Single audit report of the state of Georgia, for the fiscal year ended June 30, 1996

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0/ State (Jeorfjia
SINGLE AUDIT REPORT
:lor tl.. :l;;caE7j.ar ended Jun. 30, 1996

0/ State (}eor'Jia
Zell Miller, Governor
SINGLE AUDIT REPORT

Prepared by
GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
Claude L. Vickers, State Auditor

Photographs by Gregory Rooks

Our Cover

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 16, 1997

To the Citizens of the State of Georgia, The Honorable Zell Miller, Governor of Georgia
and Members of the General Assembly of Georgia
It is my pleasure to transmit to you the Single Audit Report ofthe State ofGeorgia for the fiscal year ended June 30, 1996.
The Single Audit Report of the State of Georgia discloses the results of the financial operations of the State of Georgia reporting entity, as well as its compliance with requirements applicable to Federal fmancial assistance programs administered by the State.
This is the sixth year that the State of Georgia has elected to satisfy the requirements of the Single Audit Act of 1984 and the Office of Management and Budget's (OMB) Circular A128 by performing a statewide single audit.
The State of Georgia, however, is now faced with perhaps the most significant changes in single audit policy history as a result of the Single Audit Act Amendments of 1996. These new requirements have established a risk-based approach for identifying major programs to be audited in subsequent fiscal years.
We appreciate the support given this office as we continue our efforts toward promoting improverllents in accountability and stewardship in state government.
Respectfully,
~~
Claude L. Vickers State Auditor

SECTION A
I EXECUTIVE SUMMARY

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Stale 01(jeor<Jia--------------------
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1996
INTRODUCTION
The Single Audit of the State ofGeorgia for the fiscal year ended June 30, 1996, 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 ofGovemmental 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 ofFindings and Improper or Questioned Costs of this
report, the control numbers which have been assigned to each organizational unit are provided.
SOURCE OF REVENUES
Total Revenues of $26,470,238,239 (*)
66% STATE
23% FEDERAL
11% OTHER
(0) Ste General Purpost Finandal Slaltmtnl$ for a tomplelt breakdown of revtnuu.

01 Stale (jeorgia - - - - - - - - - - - - - - - - - - - - -
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30,1996
OBJECTIVES
The objectives ofthe Single Audit ofthe State ofGeorgia for the year ended June 30, 1996, 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 Federallaws 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 ofGeorgia 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.
A4

0/ State georgia - - - - - - - - - - - - - - - - - - - - - - -
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1996

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/or independent certified public accountants in accordance with generally accepted auditing standards.

AUDIT COVERAGE ACHIEVED
ASSETS ~

LIABILITIES

REVENUES ~

(*) EXPENSES

o 10 20 30 40 50 60 70 80 90 100

o

%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 ofCertified 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-S

0/ State (jeorgia - - - - - - - - - - - - - - - - - - - - - -
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1996

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, 1996, the State of Georgia incurred approximately 5.5 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 ofManagement 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 $ 5.4 billion and certain nonmonetary expenditures of$ .8 billion, the threshold for determining major Federal financial assistance programs was set at $19 million.

FISCAL YEAR 1996 FEDERAL FINANCIAL ASSISTANCE
GROSS TOTAL $7,907,309,527.55

AGRICULTURE
1-J DEFENSE

EDUCATION -

HEALTH AND HUMAN SERVICES -

LABOR -
I
TRANSPORTATION -

OTHER FEDERAL AGENCIES -

I

a

0.5

1

1.5

2

2.5

3

BILLIONS OF DOLLARS

MAJOR PROGRAMS

o NONMAJOR PROGRAMS

A6

0/ State georgia - - - - - - - - - - - - - - - - - - - - -
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1996

Using the above criteria, 35 Federal finanrial 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 10.56 I

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 14.239 14.856

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

U.S. Department of Labor

17.207 17.225 17.246 17.250

Employment Services Unemployment Insurance Employment and Training Assistance Dislocated Workers Job Training Partnership Act

U.S. Department of Transportation

20.205

Highway Planning and Construction

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

Title I Grants to 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 93.959

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

Social Security Administration

96.001

Social Security Disability Insurance

A-7

Slale 0/(jeor<jia--------------------
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1996
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 detefITline 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 norunajor programs and the decentralized administration of these programs, we are performing these procedures on a three year cycle. Fiscal year 1996 was the third year of a three year cycle of examinations of all nonmajor programs for the State of Georgia.
AUDIT OF 1996 FEDERAL FINANCIAL ASSISTANCE
o Major Programs (100% Tested)
Nonmajor Programs -Internal Control Understanding
~ 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

0/ State (jeorgia - - - - - - - - - - - - - - - - - - - - - -
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30. /996
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 arc 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 fOUf percent of the findings reported in the fiscal year 1995 Single Audit Report (excluding electronic data processing findings) were corrected during fiscal year 1996.
STATUS OF UNRESOLVED FINDINGS
I I "376 UNRESOLVED FINDINGS AS OF JUNE 30,1996"

o

Current Year Findings Only

Prior Year/Current Year Findings (Repeat Findings)



Prior Year Findings (Unresolved)

A9

Stale 0/(jeor'Jia---------------------
EXECUTIVE SUMMARY
For Ihe Fiscal Year Ended June 30. 1996

TOTAL FINDINGS
BY ORGANIZATION TYPE

I" ".'15 1<'11 . ; 'f-) -"

Er8t~1

_ _ ~<.~.-~ "r,"'--_L-__'III ~

Units of the University System

'

Agencies and Authorities

Technicallnstilules

B 0 Fiscal Year 1994

Fiscal Year 1995

Fiscal Year 1996

Totals

INTERNAL CONTROL DEFICIENCIES
Reportable Conditions
Cash and Cash Equivalents (Department of Medical Assistance, Department of Transportation)
Revenue/ReceivablesIReceipts (Department of Medical Assistance, Department of Revenue)
ExpendituresILiabilitieslDisbursements (Department of Administrative Services) Electronic Data Processing Controls (Various Organizations)
Reportable Conditions and Material Weaknesses
Revenue/Receivables/Receipts (Department of Revenue) ExpenditureslLiabiJitiesIDisbursements (Department of Revenue) General Ledger (Department of Medical Assistance) General Fixed AssetslProperty Management - Administrative Requirements
COMPLIANCE DEFICIENCIES
Material Noncompliance
Earmarking Requirement - Block Grants for Prevention and Treatment of Substance Abuse Program (CFDA 93.959)
Monitoring SUbrecipients General Fixed AssetslProperty Management - Administrative Requirements
A-IO

01 State (jeorfJia----------------------
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30. 1996
QUESTIONED COSTS The Single Audit of Georgia resulted in fiscal year 1996 questioned costs of $ 442,089.57 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 - - . - - - - - - - - - - - - - - $800,000.00 - f - - - -
+ - - - $600,000.00 + - - - $400,000.00
$200,000.00 +---jl!~-
1992 1993 1994 1995 1996
A-II

Stat. of(jeo"Jia--------------------
EXECUTIVE SUMMARY
For the Fiscal Year Ended June 30, 1996
RECOMMENDATIONS
Each organization ofthe State ofGeorgia should make every effort to resolve their respective audit findings during the subsequent fiscal year. As in the pasl. special emphasis should be given to repeal 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.
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 ofeach 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.
Electronic data p.rocessing systems are an essential element in most systems of internal control. Various organizations of the State of Georgia continue to operate outdated electronic data processing systems. Each organization should evaluate the adequacy ofeach
system or subsystem they currently operate to ensure that they are capable of meeting the
needs in a changing environment. Upgrades should be anticipated in advance, when possible, to allow sufficient time for funding and testing.
Compliance with laws. regulations, contra<:ls. and grants applicable to the State ofGeorgia 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 of laws and regulations. Managements failure to observe pertinent laws and regulations could result in direct material affects on the financial statements.
Particular emphasis should be given to Federal and State compliance requirements for equipment inventories. Inadequacies in this area SIe 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.

SECTIONB
GENERAL PURPOSE FINANCIAL STATEMENTS
qlwmad L Waldon IwtJ
J pubAc office /or on/g 5 ,!eaJ':l
duriTUJ hi:l A/e but dnminated the poAtical:lcene in (le0'7lia /or more
than 20 ~aJ':l a:J the gader 0/the Southern PapuA:lt:l.
fie wa:J a member 0/the (le0'7lia fiou:le 0/RepretJentativetJ from f 882 untilre:lif/niTUJ in f 884. fie became
active in the Soutlwrn ~aJ'mer:l .
-4IAance and ~ed allunhapp,! farmer:l, both black and white, to join
tOf/ether ~in:Jt the indutltriaA:lt:l 0/the
cWe:l. .JJe wa:J egcled to the Us.
.J.!ou:le 0/Repre:lentative:l in f 890, but wa:J defeated in f 892.
fie :lOUffht to reFn hi:l :leat in the.J.!outle in f 894, but wa:J defeated. fie ran /or 'Uce-
P pre:lident on the popuAtJt aJ't'! ticket in f 896 and/or pre:lident in f 904 and f 908.
With editoria!:J in hi:l weeki,! newtJpaper, ':Jhe Je!/er:Jonian "and the month/g "WattJon~ matj=ine : and hi:l ~nificent oratorical:lkil!:J, he had Fned a :lub:ltantial/ollowiTUJ
around tlw :ltate. -4/ollowiTUJ :Jo ~e that no (lovernor wa:J egcled or reegcted without
hitJ :lupport /or 20 '!eaJ':l. .!In f 920, he wa:J egcled to :lerve in the Us. Senate and
:lerved untilI..i:J death in f 922.

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 oftne General Assembly oftne 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, 1996. 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 OUT audit. We did not audit the financial statements of certain organizations which, combined, represent less than I% of the assets and revenues of the general fund, 100% of the assets and revenues of the capital projects funds, 57% of the assets and 20% of the revenues of the internal service funds, 59% of the assets of the fiduciary funds and less than 1% of the expendable trust funds revenues and 100% of the pension trust funds revenues, and 9% of the assets and less than 1% of the liabilities ofthe general fixed assets and generallongtenn debt account groups, respectively. In addition, we did not audit certain discretely presented component units which represent less than 1% of the assets and revenues of the component unit governmental fund types, 82% 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 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 perfonn the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The financial statements of the Employees' Retirement System of Georgia, Georgia Lottery Corporation, Georgia Ports Authority, Georgia State Financing and Investment Commission, and Teachers' Retirement System of Georgia were not audited in accordance with Government Auditing Standards. 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 ofGeorgia'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 64 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 ofthe Department ofAudits and Accounts to consolidate financial information presented in individual organization financial statements and to prepare adjusting journal entries necessary for the production ofthe 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 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 ofthese limitations on the general purpose financial statements.
As discussed in Note 1 to the general purpose financial statements, the accounting systems ofthe 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 ofthese limitations on the general purpose financial statements.
As discussed in Note 1 to the general purpose financial statements, revenues for certain expenditure-driven programs were accrued based on the unexecuted portion ofcontracts for goods and services. These accruals primarily affected the Intergovernmental and Sales and Services revenue categories. We were unable to determine the effect ofthis 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 ofthis departure from generally accepted accounting principles on the general purpose financial statements.
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.
B-4

The State ofGeorgia did not maintain adequate systems to effect the timely detection ofeither duplicate claim payments or claim overpayments of the \t orkers' Compensation Fund. We were unable to determine the accuracy and completeness ofthe 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 ofRevenue on behalf of local governments and the disbursements of those taxes to local governments. State statutes require that all sales-based taxes be collected by the Department of Revenue and remitted to the Office ofTreasury and Fiscal Services. Amounts of sales-based taxes collected on behalfoflocal governments are subsequently returned to local government jurisdictions based on information compiled by the Department of Revenue from sales tax returns. The Department of Revenue did not maintain adequate information systems to properly identify amounts of sales-based taxes collected on behalfoflocal governments. We were unable to determine the accuracy ofthe sales-based taxes retained by the State of Georgia or the accuracy ofthe amounts collected 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 of the State of Georgia as of June 30, 1996, 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.
As discussed in Note 2 to the general purpose financial statements, the State of Georgia adopted Statement No. 24 ofthe Governmental Accounting Standards Board Accounting and Financial Reportingjor Certain Grants and Other Financial Assistance in 1996.
In accordance with Government Auditing Standards, we have also issued a report dated May 16, 1997 on our consideration of the State of Georgia's internal control structure and a report dated May 16, 1997 on its compliance with laws and regulations. Those reports are included in the State's Single Audit Report.
Our audit was made for the purpose offorming 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 ofthe 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.
Res~~

May 16, 1997

Claude L. Vickers State Auditor

B-5

(THIS PAGE INTENTIONALLY LEFT BLANK)

GENERAL PURPOSE FINANCIAL STATEMENTS

The notes to the financial statements are an integral part ofthis statement. B-8

Fiduciary F\mdType
Trust and Agency

College and Univenity

Account Groups

General

General

Fixed

Long-Tenn

Assets

Debt

Totals (Memorandum
Only)
Primary Government

Govennnental Fund Types

CompooentUnits
Proprietary F\md Types

Fiduciary
F\md Types

Totals (Memorandum
Only)
Reporting Entity

$ 2,039,395,574 $ 309,783,448 $

$

$ 4,696,486,254 $

14,196

14,196

8,085,080,817

163,068,367

11,061,564,801

785,139 75,656,539
4,383,634 97,885,475 49,867,915

39,124,110 1,593,938
47,507,844
155,055,916

21,380

25,570,943 16,006,317

1,594,350,790 122,873,201 51,891,478 734,144,922 377,209,380 26,081,708 0 414,969 80,352,615 86,528,678

0 0

251,402,084

0 0 6,925 215,000 251,402,084

3,823,605,995

2,550,517,850

6,784,430,706 0
102,354,479

134,272,330

134,272,330

4,811,665,980

4,811,665,980

2,893,086 $ 15,246,128 7,965,314
168,344 61,572
47,823,948 6,945,412

131,064,358 $ 262,093,535

37,245,396 $ 18,599,021,568

4,867,689,094 14,196
29,937,926,032

92,047,459 5,686,717
811,163,640
45,026,151
325,182
5,329,563 3,816,355

198,234,198 174,554,832
33,081

1,686,398,249 326,794,116 863,055,118 734,144,922 604,755,677 26,081,708 325,182 414,969 85,850,522 90,439,686

133,311,957 306,749,903

133,311,957 306,749,903

6,160,613 555,083,857

6,160,613 555,083,857
6,925 215,000 251,402,084

797,287,743 17,195,414 80,981,982

476,583

7,630,018,980 17,195,414
183,336,461

134,272,330

4,818,611,392

$ 10,604,492,753 $ 4,581,316,878 $ 2,550,517,850 $ 4,945,938,310 $ 30,916,260,496 $

81,103,804 $ 3,253,324,429 $ 19,009,565,658 $ 53,260,254,387

$

$

$

4,654,897

193,976,685

94,769,325

21,138 869,031

4,628,500 19,664,220 5,218,398

3,873 2,630,152,585
6,925

60,560,564 14,021,904
19,010,031 129,681
1,414,206

$ 2,636,308,455 $

21,000 413,414,514 $

$

$

18,431,241 $

686,778,168

198,202,493

300,614,312

86,572,919

86,625,479

1,414,141,825

481,563,422

567,140,401

26,014,876

66,832

325,182

0

221,105,798

2,649,492

17,255,148

0

2,687,311,871

6,043,134

2,735,507

6,925

0

4,658,513,346

4,660,112,917

0 $ 4,945,938,310 $ 11,237,551,650 $

$ 25,588,424
821,319
479

$ 112,366,131
2,554,438
3,217,863 353,484

58,710

329,541

500 6,124,093

18,440,986 63,396,483
484,931 41,636,375 265,180,989 9,482,227 15,480,505

215,000

1,354,821,486

32,593,525 $ 1,887,960,451 $

$ 1,721,449
49,044 26,712

18,437,241 826,454,172 304,050,069
86,625,479 1,477,965,688
481,966,429 567,140,401 26,014,876
481,801 325,182 18,440,986 285,102,781 23,864,178 41,636,375 2,952,498,866 15,525,361 18,216,012
6,925 215,000

6,014,934,403

1,791,205 $ 13,159,902,831

(continued)

B-9

Stale of (Jeorftia
COMBINED BALANCE SHEET ALL FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS (continued)

lundO, 1996

PrimaIy Government

Genend

Equity lI1ld Other Creditll: OtherCrediIs: lnvestment in Genernl.F"ed Amlets

$

-$

Equity:

Net lnvestment in Plant

$

-$

Colleges lI1ld Uni.......ifu;s

Contributed C8pillll

Retained ll8minglI

Reserwd

l.Inresened

FUnd BaIanceo

Reserwdfor~*

4,829,913

Reserved for Advances

221,925

Resemod for lnventorill$

32,829,037

Reserved for Dobt Service

Reserwd for Disaster Assistll1lce

19,873,305

Reserwd tor D.istonce Learning and Telemedicine

30,265,406

Reserwd for Guarlmteed Re_ Dobt Common RlliIerve FUnd

19,029,945

Reserved fur HazaI'dous Wsste Trust FUnd

20,956.561

Reserwd for LotleIy fur Educalion

299,102,913

Reserwd tor Pension Benefits

RlliIemod for Mi(lyear Alijustment

104,461,845

Reserved for Mowr Fuel Tax FUnds

919,899,588

Reserwd for Rel'llmle Shorttilll

313,385,534

Resemod for Und<qround Storage Troat FUnd

24,997,467

RlI$emod for Other Specilie Purposes

52,691,160

U=serwd, DlliIignated

Designated fur Liability Troat FUnd

9,19$,S31

Designeted tor fUture C8pillIl Outlay

Designated tor Other Specilic Pmposes

107,130

UnreseIVtld, UtldelIignated

620,949,920

TollllEquity

$ 2,472,800,480 $

Total Equity lIIld Other Credits

$ 21472,800,480 $

GovemmenllllFUnd Dr'"

Speeial Revenue

Dobt Service

C8pillll Projects

Proprie!aty FUnd Types

~e

lnternat Service

$

-$

-$

-$

$

-$

-$

-$

271,702,732

12.5,939,453

385,695,410 370,389,932

134,272,330

1,195,275

3,244,349 3,244,349 $
3,244,349 $

1,223,629,656
3,234,717 134,272,330 $ 1,228,059,648 $
134,272,330 $ 1,228,059,648 $

125,939,453 $ 1,027,788,074 125,939,453 S 1,027,788,074

Total I.iabiIilie$, Equity lIIld OlherCredits

$ 5,412,977,713 $

3,329,328 S 134,272,33Q. S 1,296,891,936 S 299,465,512 S 1,081,Q.57,886

The ttotesto the firlJlncial statemems are an integral part ofthis statement. 8-10

fiduciaty FUnd Type
Trust and
Agency

College and
Univenity

Account Groups

General

0eneraI

FIxed

Long-Tmn

Assets

Debt

Totals (Memomndum
Only)
PrimaIy Gowrnmont

Gowrnmental FUnd Type!

Component Units
Proprielary Fund Type!

FlduciaJy FUnd Type!

Totals (Memomndum
Only)
Reporting
Entity

$

-$

- $ 2,550,517,850 $

$

- $ 3,809,483,805 $

$

358,418,559

6,266,932,913

1,684,086,231

17,165,154

$ 7,968,184,298 $ 4,167,902.364 $

0$

$ 7,968,184,298 $ 4,167,902.364 $ 2,550,517,850 $

- $ 2,550,517,850 $ 47,823,948 $

390,210 $

$ 2,598,732,008

$ 3,809,483,805 $ 358,418,559 271,702,732
511,634,863 370,389,932
4,829,913 221,925
32,829,037 134,272,330 19,873,305 30,265,406 19,029,945 20,956,561 299,102,913 6,266,932,913 104,461,845 919,899,588 313,385,534 24,997,467 1,737,972,666
9,198,831 1,223,629,656
107,130 644,594,140 0 $ 17,128,190,996 $
0 $ 19,678.708,846 $

$

$

852,517,094

- $ 3,809,483,805
358,418,559
1,124,219,826

73,638,381 418,571,029

585,273,244 788,960,961

97,058

10,148,047

19,007,768,453

4,829,913 221,925
32,829,037 134,272,330
19,873,305 30,265,406 19,029,945 20,956,561 299,102.913 25,274,701,366 104,461,845 919,899,588 313,385.534 24.997,467 1,748,217,771

589,273 686,331 $

10,099,217 1,364,973,768 $

19,007,768,453 $

9,198,831 1,223,629,656
107,130 655,282,630 37,501,619,548

48,510,279 $ 1,365,363,978 $ 19,007,768,453 $ 40,100,351,556

$ 10,604,492,753 $ 4,581,316,878 $ 2,550,517,850 $ 4,945,938,310 $ 30,916,260,496 $ 81,103,804 $ 3,253,324,429 $ 19,009,565,658 $ 53,260,254,387

B-ll

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, 1996

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) ofRevenues Over (Under) Expenditures

General
$ 9,891,126,837 $ 343,118,630
5,457,074,211 413,666
344,978,758 32,022,270 144,672,297 17,558,278 169,020,652
9,082,163 25,809,698
5,937,535
$ 16,440,814,995 $

$

467,110,847 $

4,998,994,142

6,558,077,298

1,287,172,005

1,104,443,315

294,112,317

169,961,642

46,557,857

$ 14,926,429,423 $ $ 1,514,385,572 $

Primary Government

Governmental Fund Types

Special Revenue

Debt Service

$

18,342,043 274,094

18,616,137 $

0;...

4,045,961 $

352,300,000 218,523,118

4,045,961 $

570,823,118

14,570,176 $ (570,823,118)

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 Govenunent

Component Units Govenunental Fund Type

Totals (Memorandum
Only) Reporting
Entity

$

$

418,914,774 $ 10,310,041,611 $

- $ 10,310,041,611

343,118,630

343,118,630

97,113,097 41,999
844,416

19,586,607 135,159 1,050
105,171,907 61,114
141,337

5,476,660,818 413,666
363,455,960 32,023,320
347,231,395 17,600,277 169,081,766 9,082,163 25,809,698 6,923,288

247,946
10,043,779
1,683,062 27,580
10,908,776

5,476,908,764 413,666
373,499,739 32,023,320
348,914,457 17,627,857
179,990,542 9,082,163
25,809,698 6,923,288

$

97,999,512 $

544,011,948 $ 17,101,442,592 $

22,911,143 $ 17,124,353,735

$

83,940 $

23,123 $

471,263,871 $

152,669

4,999,146,811

64,952,690

6,623,029,988

1,287,172,005

1,104,443,315

308,346,594

602,458,911

163,799

170,125,441

46,557,857

391,876,879

391,876,879

41,999 163,322 496,006

352,341,999 218,686,440
496,006

$

392,662,146 $

373,638,875 $ 16,267,599,523 $

$ 67,221,628

471,263,871 4,999,146,811 6,623,029,988 1,287,172,005 1,104,443,315
602,458,911 237,347,069
46,557,857 391,876,879

352,341,999 218,686,440
< 496,006

67,221,628 $ 16,334,821,151

$ (294,662,634) $

170,373,073 $

833,843,069 $

(44,310,485) $

789,532,584 (continued)

B-13

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES, EXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS (continued)
For the Year Ended June 3D, 1996

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 General Obligation Bond Proceeds
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 from Component Units Residual Equity Transfers Out Residual Equity Transfers to Component Units Transfer ofEquity to Component Unit Increase in Inventories

General

$

257,681,347 $

544,416,283 (1,890,825,568)
(55,084,120) 4,108,680

$ (1,139,703,378) $

$

374,682,194 $

2,087,197,987 10,776
12,872,427

(3,489,690)

1,526,786

Primary Government

Governmental Fund Types

Special

Debt

Revenue

Service

$

598,390,039

(14,000,000)

(14,000,000) $

598,390,039

570,176 $ 2,674,173

27,566,921 106,705,409

Fund Balances, June 30

$ 2,472,800,480 $

3,244,349 $ ====1=34=,2=7=2,=33=0=

The notes to the financial statements are an integral part ofthis statement. B-14

Capital Projects

Fiduciary Fund Type
Expendable Trost

Totals (Memorandum
Only) Primary Government

Component Units Governmental Fund Type

Totals (Memorandum
Only) Reporting
Entity

$

6,440,575 $

(301,374,730)

960,650,338 $ 665,716,183 $

3,425,000 $

865,936,961 $ 0
544,416,283 (2,206,200,298)
(55,084,120) 4,108,680
960,650,338

3,425,000 $ 113,827,844 $

$
14,650,263

865,936,961 14,650,263 544,416,283
(2,206,200,298) (55,084,120) 4,108,680 960,650,338

14,650,263 $ 128,478,107

371,053,549 $ 173,798,073 $ 947,670,913 $

914,377,435

1,527,243,115

(12,367,159) (45,004,177)

4,638,198,119 10,776
12,872,421 (12,367,159) (48,493,867)
()
1,526,786

(29,660,222) $ 918,010,691

91,313,352 (60,966,799)

4,729,511,471 10,776
12,872,427 (12,367,159) (48,493,867) (60,966,799)
1,526,786

$ 1,228,059,648 $ 1,701,041,188 $ 5,539,417,995 $

686,331 $ 5,540,104,326

B-lS

State of(}eorg:ia
STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND

For the Fiscal Year Ended June 30, 1996

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

Original Appropriation

Final Budget

Actual

Variance Favorable (Unfavorable)

$ 10,259,819,647 $ 10,520,187,632 $ 10,507,245,495 $

427,991,680

476,082,741

475,582,741

4,676,038,601

5,587,046,565

4,748,489,391

2,817,785,243

4,040,301,723

3,690,626,719

(12,942,137) (500,000)
(838,557,174) (349,675,004)

$ 18,181,635,171 $ 20,623,618,661 $ 19,421,944,346 $ (1,201,674,315)

1,720,257,820

1,408,702,111

(311,555,709)

$ 18,181,635,171 $ 22,343,876,481 $ 20,830,646,457 $ (1,513,230,024)

