secretary within the Computer Center. By the end of fiscal year 1996, the Director of Computer and Informational Technology Services coupled with the ARPEC Committee will develop a plan to address tracking and prioritization of problems to include documentation and resolutions.

Application Change Management Reportable Condition Audit Control Number 533a-95-06
The Board of Regents has the ability to make program changes to the four centrally supported fmancial applications distributed to Fort Valley and the other participating institutions. Only the object code for these applications is provided; therefore, Fort Valley cannot make changes directly to the fmancial applications.

F179

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

PROBLEM MANAGEMENT AND APPLICAnON CHANGE MANAGEMENT

Observations related to change management apply only to the locally developed applications such as Fee Payment, Financial Aid, Registration and Student Accounting Systems. Also included are in-house developed reporting programs which serve as add-ons to the four centrally supported fmancial applications. These reporting programs read the fmanciaI application data files and produce any fmancial reports desired.

Per discussion with Computer Center personnel, few changes are being made to the Fee Payment and Financial Aid Systems in anticipation of the Banner student information system, scheduled to be implemented over the next few years. As a result, the risks outlined below may be somewhat mitigated for these two applications:



Although some infonnaI procedures are in place, application change management procedures are not

consistent for all program changes. Procedures have not been formalized to require documentation

of the authorization, testing and approval of program changes by user and Computer Center

management before implementation. Users are only involved with testing "major" changes. In most

instances, changes are implemented without user testing and approval.



The programmer has system access capabilities to implement program changes into the production

environment and normally performs this task. Because monitoring is not performed and audit trails

are not available, there is a risk that program changes are implemented which have not been

authorized or approved by user and Computer Center Management. Per discussions with Computer

Center personnel, changes to programs are sometimes implemented without the Computer Center

Director's approval.

We recommend that the Computer Center develop and implement policies and procedures for application change management control to ensure the quality of changes made and to ensure that all changes have been authorized and approved by the appropriate users and Computer Center management.

Mana"emenf Response

In November 1995, the College moved the CUFA system from the TII500 to the HP9000. The Banner Student Information System also operates on the HP9000. By the June 15, 1996, all applications will be migrated to the HP9000. We hired a new director ofthe CITS in March 1996. The College is in the midst ofa major conversion process. Policies and Procedures' manuals for the Banner System are documented and available for review. The System controls the application changes for the CUFA systems.

The College, as part of its implementation, will develop by August 30, 1996 policies and procedures to ensure application change management controls to include proper authorization by users and CITS managements are in place.

F - 180

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FORT VALLEY STATE COLLEGE - EDP GENERAL CONTROLS CURRENT YEAR

PROBLEM MANAGEMENT AND APPLICAnON CHANGE MANAGEMENT

Acquisition Policies and Procedures Reportable Condition Audit Control Number 533a-95-07

During our review and testing of compliance with acquisition policies and procedures for computing resources, we observed the following:



Although adequate documentation existed with the Purchasing department, documentation was often

incomplete as retained by the Computer Center. The Purchasing department provided copies of

checks and purchase orders, from which we selected sample items for testing. At the Computer

Center level, we attempted to examine the initial and fmal requisitions, as well as the approvals by

the ARPEC committee and by the Vice President ofthe Office of Information Technology. However,

Computer Center personnel were unable to locate some of the supporting documentation retained by

the Computer Center for computer-related purchases.

As a result, we were unable to examine the evidence for compliance with acquisition policies and procedures for all items sampled. Documentation that we were able to examine for some items tested indicated that the policies and procedures were being followed appropriately.

We recommend that the Computer Center implement procedures to properly maintain the records of all purchases made for computer equipment and software. An appropriate audit trail will be maintained providing accountability for approvals and a historical record of purchases will be available for review.

Mana~ement Response

The College does not concur with this recommendation. The College maintains adequate records and documentation on all purchases made for computer equipment and software. The ARPEC Committee approves all computer and software resources. The Assistant Director of the Computer Center maintains the records of approval. Further, historical records of all computer equipment purchases over $1,000.00 are maintained by our Property Management System. All records of purchases and computer equipment and software are available to the Center for periodic review and compliance with policy.

F - 181

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, J995

GEORGIA COLLEGE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findinl:

536-94-01

Corrective Action Implemented

F - 182

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA SOUTHERN UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

539-94-01 539-94-02 539-94-03

See Audit Control Number 539-95-01 See Audit Control Number 539-95-02 Corrective Action Implemented

PRIOR YEAR

REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 539-95-01
The audit report for the year ended June 30, 1994, disclosed that Georgia Southern University had $72,324.25 in student accounts receivable which were either incurred prior to Summer quarter, 1994, or had no approved fmancial aid. This balance decreased to $70,333.83 as of June 30, 1995. There is no provision in the policies of the Board of Regents for deferments of student accounts without the student having approved fmancial aid at the time of registration.
Collections of student accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved fmancial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.
Mana~ement Response
We concur with this recommendation. Georgia Southern University will follow the Board of Regents Policy, Section 704, on collecting fees at registration and insure any exceptions to the policy, allowed by the Board of Regents, having supporting documentation.
Procedures to collect outstanding accounts receivable balances have been implemented. Students are notified by letter which include statements of their outstanding obligation. Failure to respond after three (3) notices results in turning the account over to a collection agent for collection. Should this fail, the accounts will be forwarded to the Attorney General's office for legal action.
EXPENDITURESILIABILITIESIDISBURSEMENTS Agency Fund Overpayments Financial Statements Questioned Cost: $2,863.96 Audit Control Number 539-95-02
The audit report for the year ended June 30, 1994, disclosed that Georgia Southern University had a combined total deficit of $34,652.68 in funds of the Fiduciary Fund Type - Agency Funds which could not be verified as received in the subsequent fiscal period. This balance decreased to $2,863.96 as of June 30, 1995, and consisted of the following funds:

F -183

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
GEORGIA SOUTHERN UNIVERSITY PRIOR YEAR

Amount

Bulloch County Law Library Hillel Affiliate Secolas Annals Travel Cards

$ 2,100.21 298.67 232.07 233.01

$ 2.863.96

The deficit balances ofthese funds are the cumulative result of beginning deficit balances and current year activity. Appropriate action should be taken by the University to secure reimbursement ofthese overpayments. Payments should not be made in excess of collections for Agency Funds.

Mana~ement Response

We concur with this recommendation. Individuals and organizations have been billed and contacts have been made to resolve the remaining deficit balances in the Agency Funds during fiscal year 1996.

Procedures have been established that Agency Accounts must have written agreements between the Institution and organizations which covers the operating functions of the agency account and the method to handle available funds within the account. In addition, expenditures from agency accounts will require prior approval from the accounting office, that funds are available, before any expenditures are made.

CURRENT YEAR

SPECIAL REPORTING Institutional Payment Summary Reports Not Submitted on a Timely Basis Federal Financial Assistance Pell Grant Program [84.063] Audit Control Number 539-95-03
Special reporting requirements ofthe Pell Grant Program (84.063) for Georgia Southern University included submission of the Institutional Payment Summary (IPS) to the U. S. Department of Education during six periods for the year under review. Georgia Southern University failed to submit a report for the period February 16, 1995, through April 15, 1995.
The University should implement procedures to ensure that all IPS reports are submitted on a timely basis.
Mana~ementR$eDOnse
We concur with this recommendation. The University will establish procedures to ensure that all Institutional Payment Summary reports are submitted to the U.S. Department of Education on a timely basis.
The Federal Pell Grant Program "Statement of Account" lists the Institutional Payment Summary (IPS) submission dates. Throughout the year the Revenue Accounting office will obtain copies ofthe Statement of Account from the Financial Aid office to verify that IPS reports are being submitted within each required reporting date range. If an IPS report has not been submitted during a required date range, this office will notify management in the Financial Aid office that a report must be submitted prior to the last date in the respective date range.

F - 184

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS CURRENT YEAR

INFORMATION TECHNOLOGY PLANNING

Strategic and Resource Planning Reportable Condition Audit Control Number 539a-95-01

Strategic use of information technology does not appear to be an institutional priority at Georgia Southern. The institution presently does not have an Information Technology Steering Committee that can defme the mission and goals for applying information technology and establishing priorities for Computer Services, ensuring that computing efforts are in accordance with the strategic direction of the institution.

Computer Services has not been involved in the institutional strategic planning process and independently develops a three year strategic plan for technology. This exercise has generally been viewed as a non-value added activity that is required by the Board of Regents.

We observed some users feel compelled to seek their technology solutions from within their own departments instead of utilizing the expertise of Computer Services personnel. Many academic departments at Georgia Southern develop and manage their own technology, including LAN and PC related hardware and application software without the consultation or participation of Computer Services. This "outsourcing" may not be an optimal use of resources. But, such a judgment is difficult to make without an understanding of the university's strategic position on the deployment of information technology.

Without an effective strategic plan for information technology in place, planning for adequate resources and the associated budgeting for those resources becomes difficult at best. A resource plan that effectively serves the institution should flow directly from the information technology strategic plan, which is in tum coordinated with the strategic plan for Georgia Southern.

We recommend the university consider the following actions:



Form an information technology steering committee comprised of key users and Computer Services

with specific responsibilities to establish the direction and priorities of Computer Services.



Perform planning efforts in cooperation with overall university planning.



Develop policies and procedures with controls to monitor compliance which will provide a formalized

means to achieve institutional and Computer Service objectives and provide a benchmark with which

to measure performance.

A1ana~ementResponse

We concur. On July 24, 1995, University President appointed an Information Technology Advisory Council. The council, composed of fifteen members of the faculty and staff, represents all aspects of information technology. Primarily, the Council will assist with priorities for Computer Services and develop recommendations to the Executive Planning Council regarding the role of Information Technology within the overall University Strategic Plan. Further, they will recommend institutional policies and procedures relevant to the use of information technology, and assist where needed with other information technology projects.

F - 185

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS CURRENT YEAR

INFORMAnON SYSTEM SECURITY

Information System Security Policy Reportable Condition Audit Control Number 539a-95-02

Georgia Southern does not have a documented Information Security Policy which establishes responsibility and accountability for protection of information assets. Georgia Southern has recently developed guidelines regarding the request for and termination of system IDS. However, these guidelines are very broad and do not comprise a policy statement.

We believe the following observations can be attributed to the lack ofa security policy:



Ownership of system resources has not been specifically defmed and/or formally communicated to

users.



Written standards are not in place that specify the appropriate access levels to system resources

according to job responsibilities for system users and Computer Services personnel.



The established procedures between Human Resources and the Computer Services to communicate

employee terminations and transfers takes place once every other month.



System security monitoring is not always performed for the various computing platforms used at

Georgia Southern. No security logging or monitoring is performed for the TI-1500, the platform

upon which the fmancial applications and data reside. Minimal logging is performed and reviewed

for unsuccessful log-ins or passwords changes on a monthly basis for the DECNAX 5420, which

processes the Student Information System. The capabilities exist for the tracking and review of

unauthorized access attempts and the use of powerful IDS and system utilities; however, few are

currently utilized at Georgia Southern.

We recommend Georgia Southern develop an information security policy which will address the above observations and mitigate the risk of unauthorized or inappropriate access. This policy statement should include input from the information technology steering committee and its development should be a joint effort with the Computer Services and key information system users.

The goals of the policy statement should be written in generic, non-platform or application specific terms which address the following key areas:



Confidentiality - assuring that sensitive data is read only by authorized individuals.



Integrity - protecting data and software from improper modifications.



Availability - ensuring that systems are accessible when authorized users need them.

The need for a policy that addresses ownership, accountability, and responsibility for protecting information resources is not an issue to be owned by the Computer Services nor is it a platform or application specific issue. This is an institute-wide issue that requires buy-in and participation at the most senior levels of leadership.

F - 186

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS
CURRENT YEAR
INFORMAnON SYSTEM SECURITY
Once a policy has been developed and formally communicated, the Computer Services can contribute by providing the necessary tools and support to help administer security.
Mana~ement Response
We concur. The Director of Computer Services, Computer Services staff, major users, and the Information Technology Advisory Council will develop an information system security policy which will address the concerns expressed in the audit report and establish a means by which the risk of unauthorized or inappropriate access is reduced to an acceptable level. This policy will be developed and implemented by October I, 1996.

Information System Security - Platform Specific Observations Reportable Condition Audit Control Number 539a-95-03

It should be noted that the fmancial application systems are afforded two layers of protection; system level security and application level security. Our review was limited to the overall system level security for the platform that processes the fmancial applications, the TI-1500 and the platform that processes the Student Information System, the DECNAX 6420. It is possible that in some instances, the system level security risks identified here may be somewhat mitigated by the application level security controls in place.

We observed opportunities to improve security controls as follows:

Texas Instruments Model 1500 - UNIX and DECNAX 6420-VMS



Based on our testing of user IDS for both the VAX and the TI-1500, it appears that some student

employees are sharing system IDs. These IDs are shared by student assistants that work in various

departments such as accounting and fmancial aid.

Based on our procedures, these shared IDs appear to be appropriately limited to those specific application programs and functions in accordance with their job duties. However, individual accountability for system or application-specific activities is often lost or obscured when IDs are shared.

We recommend that each person using the system be assigned their own user ID. When each user has an individual ID on the system, activity can be logged and can provide a clear audit trail of any activity on the system by that user.



Passwords on both the VAX and the TI-1500 are required to be changed only every 90 days. This

three month period of time before passwords are required to be changed may increase the risk of

unauthorized access by guessing or otherwise determining a user password over time.

F - 187

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS CURRENT YEAR
INFORMATION SYSTEM SECURITY
We recommend that Georgia Southern, as part of the development of formal security policies and procedures, reassess the adequacy of this password expiration interval in addressing the potential risks associated with this procedure. Mana~ement Response We concur. These recommendations will be evaluated and included in the development ofthe information system security policy.

DISASTER RECOVERY

Disaster Recovery Reportable Condition Audit Control Number 539a-95-04

Georgia Southern has not developed a plan to recover the processing platforms for the four centrally supported financial applications or any other application system operated at the institution in the event of a disaster. Should there be a disaster or other event signifIcantly affecting computer operations, there may be a direct impact upon the activities and operations of the institution, especially during registration or other periods of increased use of information technology. Presently, certain payroll functions can be assumed by the Board of Regents in the event of a disaster. However, no other Computer Services functions are addressed in a recovery plan either by the Board of Regents or Georgia Southern.

Key to restoration of systems are adequate backup procedures. Backups of Georgia Southern's critical programs and data are only taken off site by Computer Services personnel once a month. This may have a significant impact on the recovery of critical programs and data in the event of a disaster, regardless of the existence or adequacy of recovery procedures and whether performed by Georgia Southern or by the Board of Regents.

The Board of Regents is developing a university system-wide recovery plan for the four Regents-supported fmancial applications processed at each participating institution. In conjunction with this effort, we recommend Computer Services management in cooperation with key user management address the following:



Perform a risk assessment of the local institution's application systems and business processes to

identify those that are mission critical. Then determine the impact a disruption in computer

processing would have on the critical application systems and identify the resources needed for

recovery.



In connection with the above, perform a cost/benefit analysis to assist in decision making. Develop

the recovery procedures and business process procedures required to recover the critical application

systems and restore processes in an organized manner and within an accepted period of time.



The recovery plan, once implemented, should be periodically tested and maintained to accommodate

the institution's changing information technology environment. Personnel responsible for the

implementation of the plan should be informed and trained for their responsibilities.

FI88

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS
CURRENT YEAR
DISASTER RECOVERY
Mana~ement Response We concur. The Director of Computer Services, Director ofInternal Audit, major users, and key administrators will determine the critical applications, evaluate the risk of system failure, identify resources required for recovery, and develop a plan for disaster recovery to be implemented by December 31, 1996.
PROBLEM MANAGEMENT AND APPLICAnON CHANGE MANAGEMENT
Problem Management Reportable Condition Audit Control Number 539a-95-05
The Computer Center does not follow a formal process to manage problems reported by users. This includes notification, prioritization, and disposition reporting of user problems. Microcomputer application related problems encountered by faculty and student are reported to a Help Desk manned by student employees. Problems related to the accounting applications on the TI-1500 and the Student Information System on the DECNAX 6420, are typically reported directly to the Computer Services programmer who supports the application.
There are no formalized policies and procedures regarding problem management for the Help Desk. As a result, there may be inconsistent treatment of reported problems, especially since the Help Desk is manned primarily by a number of part-time students.
We recommend that Computer Services defme and implement formal problem management policies and procedures. A centralized point 0 contact would facilitate the consistent treatment and logging of all reported problems and enable tracking and trend analysis.
Mana~ement Response We concur. Computer Services will establish consistent policies and procedures for problem management. Help Desk software, Remedy Corporation's Action Request System, has already been purchased and should be installed and operational by fall quarter, 1996.
Application Change Management Reportable Condition Audit Control Number 539a-95-06
The Board of Regents has the ability to make program changes to the four centrally supported fmancial applications distributed to Georgia Southern and the other participating institutions. Georgia Southern and any of the other institutions do not and cannot make changes directly to the fmancial applications.
F - 189

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS CURRENT YEAR PROBLEM MANAGEMENT AND APPLICATION CHANGE MANAGEMENT
Application change management policies and procedures have not been formally approved by all affected parties for SIS ad BIS application development activities, resulting in a lack of consistency in managing program changes. There are no formal standards which require the documentation of requests, testing and approvals for all program changes. As a result, some application development control procedures and documentation standards are inconsistent, depending on the nature ofthe change. In addition, formal user ad Computer Services supervisory authorizations and approvals are not always consistently obtained prior to the implementation of both SIS and BIS program changes. System support personnel do not typically review documentation for these approvals prior to the installation of the change to the production libraries. This applies only to locally developed applications such as the Student Information System. Also included are the in-house developed reporting programs which serve as add-ons to the centrally supported fmancial applications. These reporting programs read the fmancial application data files and produce any fmancial reports desired. We recommend Computer Services develop and implement policies and procedures for program change management control to help ensure the quality of changes made and to ensure that all changes have been authorized and approved by the appropriate users and Computer Services management. Mana~ement Response We concur. The production environment is already maintained separate from applications development, and Computer Services will develop more formal policies and procedures which include appropriate signoffs and approvals.
F -190

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

GEORGIA SOUTHWESTERN COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

542-92-01 542-92-10 542-93-06 542-94-01 542-94-02

Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 542-95-02 See Audit Control Number 542-95-01

A1ana~ementResDQnSe

Audit Control Number 542-92-10

The College is awaiting contact from the U.S. Department of Education Audit Resolution Branch in accordance with a letter from the ED Regional Inspector General for Audit, dated September 9, 1994.

Audit Control Number 542-93-06

The fmding results from an undocumented accounts receivable. A first year student from Colombia had been robbed shortly after entering the United States. College officials worked daily with the student to help him secure funds from his family in Colombia, without success. The College provided the student room and board temporarily until he could return to his home. Subsequent audits and reviews have indicated that College Management enforces the University System policy regarding accounts receivable documentation.

PRIOR YEAR/CURRENT YEAR

REVENUEIRECEIVABLESIRECEIPTS Students Accounts Receivable Variance Financial Statements Audit Control Number 542-95-01
The review report for the year ended June 30, 1994, disclosed that Georgia Southwestern College's subsidiary student accounts receivable records for the Loan Funds did not reconcile to the general ledger control account. An unidentified variance of $575.00 existed at June 30, 1994. At June 30, 1995, there was an unidentified variance of $627.00 between the subsidiary student accounts receivable records and the general ledger control account. The unidentified variance occurred because management failed to reconcile Loan Fund records maintained at the College with records maintained by the outside billing agency.
Procedures should be implemented by the College to ensure that subsidiary accounts receivable records maintained by the billing agency are reconciled to the general ledger control account.

F -191

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA SOUTHWESTERN COLLEGE
PIDORYEA&CURRENTYEAR
Mana"ement Response In May 1993 the Loan accounts were transferred to an outside billing agency. During this process the billing service did not completely reconcile their subsidiary ledger to the General Ledger balance provided by the College. During the past year, College personnel have spent hundreds ofhours reconciling these accounts and have found several posing errors from the original conversion period. The unreconciled balance is now $250.10. Loan Office personnel will devote as much time as possible to the reconciliation of this difference. SPECIAL TESTS AND PROVISIONS Due Diligence Provisions Not Followed Federal Financial Assistance Perkins Loan Fund [CFDA 84.038] Audit Control Number 542-95-02 The audit report for the year ended June 30, 1992, and the review reports for the years ended June 30, 1993 and 1994, disclosed that Georgia Southwestern College failed to exercise due diligence in the collection of delinquent Perkins Loans. For the year under review, a sample often Perkins Loan recipients in default disclosed the following exceptions:
(1) The College failed to refer six accounts in default to collection agencies or to the College's collection office.
(2) The College failed to bring litigation against five accounts in default in excess of 12 months. The College failed to meet due diligence requirements because management did not follow-up on delinquent loans. The College should implement procedures to ensure that due diligence is exercised and documented for the collection of Perkins Loans as required by Federal regulations (34 CFR 674.41). The College should contact the U. S. Department of Education regarding resolution of this fmding. Manqumenf Response The College has made substantial progress in satisfying due diligence requirements in the collection of Perkins Loans. The Perkins Loan Cohort Default Rate as of June 30, 1995 is 10.86%, compared to 18.07% on June 30, 1994. In October 1994 the College employed a full-time Loan Collection Officer which has resulted in significant progress in collections and due diligence. Since October 1994, the Loan Collection Officer has processed 200 Exit Interview forms, referred 52 accounts to a collection agency, 13 accounts for litigation, submitted 26 accounts for assignment to the Department of Education, and has contacted many
past due borrowers. A continuing effort is planned to comply with due diligence requirements. The College will contact the u.s.
Department of Education regarding resolution of this fmding.
F192

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA SOUTHWESTERN COLLEGE CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Overaward of HOPE Scholarship Financial Statements Questioned Cost: $315.00 Audit Control Number 542-95-03

For the year under review, an examination of thirty-five students who received Pell and/or Perkins Loan funds revealed that one student was disbursed a total of$315.00 in excess of the amount allowable for a HOPE grant. When determining eligibility for a HOPE grant, amounts awarded for the Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), and Job Training Partnership Act (JTPA) assistance should be applied to a student's tuition and mandatory fee charges before the HOPE grant can be awarded. The overaward occurred because the College failed to consider the Federal Supplemental Educational Opportunity Grant (FSEOG) awarded to the student before disbursing HOPE grant funds.

Procedures should be implemented by the College to ensure that Pell, Federal Supplemental Educational Opportunity Grant (FSEOG), and Job Training Partnership Act (JTPA) disbursements are applied to tuition and mandatory fees prior to awarding the HOPE grants. The College should contact the Georgia Student Finance Commission concerning resolution of the questioned cost.

Mana'lement Response

In the awarding of HOPE grants, one must deduct all appropriate grants from the cost of attendance and award HOPE for the difference. In this case the person packaging the award overlooked an SEOG award of $300.00. The SEOG award should have been deducted from the cost of attendance. The College will contact the Georgia Student Finance Authority regrading the resolution of this fmding.

FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Audit Control Number 542-95-04

For the year under review, a review of the Federal Cash Transaction Report - Status of Federal Cash, submitted by the College to the U. S. Department of Education, disclosed a difference of $4,694.24 between reported "cash on hand end of period" and ending cash per the College's accounting records as noted below:

Report Date

Cash on Hand End of Period Reported on FormPMS 272

Ending Cash per Accounting
Records

Difference

June 30, 1995

$ -78.439.98

$ -83.134.22

$ 4.694.24

This difference occurred because management failed to compare accounting records to the.Federal Cash Transactions Report prior to submission to the U. S. Department of Education.

Procedures should be established to ensure that all Federal Cash Transaction Reports are reconciled to the College's formal accounting records, and documentation should be maintained reflecting this reconciliation. The College should contact its grantor agency regarding this unreconciled difference.