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 ofthe Guaranteed Revenue Debt Common Reserve Fund Human Resources, Department of Industry, Trade and Tourism, Department of Insurance, Department of Investigation, Georgia Bureau of Judicial Branch Labor, Department of Law, Department of Medical Assistance, Department of Natural Resources, Department of

$

180,929,466 $

294,392,238 $

267,309,562 $

4,872,456

5,653,836

5,652,033

49,001,500

52,696,921

51,880,676

1,366,188

1,343,075

1,286,397

18,664,008

18,855,090

18,753,251

9,237,778

9,237,778

8,750,515

36,351,064

47,977,569

47,948,764

130,588,580

138,984,970

135,630,242

66,844,296

257,999,548

146,286,740

690,629,167

703,489,169

691,371,421

16,422,473

25,061,973

24,185,197

4,384,219,221

4,594,946,446

4,545,717,189

4,148,228 41,400,909 25,029,738 417,500,665 35,640,145
0 2,385,426,770
26,805,896 17,063,318 46,352,276 77,513,606 163,894,364 13,154,819 3,841,148,555 132,818,141

4,556,682 43,834,959 26,974,054 524,313,203 140,181,407
0 2,556,453,516
45,066,294 17,866,500 56,240,313 84,435,403 179,441,198 14,766,446 4,355,385,054 202,412,273

4,139,227 42,689,351 21,773,083 524,313,203 98,614,670
0 2,449,486,095
29,063,650 16,537,421 53,752,256 83,365,224 149,938,638 14,208,537 3,605,327,165 192,782,002

27,082,676 1,803
816,245 56,678 101,839 487,263 28,805 3,354,728 111,712,808 12,117,748 876,776 49,229,257
417,455 1,145,608 5,200,971
0 41,566,737
0 106,967,421 16,002,644
1,329,079 2,488,057 1,070,179 29,502,560
557,909 750,057,889
9,630,271

The notes to the financial statements are an integrlll part ofthis statement.
B-16

STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND

For the Fiscal Year Ended June 30, 1996

Original Appropriation

Final Budget

Actual

Variance Favorable (Unfavorable)

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 of Georgia, Board of

Removal of Hazardous Materials, Agency for

Revenue, Department of

Secretary ofState

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

41,369,832 $
1,032,668,020 121,838,041 13,315,000 10,698,937 23,286,778
2,436,838,430 117,064
100,320,460 31,897,441
2,350,955 158,300,462
10,696,694 239,426,546 1,099,193,717
31,648,982 10,644,185

42,035,685 $
1,033,198,291 134,432,957 13,315,000 11,528,232 37,658,776
3,030,634,874 2,402,026
105,301,129 33,591,196
2,408,449 203,037,614
1l,093,766 303,229,036 2,934,774,743
31,975,791 10,693,001

41,83l,361 $
950,277,467 132,093,038
13,315,000 10,822,061 67,550,893 2,902,435,472 2,401,622 104,615,352 32,698,497 2,329,082 184,254,531 10,067,004 286,591,052 1,317,140,572 31,888,833 10,558,337

204,324
82,920,824 2,339,919
706,171
(29,892,117) 128,199,402
404 685,777 892,699
79,367 18,783,083
1,026,762 16,637,984 1,617,634,171
86,958 134,664

Total Expenditures

$ 18,181,635,171 $ 22,343,876,481 $ 19,331,632,683 $ 3,012,243,798

Excess of Funds Available over Expenditures

$ 1,499,013,774 $ 1,499,013,774

The notes to the fmancial statements are an integral part of this statement B-17

COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND EQUITY/FUND BALANCES ALL PROPRIETARY FUND TYPES, SIMILAR TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS

Fund Types Pension Trust

Totals (Memorandum
Only)
Primary Government

Component Units

Proprietary Fund Types

Fiduciary Fund Types

Totals (Memorandum
Only)
Reporting Entity

$ 343,952,000 $ 1,419,279,759 $

-$

880,271,277 $ 2,299,551,036

0

13,557,167

13,557,167

14,128,622

14,128,622

736,698,000

810,211,078

88,979,332

2,163,890,480

3,063,080,890

0

23,476,035

23,476,035

32,074,650

66,573,692

98,648,342

267,401,912

1,722,987,746

1,435,055

1,991,824,713

0

1,721,534

10,577,717

12,299,251

868,858

15,350,879

199,108

16,418,845

$ 1,080,650,000 $ 2,543,964,879 $ 1,919,089,218 $ 3,069,930,804 $ 7,532,984,901

$

3,260,337 $ 316,876,263 $ 143,420,269 $

163,389,335

305,924,459

0

59,802,609

289,383,000

1,087,492,552

80,619,237

0

789,174,000

15,212,000

15,212,000

2,145

1,457,101

31,445,276

822

41,724,234

8,709,542 $ 684,027,963
32,316,236

469,006,074 469,313,794
59,802,609 1,771,520,515
80,619,237 789,174,000
47,528,236 2,145
32,902,377 41,725,056

$ 307,855,337 $ 1,665,049,455 $ 1,371,490,847 $

725,053,741 $ 3,761,594,043

$ 772,794,663 $ 878,915,424 $ 547,598,371 $ 2,344,877,063 $ 3,771,390,858

$

-$

0$

387,514 $

861,630

25,793,308

0

474,444

0

15,621,888

(76,628)

(34,893,216)

0

(2,691,102)

(5,874,335)

3,536,644

$

387,514

26,654,938

474,444

15,621,888

(34,969,844)

(2~691,102)

(2,337,691~

$

0$

(5,089,333) $

8,229,480 $

0$

3,140,147

$ 772,794,663 $ 873,826,091 $ 555,827,851 $ 2,344,877,063 $ 3,774,531,005

B-19

(continued)

Stale of (/eorflia
COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND EQUITYIFUND BALANCES ALL PROPRIETARY FUND TYPES. SIMILAR TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS (continued)
For the Fiscal Year Ended June 30, 1996

Primal}' Government

Proprietal}' Fund Types

Enterprise

Internal Service

Fiducial}' Nonexpendable
Trust

Operating Transfers: Transfers In Transfers from Primal}' Government Transfers Out Transfers to Primal}' Government

$

-$

40,370,203 $

(18,502,104)

Net Operating Transfers

$

o$

21,868,099 $

....;0;....

Net Income

$

18,988,061 $ 103,908,093 $

3,373

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

Fund EquitylFund 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 Primal}' Government Transfer of Equity from Component Unit Increase (Decrease) in Inventories

106,951,392

908,695,431 1,560,302
12,367,159
1,042,557
214,532

206,824

Fund EquitylFund Balances, June 30

$

125,939,453 $ 1,027,788,074 $=====21;;,;;0~,1=97~

The notes to the ftlllltlcial statements are an integral part ofthis 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

$

$

40,370,203 $

$

$

40,370,203

0

51,050,120

4,034,000

55,084,120

(18,502,104)

(18,502,104)

0

(550,489,473)

(367,385)

(550,856,858)

$

0$

21,868,099 $ (499,439,353) $

3,666,615 $ (473,904,639)

$ 772,794,663 $ 895,694,190 $

56,388,498 $ 2,348,543,678 $ 3,300,626,366

5,492,913,659 1,224,591

0
6,508,767,306 2,784,893 12,367,159 0 0 1,042,557 0 0 214,532

(258,606)
1,210,533,237 (32,521,088)
48,493,867 31,551,528
2,767,830 (12,872,427) 60,966,799
(75,870)

16,659,224,775

(258,606)
24,378,525,318 (29,736,195) 12,367,159 48,493,867 31,551,528 3,810,387 (12,872,427) 60,966,799 138,662

$ 6,266,932,913 $ 7,420,870,637 $ 1,364,973,768 $ 19,007,768,453 $ 27,793,612,858

B-2!

01 Stale (jeo'}lia
COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES, NONEXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS

For the Fiscal Year Ended June 30, 1996

Cash Flows from Operating Activities: Cash Received from Customen Cash Received from Required Contributions Cash Received from Insurance Proceeds Principal Payments Received on Program Loans Interest Received on Program Loans Cash Paid to Vendors Cash Paid to Employees Cash Paid for Benefits Cash Paid for Claims and Judgments Cash Paid for Lottllty Prizes Cash Paid for Scholarships Origination ofProgram. Loans Governmental and Fiducialy Fund Type Activity (Net) Other Operating Items (Net)
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Noncapital Financing Activities: Operating Transfers In Operating Transfers from Primary Government Cash Grants Received Proceeds from Assignment ofProgram. Loans Under
Repurchase Agl:eements Issuance ofBondsiLoansINotes Contributed Capital HotellMotel Tax (Net) Operating Transfers Out Operating Transfers to Primary Government Repayment ofAdvances Principal Paid on Boncls!LoanslNotes Interest Paid on Boncls!LoanslNotes Return ofContnbuted Capital Other Debt Service Payments Other Noncapitalltems (Net)
Net Cash Provided by (Used in) Noncapital Financing Activities
Cash Flows from Capital and Related Financing Activities: Issuance ofBondslLoanslNotes HotellMotel Tax Received Contributed Capital Sale of Capital Assets A<:quisition and Construction ofCapital Assets Principal Paid on Boncls!LoanslNotes Interest Paid on BondslLoanslNotes Other Debt Service Payments Other Capital and Related Items (Net)
Net Cash Used in Capital and Related Financing Activities
Cash Flows from Investing Activities: Pwchas. ofInvestments (Net) Interest on Investments Gain on Sale ofInvestments Other Investing Items (Net)
Net Cash Provided by (U.ed In) Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, July 1

l'rinun;r Government

Fiduciary

Proprie!aly Fund T e

Fund Type

Internal

Nonexpendable

Enterprise

Service

Trost

Totals (Memorandum
Only)
Primary Government

Component Units Proprie!aly FundTe

Total. (Memorandum
Only)
Reporting Entity

$

32,531 $ 306,132,323 $

941,735,507

137,777,172

14,128,622

(152,427,099) (2,071,631)
(783,243,713)

(230,065,216) (79,456,885) (13,391,000) (80,645,071 )

-$
(822) (5,588) (2,145)

306,164,854 $ 1,079,512,679
14,128,622 0 0
(382,493,137) (81,534,104) (796,634,713) (80,645,071 )
0 (2,145)
0 0 0

1,841,975,186 $
99,393,220 72,954,374 (388,211,203) (107,551,408)
(739,130,000)
(147,976,704) 6,908,310 238,600

2,148,140,040 1,079,512,679
14,128,622 99,393,220 72,954,374 (770,704,340) (189,085,512) (796,634,713) (80,645,071) (739,130,000)
(2,145) (147,976,704)
6,908,310 238,600

$

4,025,595 $ 54,479,945 $

(8,555) $ 58,496,985 $ 638,600,375 $ 697,097,360

$

- $ 40,370,203 $

(18,502,104)

1,673,398

$

o $ 23,541,497 $

$ 40,370,203 $

$ 40,370,203

0

51,050,120

51,050,120

0

26,079

26,079

0 0 0 0 (18,502,104) 0 0 0 0 0 0 1,673,398

4,317,167 65,774,259 32,300,410
2,873,362
(550,489,473) (53,750)
(93,394,217) (51,630,499) (12,872,427)
(705,455) 1,552,221

4,317,167 65,774,259 32,300,410
2,873,362 (18,502,104) (550,489,473)
(53,750) (93,394,217) (51,630,499) (12,872,427)
(705,455) 3,225,619

o $ 23,541,497 $ (551,252,203) $ (527,710,706)

$

-$

800,000 $

2,463,989

(60,810)

(34,615,741) (421,429) (76,628)

$

(60.810) $ (31.849,809) $

-$
o$

800,000 $ 0
2,463,989 0
(34,676,551 ) (421,429) (76,628) 0 0
(31,910.619) $

1,438,965 $ 12,448,325 46,227,817
812,175 (86,491,755)
(9,363,590) (39,394,047)
(2,158,583) 1.108,376

2,238,965 12,448,325 48,691,806
812,175 (121,168,306)
(9,785,019) (39,470,675)
(2,158,583) 1,108,376

(75.372.317) $ (107.282,936)

$

1,651,643 $ (180.765.001) $

13,629,735

33,906,781

24.257.040

$ 15,281,378 $ (122,601.180) $

$ 19,246,163 $ (76,429,547) $

29.076,409

112,370,831

(6,275) $ 14,450

(179.119,633) $ 47.550,966 24,257.040 0

(137.501,385) $ 42,431,002
(65.871)

(316,621,018) 89,981,968 24,257.040 (65,871)

8.175 $ (107.311,627) $ (95,136,254) $ (202,447.881 )

(380) $ (57,183,764) $ (83.160,399) $ (140,344,163)

14,576

141.461,816

347,536.714

488.998.530

Cash and Cash Equivalents, June 30

$ 48,322,572 $ 35,941,284 $

14,196 $ 84,278,052 $ 264,376,315 $ 348,654,367

The notes to 1he fmancia! statements are an integral part of1his statement. 8-22

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

COMBINED STATEMENT OF CHANGES IN FUND BALANCES COLLEGE AND UNIVERSITY FUNDS
The notes to the financial statements are an integral part ofthis statement. B-24

Endowment and Similar
Funds

Unexpended

Plant Funds Renewals and Replacements

Investmentin Plant

Total (Memorandum
Only)

$
2,179,149 3,789
4,127,445

$ 3,704,912 4,809,581
691,353 5,884,004
10,397,200
(822)

21,985
7,591,345 3,567,621

$

6,310,383 $

36,667,179 $

$ 52,941 44,114
27,000

$ 48,969,935

997,591,543 549,566,253 139,656,907
4,940,120 190,132,253

588,220

7,980,831 11,572,030 5,083,830 4,160,705
1,258,467

157,116,009

157,116,009

151,828,219 7,671,947 9,045
115,006,420

151,828,219 7,671,947 9,045
115,028,405

28,403

7,591,345

709

5,805,380

163,085

740,678 $ 480,602,284 $ 2,357,156,374

$

$

222 $

$

$ 2,613,253,630

156,251,928

190,494,244

51,327,329

82,818

540,457

3,180

524,683

30,613

151,515,483 26,642,738

7,671,947 1,526,369

312,736 11,793
39,071,866

159,500,166 28,180,900
146,511 39,071,866

$

30,613 $ 178,161,623 $

9,198,316 $

39,396,395 $ 3,239,374,532

(continued)

B-25

COMBINED STATEMENT OF CHANGES IN FUND BALANCES COLLEGE AND UNIVERSITY FUNDS (continued)
The notes to 1he financial statements are an integral part of1his statement. B-26

Endowment and Similar
Funds

Unexpended

Plant Funds Renewals and Replacements

Investment in Plant

Total (Memorandum
Only)

2,787;1.29 $
(840,871) 1,946,358 $

-$
(10,088) 38,033,577
38,023,489 $

-$
11,959,732 11,959,732 $

52,759 $ 52,759 $

0
(l0,088) 0
(10,088)

$

-$

67,700,940 $

156,580 $

- $ 1,326,300,162

191,174

(5,128)

(1,464,349)

(14,650,263)

$

0$

67,892,114 $

151,452 $

0 $ 1,310,185,550

$

8,226,128 $ (35,578,841) $

3,653,546 $ 441,258,648 $ 427,957,304

70,583,558

55,694,643

26,621,328

3,367,622,124 603,033

3,658,783,515 81,161,545

78,809,686 $

20,115,802 $

30,274,874 $ 3,809,483,805 $ 4,167,902,364

B-27

COMBINED STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES COLLEGE AND UNIVERSITY FUNDS

For the Fiscal Year Ended June 3D, 1996
Revenues: Tuition and Fees Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants and Contracts Investment Income Sales and Services of Educational Departments Sales and Services of Auxiliary Enterprises Sales and Services of Hospital Other Sources
Total Revenues
Expenditures and Mandatory Transfers: Education and General Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Student Housing Faculty and StaffHousing Food Services Stores and Shops Intercollegiate Athletics Other Service Units Hospital Expenditures Medical College of Georgia Hospital Georgia War Veterans Nursing Home Mandatory Transfers, Net (In) Out
Total Expenditures
Other Transfers and Additions (Deductions): Excess of Restricted Receipts over Transfers to Revenues Nonmandatory Transfers, Net In (Out) Other Additions (Deductions), Net Operating Transfers Transfers In Transfers Out Transfers to Component Units
Total Other Transfers and Additions (Deductions)

Current Funds

Unrestricted

Restricted

Total (Memorandum
Only)

$ 437,947,110 $

$ 437,947,110

55,614,118

501,266,801

556,880,919

3,086,501

133,342,764

136,429,265

315,945

4,271,835

4,587,780

5,617,712

125,900,329

131,518,041

95,132

2,521,043

2,616,175

40,289,714

4,866,504

45,156,218

153,548,677

153,548,677

219,540,218

219,540,218

81,536,416

81,536,416

$ 997,591,543 $ 772,169,276 $ 1,769,760,819

$ 759,742,132 $

84,286,524 $ 844,028,656

183,828,672

217,810,709

401,639,381

129,887,935

53,308,712

183,196,647

179,317,431

5,702,346

185,019,777

98,512,286

3,826,771

102,339,057

253,998,277

21,742,602

275,740,879

186,344,159

69,324

186,413,483

55,892,393

378,983,135

434,875,528

46,622,224 1,664,038
32,368,820 18,614,016 25,013,892 31,968,938

46,622,224 1,664,038
32,368,820 18,614,016 25,013,892 31,968,938

183,195,344 1,552,759

7,298,900 1,178,014

183,195,344 7,298,900 2,730,773

$ 2,188,523,316 $ 774,207,037 $ 2,962,730,353

$

-$

(45,834,129)

2,181,424

1,258,442,642 (1,650,395)
(14,650,263)

$ 1,198,489,279 $

7,174,901 $ (3,377,983)
(53,255)

7,174,901 (49,212,112)
2,128,169

1,258,442,642 (1,650,395)
(14,650,263)

3,743,663 $ 1,202,232,942

Net Increase (Decrease) in Fund Balances The notes to the financial statements are an integral part ofthis statement.
B-28

$

7,557,506 $

1,705,902 $

9,263,408

Stale of(/eo'YJia
NOTES TO THE FINANCIAL STATEMENTS

Index
Page

Note 1 Summary of Significant Accounting Policies

B-30

Note 2 Other Accounting Disclosures

B-42

Note 3 Budgetary Accounting

B-43

Note 4 Deposits and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-46

Note 5 Receivables

B-51

Note 6 Fixed Assets

B-53

Note 7 Risk Management

B-55

Note 8 Construction and Other Significant Commitments

B-56

Note 9 Operating Leases

B-56

Note 10 C~pital Leases and Installment Purchases

B-58

Note 11 Long-Term Debt

B-59

Note 12 Interfund Balances

B-65

Note 13 Contributed Capital

B-66

Note 14 Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-67

Note 15 Subsequent Events

. . . . . . . . . B-69

Note 16 Deferred Compensation Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-69

Note 17 Retirement Systems

B-70

Note 18 Nonmonetary Transactions

B-86

Note 19 Postemployment Benefits

B-87

Note 20 Fund Deficits

B-87

Note 21 Violations of Revenue Bond Covenants

B-88

Note 22 Major Discretely Presented Component Unit Condensed Financial Statements

B-88

8-29

01 State (jeor'}ia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
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 financial 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 ....:counting and financial 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 define 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 financial 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 defines a component unit as a legally separate organization for which the primary government is financially 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 financial statements to be misleading or incomplete.

Financial accountability is the ability to appoint a voting majority 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 ofthe 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) (Capital Projects Fund) 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 Fund) is a body corporate and politic. The authority is responsible for the construction and management of farmers'markets. The Board consists of four State officials designated by statute and one member appointed by the Governor.
Georgia Building Authority (Penal) (Capital Projects Fund) 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 facilities and county correctional institutions. The Board consists of four State officials designated by statute and one member appointed by the Governor.

B-30

0/ State (Jeorgia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
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 of five State officials designated by statute and one member appointed by the Governor.
Georgia Building Authority (Internal Service Fund) is a body corporate and 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.
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 seven blended defined benefit pension plans: the Employees' Retirement System Fund, the District Attorneys' Retirement Fund, the District Attorneys' Retirement System, the Legislative Retirement System, the Superior Court Judges Retirement Fund, the Superior Court Judges 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.
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. The Board consists of the mayor of the City of Milledgeville, and one trustee elected from each of the six

municipal voting districts of the City of Milledgeville, as required by statute.
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 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 Agrirama Development Authority (Proprietary Fund Type) is a body corporate and politic. The purpose of this authority is to utilize all funds for the purpose of beautifying, 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 farmers and businessmen to obtain needed capital funds. The Board

B - 31

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996

Note 1. Summary of Significant Accounting Policies (continued)
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 ofstudents. The corporation is governed by the Board ofCommissioners of the 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 ofthree 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 housing and housing finance, and financing 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 abody corporate and politic. The purpose of the authority is to develop and improve the harbors or seaports ofthe 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 ofwhich are appointed by the Governor.
Georgia RailPassengerAuthority (Proprietary Fund Type) is a body corporate and politic. This authority is responsible for construction, financing, 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 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. Ofthe ten members serving on the Board, six members are State officials or are appointed by State officials.
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 offifteen members, four of whom are State officials and the remaining eleven are appointed by the Governor.
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. The 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.

B-32

0/ State (Jeorflia
NOTES TO THE FINANCIAL STATEMENTS

June 30, J996
Note 1. Summary of Significant Accounting Policies (continued)
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 financial 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, defined 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, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the judges of the Probate Courts ofthe 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, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the peace officers ofthe State ofGeorgia. The Board of Commissioners ofthe 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

B-33

State o/georgia
NOTES TO THE FINANCIAL STATEMENTS

June30. J996
Note 1. Summary of Significant Accounting Policies (continued)
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 ofTrustees and two other Governor's appointees not on the Employees' Retirement System Board.
Sherijft' Retirement Fund of Georgia (Fiduciary Fund Type) is a multiple-employer, defined 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, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the Superior Court Clerks ofthe State ofGeorgia. 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 ofGeorgia (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 fonn 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 G~orgia uses funds and account groups to report on its fmandal position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial 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 financial 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 fmandal resources.
Primary Government - The financial statements of the primary government are divided into four fund categories (further divided by fund type) and two account groups, aU 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-tenn debt account group.
Governmental Fund Types are used to account for aU 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 ofcertain public infonnation.
Deht Service Funds - Debt Service Funds are used to account for the payment ofprincipal and interest on general long-tenn debt.
The primary government debt service fund is the General Obligation Debt Sinking Fund, which is administered by the Office of Treasury and Fiscal Services. The Debt Sinking Fund is responsible for the accumulation of resources for the payment of principal and interest on general obligation bonds.
Capital Projects Funds - Capital Projects Funds are used to account for the acquisition or construction of capital facilities.

B-34

01 State (}eorflia
NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 1. Summary of Significant Accounting Policies (continued)
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 financial 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 ofrevenues 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 annual and compensatory leave, capital lease obligations and other long-term liabilities not otherwise recorded in proprietary, fiduciary, and college and university funds.

B -35

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 1. Summary of Significant Accounting Policies (continued)
Discretely Presented Component Units - The financial statements of the component units, other than the component units whose financial statements were blended with the fmancial statements ofthe 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 financial 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 financing 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, 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
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 ofGeorgia

B-36

01 Stale (}eorg:ia
NOTES TO THE FINANCIAL STATEMENTS

June 30, J996
Note 1. Summary of Significant Accounting Policies (continued)
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 exception that contractual obligations for services which have not been performed and for goods which have not been delivered at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements.
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 Govemor and adopted by the General Assembly prior to the beginning of the 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 pr 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, 1996, to the excess of revenues over expenditures and other financing 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 of the college and university funds, which report all time deposits as cash.
Investments Investments are defmed as those financial 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 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):

B-37

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 1. Summary of Significant Accounting Policies (continued)
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 ofother political subdivisions ofthe State.
Other organizations ofthe 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, 1996 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, 1996 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, 1996, the State had $62,322,644 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, 1996, was 2.17 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 of the funds and may take the form of certificates of deposit, letters of credit, money orders or cashiers' checks. At June 30, 1996, the Department held surety bonds in the amount of $20,499,326 and cash bonds in the amount of $11,042,766. 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 of a 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, 1996, securities in the amount of$193,389,219 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 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 financial statements. At June 30, 1996, $44,923,533 in escrow deposits were administered by the Department of Transportation and $97,442 by the State Tollway Authority.

B -38

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 1. Summary of Significant Accounting Policies (continued)
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 ofreceivables included within the fmancial 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 of long-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 financial 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, 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, 1996, 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. tFixed 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.
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

B-39

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 1. Summary of Significant Accounting Policies (continued)
leases in prior years have not been recorded on the fmancial 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 ofproprietary funds do not record depreciation on fixed assets as required by GAAP.
M. Compensated Absences
The State's liability for accumulated unpaid annual leave is reported in the accompanying general longterm 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 employee's 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 ofninety 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, 1996, mortgage loans totaling $41,636,375 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 (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.

B-40

0/ State (}eorftia
NOTES TO THE FINANCIAL STATEMENTS

June 30. J996
Note 1. Summary of Significant Accounting Policies (continued)
P. Long-Term Obligations
Long-tenn debt and other long-tenn 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-tenn obligations, with the exception of the long-tenn portion of some capital leases, are reported in the generallong-tenn debt account group.
Long-tenn 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 financial 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 tenn 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 ofexpenditures/expenses in the fund that is reimbursed.
Residual equity transfers are recorded for nonrecurring or nonroutine pennanent 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 financial 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 confonnity with GAAP. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
v. Fiscal Reporting Periods
The financial statements include financial activity for the Stone Mountain Memorial Association whose fiscal reporting period differs from that of the State of Georgia (July 1, 1995 through June 30, 1996). 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 26, 1994 through December 31,1995.

B -41

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 2. Other Accounting Disclosures
Change in Accounting Policy and Restatements
In fiscal year 1996, the State implemented accounting and financial reporting standards for food stamps in accordance with GASB Statement 24, "Accounting and Financial Reporting for Certain Grants and Other Financial Assistance." The food stamp coupon balance of $94,845,905 on hand at June 30, 1996, is reported as "Other Assets" on the General Fund Balance Sheet with Deferred Revenue as the offsetting liability. Food stamps in the amount of $708,604,202 distributed during the fiscal year ended June 30, 1996, were reported as Revenues Intergovernmental - Federal and Expenditures - Health and Welfare.
The Aviation HaIl ofFame has been added to the reporting entity as a part ofthe General Fund for the year ended June 30, 1996. The beginning fund balance for the General Fund has been increased by $10,776 due to the inclusion of the Hall of Fame.
In fiscal year 1996, certain pension trust funds adopted the accrual basis ofaccounting in accordance with GAAP. This change is reflected as a fund balance adjustment in the pension trust funds.
In fiscal year 1996, the State recorded revenue for patient services at the Medical College ofGeorgia on the modified accrual basis of accounting. This change is reflected as a fund balance adjustment in the college and university funds.
In fiscal year 1996, the financial statements of the Student Finance Authority (Discretely Presented Component Units) were presented on the accrual basis of accounting; and, as such, were transferred from Governmental Fund Types to Proprietary Fund Types. The prior year balance of this program is shown as a transfer of equity from the governmental fund types to the proprietary fund types. The change in accounting principle is reflected as a retained earnings adjustment in the discretely presented component units - proprietary fund types.
Fund balances and retained earnings at July I, 1995, have been adjusted as follows:

Primary Government

General Fund

Restatement ofBeginning Fund Balance

for the Inclusion ofAviation Hall of

Fame

$

10.776

Internal Service Funds Other (Georgia Building Authority)

$ 1.560.302

Pension Trust Funds Conversion to Accrual Basis

$ 1.224.591

College and University Funds Accrual of Patient Revenues

$ SI.l61.545

Discretely Presented Component Units

Governmental Fund Types

Transfer ofEquity

$ (60.966.799)

Proprietary Fund Types Conversion to Accrual Basis Other

$ (32,271,OSS) (250.000)
$ <32.521.0SSl

Transfer of Equity

$ 60266.799

In fiscal year 1996, the general fund accrual of teacher salaries was reflected as SalarieslWithholdings Payable and the accrual of Medicaid benefits was reflected as Benefits Payable. Previously, these accruals were included in Accounts Payable and Other Accruals. This change in accounting policy had no effect on fund balance.

B-42

01 State (/eorftia
NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1996
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 I of each year, the head of each executive branch budget unit must submit estimates of the financial 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.
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 ofadditional 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, debt service fund and capital projects 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.

8-43

Stale of(jeortjia
NOTES TO THE FINANCIAL STATEMENTS
June 30. 1996
Note 3. Budgetary Accounting (continued)

Budgetary Fund

Financial Statement Fund TyPe!

Primary Government

Excess ofFnnds Available Over Expenditures - Budget Fund Budgetary Method
Entity and Perspective Differences:
ReA>lassification of Budgetary Fund. to GAAP Financial Statement Fund Types
Non-Budgeted Funds
Budgeted Non-Current Funda
Basis Differences:
Net Accrued Revenues, Related Receivables and Deferred Revenues
Net Accrued ExpeodituresJExpenses and Related Liabilities
Timing Differences:
Revenues
ExpenditureslExpenses
Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing UsesINet Income (Los.)lNet Increase (Decrease) in Fund Balances - Current Fund. GAAP Fund Types

Budget

General

Spotial Revenue

Debt Sorvie"

Capital Projects

Enterprise

Internal Service

$ 1,499,013,774 $

$

$

$

$

$

(1,499,013,774)

1,390,083,124 804,358,071

570,176

27,566,921

371,053,549

126,248,835

2,376,033 91,373,303

(1,791,687,151) (32,235,815) 4,163,965

(106,958,920) (301,854)

(8,754,834) 21,267,195

(2353,604)

$ 374682194 $

570,176 $ 27,566 921 $ 371053549 $ 18,988,061 $ 103908093

B-44

State of(feorlJia
NOTES TO THE FINANCIAL STATEMENTS
June 30, J996

Financial Statement Fund Types

Primary Government

Discretely Presented Component Units

Excess ofFunds Available Over Expenditures - Budget Fund Budgetary Methud
Entity and Perspective Differences:
Reclassification of Budgetary Funds to GAAP Financial Statement Fund Types
Non-Budgeted Funds
Budgeted Non-Current Funds
Basis Differences:
Net Accrued Revenues, Related Receivables and Deferred Revenues
Net Accrued ExpenditureslExpenses and Related Liabilities
Timing Differences:
Revenues
Expenditures!Expenses
Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing UseslNet Income (Loss)INet Increase (Decrease) in Fund Balances - Current Funds GAAP Fund Types

Expendable Trust

Nonn_dable Trust

Peosion Trust

College and University

Governmental

Proprietary

Fiduciary

$

$

$

$

$

$

$

173,798,073

3,373

200 772,794,663

(20,857,520) 3,300,436
24,161,792

29,614 29,365

764,103 56,131,515

369,385 2,348,540,997

(200)

15,688,067

(30,048,466)

(1,029,378)

(13,336,224)

329,265

263,652

23,463 283394

(2,000) 2,681
(367385\

$ 173798073

3373 $ 772 794 663 $ 9263408

$(29 660 222) $ 56129892 $ 2 348,543,678

B-45

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
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 $425,851,138, and the bank balances were $938,006,430. The amounts of these bank balances are classified into three categories ofcredit risk: (l) 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 financial 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, 1996:

Risk Catel!orv
2 3

Bank Balance $ 288,006,031
208,983,357 441,017,042 $ 938006.430

B-46

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
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:

Governmental Fund Types
Georgia Education Authority (Schools)
Georgia Public Telecommtmications Commission
Proprietary Fund Types
Environmental Facilities Authority
Georgia Housing and Financing Authority
Georgia Student Finance Authority
Tollway Authority
All Other Component Units
Fiduciary Fund Types
Teachers Retirement System ofGeorgia
All Other Component Units

Risk Categorlt"s

Z

3

Bank Balance

Funds Held by the Prbnary Government

S

61 S

1l0,397

S 603,221

61 713,618

2,546,820

S

S

2,546,820

38,479,024

365,373 S

S

500,000 S

1l,952,934

330,006 1,400,546 15,436,938

75,643,571 13,424,036 5,981,948 1l,752,591

114,122,595 14,1l9,415 7,882,494 S 39,142,463

539,126 17,783,337
168,927,393 355,450
1,029,215 2,758,603 90,350,560

S 37,470,444 S 671,328

S 718,341

653,783

37,470,444 S 2,043,452

S

392,348,403

Carrying Amount

S

61

S

(183,310)

9,299,680

S

115,817,600

S

10,479,002

9,342,639

32,433,934

S

36,403,758

S

1,502,798

Investments - Investments are stated at cost or amortized cost, with the exception ofdeferred compensation plan assets which are stated at market value, and are summarized and classified as to risk in the following three categories: (l) 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-47

Stale of(jeor<Jia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
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 lnvestm...t Commer<ia1 Paper Corporate Bonds Municipal Bonds Repun:hase Agreements Stocks U.S. Government Securities and Corporate Obligations
U"cl1JSsijied Loans (Interfund) Mortg1lges Mutual Funds Unemployment Compensation Funds P""led with the U.S. Treasury Totallnves1menls

$

1,573,464

3,868,093

10,580,605

1,876,824,727

3,445,835,536

Risk Categories

2

J

$

$

7,186,868

1,429,258,550 22,752,540

Carrying Amount

$

1,573,464

11,054,961

10,580,605

3,306,083,277

3,468,588,076

Market Value

$

1,611,693

10,810,863

10,580,394

3,303,438,453

4,922,333,714

_ 7,502,51~ $ 1:z.Il41 193039

64328445 1 523526403

-~ L....-229,73()

7,567 068 780 14,364,949,163

7790 813.748 $ 16,039,588,865

92,021 4,730,699 21,758,080

92,021 4,784,521 23,007,750

1,581886395 $ 15974 416 358

I 582 886,395
$ 17650 359 552

lJ.48

01 Stale (;orgia
NOTES TO THE FINANCIAL STATEMENTS

June 30,1996
Note 4. Deposits and Investments (continued)
Significant Discretely Presented Component Units
The carrying amounts, risk categories and market value ofthe investments of the State's significant discretely presented component units are listed below:
Proprietary Fund Types

Proprlelary FUlld '!)pes
Georgia HousiJ1g and Firulnoe Authority

Type ofInve_nt
Mutual Funds US. Government
Securities and Corporate Obligations

Ullclassified Mortgages

Geo. L. Smith II Gemgia World Congress Cenler Authority

Repurchase Agreements Ullclassified Mutual Funds

Lo~ COlporatiOll

u.s. Government
Securities and
COlporate Obligations

All Other Component Units

Repurchase Agreements
US. Government Securities and Corporate Obligations

Risk Categories

3

Camlng Amount

Market Value

$

8,276,662

$

$

8,276,662

$

8,276,662

109090991.

$ 1I7 367,Q53

$

L-

109090991 117,367,653

109,323,286 117,599,948

2,821 175 $ 120188828

f.82I,175 $ 120421123

$

$

$

27285338

$ 27,985,338

$

27,985,338

37764425 $ 65749763

37,764,425 $ Q5149763

$ 11Ul2.llOO

$

$

$ 3,780,155

$

$

178 572 000 3,780,155

175472000 $ 3,780,155

6609,547 $ 10389702

741,630

$

741630

2$849 $ 2268849

10,320026 $ 14,100,181

10,500719 $ 14,280,874

Mutual Funds

19,217362 $ 33317543

19,217.362 ~ 33498236

8-49

NOTES TO THE FINANCIAL STATEMENTS
June30, 1996
Note 4. Deposits and Investments (continued)
Fiduciary Fund Types

Risk Calegorl.s

TXp. oflnn$lJt!l1

3

Fiduciary Fund Types

Teachers Retirement

System ofGco;gia

Repurchase Agreements

$ 216,716,000

$

Stocks

8,792,332,000

U.S. Government Securities and Corpmate Obligaliolls

8,699 432,000

; 117Q8 4&0 000

$

$

Uncl4nifted

Real Estate

All Other Component O'nits Bonds and Pebentures

$ 19,358,693

$

$

Investment ACCOlIllts

75,124

Notes

38,IlH,973

Repurchase Agreements

740,000

Slocks

181,510,249

U.S. Government Securities and Corporate Obligaliolls

217,J23,J09

$ 4569119148

;

$

UnclMsljI.d

MulUlllFunds

Real Estate

Camlng An.o"nl

MarketVal"e

$ 216,716,000 8,792,332,000

$ 216,716,000 12,831,101,000

8,692-432.000 $ 17,708,480,000

9,243.863J)QO $ 22,291,680,000

6.316.QQQ $ 177147%gog $ 19,358,693
75,124 38,181,973
740,000 181,$10,249

.316.QQQ

$ 22 291926 000

$

18,906,926

75,124

37,92tl,991

740,000

253,937,446

217,123,109 $ 456,989,148

220,24!),8j)2 $ 531,821,289

33,350,897 1,243,120 $ 491 583165

33,350,897

$

565172186

8-50

NOTES TO THE FINANCIAL STATEMENTS
June 30,1996
Note 5. Receivables
Primary Government Receivables by fund type as of June 30, 1996, consist of the
following:

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

Gross Receivables

Allowance For
UncoJlectibles

Net Total Receivables

$ 2,362,818,098 $ 1,842,732
18,312,895

$ 2,362,818,098 1,842,732
18,312,895

20,857,445 6,674,469

(1,896,378)

18,961,067 6,674,469

123,570,282 4,000
104,746,000 16,358,420
310,231,906

(16,100,000) (66,950,098)

107,470,282 4,000
104,746,000 16,358,420
243,281,808

$ 2965.416247 $ (84946476) $ 2.880.469.771

B-51

State of(jeorgia
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1996
Note 5. Receivables (continued)
Significant Discretely Presented Component Units
Receivables ofthe significant discretely presented component units as ofJune 30, 1996, consist of the following:

Goverrunental Fund Types
Georgia Public TelecoJ!lJ!lunicatiollS CoJ!lJ!lission
Proprietary Fund Types
Georgia Envirornnental Facilities Authority
Georgia Housing and Finance Authority
Georgia Student Finance Authority
All Other Component Units
Fiduciary Fund Types
Teachers Retirement System O f Georgia
All Other Component Units

Gross Receivables

Allowance For
Uncollecfibles

Allowance For Service Repayments

Deferred Loan Fees

Net Total Receivables

$ 7,965,314

$

$

$

$ 7,965,314

472,351,411
600,682,329 338,506,926 126,476,512

(255,249) (1,262,942) (2,786,162)

(18,348,543)

(195,845)

472,351,411
600,427,080 318,895,441 123,494,505

368,415,832 4,373,198

----

368,415,832 4,373,198

$ 1.918,7'Z.U22

$ (4,304,353)

$08348,S,ill

$ (195,845) $ 1.895,922,781

1M2

01 State (/eorlJia
NOTES TO THE FINANCIAL STATEMENTS
June 30,1996
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, 1995 $ 1,602,058,693
714,737,662
$ 2316796355

Additions $ 168,680,243
108,306,742
$ 276986985

Retirements $
(43,265,490)
$ (43 265 490)

Balance June 30, 1996 $ 1,770,738,936
779,778,914
$ 2550517 850

The following is a summary of the proprietary fund types and college and university funds fixed assets at June 30, 1996.

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

Proprietary Fund Types

Enterprise Funds

Intemal Service Funds

$

$ 236,384,243

163,158

183,587,750 (9,828,290)

$

163 158

$ 410 143703

College and University Funds $ 2,283,386,714
160,531,122 1,376,720,705
2,967,454 $ 3823605995

B-53

NOTES TO THE FINANCIAL STATEMENTS
June 30, 1996
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. 1996:

Land and llIlildings Improvements Other Than Buildinll$ MachinetY and Equipment Less: Accwnulated Depreciation Construc1ion in Progress Net Fixed Assets

Cov.rnn....nt.1 Fund Jxl>g

Pl'llIlrl.tary Fund 'fV!!r!

Georgia Publk
TeI"""mmunl<a~nt COUlmisskm

S

1,278,948

46,545,000

~

47823948

Georgia Porn
Autbgrlly

Stone Mounlaln Memorial Atsocljllion

C.... L. ShIllll II Georgia World
Congren
Center

S

100)17,567 S

47,162,831 S

209,402,736

183,855,691

18,981,049

109,021,811

20,895,935

10,940,986

(173,207,452)

(33,810,4%)

(27,488,271)

32,462.686

18,691.103

56557589

S

3324503ll3 S

71920 41!2 $

249413040

AllOlher
Com~
Units

S

100,522,058

2,709,612

31,749,699

(I3,7II,llll9)

22,2)4.438

$

143503918

Land and Buildings Machinery and Equipment Net Fixed Assets

FiduciarY Fund Types

Firemen's Pension Fund $ 124,545
115,144 $ 239689

Peace Officers' Annnityand Benefit Fund

$

55,961

147,826

$

203787

All Other Component
Units $
$ 3.3.107

As noted in the Summary of Significant Accounting Policies (Note 1), the State does not maintain complete and accurate inventory records applicable to State-owned land and buildings. nor are there historical cost values for certain

parcels of land and buildings; therefore, the tables above do not represent a comprehensive valuation of the assets owned by the State of Georgia.

8054

01 State (/eorlJia
NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1996
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 fiscal years ended June 30, 1996 and 1995, is shown below:

Unpaid Claims and Claim Adjustments July 1

Fiscal Year Ended June 30. 1996

Fiscal Year Ended June 30, 1995

$157,898,978 $135,133,547

Incurred Claims and Claims Adjustment ElI.1JeI1SesProvisions for Insured Events of the Current Year

784,718,552

752,934,481

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

(783,243,713) <730,169,050)

Unpaid Claims and Claim Adjustments June 30

$159.373817 $157898.978

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 oftotal claims liabilities for fiscal years ended June 30, 1996 and 1995, is shown below:

Fiscal Year Ended June 30, 1996

Fiscal Year Ended June 30, 1995

Unpaid Claims and Claim Adjustments July 1

$25,480,000 $ 21,330,000

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

115,501,490

150,098,798

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

(121,381,490)

(145,948,798)

Unpaid Claims and Claim Adjustments June 30

$19600000 $25480000

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

8-55

NOTES TO THE FINANCIAL STATEMENTS

June 30.1996
Note 7. Risk Management (continued)
State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS services claims for risk ofloss 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 are 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.
As noted in the Summary ofSignificant Accounting Policies (Note 1), various risk management funds are reported essentially on the cash basis of accounting, which is not in conformity with GAAP; therefore, a reconciliation of total claims liabilities is not presented.
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, 1996, the undisbursed balance remaining on these agreements approximates $1,707,000,000.
Significant Discretely Presented Component Units
Proprietary Fund Types
At June 30, 1996, 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 ofthe 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, 1996, 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. 1997 1998 1999 2000 2001 2002 and Subsequent
Total Minimum Commitments

$30,177,822 1,475,872 269,486 236,772 162,717 493.952
$32816621

E,...penditures for rental ofreal property and equipment for the year ended June 30, 1996, totaled $42,752,100.

B-56

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 9. Operating Leases (continued)
Significant Discretely Presented Component Units
Proprietary Fund Types

Georgia Lottery Corporation

Fiscal Year Ended June 30,

1997

$ 1,986,000

1998

1,986,000

1999

1,656,000

2000

1,656,000

2001

1,656,000

2002 and Subsequent

3,313,000

$ 12,253,000

Less: Sublease Revenues

(2,309,000)

Total

$ 9.944000

B, Lessor
The State leases certain of its facilities for use by others for tenus varying from 1 to 65 years, with the majority of leases controlled by the State Properties Commission. These leases are accounted for as operating leases; revenues for services provided and for use offacilities are recorded when earned. Minimum future revenues and rentals to be received under operating leases as ofJune 30, 1996, are as follows:
Primary Government

Fiscal Year Ended ,June 30\ 1997 1998 1999 2000 2001 2002 and Subsequent
Total

$ 6,781,707 6,900,513 7,019,427 7,135,348 7,248,180
163,718,433 $ 198,803.QS

Expenditures for rental ofreal property and equipment for the year ended June 30, 1996, totaled $1,583,000.

All Other Component Units

Fiscal Year Ended June 30,

1997

$ 899,986

1998

394,546

1999

170,747

2000

48,534

2001

36,734

2002 and Subsequent

Total Minimum Commitments

$ 1.550 ~4Z

Expenditures for rental of real property and equipment for the year ended June 30, 1996, totaled $1,573,788.

Significant Discretely Presented Component Units
Proprietary Fund Types

Georeia Ports Authority Fiscal Year Ended June 30,
1997 1998 1999 2000 2001 2002 and Subsequent Total

$4,510,924 3,631,851 3,213,545 1,535,779 717,793 6,385,226
lli.995.lj8

B-57

Stale of(jeorgia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 10. Capital Leases and Installment Purchases
The State acquires certain property and equipment through multi-year instalhnent purchases or capital leases with varying tenns and options. The majority of these agreements contain fiscal funding clauses in accordance with DCGA 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 asstn'ed, 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 1), 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 the minimum 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 financing sources in the governmental fund types when capitalized leases are entered into as required by GAAP. At June 30, 1996, future commitments under installment purchases and capital leases were as follows:

Primary Government
Fiscal YOil' En....d June 30. 1991 1998 1999 2000 2001 2002 and Subsequent Total Capital Lease and Installment Purchase Payments Less: Interest Present Value ofCapital Lease and InstaJlment Purebllse Payments
InstaJlment Purchases Capital Leases

$6,399,886 5,2S8,151 4,032,738 2,538,180
154,135
$18,383,090 0.127.940)
$ 2,370,458 ~

Significant Discretely Presented Component Units
Governmental Fund Types

Coo rybJle T.I!'!!!l!lllunlcations CO!llIllISfIon

Flseal Year End.d June 30.

1997

$ 1,254,751

1998

1,254,751

1999

1,243,931

m,m

2001

799,897

2002 and Subsequent

1.m.?95

Total Installment Purcbllse Payments

$ 6,953,022

Less: Interest

1828,929)

Present Value of InstaJlment Purchase Payments

S 6124093

a-ss

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 10. Capital Leases and Installment Purchases (continued)
Proprietary Fund Types

G!:OfI!a Portl Authority
Fiscal Year Ended June 30. 1997 1998 1999 2000 2001 2002 and Subsequent Total Capital Leases Less: Interest Present Value ofCapital Leases

S 183,330 43,835
S 227,165

G-.L.Sm.... 1I C-l!!a World C...msr Cmt... Authority
Flrcal Year En..... June 30.
1997
1998
1999
2000 2001 2002 and Subsequent Total Capital Lease and InrtaDment Purchase Paymenls
Less: Interest Present Value ofCapita1 Leases and InstaDment Pun:barer

S tn,363 60,542 5,339
S 243,244

InrtaDment Pun:barer Capital Leases

S 94,217

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

$ 3,816,700,000 838,860,000
$ 4 655 560 000

B-59

01 Stale (/eorgia
NOTES TO THE FINANCIAL STATEMENTS
June 3D, 1996
Note 11. Long-Term Debt (continued)
Annual debt service requirements to maturity for general obligation bonds are as follows:

Fiscal Year Ended June 30 1997 1998 1999 2000 2001
Thereafter

Principal $ 274,330,000
284,690,000 286,605,000 285,405,000 226,710,000 3,297,820,000 $ 4655560000

Interest $ 271,457,556
254,057,438 236,370,859 218,737,551 202,757,874 1,216,934,518 $ 2400315796

Total $ 545,787,556
538,747,438 522,975,859 504,142,551 429,467,874 4,514,754,518 $ 7055875796

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, 1996, 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, 1996, are as follows:

Purpose
Georgia Military College - Library Building

Interest Rates 3.00%

Amount $ 21000

B60

NOTES TO THE FINANCIAL STATEMENTS
June 30, 1996
Note 11. Long-Term Debt (continued)
Revenue bond debt service requirements to maturity are as follows:

Fiscal Year Ending June 30 1997 1998 1999 2000 2001
Thereafter

Georgia Military College

Principal

Interest

$ 7,000

$

525

7,000

420

7,000

210

$ 21000

$

I 155

Total $ 7,525
7,420 7,210
0 0 0 $ 22155

At June 30, 1996, $505,620,000 of outstanding general obligation bonds (including prior years' refundings), $280,000 of outstanding Georgia Building Authority (Markets) revenue bonds and $5,265,000 of outstanding Georgia Education Authority (University) revenue bonds (including prior years' defeasances) are considered defeased.

Changes in Long-Tenn Liabilities. During the year ended June 30, 1996, the following changes occurred in liabilities reported in the general long-term debt account group:

Compensated Absences Claims and Judgements Capital Leases and 1nstalhnent Purchases Genem! Obligation Debt Genem! State Bond Debt LongTenn Notes

Balance July 1 $ 189,303,709
115,197,979 1,241,803
4,047,250,000 15,505
2979840 $ 4 355988 836

Retroactive Restatement of
Prior Year Balance
181,997

$

181997

Addillon.
2,303,424 960,610,000
962913 424

Reductions
(28,625,000) (1,077,732) (352,300,000)
141 999) $ 082 044 731\

Earned and UIlUzedlNeI)
$ 8,898,784
8898784

Balance June 30 198,202,493 86,572,979 2,649,492
4,655,560,000 15,505
2937841 $ 4945938 310

B-61

NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 11. Long-Term Debt (continued)
Significant Discretely Presented Component Units
Governmental Fund Types
Long-term Operating Debt. Long-tenn operating debt has been issued by the Georgia Student Finance Authority. This debt consists of fmancing agreements with the Student Loan Marketing Association and a multiple disbursement revolving note with Trust Company Bank with outstanding balances at June 30,19%, of$ 15,326,220 and $15,472,106, respectively.

Purpose
Georgia Student Finance Authority

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

Amount $ 30 798.326

Defeased Debt. At June 30, 1996, $4,805,000 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 $731,034,709 and $198,736,544 at the Georgia Housing and Finance Authority and the Geo. L. Smith II Georgia World Congress Center Authority, respectively, at June 30, 1996, are as follows:

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

Fiscal Year Ending JuneJO

Georgia Student Finance Authority

Principal Interest

Total

1997

$ 15,472,106 $

$ 15,472,106

1998

1999

- - 15,326,220

15,326,220

$30798326 $ -

$ 30.798,326

Inleresl varies based on u.s. Treaswy BilIllltes and dterefore is not available fOr
dtis 5Cbedule.

8-62

NOTES TO THE FINANCIAL STATEMENTS
June 3D, 1996
Note 11. Long-Term Debt (continued)
Purpose Georgia Housing and Finance Authority Financing the Purchase of Single Fanlily Mortgage
Loans for Eligible Persons and Fanlilies of Low and Moderate Income within the State ofGeorgia - Financing the Purchase ofHospital Equipment and Facilities by Eligible Hospitals Geo. L. Smith II Georgia World Congress Center Authority - Construction ofthe Georgia Dome Stadium
Revenue bond debt service requirements to maturity are as follows:

Interest Rates 2.95% - 9.50% 6.65% - 7.875%

Amount

$ 723,979,880

$

7,054,829

$ 198,736,544

Georgia Housing and Finance Authority

Fiscal Year Ending June 30

Principal

Interest

Total

1997

$

8,710,000

$ 47,173,000

$

55,883,000

1998

9,860,000

45,432,000

55,292,000

1999

10,450,000

44,592,000

55,042,000

2000

11,110,000

43,911,000

55,021,000

2001

13,870,000

43,042,000

56,912,000

111ereafter

813,442,000

568,949,000

1,382,391,000

Unamortized Discount

(1,445,153)

1,445,153

Future Accretion of Capital Appreciation Bonds

(142,016,967)

142,016,967

$ 723979880

$ 936561 120

$ 1660541000

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

8-63

NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
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 30,1996, was $7,054,829. 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

Ceo. L. Smith II Georgia World Congress Center Authority

Fiscal Year Ending June 30

Principal

Interest

1997

$

1,500,000

$

15,368,953

$

1998

2,500,000

15,234,702

1999

3,150,000

15,042,440

2000

3,485,000

14,813,449

2001

3,745,000

14,559,398

Thereafter

184,870,000

181,646,876

Unamortized Discount

(513,456)

513,456

$

198,736544

$ 257179,274

$

Total 16,868,953 17,734,702 18,192,440 18,298,449 18,304,398 366,516,876
455.915.818

DefeasedDebt. At June 30, 1996, $9,880,000 of outstanding Georgia Highway Authority revenue bonds (including prior years' defeasances) are considered defeased.