F - 193

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA SOUTHWESTERN COLLEGE

CURRENT YEAR

Federal Financial Assistam~e Prorgams Aflested:

84.007 84.033 84.038 84.042 84.047 84.063

Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Program Student Support Services Upward Bound Pell Grant Program

A1ana~ement~ponse

The General Ledger cash balance has not reconciled to the Federal Cash Transactions Report for several years. During the year under review, Federal cash transactions reconciled to the receipts and disbursements posted to the College's ledgers. College officials have a monthly reconciliation process; however, the difference from previous years has not been located. College personnel understand the importance of reconciling this report to the College records and will attempt to correct the problem.

TYPES OF SERVICES/ALLOWED OR UNALLOWED Disbursement in Excess of Eligible Award Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Questioned Cost: $400.00 Audit Control Number 542-95-05

For the year under review, an examination of thirty-five students who received Pell and/or Perkins Loan funds revealed that one student was disbursed a total of$400.00 in excess oftheir eligible award for the Federal Family Education Loan Program (CFDA 84.032). Federal Regulations (34 CFR 674.14) state that an institution may only award or disburse a loan to a student ifthat loan, combined with other resources the student receives, does not exceed the student's fmancial need. The overpayment ofthe Federal Family Education Loan occurred because the College failed to consider a scholarship that had been awarded to the student.

Procedures should be implemented by the College to ensure that students are not disbursed fmancial aid in excess of their award. The College should contact the U. S. Department of Education regarding the resolution of this questioned cost.

Mana~ement Response

In the case in question, the student award had previously been packaged with need-based aid. Subsequently, the student received additional funds in the form of an Institutional Scholarship. When this action puts the student in an over award situation, an appropriate adjustment to the award letter is made and disbursements reduced accordingly. In this particular case the person who revised the award letter did not notify the persons responsible for reducing the actual disbursement of the Family Federal Education Loan. The College will contact the Department of Education regarding the resolution of this fmding.

F -194

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

KENNESAW STATE COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

543-94-01 543-94-02 543-94-03

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

F195

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

NORTH GEORGIA COLLEGE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

545-94-01

See Audit Control Number 545-95-0 I

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 545-95-01
The review report for the year ended June 30, 1994, disclosed that North Georgia College did not provide for adequate separation of duties in the performance of accounting functions and related procedures. In the year under review, no improvements were noted. These weaknesses in internal control pertain to all funds and programs administered by the College. The control categories affected are as follows:
(1) General Ledger
(2) Inventories
(3) General Fixed AssetslProperty Management
Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and fmancial statements are accurate and complete.
Federal Grantor A~encies Affected:
Environmental Protection Agency National Foundation on the Arts and the Humanities National Science Foundation Tennessee Valley Authority U. S. Department of Defense U. S. Department of Energy U. S. Department of Education U. S. Department of Transportation
A1ana~ementResponse
(1) General Ledger
We concur that there are more tasks performed in the Business Office that should be separated than there are employees in the Business Office to assign to the tasks. The Strategic Plan for North Georgia College includes an additional halftime position in the Business Office to help facilitate the distribution of duties. The target date for the position is June 30, 1996.

F - 196

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
NORTH GEORGIA COLLEGE PRIOR YEAR/CURRENT YEAR
(2) Inventories We concur with the need for keeping the records keeping function and the custodianship ofthe inventory separated. The Strategic Plan for North Georgia College includes a half time position for the Office of Procurement to separate the records keeping function from the custodial function. The target date for this position is July 1, 1996. (3) General Fixed Assets/Property Management Records keeping and surplus property management should be separated. Item (2) above addresses this fmding also. The part time position in the Strategic Plan will also be utilized to separate these functions.
F - 197

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SAVANNAH STATE COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

548-94-01 548-94-02 548-94-03 548-94-04 548-94-05

See Audit Control Number 548-95-01 Corrective Action Implemented See Audit Control Number 548-95-02 See Audit Control Number 548-95-03 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 548-95-01
The review report for the year ended June 30, 1994, disclosed that Savannah State College had $52,807.18 in student accounts receivable which were not supported by approved fmancial aid. On June 30, 1995, the balance had increased to $53,973.09 in student accounts receivable which were not supported by approved fmancial aid. There is no provision in the policies of the Board of Regents for deferments of student accounts without the student having approved fmancial aid at the time of registration.
Collections of student accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved fmancial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.
A1ana~ementResponse
The College has hired a local collection agency to assist with the collection of student accounts receivable. Delinquent accounts are assigned to the Collection Agency quarterly. The College will continue to utilize the services of the Loan Collection Clerk to assist with collection efforts of accounts receivable. To further reduce student accounts receivable, the College will write off uncollectible debts of$100.00 or less under House Bill 1536 (codified as O.C.G.A. Section 50-16-17) as of June 30, 1996.
A Financial Aid Deferment Memo form has been created to assist with deferments. This form contains pertinent information for the quarter such as the type and amount of aid the student is eligible to receive from a guaranteed agency, including the college and external sources. The form will be completed by a Financial Aid staff member and forwarded to the Vice President for Business and Finance prior to considering the student for Financial Aid Deferment.

F - 198

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
SAVANNAH STATE COLLEGE PRIOR YEAR/CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Deficit Cash Balance Financial Statements Audit Control Number 548-95-02 The review report for the year ended June 30, 1994, disclosed that Savannah State College had a negative fund balance of $142,433.56 in the Restricted Funds - Naval Science Scholarship Account that was not supported by a valid accounts receivable. On June 30, 1995, the account had a negative fund balance of$133,898.56. The negative balance occurred due to the College continuing to award Naval Science Scholarships without funding. The College should implement procedures to adequately fund this deficit and ensure that Naval Science scholarships are not awarded until funds are available. Mana"emenf Response The College will continue to apply a portion of its annual General Scholarship funds to the Naval Science Scholarship account annually until the deficit is paid. FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 548-95-03 The review report for the year ended June 30, 1994, disclosed that Intercollegiate Athletics had a deficit fund balance of $180,383.94. At June 30,1995, Intercollegiate Athletics had a deficit fund balance of$318,347.18. This deficit has a direct relation to the lack of sufficient funds to meet obigations on a current basis. The Board of Regents' Policy Manual, Section 702.02 states that auxiliary enterprises "shall be placed on a self-supporting basis, and the State will not make an appropriation to fmance its operations." The College should take appropriate action to fund this deficit. Mana"emenf Response The College is projecting its Athletic budget to realize a surplus balance of $30,000.00 to $60,000.00 as of June 30, 1996. This balance will be applied to the deficit. With a combination of the increase in the Athletic fee and reduction in expenditures, it is projected that the Athletic program will continue to realize a surplus in the future. The surplus will be applied to the deficit until it is paid in full. The College will also increase external athletic fund raising efforts to assist with the deficit and day-to-day operations of the Athletic program.
F - 199

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
SAVANNAH STATE COLLEGE CURRENT YEAR
GENERAL LEDGER Inadequate Journal Entry Documentation Financial Statements Audit Control Number 548-95-04 For the year under review, Savannah State College did not have procedures in place to ensure that adequate descriptions and documentation supporting journal entries were included with each journal entry posted to the General Ledger. In addition, several journal entries could not be located. The College should implement procedures to ensure that journal entries are properly documented prior to entry into the accounting system.
A1qna~entRe~Qnse
The College concurs with the finding and has taken steps to ensure that all journal entries contain the proper explanation and documents to support transactions. The staff has completed its review of the journal entry file and has made the appropriate corrections.
F-200

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

VALDOSTA STATE UNIVERSITY

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

551-94-01 551-94-02 551-94-03 551-94-04 551-94-05 551-94-06 551-94-07 551-94-08 551-94-09 551-94-10

See Audit Control Number 551-95-02 See Audit Control Number 551-95-03 Corrective Action Implemented See Audit Control Number 551-95-05 See Audit Control Number 551-95-01 Corrective Action Implemented Corrective Action Implemented See Audit Control Number 551-95-04 Corrective Action Implemented See Audit Control Number 551-95-06

PRIOR YEAR

AUDIT DISTRIBUTIONIRESOLUTION Inadequate Calculations of Repayments Federal Financial Assistance Federal Perkins Loan Program [CFDA 84.038] Questioned Cost: $192.00 Audit Control Number 551-95-01
The audit reports for the years ended June 30, 1992, and June 30, 1993, noted repayments totaling $1,019.00 that were not requested from three students due to improper application of the University's repayment policy. During the year under review, the University produced additional information to resolve these costs for two of the students involved. However, a repayment of$192.00 requested from one student had not been resolved as of the date of this audit.
The University should secure repayment from the student identified above for refund to appropriate grantors.
Mana'lement Response
We agree with your recommendation. A letter requesting repayment has been mailed to the student by the University.

F - 201

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
VALDOSTA STATE UNIVERSITY
PIDORYEAWCURRENTYEAR
ACCOUNTING CONTROLS (OVERALL) Financial Statements ADMINISTRATIVE REQUIREMENTS Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 551-95-02
The audit report for the year ended June 30, 1994, disclosed that Valdosta State University did not provide for adequate separation of duties in the performance of accounting functions and related procedures for the control category ExpenditureslLiabilities/Disbursements. For the year under review, our audit noted no improvement regarding adequate separation of employee duties for this control category. This deficiency was a result of management not assigning employee duties in a manner to adequately safeguard assets and/or promote efficiency and accuracy in key accounting functions.
The University should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control category, and implement those procedures to strengthen the internal controls over the accounting function.
Federal Grantor Auncies Affected:
National Science Foundation U. S. Department of Education U. S. Department of Energy U. S. Department of Health and Human Services
Mana.'iement Response
We agree with your recommendation. Management is reviewing the work performed by this employee, but complete separation of duties is not possible at this time. During the implementation of the new fmancial accounting software system it will be possible to have complete separation of duties.
REVENUEIRECEIV ABLESIRECEIPTS Tuition and Fees Financial Statements Audit Control Number 551-95-03
The audit reports for the years ended June 30, 1989, through June 30, 1994, disclosed that Valdosta State University routinely allowed the reinstatement of students who paid their fees subsequent to the fmal payment deadline. For the year under review, our examination of summer quarter 1995 registration noted that of twenty- five students sampled, whose registration had been canceled for nonpayment of fees, nine had been reinstated as of the date of our audit. This discrepancy occurred due to management's decision to allow students to defer fee payments. This practice is in violation of Section 704 of the Board of Regents' Policy Manual which states, in part, that payment of fees may not be deferred and all fees are due and payable upon registration.
The University should discontinue the practice of reinstating the registration of students who pay fees past the established fee payment deadline.
F -202

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
VALDOSTA STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
Mana'iement Response
We agree with your recommendation. Students will not be allowed to register or defer fees after registration deadlines. For students who have been canceled due to error on the University's part, a formal appeal process has been implemented and documentation will be attached to each appeal form.
GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Audit Control Number 551-95-04
The audit report for the year ended June 30, 1994, noted that accounting procedures of Valdosta State University were found to be inadequate in several areas. For the year under review, deficiencies were noted as follows:
(1) Bank reconciliations as presented for examination were found to be inadequate as follows:
(a) In eleven months during the fiscal year, unlocated differences were noted on reconciliations of the operating account.
(b) In five months during the fiscal year, unlocated differences were noted on reconciliations of the payroll account.
(c) Bank reconciliations were not prepared during fiscal year 1995 for the Jekyll Island Theater account.
(2) Subsidiary student deposit records for the Auxiliary Enterprises Fund did not reconcile to the general ledger control accounts.
(3) Accounts receivable recorded on the general ledger for the Restricted Funds totaled $1,182,239.50. An examination of these receivables revealed that $89,518.55 was not supported by appropriate documentation.
These deficiencies were the result of management improperly implementing procedures and/or not having adequately trained staff to ensure proper maintenance of accounting records.
Procedures should be implemented by the University to ensure that the deficiencies identified above are corrected.
Mana'iement Response
We agree with your recommendation. Management has implemented procedures to ensure that the differences identified have been corrected.
(1) (a) An entry was made at the end of the year for $18.99 to bring the operating account into balance.
(b) All differences in the payroll account were netted out by year end. No adjustments were required.
F -203

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

VALDOSTA STATE UNIVERSITY

PRIOR YEAR/CURRENT YEAR

(c) The Jekyll Island account is held in dormant status to avoid the monthly fee. This account is used only during the summer months. The account was reconciled before the end of audit field work without exception.

(2) Forfeited housing deposits are being reconciled to amounts realized as revenue by the Auxiliary Services accountant after Spring Quarter.

(3) Administrative Reliefhas been requested to re-open closed award years for prior year Pell amounts. The Pell Program reduced authorized amounts already expended due to duplicate Student Aid Reports from different institutions.

FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Audit Control Number 551-95-05

The audit reports for the years ended June 30, 1990, through June 30, 1994, disclosed that the expenditures reported on Valdosta State University's fmal monthly fiscal years' 1990, 1991, 1992, 1993, and 1994 Federal Cash Transaction Report for the U. S. Department of Education could not be reconciled to accounting records.

For the year under review, expenditures reported on the University's fmal monthly fiscal year 1995 Federal Cash Transaction Report to the U. S. Department of Education could be reconciled to the accounting records. However, a review of the Federal Transactions Report (Form PMS 272-A) submitted by Valdosta State University to the U. S. Department of Education disclosed a difference of$98,900.23 between "cash on hand end ofperiod" and ending cash per the University's accounting records as noted below:

Report Date

Cash on Hand End of Period Reported on Form PMS 272

Ending Cash per Accounting
Records

Difference

June 30, 1995

$ -350,102.61

$ -251.202.38

$ 98,900.23

This difference occurred due to cash transactions reported on the Federal Transactions Report (Form PMS 272-A) not being reconciled to the accounting records in prior years.

Procedures should be established to ensure that all Federal Cash Transactions Reports are reconciled to the University's formal accounting records, and documentation should be maintained reflecting this reconciliation. The University should contact its grantor agency regarding these unreconciled differences.

Federal Financial Assistance PrQ'trams Affected:

84.007 84.021 84.026 84.029 84.033

Supplemental Educational Opportunity Grants Fulbright-Hays-Group Projects Abroad Media and Captioning For Individuals with Disabilities Special Education - Personnel Development and Parent Training Federal Work-Study Program

F-204

';:STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
VALDOSTA STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
84.063 Pell Grant Program 84.180 Technology, Educational Media and Materials for Individuals with Disabilities 84.219 Student Literacy Corps and Student Mentoring Corps
Manaument Response
We agree with your recommendation. Procedures have been implemented to ensure all Federal Cash Transactions Reports are reconciled. As ofthe December 1995 PMS272 report, Federal Cash per the University accounting records reconciles to Federal Cash per the Department of Education. The only unresolved matter is prior year Pell differences.
SPECIAL TESTS AND PROVISIONS Improper Distribution of Refunds Federal Financial Assistance Pell Grant Programs [CFDA 84.063] Federal Family Education Loans [CFDA 84.032] Questioned Cost $518.99 Audit Control Number 551-95-06
The audit report for the year ended June 30, 1994, noted deficiencies in the University's compliance with Federal requirements relative to the University's fmancial aid refund procedures. These deficiencies continued to exist during the year under review, as follows:
(1) The prior year audit report noted that $461.20 was refunded in error to a student. These funds should have been returned to the Pell Grant Program. During the year under review, a refund of $461.20 had been requested from the student but had not been received as of the date of this audit.
(2) The prior year audit report disclosed that fmancial aid refunds were returned to Federal programs in a manner inconsistent with the prescribed order of distribution. During the year under review, an examination of four fmancial aid refunds made by Valdosta State University revealed that one refund was not properly distributed to student fmancial programs as prescribed in Chapter 3, Section 4 of the Federal Student Financial Aid Handbook. The University's failure to distribute these refunds in the proper order resulted in $57.79 not being returned to the Federal Family Educational Loan lender. This deficiency occurred due to University personnel applying a pro rata share of the refund to a grantor agency instead of distributing the refund in the proper order mandated by Chapter 3, Section 4 of the Federal Student Financial Aid Handbook.
Procedures should be implemented by the University to ensure that refunds are returned to Federal programs in the order prescribed in the Federal Student Financial Aid Handbook. The University should also secure reimbursement of $461.20 from the student identified above for refund to the U. S. Department of Education and should contact the U. S. Department of Education regarding resolution of the $57.79 questioned cost.
Mana'l?ment Response
We agree with your recommendation. The student has been contacted and the $461.20 has been repaid. The $57.79 has also been repaid to the FFEL lender.
F -205

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
VALDOSTA STATE UNIVERSITY
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Salary Listing Not Reconciled Accounting Records Financial Statements Audit Control Number 551-95-07
For the year under review, tests ofpayroll procedures revealed that the salary listing as submitted by the University to the Georgia Department of Audits did not reconcile to the University's general ledger. An unlocated difference of $2,281.87 existed at June 30, 1995. This deficiency occurred as a result of management's failure to reconcile salary information on a quarterly basis.
The University should establish controls to ensure that the salary listing submitted to the Georgia Department of Audits is reconciled with the general ledger.
A1ana~mentResDQnse
We agree with your recommendation. Payroll distributions balanced exactly to the accounting records. The database which is accumulated/transmitted to the state has no detail to which we can adjust. Any problems with this database must be located/corrected in our Central Payroll Support. All quarters since 06-30-95 have been reconciled without exception.
ELIGIBILITY Deficiencies in AwardinglDisbursing Student Financial Aid Federal Financial Assistance Pell Grant Program [84.063] Questioned Cost $167.00/$-67.00 Audit Control Number 551-95-08
For the year under review, a sample of fifty-one students receiving Pell Grants disclosed two deficiencies in awarding and disbursing student fmancial aid as follows:
(1) One student was disbursed student fmancial aid in excess of her eligible award, which resulted in an overpayment of$167.00 from the Pell Grant Program. Federal Regulation (34 CFR 690.62) states that the amount of a Student's Pell Grant for an academic year is based upon the payment and disbursement schedules published by the U. S. Department of Education each award year. This overpayment occurred due to an adjustment of the expected family contribution which decreased the maximum allowable amount the student was eligible to receive.
(2) One student was not disbursed student fmancial aid in accordance with her eligible award which resulted in an underpayment of $67.00 ofPell Grant Program funds. Federal Regulation (34 CFR 690.62) states that the amount of a Student's Pell Grant for an academic year is based upon the payment and disbursement schedules published by the U. S. Department of Education each award year. This underpayment occurred due to an adjustment of the expected family contribution which increased the allowable amount the student was eligible to receive.
The University should establish procedures to ensure that fmancial aid awards are based on student's eligibility for Student Financial Aid Programs and that awards are made in accordance with appropriate Federal regulations. The University should contact the U. S. Department of Education regarding the resolution of these questioned costs.
F 206

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
VALDOSTA STATE UNIVERSITY
CURRENT YEAR
Manq"ement Response
(1) We agree with your recommendation. A letter requesting repayment of the $167.00 has been delivered to the student.
(2) We agree with your recommendation. A check request for the $67.00 will be prepared as soon as the award letter is issued by Financial Aid.
SPECIAL TESTS AND PROVISIONS Failure to Delay Loan Proceeds Federal Financial Assistance Federal Family Education Loans [CFDA 84.032] Audit Control Number 551-95-09
For the year under review, our examination revealed two instances in which the University did not delay the disbursement to firstyear, first time undergraduate Stafford borrowers for 30 days after the first day of a student's program of study. Chapter 10 of the Federal Student Financial Aid Handbook states that a school may not deliver the first installment of Stafford Loan proceeds to a first-year undergraduate student borrower who has not previously received a Stafford Loan until 30 days after the first day of the student's program of study (loan period). This deficiency occurred as a result of the University's unawareness of the requirement.
The University should implement the necessary procedures to ensure that distributions of loan proceeds are in accordance with the Federal Student Financial Aid Handbook.
Mqnq"ement Response
We agree with your recommendation. The Banner Student Information System should assist in implementing procedures to ensure loan proceeds are distributed in accordance with the Federal Student Financial Aid Handbook.
SPECIAL TESTS AND PROVISIONS Disbursement in Excess of Need Federal Financial Assistance Federal Family Education Loans [CFDA 84.032] Questioned Cost $729.60 Audit Control Number 551-95-10
For the year under review an examination of40 student files disclosed that one student was disbursed a total of $729.60 in Federal Family Education Loans in excess of the eligible award. This overpayment occurred due to the University disbursing three installments of $729.60 instead of the approved two installments as listed in the student's Loan Guarantee and Disclosure Statement.
Procedures should be implemented by the University to ensure that students are not disbursed fmancial aid in excess of their awards. Reimbursement of $729.60 should be secured from the individual involved and deposited to the University's operating account.
F -207

I

STATE OF GEORGIA

I

FINDINGS AND IMPROPER OR QUESTIONED COSTS

I

For the Fiscal Year Ended June 30, 1995
VALDOSTA STATE UNIVERSITY
CURRENT YEAR
Mana'lement ResPonse
We agree with your recommendation. Banner should assist in implementing controls to ensure loans are properly disbursed. A letter has been written requesting repayment from the student.
SPECIAL TESTS AND PROVISIONS Incorrect Refund Calculations Federal Financial Assistance Federal Family Education Loans [CFDA 84.032] Amount: $119.00 Audit Control Number 551-94-11
For the year under review, our examination revealed an error in calculating the amount of student fmancial aid to be retained by the University for a withdrawn student. As a result ofthis error, an additional $119.00 is due to the Federal Family Educational Loan lender. The error occurred because University personnel applied the incorrect refund percentage, based on the actual period of attendance by the student, as stated in the University's refund policy.
The University should ensure that all refunds are correctly calculated and returned to the appropriate programs. The College should contact the U. S. Department of Education regarding resolution of this finding.
Manaument Re~ponse
We agree with your recommendation. Procedures are currently in place to ensure the proper calculation of refunds. The University will contact the U.S. Department of Education regarding the $119.00 over payment and its resolution.

I I I I I I
I I I I I I
I I

I

I

I

I

I

I

I

I

I

F -208

I

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

WEST GEORGIA COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

554-94-01 554-94-02 554-94-03 554-94-04

See Audit Control Number 554-95-01 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR

AUDIT DISTRlBUTIONIRESOLUTION Theft of Funds Financial Statements Amount: $104.67 Audit Control Number 554-95-01
The audit report for the year ended June 30, 1989, called attention to an internal audit conducted by West Georgia College that revealed missing library fmes totaling $8,499.20. A total of$7,569.53 was recovered as of June 30, 1994. By order of the court, restitution of the remaining balance is due from the individual involved and is to be paid to the Clerk of Court - Carroll County at a rate of$75.00 per month. These funds will be remitted by the Court to West Georgia College. During the year under review, $825.00 was recovered and remitted to the College, leaving a balance of$104.67 at June 30, 1995.
Mana"ement Response
The individual is on schedule with agreed upon payments. The full amount has now been recovered.
CURRENT YEAR

CASH AND CASH EQUIVALENTS Uncollateralized Deposits Financial Statements Audit Control Number 554-95-02
As of June 30, 1995, the College failed to have Certificate of Deposit Number 716455 fully collateralized as provided for by the Official Code of Georgia Annotated Section 50-17-59. This noncompliance occurred because of management's failure to adequately monitor the collateralization of balances at individual banks. The College should implement adequate procedures to monitor the collateralization of bank balances to ensure compliance at all times with State Laws governing deposits and investments.
Mana"ement Response
Previously, the Board of Regents maintained the collateralization for all certificates of deposit. There has been some confusion between the offices as to that procedure and apparently they have stopped doing it. We are now verifying all collateralization on CDS through our office before they are placed. We trust this will take care of the problem in the future.