8-64

NOTES TO THE FINANCIAL STATEMENTS
June 30,1996
Note 12. Interfund Balances
Interfimd assets and liabilities at June 30, 1996, consist of the following:
Due Fromffo Other Funds:

Receivable Fund General Fund
Intemal Service Funds Intemal Service Funds Intemal Service Funds Intemal Service Funds Intemal Service Funds
Internal Service Funds
Internal Service Funds
Proprietary Fund Types Discretely Presented ComponCllt Units Total

Payable Fund Proprietary Fund Types Discretely
Presented Component Units General Fund Special Revenue Fund College and University Funds Pension Trust 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

Due From
$ 262,780 19,927,441 66,832 5,218,398 869,037
58,710
66,767
26,712
325,182 $..29,821 859

Due To
$ 262,780 19,927,441 66,832 5,218,398 869,037
58,710
66,767
26,712
325,182 $ 26 821.859

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

215,000 $ :m925

215,000 $ 221.925

B-65

NOTES TO THE FINANCIAL STATEMENTS
June 30, 1996
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 Govenunent Fixed Assets Contributed by Other Sources
Total Additions Contributed Capital July 1, 1995 Contributed Capital June 30, 1996

Internal Service Funds

Department of Administrative
Services

Georgia BuDding Authority (Regular)

Georgia Correctional Industries Administration

Total

$ 10,945,727 $ 1,421,432

1,042.557

$ 10,945,727 42.438,939
$ 53384666

$ 2,463,989 214.544,129
$ 217008,118

$

$ 12,367,159

1,042,557

$

$ 13,409,716

1.309,948

258,293,016

$ J 309948 $ 271702732

Significant Discretely Presented Component Units
Proprietary Fund Types

So!m
GeneralObligalion Bond ProceedslCapital Outlay Contributed by Primary Government Contributions from Federal Goven1ment Contributions from Other Sources General ObIigalion Bond ProceedsIClpital Outlay Retumed to Primary Government Total Additions (Deletions) Contn"buted Capital July I, 1995 Contributed CtpitallWle 30, 1996

e-p
Environmental FaciUlin Aul!lor!ty $ 20,750,000 3I,SSI,528
$ 52,301,528 384,7S4,09S
5 4371155623

e-p
P...... Aul!lor!ty
$ 6,041,146

Ceo. L. Smltb II e-cJaWorld
C.......... CenIer
A!!thorltt
$

AIIOtIMr COIDpooHnt
--l!.!l!!!..-
S 21,702,721

(9.482,20Sl S 0,441,(59)
231,U8.466 5227717407

2,750,000
$ 2,750.000 50.000000
5 52750000

17,1130 Q.39O.222) S 18,330,329 l!6,663.73S 5 134994Jl64

8-66

NOTES TO THE FINANCIAL STATEMENTS

June 30,1996
Note 13. Contributed Capital (continued)
Contributed Capital I Residual Equity Transfers for the fiscal year ended June 30, 1996, are as follows:

General Fund

Rt'celvlng Fund

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 Capital Projects Funds
General Fund
Capital Projects Funds

Internal Service Funds
Proprietary Fund Types - Discretely Presented Component Units

Other Sources Other Sources

Received
$ 12,872,427 12,367,159
3,489,690
45,004,177 $ 73,733,453
1,042,557
34,319,358 $ 109095368

Contributed $ 12,872,427 12,367,159 3,489,690 45,004,177 $ 73,733,453
$ 73733453

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 a request for reimbursement by 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 financial 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 would not have a matetial adverse effect on the financial condition of the State, with the following exceptions:
Primary Government
Three suits for refund 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 ta.xes 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 an additional $23,000,000. The two refund cases are still pending in the trial court.
Litigation involving a local school board claims that the State's funding formula for pupil transportation is unconstitutional and that the State should finance a major portion ofthe cost ofits desegregation program. The Board of Public Education for Dekalb County originally requested restitution in the amount of$67,500,000. The Federal District Court ruled that the State's funding fOffimla for pupil transportation is contrary to state law but ruled in the State's favor on the school desegregation costs issue. Motions to reconsider and amend the Court's judgment were filed by both parties. The State's motion was granted, in part, which reduced the required state payment to approximately $28,000,000, as of the date ofdecision. Notices of appeal and briefs to the Eleventh Circuit Court of Appeals were filed by both sides, and oral arguments on appeal were heard in October, 1996. In April, 1997, a three-judge panel of the Eleventh Circuit Court of Appeals rendered a decision,affllming the trial court's decision in the State's favor as to school desegregation costs issue and reversing the trial COllii's decision against the State as to the State's funding

B-67

Stale of(]eorqia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 14. Contingencies (continued)
fonnula for pupil transportation being contrary to state law. Thus, under the Eleventh Circuit panel's decision, the State has no liability. On April 28, 1997, the Plaintiffs filed a motion for rchearing and en bane consideration, and motion is still pending.
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. The trial court grantcd the State's motion to dismiss and for summary judgment, which completely resolved the case in the State's favor. The case was appealed to the Georgia Supreme Court which affinned the grant of summary judgment to the State. The plaintiffs' motion for rehearing was denied by the Supreme Court, and the case has, thus, been concluded in the State's favor.
In a civil action case filed on February 28, 1996, Georgia Power Company has filed a sales and use tax refund suit in Fulton Superior Court for approximately $10,500,000. The taxes at issue were collected on an amount paid by the plaintiff for "uranium enrichment services" perfonned by the United States Department of Energy in producing enrich~ uraniur.n for use in the plaintiff's nuclear power plants. Discovery IS now complete, and the case will either be tried or submitted on motions shortly.
In order to comply with U.S. EPA standards effective in 1998, the State is involved in environmental clean-up of State underground petroleum storage tanks that have the potential

to cause soil and groundwater contamination. Approximately 1,000 sites have been currently identified. The cost for full remediation of these sites cannot currently be estimated.

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 (l) twenty percent (20%) of the outstanding balance of loans in repayment status at the beginning of each year which were disbursed prior to October 1, 1993, and (2) twenty twopercent (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.

In a civil action case filed August 26, 1996, the plaintiffs seek

a court order declaring that two games sponsored by the

Georgia Lottery Corporation, "Quick Cash" and "Cash

fTuhrrteh~e"ofaferreinugnocfotnhsetsietugtiaomneasl.

and enjoining the Plaintiffs seek the

lottery return

from of all

monies played on these games during a specified period,

approximately $1,703,462,781. As a preliminary mat~er, the

Court ruled that the plaintiffs would not be legally entitled to

the monies claimed. The plaintiffs have attempted to appeal.

Any judgement against the Georgia Lottery Corporation would

not be satisfied from the State's general fund.

B68

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 15. Subsequent Events
Primary Government
The State issued General Obligation Bonds in the amount of $65,340,000 on August 1, 1996 (Series 1996 C). Proceeds from these bonds will be used for the purpose of financing various capital outlay projects.
Note 16. Deferred Compensation Plan
The State of Georgia offers its employees a defelTed 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 of their 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 defelTed 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 ofthe 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, 1996, by plan type are as follows:

Guaranteed Invesbnent Contracts Index Trust 500 Portfolio The Vanguard Group oflnvesbnent Companies Magellan Fund Fidelity Institutional Retirement services Company Over-The-Counter Portfolio Fidelity Institutional Retirement Services Company Ptirne Portfolio The Vanguard Group of Investment Companies United International Growth Fund Waddell and Reed Asset Management Company Wellesley Income Fund The Vanguard Group of Investrnent Companies Windsor II The Vanguard Group oflnvestmellt Companies
Participants Accounts Reserve for Administration ofPlan

S 119,726,698 23,585,612 48,575,164 15,655,597 3,171,354 4,331,426 20,145,155 16211 07g
$ 251402084 S 246,844,335
4557749 $ 251 402084

8-69

NOTES TO THE FINANCIAL STATEMENTS

lune30, 1996
Note 17. Retirement Systems
Primary Government
Georgia Defined Contribution Plan
Plan Description
Organization and Purpose The Georgia Defined Contribution Plan ("GDCP") is a single-employer 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. The GDCP is administered by the Employees' Retirement System (ERS) Board of Trustees.
Membership As of June 30, 1996, membership data related to GDep is as follows:

Active Plan Participants Inactive

45,439 40.823 86,262

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 hislher 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 hislher 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 Fund
Plan Description
Organization and Purpose The District Attorneys' Retirement Fund ("DARF") is a single-employer, defined benefit pension plan established in 1949 by the General Assembly of Georgia for the purpose of paying retirement benefits to the district attorneys of the State of Georgia. DARF is directed by its own Board of Trustees. The Board of Trustees for ERS and DARF entered into a contract for ERS to administer the plan effective July 1, 1995.
Membership As of June 30, 1996, DARF had thirteen (13) retirees and beneficiaries currently receiving benefits.
Benefits Persons appointed as district attorney emeritus shall receive an annual benefit of$15,000 or one-half of the state salary received by such person as a district attorney for the calender year immediately prior to the person's retirement, whichever is greater.
Contributions and Vesting Member contributions were five percent (5.0%) of their salary plus an additional two and onc-half percent (2.5%) for the spousal coverage benefit if elected. The State paid member contributions of five percent (5.0%) of the member's annual salary. Additional employer contributions are not actuarially determined but are provided on an asneeded basis to fund current benefits.
Contributions Required and Contributions Made
Funding Policy DARF is not an actuarially funded plan; therefore, no periodic actuarial valuations have been performed. As set forth in the Official Code of Georgia Annotated (OCGA) Section 47-12-100, the State pays benefits without regard to the sufficiency of the fund to pay such benefits. Employer contributions are thus appropriated by the State to fund current benefits.
Total contributions to the System in 1996 amounted to (in thousands) $203, all of which were made by the employer.

B-70

0/ Slale (}eorfl.ia
NOTES TO THE FINANCIAL STATEMENTS

June 3D, 1996
Note 17. Retirement Systems (continued)
District Attorneys' Retirement System
Plan Description
The District Attorneys' Retirement System (DARS) is a single-employer defmed benefit pension plan established by the Georgia General Assembly in 1978 for the purpose of providing retirement benefits to the district attorneys of the State of Georgia. DARS is directed by its own Board of Trustees. The Board of Trustees for ERS and DARS entered into a contract for ERS to administer the plan effective July 1, 1995.
Membership As of June 30, 1996, membership data related to DARS is as follows:

Retirees and Beneficiaries Currently

Receiving Benefits

6

Active Plan Participants

50

Inactive

...1

59

Benefits The normal retirement for DARS is age sixty (60) with ten (10) years of creditable service with a benefit of four percent (4.0%) of the member's average annual compensation for each year of creditable service. If service exceeds sixteen (16) years, the benefit is four percent (4.0%) for each year of creditable service pus one percent (1.0%) for each year served after sixteen (16), not to exceed twenty four (24) years (72%). "Average annual compensation" is the highest average of two consecutive years of creditable service, except no increase during such period in excess of five percent (5.0%) may be used. Death, disability, and spousal benefits are also available. Early retirement benefits are not available.

Funding Status and Progress
Pension Benefit Obligation The pension benefit obligation for the DARS is presented below. The amount of the pension benefit obligation is based on a standardized measurement established by Section Pe6 ofthe 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 measurement 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 measurement 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 measurement of the pension benefit obligation; these assumptions are summarized below.
Significant actuarial assumptions used to calculate the DARS pension benefit obligation include the following:
A) The present value offuture 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 five and one-half percent (5.5%) per year.
The standardized measurement of the DARS assets in excess of pension benefit obligation as of June 30, 1995 (the latest annual actuarial valuation) is as follows (in thousands):

B -71

State o/(jeorgia
NOTES TO THE FINANCIAL STATEMENTS

June30, 1996
Note 17. Retirement Systems (continued)

Pension Benefit Obligation:
Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits
Current Employees:
Retirement Benefits
Withdrawal Benefits
Disability Benefits
Death Benefits
Refund of Employee Contributions
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Assets in Excess of Pension Benefit Obligation

$ 2,418
9,443 16
499 370 42 $ 12,788
15,231
$ (2.443)

Contributions Required and Contributions Made
Funding Policy OARS funding policy provides for periodic actuarial valuations ofthe assets and liabilities of the plan, OARS is valued under the aggregate actuarial cost method. This
method computes each year's normal cost as a level
percentage of covered compensation. In addition, this method does not directly calculate an actuarial accrued liability; therefore, it does not explicitly recognize experience gains and losses nor does it create balances to be amortized over future years. Rather, this method spreads these variations over future service years and includes them in the normal cost.

Significant actuarial assumptions used to compute contribution requirements are the same as those used to compute the standardized measure of pension benefit obligation.
Trend In/ormation

Net Assets Available for Benefits as a Percentage ofthe Pension Benefit Obligation
Assets in Excess ofPension Benefit Obligation as a Percentage ofAnnual Covered Payroll

Fiscal Year

119.1% 119.2%

68.9%

58.3%

Additional historical trend information presenting the OARS' progress in accumulating sufficient assets to pay benefits when due is presented in the ERS June 30, 1996, financial report which may be obtained from the ERS,
Employees' Retirement System ofGeorgia
Plan Description
Employees' Retirement System of Georgia ("ERS") is a single-employer, defined 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, 1996, membership data relating to ERS is as follows:

Total contributions to the System in 1996 amounted to (in thousands) $496 of which $180 and $316 were made by the employer and members, respectively. The contribution amounts were based on actuarial valuations as of June 30, 1995. The pension contributions represent funding for normal cost of $(-)1,187 in 1995. Contributions made by the employer and members approximate four and fivetenths percent (4.5%) and seven and nine-tenths percent (7.9%), respectively, of covered payroll for the year,
B-72

Retirees and Beneficiaries Currently Receiving Benefits
Active Plan Participants
Inactive

19,845 73,625 51.542 145,Q12

0/ State (feorljia
NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 17. Retirement Systems (continued)
Benefits The benefit structure of ERS was significantly modified on July I, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July I, 1982, is an "old plan" member subject to the plan provision in effect prior to July I, 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 annually 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 15 years based upon the actuarial valuation at June 30, 1995.
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 Pe6 of the GASB Codification of Governmental Accounting and Financial Reportin~ 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 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:

B -73

NOTES TO THE FINANCIAL STATEMENTS

June 30, J996
Note 17. Retirement Systems (continued)

An
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, 1995, 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, 1995, (the latest annual actuarial valuation) is as follows (in thousands):

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

$2,517,235
685,011 1,211,531 1,268,334 $5,682,1ll
5.368.067 S 314.044

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, Level percentage ofpayroll 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 15 years following the valuation date.
Total contributions to the System in 1996 amounted to (in thousands) $327,943 of which $271,342 and $56,601 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, 1995. The pension contributions represent funding for normal cost ($863,651 in 1995) and the amortization of the unfunded actuarial accrued liability ($927,653 in 1995). Contributions made by the employer and members approximate fifteen and three-tenths percent (15.3%) and three and two-tenths percent (3.2%), 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

Fiscal year

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

94.5% 94.0"1.> 91.0% 16.7% 17.6% 25.8% 15.3% 14.1% 13.9%

Actuarial valuations for the fiscal year ended June 30, 1996, are currently in process and are not available for this analysis.

B -74

NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 17. Retirement Systems (continued)
Additional historical trend information presenting the ERS' progress in accumulating sufficient assets to pay benefits when due is presented in the ERS June 30, 1996, financial report which may be obtained from the ERS.
Legislative Retirement System
Plan Description
Legislative Retirement System ("LRS") is a singleemployer defined 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, 1996, membership data related to LRS is as follows:

Retirees and Beneficiaries

Currently Receiving Benefits

163

Active Plan Participants

196

Inactive

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 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 his/her member contributions, the member forfeits all rights to retirement benefits.
Based on the June 30, 1995, actuarial valuation ofLRS, the employer contributions are projected to liquidate the unfunded actuarial accrued liability within 21 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 ofthe pension benefit obligation; these assumptions are summarized below.

B -75

0/ State (}eorfJia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 17. Retirement Systems (continued)
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 ofretum on investments in the plan in future years.
The standardized measure of the LRS unfunded pension benefit obligation as of June 30, 1995, (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
Employer-Financed Nonvested
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Unfunded Pension Benefit Obligation

$ 10,316
1,509 2,025 _ _1_0 $13,860 ~ ~

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 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 21 years following the valuation date.
Total contributions to the System in 1996 amounted to (in thousands) $363 ofwhich $164 and $199 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 30,1995. The pension contributions represent funding for normal cost ($1,097 in 1995) and the amortization of the unfunded actuarial accrued liability ($1,276 in 1995). Contributions made by the employer and members approximate seven and four tenths percent (7.4%) and nine percent (9.0%) 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 ofthe Pension Benefit Obligation
Unfunded Pension Benefit Obligation as a Percentage of Annual Covered Payroll
Employers Contributions to the Pension Plan as a Percentage ofAnnual Covered Payroll

Fiscal Year

1995

1993

1991

90.8% 89.9% 94.3%

59.1% 59.5% 26.1%

8.9%

5.5%

3.5%

Additional historical trend information presenting the LRS' progress in accumulating sufficient assets to pay benefits when due is presented in the ERS June 30, 1996, financial report which may be obtained from the ERS.

B-76

0/ State (}eorflia
NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 17. Retirement Systems (continued)
Superior Court Judges Retirement Fund
Plan Description
Organization and Purpose The Superior Court Judges Retirement Fund ("SCJRF") is a single-employer, defmed benefit pension plan established in 1945 by the General Assembly of Georgia for the purpose of providing retirement benefits to the superior court judges of the State of Georgia. SCJRF is directed by its own Board of Trustees. The Board of Trustees for ERS and SCJRS entered into a contract for ERS to administer the System effective July 1, 1995.
Membership As of June 30, 1996, membership data relating to SCJRF is as follows:

Retirees and Beneficiaries Currently

Receiving Benefits

35

Active Plan Participants

....Q

41

Benefits The normal retirement for SCJRF is age sixty eight (68) with nineteen (19) years of creditable service with a benefit of two-thirds the salary paid to superior court judges. A member may also retire at age sixty five (65) with a minimum of ten (10) years of creditable service with a benefit of one-half the salary paid to superior court judges. Death, disability, and spousal benefits are also available.
Contributions and Vesting Member contributions are five percent (5.0%) of their salary plus an additional two and one half percent (2.5%) for the spousal coverage benefit if elected. The State pays member contributions of five percent (5.0%) ofthe member's annual salary. Additional employer contributions are not actuarially determined but are provided on an as-needed basis to fund current benefits.

Contributions Required and Contributions Made
Funding Policy SCJRF is not actuarially funded plan; therefore, no periodic actuarial valuations have been performed. As set forth in the Official Code of Georgia Annotated (OCGA) Section 47-12-100, the State pays benefits without regard to the sufficiency of the fund to pay such benefits. Employer contributions are thus appropriated by the State to fund current benefits.
Total contributions to the System in 1996 amounted to (in thousands) $1,920 of which $1,889 and $31 were made by the employer and members, respectively.
Superior Court Judges Retirement System
Plan Description
Organization and Purpose The Superior Court Judges Retirement System ("SCJRS") is a single-employer, defined 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. SCJRS is directed by its own Board of Trustees. The Board of Trustees for ERS and SCJRS entered into a contract for ERS to administer the plan effective July 1, 1995.
Membership As of June 30, 1996, membership data relating to SCJRS is as follows:

Retirees and Beneficiaries Currently

Receiving Benefits

48

Active Plan Participants

160

Inactive Plan Participants

-i

212

Benefits The normal retirement for SCJRS is age sixty (60) with sixteen (16) years of creditable service with a benefit of two-thirds of the state salary paid to superior court judges at the time ofthe members retirement, plus one percent (1.0%)

B -77

NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 17. Retirement Systems (continued)
for each year ofcreditable service over sixteen (16) up to a maximum of twenty four (24) years. Additionally, a member may retire with reduced benefits at age sixty (60) with a minimum of ten (10) years ofcreditable service. A member must retire at age seventy five (75), or at the end of the term in which the member becomes seventy five (75), or forfeit all retirement and disability benefits. Death, disability, and spousal benefits are also available.
Contributions and Vesting Member contributions are seven and one half percent (7.5%) of their salary plus an additional two and one half percent (2.5%) for the spousal coverage benefit or two and three fourths percent (2.75%) for the spouse plus benefit if elected. The State pays member contributions of four and three fourths percent (4.75%) of the member's annual salary. Employer contributions are actuaria11y determined and approved and certified by the Board.
Members become vested after ten (10) years of creditable service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if a member later holds office as a superior court judge, the member shall be reinstated as if never before a member and may re-establish prior service by repaying the amount withdrawn, plus interest, within sixty (60) days of certifications of such amount.
Funding Status and Progress
Pension Benefit Obligation Presented below is the pension benefit obligation for SCJRS. The amount of the pension benefit obligation is based on a standardized measurement established by Section Pe6 of the GASB Codifiation of Governmental AccQynting 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 measurement 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-concem 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 measurement of the pension benefit obligation; these assumptions are summarized below.
Significant actuarial assumptions used to calculate the SCJRS 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 the future years.
B) Salary increases are assumed to be five and one half percent (5.5%) per year.
The standardized measure of the SCJRS unfunded pension benefit obligation as of June 30, 1995, (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:
Retirement Benefits
Withdrawal Benefits
Disability Benefits
Death Benefits
Refund of Employee Contributions
Total Pension Benefit Obligation
Net Assets Available for Benefits, At Cost
Unfunded Pension Benefit Obligation

$13,708
40,935
2,856 2,059
-M
$59,595

B78

0/ State (Jeorfl.ia
NOTES TO THE FINANCIAL STATEMENTS

June 30, J996
Note 17. Retirement Systems (continued)
Contributions Required and Contributions Made
Funding Policy SCJRS funding policy provides for periodic actuarial valuations of the assets and liabilities of the plan. SCJRS is valued under the aggregate actuarial cost method. This method computes each year's normal cost as a level percentage of covered compensation. In addition, this method does not directly calculate an actuarial accrued liability; therefore, it does not explicitly recognize experience gains and losses nor does it create balances to be amortized over future years. Rather, this method spreads these variations over future service years and includes them in the normal cost.
Total contributions to the System in 1996 amounted to (in thousands) $2,411 of which $1,178 and $1,233 were made by the employer and members, respectively. The contribution amounts were based on actuarial valuations as of June 30, 1995. The pension contributions represent funding for normal cost ($13,098 in 1995). Contributions made by the employer and members approximate seven and eight tenths percent (7.8%) and eight and two tenths percent (8.2%), 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 pension benefit 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

Fiscal Year

96.0%

88.0%

21.4%

58.7%

Additional historical trend information presenting the SCJRS' progress in accumulating sufficient assets to pay benefits when due is presented in the ERS June 30, 1996, financial report which may be obtained from the ERS.
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, 1996, membership data related to TJSRF is as follows:

Retirees and Beneficiaries

Currently Receiving Benefits

35

Active Plan Participants

146

Inactive

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%) of the 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.

B79

NOTES TO THE FINANCIAL STATEMENTS

June30, 1996
Note 17. Retirement Systems (continued)
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 hislher member contributions, the member forfeits all rights to retirement benefits.
Based on the June 30, 1995, 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 POO of the GASB Codification of Governmental Accountin~ and Fjnancial Rej>orting 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 Fund, the measurement is independent ofthe 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 ofthe pension benefit obligation; these assumptions are summarized below.
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 ofseven 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, 1995, (the latest annual actuarial valuation; present Board policy requires a biennial valuation) is as follows (in thousands):

Pension Benefit Obligation:
Retirees and Beneficiaries Currently Receiving Benefits and Tenninated 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

$ 7,070
3,891 6,006 ~ $22,617
..12m

Contributions Required and Contributions Made
Funding Policy Employer contributions to TJSRF are 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, 1995, there is no unfunded actuarial liability.

880

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 17. Retirement Systems (continued)
Total contributions to the System in 1996 amounted to (in thousands) $995 of which $472 and $523 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, 1995. The pension contributions represent funding for normal cost ($10,252 in 1995) and the amortization of the unfunded actuarial accrued surplus ($3,375 in 1995). Contributions made by the employer and members approximate eight percent (8%) 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

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

Fiscal Year

1995

1993

ill.!.

112.0% 112.7% 114.6%

45.3% 44.9% 43.1%

9.7%

8.6%

7.1%

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 ERS June 30, 1996, fmancial report which may be obtained from the ERS.

Regents Retirement Plan
Plan Description
The Regents Retirement Plan, a single-employer defined 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, 1996, was $257,665,215, and the total payroll of the College and University Funds was $1,388,943,263. The required contributions, which matched those actually made, were $13,135,425 by members and $10,515,334 by the employer, representing five percent (5%) and four percent (4%) of covered payroll, respectively.