F -209

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

557-94-01

Corrective Action Implemented

F -210

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
ATLANTA METROPOLITAN COLLEGE
CURRENT YEAR
FUND EQUITIES Deficit Fund Balance Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Costs: $30,436.00 Audit Control Number 561-95-01
Our review ofPell Grant Program receivables at June 30, 1995, revealed that the College had improperly recorded receivables of $30,436.00. An adjusting entry was made to correct the receivables which resulted in a deficit of$30,436.00 in the fiscal year 1994 Pell Grant Program. The College should contact the Board of Regents and the grantor agency regarding funding of this Pell Grant Program deficit.
A1ana~ementResponse
We concur with this fmding. The recording of this improper receivable resulted from Pell Grant awards being made to students by Financial Aid Office personnel without submitting award information and receiving award approval through the Student Payment Summary Report process. In order to prevent this occurrence in the future, the college has made personnel changes which resulted in significant improvements in the staff of the Financial Aid Office. A new fmancial aid director and two recently employed fmancial aid counselors represent important additions to ensure proper execution of written procedures established by the new director. These procedures are available for examination. The college has contacted the Board of Regents and the grantor agency regarding this Pell Grant Program deficit and will have more comprehensive discussions with the Board of Regents about the funding of this deficit.
FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 561-95-02
For the year under review, the U. S. Department of Education Student Payment Summary (SPS) report indicated that the College incurred $1,204,864.00 in Federal Pell Grant Program expenditures. This amount represented the College's authorized amount of the Federal Pell Grant award for fiscal year 1995. However, the College actually incurred a total of$I,316,368.20 in fiscal year 1995 Pell Grant Program expenditures. In order to be reimbursed for the excess Pell Grant expenditures, the College, in conformity with Federal Statutes, must certify the validity of these payments to the U. S. Department of Education. The Federal agency can then institute an upward adjustment of the fiscal year 1995 authorized amount in order to make the funds available to the College.
A1ana~ement Response
We concur with this fmding. The excess Pell Grant expenditures referred to in this fmding resulted from Pell Grant awards being made to students by Financial Aid Office Personnel without submitting award information and receiving award approval through the Student Payment Summary Report process. In order to prevent this occurrence in the future, the college has made significant personnel changes which resulted in a significant upgrade in the qualifications of the Financial Aid Office staff. The new financial aid director has established written procedures to ensure that future Pell Grant awards are not made unless award approval has been received through the Student Payment Report process. These procedures are available for review.
F - 211

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30. 1995
ATLANTA METROPOLITAN COLLEGE CURRENT YEAR
At the time of this fmding the discrepancy between the fiscal year 1995 Pell Grant authorized amount and actual expenditures was $111,504.20. Since the time of this fmding, the college has been in contact with the U.S. Department of Education and thus far has been successful in reducing this discrepancy to $64,595.20.
F - 212

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

DEKALB COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

571-94-01

Corrective Action Implemented

F -213

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FLOYD COLLEGE
STAIDS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindinl:

573-94-01 573-94-02

Finding Deleted Corrective Action Implemented

F - 214

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MACON COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

581-92-01 581-94-01 581-94-02 581-94-03

No Corrective Action Implemented See Audit Control Number 581-95-03 See Audit Control Number 581-95-02 See Audit Control Number 581-95-01

Mana'lement Response

Audit Control Number 581-92-01

Macon College has initiated action to liquidate the fund assets and transfer the loan balances to the U.S. Department of Education. This transfer is expected to be completed by the end of FY 1996.

PRIOR YEAR/CURRENT YEAR

FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 581-95-01

The review report for the year ended June 30, 1994, reported that Intercollegiate Athletics, a segment of Auxiliary Enterprises, had a deficit fund balance of$13,752.86. For the year under review the deficit increased to $16,887.18 due to disbursing funds in excess of intercollegiate revenues. This deficit has a direct relation to the lack of sufficient funds to meet obligations on a current basis. The Board of Regents' Policy Manual, Section 702.02 states that auxiliary enterprises "shall be placed on a selfsupporting basis, and the State will not make an appropriation to fmance its operations". The College should budget and provide for adequate funds to cover this deficit.

Mana'lementResponse

The College is in the process of identifying funds to cover this deficit. We have also strengthened our fmancial controls relative to the Intercollegiate Athletic program. They are as follows:



Appointed an Acting Intercollegiate Athletic Director



Developed a policy manual for Intercollegiate Athletics:



providing purchasing requirements



establishing purchasing authorization



defming budget requests and amendments

F215

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MACON COLLEGE

PRIOR YEAR/CURRENT YEAR

GENERAL LEDGER Detail Listing of Salaries Not Reconciled Financial Statements Audit Control Number 581-95-02

The review report for the year ended June 30, 1994, reported that Macon College did not reconcile the detail listing of salary payments submitted to the Georgia Department of Audits to the general ledger. For the year under review, it was again noted that the detail listing of salary payments made to employees as submitted by Macon College to the Georgia Department of Audits was not reconciled to the College's general ledger resulting in an unidentified variance of $1,886.99. This condition occurred because management neglected to identify the variances between the listing of salaries and the general ledger.

The College should follow established procedures to ensure that the detail listing of salaries and wages is reconciled to the accounting records prior to submission to the Georgia Department of Audits.

Manq~ement Response

In reconciling the Report ofPayroll for Continuous Audit, we have discovered that College Work Study payments were appearing on the report. We thought we had resolved the problem by changing the coding of the CWSP student, however that was not the answer. Any student who has received Student Assistant and College WOIk Study payments within a quarter must be identified and manually adjusted during the reconciliation process. This control has been established as our normal operating procedure.

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 581-95-03

The review report for the year ended June 30, 1994, noted that an equipment inventory sample of randomly selected items disclosed deficiencies in Macon College's equipment inventory records. For the year under review, an equipment inventory sample of 20 randomly selected items was utilized to test the accuracy and validity of the equipment inventory records. The results of our testing procedures disclosed the following exceptions:

(1) Two items located on site were not on the equipment records.

(2) Two items selected to be traced to their location were found to have improper identifying information on the equipment inventory records.

(3)

The College did not perform a reconciliation of the equipment inventory records to the accounting

control records. An unidentified variance of$220,604.46 existed between the subsidiary and control

records which the College could not identify.

These deficiencies occurred because of management's failure to adequately monitor the subsidiary equipment records. The College should establish appropriate procedures to strengthen internal accounting controls and to ensure that assets are safeguarded against loss from unauthorized use or disposition.

F -216

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MACON COLLEGE PRIOR YEAR/CURRENT YEAR

Afana~ementResponse
Macon College has had to completely rebuild their inventory records and inventory procedures. We have strengthened our internal controls and will continue to refme those controls as new and unusual requirements are encountered.
The unidentified variance of $220,604.46 was a result of rebuilding our inventory records. Any explanation of this variance was unsatisfactory to management and did not warrant a request for write-off. The College will continue to make a concerned effort to resolve this variance.
CURRENT YEAR

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 581-95-04

During the year under review, the College's accounting procedures were insufficient to provide for adequate internal control over the bank reconciliation process. The following deficiencies were noted:

(1) The monthly bank reconciliations of the payroll account were not performed in a timely manner.

(2) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.

(3) The monthly bank statements for the payroll account were not properly reconciled to the general ledger resulting in an unidentified variance of $3,766.17 between the reconciled bank balance and the book balance.

These deficiencies were the result of management's disregard of proper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard and report the cash and cash equivalents of the College. The College should establish appropriate internal controls to ensure that bank statements are reconciled with the accounting records monthly and that needed adjustments are recorded on a timely basis.

Afana'lement Response

Through miscommunications and changes in job responsibilities the college did not maintain the proper internal control for all cash and bank reconciliations. In an attempt to strengthen internal controls, new procedures were implemented so that a general operating employee balances the payroll bank statement and a payroll employee balances the general operating bank statement. However, the Director failed to communicate those procedures effectively. Thus, the following additional controls have been established:



Two employees have been assigned the responsibility of reconciling the different bank statements.



Initial training has already been accomplished and will be continuous as necessary.



The bank statements will be reconciled by the 15th of every month.

F - 217

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MACON COLLEGE

CURRENT YEAR



Concerns or problems arising from the reconciliation process will be addressed by the Director before the 15th of the

month.



Book errors will be resolved before the reconciliation is considered complete.

Macon College's internal control over the bank reconciliation process has been and continues to be adequate to address all possible audit concerns. We have addressed areas in which we can strengthen those controls, but more importantly we solved our communications problems that resulted in this fmding.

These controls are:



The bank payroll reconciliation will be accomplished by the 15th of every month.



Concerns or problems arising from the reconciliation will be addressed by the Director before the 15th of the month.



Book errors will be resolved before the reconciliation is considered complete.

The unidentified variance of $3,766.17 has been identified as an initial problem with the payroll system handling a retired employee working as a part-time employee. The payroll system was corrected several months after the employee started back to work, however the previous months were not corrected.

CASH AND CASH EQUIVALENTS Uncollateralized Deposits Financial Statements Audit Control Number 581-95-05

At June 30, 1995, Macon College failed to have its time deposits fully collateralized as provided for by the Official Code of Georgia Annotated Section 50-17-59.

This noncompliance occurred because of management's failure to adequately monitor the collateralization of balances at individual banks. The College should implement adequate procedures to monitor the collateralization of time deposits to ensure compliance at all times with State laws governing deposits.

Afana~ementRespQnse

The College has established a procedure to check bank collateralization on a monthly basis. This procedure has been incorporated into the monthly close-out procedures and will be handled telephonically.

F - 218

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
MACON COLLEGE CURRENT YEAR
FEDERAL FINANCIAL REPORTS Report Not Reconciled to Accounting Records Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 581-95-06 A review of Macon College's Fiscal Operations and Application to Participate (FISAP) Report for the fiscal year ended June 30, 1994, submitted to the U. S. Department of Education did not reconcile with the accounting records. The College's reported expenditures for the Pell Grant Program were based on the grant award rather than actual expenditures. No reconciliation of the reported expenditures for the program was provided by the College. Federal Regulations require the College to ensure that the information is accurate and reconciled to the accounting records. The College should implement procedures to ensure that the FISAP is accurately completed and supported by the accounting records. Detailed reconciliations should be prepared for any adjusted amounts and maintained as a part of the supporting documentation. Manaument Response Procedures have been established to require that the fmal FISAP report not be released from the College until the Director of Business Services has determined that all reported expenditures have been reconciled to the accounting reports. The College has and will continue to maintain detailed reconciliations. However, in the future we will ensure that no report concerning the fmancial aspects of the College be released without approval.
F - 219

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MIDDLE GEORGIA COLLEGE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin&

584-91-002 584-91-006 584-94-01

Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 584-95-01

Mana~ement Response

Audit Control Number 584-91-006

This was a minor exception in the fmancial aid audit for the fiscal year ending June 30, 1990. It was a clerical error (only one in a sample of 50). The U.S. Department of Education was notified and we assumed the exception was removed. We are still awaiting a response from them.

PRIOR YEAR/CURRENT YEAR

REVENUESIRECEIVABLESIRECEIPTS Student Accounts Receivables Not Supported by Financial Aid Financial Statements Audit Control Number 584-95-01

The review report for the year ended June 30, 1994, disclosed that Middle Georgia College had $18,373.61 in student accounts receivable which were not supported by approved fmancial aid. On June 30, 1995, the balance had increased to $19,600.32 in student accounts receivable which were not supported by approved fmancial aid. There is no provision in the policies of the Board of Regents for deferments ofstudent accounts without the student having approved fmancial aid at the time of registration. This condition occurred because management disregarded the policies of the Board of Regents.

Collection of student accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved fmancial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.

Mana~ement Response

We do not defer fees without approved fmancial aid. This is a continuing exception. Almost all of these accounts are several years old. We have made, and will continue to make, every effort to collect these accounts.

F -220

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MIDDLE GEORGIA COLLEGE
CURRENT YEAR
DRUG-FREE WORKPLACE ACT Failure to Implement a Drug Awareness Program Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 584-95-02
According to the provisions ofP.L. 100-690, all grantees that have been approved or awarded a direct Federal grant on or after March 18, 1989, are required to certify that a drug-free workplace is maintained. Such certification is a precondition of receiving a direct Federal grant. Our review disclosed the College was awarded a grant from the U.S. Department of Education in support of the Pell Grant Program (84.063). However, it was noted no drug awareness program was established. This program must inform employees of the dangers of drug abuse in the workplace, of the grantees policy for maintaining a drug-free workplace and of any available drug rehabilitation and employee assistance programs. This condition occurred because management claimed it was unaware of this requirement. The College should develop a drug-free awareness program that includes all the elements of the drug-free policy.
Mana'l,ement Response
We concur with this recommendation. Indeed, management was not aware of this requirement. Middle Georgia College has taken steps for the Director of Personnel and Chief of Police to jointly produce a series of seminars on Substance Abuse.
TYPES OF SERVICES/ALLOWED OR UNALLOWED Award not Properly Calculated Federal Financial Assistance Pell Grant Program [84.063] Finding Resolved Audit Control Number 584-95-03
For the year under review, an examination of the records of twenty-five students who received Pell Grants revealed that one student was underpaid a total of$192.00. Federal regulations (34 CFR 690.62) state that the amount of a student's Pell Grant for an academic year is based upon the payment and disbursement schedules published by the U.S. Department of Education each award year. For fiscal year 1995 the student was awarded $1,341.00 based on anticipated enrollment status for the year. The student enrolled one quarter at three fourths enrollment status, however was paid at half-time enrollment. This underpayment occurred due to an oversight in the Financial Aid Department.
In the subsequent period a payment was made to the student for $192.00 to correct this underpayment.
Mana~ement Response As noted above, this error was corrected.
F - 221

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MIDDLE GEORGIA COLLEGE CURRENT YEAR
ELIGIBILITY Failure to Document Eligibility Certification Federal Financial Assistance Audit Control Number 584-95-04 Federal Regulations (34 CFR 668 Subpart A, 668.11, 682.200 and 682.600) require Middle Georgia College to be an eligible institution of higher education in order to participate in the Title IV (Student Financial Assistance) Programs. During the year under review, our examination disclosed that the College could not provide the certification letter which lists the institution's current location, any eligible branch campuses and eligible programs. Action should be taken by the College to obtain and maintain on file an Eligibility Certification as required by Federal regulations. Federal Grantor A~en<,y 4flected:
u. S. Department of Education
Manq~ement Response An Eligibility Certification has been obtained. It is maintained on file in the Office of the Director of Business Services.
F -222

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SOUTH GEORGIA COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

587-94-01 587-94-02

See Audit Control Number 587-95-02 See Audit Control Number 587-95-01

PRIOR YEAR

AUDIT DISTRlBUTIONIRESOLUTION Matching Requirements Not Met Federal Financial Assistance Federal Supplemental Educational Opportunity Grant [84.007] Amount: $4,615.95 Audit Control Number: 587-95-01

The review report for the year ended June 30, 1994, noted that South Georgia College failed to meet its matching requirements, as required by Attachment E ofOMB Circular A-II0, in the amount of$4,615.95. For the year under review, the College met the matching requirement; however, as of the date of this report, no response has been received from the U. S. Department of Education regarding the prior year matching requirement. The College should continue to seek resolution of this matter from the grantor.

Mana~ement Response

South Georgia College is awaiting a response from the U.S. Department of Education regarding this fmding.

PRIOR YEAR/CURRENT YEAR

FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 587-95-02
The review report for the year ended June 30, 1994, noted that Auxiliary Enterprises, excluding Intercollegiate Athletics, had a net deficit fund balance of $22, 172.38. The Board of Regents' Policy Manual, Section 702.02 states that auxiliary enterprises "shall be placed on a self-supporting basis, and the State will not make an appropriation to fmance its operations". For the year under review, the College had a net deficit fund balance in the Auxiliary Enterprises, excluding Intercollegiate Athletics, of $24,694.00. The cause of this deficit is due to the lack of sufficient funds to meet obligations. The College should budget and provide for adequate funds to cover this deficit.
Manq~ement Response
The financial position of Auxiliary Enterprises was monitored during fiscal year 1995 and steps were taken to increase profitability in selected areas. The alteration in pricing strategies and merchandise mixes appeared to have worked for the bookstore but low occupancy in the dorms failed to turn this area around even with an increase in price. The Vice President for Business Affairs will continue to monitor Auxiliary Operations and will reduce expenses in all possible areas.

F -223

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA MILITARY COLLEGE (*)

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the audit report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

590-94-01 590-94-02 590-94-03 590-94-04 590-94-05

See Audit Control Number 590-95-01 See Audit Control Number 590-95-02 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR

FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 590-95-01

The audit report for the year ended June 30,1993, noted that the U. S. Department of Education Student Payment Summary (SPS) report indicated that the College incurred $747,859.00 in Pell grant program expenditures. This amount represented the College's authorized amount of the Pell grant award for FY 1993. However, the College incurred a total of$802,135.00 in FY 1993 Pell grant payments or $54,276.00 in excess ofthe authorized amount reflected on the SPS report. In order to be reimbursed for these Pell payments, the College, in conformity with Federal statutes, is responsible for certifying the validity of these payments to the U. S. Department of Education. The Federal agency can then institute an upward adjustment to the FY 1993 authorized amount in order to make the funds available to the College.

During the fiscal year 1994, the Georgia Military College initiated the appropriate steps to obtain the U. S. Department of Education's approval to increase the amount of the FY 1993 Pell grant authorization in support of the $54,276.00 in Pell grant program payments made by the College. No response or fmal determination, however, has been received from the U. S. Department of Education as of June 30,1995.

Mana~ementResponse

The college has requested the U.S. Department of Education's approval to increase the level ofPell grant authorization for the fiscal year ending June 30, 1993. As of June 30, 1995, the college is awaiting a response from the Department of Education (subsequent to June 30, 1995, the Department of Education did increase the Pell grant authorization as requested).

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F-224
- --.~--~-- ~----

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA MILITARY COLLEGE (*) PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS/ PROPERTY MANAGEMENT Inadequacies In Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 590-95-02 The audit reports for the years ended June 30, 1989 through June 30, 1994 noted that the College was unable to provide detailed fixed assets records which support the Plant Fund Investment in Plant balances as reported on the Combined Balance Sheet. The Certifted Public Accounting firm noted in its Independent Auditor's Report that the Plant Fund Investment in Plant was not audited because the College was unable to provide subsidiary fixed asset records or other historical cost evidence supporting the balance. The College should take appropriate action to provide for an adequate property management system for general fixed assets which would include subsidiary records that adequately reflect an inventory ofland, buildings and equipment owned by the College. Such records should include but not be limited to (1) date acquired, (2) acquisition cost, (3) estimated replacement cost (4) location and description. Detailed records should be maintained for all deletions and additions to the Plant Fund. Mana"emenf Response The college has subsidiary records that reflect equipment owned by the college. These records include: 1) description; 2) date acquired; 3) acquisition cost; 4) estimated replacement cost; and 5) location. Equipment with a value of$I,OOO.OO or more is capitalized annually into the Plant Fund Investment in Plant. The value of our buildings is determined from new construction costs and those values are capitalized annually into the Plant Fund Investment in Plant. For the buildings that pre-date the mid 1960's, records no longer exist that will allow us to determine their original value. Search of courthouse records of property transactions was not productive in determining original values for land and buildings. For properties that we have purchased or that have been deeded to the college by the foundation, a value has been established and has been included in the Plant Fund Investment in Plant.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -225

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SKIDAWAY INSTITUTE OF OCEANOGRAPHY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

593-94-01

See Audit Control Number 593-95-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 593-95-01

The review report for the year ended June 30, 1994, disclosed that Skidaway Institute of Oceanography did not provide for adequate separation of duties in the performance of accounting functions and related procedures. In the year under review, the Institute still did not achieve an adequate degree of internal control for certain control categories. This deficiency was a result of management's decision to limit the number of administrative staff responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff. These weaknesses in internal control pertain to all funds and programs administered by the Institute. The control categories affected are as follows:

(1) Cash and Cash Equivalents

(3) ExpenditureslLiabilities/Disbursements

(2) Revenue/Receivables/Receipts

(4) General Ledger

Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control.

Federal Grantor A'tencies Affected:

National Science Foundation U. S. Department of Commerce U. S. Department of Defense U. S. Department of Energy U. S. Department of Navy U. S. Environmental Protection Agency

Management Response

This is the same continuing problem related to the scale of our operation that has produced this fmding for several years. Skidaway Institute is a very small operation (60 employees) with a total fiscal affairs staff ofthree. This size staffmakes it almost impossible to establish a logical work flow and satisfy the principle of separation of duties. We have, and continue to review our operation to determine if duties can be reassigned to achieve a higher degree of procedural internal control with existing staff.

F-226

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
SKIDAWAY INSTITUTE OF OCEANOGRAPHY PRIOR YEAR/CURRENT YEAR
Admitting the inability to achieve complete separation of duties must be reviewed in the positive light of our scale of operation. With the small staff in our fiscal operation comes a high level of supervision and oversight of all functions. I feel that this positive aspect of scale offsets the limited separation of duties obtainable. We remain open to workable suggestions for improvement in separation of duties and will continue to make improvements where possible.
F -227

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

OKEFENOKEE TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

818-94-01 818-94-02

See Audit Control Number 818-95-01 See Audit Control Number 818-95-02

PRIOR YEAR/CURRENT YEAR

INVENTORIES Missing Bookstore Cash Receipts Financial Statements Amount: $5,458.37 Audit Control Number 818-95-01

The review report for the year ended June 30, 1994, noted a cash shortage of$5,458.37 in the bookstore operations ofthe Institute for the period July 1, 1993 through August 31, 1994. This shortage occurred because the Institute did not provide for adequate internal controls as described below:

(1)

Sales revenue was recorded based on deposit slips instead of bookstore sales documents.

(2)

Sequentially issued receipts were not accounted for or reconciled to bookstore sales.

For the year under review, the Institute implemented procedures to ensure accountability of all bookstore receipts including verification and reconciliation of cash receipts, deposits and sales documents. The Institute initiated action to recover the missing funds. However, the Department of Administrative Services, Office of Risk Management Services has determined that there is insufficient evidence for recovery of these missing funds under the Institute's public employee dishonesty bond coverage.

Mana'lement Response

Okefenokee Tech has procedures in place to account for and record all bookstore sales. Indeed, in addition to the computerized printout of bookstore receipts and sales, we utilize a detailed LOTUS spreadsheet to ensure that all receipts are accounted for and recorded in our accounting system. We hope to purchase different Book Sales software to make this accounting procedure less time consuming.

Regarding our initiating action to recover missing funds, as of this date, DOAS Risk Management has indicated that there is not sufficient evidence for coverage under our Fidelity Bond and it is unlikely that we will be able to recover the missing receipts for deposit.

F -228

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
OKEFENOKEE TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 818-95-02 The review report for the year ended June 30, 1994, noted that equipment inventory records for the Okefenokee Technical Institute's general fixed assets were found to be deficient. In the year under review, the Institute recorded equipment purchases by the Georgia Department of Technical and Adult Education - Administrative Central Office for the Okefenokee Technical Institute in the Institute's equipment inventory records. However, equipment additions continue not to be reconciled to general ledger expenditure accounts in a timely manner. The Okefenokee Technical Institute should establish controls to ensure that equipment inventories are maintained in accordance with Official Code of Georgia Annotated 50-16-161 and the State Property System Manual.
A1ana~ementResponse
Okefenokee Technical Institute concurs with this fmding. The volume of activity required to bring the Property records up to date from the previous year's huge influx of Lottery funded equipment purchased from both the Georgia Department of Technical and Adult Education's Administrative Central Office and directly from Okefenokee Tech's necessitated our utilizing various requested FACS (Fiscal Accounting Control System) and PROPS (Property Records System) computer generated reports to ensure we had added everything that needed to be added from the previous year. In addition to this, we were adding the 1995 acquired property as we received it so as to not fall behind on current year additions. Again, we utilized various computer generated reports and documents to ensure that all property which should be added to Okefenokee Technical Institute's PROPS system was added. Although our process was not an actual "Property Reconciliation" to arrive at a fmal figure, this was an ongoing reconciliation to ensure that the equipment purchased through our FACS accounting system was followed through and recorded on PROPS. In fact, the PROPIFACS REFERENCE NUMBER EXCEPTION REPORT indicated that all 1995 purchased equipment received as of June 30th had been added to PROPS except for 2 vacuum cleaners ($2,998.95) that were received exactly at year end. We are in the process of completing an actual reconciliation in the form called for in accordance with the State Property System Manual.
F - 229

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

WEST GEORGIA TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

819-94-01

See Audit Control Number 819-95-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 819-95-01
The report for the year ended June 30, 1994, stated that West Georgia Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures for the Expenditures/LiabiIitieslDisbursements control category. For the year under review, our review noted no improvement regarding adequate separation of employee duties.
Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and fmancial statements are accurate and complete.
The Institute should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control category, and implement those procedures to strengthen the internal control over the accounting function.
Federal Grantor A~encies Affected:
U. S. Department of Education U. S. Department of Energy U. S. Department of Health and Human Services U. S. Department of Labor
A1ana~ementResvQnse
We are continually improving our procedures to further satisfy the separation of duties requirement. It is our opinion that, without additional staff, complete resolution of this fmding is not obtainable.

F -230

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

WEST GEORGIA TECHNICAL INSTITUTE CURRENT YEAR

CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 819-95-02

A review of cash management procedures for the Pell Grant Program disclosed that cash draws were made in advance of immediate cash needs. On September 6, 1994, January 27, 1995, and May 30, 1995, West Georgia Technical Institute used the ACHIEFT method to drawdown funds which were disbursed from Agency funds on September 14, 1994, February 15, 1995, and June 30, 1995, respectively. Federal cash drawdowns should not exceed the immediate need. For institutions using the ACHIEFT method, immediate need is defined as need for a three-day period.

Procedures should be implemented by the Institute to ensure that requests for cash draws do not exceed the immediate need.

Mana~ement Response

West Georgia Technical Institute is implementing appropriate procedures and controls to ensure that:

1.

Federal cash drawdowns will be done based on immediate need.

2.

Adequate documentation supporting each drawdown will be kept on file.

3.

Disbursement will be done within 3 days of receipt of Federal Funds.

4.

Implementation date for these procedures is March 31, 1996. The Accountant is responsible for implementation.

F - 231

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

ALBANY TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

820-94-01 820-94-02 820-94-03 820-94-04 820-94-05 820-94-06 820-94-07

See Audit Control Number 820-95-0 I See Audit Control Number 820-95-02 See Audit Control Number 820-95-04 See Audit Control Number 820-95-03 See Audit Control Number 820-95-05 Corrective Action Implemented No Corrective Action Implemented

Mana'lement Response

Audit Control Number 820-94-07

Errors in voiding checks and untimely reporting of changes in student schedules resulted in the overstatement of earned tuition and fees for students who withdrew. Corrections were made in January and this reported overstatement of tuition and fees has been reduced. A new policy for student drop/adds was implemented effective Winter Quarter 1995, requiring weekly submissions by instructors.

PRIQRYEA~CURRENTYEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Audit Control Number 820-95-0 I
The review report for the year ended June 30, 1994, disclosed that Albany Technical Institute's accounting procedures did not provide adequate internal control over the bank reconciliation process. During the year under review, the accounting procedures related to cash were again found to be deficient as follows:
(1) The monthly bank statement for the general operating account was not reconciled at June 30, 1995.
(2) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.
These deficiencies were a result of management's failure to adequately implement procedures for the bank reconciliation process. The Institute should implement appropriate procedures and controls to ensure that all bank statements are reconciled to the general ledger on a timely basis and that reconciling items are identified and corrected promptly.

_... _-----=,""'~""'"'-------

F -232

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
ALBANY TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
Federal Financial Assistance Protpams Affected:
10.558 Child and Adult Care Food Program 17.250 Job Training Partnership Act 84.048 Vocational Education - Basic Grants to States 84.063 Pell Grant Program 93.561 Job Opportunities and Basic Skills Training 93.575 Child Care and Development Block Grant
Mana"ement ~ponse
Effective December 1995, time lines have been implemented to have Bank reconciliations completed within two weeks after the monthly General Accounting close.
To assist in the reconciliation process, Financial Aid payrolls such as HOPE and PELL will be issued prior to the 15th of the month to limit the number of outstanding checks. Both the Vice President and Accountant will sign off on all account reconciliations.
INVENTORIES Inadequate Resale Inventory Records Financial Statements Audit Control Number 820-95-02
The review report for the year ended June 30, 1994, noted that the Institute's internal accounting procedures relating to the costing ofresale inventories were deficient. During the year under review, tests revealed that the perpetual inventory system was again found to be deficient as follows:
(1) Inventory was not properly updated for new costs when items were purchased.
(2) We were unable to reconcile beginning resale and ending resale inventories through an analysis of fiscal year purchases/sales activity.
(3) An unreconciled variance of $300.00 existed between the general ledger and the subsidiary record at June 30, 1995.
These conditions were caused by management's failure to adequately monitor activity for the resale inventory records. The Institute should implement appropriate procedures to ensure that the resale inventory system is updated for new costs when items are purchased, that accounting records document the purchases/sales activity for all inventory for resale and that subsidiary records agrees with the general ledger.
Mana"ement Response
Effective January 1996, a spreadsheet has been devised to compute the price per book based on a calculation of unit cost per book + unit freight cost + 25% markup.
Book prices are calculated on the spreadsheet to avoid human error in calculations. A double check is also in place by having our Accountant verify price changes.
F -233

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
ALBANY TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 820-95-03
The review report for the year ended June 30, 1994, disclosed that deficiencies were noted in the accounting records of the Albany Technical Institute. During the year under review, the accounting records were again found to be deficient as numerous journal entries lacked documentation and evidence of proper authorization.
These deficiencies were a result ofmanagement not ensuring proper procedures were being followed for the journal entry process. The Institute should establish appropriate procedures to ensure that detail records supporting the general ledger are complete, accurate and reliable.
Federal Fjnancjal Assistance Prorgams A/lected'
10.558 .Child and Adult Care Food Program 17.250 Job Training Partnership Act 84.048 Vocational Education - Basic Grants to States 84.063 Pell Grant Program 93.561 Job Opportunities and Basic Skills Training 93.575 Child Care and Development Block Grant
Mana~ement Response
A change in personnel has taken place at Albany Technical Institute for both the Accountant and the Vice President of Administrative Services. Procedures are now in effect to require supporting documents for all journal vouchers, as well as authorization by both the Accountant and Vice President.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Vocational Education - Basic Grants to States [CFDA 84.048] Audit Control Number 820-95-04
The review report for the year ended June 30, 1994, disclosed that the equipment inventory records for Albany Technical Institute's general fixed assets were deficient. For the year under review, the equipment inventory records were again deficient as additions and deletions made during the 1993, 1994 and 1995 fiscal years have not been updated to the inventory records.
These deficiencies occurred because of management's failure to ensure that equipment inventory records were properly updated. The Institute should establish the necessary controls to ensure that equipment inventories are maintained in accordance with provisions of Federal Regulations and the State Property System Manual.
F -234

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

ALBANY TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR

A1anq~mentResponse

All departments completed physical inventories during Fall Quarter. The Business Office has removed Flood loss items and has begun to update our inventory records to reflect additions and deletions from fiscal years 1993, 1994, 1995 and 1996. Procedures have been implemented for the transfer of equipment from department to department so that property inventories are reflective of the move.

In March, the Business Office will complete a reconciliation to ensure all Property Inventory Records are current. Monthly reconciliations will then be put in effect to ensure an ongoing process.

FEDERAL FINANCIAL REPORTS Federal Cash Transactions Report Not Reconciled Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 820-95-05

The review report for the year ended June 30,1994, disclosed that the Federal Cash Transactions Report - Status of Federal Cash submitted by the Albany Technical Institute to the U. S. Department of Education reflected a difference of $11,348.82 between reported "cash on hand end of period" and ending cash per the Institute's accounting records.

For the year under review, "cash on hand end of period" reported on the Institute's fmal monthly fiscal year 1995 Federal Cash Transaction Report - Status of Federal Cash to the U. S. Department of Education again could not be reconciled to the accounting records as indicated below:

Report Date

Cash on Hand End of Period Reported on Form PMS272

Ending Cash per Accounting
Records

Djfference

June 30, 1995

$ 2,523.00

2.726.20

This difference occurred because records maintained by the Financial Aid Office were used to prepare the Federal Cash Transactions Report, and these records were not reconciled to the formal accounting records maintained in the Business Office.

Procedures should be established to ensure that all Federal Cash Transactions Reports are reconciled to the Institute's formal accounting records, and documentation should be maintained reflecting this reconciliation. The Institute should contact its grantor agency regarding these unreconciled differences.

A1qnq~ment Response

In reviewing the Federal Cash Transactions Reports from prior year, we are unable to determine the origin of the unreconciled differences. An account reconciliation has been requested from the Department of Education. Reconciliation is in process and repayments, in terms of adjustments to our Winter Quarter draw down, will occur if identified and documented.

F - 235

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
ALBANY TECHNICAL INSTITUTE
CURRENT YEAR
ELIGIBILITY Disbursements in Excess of Need Federal Financial Assistance Job Training Partnership Act [CFDA 17.250] Amount: $225.00 Audit Control Number 820-95-06
For the year under review, an examination of the records of twenty-five students who received fmancial aid revealed that one student received $225.00 of Job Training Partnership Act funds for textbooks in excess of fmancial aid need. This condition occurred because management failed to consider the impact of Hope Grant funds received by the student.
The Institute should secure reimbursement of $225.00 for refund to the Southwest Georgia Regional Development Center.
The Institute should establish procedures to ensure that student financial aid is properly coordinated between the Hope Grant and other student fmancial aid programs.
Manaument Response
Refund in the amount of$225.00 has been made to the Southwest Georgia Regional Development Center.
The Financial Aid Department has been moved from the Student Services Group to the Administrative Services Group to ensure a cohesive relationship between Financial Aid and the Business Office Staff. All scholarships will be administered by the Financial Aid Department to ensure a coordination of benefits occurs for all students.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 820-95-07
A review of cash management procedures for the Pell Grant Program disclosed that cash draws were made in advance of immediate cash needs. On February 21, 1995, Albany Technical Institute used ACHIEFT method to drawdown funds which were disbursed from Agency Funds on March 9, 1995. Federal cash drawdowns should not exceed the immediate need. For institutions using ACHIEFT method, immediate need is defmed as need for a three-day period.
The excessive cash balances are a result of management's failure to adequately forecast the cash needs of this program. Procedures should be implemented by the Institute to ensure that requests for cash draws do not exceed the immediate need.
Manqwment Response
Effective fiscal year 1996, procedures have been implemented to ensure PELL Grant Cash Draws are made from the Student Eligibility List obtained from Financial Aid.
If deletions occur after the cash draw request has been made, the adjustment is then made to the next cash draw.
F -236

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
ALBANY TECHNICAL INSTITUTE CURRENT YEAR
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Vocational Education - Basic Grants to States [CFDA 84.048] Audit Control Number 820-95-08 A review of cash management procedures for the Vocational Education - Basic Grants to States disclosed that cash draws utilizing the cash request method, were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 1995, the program had an average cash balance of $15,728.31 and had excessive ending monthly cash balances in five months. The excessive cash balances are a result of management's failure to adequately forecast the cash needs of this program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from Georgia Department of Technical and Adult Education and disbursement of such funds by the Institute. Manaument Response Cash is requested on a reimbursable basis after the Monthly Expense system close as per DTAE Policy.
F -237

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

ATHENS AREA TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

822~94-01
822-94-02

See Audit Control Number 822-95-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

REVENUEIRECEIVABLESIRECEIPTS Unsupported Student Accounts Receivable Financial Statements Audit Control Number 822-95-01

At June 30, 1994, Athens Area Technical Institute had $7,082.58 in student accounts receivable for tuition and fees which were not supported by approved fmancial aid at the time of registration. The Institute collected $400.94 during the year under review,
a leaving balance of $6,681.64 at June 30, 1995.

Deferring payment of tuition and fees without approved fmancial aid is beyond the authority granted to the Institute by the Administrative Central Office of the Georgia Department of Technical and Adult Education. The Institute should initiate extensive collection procedures in an effort to collect all amounts due to the Institute.

A1anq~ementRespQnse

As we stated in our response to this fmding in previous years, it is not the intent of the Institute to defer student payment of tuition and fees unsupported by fmancial aid. Our corrective action was implemented July 1, 1992 and we have made progress in our efforts to eliminate this problem. This is evidenced by the decrease in unsupported Accounts Receivable.

F -238

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

AUGUSTA TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findinl:

824-94-01 824-94-02 824-94-03

See Audit Control Number 824-95-02 See Audit Control Number 824-95-0 I Corrective Action Implemented

PRIOR YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 824-95-01
The review report for the year ended June 30, 1994, disclosed instances where two items of equipment were physically located, but were not recorded on the equipment inventory records. For the year under review; these two items were still not included on the Institute's equipment inventory records.
The Institute should follow established procedures to ensure that all equipment is recorded on the equipment inventory records.
Mana~ement Response
To improve on the efficiency of the equipment inventory records, a physical inventory has been initiated for FY'96 by the Business Office Staff and will be reconciled to the property books. In addition, measures have been taken to train personnel in the responsible department, the importance of performing an accurate inventory review and the importance of maintaining their inventory, notifying the property manager when changes occur.
PRIOR YEAR/CURRENT YEAR

REVENUEIRECEIVABLESIRECEIPTS Inadequate Accounting Control Procedures Financial Statements Audit Control Number 824-95-02
The review reports for the years ended June 30, 1991, 1992, 1993 and 1994, disclosed numerous accounting control deficiencies with the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis). For the year under review, the accounts receivable procedures were again deficient as indicated below:
(1) As of June 30, 1995, the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis) included $295.00 in student receivables outstanding from fiscal year 1994, $277.91 in student receivables outstanding from fiscal year 1993, $1,783.65 in student receivables outstanding from fiscal year 1992, $2,551.46 in student receivables outstanding from fiscal year 1991, and $23,665.30 in student receivables outstanding from fiscal year 1990.

F -239

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
AUGUSTA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
Tests of the underlying documentation supporting these receivables disclosed numerous instances where supporting documentation was not adequate to determine if the amounts recorded were actually earned by the Institute.
(2) As of June 30, 1995, the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis) included $8,869.61 in checks returned for insufficient funds. Included in this amount were $8,277.98 from fiscal year 1994 or earlier.
(3) As of June 30, 1995 the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis) included $751.39 in accounts receivable for tuition and fees from fiscal year 1993 for which payment was deferred by the Institute under a "Tuition Work Assistance Agreement" to enroll and attend classes at the Institute. Under this agreement, students were allowed to enroll and attend classes in exchange for work for the Institute. The "Tuition Work Assistance" policy was discontinued as of June 30, 1993.
(4) As of June 30, 1995 the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis) included $2,330.59 in accounts receivable for tuition and fees for which payment was deferred by the Institute. These deferments were a result of the Institute's approving a number of students for Pell Grants only later to find out the students were ineligible.
Deferring payment oftuition and fees without approved fmancial aid is beyond the authority granted to the Institute by the Administrative Central Office of the Georgia Department of Technical and Adult Education. This practice by the Institute should be discontinued.
The Institute should initiate collection procedures in an effort to collect all amounts due to the Institute. Furthermore, the Institute should review all delinquent student accounts receivable to determine if the amounts accurately reflect amounts owed to the Institute.
A1anq~ementRespQnse
(1) Analysis of outstanding receivables were made during FY'95, those determined to be insupportable were adjusted in the revenue subsystem during FY'95.
(2) Outstanding receivable for insufficient funds from prior years are pursued for collection. Every student with fees due is shown in our Banner student system and their accounts are placed on hold status, preventing them from all transactions until their fees are paid. In FY'93, procedures were developed, and remain as policy in FY'94, to remove students from classes if their check for fees is returned.
(3) For FY'93 Tuition Work Assistance outstanding receivables were established in exchange for the student working for the Institute, however, balances remaining in these accounts resulted from the student withdrawing from school before completing the hours required to work. Efforts are being made to collect these debts and holds have been placed on the student's account. In FY'94, with the implementation of the Hope Grant Program, the need for Tuition Work Assistance has been eliminated.
(4) The Financial Aid Office eligibility determination has been improved upon through the utilization of the Microfaids and the Electronic Data Exchange System software packages, allowing ineligibility to be detected sooner. Also a more intense screening before approval has been implemented. Attempts are made to collect the debt from the student and a hold is placed on the student's file.
F-240

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

BEN HILL-IRWIN TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

825-94-01

Corrective Action Implemented

F - 241

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

CARROLL TECHNICAL INSTITUTE
STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

826-94-01

See Audit Control Number 826-95-01

PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 826-95-01
The review report for the year ended June 30, 1994, disclosed that Carroll Technical Institute's accounting procedures did not provide for adequate internal control over the bank reconciliation process. For the year under review, this deficiency continued to exist. Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.
The Institute should implement appropriate procedures and controls to ensure that all reconciling items are identified and corrected promptly.
Mana'iement Response
Reconciling items are identified and researched on a monthly basis. The appropriate method of adjustment is assessed for each item. Consequently, (utilizing FACS functions and procedures) proper action is taken following identification of the items on the monthly reconciliation.
The disposition of each item (using FACS) is initiated and coordinated by the Staff Accountant. By working with the related support staff including the accounts payable, payroll, and revenue clerks, data is reconciled and/or adjusted promptly.
Expediency and accuracy is monitored by the Director ofAccounting on a monthly basis. Appropriate follow-up and feedback is communicated to the Staff Accountant to ensure all required action is carried out promptly. This process will provide a true cash balance for interim periods.
CURRENT YEAR

GENERAL LEDGER Inadequate Internal Controls Financial Statements Audit Control Number 826-95-02
For the year under review, Carroll Technical Institute's internal controls did not provide for adequate safeguards over the accounting process. The following deficiencies were noted:
(1) Excessive journal entries were required to correct numerous errors.

F -242

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
CARROLL TECHNICAL INSTITUTE CURRENT YEAR
(2) The journal entries did not contain proper authorization and/or adequate supporting documentation. The Institute should implement procedures to ensure that accounting records are correct without the need for numerous journal entries. Controls should also be established to ensure that journal entries are properly approved and documented prior to entry into the accounting system.
A1ana~mentResvonse
Correctibility of the accounting records without numerous N's will be accomplished by using the appropriate database function in the FACS and/or PACS system. The related accounting staffhas received additional training on the use of the relative system functions for making the necessary corrections. The Journal Voucher (N) source document has been reformatted. Additionally, all journal vouchers must be approved by the Director of Accounting. Also, proper documentation supporting the justification of the N must be attached before approval. After proper documentation and approval, the Staff Accountant will enter the journal voucher for the appropriate period. The effect of the N on the fund source trial balance is reviewed internally by the Director of Accounting. Consequently, functions available in FAC and/or PACS components of the state system will ensure that the accounting records are correct without the use of a disproportionate number ofN's. ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Financial Statements Audit Control Number 826-95-03 For the year under review, Carroll Technical Institute did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures over Cash and Cash Equivalents. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff. A1anq~ment Resvonse Additional staff and redefmition of duties for existing staff in the business office have enhanced the ability to separate duties within the administrative serviced division. The staffmg changes allowed management to reassess the duties of each staff member. As a result of the assessment, a greater separation of duties has resulted for the various functions within the office. The implementation date for all of the above is March I, 1996.
F -243

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

CHATTAHOOCHEE TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

827-94-01

See Audit Control Number 827-95-01

PRIOR YEAR

EMPLOYEE COMPENSAnON Salary Overpayments Financial Statements Questioned Cost: $3,170.00 Audit Control Number 827-95-01
The review report for the year ended June 30, 1993, disclosed that Chattahoochee Technical Institute paid additional compensation of $4,200.00 to an employee for part-time work which was not substantiated by proper time and attendance records as being above her normal full-time instructional workload. Furthermore, an addendum was not included to the employee's contract of employment to support the additional compensation.
During fiscal year 1994, a review of this matter by the Administrative Central Office of the Georgia Department of Technical and Adult Education resulted in this questioned cost amount being adjusted to $4,770.00. The Administrative Central Office instructed the Institute to establish written policies and procedures which provide assurance that employees will not be paid without appropriate documentation on file and to secure reimbursement of $4,770.00 from the employee involved for deposit to the Institute's Budget Fund.
During the year under review, the Institute established procedures to ensure that payments made to employees are properly documented. In addition, the Institute secured reimbursement of$I,600.00 from the employee involved, leaving a remaining balance of $3, 170.00. The Institute should secure reimbursement of $3, 170.00 from the employee involved for deposit to the Institute's Budget Fund.
Manaument Response
The contract for the employee involved in overpayment was non-renewed June 30, 1995. The balance owed to the Institute at that date was $3,170.00. The employee's fmal paycheck in the amount of $2,520.04 has been held by the business office and certified letters have been sent on June 30, 1995 and on March 27, 1996 to this former employee requesting payment of $640.96 to clear the final obligation owed to the Institute.

F-244

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

CHATTAHOOCHEE TECHNICAL INSTITUTE

CURRENT YEAR

CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Vocational Education - Basic Grants to States [CFDA 84.048] Audit Control Number 827-95-02

A review of cash management procedures for the Vocational Education - Basic Grants to States Program disclosed that cash draws utilizing the cash request method were made in advance of immediate cash needs resulting in the accumulation of excessive cash balances. During fiscal year 1995, the program had an average cash balance of$19,536.61, with excessive ending monthly cash balances in six months.
Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Administrative Central Office of the Georgia Department of Technical and Adult Education and disbursement of such funds by the Institute.

Manawment Res.ponse
Procedures have been established effective December 1, 1995 to request the transfer of funds for the Basic Grants to States Program from the Administrative Central Office of the Georgia Department of Technical and Adult Education for reimbursement only of cash disbursements by the Institute. Monthly expense reports received for each reporting period are the basis for these cash reimbursement requests.

FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 827-95-03

For the year under review, the U.S. Department of Education Student Payment Summary (SPS) Report indicated that Chattahoochee Technical Institute incurred $757,202.00 in Federal Pell Grant Program expenditures. However, the Institute actually disbursed $652,946.99 in Pell Grant Program expenditures for the 1994-1995 award year. The following reconciliation summarizes the reporting errors made by the Institute in reporting Pell Grant Program expenditures to the U.S. Department of Education:

AMOUNT REPORTED ON SPS REPORT

$ 757,202.00

REPORTING ERRORS

CATEGORY DESCRIPTION

I

Students on SPS Report for amount greater than actual disbursement.

II

Students on SPS Report for amount less than actual disbursement.

III

Students not on SPS Report but received Pell Grant funds.