B81

NOTES TO THE FINANCIAL STATEMENTS

June 30, J996
Note 17. Retirement Systems (continued)
Significant Discretely Presented Component Units
Georgia Ports Authority Retirement Plan
Plan Description
The Georgia Ports Authority Retirement Plan ("Plan") is a single-employer defined 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 one-quarter 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%) ofthe 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 R((porting 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 defined 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 ofthe actuarial funding method, if any, used to determine contributions to the affected public employees retirement system.
The Plan's funded status at June 30, 1996, 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 at July I, 1987 Prepaid Pension Cost at June 30, 1996

$ 28,935,642 85.930
$ 29.021.572 $ (31,822,813)
35.455.213
$ 3,632,400 (2,457,557) 205,639
(60.953) $ 1.319.529

Contributions Required and Contributions Made
The Authority's payroll for employees covered by the Plan for the fiscal year ended June 30, 1996, was $19,002,738, and the Authority's total payroll was $27,010,525. The required contributions, which matched those actually made, were $236,373 by members and $653,639 by the employer, representing one and two-tenths percent (1.2%) and three and four-tenths percent (3.4%) 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

B-82

State of (jeor'jia
NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 17. Retirement Systems (continued)
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, 1996, membership data related to TRS is as follows:

Retirees and Beneficiaries Currently Receiving Benefits
Active Plan Participants
Vested Nonvested

37,326
70,556 '.!Qi.1!! 213.593

Benefits A) Retirement Benefits: 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 ofservice multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth (1/12) 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-living 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

6.79% 4.87%

Members become fully vested after 1 years of service. If a member terminates with less than 1 years of service, no
vesting of employer contributions occurs, but the member's
contributions are refunded with interest.

B - 83

State ot(jeorftia
NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996
Note 17. Retirement Systems (continued)
The employer contributions to the unfunded accrued liability will liquidate the accrued liability within a period of 30 years on the assumption that the aggregate accrued liability contribution will increase by three and threequarters percent (3.75%) each year.
Funding Status and Progress
Pension Benefit Obligation Presented below is the total pension benefit obligation for TRS. The amount of the 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 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 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:

Au

Annual Rate

20

6.00%

25

6.00%

30

6.50%

35

5.75%

40

5.25%

45

5.00%

50

4.75%

55

4.25%

60

3.75%

C) Future pension payments reflect post-retirement increases ofthree 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, 1995, (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

$6,917,784
2,959,297 4,882,758 2.682.768 $17,442,607 15.857.066 $ 1.585541

B-84

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 17. Retirement Systems (continued)
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 30-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 1996 amounted to (in thousands) $863,291, of which $603,608 and $259,683 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 of June 30, 1994. The pension contributions consisted of (in thousands) $604,390 normal cost, $251,165 amortization of the unfunded actuarial accrued liability and $7,736 expenses of administering TRS. Contributions made by the employers and members approximate eleven and eighttenths percent (11.8%) and five percent (5%), respectively, of covered payroll for the year ended June 30, 1996.
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 $3.4 billion at June 30, 1995.
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

1995

1994

1993

90.9% 93.1% 92.2% 33.6% 24.4% 26.5% 11.8% 11.8% 11.8%

Actuarial valuations for the fiscal year ended June 30, 1996, 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, 1996, financial report which may be obtained from the TRS.

B - 85

NOTES TO THE FINANCIAL STATEMENTS

June30,1996
Note 18. Nonmonetary Transactions
Primary Government
The State of Georgia received donated goods for its use and for distribution to other quali1)ring 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 Childhood InulUmization Grant
HIV Prevention Activities. Health Department Based
Preventive Health and Health Services Block Grant
Preventive Health Services Sexually Transmitted Disease Control Grants
Project Grants and Cooperative Agreements for Tuberculosis Control Programs
Public Health and Social Services Emergency Fund

Value of Inventory Received

Value of Inventory Repol'tedat June 30, 1996

$

26,818,828 $

$

1,464,303 $

51,738 859,971

$

28,195,038 $

$

13,000 $

$

1,359,167 $

$

690,949 $

$

93,621 $

$

206,250 $

The value ofdonated 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 quali1)ring 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, 1996, is not reported on the combined balance sheet. The changes in

Federal surplus personal property inventory during the fiscal year ended June 30, 1996, were as follows:

Balance July 1, 1995 Additions Property Received
Deductions Property Donated and Olher Distributions Balance June 30, 1996

$ 16,797,852 18,851,260
$ 35,649,112
26,168,612 $9480,500

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 18. Nonmonetary Transactions (continued)
The Federal government provides food stamps to low-income households, The amount offood 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 of food stamps distributed as approved by the Department was $708,604,202,
Significant Discretely Presented Component Units
Governmental Fund Types
Donated support of volunteer services and other sources totaling $650,042 was provided to the Georgia Public Telecommunications Commission during the year ended June 30, 1996. 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 ofthe State contIibute 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, 1996, there were 47,524 employees who had retired and were receiving postretirement health care benefits through the State Health Benefit Plan. For the fiscal year ended June 30, 1996, the State recognized expenditures of $114,882,419, which was net of retiree contributions of $36,168,852.
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 employees of the University System eligible for retirement or that become pelmanently and totally disabled to continue as members of the group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System and who have at least tcn 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, 1996, the University System recognized expenditures of$17,421,832, which was net of participant contI'ibutions of $4,583,206.
Note 20. Fund Deficits
The following organizations had deficit balances at June 30, 1996.
Proprietary Fund Types - Discretely Presented Component Units
North Georgia Mountains Authority - At June 30, 1996, the Authority had an unreserved retained earnings deficit of $3,825,356.

8-87

0/ Stale (jeorgia
NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 21. Violations of Revenue Bond Covenants
As ofJooe 30, 1996, the State was not in compliance with the provisions of the Series 1990 (Domed Stadium Project) and Series 1991 (Georgia 400 Project) revenue bonds covenants that define certain criteria for the types of "permitted investments" in which funds pledged to retire debt and related interest may be invested. Acting as revenue bond Trustee for the State, the Bank of New York had invested $56,866,780 and $115,007 in the Nations Treasury Food Class B and Fidelity Treasury Portfolio II, respectively at June 30, 1996. These investments are considered open-end mutual funds. Certain investment types listed in the prospectus for these mutual funds do not meet the criteria stipulated in the bond covenants for permitted investments.

Note 22. Major Discretely Presented Component Unit Condensed Financial Statements
The condensed financial statements of the major discretely presented component ooits of the State of Georgia reporting entity are presented below. "Major" component ooits, for purposes ofthis presentation, have been determined by giving consideration to each component ooits' significance relative to the other component ooits and the nature and significance of its relationship to the primary government. Condensed financial statements for all nonmajor discretely presented component units are presented in the aggregate.

8-88

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 22. 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-Tenn Debt
Total Assets and Other Debits
LIABILITIES Due to Primary Government Other Liabilities Bonds and Other Long-Ternl 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
REVENUES
EXPENDITURES
EXCESS (DEFICiENCY) OF REVENUES OVER (UNDER) EXPENDITURES
Operating Transfers from Primary Govenunent
EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES
FUND BALANCES, JULY 1 Transfer of Equity to Component Unit
FUND BALANCES, JUNE 30

Georgia Education Authority (Schools)

Governmental Fund Types

Georgia Public Teleconmlllnications Commission

Georgia Student Finance Authority

Total

$

539,187 $

-$

26,334,444 47,823,948

6,945,412

$ ==~53=9!::i::,1=87=$ ======~=== =====0,= $====8=1,=1O;;;3!::i::,8=04=

$

$

$

--:;O_$_--::.=~=-

$

$

539,187

$

539,187 $ _ _---"-....;.;.::c.c...:;...

$

539,187 $ ============

$

;...29'-"';...36;.;.5_ $

22,881,778 $

$

0'-$

67,221,628 $

$

58,710

25,589,403

6,945,412

$

32,593,525

0$
$
_ $
....;.0;.:_ $

47,823,948 97,058
589,273 48,510,279 81,103,804
22,911,143 67,221,628

$

29,365 $

(44,339,850) $

14,650,263

$

(44,310,485)

14,650,263

$

29,365 $

(29,689,587) $

$

(29,660,222)

509,822

29,836,731

60,966,799 (60,966,799)

91,313,352 (60,966,799)

$

539,187 $ ====1..4..:i7,=14=4= $ ======,0=$ ====,6=8.:i6,.3.3. :.;1=

B-89

NOTES TO THE FINANCIAL STATEMENTS

June 30. 1996

Note 22. 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

Housing and Finance Authority

Lottery Corporation

$

$

650.790,977

390,210

$

651,181,187 $

$ 11 0,260,495 743,730,702
6,035,692
860,026,889 $

$ 89,140,760 178,968,000 3,514,000
271,622,760 $

Ports Authority
26,882,683 836,894
332,450,303 360,169,880

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

$

3,827 $

3,201 $

31,200 $

12,504

7,315,810

50,437,725

78,776,560

6,466,700

92,325,000

739,368,397

179,203,000

18,846,193

$

99,644,637 $

789,809,323 $

258,010,760 $

25,325,397

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

$

390,210 $

437,055,623

2,293,050 93,928,760

10,148,047

7,720,860

$

551,536,550 $

$
20,348,074 47,491,135
2,378,357 70,217,566 $

$
396,000 13,216,000

227,717,407 107,127,076

13,612,000 $

334,844,483

Total Liabilities, Equity and Other Credits

$

651,181,187 $

860,026,889 $

271,622,760 $

360,169,880

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

$

$

8,568,243 $ 1,543,593,000 $

75,944,125

16,752,684

66,816,268

$

16.752,684 $

75,384,511 $ 1,543,593,000 $

75,944,125

OPERATING EXPENSES Depreciation Other Total Operating Expenses

$

$

434,073 $

2,294,000 $

14,779,861

6,557,271

69,907,286

1,004,359,102

51,191,293

$

6,557,271 $

70,341,359 $ 1,006,653,102 $

65,971,154

OPERATING INCOME (LOSS)

$

10,195,413 $

5,043,152 $

536,939,898 $

9,972,971

Nonperating RevenueslExpenses (Net) Operating Transfers to/from Primary Government (Net) NET INCOME (LOSS)

7,481,021

1,435,898

$

19,1l2,332 $

(724,078) 4,319,074 $

8,217,000 (543,433,898)
1,723,000 $

(3,976,506) (615,000) 5,381,465

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

(11,266)

(248,341)

FUND EQUITY, JULY 1 Adjustments (Net) Current Capital Contributions (Net) Transfer ofEquity from Component Units Decrease in Inventories

479,743,746 52,301,528

66,146,833

11,889,000

332,904,077 (3,441,059)

FUNDEQUITY, nJNE30

$

551,146,340 $

70,217,566 $

13,612,000 $

334,844,483

B90

All Other

Student

World

Discretely Presented

Finance

Congress Center

Proprietary

Authority

Authority

Fund Types

Total

$

$

$

330,403,658

14,923,047

59,199,844

2,957,722

249,413,040

$

333,361,380 $

323,535,931 $

325,182 $ 233,920,718
18,570,890 202,526,776
455,343,566 $

325,182 1,456,322,338 1,001,306,330
797,287,743
3,255,241,593

$

255,117 $

10,851 $

1,956,492

35,913,741

295,490,312

215,077,838

$

297,701,921 $

251,002,430 $

12,847 $ 21,379,521 146,990,779 168,383,147 $

329,547 202,246,549 1,687,301,519 1,889,877,615

$

$

$

52,750,000

28,584,976 7,074,483

141,448 19,642,053

$

35,659,459 $

72,533,501 $

$

333,361,380 $

323,535,931 $

$ 134,994,064

390,210 852,517,094

21,874,833 130,091,522

73,638,381 418,571,029

286,960,419 $

10,148,047 10,099,217 1,365,363,978

455,343,566 $ 3,255,241,593

$

1,803,495 $

15,164,320 $

2,468,587

5,767,987

32,594,772

$

10,040,069 $

47,759,092 $

77,914,563 $ 21,007,448
1,721,534 48,972,192 149,615,737 $

1,722,987,746 23,476,035 1,721,534 170,903,903
1,919,089,218

$

267,537 $

48,127,377

$

48,394,914 $

$

(38,354,845) $

(302,529)

45,621,122

$

6,963,748 $

8,641,388 $ 42,688,078 51,329,466 $
(3,570,374) $
2,268,711 (6,440,575) (7,742,238) $

5,028,417 $ 117,215,164 122,243,581 $

31,445,276 1,340,045,571 1,371,490,847

27,372,156 $

547,598,371

(4,734,139) 3,993,100 26,631,117 $

8,229,480 (499,439,353)
56,388,498

(32,271,088) 60,966,799

$

35,659,459 $

77,537,661 2,750,000
(11,922) 72,533,501 $

1,001

(258,606)

242,311,920 (250,000)
18,330,329
(63,948)

1,210,533,237 (32,521,088) 69,940,798 60,966,799 (75,870)

286,960,419 $ 1,364,973,768

B-91

NOTES TO THE FINANCIAL STATEMENTS

June 30, 1996
Note 22. 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

$ 18,119,281,286 $

889,901,789 $ 19,009,183,075

476,583

476,583

TOk'll Assets
LIABILITIES Due to Primary Government Other Liabilities Total Liabilities
EQUITY Fund Balances Reserved
Total Liabilities and Equity

$ 18,119,281,286 $

890,378,372 $ 19,009,659,658

$

26,712 $

1,581,493

$

1,608,205 $

$ 283,000 2-8.3.,;0.0.0~_ $

26,712 1,864,493 1,891,205

$ 18,117,673,081 $ 890,095,372 $ 19,007,768,453

$ 18,119,281,286 $

890,378,372 $ 19,009,659,658

OPERATING REVENUES

$ 2,934,876,385 $

OPERATING EXPENSES

$

677,968,319 $

NET INCOME BEFORE OPERATING TRANSFERS $ 2,256,908,066 $

Operating Transfers to/from Primary Government (Net)

3,666,615

NET INCOME

$ 2,260,574,681 $

FUND BALANCES, JULy 1 FUND BALANCES, JUNE 30

15,857,098,400 $ 18,117,673,081 $

B-92

135,054,419 $ 3,069,930,804

47,085,422 $

725,053,741

87,968,997 $ 2,344,877,063

3,666,615

87,968,997 $ 2,348,543,678

802,126,375

16,659,224,775

890,095,372 $ 19,007,768,453

SECTION C
I SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
f,I/J icluuJB. RUM.!!, J. ~JX'ni 50 ~J in "1..:,,,,,o/fiu. ..J.j" firJI ""rwdfor in to 'j<JarJ
o! flu. 9~l'<Jia.JJouMt R.pNJ<>n1ali<'tl!!J
/rom 192' 10 1931 . .Jj" wa.1
(jfJQ"fIia; g0lltJNUJ,. fo,. 01Ul [It,.,,, j!n,,,, /93/101933. ..9,. /933, IwwaJ .&"..1 ~ It.. US S.=I. WIu& in d... S"rw)tJ, R"JJ41/tgain.eJ r'ilJptla f.,,.I.iJ ;..l"",.jlg, l..giJt.li<16 abigl'l' w.J expert t/low~. of....I..J
w.JproCilJur.,J. .JJ., ki..d [/,. 5.,nal" i..lI<lj[igaJion info i1.. JimtiiUO.!
.f9'M~f;b..../" mo<A,"~.
A,now) f,;j <yJpoinlnumfJ in flu.
01 s.,nalil, Iu. il<>N/"J <u .. nwmL,r flu.
Warren. C,mmijJion, IJ... Seno.lfJAl'fl"OrriationJ c,mm<ff_, II.. joint C,mmillfl'f1 on
Alomic G.w"fl'j, and tIu.A"ronau.fico.fand Spaa' Sci"""'J C,mmiU..... .J.J. at. c/.a;,..,J
tlw 5.,nal{lA,.,...,JS",..,iwJ C,mmill,,",

CI.,\UOE L. VICKERS
srATAUOITOR (404) 65&2174

DEPARTMENT OF AUDITS
254 Washington StreeL, S.w., Suile 214 Atlanta, Georgia 30334-8400

REPORT ON SUPPLEMENTARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

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 Stale of Georgia, as of and for the year ended June 30, 1996, and have issued our report thereon dated May 16, 1997. This report was qualified for various departures from generally accepted accounting principles. These general purpose financial statements arc the responsibility of the State of Georgia's management. OUf responsibility is to express an opinion on these general purpose financial statements based on our audit
Certain P0l1iol1s of the statements and the related Schedule of 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, the Georgia Student Finance Authority, and the University of Georgia. Federal financial assistance activity forthese organizations reflect a combined total of $1 ,817,822,206, which comprised approximately 23 percent of total Federal assistance activity, including the Federal government's risk in outstanding loan balances, for the State of Georgia as of and for the year ended June 30, 1996. 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 of the United States, and the provisions of Office of Management and Budget (OMS) Circular A-128, Audits o/State and Local Governments. Those standards and OMS 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 llsed and significant estimates made by management, as well as evaluating Ihe overaillinancial statement presentation. We believe Ihat 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 Slate 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 16, 1997

Respectfully submitted,
~~
Claude L. Vickers
State Auditor

C-4

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

(THIS PAGE INTENTIONALLY LEFT BLANK)

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Agency for International Development, U. S.
Other Federal Assistance Direct Georgia State University
AGENCY TOTAL
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 University 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 University
Market News Direct Agriculture, Department of
Inspection Grading and Standardization Direct Agriculture, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA $
$

564,936.57 564,936.57

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

57,628.39
254,506.39 78,524.84 58,998.08
256,745.57 648,774.88
61,000.00
59,000.00
33,535.80 19,001.75 52,537.55
2,860.46
25,874.48
2,405,777.52

C-7

State of georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Agriculture, U. S. Department of
Wholesale Market Development Direct Agriculture, Department of
Grants for Agricultural Research, Special Research Grants Direct University of Georgia Through: University ofGeorgia Research Foundation University ofGeorgia
Cooperative Forestry Research Direct University ofGeorgia
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 University
Grants for Agricultural Research Competitive Research Grants
Through: University ofGeorgia Research Foundation University ofGeorgia
Small Business Innovation Research Direct University ofGeorgia
1890 Institution Capacity Building Grants Direct Fort Valley State University
Higher Education Challenge Grants Direct University ofGeorgia
Buildings and Facilities Program Direct Savannah State University
Biotechnology Risk Assessment Research Through: University ofGeorgia Research Foundation University ofGeorgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.164 $
10.200 $
$ 10.202
$ 10.203
$ 10.205
$ 10.206
$ 10.212
$ 10.216
$ 10.217
$ 10.218
$ 10.219
$

25,000.00 7,733.67 1,945,762.47 1,953,496.14 704,213.99
4,170,877.93
1,961,985.51
1,457,173.29 42,882.82 300,465.79 79,105.61 55,854.20 18,801.61

C-8

SCHEDULE OF FEDER<\L FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1996
Agriculture, U. S. Department of Rural Self-Help Housing Technical Assistance Direct Fort Valley State University Cooperative Agreements with States for Intrastate Meat and Poultry Inspection Direct Agriculture, Department of Cooperative Extension Service Direct Fort Valley State University University of Georgia
Food Distribution Direct Education, Department of Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.420 $
10.475
$ 10.500
$
$ 10.550
$

45,800.92

2,856,592.22

1,596,995.37 10,936,401.23
12,533,396.60

571.25

$

26,883,267.92 81,089.47

Food Stamps Direct Human Resources, Department of
School Breakfast Program Direct Education, Department of
National School Lunch Program Direct Education, Department of
Special Milk Program for Children Direct Education, Department of

$ 10.551
10.553 *
$

571.25

$

27,663,380.08 (4)

$

708,604,202.00 (4)

45,284,203.92

$ 10.555
$

45,928,044.14 157,566,145.26

$ 10.556
$

158,614,509.95 2;;.,4;.:.,0;.,;6.,;.0;,;..9,;;...6

C-9

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, 1996

Agriculture, U. S. Department of
Special Supplemental Food Program for Women, Infants, and Children (7)
Direct Human Resources, Depanment of
Child and Adult Care Food Program Direct Education, Department of Th'rough: Education, Depanment of Albany State Universrty Albany Technicallmtittlte Aim RiverTectU)iC<illnslitute Fort Valley StateUnlver'Slly West Geo~&1lhl:~iI&!~ Institute
Summer Food Service Program for Children Direct Abraham Baldwin Agricultural College Atlanta Metropolitan College Fort Valley State University Georgia Southern University Georgia Southwestern College Savannah State University

State Administrative Expenses for Child Nutrition Direct Education, Department of
State Administrative Matching Grants for Food Stamp Program Direct Human ReSQurces, Department Qf Through: Hunlan Resources, Department Qf Judicl~~~h

Nutrition Education and Trnining Program

Direct

Education, Department of

Human Resources, DeparunC;;"~'ro~r

rough; Education. Departmeiii'Of

CI3)10" Slate Colleg",~

~

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.557
,

136,810,506.28

10.558
,

31,354,92992

66,835.52

19,915.56

50,083.76

32,137.48

2,095.37

,

31,525,997.61

10.559
,
,

8,168.72 11,427.86 78,548.04 11,676.46 4,960.39 31,818.54
152,600.01

10.560
,

2,042,544.84

10.561
,

54,952,061.83

819,328.00
, 55,771,389.83

10.564

$

256,099.36

~_ _~4,004.16
= =i iii

2t,l98.00

,

~2~8~1,~30~1~',,--2

C -10

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Agriculture, U. S, Department of
Emergency Fo<X! Assistllnce 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 CommissiCln, Stille Georgia Southern University University of Georgia Through: University ofGoorgia Research Foundation University of Georgia
Cooperative Forestry Assistance Direct Forestry Commission, Stllte Public Safety, Department of University of Georgia
rough: Forestry ilfumlSS oil; Stlite
atural Resources, De~e?lQL., Through: University of Georgia Research Foundation
University of Georgia
Water and Waste Disposal Systems for Rural Communities Through: Virginia Water Project, Incorporated Community Affairs, Department of
Technical Assistllnce and Training Grants Direl;t Fort Valley State University
Rural Development Grants Direct Fort Valley State University

eFDA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENIlITUR"':S

10,568

S 10.569

434,944.90

S

10.570
,

2,699,540.00

10.652

S

178,019,35

14,197,20

19,836.35

1,186,087.67

S

1,398,140.57

10.664

S

1,830,718.15

10,000.00

201,973.61

.- .

_ !!f!! ;J!J,189,oo

42,170.75

S

2,168,051,51

10.760

S

36,406.15

10.761

S

122,384.36

10.769

S

132,007.27

1,795,524.04

C-ll

SCHEDULE OF FEDERAL FINANCIAL. ASSISTANCE

For/he Fiscal Yeor Ended June 30. 1996
Agriculture, U. S. Depanment of
Agricultural Statistics Reports Dit'el:t Agriculture, Department of
International Agricultural ReseaR:1I Program Through: Univcrsity of Georgia Rescartll Foundation University ofGeorgia
International Training. Foreign Participant Direct University ofGeorgia
Scientific and TecliniCllI Coopenuion Through: University ofGeorsia Reseatcll Foundation University of Georgia
Other Federal Assistance Direct Fon Valley State University Georgia Institute ofTeclinology Invesligation, Georgia Bureau of State University of West Georgia University ofGeorgia Througlt: larIgston University Fort Valley State University Through: Natun.1 ResourceConservalion SClVioe Nonll Metro Tecllnicallnstitute Through: Ollio State University Fort Valley State University Througlt: University ofGeorgia Researcll Foundation Fon Valley State University University of Georgia
AGENCY TOTAL
: lN7"RAREPOR 'NGENTlTYACTn'l
NETTOTALAGENCY

eFDA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.950 S
10.961 S
10.962
S
10-963
S
OFA
S
S

54,190.14
2.337.11
27,416.26
4,5)8.11
110,262.07 -297.75
61.204.15 1,241.38
482,820.51 343.50
86,209.33 1,091.58 6,298.93
2.358,492,67 3,107,671.97

S

470,855,228.43

S

738,063,106.12

2,736,987.60

,022.69

S

468.063.240.33

S

137)64,033.43

C-12

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For fhe Fiscal Year EndedJune 30, /996

Appalachian Regional Commission
Appalaehian Regional Development Direct Industry. Trtdc and Tourism, Department of Lanier Tcclmieallnstitulc ough: CommUnity Affairs, Depanmel)l of 1.D.dustt}'.., Trade ancl'Touris~ artment of
Appalachian Housing Projc Planning Loan, Teellnieal As$istance (ir-mt and Site Development and orr-Site lmprovemenl (iBI1l: Stale Appalachian Housing Progr.uns Direct Hou.sina and Finance Authotity, Geof&~
Appalachian State Resean:h, Technical Assistan, and Dcmon.slntion Projects (3)
Direct Community Atr,il'S. Dcp.u1mem of
Appal3(hian Voution.al'nd Other Education Facililies and Opel\llions
Direct COO$3 Val1eyTechniC3llnstitule Technical and Adull Eduution, Department of

AGENCY TOTAL $5: If'IiRA.REP.ORTlNG

TYAC17Vm

NETTOTALAGENCY

Commerce, U. S. Vcparlmenl of
EJcport Promotion - Malkel Dcvclopmenl COOper.llot Dire<:t Industry, Trade and TOIlrism, Department of
Economic: Development- TechniC31 Assistanee ThrOllgh: Georgi. Tech Researc:h COfpOr.llion Georgi, lnslilule of Technology

eFDA
NUMBER

MONETARY EXPEi"DITVRf.S

NONMONETARY EXPENDITURES

23.001 S
S 23.005

24,767.98 41,925.37
20,779.10
87,472,45

S 23.011
S 23.012
S S S
S

141,516.00

556.569.22

S

1.279,896057

54,524.24 g60599.03
141,123.27

926,680.94

S

:.20,779.10

905,901.84

S

1,279,896.57
~OO
1.219,&96057

11.112 S
11.303 S

.377.09 16.995.19

C-D

0/ State {}eolYJia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Commerce, U. S. Department of
Research and Evaluation Program Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute ofTechnology
Trade Adjustment Assistance Direct Savannah State University
Interjurisdictional Fisheries Act of 1986 Direct Natural Resources, Department of
Sea Grant Support Direct Natural Resources, Department of Through: University ofGeorgia 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
Fisheries Development and Utilization Research and Development Grants and Cooperative Agreements Program
Direct University ofGeorgia
Climate and Atmospheric Research Through: Georgia Tech Research Corporation Georgia Institute ofTechnology Through: University ofGeorgia Research Foundation University ofGeorgia

CFDA
NUMBER

MONETARY EXPENDITURES

11.312 $
$ 11.313
$ 11.407
$ 11.417
$
$ 11.419
$ 11.420
$ 11.427
$ 11.431
$

8,476.28 40,738.32 49,214.60
101,134.22
34,641.60
10,000.00 1,000.649.14 1,010,649.14
77,280.00
92,747.00
1,928.30
54,982.96 28,612.27 83,595.23

NONMONETARY EXPENDITURES

C-14

01 State georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For tile Fiscal Year Ended June 30. 1996
Commerce, U. S. Department of
Marine Fisheries Initiative Direct Natural Resourees. Departmenlof Through: University ofGeor~ia Researeh Foundation University ofGcorgia
Cooperative Fishery Statistics Direct Natural ResoulUS, Dcpanment of
Marine Remreh Regional Programs Direct Savannah Stale University Through: University of NOM Carolina at Wilmington Savannah State University
Unallied Scien Pfo&ram
Direct Natuq.1 Resources. Depanment of
Atlantie Coastal Fisheries Cooperative Management Aet Direct Naluq.l Resoun:es, Dcpanment of
Public Tclecommunications Facilities Planning and Construction
Direct Georgia Stale Ur'livcrsity Public Tclecomml,lniutions Commission, Georgia
Telecommunicalions and Information Infrastructure Assistan~ Progrnm Through: GeOlJia Tech ReSCllreh Corporation GcorzialllStilutc ofThnology
Measurement and Engineering R~reh and Standards rough: Geofgia Institute ofTedmology oxhnieal a.nd Adult Ed...clllion. De~nt of
Through: Georgia Tech Rese;ltch COfp0r8lion Georgia Institute ofTechnotogy

eFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

11.433 $
$ 11.434
$ 11.464
$
$ 11.472
$ 11.474
$ 11.550
$
$ IUS2
$ 11.609
$
$

169.427,00 62,738,78 232,165,78
89,643.00
6,334.67
I,SOO.OO
7.334.67
75,538.00
103.554.00
45,263.5 I 247.946.00 293,209.51
109,499.31
, 077.(jIJ
3.332.905.60 3.404.982.69

Ct5

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For 'he Fiscal Year EndedJune 30, /996
Commerce, U. S. Department of Other Federal Aui$tance Dircet Skidaway Institute ofOceanogr.tphy University ofOcorgia Through: Ocorgia Th Rescarch Corporation Oeorgia Institute ofThnology
AGENCY TOTAL LESS: INTRAREPORT1l'>'G ENTTTY AC11J'11T'
NET TOTAL AGENCY
COnSumer Produci Safety Commiuion. U. S. Other Federal Assistance DirtCl Governor. OffICe of tile
AGENCY TOTAL
Corporuion for National and Community Service National Models Program Dircet Community Affairs, Department of Through: Communiry AffaIr!. Departmenl of Sludent F1IIIIICCAuUlonl)'. ~
I.eam and Save America Scbool and Community Based I"ropams
Oi"" Ed...c:alkm, Department of
lc:am and Serve Ametita Hi&hef Edueation Direct brIon College
AmeriCorps Direct Community Affairs, Depanmenl of

ernA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPIJI(DlTURES

OFA
,
,
,
,

111,135.00 61,315.62 3,610,861.16 3,739,817.78
9,611,&07.61
n,on.c
9,.S46,730.s2

OFA
,
S

1,100.00 1,100.00

94.001
,
,
94.00<
,
94.ooS
,
94.006 S

190,601.92 87,941.00 171.S4I.92
5J7.6I4.S9 51,631.05 3.029.915.00

C 16

Slale of georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year EndedJune 30. /996
Corporation (or Nadonaland Community Service
Trainina and Technical A$SiSWlCe 0;"" CommuniI)' AITairs, Department of
Senior Companion Propam
0;""
GeorP Southern Univenil)'
AGENCY TOTAL
: 1NT1U-RE RT1NG ENTITYAC17VlTY
NETTOTAL AGENCY
or Ddense, U. S. Department
Procurement Tec:hnieal A$Sistanee for Business Firms Through: Defense Logistics Agency Columbus Stale University Through: Georgia Tec:h Research Corporation Georgia Inslitute of Technology
Aquatic Plant Control Direct Nalul1ll Resources, Department of
Navigation Projec:ts Direct Natural RcsourteS, Depanment of
Planning A$SislanCe to Stales Direct Nalu~1 Resources, Depanment of
Basic and Applied Scientirlc Researeh Direct Gec:qia Ill$litule of Technology Through: Georgia Tech Research Corpuoalion Gec:qia Institute of Technology
Basic Sciefllirlc Researcll 0;""
Georlia Il15titute ofTtehnology

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

94.009 S
94.016 S S
S

444,206.03
131,355.2. 5,060,347.83
87,941.00 .,9n,406.83

lum S
S 12,100
S 12.107
S 12.110
S 12.300
S
S 12.431
S

99,163.7. 247,996,27 347,160,01
43,056.00
290.483.00
32I,lS9.SO
237.36 5,S58,996.03 S,SS9,23U9
49,S36.12

C 11

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996

CFDA NUMBER

MONETARY EXPENDITURES

Defense, U. S. Department of
Air Force Defense Research Sciences Program Through: Georgia Tech Research Corporation Georgia Institute ofTechnology Through: Research and Development Laboratories Columbus State University
Mathematical Sciences Grants Program Direct Georgia State University
Research and Technology Development Through: Georgia Tech Research Corporation Georgia Institute of Technology
Other Federal Assistance (5) Direct East Georgia College Fort Valley State University Georgia Institute ofTechnology Georgia Southern University Georgia State University Military College, Georgia Natural Resources, Department of North Georgia College Skidaway Institute ofOceanography Southern College ofTechnology University ofGeorgia Waycross College Through: Georgia Tech Research Corporation Georgia Institute of Technology Through: Medical College of Georgia Research Institute Medical College ofGeorgia Through: National Guard Bureau Defense, Department of Through: U. S. Army Medical Research and Material Command North Georgia College Through: University ofGeorgia Research Foundation University ofGeorgia

12.800
12.901 12.910 OFA

1,457,557.60

12,532.75

$

1,470,090.35

$ - - - - - - - - - 13,584.61

--------- $

148,189.13

3,000.00 125,304.38 62,325.73 68,271.54 161,418.17 1,107,592.23 17,750.00
3,111.19 176,822.20 164,724.99 11,088.44
4,369.51

85,161,132.74

848,995.07

18,901,44134

85,861.99

979,790.38

$

107,882,999.90

AGENCY TOTAL

$

11..6..:.,,1.2.5...:,,4_9_2.0...1_

NONMONETARY EXPENDITURES

C-18

Slale 01 georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Edunlion. U. S. Dtpartmtnt or
Adult Education Stille GlW1t Pro&mn
o;~
Ttchnic:al and Adult Education, ~t of Throu&lt: Appat.chim RqioMJ Commission
West Gaqia Tcchnia.llnstitutt Throop: Bibb County Board of Education
Maeoo Tedlnic:allnstitutt
Throop: Technical and Adult Education, Depanmenl or
Altamaha Ttchnic:allnstitutt Athens Area Tec.hnic:allnstitu\.C: AUp$tII Technieallnstitutc Ben Hill-Irwin Tedmicalln$titulc Carroll Technic:allnstitulc Coosa Valley Tedmieallnstitutc DallOl1 Colle~ Ainl Rivcr Technical Inslitu\.C: Griffin TechnicallnslilU\.C: Heart ofGcor&ia Technicallnstitulc Lanier Tochnieallnstitule Middle Geollia Technleallnstitulc Moultrie Arca Techniealloslltute North Georllia Technicallnstitulc North Metro Technicallnstilute Ogeechec TechniCltllnSlilute OkefcllOkce Technical Institute Pickens Technicallnstilutc Soum GeorJia TeehniCltI Inslitu\.C: Soumeaslern Tcx:hnieallnSlilutc Swainsboro Tcx:hnicallnstitulc Thomas Tcx:hniCltllnslilute Valdosta TcehnlCltllnslilute Walter Tcx:hniCltI Inslitute West Georgia Technieal In$tilUlc Throu&h: WilkC$ County Board of Education Alhelll Area Technical Institute
Dese&l"eption Auis~. Civil RilhlS TrlIining, and AdVisory SeJvioes
O;~
Education, Department of

Ct"DA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXP[1'o"DITURES

84.002 S
S 84.004
S

7,461,105.62
40,063.51
57,170.94
90,)11.29 294,441,00 295,731.83 llJ,191.1l 271,674.08 207,593.n 119,591.59 92,79&.91 1&4,030.&7 129,499.95 260.730.00 IJ4,J4I.S4 145.460.00 165.050.26 74.926,99 91,133.95 123,592.45 164.992.03 98,115,00
74,0&3.35 152,611.42 117,261.70 130,442.62 l76,954.51 J68,957.69
3,000,00
11,446,636.56
236,144.59

C-19

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, 1996
Education, U. S. Department of
Federal Supplemental Educational Opportunity Grants Direct Abraham Baldwin Agricultural College Albany State University Armstrong State College Athens Area Technical Institute Atlanta Metropolitan College Augusta State University Augusta Technical Institute Bainbridge College Brunswick College Carroll Technical Institute Chattahoochee Technical Institute Clayton State College Columbus State University Dalton College Darton College DeKalb College East Georgia College Flint River Technical Institute Floyd College Fort Valley State University Gainesville College Georgia College Georgia Institute of Technology Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Griffin Technical Institute Kennesaw State University Macon College Macon Technical Institute Medical College ofGeorgia 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 University South Georgia College Southern College of Technology State University of West Georgia Thomas Technical Institute University ofGeorgia Valdosta State University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.007 $

155,787.00 262,224.36
41,976.90 29,700.00 144,143.87 198,670.50 42,413.00 50,000.01 80,000.00 64,780.00 16,029.00 84,890.00 95,428.50 46,442.55 74,530.64 142,199.00 10,126.00 19,900.00 30,752.02 220,045.83 45,980.00 79,786.17 323,765.00 262,809.80 95,345.25 472,565.70 43,137.76 26,549.00 121,793.46 92,559.85 99,230.00 43,374.00 92,102.85 22,050.00 56,328.00 86,155.00 28,519.00 18,752.00 19,200.00 205,184.58 97,162.86 75,100.72 142,375.97
9,000.00 427,466.90 398,585.25

C-20

Slale 01 georg-ia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, /996

Education, U. S. Departmenl of
Federal Supplemental EdllCational Oppollunity Grants Direct ValdoSIl Technicallnslilute Waycross College West Georgia Technical Institute

Education orChildren with Disabilities in State Operated or Supported Schools
Direct Education, Department of
[fbrough; Educalion, Departmentof Children and Youth Services, ,Department of CornctiOns. Deparonent of
-Human Resources DeDlUtrnerlt of

Tille [Grants 10 Local Educational Agencie:s

Dira:t

EdllCalion, Department of

rough: Education, ~l of

Conections De

<0'

Migrant Education - Basic State Grant Prognlm Direct Education, Depanmcnt of Through: Southem Pine Migrant Educational Agency Abraham Baldwin Agricultural College

Educationally Deprived Children - State Administralion Direct Education, Department of
Title I Program for Neglected and Delinquent Children Direct Education, Departmenl of rough~ Education, Dcp:utment of Childreo and Youth ServiCC3 Depll.(Ul)en 0

FollowThrough Direct UniVClSily or Georgia

CFDA "'UMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84,001 $
$ 84.009

15,000,00 32,236.63 26)27.00
5,328,481.93

$

17,72941

11,741.00

12,307.02

,

28,420.72

$

70.198.15

84.010

$

161,626,159.38

305,736.72

$

161.931.896.10

84.011

$

4,657,629.19

19,107.85

$

4,676,137.04

84.012

$

1,102,833.63

84.013

$

990,467.48

612,209.25

$

1,602,676.73

84.014

$

32,632.22

C-21

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
Undergraduate International Studies and Foreign Language Programs
Direct Columbus State University
Through: Georgia Tech Research Corporation Georgia Institute ofTechnology
International Research and Studies Through: University ofGeorgia Research Foundation University ofGeorgia
International: Overseas - Group Projects Abroad Direct Columbus State University Valdosta State University
Special Education - Innovation and Development Direct Georgia State University Through: First District Regional Educational Service Agency Annstrong State College Through: University ofGeorgia Research Foundation University ofGeorgia
Early Education for Children with Disabilities Direct Human Resources, Department of University ofGeorgia Through: University of Kansas Valdosta State University
Services for Children with Deaf-Blindness Direct Education, Department of

CFDA
NUMBER

MONETARY EXPENDITURES

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

76,055.47 76,930.97 152,986.44
1,757.61
59,000.00 33,359.65 92,359.65
32,040.08 9,919.17 138,087.49 180,046.74
119,502.85 186,591.31
2,945.96 309,040.12
232,915.34

NONMONETARY EXPENDITURES

C-22

State of georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, /996
Eduution, U, S. Department of
Spe<:ial Education Grants to States Direct Education, Department of Through: Education, Department of Corroctions, Department of Human Resources DenarlmCllt of
Spa;ial Education - Personnel Development and Parent Traininll
Direct Education, Department of GIrgia State University University ofOeorgia Valdosta State University
Higher Education Institutional Aid Direct Albany State University Atlanta Metropolitan College Chattahoochee Teehnicallnstltute Fort Valley State University Macon College Middle Georgia College Savannah State University
Federal Family Education Loans (3) Direct Higher Education Assistance Corporation, Georgia
Federal Work-Study Program Direct Abraham Baldwin Agricultural College Albany State Universily Armstrong State College Athens Area Technical Institute Atlanta Mettopolitan College Augusta State University Augusta Teehnicallnstitute Bainbridge College BrunSwH:k College Carroll Tedmicallnstitute Chaltaho<x:hee TechnicallnSlitute Clayton State College Columbus State University Dallon College

CFOA NUMBER

MONETARY EXPENDlTIJRES

NONMONETARY EXPENDITURES

84.027 $
$ 84,029
$
$ 84.031
$
$ 84.032
$ &4.033
$

53,173,05458
20,400.00 93,074.53
53,286,529.11

173,987.24 107,856.87 842,948.37 144,023.83
1.268,816.31

1,258,130.09 28,463.83 341,044.52
1,126,790.67 337,077.26 374,015.43
1.484.408.07
4.949.929.87

30,052,251.00

$

1.385,783,506.00

204,924.53 266.679.58 45,912.85
13,849.18 110,664.80 226.149.53 24,506.65 23,388,92 65,274.00 12,197.00
4,906.65 14,193.68 103,745.60 32,734.00

C -23

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For IheFiscol Y~o,ndedJull~30,1996
Eduration, U. S. Department of
Fedtral Work..sludy PYop1m 1>= Darton ColkJC Dr;Kalb ColleJC East. Georpa ColleJC Floyd Colleee FOl't Valley State UniV'Crsily Gainesville ColI<:ge
Georcil College
GcortillnSlilUte ofTtc:hno!o&Y
GeortiI Southern UniV'Crsil)' Gcorp Southwestern College Gcor&il Stale University
Gordon ColIeJC Griffin Techniallnslilute KeMCSlIw State UniV'CJSily MxonColkgc Mxon Ttc:hniallnslilute Mcdiul Collese ofGcorcA Middle Geor&ia College Miliwy Collese, GeorCi.a Moultrie Area Technieallnslitule Nonll Geoflia CoUeee North OeGI&ia Technieallnst'tule NOIIh Metro TechnicallnSlilute O&eechec Technical Instilule Okefenokee TechnieallnSlitute Savannah Slate University South Georgia College South Georgia Technical Institute Southern College ofTechnoJogy Slate University of West Georgia SwainsborO Tcchnicallnstitute Thomas TechnicallnstitulC University of Gcor&ia Valdosta SUIte UniV'CJShy Valdosta Technicallnstilute WalkCf Technical Institute Wa)'ClOSS Colqe WC$1 GeorJia Techni<:allnstitulc
Public Ubfary 5ervic:cs
- - " 1>= Education, ~nl of gh: Educa.lion, Department or

CFDA NUMBER

MONETARY EXPENOI11JR.S

NONMONETARY EXPE."DITURES

14.033


14.034


74,370.54 110,410.00 12,.211.63 32,$21.16 406,931.72 ,446.03 123,336.00 193,211.54 392,IIS.96 104,J74.1S 346,641.41 34,021.23 11,204.00 4S,17I.37 63,263.00 24,130.56 130,S22.OO 81,S2S,73
7,064.20 14,226.00 89,291.13 78,4S2.OO 11,680.79 20,091.00 9,33S.00 326,690,67 147,008.74 12,041.22 47.332.86 168,567.31 7,180.81 9,3S4.89 491,910.1) 401,484.93 20,'187.00 1),971.00 23,737.21 14,297.64
S,385.S33.32
1,71I,04S.23
26.027.79
1.737,07302

C24

State of georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
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 University Annstrong State College Augusta State University Clayton State College Columbus State University Fort Valley State University Georgia College Georgia Institute ofTechnology Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Kennesaw State University Macon College Medical College of Georgia Middle Georgia College North Georgia College Savannah State University South Georgia College Southern College of Technology State University ofWest Georgia University ofGeorgia Valdosta State University
TRIO - Student Support Services Direct Abraham Baldwin Agricultural College Atlanta Metropolitan College Georgia Southwestern College Georgia State University Macon College Savannah State University South Georgia College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.035 $
84.038 *
$
$ 84.042
$
$

455,721.40

32,635.73 (I) $ 1,094.01 (I)

32,944.30 (I) -5,875.78 (I) 3,179.62 (I) 71,098.1 1 (1) 173,748.15 (1)
71,734.97 (1)
33,012.61 (1)
61,066.07 (1)
230,845.25 (I)

13,805.00 (1)

47,005.00 (I) 1,271.15 (I)
-81,128.60 (1)
3,636.68 (1)
18,587.04 (I) 38,806.20 (1)
25,917.65 (I)
99,685.83 (I) -345,774.99 (1)

527,294.00

$

2,208,965.61 (I)
340,737.06 (I) 6,371.12 (I)
701,093.98 (I) 13,249.59 (I)
570,317.32 (I) 2,089,214.83 (1)
2,063,957.36 (I) 6,432,471.07 (1) 3,437,329.26 (I) 1,141,870.45 (1) 5,029,577.42 (I)
9,435.26 (I)
380,032.53 (I) 4,356.1 I (I)
2,547,374.56 (I) 187,731.80 (I)
774,768.95 (1)
808,027.70 (I)
1,064,541.42 (1) 972,%1.37 (1)
2,020,657.65 (I)
9,053,072.74 (1) 996,355.88 (1)
42,854,471.04

168,456.89 205,050.86 182,349.07 182,735.14 165,518.39 170,124.33 188,047.19
1,262,281.87

C-25

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Elided lillie 30. 1996
EduUlion, U. S. Dtpllrtment of
TRIO - Talent Sc:m;h Direct Fon Valley State UniV(rsily Georgia Sou!hcm Universily Savannah Suue Univcrsily
TJUO Upward Bound Direct Abraham Baldwin Agrieu1Lural College Atlanta Metropolitan College Fort Valley State University Georgia Soulhem UniV(rsily Georgia Sou!hl'o''estem College Georgia State University Savannah State University Unh-ersily ofGeorgia
Vocational Edue:ltion Basic Grants to States Direct Education, OeJWIment of rough: llC;\tion, Department of Children and Youlh Services, Department of Corrections, Department of Teehnieallllld AdUlt.Eduealio~pa",nrn""":"""""r,Through: Nonh Georgia Regional Educational Service Ageney ValdoSUl Technical Institute Through: NOrtheast Georgia Regionol Educational Service Ageney Goorgia Soulltem UniYc""";~";<;;;:;;;;;;;-n;;;;;;;;;;;;;:J' rough: Technical and Adult EduClltion. Department'of Albany TcehnicallOStitutc Altamaha Tedmicallnstitute Athens Area Tcehnicallostitutc Augusta TochnicallnstiLute ~lnbrid&e College Ben Hill,lrwin Toehnical Institute BnJllswid: College Carroll'Tccl'inieallnstitute ChtWtoochec Tcehnieallnslitute Cla}"totl State College Columbus TecllnieaJ Institute Coosa V31lcy TcehniC1lIIl\Stiltlte Dalton College Flint RiverToehniC1lllnstitute Griffin Toehnieallnslitutc HC#torGcorgia Thnieallnstitute

CFDA
NUMB}:R

MONETARY EXPENDITURES

84.044

'
84.047

S 84.048
,

210,865,80 199,189.70 271,662.13
~6=8~1,7~1=7=.63,-
244,165.47 305,923.21 194,031.53 312,678.99 211,649.42 256,969.16 448,749.04 373.624.11
2,347,790.93
28,513,449.36
151,320,08 162,820.35
,13,,,,,6.,,7~4,.S"8'-

3,141,89

~

1~404".I~I~O.;'~I

515,568,7g 216,873.32 376,198.28 518,800,10 209,293.27 385,705.00 102,757.60 354,524.88 270,002.1$
52.275,55 674,608.15 291,544.84 92,572.00 253,600,11 357,290.28 241,833.81

fl;ONMONETARY EXPENDITl/RES
. ~~_ ...
,

C - 26

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
Vocational Education - Basic Grants to States Through; Teclmical and Aduh EducatIOn. Department of Lanier Technica1lnstitute Macon TechnicallnSlitute Middle Georgia Technical Instilute Moultrie Area Technicallnstilute North Georgia TechniCal Institute North Metro Technical Institute Ogeechee Teclmical Institute Okefenokee Technical Institute Pickens Technlca1lnstitute South Georgia Tecltnicallnstitute Southeastern Technical Institute Swainsoon} Technical Institute ThQfTlltS Technical Institute Valdosta Technical Institute Walker Technical Institute j~hniCailnstitule
Vocational Education - Consumer and Homemaking Education Direct Education, Department of Through; Education, Department of Pui:echnical and Adult Education, Department of oUght' Technical and Adult Education, Department of Albany Technical Institute Athens Area Technical Institute
~Crth"Geor~a Iechnicallnstltute
Vocational Education - State Councils Direct Governor, Office of the
Higher Education - Cooperative Education Direct Georgia State University
Federal Pcl! Grant Program Direct Abraham Baldwin Agricultural College Albany State Univcrsity Albany Technical Institute Altarnaha Technical Institute Annstrong State Collcge Athens Area Technical Institute Atlanta Metropolitan College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84048
,
,
84.049
,
,
84.053
,
84.055
,
84.063
,

232,620.12 :912,652.00 471,115.33 239,697,00 341,997,76 241,256.69 212,539.72 241,303.00 159,055.95 410,950.79 234,380.46 258,299.44 261,855.49 454,881.85 312,682.02 297,Q52,7S
52,937,266.19
163,464 24
88,19139
3S,OU;,59 14,898.80 38,276,00
339,847.02
242,725.30
28,082.78
1,333,564.92 3,414,514.18
863.672.88 249,784.00 2,649,478.06 627,555.00 1.401.368.14

C-27

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
Federal Pell Grant Program Direct Augusta State University Augusta Technical Institute Bainbridge College Ben Hill-Irwin Technical Institute Brunswick College Carroll Technical Institute Chattahoochee Technical Institute Clayton State College Columbus State University Columbus Technical Institute Coosa Valley Technical Institute Dalton College Darton College DeKaib College East Georgia College Flint River Technical Institute Floyd College Fort Valley State University Gainesville College Georgia College Georgia Institute ofTechnology Georgia Southern University Georgia Southwestern College Georgia State University Gordon College Griffin Technical Institute Heart ofGeorgia Technical Institute Kennesaw State University Lanier Technical Institute Macon College Macon Technical Institute Medical College ofGeorgia Middle Georgia College 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 University South Georgia College South Georgia Technical Institute Southeastern Technical Institute Southern College ofTechnology State University ofWest Georgia Swainsboro Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.063 *
s

2,376,608.60 905,034.33 907,846.25 478,766.00 943,368.00 422,440.95 532,112.94
1,288,384.90 2,440,820.70
989,703.00 496,358.00 920,902.19 1,167,669.65 4,364,606.70 432,124.50 368,999.79 1,139,873.26 3,764,528.69 699,098.39 1,671,385.96 1,950,203.00 5,999,909.00 1,332,827.29 4,929,550.82 860,595.34 432,888.00 336,282.00 1,941,467.37 300,127.00 1,699,129.82 1,529,283.93 273,097.00 1,141,236.90 625,170.76 1,147,397.00 441,677.00 631,704.00 439,327.00 205,828.29 480,473.55 329,491.08 315,879.00 3,495,774.64 762,971.42 490,323.31 371,189.07 764,402.65 2,455,234.00 447,560.69

C-28

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
FederaJ Pell Gl'Vlt Prognun Direct Thomas Technical Institute University of Georgia Valdosta State University Valdosta Technical Institute Walker Tecbnicallnstitute Waycross College West Georgia Technical Institute
TRIO - EdllCational Opportunity Centm Direct Fon Valley Sliltc Univa1ity Georgia State Univa1ity Univa1ity ofGeorgja
Stale Studmt Inoeruive$ GranIS
1);=
Student finance Authority, Geor&ia ll:"Jgb; Student fill.lllCe Authority, Geortia
~College
Through: University ofGcorgia Research foundation University of Georgia
National Diffusion Network Direct University ofGcorgia
Special Education - PostsecondiUY Education Programs fOt Per$ons with Disabilities Through: Univa1ity ofTennessee DeKalb College
Special Education - Prognm fOt Severely DiJabkd Children
1);=
Georgia State University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPEJ'I,'UITURES

84.063
S
S 84.066
S
S 84.069
S
S 84.073
S 84 078
S 14.016
S

452,379.12 5,168,755.00 4,755,620.89
611,027.00 299,443.00 506,110.48 322,539.61 85,097,446.01
269,803.86 205,595.63 288,440.38 763,839.87
1,099,867.00 (2) 61,330.00 434,143,00
1,595,340,00
131,014,39
42,180,10
235,603.lS