ACTUAL DISBURSEMENTS FOR 1994-1995 AWARD YEAR

AMOUNT $ -288,876.50
3,164.00 181.457.49 -104,255.01
$ 652,946.99

F -245

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
CHATTAHOOCHEE TECHNICAL INSTITUTE
CURRENT YEAR
The Institute should report to the U. S. Department of Education the downward adjustments in Category I which will reduce the Institute's final authorization for the 1994-1995 award year. In order for the Institute to be reimbursed for the Pell Grant expenditures in Categories II and III, the Institute must certify the validity of these payments to the U. S. Department of Education. The Federal agency can then provide an upward adjustment of the fiscal year 1995 authorized amount in order to make the funds available to the Institute.
A1ana~ement~DQnSe
The Institute has been granted administrative relief from the 1994-1995 Federal Pell Grant student award data submission deadline by the U. S. Department of Education on February 23, 1996. This administrative relief allows the Institute to make both upward and downward adjustments to the individual student records necessary to reconcile Pell Grant Program expenditures to the U. S. Department of Education for the 1994-1995 award year. Procedures are in place effective December 1, 1995 to ensure that the student award data is submitted to the U. S. Department of Education by the required reporting deadline and that these records are reconciled to the Institute's disbursement records.
FEDERAL FINANCIAL REPORTS Failure to 'Submit Institutional Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 827-95-04
Regulations of The Blue Book of the U. S. Department of Education require the Institute to submit Institutional Payment Summary (IPS) Reports during three specified reporting periods. For the year under review, Chattahoochee Technical Institute failed to submit an IPS Report for the period July 1, 1994 - December 15, 1994.
The Institute should implement procedures to ensure that all Institutional Payment Summary Reports are prepared and submitted to the U. S. Department of Education in accordance with Federal reporting requirements.
A1ana~ement~DQnSe
Due to the resignation of the Director of Financial Aid during this period, the Institute failed to submit the required IPS Report for this reporting period. Procedures have been implemented effective November 1, 1995 to ensure that the required reports are prepared and submitted to the U. S. Department of Education in a timely manner.
DRUG-FREE WORKPLACE ACT Failure to Implement a Drug Awareness Program Federal Financial Assistance Audit Control Number 827-95-05
The Federal Drug-Free Workplace Act of 1988 requires all grantees that have been approved or awarded a direct Federal grant to implement a Drug-Free Awareness Program. During the year under review, the Institute did not comply with this requirement. For the grantee to be certified as a drug-free workplace, a drug awareness program must be established. This program must inform employees of the dangers of drug abuse in the workplace, of the grantee's policy for maintaining a drug-free workplace and of any available drug rehabilitation and employee assistance programs. Chattahoochee Technical Institute should develop a drug-free awareness program that includes all the elements of the drug-free policy.
F - 246

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
CHATTAHOOCHEE TECHNICAL INSTITUTE
CURRENT YEAR
Federal Financial Assistance Pro~rams Afkcted:
84.031 Higher Education - Institutional Aid 84.033 Federal Work-Study Program 84.063 Pell Grant Program
Manq~ement Response
The Institute designated a coordinator to develop a Drug-Free Awareness Program in March 1996. This program should be in place by April 1996 in order to comply with the Federal requirement to be certified as a drug-free workplace.
ELIGIBILITY Failure to Sign Statement of Educational Purpose Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 827-95-06
Federal regulations 34 CFR 668.32 require that students sign a Statement of Educational Purpose to be eligible for Title IV program funds. For the year under review, an examination of fifteen student files disclosed that three files did not contain a signed Statement of Educational Purpose.
Procedures should be implemented by Chattahoochee Technical Institute to ensure that student files contain a signed Statement of Educational Purpose as required.
Manawment Response
All student aid files for the 1994-1995 award year are being reconstructed to ensure that each file contains the required documentation for fmancial aid eligibility. Files were not properly maintained during this reporting year due to the vacancy of the Director of Financial Aid position for a significant period of time. Procedures are now in place effective December 1, 1995 to ensure that student files contain a signed Statement of Educational Purpose as required.
SPECIAL TESTS AND PROVISIONS Required Data Verification Not Performed Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 827-95-07
Federal regulations 34 CFR 668.576 require that students selected for verification of eligibility requirements by the U. S. Department of Education must submit signed copies offmancial documents to the Institute before Pell Grant funds can be disbursed to the student. For the year under review, an examination of three student files selected for verification disclosed that one file did not contain a copy of the student's 1993 tax return as required.
F -247

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
CHATTAHOOCHEE TECHNICAL INSTITUTE CURRENT YEAR
Procedures should be implemented by Chattahoochee Technical Institute to ensure that verification requirements are completed before funds are disbursed to students. Manqument Response As part of the file reconstruction for the 1994-95 award year that is being done for the student financial aid files, procedures were implemented to ensure that required verification is performed. This file reconstruction will be completed by April 30, 1996.
F -248

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

COLUMBUS TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

828-94-01 828-94-02 828-94-03 828-94-04

Corrective Action Implemented Corrective Action Implemented See Audit Control Number 828-95-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 828-95-01

The review report for the year ended June 30, 1994, disclosed that the Institute made cash draws for the Pell Grant Program in advance of immediate cash needs. For the year under review, a review of cash management procedures disclosed that on September 27, 1994 and March 1, 1995, Columbus Technical Institute used the ACH/EFT method to drawdown funds which were disbursed from Agency Funds on October 17, 1994 and March 21,1995, respectively. Federal cash drawdowns should not exceed the immediate need. For institutions using the ACH/EFT method, immediate need is defmed as need for a three-day period.

Procedures should be implemented by the Institute to ensure that requests for cash draws do not exceed the immediate need.

Mana~ement Response

We concur with this fmding. The small cash balances on hand on those two dates were due to voiding of outstanding checks. We have implemented procedures in FY 96 to watch for these balances so that we can anticipate them when we draw funds. This was implemented on September 1, 1995.

F -249

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

COOSA VALLEY TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

829-94-01

Finding Deleted

CURRENT YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Travel Listing Not Reconciled to Accounting Records Financial Statements Audit Control Number 829-95-01
For the year under review, the detail listing of travel payments by individual submitted to the Department of Audits by Coosa Valley Technical Institute was not reconciled to the Institute's general ledger. After extensive review procedures were performed, an unidentified variance of$858.20 remained between the listing of travel payments and the Institute's general ledger.
Administrative procedures should be implemented by the Institute to ensure that the detail listing of travel is reconciled to the accounting records prior to submission to the Department of Audits.
Manaf:ement Response
Prior to the mailing of the 7202 monthly report to the state auditors, the 7202 report will be reconciled with the 2065 and the 2410. The person preparing the reconciliation will use a formalized schedule that is to be signed off by the Director of Financial Operations prior to the 7202 being mailed to the state.

F -250

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
LANIER TECHNICAL INSTITUTE CURRENT YEAR
SPECIAL TEST AND PROVISJONS Failure to Obtain Financial Aid Transcript Federal Financial Assistance Audit Control Number 834-95-01 During the year under review, the U. S. Department of Education performed a program review of the Institute's Title IV Federal Student Financial Assistance programs. The focus ofthe review was to ascertain the Institute's compliance with Title IV program statutes and regulations. The review disclosed one program deficiency in which the Institute did not have a fmancial aid transcript on file for one student who received Title IV assistance. Federal regulations contained in 34 CFR 668.19 require that, prior to the Institute disbursing Title IV funds to the student, such a transcript must be requested by the student or the Institute from the institution previously attended by the student. The program review recommended that the Institute obtain the required fmancial aid transcript for the student. We noted that, in accordance with the report's recommendation, the Institute requested and received the required fmancial aid transcript from the Institution previously attended by the student. Federal Grantor AgencY Atjected: U. S. Department of Education Manaument Resvonse As noted in the above paragraph, this exception has been corrected.
F - 251

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MACON TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

835-94-01

Corrective Action Implemented

CURRENT YEAR

ELIGIBILITY Failure to Sign Statement of Educational Purpose Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 835-95-01
Federal regulations (34 CFR 668.32) require that students sign a Statement of Educational Purpose to be eligible for Title IV program funds. For the year under review, an examination of twenty-five student files disclosed that two files did not contain a signed Statement of Educational Purpose. This noncompliance occurred because of management's failure to adequately monitor the student files.
Procedures should be implemented by the Institute to ensure that student files contain a signed Statement of Educational Purpose as required by Federal regulations.
Mana~ement Response
Procedures were implemented in May of 1995 to ensure all student files contain a signed Statement of Educational Purpose and all other required information. A control log of all required documents is placed in each student fmancial aid file to provide a guide for ensuring all documents are included in the file. Additional personnel for the fmancial aid office have also been added, along with additional training for these employees. The financial aid office was under the management ofthree different directors in FY 95, and steps have been taken to stabilize this office.

F -252

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
MIDDLE GEORGIA TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

836-94-01 836-94-02 836-94-03 836-94-04

See Audit Control Number 836-95-01 Corrective Action Implemented Corrective Action Implemented No Corrective Action Implemented

Manaument Response

Audit Control Number 836-94-04

We concur with this recommendation.

MGT developed procedures in January 1995 to ensure that all Institutional Payment Summary Reports are reconciled with the formal accounting records prior to submission to U. S. DOE.

This procedure was implemented in January 1995 and has been followed each reporting period since, with no discrepancies.

PRIOR YEAR/CURRENT YEAR

GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 836-95-01
The review report for the year ended June 30, 1994, reported that Middle Georgia Technical Institute had several deficiencies in their accounting records. For the year under review, the accounting records were again deficient, as listed below:
(1) Numerous joumal entries lacked evidence of proper authorization prior to recording in the accounting records.
(2) The monthly bank reconciliations were not performed in a timely manner to enable the posting of adjustments in the proper accounting period.
(3) The bank reconciliations at June 30, 1995, disclosed numerous book errors which had not been posted to the general ledger in the year under review. Some of these items were noted in prior fiscal years.
(4) The bank account for the Youth Apprenticeship Aerospace program for June 1995, was not reconciled to the accounting records.
These conditions occurred because management did not establish appropriate procedures to ensure that the general ledger is posted, balanced and reviewed on a monthly basis, and that subsidiary records supporting the accounting records are complete, accurate and reliable. The Institute should implement the proper procedures and controls to ensure that bank statements are reconciled to the accounting records monthly and that needed adjustments are recorded on a timely basis. All journal entries should be reviewed, approved and properly documented prior to posting to the general ledger.

F - 253

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MIDDLE GEORGIA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
Federal GrantQr A~encies Affected'
U. S. Department of Education U. S. Department of Health and Human Services U. S. Department of Labor
Manq~ement RewQnse
We concur with this recommendation:
This finding occurred because the Vice President for Administrative Services did not monitor the Business Office activities closely enough. Appropriate action was taken in December, 1995 by MGT to ensure that the general ledger is posted, balanced, and reviewed on a monthly basis and that subsidiary records properly support the general ledger. All journal entries are reviewed by the Vice President of Administrative Services prior to entry into the accounting system. Bank reconciliations are completed within the month following receipt of statements and reviewed by the Vice President of Administration for accuracy. The Institute P.residenthas taken steps to completely review, revise, document and implement procedures within the Business Office, including review the balancing activity with the Vice President weekly to ensure that these steps are being followed and that this fmding does not recur.
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Sales and Use Tax Reporting Financial Statements Audit Control Number 836-95-02
For the year under review, an examination of the Institute's Sales and Use Tax Report filed with the Georgia Department of Revenue revealed that the Institute submitted an improper Sales and Use Tax Report for the period of January through March, 1995. The report filed by the Institute indicated gross sales of $15,713.90 and a tax liability of $491.88. A review of the accounting records disclosed that the Institute had actual sales of approximately $92,000.00 and had collected sales taxes of $4,077.41. The Official Code of Georgia Annotated Section 48-8-8 provides, in part, as follows:
"It shall be unlawful for any dealer required by this article to make, render, sign, or verify any return to make afalse or fraudulent return with intent to evade the tax levied by this article".
This finding occurred because management disregarded the applicable laws and regulations. The Institute intentionally understated the sales revenue and related liability for the period to cover an unidentified deficit that had accumulated over several years in the holding account used to pay the sales tax liability. The Institute had been given appropriate adjustments by the Georgia Department of Audits and had agreed to fund the deficit with local funds in prior years. Middle Georgia Technical Institute should implement procedures to ensure that all sales and related liabilities are properly reported as required. The Institute should contact the Georgia Department of Revenue concerning the resolution of this fmding. Any payments due, including penalties and interest, should be funded from local reserves.
F -254

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MIDDLE GEORGIA TECHNICAL INSTITUTE
CURRENT YEAR
Manaument Response
We concur with this recommendation:
This fmding occurred because the Vice President of Administrative Services ignored the prior year adjusting entries given to him to remove a negative balance in the Sales and Use Tax trust project. Instead of making the proper adjusting entries, he disregarded the applicable laws, regulations and MGT! policy by filing an incorrect Sales and Use Tax Report.
On November 1, 1995, MGT filed an amended return with the Georgia Department of Revenue, and paid the correct amount. Any penalties and interest will be funded from local reserves. The Institute President has taken steps to completely review, revise, document and implement procedures within the Business Office. Appropriate disciplinary action will be taken against the V.P. of Administrative Services. The new procedures implemented will ensure that the President reviews the Sales and Use Tax Report before it is submitted to the Georgia Department of Revenue.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Improper Recording of Capital Leases Financial Statements Reportable Condition - Material Weakness Audit Control Number 836-95-03
For the year under review, our examination of the Institute's capital leases revealed that the leases were not recorded at the cash purchase price in the Institute's subsidiary equipment records as required by State of Geor~ia Accountin~ Procedures and Instruction Manual. The Institute failed to add the leases to the records during the fiscal year, even though the liability had been incurred and payments had already been made on the leases. In the subsequent fiscal period, the Institute recorded the leased equipment as an addition to the equipment records at the total acquisition cost of the equipment, including interest.
This condition occurred because management disregarded the provisions of the State regulations regarding capital leases. The Institute should implement procedures to ensure that all leases are properly recorded at the required values. Subsequent to the review, the Institute corrected the values recorded for the capital leases in the subsidiary records.
Mana'{ement Response
We concur with this recommendation:
This fmding occurred because the Vice President for Administrative Services failed to review the values prior to entry into the PROPS system. As reported above, in November, 1995, MGT corrected the subsidiary record by properly reflecting the correct value for the two capital leases in question. In addition, MGT's PROPS coordinator currently reviews all new equipment purchases and capital leases with the Vice President of Administrative Services to ensure that all additions are recorded in a timely manner and at the correct value. The Institute President has taken steps to ensure that all property is recorded and inventoried correctly and that proper procedures are being followed.
F - 255

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
MIDDLE GEORGIA TECHNICAL INSTITUTE
CURRENT YEAR
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Federal Financial Assistance Job Training Partnership Act [CFDA 17.250] Vocational Education-Basic Grants to States [CFDA 84.048] Questioned Cost: $13,951.40 Audit Control Number 836-95-04 A review of the salaries charged to the Federal programs revealed that expenditures for personal services were not supported by time and attendance records as required by Office ofManagement and Budget Circular A-87. Salary and related benefit charges should be based on actual time worked by employees and documented with appropriate time distribution records. The Institute incurred charges of$7,936.68 for the Job Training Partnership Act program (CFDA 17.250) and $6,014.72 for the Vocational Education-Basic Grants to States program (CFDA 84,048) that could not be properly documented. This condition occurred because management used program budgets and not actual time worked by the employees to determine the program charges. Appropriate internal controls should be established by the Institute to ensure that all salary charges of employees involved in Federal and/or State projects be based on actual hours worked and that this time be properly documented. The Institute should contact the grantor agencies concerning the resolution of this finding, Mana'lement Response We concur with this recommendation: This finding occurred because the Vice President for Administrative Services failed to properly review the monthly time and attendance reports for the two employees. The two programs in question had one part-time employee each who were funded from both Federal and local funds. Their time and attendance records did not correctly reflect the distribution of their efforts between the two fund sources, even though they had performed the work as required. The institute currently reviews all time and attendance records on a monthly basis to ensure compliance with OMB Circular A-87. Any adjustments of actual time worked and documented to budgeted amounts is made on a monthly basis prior to requisitioning funds for payment. On January 25, 1996, steps were taken by the Institute President to completely review, revise, document and implement procedures within the Business Office to ensure that this finding does not recur.
F -256

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MOULTRIE AREA TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

837-93-05 837-94-01 837-94-02 837-94-03 837-94-04

Corrective Action Implemented See Audit Control Number 837-95-01 See Audit Control Number 837-95-02 Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRA TIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 837-95-01

The review report for the year ended June 30, 1994, stated that Moultrie Area Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures. In the year under review, no improvement was noted. The Institute did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures for the following control categories:

(1) Budget Preparation!Execution (2) Cash and Cash Equivalents (3) Inventories (4) RevenuelReceivableslReceipts (5) Procurement

(6) Expenditures/Liabilities/Disbursements (7) Employee Compensation (8) General Ledger (9) General Fixed Assets/Property Management

Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and fmancial statements are accurate and complete. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions.

The Institute should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories, and implement those procedures to strengthen the internal controls over the accounting functions.

Federal Grantor A~encies Affected:

U. S. Department of Education U. S. Department of Labor

F -257

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

MOULTRIE AREA TECHNICAL INSTITUTE

PRIOR YEAR/CURRENT YEAR

Mana~ementRes,vonse

Moultrie Area Technical Institute does agree that we have not been able to adequately achieve separation of duties due to limited personnel. Management has corrected this deficiency with the decision to hire two additional staff members who were added September I, 1995. In addition, a part-time staff member was added November 6, 1995. With the additional staff, we should achieve the separation of duties in FY96.

FEDERAL FINANCIAL REPORTS Federal Cash Transactions Report Not Reconciled Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 837-95-02

The review reports for the years ended June 30, 1992, June 30, 1993 and June 30, 1994, disclosed that the Federal Cash Transactions Report - Status ofFederal Cash submitted by Moultrie Area Technical Institute to the U. S. Department of Education reflected differences of$4,313.06, $11,520.75 and $14,399.37, respectively, between reported "cash on hand end of period" and ending cash per the Institute's accounting records.

For the year under review, "cash on hand end ofperiod" reported on the Institute's fmal monthly fiscal year 1995 Federal Cash Transaction Report - Status of Federal Cash to the U. S. Department of Education again could not be reconciled to the accounting records as indicated below:

Report Date

Cash on Hand End of Period Reported on Form PMS272

Ending Cash per Accounting
Records

Difference

June 30, 1995

$ 4,868.00

-774.00 $ 5,642.00

This difference occurred because records maintained by the Financial Aid Office were used to prepare the Federal Cash Transactions Report, and these records were not reconciled to the formal accounting records maintained in the Business Office.

Procedures should be established to ensure that all Federal Cash Transactions Reports are reconciled to the Institute's formal accounting records, and documentation should be maintained reflecting this reconciliation. The Institute should contact its grantor agency regarding these unreconciled differences.

Mana~ement Res,ponse

We concur with the recommendation. Procedures have been established as of October 24, 1995 to pay back to the U.S. Department of Education any cash on hand and to maintain a zero balance in cash. The Institute has been in contact with the grantor agency and has made payment to resolve unreconciled differences.

A new employee was hired to work in the Administrative Services office and the Financial Aid office. This person is required to balance the Financial Aid reporting to the Accounting office records of payment.

F -258

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

MOULTRIE AREA TECHNICAL INSTITUTE CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Audit Control Number 837-95-03

For the year under review, it was noted that Moultrie Area Technical Institute's accounting procedures did not provide adequate internal control over the bank reconciliation process. The accounting procedures related to cash were found deficient as follows:

(l)

The monthly bank statement for the general operating account, payroll, and Pell accounts were not

reconciled at June 30, 1995.

(2)

Outstanding check lists were not complete. Checks were noted that had not been recorded on the

accounting records.

(3)

Void checks were not voided correctly and two voided checks could not be located.

These deficiencies were a result of management's failure to adequately implement procedures for the bank reconciliation process. The Institute should implement appropriate procedures and controls to ensure that all bank statements are reconciled to the general ledger on a timely basis and that reconciling items are identified and corrected promptly. The Institute should establish procedures which ensure that cash and cash equivalents are adequately safeguarded.

Federal Grantor AUncies Affected:

U. S. Department of Education U. S. Department of Labor

Manaument Response

We concur there were deficiencies in bank reconciliation processes. The bank reconciliations were completed, however, due to an erroneous bank reconciliation format on a lotus spreadsheet, there were inaccuracies that were not detected. New procedures were established on January 15, 1996 to create a new spreadsheet that should prove to be error free. An individual has been assigned the task to accomplish these reconciliations on a timely basis with supervisor review.

SPECIAL TESTS AND PROVISIONS Student Financial Aid Overpayment Federal Financial Assistance Pell Grant Program [CFDA 84.063] Amount: $575.00 Audit Control Number 837-95-04

For the year under review, an examination of thirteen student fmancial aid files revealed that one student received $575.00 in excess of the amount that the student was eligible to receive.

This deficiency was a result of management's failure to adequately monitor the disbursement of Pell Grant Funds. The Institute should implement procedures to improve the monitoring of funds disbursed to students. Action should be taken to collect the Pell overpayment from the student.

F -259

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
MOULTRIE AREA TECHNICAL INSTITUTE CURRENT YEAR
A1ana~ent~pQnse
Procedures have been established as ofNovember 15, 1995 to better monitor the disbursement ofPell Grant funds and to ensure that students will not receive Pell award in excess of their eligibility. Action has been taken to collect the Pell overpayment from the student and will continually be pursued.
F-260

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

NORTH GEORGIA TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findings

838-93-07 838-94-01 838-94-02 838-94-03 838-94-04

Corrective Action Implemented See Audit Control Number 838-95-01 See Audit Control Number 838-95-02 Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

REVENUES/RECEIVABLES/RECEIPTS Inadequate Accounting Control Procedures Subsidiary Accounts Receivable Listing for Tuition and Fees Financial Statements Audit Control Number 838-95-01
The review report for the year ended June 30, 1994, disclosed that a detailed accounting of student tuition and fees activity was not maintained in the formal accounting records for the Governmental Fund Type - Budget Fund in accordance with the Policy Manual of the State Board of Technical and Adult Education. Instead, a detail of activity was maintained in subsidiary ledgers with collections posted to the Fiscal Accounting and Control System as cash was received. As a result, no accounts receivable were included on the formal accounting records for those tuition and fees guaranteed by financial aid. For the year under review, this deficiency continued to exist.
The Institute should follow established procedures to ensure that accounts receivable for tuition and fees guaranteed by fmancial aid are recorded on the Fiscal Accounting and Control System as required by State Board policy.
Mana~ement Response
In order to record accounts receivable for tuition and fees guaranteed by fmancial aid on the Fiscal Accounting and Control System, North Georgia Technical Institute will implement the accounts receivable portion of the Banner Student Registration software. This software will allow tuition and fees to be recorded into the Fiscal Accounting and Control System as they are earned. The implementation ofthe Banner Accounts Receivable module began in January, 1996 and should be complete by June, 1996.
GENERAL LEDGER Agency Funds - Inadequate Accounting Records Financial Statements Audit Control Number 838-95-02
The review report for the year ended June 30, 1994, disclosed that North Georgia Technical Institute maintains a student loan program funded by the Georgia Electrification Council. As of June 30, 1995, this fund had a cash balance of $3,504.11 and student notes receivable of$8,040.00 that were included on the Combined Balance Sheet (Statutory Basis) of the Institute. The student notes receivable, totaling $8,040.00, are in default.

F - 261

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
NORTH GEORGIA TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR
The review report for the year ended June 30, 1994, also noted that a loan was improperly made to a student in excess of the $250.00 per quarter per student stipulation in the Georgia Electrification Council agreement. No new loans were made during the year under review. North Georgia Technical Institute's decision effective June 30, 1992, to discontinue the loan program was accepted by the Georgia Electrification Council with the stipulation that the Institute return the original principal of $10,000.00 less a deceased student's loan of $500.00 to the Council. As of the date of this report, a fmal disposition of the principal balance had not been made.
A1anq~ementResQQnse
North Georgia Technical Institute has made several attempts to collect the defaulted loans from the loan program funded by the Georgia Electrification Council. Many students as well as the individuals that co-signed the loan have moved and so collection attempts have been futile. Therefore, the President of North Georgia Technical Institute will request that the Georgia Electrification Council amend the program from a loan program to a scholarship program. The balance of $3,504.11 plus any accrued interest will be returned to the Council if an agreement is made.
F -262

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1995

PICKENS TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

840-93-02 840-94-01 840-94-02

No Corrective Action Implemented See Audit Control Number 840-95-01 Corrective Action Implemented

Mana~ement Response

Audit Control Number 840-93-02

This fmding resulted when an inventory item was removed from the Institute's campus with the permission of the State Surplus Property Division. The appropriate paper work was immediately forwarded to the State Surplus Property Division to obtain the necessary transaction number to remove this inventory item from our equipment records. In the Fall of 1995, we were advised by State Surplus that the paper work could not be located.

The Institute will continue to cooperate with the State Surplus Property Division to obtain the transaction number necessary to remove this item from our inventory records.

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 840-95-01

The review report for the year ended June 30, 1994, disclosed that Pickens Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures for the following control categories:

(1)

Cash and Cash Equivalents

(2) General Fixed AssetslProperty Management

(3) Expenditures/LiabilitieslDisbursements

In the year under review, no improvement was noted. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control.