C-29

0/ Stale georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FOr/he Fiscal Year ended June 30, 1996
Education, U. S. Department of
Harris Fellowships Direct Georgia Southern University Georgia State University University ofGeorgia Through: Georgia Tech Research Corporation Georgia Institute ofTechnology
law School Clinical E:<pcrience Program Direct Georgia State University
Fund for the Improvement OfP!lSlSCCOndary Education Direct Kennesaw State University Through: Georgia Tech Research Corporation Georgia Institute of Technology
Educational Research and Development Direct Education, Department of Through: University of Georgia Research Foundation University ofGeorgia
Minority Science Improvement Direct Albany State University
Rehabilitation Services - Vocational Rehabilitation Grants to States
Direct Human Resources, Department of
rough: Human Resources, Department of Athell$ Area Technicallnstitute
Through: Human Resources, North Carolina, Department of
Pickens Technical Institute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84,094 S
S 84.097
S 84.116
S
S 84.117
S
S 84.120
S
84.126
S
S

31,588.29 1,447.79
151,956.07 15,002.96 199,995.11
82,505,24
38,219.40 8,479.55 46,698.95
2,087.08 1,701,011.46 1,703,098.54
110,932.17
59,177,489.07 75<139l 302.00
59,195,334.98

C -30

0/ State georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
Rehabilitation Long-Tenn Training Direct Fort Valley State University University ofGeorgia
National Institute on Disability and Rehabilitation Research Direct Human Resources, Department of University of Georgia Through: University of Georgia Research Foundation University of Georgia
Business and International Education Direct Georgia Southern University Georgia State University
Public Library Construction and Technology Enhancement Direct Education, Department of
Training Interpreters for Individuals who are Deaf and Individuals who are Deaf-Blind Through: University ofTennessee 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 Direct Georgia State University University of Georgia Through: Chattooga County Board of Education State University ofWest Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.129 $
$ 84.133
$
$ 84.153
$
$ 84.154
$ 84.160
$ 84.161
$ 84.162
$ 84.164
$

25,374.64 402,532.29 427,906.93
124,468.90 98,195.04 32,410.61 255,074.55
35,739.06 12,420.21 48,159.27
539,744.00
7,280.83
166,345.41
357,411.86
128,925.40 1,568,190.73
1,488.15

C -31

SCHEDULE OF FEDERAL FiNANCIAL ASSISTANCE

FOf"lheFiscal YearEndedJuneJO, 1996
Education, U. S. Departmtnt of
Eisenhower Mathematics and Science: EducationSllIte Gnlna
Through: &!uClIlion, Department of Augusta Stale University Cllildren and Youth Serviees, Department of Georllia Southern University
Through: Floyd County Board ofEduClllion State University ofWcst Georgia
Through: Georgia Tech Rcsearch Corporalion Georgia ItlStitulC ofToc:hnoJocy
Throu&h: Paulding County Board ofEduelltion Slate University of We51 Geofila
ThrOU&b: Polk County Board of Edua.lion SIaIC University ofWcst Gcorgja
Throup: Spalding County Board of Educa1ion Swe UftivcrsityofWt$I. Cieorp.
Through: Uni\'~rsity of Georgia AIb.1ny Slate Unh'el'Sity ArmstrOllI Slate CoIIqe Cla)1on SUtt College Columbus Swe University Fon Valley SUte Uni~rsity Georgia College Georgia Southern Uni~rsity Georgia Soulll",-estem College Nonh Gcorgia College State University of West Georgia Valdosta State Uni,versity
lndcpendentl,.iving - Stale Grana Direct Uuman Resources, Dcpanmenl of
Special EdllCalion - Preschool GIWlU
orr",
Ed\Oca.ltOn. ()epanrnent of
Voationa\ Edlntion - Community Based Orpmations
orr",
EcftQlion, Dcpanment of Through; Education, DcpaJtment of
Technical and Adult EducatIOn. Departmenl of gh: Teclmical and Adult EdllQllon. Ocpar1ment of
West Georgia TecltllieaJ hUlLlute

eFD,
NUMBER

MONETARY L,<PNDITURES

84.164 $
$ 84.169
$ &4.173
$ 84.174
$ $

8,013.41 25,610.00 47 96.61
1.747.61 310.47
12,4S9.S4 10.011.30 2.100.13 47.859.62 121,240.23 25.868.35 128,194.&8 63,037.13 18.919.16 158,979.35 23,476.38 23,742.19 18.055.51 6,187.43 2,448,821.28
203.060.42
8.,590,196.29
14,621.91 24,529.80 24.529.80 63.6SS.51

NONMONETARY XPl'o"DITURES

C - 32

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
Rehabilitation Services -Independent Living Services for Order Individuals Who are Blind
Direct Human Resources, Department of
Te<::hnology Applications for Individuals with Disabilities Direct Valdosta State University
Special Education - Grants for Infants and Families with Disabilities
Direct Human Resources, Deparunent of
rou Human RWiuf&5;nepartffie"ii.t of Valdosta State nl~eM~
Drug-Free Schools and Communities - National Programs Direct Macon College Middle Georgia College
Byrd Honors Scholarships Direct Education, Department of
Safe and DrugFrec Schools - State Grants Direct Education, Department of Human Resources, Depanment of
or rough; Education, Department
9Jll!~~~~ X:QuthJ~~ices, Department of
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

eFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.177

S 84.180
S 84.181

152,427.96 207,539.13

S

6,992,496.82

40,242.51

I

S

7,032,739.33

84,184

S

53,949.35

8.192.73

S

62,142.08

84.185

S

772,500.00

84.186

S

8,491,437.51

..... , "" 1,325,752.91

81,891.04

J

S

9,899,081.46

84,187

S 84,190
S 84,)94
S

536,257,6) 30,051,00 29,573.47

C - 33

0/ State (jeorg.ia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S. Department of
Bilingual Education Training Grants Direct Georgia State University
Education for Homeless Children and Youth Direct Education, Department of
Graduate Assistance in Areas of National Need Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology
Women and Minority Participation in Graduate Education Direct Georgia State University
Even Start - State Educational Agencies Direct Education, Department of
Capital Expenses Direct Education, Department of
McNair Post-Baccalaureate Achievement Direct Georgia State University
State Program Improvement Grants Direct Education, Department of
Centers for International Business Education Through: Georgia Tech Research Corporation Georgia Institute ofTechnology
State Grants for Assistive Technology Direct Human Resources, Department of
Income Contingent Loan Program (3) Direct Abraham Baldwin Agricultural College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.195 $
84.196 $
84.200 $
$ 84.202
$ 84.213
$ 84.216
$ 84.217
$ 84.218
$ 84.220
$ 84.224
$ 84.226
$

70,278.36

716,913.25

133,494.37 33,975.30 167,469.67

10,200.00

2,366,572.62

304,521.00

90,933.13

661,386.24

239,491.92

730,338.83

-33,654.11

$

139,381.25

C -34

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, U. S, Department of
Rehabilitation Services - Independent Living Services for Order Individuals Who are Blind
Direct Human Resources, Department of
Technology Applications for Individuals with Disabilities Direct Valdosta State University
Special Education - Grants for Infants and Families with Disabilities Direct Human Resources, Department of Through; Human Resources, Department of Valdosta State Unjve~j
Drug-Free Schools and Communitics - National Programs Direct Macon College Middle Georgia College
Byrd Honors Scholarships Direet Education, Department of
Safe and Drug-Free Schools - State Grants Dircct Education, Department of Human Resources, Department of Through; Education, Department of Chj!!4slJJYlU~,Departmcnt of
Supported Employment Services for Individuals with Severe Dis.abilities Direct Human Resources, Department of
Christa McAuliffc Fellowships Direct Education, Department of
Bilingual Education Support Services Direct Education, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.177
S
84.180
S
84.181
S
S
84.1&4
S
S
84,185
S
84.186
S
S
84.187
S
84,190
S
84,194
S

152,427.%
207,539.13
6,992,496.82 40;142:51
7,032,739.33
53,949,35 8J92.73
62.142.08
772,500.00
8,491,437.51 1,325,752.91
81,891.04 9,899,081.46
536,257,61
30,051,00
29,573.47

C - 33

01 State (Jeorfjia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30. 1996
Education, U. S. Department of
Bilingual Education Training Grants Direct Georgia State University
Education for Homeless Children and Youth Direct Education, Department of
Graduate Assistance in Areas ofNational Need Direct Georgia State University Through: Georgia Tech Research Corporation Georgia Institute of Technology
Women and Minority Participation in Graduate Education Direct Georgia State University
Even Start - State Educational Agencies Direct Education, Department of
Capital Expenses Direct Education, Department of
McNair Post-Baccalaureate Achievement Direct Georgia State University
State Program Improvement Grants Direct Education, Department of
Centers for International Business Education Through: Georgia Tech Research Corporation Georgia Institute of Technology
State Grants for Assistive Technology Direct Human Resources, Department of
Income Contingent Loan Program (3) Direct Abraham Baldwin Agricultural College

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.195 $
84.196 $
84.200 $
$ 84.202
$ 84.213
$ 84.216
$ 84.217
$ 84.218
$ 84.220
$ 84.224
$ 84.226
$

70,278.36

716,913.25

133,494.37 33,975.30 167,469.67

10,200.00

2,366,572.62

304,521.00

90,933.13

661,386.24

239,491.92

730,338.83

-33,654.11

$

139,381.25

C -34

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Education, V. S. Department of
National Science Scholars Direct Fort Valley State University
Tecll-Prep Education Direct Education, Department of Througll: Crawford County Board of Education flint River Teellnieal Institute Through: Educatlon,1':lep'ari{rientQ Technical an~~~ll!tio",,~ent o[ Through.: Habersham County Board of Education Nortll Gcorgia Tecllnicallnstitule Through: Meriwether County Board of Education Flint River Tecllnieal Institute Through: Muscogee County Board of Education Columbus Tecllnicallnstitute Through: Randolph County Board of Education Albany Tecllnicallnstitule Through: Taylor County Board of Education Flint River Tecllnieallnstitute
Foreign Languages Assistance Direct Education, Department of
State Literacy Resource Centers Direct Technical and Adult Education, Depanment of
National Institute for Literacy Direct Human Resources, Department of
Rellabilitation Training - Continuing Education Direct Georgia State University
Rellabilitation Training - State Vocational Rellabilitation Unit In-Service Training Direct Human Resources, Department of
State Postsecondary Review Direct Student finance Commission, Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.242
,
84.243
,
$ 84.249
$ 84.254
$ 84.257
$ 84.264
,
84.265
,
84.267
,

952.00
3,261.904.16 15,808.12 31,965.06 15J)0000 27,749.38 10,000.00 20,269.17 4,093.87
3,386,789.76
68,231.01
24,092.60
3,247.62
80,224.73
230,335.02
75,283.71

C -35

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For lhe Fiscal Year Ended June 30, 1996
EduCl.tion, U, S. Department of
Federal Direct Studenl Loan Direct Albany SllIle University Columbus State University Fon Valley State University Georgia College Georgia Southern University Georgia State University Savannah State University Southern College ofTcehnology State University of West Georgia University of Georgia Valdosta State University
Goals 2000 - State and Local Education Systemic Improvement Grants Direct Children and Youth Services, Depanment of Education, Department of
Eisenhower Professional Development Stale Grants Direct Education, Department of University of Georgia fhrOugh: Edueal1on, Department of Corrections, Department Of !lirough~ UniversityofGeorgia Annstrong State College Kennesaw State Universily Macon College
_North Geor~a College
Public Charter Schools Direct .Education, Depanment of
Innovative EdlK:lltion Program Slfategics Direct Children lind Youth Services, Depanment of Education, Depanment of oug.h: EducatiOf!, Depanment of Corrections., De enlor

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.268
,
,
84.276
,
,
84.281
,
,- ,
,
84.282
,
84.298
,
,

5,950,870.32 5,914,960.88 11,872,389.60 6,234,233.48 28,443,853.00 42,093,597.40 6,116,723.95 4,065,810.64 10,631,501.00 56,959,159.10 23,616,559.00 201,899,658.37
30,220.77 1.739.743,05
1.769.963,82
4,672,072.75 98,421 23
4,402.67 12,389.34 87,530.48
23.75 3,665.18 4,878,505.40
220,000.00
23,053.00 9,394,048.29
10,302.95 9,427,404.24

C-36

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For lhe Fiscal Year Ended JUM 30, 1996

CFD' NUr,fBER

MONETARY EXPENDITURES

NONMONETARV EXPNDrruRES

Education, U. S. Department or

Other Federal Assistance

OF'

Direct Georgia College

s

952,00

Georgia Institute of Technology

64,670,00

Georgia Stale University

417,142.14

Savannah State University

48,784.79

University of Georgia

626,223.53

Through: Alabama A&M University

Fort valley State University

13)90.37

Through: Douglas MacArthur State Technical College

Bainbridgt: College

10,080.13

lltrough: F"lJ'St Di$lriet Re&ionaJ Educational

Service Agency

Armst:rortg State College
Through: Geoti.i'- Tech Resureh Cotpomion

1',605.38

Georgia institute ofTechDoIogy

66,071.84

gil: Go.Trnor, OIT"Klt or the

--~ Through: N<rtionaI Caller on Posuecondary Teaching

6,494.43

Georgia State University

356.39

Through: National Writing Project Corporalion

Fort Valley State Univenity

2,7S3.46

Kc:nnesaw State University

9,160.42

Through: Nor1h Georgia Regional EdllClltiol\ill

Service Agency

-------------;;l,.O;.. rFoeun~VUalnleivyeSrstiattye

universi',Y;.ofGoorgia

~_......

;;.;;7.9 .- - - - - - - - -_ _. . .

... .. tateUniversi QfWe.st eOTi~;.'::---~-----~----~-------'",'".,4".""-- ----~----

Through: University ofNor1h Carolina

Columbus State University

68,227.15

$

1,366,686.82

AGENCY TOTAL ESS: INTRA-REPORnNG ENTT71' ACTIVIIT

s

752,695,723.51

s

1,428,177,358.19

30,583,565,83

0.00

NETTOTALAGENCY

s

'"""".1"12",""'"."::.. S_-,1~.4~28~,,"n~)~s~.=.29<..

C -37

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, /996
Energy, U. S. Department of
State Energy Conservation Direct AlbanyTeclmicallnstitutc Bainbridge College Environmental Facilities Authority, Georgia Floyd College Georgia State University Natural Resources, Department of University of Georgia 1Through: Environmental Facilities Authority, Georgia Transportation, Depanmem of Through: Governor, Office of the Community Affairs, Depa.nmcnt of Forestry Commission, State Soil and Water Conservation. Commission, SllIte
Weatherization Assistance for Lowlncome Persons Direct Environmental Facilities Authority, Georgia
Basic Energy Sciences - University and Science Education Direct Geor8ia SUl.le University North (ftorgia College Through: Georgia Tech Research Corpontion Georgia Institute of Technology Through: University of Georgia Research Foundation University of Georgia
Energy Extcnsion Service Through: GO~'emor, Office of the Agriculture, Departmel1t of
S~te University of West GeorRia
University Coal Research Throogh: Georgia Tech Research Corporation Georgia Institute of Technology
Conservation Research and Development Direct Natural Resources, Department of
Renewable Energy Researeh and Development Through: Georgia Tech Researeh Corporation Georgia Institute ofTcchnology

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

81.041 $
$ 81.042
$ 81.049
$
$ 81050
$ $ 81.051 $ 81.086 $ 8l.081 $

6,835.00 51,023.00 408,808.00 (2) 39,071.57 43,392.84 220.208.00 47,65000 20,000.00 257,095.49 20,891.86 17,388.29 1,132,364.05
2.520.710.00 (2)
109,853.06 17,108.58
911,454.82 1,705,993.76 2.744,410,22
14,981.15 10,721.95 25,709.10
151,212.91
100,000.00
56,511.56

C38

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year ndedJune 30. /996
Energy, U. S. Deplrtmenl of
&vironmcntal Restonlion
""'"GeorIiIo InsliMt ofTechnoloCY
Nuclear Ener&Y. RcaetoI' SyslemS, Developmcrtt,
and TeclmoJo&y Direa Governor. Omce of the
NalionaJ Industrial Competitiveness Uuouch Energy,
Environment, and Economics Did NalunJ Rcsoun:a, 0eparImcnt of
Other Fedcm Auistanu Did Fort Valley Stale UnivCfSity Gcortialnstitute ofTcchnolOl)' GcorJia Southern UnivCfSity SaYUlnah Stile Uni~rsity SkitlaWllY ll15tilute of Qc:eanos.raphy Valdosta State University Through: Geotaia Tech Research Corporation Georaialnstitute ofTcchnolOl)' rough: Go,el1lOf. Office of the Geolii. Sou1llcm University, Through: Medical College ofGeoraia RcStllCh In~litule Medical College of Georgia Through: Nalionallnstitule for Pelroleum and Eneri)' Research Fort Valley Stale Uni~rsity Through: University of Georgia Rescarch Foundation University of Georgia Through: Xavier Uni~rsity Sava,,"ah Stale Uni~rsilY
AGENCY TOTAL
ESS: IN'TRA-REPOR11NG ENTITYAC11JI1Tf
Nt:TTOTALAGENCY

ernA
NUMBER

MONETARY EXPEI\'DITURES

NONMONETARY EXPENDITURES

SU)92 S
11.095
S 8L105
S OFA
S

1904.117.90
551.70.90
231.663.00
101,676.55 36',426.27
52,94\.00 147.400.64 347,45U5
32U5 4,562,686.99

43,272,44

22,716.35

11.993,011.16

733.72

S'

'"'"'66=,84,,,',,.',,-'

s

26.082,415.99

371,2&0.07

S' _ _-",,~,7~'~',~Jl~,~.92,,-

C_39

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended JUlie 3D, 1996
Environmental Protection Agency
Air Pollution Control Program Support Dire(;t Natural Resources, Department of
State Indoor Radon Grants Dirc<:t Human Resources, Department of
Water Pollution Control- State and Interstate Progrtlm Support
Dire<:t Naturtll Resources, Department of
Sute Public Water System Supervision Direct Natural Resources, Dcpanment of
Sute Undcrground Walcr Source Protcctlon Direct Natural Resources. Department of
Water Pollution Control. Lake Restoration Cooperative Agreements
Direct Kennesaw State University Natural Resources, Department of
Construction Management Assistance Dircct Natuml Resources, Department of
Watcr Quality Managcment Planning Direct Natuml Resources, Department of rOUf!: Naluml Resources, Departmenl or Foresuy Commission, Stale Soil and Water Conservalion Commission, State rough: North Georgia College Savannilh Stale University
Capitalization Grants for State RevolvinS Funds (3) Direct Environmental Facilities Authority, GCOfgia Natuml Resources, Dcpanmem of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

66001
,
66.032
,
66.419
,
66.432
,
66.433
,
66.435
, ,
66.438
,
66.454
,
,
66.458
, ,

1,930,765.00 4,400.00

2,364.275.00 1,118.982.00
67,SS5.oo

9,340.17 267)53.00
276.693.17

277,641.00

248,197.00
20,299.99 267,766.59
917.76 537.1lIl,34

10,298,026.00

,

167,642,606.00

11,431,716.14

21.729,742.14

,

167,642.606.00

C-40

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Environmental Protection Agency
Nonpoint Source Implementation Grants Direct Natural Resources, Department of
Wetlands Protection - State and Tribal Development Grants Direct Natural Resources, Department of Through: University ofGeorgia Research Foundation University ofGeorgia
National Pollutant Discharge Elimination System Related State Program Grants Direct Natural Resources, Department of
Environmental Protection - Consolidated Research Through: University of Georgia Research Foundation University of Georgia
Air Pollution Control Research Direct Georgia Institute ofTechnology Through: University ofGeorgia Research Foundation University ofGeorgia
Solid Waste Disposal Research Direct Georgia State University Through: University ofGeorgia Research Foundation University of Georgia
Water Pollution Control- Research, Development, and Demonstration
Direct Georgia Institute ofTechnology Skidaway Institute ofOceanography
Through: University of Georgia Research Foundation University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

66.460 $
66.461 $
$ 66.463
$ 66.500
$ 66.501
$
$ 66.504
$
$ 66.505
$
$

1,317,517.00
223,479.00 38,425.42
261,904.42
226,785.00
40,063.08
2,623,424.04 710,480.77
3,333,904.81
32,756.73 80,928.98 113,685.71
139,255.32 333,898.41
943.15 474,096.88

C -41

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE C-42

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, /996
Environmental Protection Agency
Environmenlal Education Granl$
();""
Georgia SlalC Univmity
Other FcOcfal MsisWlCe Direcl Kennaaw SlalC University Natunl Resowtts, Dtparunmt of Univmity of Georgia
ThrouJh: Gmriia Tech RCSCIIdl COfJlOfIlion Gcor&ia IlI$lituteofTcchnoIogy
Thro\I&h: Medical Collqe ofGeorgia RcseuclIlnstitulC
Medical CoIlqe ofGeorP
Through N"ura! Re$Oll:e$. Depanment of Kcnl\C$llw Slate Univefllty North Georgia College
rouen: Universi\}'ofGOQr&ia NortbGcot . Col...
Through: Univcrsity ofGcorgia ReseaKh Foundation UniVCfSity ofGCO/lia
Through: Virginia Waler f'rojecl,lror:orpol1llCd Community AlTairs, Department of
AGENCY TOTAL
FSS: INTRAREPORTING EN11TYACT/VITY
NET TOTAL AGENCY
Eq!lal Employment Opportunity Commission
Employment DiSCfimination Tille VII of the Civil Rights Act of 1964
();""
Governor, OffICe of the
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY I:XPENDrnJRES

66.9~1
S OfA
S
S S S

413.11

10,.302.0
~I,30S.00
3,079.48
2,S42,IU.60
18,~U.19
~9,4~8.93
41,112.21
6,623.11
1S1,231.62
6,396.14
2.897.~O7.97

42,646,328.02

S

167,642,606.00

396,838.65

0.00

42.249,489.31

S

161,642,606.00

30.001 S S

133,099.41 133,099.47

C -43

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

Forihe Fiscal Year EndedJune 30, /996
Federal Emergency Management Agency
Hazardous Materials Trnining Progrnm for Implementation of the Superfund Amendment and Reauthorlution Act (SARA)ofI986
Direct Governor, Office of the
Hazardous Materials Assistance Program Direct Governor, Office of the
Flood Insurance Direct Albany State University
Community Assistance Program - State Support Services Element (CAP-SSSE) Direct Governor, Office of the
Civil Defense - Stale 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
rough: OOV&tror;omce ofthe
Human Resow-ees, Department of Public Safety, Department of Technical and Adult Education. Department of ough: Technical and Adult Education, Department of
AI"'" TC(bnicalinstiwle
Hazard Mitigation Assistance Direct Governor, Office of the State UniveP.iity of West Georgia
Hurricane Program Direct Governor, Office of the

eFOA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

nOll

,

65,611.96

83.012
,

7,094.28

83.100
,

1,6011-00

83.105
,

100,000.00

83.503
,

881,907.80

83.505
,

71,810.45

83.516
,

35,471,709.36

2,368,591.95 50,000.00 542.00

2,170.00

I

,

37,893,013.31

83.519
,
,

7,859,986.33 12,233.19
7,872,219.52

83,520
,

59,002.01

C44

0/ Stale geQrgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended Junt 30, /996
Federal Emergency Management Agency Earthquake HlIZllrds Reduetion Grants Direct Governor, Office of the Emergency Management Institule - Field Training Program Direcl Governor, Office of the Stale and Local Emergency Management Assistance Olher Assislallce Direct Governor, Office of the F..::ililies and Equipmenl
0;""
Governor, Office of the Emergency Managanent - Stale and Local Assistanee
Dire<:( Governor, Office of the
AGENCY TOTAL
'$: INTRA-REPORTING ENTITYA
NET TOTAL AGENCY
General Services Administration Donation of Federal Surplus Personal Property
o;~
AdminislJ111ive Services, Department of Olher Fedenl Auisl100e
I>=< Ull,venity ofGeorgia
AGENCY TOTAL

eFDA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPEJIo'DITURES

83.m
$ 83.S28
$ 83.m
$
usn
$ 13.S34
$
$
$

32,770.'11 120,269.80
ISS,I44.42
25,.500.00
1,312,091.47 48,661,035.43
2,421,303.95 46,239,731.48

39.003
OFA $ $

$

IB,BSI,26O.00

131,173.92

83lJ73.92

$

18,851,260.00

c -4S

0/ State georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Health and Human Services, U. S. Department of
Public Health and Social Services Emergency Fund Direct Human Resources, Department of
Special Programs for the Aging - Title VII, Chapter 3 Programs for Prevention of Elder Abuse, Neglect, and Exploitation
Direct Human Resources, Department of
Special Programs for the Aging - Title VII, Chapter 2 Long-Term Care Ombudsman Services for Older Individuals
Direct Human Resources, Department of
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
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 VII, Chapter 6 Allotments for Vulnerable Elder Rights Protection Programs
Direct Human Resources, Department of
Demonstration Grants for Residential Treatment for Women and Their Children
Through: Thomas County MHMRSA Area Services Valdosta State University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.003 $
93.041

6,138,286.26

$

$ 93.042
$ 93.043
$ 93.044
$ 93.045
$ 93.046
$ 93.048
$ 93.049
$ 93.102
$

82,925.55 75,796.50 158,049.00 6,603,643.07 10,127,497.16 291,090.25 800,026.20 12,563.66 70,920.92

206,250.00

C-46

0/ State georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Health and Human Services, U. S. Department of
Food and Drug Administration - Research Direct Agriculture, Department of
Maternal and Child Health Federal Consolidated Programs Direct Human Resources, Department of
Biological Response to Environmental Health Hazards Through: Medical College ofGeorgia Research Institute Medical College ofGeorgia
Applied Toxicological Research and Testing Direct Georgia State University
Project Grants and Cooperative Agreements for Tuberculosis Control Programs
Direct Human Resources, Department of
Grants for Preventive Medicine and Dental Public Health Through: Georgia Tech Research Corporation Georgia Institute ofTechnology
Acquired Immunodeficiency Syndrome (AIDS) Activity 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 ofTechnology Through: Medical College of Georgia Research Institute Medical College of Georgia Through: University of Georgia Research Foundation University ofGeorgia
Mental Health Planning and Demonstration Projects Direct Human Resources, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.103 $
93.110 $
93.113 $
93.114 $
93.116
$ 93.117
$ 93.118
$ 93.119