Federal Grantor Auncies Affected:

U. S. Department of Education U. S. Department of Health and Human Services U. S. Department of Labor U. S. Department of Veterans Affairs

F -263

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
PICKENS TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR
Afana~ementResponse
The lack of personnel in the Business Office precludes complete separation of duties. During 1996, a complete study of internal control for Pickens Technical Institute will be conducted, with the possibility of involving personnel from other departments to be investigated.
CURRENT YEAR
SPECIAL TEST AND PROVISIONS No Refund Policy/ln adherence to Satisfactory Academic Progress Standards Federal Financial Assistance Audit Control Number 840-95-02 During the year under review, the U.S. Department of Education performed a program review of the Institute's administration ofthe Title IV Federal Student Financial Assistance programs for the period July 1, 1992 through December 14, 1994. The focus of the review was to ascertain the Institute's compliance with Title IV program statutes and regulations. The review disclosed two program fmdings. One fmding disclosed that the institution did not have a written pro rata refund policy as required by 34 CFR 668.22. A second fmding revealed that, in conflict with 34 CFR 668.l4(e), the Institute paid a student $100.00 in Pell grant funds although the student had not met academic standards. The program review recommended that to resolve the first fmding, the Institute develop a written pro-rata refund policy, make it available to all students and immediately apply the policy to current and all incoming students. For the second fmding, the report recommended that the Institute (1) implement satisfactory academic standards so that, as prescribed Federal regulations, only those students who meet such standards receive Pell grant funds and (2) refund $100.00 in Pell grant funds to the Federal agency by a required due date. We noted that, in accordance with the report's recommendations, the Institute implemented satisfactory academic standards and refunded the questioned cost of $100.00 to the Grantor Agency. Federal Grantor A~enQ' Affected: U. S. Department of Education Afanagement Response On May 4, 1995, the State Board of the Department of Technical and Adult Education adopted a pro-rata refund policy which meets the requirements of 34 CFR 668.22 and was immediately implemented by Pickens Technical Institute. As noted in the above fmding, Pickens Technical Institute implemented satisfactory academic standards and refunded the questioned cost of $100.00 to the Grantor Agency.
F -264

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

SOUTH GEORGIA TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

842-94-01 842-94-02

See Audit Control Number 842-95-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 842-95-01

The review report for the year ended June 30, 1994, disclosed that South Georgia Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures. This deficiency was a result of a management decision in assigning accounting functions among entity personnel. For the year under review, the Institute did not achieve an adequate degree of internal control for the following control categories:

(1) Cash and Cash Equivalents

(2) RevenuelReceivableslReceipts

(3) Expenditures/Liabilities/Disbursements

Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and financial statements are accurate and complete.

The Institute should review the accounting procedures in place, design procedures which would enhance segregation of duties related to the above control categories, and implement those procedures to strengthen the internal controls over the accounting functions.

Federal Grantors A~encies Afftcted:

U. S. Department of Education U. S. Department of Labor

Manaument Response

We concur with this fmding. Additional separation of duties was attempted during the year under review; however, additional separation is still necessary. Lack of the necessary staff to completely separate duties prohibits deletion of this fmding.

However, steps are currently being taken to distribute duties to those uninvolved in the processing of those duties. Further guidance from the Department of Audits is requested to identify all areas of noncompliance.

Implementation date - Ongoing

F -265

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

THOMAS TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

846-94-01

See Audit Control Number 846-95-01

PRIOR YEAR/CURRENT YEAR

INVENTORIES Inadequate Resale Inventory Records Financial Statements Audit Control Number 846-95-01
The review report for the year ended June 30, 1994, disclosed accounting procedures that did not provide for adequate internal controls over resale inventory procedures. For the year under review, the accounting procedures over resale inventory were again deficient-as we were unable to reconcile beginning resale and ending resale inventories through an analysis of fiscal year purchases/sales activity.
Appropriate action should be taken by management to ensure that accounting records document the purchases/sales activity for all inventory for resale.
Manq"ement Response
Thomas Technical Institute elected to change the bookstore operations at the beginning of a fiscal year. Therefore, as of July 1, 1995, the two previous bookstores were combined to have only one centralized bookstore and an employee was hired with their primary responsibility being the operations of the bookstore.
Thomas Technical Institute also converted from a manual system of selling books to students to a computerized point-of-sale cash register system which will maintain inventory as well. This system has been purchased and was placed into operation on July 1, 1995.
CURRENT YEAR
SPECIAL TESTS AND PROVISIONS Failure to Calculate Refunds Federal Financial Assistance Pell Grant Program [CFDA 84.063] Amount: $153.00 Audit Control Number 846-95-02
For the year under review, it was noted that Thomas Technical Institute failed to make a refund calculation for a student that withdrew from the Institute. The error resulted in $153.00 not being returned to the Pell Grant Program.
The Institute should establish refund procedures in accordance with the provisions of Section 485 of the Higher Education Amendment of 1992 and contact the U. S. Department of Education regarding resolution of this fmding.

F -266

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
THOMAS TECHNICAL INSTITUTE CURRENT YEAR
Manaument Response Thomas Technical Institute does have established refund procedures. All instructors will be reminded that the Admissions Office and Financial Aid Office must be properly notified when students withdraw. A refund of$153.00 has been made to the U. S. Department of Education to resolve this fmding.
F -267

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

FLINT RIVER TECHNICAL INSTITUTE

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

847-94-01 847-94-02

Finding Deleted Finding Deleted

F -268

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

WALKER TECHNICAL INSTITUTE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

849-94-01 849-94-02

Corrective Action Implemented Corrective Action Implemented

F - 269

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

JEKYLL ISLAND STATE PARK AUTHORITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the review report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

910-94-01 910-94-02 910-94-03 910-94-04 910-94-05

See Audit Control Number 910-95-01 See Audit Control Number 910-95-02 See Audit Control Number 910-95-03 See Audit Control Number 910-95-04 See Audit Control Number 910-95-05

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain a Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 910-95-01
The review report for the year ended June 30, 1994, reported that the property management system used by the Jekyll Island State Park Authority was inadequate. For the year under review, our review revealed that the Authority could not provide a detailed listing of equipment currently owned by the Authority for the purpose of reporting a General Fixed Assets Account Group in the financial statements. Appropriate action should be taken by the Authority to establish accounting controls and procedures necessary to provide for maintenance of a property management system to record all equipment owned by the Authority in accordance with the guidelines provided in Official Code of Georgia Annotated Section 50-16-161. This property management system for equipment should include, but may not be limited to, date equipment acquired, acquisition cost, estimated cost if historical cost is not available, serial number, location, description and an identifying number assigned by the Authority. In addition, detailed records should be maintained of all additions and deletions to the property management system.
As a result of the deficiencies noted above, we were unable to determine the total equipment inventory valuation that should be recorded in a General Fixed Assets Account Group.
Mana~ement Response
A fixed asset account will be shown on our balance sheet for the year ending June 30, 1996. A concerted effort will be made to determine appropriate items and values. During the next two months we will begin the process of tagging these items.
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Financial Statements Audit Control Number 910-95-02
The review report for the year ended June 30, 1994, noted that internal accounting control procedures of the Jekyll Island State Park Authority did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures. For the year under review, a limited review of these procedures revealed that the Authority had made no significant changes that would provide for an adequate separation of duties in the following control categories:

F -270

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

JEKYLL ISLAND STATE PARK AUTHORITY

PRIOR YEAR/CURRENT YEAR

(1) Cash and Cash Equivalents

(4) General Ledger

(2) Revenue/Receivables/Receipts

(5) Expenditures/Liabilities/Disbursements

(3) Inventories

The Authority should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen controls over the accounting function.

Afana~entResPQnse

The limited number of staff people in the accounting department precludes the ability to provide a total separation of duties. The accounting staff has a close working relationship on the different functions in the accounting department. This close working relationship both functionally and in proximity provides somewhat of a checks and balances system in place of an absolute separation of duties. To further enhance the controls, specific assignments will be rotated among staff.

CASH AND CASH EQUIVALENTS AccountinglInternal Control Deficiencies Financial Statements Audit Control Number 910-95-03

The review report for the year ended June 30, 1994, reported the accounting procedures and internal controls of the Jekyll Island State Park Authority were found to be inadequate in the area of cash and cash equivalents. For the year under review, deficiencies continued to exist. The following is a summary of the prior year deficiencies including corrective action taken, if any, and current deficiencies revealed during our review:

Disbursing Account

(1)

The bank reconciliation for the year ended June 30, 1994, contained a lump-sum amount of $7,632.09

on the outstanding check list for which the Authority was unable to identify by individual check

number or by payee. During the year under review, this amount was written off by the Authority.

Income Account

(1)

For the year ended June 30, 1994, credit card fees and billing adjustments were not properly posted

to the general ledger. For the year under review, the Authority properly posted credit card fees and

billing adjustments to the general ledger.

(2)

For the year ended June 30, 1994, journal entries were made monthly without proper supporting

documentation or explanation to bring the general ledger balance into agreement with the income

bank account reconciled balance. For the year under review, the Authority continued to make journal

entries without proper explanation or documentation. Unsupported journal entries to cash results in

a lack of control to safeguard assets.

(3) For the year ended June 30, 1994, cash over/short was improperly netted against sales revenues. For the year under review, the Authority continued to net cash over/short against sales revenues. An analysis of sales revenue for the test month of June revealed a net cash overage of $741.45 was included as sales revenue. The practice of netting cash over/short against sales results in the incorrect classification of revenue.

F -271

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

JEKYLL ISLAND STATE PARK AUTHORITY PRIOR YEAR/CURRENT YEAR

(4) For the year ended June 30, 1994, the income bank account could not be reconciled to the general ledger resulting in an unidentified variance of $4,377.13 remaining in the account at year end. For the year under review, bank reconciliations for the months of March, April and May 1995 were not performed until requested by the auditors. In addition, the bank reconciliation performed by the Authority for June 30, 1995, contained an unidentified variance of$352.96. This amount includes an unsupported adjustment of $296.97 made by the Authority. These deficiencies were the result of the Authority's lack of supervision over the bank reconciliation function and the failure to perform bank reconciliations and make correcting entries to the general ledger in an accurate and timely manner.

(5) During the year under review, delays of up to five days were noted in depositing receipts in the bank. This occurred because ofmanagement's failure to ensure cash receipts are deposited on a timely basis.

Payroll Account

(1)

The review report for the year ended June 30, 1994, stated that bank reconciliations for April, May,

and June 1994 were not performed until December 1994. For the year under review, all bank

reconciliations for the Payroll bank account were performed in a timely manner.

(2) For the year ended June 30, 1994, book balances per bank reconciliations for several months did not agree with the general ledger resulting in an unidentified variance of $1,566.12 remaining in the account at year end. During the year under review, monthly bank reconciliations included unidentified amounts for several months in order to reconcile with the general ledger. At June 30, 1995, an unsupported journal entry of $2,434.85 (net) was made to bring the book balance per the bank reconciliation into agreement with the general ledger.

(3) For the year ended June 30, 1994, amounts recorded on the general ledger accounting system were not supported by underlying subsidiary payroll journals. For the year under review, it was noted that data per the general ledger was again not supported by the subsidiary payroll ledgers for several months.

(4) For the year ended June 30, 1994, check registers for the months of January and June 1994 were unavailable and had to be recreated from the payroll databases. For the year under review, all monthly check registers were available for the payroll bank account.

(5)

The Authority incorrectly recorded salaries for the months of September, October, and November

1994, resulting in cash being understated and salaries being overstated by $1,962.66, $2,947.00, and

$1,467.07 for the respective periods. Correction of these errors could not be documented by the

Authority.

The Authority should develop policies and procedures for bank accounts to ensure that: (I) journal entries made to the general ledger contain adequate explanations and supporting documentation, (2) cash over/short is recorded in a separate account rather than netted against revenues, (3) bank accounts are reconciled in a timely manner and agree with the general ledger, (4) deposits are made in a timely manner, and (5) accounting functions are properly supervised. In addition, fund requests made for salaries should be supported by subsidiary ledger accounts for an amount that is equal to salary expense for the period.

F -272

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
JEKYLL ISLAND STATE PARK AUTHORITY
PRIOR YEAR/CURRENT YEAR
Petty Cash A petty cash count was performed by auditors in February 1996 and revealed a shortage of $200.00.
The Authority should maintain petty cash in the general ledger at appropriate amounts as well as perform periodic petty cash counts to verify the accuracy of general ledger amounts.
Mana~ement Res.r:)Qnse
Jekyll Island Authority has developed policies and procedures for bank accounts that provide for the following: (1) establish a separate account for cash over/short; (2) produce bank reconciliations in a timely manner identifying any variances in the process and make any correcting entries in a timely manner; (3) made cash deposits in a more timely manner, i.e., within two days of receipt; (4) agree payroll bank reconciliations to the general ledger and make sure journal entries are supported with proper documentation; (5) provide proper supervision for the accounting functions; (6) agree petty cash counts to the general ledger.
INVENTORIES Inadequate SupplylResale Inventory Records Financial Statements Audit Control Number 910-95-04
The audit report for the year ended June 30, 1994, reported that the internal accounting control procedures for the supply and resale perpetual inventory system for Jekyll Island State Park Authority were deficient. For the year under review, deficiencies continued to exist. The following is a summary of the prior year deficiencies including corrective action taken, if any, and current deficiencies revealed during our review:
(1) For the year ended June 30, 1994, the inventory cost summary sheets were not accurately added and extended. For the year under review, summary sheets were accurately added and extended.
(2) For the year ended June 30, 1994, the inventory subsidiary records did not support the general ledger account balance. For the year under review, the inventory subsidiary records again did not support the general ledger account balance. This deficiency was the result of the Authority's lack of controls to ensure inventories are properly maintained.
(3) For the year ended June 30, 1994, a physical inventory count for the uniform inventory was not performed. In addition, the Authority could not provide a detail listing of the uniform inventory at June 30, 1994. During the year under review, the Authority made an adjustment in the amount of $94,326.21 to write down the general ledger account for uniform inventory. At June 30, 1995, a physical inventory count for the uniform inventory was not performed and the Authority could not provide a detailed listing of uniform inventory recorded on the general ledger at June 30, 1995. This condition results in the fmancial statements of the Authority being incomplete and causes uncertainty as to the transactions that occurred during the period.
(4) For the year ended June 30, 1994, sampling of the perpetual inventory records revealed significant errors in the items on hand and the perpetual records. For the year under review, an inventory listing as of February 22, 1996, was provided for examination and was utilized to test the accuracy and validity of the perpetual inventory records. A sample of 25 items was randomly selected from this inventory listing. The results of test physical count procedures revealed that 20 items could not be reconciled from the physical count to the inventory listing.
F -273

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
JEKYLL ISLAND STATE PARK AUTHORITY
PRIOR YEAR/CURRENT YEAR
(5) The Authority also provides items for resale which are not included in the Authority's perpetual inventory system. These items included alcoholic beverages, concessions and food. The purchases for resale amount for these items for the fiscal year amounted to $99,794.71, $163,627.94 and $813,259.44, respectively. The recording of inventories as purchases for resale is not consistent with the Authority's other practices of accounting for resale inventories.
These deficiencies occurred because of management's failure to establish inventory policies and procedures. The Authority should take appropriate action to establish accounting controls and procedures to provide for proper accountability of inventories. As a result of the deficiencies noted above, which include the uncertainties of the account balances and the failure to record certain inventories, we were unable to satisfy ourselves as to the accuracy of the inventories valuation.
Manq<tement Response
Jekyll Island Authority has established accounting controls and procedures for the proper accountability of inventories. The accounting department will make a physical inventory count annually at year end and the warehouse manager will make periodic test counts of inventory quarterly.
The Jekyll Island Authority does not inventory items held for resale. Items that are purchased and held for resale are expended as purchases when they are acquired. This accounting method is one that is consistent from year to year, and subsidiary records are maintained in the departments directly responsible for the resale items.
GENERAL LEDGER Detailed Listing of Salaries Not Reconciled Financial Statements Audit Control Number 910-95-05
The review report for the year ended June 30, 1994, disclosed that the subsidiary records of salary payments made to employees did not reconcile with the amounts recorded as salaries in the general ledger as presented for examination. This unlocated variance amounted to $420.90. For the year under review, the subsidiary records of salary payments made to employees again did not reconcile with the amounts recorded as salaries in the general ledger. The unlocated variance amounted to $61,268.08. This condition occurred because ofmanagement's failure to correctly post amounts from the payroll journals to the general ledger and to reconcile the quarterly subsidiary records to the general ledger. The Authority should ensure that journal entries posted to the general ledger are supported by the payroll journal, and the quarterly subsidiary records are balanced to the general ledger.
Mqnq<tementResDonse
The reported unlocated variance is primarily the difference between salaries as recorded in the general ledger and salaries as reported in the quarterly state audit reports. The quarterly state audit reports were overstated by inadvertently including cash tips received by employees in the state reports. The cash tips should not have been included in the state reports and were properly not recorded as salaries in the general ledger. The quarterly state audit reports are filed by the human resources department with the state for information purposes only. The human resources department will now report salaries excluding cash tips in the quarterly state audit reports. The remaining portion of the variance primarily consists of two journal entries that were inadvertently recorded to salaries in the general ledger. These journal entries had no effect on the payroll cash account.
F -274

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
JEKYLL ISLAND STATE PARK AUTHORITY PRIOR YEAR/CURRENT YEAR
The human resources department books the payroll journal entries and the accounting department reconciles the payroll cash account. The human resources department will ensure that journal entries posted to the general ledger are supported by the payroll journal and the quarterly state audit reports. The accounting department will continue to reconcile the payroll cash account to the general ledger.
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Voucher Sample Exceptions Financial Statements Audit Control Number 910-95-06 For the year under review, an examination of eighty-one expenditure vouchers was performed to test the validity and accuracy of the transactions. The vouchers examined revealed the following deficiencies:
(1) One voucher was incorrectly paid. (2) One voucher was paid from a copy rather than an original invoice. (3) Four vouchers did not contain an invoice. (4) Ten vouchers lacked supporting documentation and\or were paid from credit card statements. (5) Thirty-one vouchers lacked purchase orders. (6) Three travel vouchers were paid without required travel reimbursement forms. These conditions have occurred because of management's failure to establish and implement controls over the disbursing function. The Authority should implement procedures to ensure expenditures are reviewed for accuracy, proper documentation, and compliance with State laws and regulations prior to payment and recording of such expenditures in the fmancial records. All expenditures should be supported by proper documentation including purchase orders, original invoices, and/or required travel reimbursement forms. Manaument Re~pQnse The Jekyll Island Authority maintains a purchase order/voucher system. The majority of the transactions at the Jekyll Island Authority are made by purchase order through the Jekyll Island Authority purchasing agent. Some transactions are made by check requests with invoice backup. Travel reimbursement is made to individuals based upon proper documentation on travel forms or other documents which in essence become travel forms. Payments from credit card statements will have invoices, original receipts and/or other documents evidencing expenditures. The system for expenditures and disbursements is in place and it will be monitored more closely.
F -275

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
JEKYLL ISLAND STATE PARK AUTHORITY
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Maintain Temporary Employee Retirement Subsidiary Ledger Financial Statements Audit Control Number 910-95-07
The Authority provides a retirement plan for its temporary status employees referred to as the Temporary Employees' Retirement Program (TERP). The retirement plan requires earnings to be allocated twice a year to the individual accounts. Investment earnings were not allocated to the individual accounts for the fiscal year. In addition, the Authority could not produce a subsidiary ledger ofparticipating employees for the TERP funds for the fiscal year ended June 30, 1995. However, the Authority did provide a subsidiary ledger for examination which included activity through August 1995. The Authority's reconciliation of the August 1995 subsidiary ledger to the general ledger liability account, which was performed during February 1996, revealed an unidentified variance of $1,910.04. These deficiencies were a result of management's failure to establish procedures for maintaining the subsidiary ledger of participating employees and failure to provide adequate supervision to ensure plan requirements are being met.
The Authority should reconcile the subsidiary ledger of participating employees to the general ledger on a monthly basis. In addition, the Authority should establish procedures that clearly indicate departmental responsibilities and perform reviews to determine that procedures are implemented.
Mana'lement Response
The Jekyll Island Authority human resources department will provide the accounting department with an updated temporary employee retirement program, subsidiary ledger by June 30, 1996. The accounting department will adjust the temp liability account accordingly. The accounting department will then monitor the temp liability account on a monthly basis.
EMPLOYEE COMPENSAnON Accounting/Internal Control Deficiencies Financial Statements Audit Control Number 910-95-08
For the year under review, the accounting procedures and internal controls of the Jekyll Island State Park Authority were found to be inadequate in the area of employee compensation. The following deficiencies were noted:
(l) The Authority contracted with employees for various services without making payroll deductions or including such amounts in income reflected by W-2's. Also, the Authority did not issue 1099's to non employees providing services to the Authority on a contract basis. This condition occurred because of management's failure to comply with federal and state law pertaining to payroll withholdings and the issuance ofW-2's and 1099's.
(2) The Authority paid bonuses to three individuals without proper supporting documentation. Personnel files for these individuals included documentation for payment of bonuses at a percentage different from the percentage actually used by the Authority in paying the bonuses. The Authority could not document formal approval of the new percentages. In addition, the underlying records used to calculate the bonuses differed from amounts recorded in the accounting records. A comparison of the bonuses actually paid to amounts calculated using the undocumented percentage and based on the accounting records indicated an overpayment in the amount of $33,232.45 to the three individuals. Personnel should be paid bonuses in accordance with written guidelines which have been formally
F -276

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
JEKYLL ISLAND STATE PARK AUTHORITY
CURRENT YEAR
approved in the official minutes of the Authority's Board meetings. In addition, underlying records used to calculate bonuses should be traceable to the accounting records. The apparent overpayments occurred because of management's failure to formally adopt and adequately oversee a bonus compensation plan.
(3) A new position was created by the Director of Human Resource without Board approval. The position was exempt from overtime yet the individual received overtime payments throughout the fiscal year. All new positions should be approved by the Board, and overtime payments should not be paid to individuals in positions which are exempt from overtime payments. These conditions occurred because of management's failure to obtain approval for the new position from the Board, and to pay according to the individual's employment contract.
(4) The Authority does not have a Board approved temporary employee pay scale. This condition occurred because management has failed to present a temporary pay scale to the Board for approval.
(5) The FICA and Federal withholdings liability accounts included in the general ledger were overpaid at June 30, 1995. Unsupported journal entries were made to reduce the overpayments. The overpayments are a result of management's failure to monitor and maintain accurate accounting records.
The Authority should develop policies and procedures to ensure that: (1) all payments to employees for services are subject to withholdings and W-2's are issued where required, and that 1099's are issued to nonemployees providing services to the Authority, (2) all bonuses paid to employees are approved by the Board and are paid according to approved policies, (3) all new positions are approved by the Board and employees are paid according to their positions, (4) a Board approved temporary pay scale is established, and (5) the general ledger payroll withholding liability accounts are monitored throughout the year to ensure that funds are correctly disbursed. In addition, the Authority should review bonuses paid during fiscal year 1995 to ensure that individuals were not overpaid.
Mana~ement Response
(1) The Jekyll Island Authority will withhold on any payments to employees for services and include these payments in W-2s issued to employees. The Jekyll Island Authority will issue 1099s to non-employees providing services when payments for these services are $600.00 or more.
(2) The Executive Director has approved a new food and beverage bonus plan which is calculated based on Jekyll Island Authority monthly departmental fmancial statements. The accounting department will closely monitor on a monthly basis the food and beverage bonus calculations. This bonus plan will be presented to the JIA Board for review at its meeting on June 10, 1996.
(3) New positions and the compensation for these positions are based on the Jekyll Island Authority personnel needs at the time and what the marketplace dictates in supply and demand for these positions. The Executive Director monitors closely any necessary new positions or positions to be eliminated at the Jekyll Island Authority as well as the required compensation necessary to fill these positions.
(4) The Jekyll Island Authority has no established temporary employee pay scale as the marketplace determines what hourly wage will be required to attract qualified people to apply for these temporary/part-time positions. The Executive Director continually monitors personnel services expenses on an on-going basis with the human resources director.
F -277

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1995
JEKYLL ISLAND STATE PARK AUTHORITY CURRENT YEAR
(5) The Jekyll Island Authority accounting department will make the necessary adjustments at fiscal year end June 30, 1996 to reflect the amounts due in the Federal and FICA withholding liability accounts. The accounting department will monitor these account balances on a monthly basis. The liability balances will be supported by actual amounts subsequently deposited or paid to the appropriate governmental entities.
F -278

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

NORTH GEORGIA MOUNTAINS AUTHORITY CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 912-95-01

For the year under review, our examination included a review of the internal accounting controls utilized by the North Georgia Mountains Authority in maintaining their State Property System. This review consisted of testing the system for compliance with State equipment laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. The following condition relating to inappropriate accounting practices was found to exist:

(1) Equipment additions were not adequately reconciled to the general ledger expenditure accounts.

In addition, a sample of equipment items was selected to test the accuracy of the Authority's fixed asset records. Of the 50 equipment items selected for physical inspection, the following deficiencies were noted:

(1)

10 items could not be located.

(2) 8 items did not have decals attached. Items were identified by serial numbers or descriptions.

The Authority is required to maintain equipment inventories in accordance with provisions of the State Pro.perty System Manual. The discrepancies identified above were caused by the Authority's failure to follow guidelines for maintaining equipment inventories.

The Authority should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.

Mana~ement Resvonse

Steps have been taken to reconcile the equipment inventory to the general ledger expenditure account. A physical inventory of all equipment has been completed and all items have been properly decaled, identified and located. Procedures have been adopted to assure compliance with State Pro.perty System Manual for the Authority. DNR audit staffwill verify the equipment inventory during an audit scheduled in May. A revised and corrected general ledger account total has been communicated to the Department of Audits for use in future year fmancial reviews.

F -279

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA STUDENT FINANCE AUTHORITY (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

917-94-01 917-94-02 917-95-03 917-95-04

Corrective Action Implemented Corrective Action Implemented See Audit Control Number 917-95-01 Corrective Action Implemented

PRIORYEA&CURRENTYEAR

FEDERAL FINANCIAL REPORTS Report Not in Agreement with Accounting Records Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Audit Control Number 9 I7-95-01

Amounts reported on the June 30, 1994 Form 799 did not agree with amounts recorded on the general ledger as student loan activity.

Similar differences were noted on the June 30, 1995 Form 799. During FY95, the Authority began using the same computer program as input for both the Form 799 and the general ledger. This should have eliminated the differences between the two documents. However, because differences continue to exist, the Authority should reconcile the student loan information in the general ledger to the Form 799 each month to verify that the differences represent appropriate reconciling items.

Mana'l?ment Resvonse

Differences continued to occur between the general ledger and the Form 799 because the original trial balance produced by the Authority must be adjusted to:

1.

Remove all negative balances before the information can be transferred to the Form 799.

2.

Remove certain loans that are not eligible for earning interest benefits and special allowance.

The negative balances from the Authority's report are included in the general ledger amounts and are treated as true reconciling items on a monthly basis.

Subsequent to this fmding, the Authority is now reconciling the differences between the trial balance and the Form 799 on a quarterly basis. N.B., the Form 799 is only generated and submitted on a quarterly basis.

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -280

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA STUDENT FINANCE AUTHORITY (*)
CURRENT YEAR
ELIGIBILITY Disbursement in Excess of Award Federal Financial Assistance Grants to States for State Student Incentives [CFDA 84.069] Audit Control Number 917-95-02
The Student Incentive Grant program (SIG) requires that all students who receive grants under the SIG program must maintain satisfactory progress in his or her course of study according to the institution's standards of satisfactory progress, during the 19941995 school year. During the 1994-1995 school year, which includes Fall, Winter and Spring quarters, a student was awarded $600.00 in grant funds to attend Georgia Southern University. This student was placed on academic probation and the Financial Aid Office accepted an appeal to continue aid to the student for Fall 1994 quarter provided certain grades were received during the Fall quarter. The student received lower than the required grades but continued to received aid for the Winter quarter. The Spring quarter award of $200.00 was canceled. The student should be required to repay the funds received for the Fall and Winter quarters.
Mana"ement Response
The regulations which govern the Student Incentive Grant program state that an eligible "student must maintain satisfactory progress in a course of study in accordance with the standards and practices of the institution at which he or she is enrolled. The institution must apply the same Satisfactory Academic Progress (SAP) policy as used for the Federal Title IV programs".
The student appealed her case to the Vice President of Student Affairs and she was granted an exception.
The institution followed its SAP policy as required by SIG regulations. Therefore the student was eligible for Fall and Winter terms. No refund is due.
(Copies of the applicable SAP policy are on file at the institution and at the offices of the Georgia Student Finance Authority.)
ADMINISTRATIVE REQUIREMENTS Failure to Update Loan Records for Student Status Changes Federal Financial Assistance Federal Family Education Loan Program [84.032] Audit Control Number 917-95-03
The U.S. Department of Education's Lender Audit Guide (Lender Audit Guide) Compliance Audits (Attestation Engagements) ofthe Federal Family Education Loan (FFEL) Program at Participating Lenders includes an assertion relating to the recording of student status changes. This assertion states that loan records are to be updated for all status changes. The Authority obtains updates to student status information in several ways, including through electronic mediums, which do not provide tangible evidence of the changes. Additionally, each update overrides previous student status information.
Because the Integrated Regulations (Part 682-Federal Family Education Loan Program) do not require that the Authority maintain the above information and because they do not maintain it, the Authority is not in compliance with the Lender Audit Guide assertion.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F - 281

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA STUDENT FINANCE AUTHORITY (*) CURRENT YEAR
Manq~ement Rewonse Because of the conflicting regulatory requirements between the Integrated Regulations (part 682-Federal Family Education Loan Program) and the Lender Audit Guide, the Authority has requested that the Department of Education approve an alternative test approach, item Ib, of the Corrective Action Plan (CAP) submitted to the Guarantor and Lender Oversight Staff of January 5, 1996. The CAP is based on asking the Department of Education to recognize the regulations of the program as stated in CFR 682.515(a)(3)(i) and CFR 682.414(a)(4)(i). These regulations allow the use of electronic medium for updating and maintaining student status change data in a machine readable format. In addition, although the student status change is overwritten to allow appropriate accounting for the account in its current status, all prior changes are posted permanently in a transaction history file which is kept in a machine readable format. The United States Department of Education informed the Authority via a memorandum that was dated April 8, 1996 that... "We have no objection to the alternative testing procedures relating to the eighth assertion in the Lender Audit Guide, as stated in item Ib of your corrective action plan"
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -282

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

918-94-01

Corrective Action Implemented

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -283

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*)
CURRENT YEAR
As an overall assessment of the review, no material weaknesses were found. The following fmdings should be reviewed to provide direction and prioritization of control measures to be taken in the future.
ORGANIZATION AND MANAGEMENT POLICIES
Purpose: To ensure that organizational policies and management procedures are in place to enable the MIS function to be properly controlled
Organization and Management Policies - Finding 1 Reportable Condition Audit Control Number 923a-95-01
There is no Information Technology (IT) Strategic Plan for GHFA which reinforces GHFA's goals and objectives and provides direction for technology purchases. Investment decisions and technology growth are occurring at GHFA but it is not evident that user management has been consulted to understand how technology can assist with achieving their business objectives. Activities have been initiated to defme a three to five year strategy in the current fiscal year.
In the absence of sound organizational policies and management procedures, GHFA may not achieve its overall business strategy and may also suffer loss due to inadequate control over the MIS function. Without an IT strategy, the IT activities may not support the overall business strategy, resulting in GHFA failing to achieve its stated business goals and objectives.
Recommendation
Develop a three to five year Information Technology Strategic Plan that is based on GHFA's strategic business plan. This plan should be a working document that addresses key issues such as hardware requirements, system software requirements, applications, budgeting, communications, MIS policies and procedures, and outside vendor relationships. At a minimum, senior management and/or close user involvement should be utilized to help establish and communicate IT strategy.
Manaument Response
Development of a three to five year Information Technology (IT) Strategic Plan would be both useful and desirable. Continuing rapid technological change coupled with evolving programmatic responsibilities emphasize the need for a strategic review of the Authority's long-term Information Technology configuration and capabilities. The impending merger ofGHFA with the State Department of Community Affairs (DCA), which was not a factor at the time of the EDP Review, has only heightened the need for such a plan.
To a degree, issues associated with the merger ofGHFA and DCA into a single and unified organization will force the evaluation and reconciliation of such issues as cabling, server and E-mail selections and hardware and software integration. In effect, these considerations will serve as a form of strategic planning. However, we agree with the recommendation regarding the existing and ongoing need for developing a formal Strategic Plan for Information Technology.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -284

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR
ORGANIZATION AND MANAGEMENT POLICIES
Organization and Management Policies - Finding 2 Reportable Condition Audit Control Number 923a-95-02 Computer security policies are informal and are not documented.

lfnot properly guided by a computer security policy, senior management may not have a clear direction of the need for security within their department, and staff may be unaware of their responsibilities and the authority's rules relating to security matters.

Recommendation

We recommend that a computer security policy be developed, documented and distributed to all persons authorized to access

the IT systems, and should include the following:



Statement and objectives



Procedures for physical, personnel and information security



authority, responsibility and roles for all staff involved



requirements of legislation

This will help to provide the standards and principles upon which security of the IT installation is based and will ensure the

maintenance of confidentiality of data, integrity of systems and application software, data and processing.

A1ana~mentResponse

Security for Macintosh and stand alone PCS has been minimal because of the relatively low risk to the Authority associated with the loss or compromise of the data or systems maintained on these platforms. However, we believe that it would be appropriate to reconsider this policy to determine if any change to this approach is warranted. With respect to the mission critical systems residing on the DEC computers, stringent DEC-certified security policies, procedures and controls have been in place since 1991. However, we agree with the recommendation that these policies should be documented, and reviewed with and provided to all members of the IT staff.

Organization and Management Policies - Finding 3 Reportable Condition Audit Control Number 923a-95-03

End-user computing policies were not identified during the review. "End-users" refers to those individuals ultimately making use of the computer output, responsible for data input and control within their job description, including the central system and personal computers.

If end user computing is not controlled by established standards and procedures, GHFA is exposed to the risks of loss of data integrity and installation of incompatible equipment. Control risks in a personal computer environment differ to those in larger environments and typically require considerably more emphasis to be placed on the prevention and detection of computer viruses,
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F - 285

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR

ORGANIZATION AND MANAGEMENT POLICIES

"pirated" (or unauthorized) software, physical access controls (hardware and media), disclosure and control over back up and recovery procedures.

Recommendation

We recommend that consideration be given to the establishment of a end-user computing policy that is understood by senior management and staffthat provides the standards and principles applicable to the end users ofthe computer. We also recommend that backup and recovery procedures be documented and that the facility for users to utilize the server to provide backup of their individual files be provided.

An end-user computing policy should address such things as:



acquisition of hardware and/or software



help desk facilities and approved support



"Compliance with standards (including disclosure)



compliance with legislation

Mana~ement Response

No response was received from management.

Organization and Management Policies - Finding 4 Reportable Condition Audit Control Number 923a-95-04

GHFA's internal audit department does not have provisions for an EDP audit function or review despite the overall IT growth that has occurred in the authority.

The lack of an internal EDP audit means that EDP expenditures and activities are never monitored by an independent party. This can encourage unauthorized expenditures and activities within the MIS department.
Recommendation
The scope of the internal audit function should include a comprehensive EDP audit program addressing areas such as disaster recovery planning, application development change control, data entry controls, information systems planning, systems controls and quality assurance. Ongoing audit of the IT function would include a quarterly review to ensure that critical controls and procedures are not overlooked.
Mana~ement Response
No response was received from management.

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -286

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*)
CURRENT YEAR
ORGANIZATION AND MANAGEMENT POLICIES
Organization and Management Policies - Finding 5 Reportable Condition Audit Control Number 923a-95-05
There needs to be more of an orientation toward interdependent departments, programs and the MIS department. While efforts are changing in this area, attention needs to be paid to communicating the overall impact ofAOD system developments that affect multiple departments, information systems and programs.
The lack of a team based approach to solving business problems will create individual departments driving toward multiple goals which may conflict with other. Result will be several projects with conflicting objectives and a single MIS department exhausting resources trying to support objectives which may not be appropriate. Also, different departments may not be aware of the changes that affect them and why these changes are occurring.
Recommendation
We recommend that GHFA be more conscious ofthe need for management participation in areas outside oftheir own department. The type of activities which may be shared could be committee meetings where all affected departments of a program change or development be in attendance, that Program Managers interface more with the MIS Manager to establish system impacts and feasibility of program introductions and changes and that the authority as a whole communicate methods at which to enhance internal communication.
Mana'lement Response
No response was received from management.
SEGREGATION OF DUTIES
Purpose: To ensure that there is reasonable segregation ofdutiesjor staff, both within the MIS department and between the MIS department and user junctions, to prevent and/or detect errors or irregularities.
Segregation of Duties - Finding 1 Reportable Condition Audit Control Number 923a-95-06
Segregated functions within the MIS department are limited due to the number of staff available for performing those functions. As well, some user departments also perform some operations functions which "shadow" MIS responsibilities creating confusion and a lack of necessary control. MIS staff are not spending the appropriate amount of time of the tasks identified in their job description and there is a potential risk due to the reliance on MIS management to perform operational duties. Also, the reliance on contract staff without adequate internal backup for operational functions on the DEC may create an exposure.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -287

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR SEGREGATION OF DUTIES

Segregation of duties is a prerequisite for internal control to prevent fraud or irregularities arising other than by collusion between parties. Without effective segregation of duties, it is possible that one person may have total control over an area, where a fraud could be perpetrated without detection or an error could go unnoticed.
Recommendation
While it appears that the GHFA MIS department is able to perform its duties and maintain the MIS department, attention should be made to the exposure that is introduced because of the lack of backup amongst individuals in the MIS department. We recommend a thorough review be performed on the current staff work capacity and tasks and consider adding additional staff if skills cannot be developed in house. Identification of additional skill required should be assessed to provide adequate backup as well as some key critical skills to help the MIS department operate more effectively and efficiently.
Management Response
The balancing of IT staff responsibilities and capabilities with the ever changing demands of both technological and programmatic requirements remains an ongoing challenge. We agree with the recommendation in the Review.
Segregation of Duties - Finding 2 Reportable Condition Audit Control Number 923a-95-07
There is no formal training plan for MIS staff.

Adequate training can have the following benefits:



Reduced implementation time for system software and application changes



Fewer errors



Less "down time"



Reduced computer operator and other labor costs

Recommendation

Develop a training plan for MIS staff under the direction of the MIS Manager to address system software, communications, and application software as appropriate. Identify primary education vendors and enrollment methods.

Mana~ment Response

The issue oftraining for IT staff will be considered as part of the overall merger ofGHFA with the Department of Community Affairs. We recognize and agree that ongoing training is a requisite for an efficient and effective IT function.

(*) THE AUDIT OF TIDS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -288

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR LOGICAL ACCESS CONTROLS
Purpose: To ensure that unauthorized access cannot be gained to sensitive data or programs. Logical Access Controls - Finding 1 Reportable Condition Audit Control Number 923a-95-08 MIS management administers network passwords, however, no centralized staff person is responsible for the administration and control of application passwords. Application passwords as well as access control are administered and controlled by AOD.
Without effective logical access controls, there is a risk of unauthorized access to data and programs from within and outside the organization. This in tum exposes the company to the risk of loss of integrity of data and programs, through unauthorized disclosure, modification or corruption. Recommendation Develop and document procedures to adequately monitor or detect unauthorized access to sensitive data or programs. This may be accomplished by reviewing systems logs on an ongoing basis. Additional measures should be taken by System Managers to ensure that access control by staff is reviewed periodically and reported to MIS for tracking purposes. The MIS department should also take measures to understand how AOD application security controls affect the overall operation of the system so that application control violations can be monitored in concert with system violations. Manaument Response Under current operational procedure, Information Technology staff are responsible for establishing user passwords in the Limited Access portion of the MAC server system and for all applications and users on the DEC. The supervisors in charge of each individual application module are responsible for protecting specific data files and functions within each program area with additional passwords. Information Technology staff as well as program supervisors monitor all password protected applications to detect unauthorized access to sensitive or critical data and/or programs. As noted in the EDP review, there is a need to document existing procedures so as to ensure a consistent application of appropriate security measures.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -289

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR
PHYSICAL ACCESS CONTROLS
Purpose: To ensure that the risk ofaccidental or malicious damage to, or theft of, computer equipment or media is minimized Physical Access Controls - Finding 1 Reportable Condition Audit Control Number 923a-95-09 The room utilized for storage of check-out loaner MAC equipment is not fully secure.
Inadequate physical access controls expose the authority to the risk of unauthorized access to the physical computer environment.
This increases the risk of the computer equipment or media being damaged or stolen. The authority could suffer loss as a result of this which, at the extreme, may impact on the overall business continuity. Recommendation Attention should be paid to the level of security placed on the loaner room. By either installing a door with key access or supplying a separate locked cabinet for computer equipment would minimize the risk and loss of investment of computer equipment. Manaument Response No response was received from management. Systems Development and Program Change Controls Purpose: To ensure that systems development andprogram changes are authorized, tested, documented and operate as designed No Findings, no systems development activity occurs within the authority that is associated with critical systems.
BUSINESS CONTINUITY AND COMPUTER OPERATIONS
Purpose: To ensure that the authority will be able to resume effective operations (within a reasonable period oftime) in the event that the existing processingfacilities are no longer available. Business Continuity and Computer Operations - Finding 1 Reportable Condition Audit Control Number 923a-95-10 GHFA does not have a formal written EDP contingency plan to document how to recover in the event of an extended disruption in data processing services.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -290

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR BUSINESS CONTINUITY AND COMPUTER OPERATIONS

A formal EDP contingency plan is important to ensure the continuity of critical application processing and data processing services and to minimize the economic impact of an extended disruption of data processing services in the event of a disaster.

Recommendatjon

We recommend that a comprehensive contingency plan be developed, documented, and periodically tested to ensure continuity in data processing services as needed in the event of a disaster. The plan should describe at least the following:



Objectives and scope of the plan



Assumptions and recovery strategies including:

A business interruption impact assessment Critical application analysis Recovery timing Procedures for damage assessment



Plan activation procedures



Notification procedures



Emergency recovery teams roles and responsibilities



Insurance coverage



Written vendor agreements to provide:

Backup processing facilities Off-site storage of forms, critical documents and supplies Off-site magnetic media User interim operating procedures Backup procedures and data recovery procedures Vendor contact list Inventory of forms, magnetic media, hardware, software, equipment and supplies Testing procedures Plan maintenance responsibilities

A1ana~ementResponse

The development of a disaster recovery plan is an acknowledged area of need within the IT function. GHFA has budgeted funds in the current fiscal year budget for the initiation of a rudimentary plan. The development of a disaster recovery plan in previous fiscal years has been inhibited due to budgetary and time constraints. We agree with the recommendation and the need for a plan.

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F - 291

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*)
CURRENT YEAR
BUSINESS CONTINUITY AND COMPUTER OPERATIONS
Business Continuity and Computer Operations - Finding 2 Reportable Condition Audit Control Number 923a-95-11 Off-site storage does not include system or application documentation to facilitate recovery in the event of a disaster.
Because all sets of back-up documentation are being maintained on-site at GHFA, it would be very difficult and time consuming to recreate the information contained on the computer files in the event of a disaster.
Recommendation In order to ensure the completeness and integrity of application system information, we recommend that GHFA also maintain copies of system and application documentation as well as the backup tapes off-site. A printed inventory of the backup tapes and their contents should also be kept off-site. The escrow agreement with AOD should include a physical inventory at least yearly to ensure that the agreement is being enforced. Mana'lement Response No response received from management. Business Continuity and Computer Operations - Finding 3 Reportable Condition Audit Control Number 923a-95-12
Data processing policies, standards and procedures for computer center operations (computer operations, tape management, network management and backup/recovery) are incomplete and not formally published.
Without concise operating instructions, programs may be run in the incorrect sequence, against the incorrect files or without a fully available operating environment as required. This could result in the loss of data integrity, in excessive run-time failures and in delays in use output, which could be critical. Operators may also not be able to recover or restart systems, as authorized, satisfactorily. Incidents (i.e. abnormal conditions arising during processing) which are not reported are difficult to control, and could result in persistent problems affecting the integrity and efficiency of systems.
Recommendation To provide for backup during employee absences, and continued operations in the event of a failure, we recommend that procedures be documented for computer center operations. Without the technical operational expertise on site for the DEC system, special care should be taken to document emergency operating procedures as well as problem records associated with malfunction of the system.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F-292

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR
BUSINESS CONTINUITY AND COMPUTER OPERATIONS
Management Response No response received from management. Business Continuity and Computer Operations - Finding 4 Reportable Condition Audit Control Number 923a-95-13 There are no special emergency procedures documented and understood by the MIS staff. As such, there has not been a test conducted of a full restore of the system.
An overall security plan includes emergency procedures. Management's commitment to security should be emphasized and provisions for communicating security objectives to all employees should be clearly specified. Emergency measures will be ineffective if not properly implemented. Therefore, employee participation and enforcement is vital at all levels. A well developed emergency training program that includes instruction in the use of emergency equipment, periodic testing and drills will reduce vulnerability of the computer center. Recommendation To protect personnel and property during emergencies, we recommend that detailed instructions and implementation responsibilities be delegated to specific individuals for shutting off utilities, powering down the computer, activating fire extinguishers, and securing valuable assets. Procedures should be posted throughout the computer center. Periodic meetings and fire and emergency evacuation drills should be conducted and documented in minutes. Management Response No response received from management. Business Continuity and Computer Operations - Finding 5 Reportable Condition Audit Control Number 923a-95-14 There is no formal documentation outlining hardware maintenance vendor relationships, data security, physical security, and telecommunications facilities.
Without proper documentation, GHFA, external auditors are unable to evaluate and measure the compliance to and performance of these standards. Without standards, and enforcement of these standards, employees have no incentive for maintaining the confidentiality and integrity of GHFA's information assets.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F - 293

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1995

GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) CURRENT YEAR

BUSINESS CONTINUITY AND COMPUTER OPERATIONS

Recommendation

The MIS department should complete the development of the Administration Procedures and Operations Procedures manuals. An outline of the type of information contained in this manual would be as follows:

1.

System Development Management (as it applies)

Change Request Management Project Management Application Acquisition/Development/Maintenance
Package Applications Custom Applications

2.

Change Management

3'.

Department Management

Department Management Organization Planning Training Personnel Practices Inventory Management (Asset tracking)
Security Physical and Logical Security Disaster Recovery
User Services Personal Computers Vendor Relations

4.

Technical Environment Management

Facility Maintenance Computer and Network Operations Hardware and System Software Maintenance
Preventive Maintenance Emergency Maintenance Configuration Management Emergency Procedures System Resource Management

5.

Appendix (Contains sample forms, documents and revisions)

Mana~ement Response

No response received from management.

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F-294

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1995
GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) BUSINESS CONTINUITY AND COMPUTER OPERATrONS
Business Continuity and Computer Operations - Finding 6 Reportable Condition Audit Control Number 923a-95-15 There are no system security precautions taken for terminated employees. The MIS Manager is notified of an employee separating from GHFA by the System Manager, and not by Human Resources.
While an employee is suspended or on leave of absence for any amount of time, there is no business need for them to access the system. By leaving their user id and password active, they could potentially use the system inappropriately. By not notifying MIS of terminations in a timely manner causes the risk of misuse of the system. Recommendation The MIS Manager should be notified by Human Resources immediately when an employee is terminated, suspended, transfers departments or on leave of absence and the employee user id and password should be removed or suspended until the employee returns to an active status and has business need to use the system resources. Follow up on internal procedures to communicate this as an understood procedure. Some recommendations might include a voicemail message accompanied with a memo or a system generated message. Another option would be to allow Senior Management the authority to revoke access in the case of a short suspension when the MIS department cannot be notified in a timely manner. Mana'lement Res.ponse No response received from management.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -295

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA AGRICULTURAL EXPOSITION AUTHORITY

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

926-94-01 926-94-02

See Audit Control Number 926-95-01 See Audit Control Number 926-95-02

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties/Improper Accounting Procedures Financial Statements Audit Control Number 926-95-01

The review report for the year ended June 30, 1994, noted that internal accounting control procedures of the Georgia Agricultural Exposition Authority did not provide for an adequate separation of duties in the performance of certain accounting functions and related procedures. It was further noted that the Authority failed to record certain accounting activity in accordance with State policies. For the year under review, a limited review of the internal accounting control procedures revealed that the Authority had made no significant changes that would provide for an adequate separation of duties in the following control categories:

(1)

Cash and Cash Equivalents

(2) RevenueslReceivableslReceipts

(3) ExpenditureslLiabilities/Disbursements

(4)

Employee Compensation

(5) General Ledger

(6) General Fixed Assets/Property Management

It was also noted that the Authority continued to record certain revenue and expenditure items directly to fund balance accounts which is not in accordance with the Accountin~ Procedures and Instructions Manual as issued by the State Auditor. Adjustments were made by the auditors to correctly reflect this activity as current period revenues and expenditures.

The Authority should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories, and implement those procedures to strengthen the controls over the accounting function. In addition, the Authority should record current revenues and expenditures as current activity rather than as adjustments to fund balance accounts.

Mana"ement Response

The management of the Georgia Agricultural Exposition Authority recognizes the importance of the proper segregation of duties as they relate to various fmancial functions. Our on-going intention is to maintain a system of internal accounting controls which would include organizational arrangements that would provide an appropriate division of responsibilities. This system would then provide reasonable assurances that transactions of the Authority are executed in accordance with management's general or specific authorizations, that the fmancial records fairly reflect, in reasonable detail, the transactions of the Authority, and that the Authority's assets are properly safeguarded. However, due to limitations in personnel, whereby all accounting functions are performed by only two individuals, obviates the Authority from attaining the optimum level of separation of responsibilities.

F -296

STATE OF GEORGIA
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA AGRICULTURAL EXPOSITION AUTHORITY
PRIOR YEAR/CURRENT YEAR
Furthermore, the addition of staff solely to merit an enhanced level of organizational effectiveness, i.e., to allow an improvement in the separation of duties and responsibilities, would not be cost effective nor cost justified, especially during a time of government streamlining and downsizing. The Authority, with its current limitations, will continue to objectively evaluate internal control issues as they relate to the separation of duties, and strive to strengthen areas where deficiencies are found to exist.
In regards to the Authority recording certain revenues and expenditures directly to fund balance accounts, the Authority will implement the auditor's recommendation and begin recording these revenues and expenditures as current activity.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Audit Control Number 926-05-02
The review report for the year ended June 30, 1994, disclosed that the equipment records for the Authority's general fixed assets were deficient. For the fiscal years 1993 and 1994, the equipment additions were not properly reconciled to the general ledger accounts resulting in unidentified variances of $234,462.84 and $83,686.28 respectively. For the year under review, the equipment subsidiary inventory records were updated to include $309,908.18 of these prior year amounts. However, the equipment records were again deficient and these deficiencies are noted as follows:
(1) Equipment inventory records were not updated in a timely manner.
(2) Equipment additions to the equipment inventory subsidiary records were not adequately reconciled to the general ledger expenditure accounts resulting in an unidentified variance of $76,729.46.
The Authority is required to maintain equipment inventories in accordance with provisions of the State Property System Manual. The discrepancies identified above were caused by the Authority's failure to follow guidelines for maintaining equipment inventories.
The Authority should establish the necessary controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.
A1ana~ementResponse
Management agrees with the audit fmdings that there was an unidentified variance of $76,729.46 in FY95. It is felt, however, that a significant portion of this amount represents items costing less than $1,000.00 each, and which should have been recorded to Object Class 012, "Regular Operating Expense". This discrepancy will be fully researched in determining the dollar amount that should be reclassified. It is important to note, however, that the unidentified variances in FY93 and FY94 in the amounts of $234,462.84 and $83,686.28 respectively, were resolved and added to equipment inventory in FY95. This action was accomplished by implementing the recommendations put forth by the Authority in last years (FY94) audit response. These recommendations consisted of re-assigning the responsibility of equipment inventory from the Maintenance Director to the Administrative/Purchasing Director's position, and conducting a complete physical inventory of fixed assets. These changes did in fact result in better control over equipment inventory and continue to provide a high degree of integrity in the accounting for fixed assets.
F -297

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3Q, 1995

STATE TOLLWAY AUTHORITY

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findin~

927-94-01

Corrective Action Implemented

CURRENT YEAR
GENERAL LEDGER Subsidiary Ledgers Not in Balance With General Ledger Financial Statements Audit Control Number 927-95-01
At June 30, 1995, subsidiary ledgers did not balance to the general ledger for the following general ledger accounts:
Accumulated Depreciation Accounts Receivable Deferred Revenue Customer Deposits Administrative Fees Depreciation Expense
In the subsequent period, the Authority balanced the ledgers for the accumulated depreciation and the depreciation expense general ledger accounts.
The Accountin~ Procedures and Instructions Manual, as published by the State Auditor, states that at the end of each accounting period totals of all subsidiary ledger amounts should be reconciled with the general ledger control account. The condition identified above was caused by the Authority's failure to follow guidelines for balancing subsidiary ledgers with the general ledger.
The Authority should develop controls to ensure that variances between subsidiary ledgers and the general ledger are investigated and corrected prior to the end of the accounting period.
Mana"ement Response
The Authority concurs with the recommendation. After careful examination of the software involved in the process of electronically providing posting data the Authority has established procedures to ensure that variances between the subsidiary ledgers and general ledgers are investigated in a timely manner and corrected prior to the end of the accounting period. A copy ofthe written procedures are available for examination and are incorporated into the Tollway Operating Procedures Manual.

F -298

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA ENVIRONMENTAL FACILITIES AUTHORITY (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized as follows:

Audit Control Number

Status ofFindin&

928-94-02 (1)

Corrective Action Implemented

(1) The Office ofEnergy Resources was transferredfrom the Governor's Office to GeorgiaEnvironmental Facilities Authority during Fiscal Year 1995. Thisfinding was shown under the Governor's Office in the prior year report.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F -299

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, J995

SUPERIOR COURT JUDGES RETIREMENT SYSTEM

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

945-94-01

Corrective Action Implemented

F -300

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

DISTRICT ATTORNEY'S RETIREMENT SYSTEM STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

946-94-01

Corrective Action Implemented

F - 301

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

PEACE OFFICER'S ANNUITY AND BENEFIT FUND OF GEORGIA

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFindin~

947-94-01

See Audit Control Number 947-95-01

PRIOR YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Retirement Benefit Overpayments Financial Statements Audit Control Number 947-95-01
The audit report for the year ended June 30, 1994, noted an outstanding balance of overpayments to certain members in the amount of$17,057.32, which was a result of errors made in the calculation of retirement benefits. In the year under review, the Annuity and Benefit Fund received $9,233.68 in overpayment recoveries.
Two members who had previously received overpayments deceased during the year under review. Those individuals owed the Fund $2,769.00 at June 30, 1995. The Annuity andBenefit Fund has determined this amount to be uncollectible. This a-nount will not be mentioned in future review reports.
The remaining outstanding balance of $5,054.64 is being recovered through deductions from the monthly benefits paid to those individuals involved.
Mana~ement Response
The fmding represents an overpayment of pension benefits occurring prior to 1987. It is being recovered through deductions from monthly pension benefits paid to the individuals to whom the overpayment was made.

F -302

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA FIREMEN'S PENSION FUND STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Findinfi

950-94-01 950-94-02

See Audit Control Number 950-95-01 Corrective Action Implemented

PRIOR YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Retirement Benefits Overpayments Financial Statements Audit Control Number 950-95-01
The fmancial report for the year ended June 30, 1994, noted an outstanding balance of $7,378.00 for overpayments of retirement benefits to deceased members. The Pension Fund recovered $2,062.50 of these overpayments during the year under review. The remaining balance of $5,315.50 is being recovered in monthly payments from the survivors of those members involved.
Manaument Response
As mentioned in the fmding, these overpayments are being recovered. Procedures were instituted to alleviate recurrences.

F - 303

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA GOLF HALL OF FAME CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Overpayment of Travel Financial Statements Questioned Cost: $118.92 Audit Control Number 958-95-01 For the year under review, our examination revealed an overpayment of employee's travel in the amount of $118.92 for various employees. These overpayments resulted from the Georgia Golf Hall of Fame reimbursing employees for mileage at the Federal rate of$.28 per mile instead of the State rate of$.21 per mile. Reimbursement of$118.92 should be secured for deposit to the Hall of Fame's General Fund. Mana'iement Response Reimbursement in the amount of$118.92 was made to the Georgia Golf Hall of Fame. Reimbursements were made on October 3, October 12, November 22, and December 20, 1995. EXPENDITURESILIABILITIESIDISBURSEMENTS Duplicate Payment of Expenditures Financial Statements Questioned Cost: $568.96 Audit Control Number 958-95-02 In the year under review, the Georgia Golf Hall of Fame overpaid a contract in the amount of $568.96. This overpayment resulted from a duplicate payment for reimbursement requests of contract expenditures. Reimbursement for this overpayment should by secured for deposit to the Hall of Fame's General Fund.
Reimbursement in the amount of $568.96 was made to the Georgia Golf Hall of Fame 1/31/96.
F -304

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1995

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the fmding disclosed in the report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status of Finding

977-94-01

Corrective Action Implemented

CURRENT YEAR

GENERAL LEDGER Inadequate Documentation of Manual Journal Entries Financial Statements Audit Control Number 977-95-01

For the year ended June 30, 1995, an examination of the manual journal vouchers and related procedures for the Georgia Public Telecommunications Commission disclosed the following deficiencies:

1.

The manual journal entry packages generally did not contain sufficient explanations or supporting

documentation to determine the propriety of each entry.

2.

Numerous manual journal entries did not reflect review or approval by appropriate supervisory

personnel.

3.

Certain manual journal entries were missing from the files and therefore not available for our

examination and verification.

This condition was caused by a lack of internal controls over manual joumal voucher preparation, data entry and file maintenance.

Appropriate action should be taken by the Commission to ensure that all manual journal vouchers are properly reviewed, approved, documented and filed and controlled sequentially in order to provide a complete audit trail.

Mana'iement ResIJonse

All journal voucher entries will be prepared and have sufficient explanations and supporting documentation attached to the journal voucher entry form. The journal voucher entry package will then be submitted to accounting management staff for review, approval and signature. The journal voucher entry package will then be given to data entry to enter. After being entered the package will be returned to the originating personnel for review of data entry for any errors that may have occurred. The package will then be returned to the Director of Finance to be maintained in a sequential file.

F - 305

STATE OF GEORGIA FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1995
GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION CURRENT YEAR
GENERAL LEDGER General Ledger not in Balance With Subsidiary Ledgers Financial Statements Audit Control Number 977-95-02 At June 30, 1995, a comparison of the Commission's general ledger to subsidiary records revealed that the "Departmental Trial Balance" (FACS Report No. 2410) did not agree with the subsidiary listings for outstanding receivables (FACS Report No. 2230) and outstanding payables (FACS Report No. 2060). This condition was caused by the Commission's failure to update subsidiary ledgers for adjustments made to the general ledger by manual journal entries. The Accountin~ Procedures and Instructions Manual, as published by the State Auditor, states that general ledger control accounts should be reconciled to the subsidiary ledger accounts at the end of each accounting period. The Commission should implement procedures to ensure that subsidiary records are updated for any adjustments made to the general ledger. Mana~ement Response Before each subsidiary ledger is closed for the month, the Director of Finance will make a comparison with the general ledger to determine ifthere are any differences. An appropriate entry will be made, if necessary, to correct differences between the subsidiary ledger and the general ledger. If an item is discovered after the subsidiary ledger is closed, a journal entry may be made in the general ledger. A reconciliation of the subsidiary ledgers to the general ledger will be made and such differences will be noted and corrected in the next accounting period.
F - 306

SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL GRANTOR AGENCY

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STATE OF GEORGIA SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL AGENCY

For the Fiscal Year Ended June 30, 1995

CFDA NUMBER

ORGANIZATIONAL UNIT NAME

Agriculture, U. S. Department of

10.550 10.551 10.553 10.555 10.557 10.569

Corrections, Department of Superior Courts, Georgia Children and Youth Services, Department of Children and Youth Services, Department of Human Resources, Department of Education, Department of

Education, U. S. Department of

84.002 84.007 84.007 84.007 84.007 84.031 84.032 84.032 84.032 84.032 84.032 84.033 84.033 84.033 84.038 84.038 84.038 84.038 84.048 84.048 84.048 84.048 84.048 84.053 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063

Technical and Adult Education, Department of Fort Valley State College Georgia Southwestern College South Georgia College Valdosta State University Chattahoochee Technicallnstitute Fort Valley State College Georgia Institute of Technology Georgia Southwestern College Student Finance Authority, Georgia Valdosta State University Chattahoochee Technical Institute Fort Valley State College Valdosta State University Fort Valley State College Georgia Institute of Technology Georgia Southwestern College Valdosta State University Albany Technical Institute Chattahoochee Technical Institute Children and Youth Services, Department of Middle Georgia Technical Institute Technical and Adult Education, Department of Governor, Office of the Albany State College Albany Technical Institute Armstrong State College Atlanta Metropolitan College Chattahoochee Technical Institute Columbus Technical Institute Fort Valley State College Georgia Institute of Technology Georgia Southern University Georgia Southwestern College Georgia State University Macon College

ENTITY NUMBER

NUMBER OF
FINDINGS

QUESTIONED COST

467

I

$

0.00

436

I

0.00

461

2

0.00

461

2

0.00

427

1

0.00

414

1

0.00

415

1

533

1

542

1

587

I

551

1

827

1

533

6

503

1

542

1

917

2

551

4

827

1

533

I

551

I

533

3

503

I

542

2

551

I

820

4

827

I

461

3

836

I

415

3

422

I

521

I

820

4

524

2

561

2

827

5

828

I

533

4

503

I

53.9

I

542

I

509

I

581

I

0.00 2.00 0.00 4,615.95 0.00 0.00 9,028.32 0.00 400.00 0.00 906.39 0.00 0.00 0.00 0.00 659.00 0.00 192.00 0.00 0.00 0.00 6,014.72 0.00 0.00 0.00 0.00 191.00 30,436.00 0.00 0.00 8,230.36 -94.00 0.00 0.00 1,175.00 0.00

F - 309

STATE OF GEORGIA SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL AGENCY

For the Fiscal Year Ended June 30. 1995

CFDA NUMBER

ORGANIZATIONAL UNIT NAME

Education, U. S. Department of

84.063 84.063 84.063 84.063 84.063 84.063 84.069 84.126 84.186

Macon Technical Institute Middle Georgia College Moultrie Area Technical Institute Thomas Technical Institute Valdosta State University West Georgia Technical Institute Student Finance Authority. Georgia Human Resources, Department of Children and Youth Services, Department of

Energy, U. S. Department of

81.095

Governor, Office of the

Federal Emergency Management Agency

83.516 83.516

Defense, Department of Governor, Office of the

General Services Administration

39.003

Administrative Services, Department of

Health and Human Services, U. S. Department of

93.563 93.773 93.778 93.778

Human Resources, Department of Insurance, Department of Insurance, Department of Medical Assistance, Department of

Justice, U. S. Department of

16.579 16.579 16.579

Defense, Department of Indigent Defense Council Superior Courts, Georgia

ENTITY NUMBER

NUMBER OF
FINDINGS

QUESTIONED COST

835

I

$

0.00

584

2

0.00

837

2

575.00

846

1

153.00

551

3

561.20

819

1

0.00

917

1

0.00

427

1

0.00

461

1

0.00

422

0.00

411

0.00

422

0.00

401

5

0.00

427

2

0.00

408

1

0.00

408

1

0.00

419

3

0.00

411

0.00

492

36,309.92

436

0.00

F - 310

STATE OF GEORGIA SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL AGENCY

For the Fiscal Year Ended June 30. 1995

CFDA NUMBER

ORGANIZATIONAL UNIT NAME

Labor, U. S. Department of

17.207 17.225 17.246 17.250 17.250 17.250 17.250

Labor, Department of Labor, Department of Labor, Department of Albany Technical Institute Labor, Department of Middle Georgia Technical Institute Technical and Adult Education, Department of

Transportation, U. S. Department of

20.205 20.600

Transportation, Department of Superior Courts, Georgia

TOTAL QUESTIONED COSTS - FEDERAL AGENCY OTHER QUESTIONED COSTS

TOTAL QUESTIONED COSTS

ENTITY NUMBER

NUMBER OF
FINDINGS

QUESTIONED COST

440

I

$

0.00

440

I

0.00

440

2

0.00

820

3

225.00

440

3

120.00

836

I

7,936.68

415

I

0.00

484

0.00

436

0.00

$

107,637.54

94,647.28

$

202,284.82

F - 311

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Georgia
Site of the 1996 Olympic Games
In order to prepare for the Games, the International Olympic Committee announces the host city 6 years in advance. Approximately, 11 million tickets will be sold to events in the 1996 Games. More than 2 million people are expected to visit Atlanta during the Games. More than 50,000 volunteers will be needed to stage the 1996 Games. The Atlanta Committee for the Olympic Games has built 10 new sports venues. The largest ofthese is the Olympic Stadium which seats 85,000 people. The opening and closing ceremonies and athletics competitions will be held in the Olympic Stadium.

STATE OF GEORGIA
APPENDIX"A"

For the Fiscal Year Ended June 3D, 1995

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY

ORGANIZATIONAL UNIT
Administrative Services, Department of Agricultural Exposition Authority, Georgia Agriculture, Department of Agrirama Development Authority, Georgia Audits and Accounts, Department of (*) Banking and Finance, Department of Boxing Commission, State Building Authority, Georgia
Regular (*) Hospital (*) Markets (*) Penal (*) Children and Youth Services, Department of Community Affairs, Department of Correctional Industries Administration, Georgia Corrections, Department of Defense, Department of Development Authority, Georgia (*) Education, Department of Education Authority, Georgia Schools (*) University (*) Environmental Facilities Authority, Georgia (*) Financing and Investment Commission, Georgia State (*) Forestry Commission, State Games Commission, State General Assembly, Georgia (*) GeorgiaNet Authority Golf Hall of Fame, Georgia Governor, Office of the Health Care Reform, Governor's Commission on Higher Education Assistance Corporation, Georgia (*) Highway Authority, Georgia Housing and Finance Authority, Georgia (*) Housing Trust Fund for the Homeless (*) Human Resources, Department of Industry, Trade and Tourism, Department of Insurance, Department of Investigation, Georgia Bureau of Jekyll Island State Park Authority

CONTROL
NUMBERS
401 926 402 940 404 406 494
900 903
904
905 461 428 921 467 411 914 414
906 907 928 409 420 496 445 941 958 422 954 918 924 923 959 427 429 408 471 910

(:Ie) Audits of these organizational units performed by other auditors.
AP-3

STATE OF GEORGIA APPENDIX" A"

For the Fiscal Year Ended June 30,1995

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY

ORGANIZATIONAL UNIT

CONTROL NUMBERS

Judicial System

Court ofAppeals, Georgia

432

Courts Automation Commission, Georgia

456

Indigent Defense Council

492

Institute of Continuing Judicial Education of Georgia

435

Judicial Council and Administrative Office of the Courts

434

Juvenile Court Judges, Council of

431

Judicial Qualifications Commission

433

Superior Courts, Georgia

436

Superior Court Clerks' Cooperative Authority, Georgia

955

Supreme Court, Georgia

438

Labor, Department of

440

Lake Lanier Islands Development Authority

913

Law, Department of

442

Lottery Corporation, Georgia (*)

973

Medical Assistance, Department of

419

Music Hall of Fame Board, Georgia

929

Natural Resources, Department of

462

North Georgia Mountains Authority

912

Pardons and Paroles, State Board of

465

Pension Funds

District Attorneys Retirement System

946

Employees' Retirement System of Georgia

Regular (*)

416

Defined Contribution Plan (*)

N/A

Legislative Retirement System (*)

N/A

Public School Employees' Retirement System (*)

468

State Employees' Assurance Department (*)

N/A

Trial Judges and Solicitors Retirement System (*)

N/A

Firemen's Pension Fund

950

Judges of the Probate Court Retirement Fund

949

Peace Officers' Annuity and Benefit Fund of Georgia

947

Sheriffs' Retirement Fund of Georgia

951

Superior Court Clerks' Retirement Fund of Georgia (*)

948

Superior Court Judges Retirement System

945

Teachers' Retirement System of Georgia (*)

482

Personnel Board, State - Merit System of Personnel Administration

460

Ports Authority, Georgia

916

Public Safety, Department of

466

Public Service Commission

470

Public Telecommunications Commission, Georgia

977

Rail Passenger Authority

960

(:It) Audits of these organizational units performed by other auditors.
AP-4

STATE OF GEORGIA APPENDIX " A"

For the Fiscal Year Ended June 30, 1995

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY

ORGANIZATIONAL UNIT
Regents of the University System of Georgia, Board of Colleges and Universities
Graduate Institutions Georgia Institute of Technology Georgia Southern University Georgia State University Medical College of Georgia University of Georgia Valdosta State University
Four Year Colleges Albany State College Armstrong State College Augusta College Clayton State College Columbus College Fort Valley State College Georgia College Georgia Southwestern College Kennesaw State College North Georgia College Savannah State College Southern College of Technology West Georgia College
Two Year Colleges Abraham Baldwin Agricultural College Atlanta Metropolitan College Bainbridge College Brunswick College Dalton College Darton College DeKalb College East Georgia College Floyd College Gainesville College Gordon College Macon College Middle Georgia College South Georgia College Waycross College
Other Military College, Georgia (*) Skidaway Institute of Oceanography

CONTROL NUMBERS
472
503 539 509 512 518 551
521 524 527 528 530 533 536 542 543 545 548 550 554
557 561 562 563 569 570 571
572
573 575 576 581 584 587 589
590 593

(*) Audits of these organizational units performed by other auditors.
AP-5

STATE OF GEORGIA APPENDIX " A"

For the Fiscal Year Ended June 30, 1995

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY

ORGANIZATIONAL UNIT
Removal of Hazardous Materials, Agency for Revenue, Department of Sapelo Island Heritage Authority Secretary of State Seed Development Commission, Georgia Soil and Water Conservation Commission, State Sports Hall of Farne Authority Sports Hall ofFarne Board Stone Mountain Memorial Association (*) Student Finance Authority, Georgia (*) Student Finance Commission, Georgia Subsequent Injury Trust Fund Board of Trustees Technical and Adult Education, Department of
State Technical Institutes Albany Technical Institute Altarnaha Technical Institute Athens Area Technical Institute Augusta Technical Institute Ben Hill-Irwin Technical Institute Carroll Technical Institute Chattahoochee Technical Institute Columbus Technical Institute Coosa Valley Technical Institute Flint River Technical Institute Griffin Technical Institute Heart of Georgia Technical Institute Lanier Technical Institute Macon Technical Institute Middle Georgia Technical Institute Moultrie Area Technical Institute North Georgia Technical Institute North Metro Technical Institute Ogeechee Technical Institute Okefenokee Technical Institute Pickens Technical Institute Sandersville Technical Institute South Georgia Technical Institute Southeastern Technical Institute Swainsboro Technical Institute Thomas Technical Institute Valdosta Technical Institute Walker Technical Institute West Georgia Technical Institute

CONTROL
NUMBERS
497 474 942 478 919 480 944 495 911 917 476 489 415
820 821 822 824 825 826 827 828 829 847 831 833 834 835 836 837 838 839 844 818 840 817 842 843 845 846 848 849 819

{*} Audits of these organizational units performed by other auditors.
AP-6

STATE OF GEORGIA APPENDIX" A"

For the Fiscal Year Ended June 30, 1995

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY

ORGANIZATIONAL UNIT
Tollway Authority, State Transportation, Department of Treasury and Fiscal Services, Office of Veterans Service, State Department of Workers' Compensation, State Board of World Congress Center Authority, George L. Smith II, Georgia

CONTROL NUMBERS
927
484 486 488 490
922

(*) Audits of these organizational units performed by other auditors.
AP-7