51,551.54 217,480.41 152,634.47 163,472.17

2,780,257.90

$

3,534.38

17,587.41

$ 93.121
$
$ 93.125
$

216,212.94
51,060.61 624,486.70 132,515.57 808,062.88
208,697.46

93,621.12

C-47

Stale of georgia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, 1996
Health and Human Services, U. S. 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 ofGeorgia
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 ofTechnology
Grants for State Loan Repayment Direct Regents of the University System ofGeorgia, Board of
Research Facilities Improvement Through: University ofGeorgia Research Foundation University ofGeorgia
Human Genome Research Through: Georgia Tech Research Corporation Georgia Institute ofTechnology Through: Medical College ofGeorgia Research Institute Medical College ofGeorgia Through: University ofGeorgia Research Foundation University ofGeorgia

CFDA NUMBER

MONETARY EXPENDITURES

93.127 $
93.130
$ 93.139
$ 93.150
$ 93.153
$ 93.161
$ 93.165
$ 93.167
$ 93.172
$
$

275,596.36
139,426.06
37,894.00
474,000.00
481,397.48 312,289.86 113,000.00 -26,045.08 105,231.73
16,887.73 4,470.19 126,589.65

NONMONETARY EXPENDITURES

C-48

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fj!cal Year Ended June 30, 1996
Hulth Ind Humin Services, U. S, Deplrtment of
Research Related to Deafness and Communication Disorders Direct Geortia Slale University Through: Medical College of Georgia Research lrultitute Medical College of Geor&ia
Disabilities Prevention Direct Human Resources, Dqwtrnent of
National Rc:seaTdJ SelVices Awards Direct University of Georgia
Allied Heallh Projecl GranlJ Direct Medical College ofGeorgia . Medical ColJc&e o(GclqiI DaltonCol1qe
Childhood Lead Poisoning Prevention Projects Stlte and Community-Based Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children
Direct Human Resourccs, Department of
Family Planning Services Direct Human Resourccs, Department of
Substance Abuse Trcaunent Conference Grants Direct Human Resourccs, Department of
Community Hallh Cenlers Direct Georgia Soulhem University
Heallh Services Research and Development Grants Direct Human Resouroes, Dcpanment of Through: University of Georgia Research Foundation University of Georgia

CFDA NUMBER

MONETARY EXPENDITURES

93,113
,
,
93.184
,
93.186
,
93.191
,
,
93.197
,
93.217
,
93.218
,
93.224
,
93.126
,
,

118,18\.66 21,218.74 140,00).40
274,133.67
9,943.15
96,940.08 24,709,96 121,650.04
481,474.66
6,131,878.79
100,002.00
9,760.89
953,051.76 16,237.36
969,289. J2

NONMONETARY EXPENDITURES

C -49

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FortM Fiscal Year EntkdJImt! 30, 1996
lIullb lad HumID ~n'icrs, U. S. Dcplrtmcnt or
Menlll Health Research Gmltll Direct Georgia State Univmity Throu&h: Medical Collqe ofGeorcia Research lrullilllte Medical Colle~ ofGeollia ThrOll&h: University ofGCOfiia Re$eln:h FOIlndalion Univef$ity of Georgia
MiCJVII Health Centers Gnntll 0;"" Hllman Resources, Department of
Childhood lmmunil.ation Gnntll (4) 0;"" Human Resources, Oq:IIrrment of
A1eollol NatioI1a1 Researc.h Service A-n!s for Rescan:h Traininl
Throup: Univel'Sity ofGeorpa RCSCIfCtI Foundation
University ofGeOf&ia
AkohoI Researdl Prognms Throu&h: Medical CoIle~ ofCieor&ia Research Institute Medical College of Georcia Throu&h: University of Georgia Research Foundation University of Georgia
DNa Abuse Reseafth Prognms Oi=<
Gcor1:ia State University
Kennesaw State Univenity
Throu&h: Georgia Tech Rt:searth Corporation
Georgia Institute of Ted1noIosY
Thtot.t&h: MCl1ical CoIIqe ofGeorP Raean:h lnstitme
Medieal College ofGeorP
Mental Health ReseatdI CareefJScienilst Development Awards
1hrou&h; Medical Collcae ofGCOf&ia Research lnstiNte
Medical College ofGeorJia Throuih: Univef$ity ofGeorJia RC$QI'Ch FoondatiOD
University of Georgia

ernA
fI,'UMBER

MONETARY EXPENDIT1JRS

NONMONETARY EXPENDIT1JRS

93.242 $
$ 93.246
$
93-'"
$ 93.212
$ 93.273
$
$ 93,279
$
$ 93.281
$
$

550,949.16 66,298.01 315,874.12 933,122.49

119.160.11

9,S26,506.15

$

21.195.031.50

121,517.54
242,S69.79 S63.211.14 U05,780.93
45,769.09 84,476.16 400,&67.47 116,713.61 717,126.40

0.01 92,168.33 92,168,34

ColO

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, /996
Htlltb Ind HumiD Services, U. S, Deputment of
Mental Health National Resean:h Service Awards for Research Tntining
Direct Georgia State University
Centers for Diseue Control and Prevention -Investigations and Technical Assistance
Direet Human Re5OIlrt:e!, Department of
Through: Medical College ofGeorllia Research Institute Medical Collelle ofGeorsia
Nurse Practitioner and NUI"$C-Midwifery Education ProllBffiS Direct Albany State Univmity Georgia Southern University
Compallltive Medicine Program Through: University of Georgia Research Foundation University ofGeorgia
Biomedical Research Suppor1 Direct University ofGeorllia Through: Georgia Tech Re$C8rCh Corporation Georgia Institute ofTechnology Through: Medical College ofGeorg.a Researeh Institute Medical College of Georsia
Health Professions Student Loans. Including PrimlUy Care LoansILoalls for Disadvanta8ed Students (3)
Direct Medical College of Georgia
Professional Nurse Tntineeships Direct Albany State University Georgia Southern University Georgia State University Medical College ofGeorgia Valdosta State University

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.282 S
93.283 S
S 93.298
S S 93.306 S 93.337 S
S 93.342
S 93.358
S
S

10,772.50

1,975,028.48 13,532.09
1,988,560.57
263,90250 227,776.60 491,679.10
54,837.55
18,733.00 2,210.85 48,195.97 69,139.82

-5,431.00

S

23,655.00 53,137.00 139,297.24 25,347.00 32,512,00
273,948.24

4,485,344.44

C -51

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For'~ Fiscal r~QI' EndedJ/.lM 30, 1996
Hultll a.d Huma. Sel"Yice:s, U. S. Df:panmeat.r
NW1e TBininllmprovement - Sped.1 Projects Direct Gcor&i, Southem Univenity Medical College ofGeo!1i.
NUI'Ilnl Resetreh
'"""MediaJ CoIqe ofGeor)iI
NUl'IinaStudenll..oMs (3)
'"""AbnhIm Baldwin Agicu.ItwaI ColJqe
Albany St.u: Univmity " -"'" Coilq< Bnanswict Collcgt
a.yu.n State Collqr:
Cohlmbus State Uniftnity Dd<>l. Coilq< Geor)iI. ColJqe
Gcof1iI Southwestern Collc:p:
Odon Col""
Kennc:saw Swe Uniftnity MICOII Collqe Medic&l College OfGcorli. South Georgi, Collcp: V,ldostJ. State Univcnity
Biomedical RcscatdI Ted!nology Throup: Georgi. Ted! Rescatch Corporation Gcortia Institute nfTcchnoIoIY Thloup: University ofGcortia R.escan:h Foundation
UniYCnity ofGcor&ia
Minority Biolllcdieal Researdl Suppon
'"""Albany $we: University
Grants (or Graduate Trainin& in Family Medicine
'"""Medical College ofGcorI"

ernA
NUMBER

MONETARY EXPENDrnJRS

NONMONETARY EXPEJIo1)ITURES

93.)59 S S
93.361 S
93.364 S
S 93.371
S
S 9J.l75
S 93.319
S

170,324.41 126.BO
170,651.21
13,611.51
S -5,956.93 (I)
1,019.47 (I) 626.n (I) 117.60 (I)
-10,100.00 (I)

-2,679.22 (I) 24.17J.04 (I)

6.570.73

S

6,400.03 1,420.465,57 1,426,165.60

149,.395.75

106,269.01

91,602.04 (I) 26,653.91 (I)
5,665.46 (I) 3,130.69 (I) 26,4U.30 (I) 5,186.10 (I)
5,.370.11 (I) 46.162.41 (I)
1.716.OS (I) 1,131.21 (I) 2,905.11 (I) 1,026,072.46 (I) 39,076.20 (I) 1l,076.59 (I)
1.300.572.71

C- 52

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FCN" t& Fiscal Year Ended June 30, 1996
(lultb and Human Services. U. S. Ikpanmcnl of
Academic Resealdl Enhaneement A\\-wd Dirtd SllIte Univenity of West Georgia Through: UnivcnityofGeorgia Rcscateh Foundation University ofGrorgia
Cancer Cause and PreventiOl'1 Reseasc.h
o;~
GeorJi.a State Univmil)'
Throup: Georgia Te.:h Reseama COfJIOfUion
Geor&.ia lDstibite ofTechnolo&Y
Cancer Tre:wnent Resear<:h
~
Geof&ia State Unillenity
Cancer BioIocY Rcsearth Thn:Ju&b: Univenity ofGoorgia Rcsc:ardl FOl&Ildation University ofGa;qia
Cancer Rcsearc:h Manpower Through: Georgia TcdJ ReseafCJt CorponItion Georgia Institute ofTcehnolOlY
Cancer COI'1lfol Dircec HUnII1I ~, Department of Through: Medical College ofGeofr,ia R~ Institute Medical College ofGeorgi.a
Abandonecllnfanu
o;~
Human ~ DeJ-rtmmt of
Family PYe:seJvation and Support Servicz5
~
Human ~ Depanrnent of
Family Support PIymcnts 10 States Auistanoe PI)'IIlClllS
o;~
Human Resoutu:s. Depanrnent of

ernA
NUMBER

MONETARY EXPENDmJRES

93.390


93.393


93.39S

93.396

93.391

93.399


93.5SI

93,SS6

93.S60


2S,9S2.31 32,.243.19 SI,I96.20
102.I9S.27 1.631.-47
100t.S33.74
17.730.66
61.,246.13
3,624.99
4,3SS.SI 236,701.02 241,0S6.60
449.99'9.9S
3,6U,S6S.16
322,102,OU03

NONMONETARY EXPENDITURES

C-S)

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For 1M Fiscal Year ENUdJW'Ie 30, /996
He-lib Ind Humin Services, U. S. Department or
Job Opponunitics and Basic Skill5 Tmnina 1>"" HumIIl Re5outces, Oqlartment of
-Through: Candler Count)' DFACS S...'ainsboro TtdlnM::allnsti1Ule c.ammunity Atrain, Dt:pw_ fll
Through: Emanuel County DFACS SWlinsboro Tcdlnicallnstitllte . I ' - Raouras.~01 AdleDI Ala TecIInIcIIlJIItitam AupIII. TocbDlcallaltitllle Bea HilI-lrwin TocbaicallnstiNto CIrroII TccIuIlcaJ IDIlilUrc
eoo. Valley Tecbaicallnslilule
fliatlUvcrTcdDkaI ~ 0rifIiIl Tocbaic:IIlaItiaR "-toiOCorP Tedlaical _ _ ~ TecbIliclllJlldlule NiddIe 00cqiI Todlak:a1 ....... HordI Gtltqja TeeMic:IIlnstiaIlI: North Wcoo Ta::t.aIlaItiI*
Opc:dlet Tc:c:bnicII ra.m.
0b:fi;uc:G:e TcdlnicaIltIIliMe Pictcns TedInicIIlnsbtaIe Soldhcul:cm Ttdlnicallnstilult Ttdlnical and Adull Educalicxl. J)qlWnaat of Tbomu Tcc:hnialllnstJtuIC Valdosta Tcchnicallllllitute
...WalWTechnkallDaiMe
Through: Jenkins County DFACS S~ Technical.lD$titlite
ThrouJh; .JobnsOtl County DFACS S...'&insboro TccMicallnstituIC
;n.oap: Tcd:IIic:aIllId AdaIlJidllCldoft, DepnnmI or
~Tec:MaI aDI:uIe ..... AlaTa::t.aI~ SlDckmil TedWcaI ~ -..SwaiIIIboro TcdlnicII1nstitJIIe Through. Tructlen County DFACS Swainsboro Techniellinstitute

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

9).561
S
S

22,760,114.1S
26.117.4&
IS 11.00
7,99'2.24
12,J06" 71,212.61 41,279.56 79.5)9.10 52.322.35 1S,,981.01 11,771.64
.......'" 46,170..&4
105,311.99
"-"'.02
7,010.77 "'730.17 26,197.64 10,219.&1 51,069.89 417,017.92 ISO,314.91 34,952.54 17,616.37 S:JfIJ.
15,6&0.34
4,036."
)1,473.17 211.17l..39
1,717.71 , '14.91
4,036.&9
24,687,2&7.29

c ..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For tJle Fiscal Year EndedJune 30, 1996
Health and Hum.n Services, U, S. Dep.rtment or
Ctllld Suppon Enforcement Direct Human Resources, Depanment of
: 1fuman RaOurces. DeparbliGll of
JudiciIJ BtalICh
State Legalization Impact AuisWlCe Grants Direct Human Resources, Depanment of
Refugee and Entrant Assistance State Administered Programs
Direct Georgia State Universil)'
.... -'" Human Resources. Depanment of
&It: HIIll'IIIl Resources. DcpartmenI 01
Lowll1oCOme Home Enetgy Auistance Direct Environmental Facilities Authoril)', Georgia Human Resources, Department of
CommuniI)' Services Block Grant Direct Human Resources, Department of
CommuniI)' Services Block Grant Discretional}' Awards Through: National Collegiate Athletic Association Fort Valley State Universil)' Georgia College Through: Virginia Water Projeet, Inoorpol1lted Community Affairs, Department of
CommuniI)' Services Block Grant Di$Cretional}' Awards Community Food and Nutrition
Direct Human RCSOIlrces, Department of
Emergency Community Services for the Homeless Direct Human Resources, Department of

ernA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.563
,
,
9J.S65
,
93.566
,
,
93.568
, ,
93.569
,
93.570
,
,
93.571
,
93.572
,

58,694,879.18 MO.092.91
59,544,972.09
357,744.76
78,621.71 6,220,881.79 2,362,421.67 8,661,925.17
1,896,055.00 (2) 10,569,577.66 12,465,632.66
10,716,172.00
59,007.15 58,810.01 13,343.S2 131,160.68
125.536.00
S26,1S4.09

C- SS

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, 1996
Health lad Humid Suviccs, U. S. IHpartmta. or
Child Care rOt' Families At-Risk ofWtlfare Dependenc)'
1>_
Human RCSOIII1:eS, Department of
Child Care and Development Block Grant Direct Gainesville College HUIIIIII Remurces. Dcparunem. of VaIdo$ui Swe University
Throupa: 0e0rP Child Care Council
Fon Valley Swe University Macon Tedlnic:allMtlMe
~: Human Raourccs. Deputmcnl: 01 AIbIny State Uaiversily
Aibut)' Tedutic:allnItiWle Columbus Swe UniYmity
......."""" fliat RiverTecbnicailnstitute
OIiebNbe TeduIk:.I1nRitutc SMimboro TccbaicallDstittR
Empowenncnt Zones Propam
1>_
CommWlity Affail'5, Department of
Slate Court Improvement Prosram Direct Judieial Brandl
""" Son
~
EOucation. Oeparullent of o-p Col\q;le
Gcl:qia Swe Unimity Throu"': Ninth Distria. Opportunity, Incorporated
G.inesville Coliese Through: University ofGeo'1i. Research Foundation
Univenity ofGeorai.
Child Welfare Re$eart:h and Demonstntion
~
Univm;ity ofQeorP
Child Development Auociate Scholar$hips
1>_
Georgi. State Univenity

eFDA NUMBE.R

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

9]574

93.575


9].SlS

93.586

9].600


93.608

9].614


2,423,04].61
44,12&.74 2&,]62,359.00
1)11.74 43,001.22 36,36652 52,,410.34 2,,168.35 49,36S.lS 14',432.10
214.12 , ....9.11 41,46721 21,160,200.66
11,454.604.00
77.401.60
14&,7&0.50 14,S1I.lS 239,07U2 21.41S2S 1]9,OOS.78 512,868.70
67.122.2
]9.345.09

CS6

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

Far the Fiscal Year Ended June 30, /996
Hnlth and Human Strvites. U. S. Dtpar1ment or
Developmental Disabilities Basic Support and Advocacy Grants
Direct Human Rcsoura::s, Department of UniYel'1ity ofGcorila
or : &man R.esoUn:es, DepIrtrnent
Stale Unlvers
Developmental Disabilities Projects of National Significance Direct Univenity of Georgia
Developmental Disabilities University Affiliated Programs Direct University of Georgia
Child~n's Justice Grants to States Direcl Human Re$Ilura::s. Department of
Child Welfate Services State Grants Dirttl Human Resources. Department of
Adoplion Opportunities Direct Human Rcsoura::s, Department of
Temporary Child Cate and Crisis Nurseries Direct HullWl Re$Ilura::s, Department of
FosluCafe Title IVE Direct Human Resources. Deparlmcnt of
&b; Human Resources, DepIrtrlIr:nt of udicial BJanth
Adoption AssisWlee Direct Human Rcsoura::s. Department of
Social Services Block Grant Dirc:et Human Resources, Department of

ernA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.630
S
S 93.631
S 93.632
S 93.643
S 93.645
S 93.6S2
S 93.656
S 93.6S1
S
S 93.659
S 93.667
S

1.669,020.90 228,546.46 92023
1,898,487.S9
118,691.98
363.689.74
286,701.44
6,881.639.15
99,356.77
394,000.00
24,514,020.01 7-"'.50
24,591,30S.S1
4,829,157.S1
61,02S,902.S4

C 57

SCHEDULE OF FEDERAL FINANClAL ASSISTANCE

For tM FiscoJ Year EndedJlIM 30, /996
lIulth ud Humaa Servicu. U. S. Ikpartmeat of
Child Abuse and Neglect Stitt Grants DilllCt Human Resources, Department of
Family Violence Prevention and Serv~Grants to Stites and Indian Tribes
Direct HullWl Resources, Department of
Community-Based Prevention Program
_eo.._ 0;"" HIlIl'WI Resoura:s, Depanrnent o(
Grants to Swes (or Planninl and Devdopment of
0;"" HIlIIIlIIlI ~ Ilql&rtmerlt. of
. a - RcIoun;les, ~ or
TceIIaieaI1ItIliuc
Independent Uvinl Direct lIuman Resources, Department o( .
Medicare -llospitaJ II1$UI'lIllll: Direct Human Resources. Department of
&It: Hwnan R.csourccs. Oeparunc:nt: of
"
Stlte Medkaid Fnllud Control Units 0;.,., lnYeStiption, Ge<qia Bureau of
S~ Surwy and Cenifx:ation ofHcalth Care Providers and Suppliers
0;"" HlllIWI ~ DqlartmeItt of Medical Auiswx:e, Departmalt of

ern,
I\1JMBER

MONETARY Xl'ENDITUJlS

NOl'l"MONETARY EXPENDITURES

93.669

93.611

93.612

93.613


93,614

93,173


93.115

93.m



584,465.41
551,020.81
lU,25l.oo
3}4,612.55 15.ooo.G4
).49,6l2.59
1,146.213.97
2,121,011.55 7S,207.J5
2,805,224.90
1,842,883.25
658.138.46 2,061.171.63 2,121,010.09

SCHEDULE OF FEDERAL FINANCIAl. ASSISTANCE
c- S9

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FOI'tM Fiscal YeM ENhdJune 30, 1996
HelUblad Hllmla Sen-Ices, U. S. Department of
Luna Discucs Rcsean:h 1lIruu&h: Medical Col. ofGooftjl RC:SCal'th Institulc
Medical Collect ofGooftjI
Tbrouab: Univmity ofGeolgil Research FoundItion l/niveQity ofGeorP
Blood DiscIsc:s and Rcsoura::s Rcscarch
""'"Gcor&iI. Soulhem Univmity
Through: Georail Tcdl Researdl Corpomion OeorJil.lnstitulc of Technology
Through: Medicf,1 Collep ofQeorail ReswclIlnslitute Medical Colleae ofGeorp
Arthritis, MusculoskdetII and Still Diseues Research
llvvu&h: Medical Collect ofGeoraia Resa.rdllnslitur MedieII Coli*, ofGeor&ia
~: Univenity ofGeor&ia Raeardl founr;Wion
UnnersityofGeor&ia
Di.abetes. EndocrinolOlD' II1d Metabolism Research
Through: MediCI! Collqe ofGcorJia Research Institute
Medical CoIleae ofGeorJi. ThrouJ,h: Univenity ofGelxgia RC:SCal'th Foundation
University ofGeorgia
Diaestive Discuet and Nutrilioa Researdl
""'"Geor&ia $we Univmity
Throup: Medical CoIJeee ofGeor&ia Researdllnstitute Medical Collqe ofGeorJia
Throup: Univmity ofGeorgia a-dI foundation University of Georgia
Kidney Di$Cl$e$, UrolosY and Hc:matology Researeh Through; University ofGelxgia Research foundation Univenity ofGeorgia
OiniCl! ReseIIdl ReWed 10 NeuroIoc.iCI1 Distll'dm lbfou&h: MediCI! Collect of Georgia R.t:sard'Ilnstitute
Medical Collqe ofGecqia

CFDA NUMBER

MONETARY EXPENDITlIRIS

NONMONETARY EXPENDITURES

93.13' S
S 93.139
S
S 93.146
S
S 93.141
S
S 93.141
S
S 93.149
S 93.'S3
S

606,07US 2U,102.0 194,I1S.9'
n,276.9S 201,616.92 l,21S,IIS.06 3,44S,101.93
491,130.20 S6,269.99 S4',OOO.19
4S8,S44.30 254,996.63 113,S40.9l
14',6n.62 S26,6J331 '41,341.98 809,641.91
311,OlS.36
23,.20S.03

C-60

Stal. ofqoo'1ia
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For t& Fiscal Ytar Ended June 3D, 1996
Hnllb lad Human Services, U. S. Department of
Biological Basis Research in the NCUfO$Cicnccs Direcc Georgia Sbte University Through: Medical College ofGeoriia Research Institute Medical College of Georgia
Allergy, Immunology and Transplantation Rcsearcl1 Direcc Georgi. State Universily Through: Georsia Tu:h Research Corpomtion Georiialnslitute ofTechnology Through: University of Georgia Rc:searcll Foundation University of Georgia
Microbiology and Infectioull Diseases Research Direct Georgi. Southern Universily Georgia State University Through: Georgia Tceb Research Corporation Georgi' Institute ofTcdmology Throogh: Medical College ofGeorgja Research Institute Medical College of Georgia Through: University ofGcorgia ResC:an:h FOl.loo.tion University of Georgia
Phannacology, Physiology, and BiorelaU:d ChemistryRe$eUCh
Through: Geor&ia Tech RescaJl;h COfpOration GeolgialnslilUte ofTeclmology
Through: Medical College ofGcorgia Rcseareh Institute Medical College of Georgia
Through: University ofGcorgia RescaJl;h Foundation University of Georgia

eFDA
NUMBER

MONETARY EXPENDITURES

93.854 $ $
93.US $
$ 93.856
$
$ 93.859
$
$

388,50$.77 309,569.41 691,075.18
274,149.64 45,407.32 262.36 319,819.32
58,601.97 417,515.58
-565.94 38,087.89 2,237,218.38 2,750,857.88
198,445.55 141,848.15 421,803.93 762.097.63

NONMONETARY EXPENDITURES

C -61

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For 1& Fiscal frar EtuhdJUM 30, /996
tlultb sad Hllmaa &:rvkn, U. S. Dcpal1mtat or
Genet)c, and Development BiolOlY Rcscan:h Dil1lCt Georgia State Univcrsity University of Georgia Through: Ckorgia Tech Re5elIr<:h COrponltion Geor,ialnSlilute ofTeehnology ThJO\lP: Medical Colle~ ofGeor)ia Resear<:h IllStilllle Medical College ofGeor&ia
Thtoup: UniV'CfSity ofGoolJia Researeh Foundation
UniV'CfSity of Georgia
.,..., Population Raeardt
SIovannah Swe lhIiV'CRity
Throu&h: Medical Collqe ofGecqia IUsardlInstiwte Medical Colkge ofGeor&ia
Reseatelt for Mothers aDd Childml 0;"" Geori:ia StaU: UniV'CfSity Throop: Georgia Tech Rcscan:h COIplntion Georgia Institute ofTeehnology ThiOllgh: Medical College of Georgia Rcscan:h Institute Medical Colle~ of Georgia Through: University of Georgia R~h Foundation University ofGeor&Ja
A&in,~
0;""
Geor&ia State UniV'Cl"'5ity
Medical College ofGeor&ia 1lutMIgh: Georgia Ted! Raeardt Colpontion
Ger:JrP lnstitllle ofTedInokJIy
lbtoticb: UniV'Crsity of(iaqia Raan:h FowxIation UniV'Cnity ofGe<qia

erDA
NUMBER

MONETARY EXPENDIT1JRS

NONMONETARY EXPENDITURES

93.862 S
S 93.164
S
s
93.86S S
S 93.866
S
S

76,844.62 160,237.6S
9,299.48 96,SJ9.32 6&1,041.77 1,030,962.14
3S,91l.61 493,739.1' S29,121.1O
104,403.51 6,998.61
367,1.57,97 712,917.24 1.191.477.)3
223,423.69 0.24
61S,374.11 313,747.19 1.IS2,S4S.21

C62

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For 1M Fiscal Yt'ar EiikdJWlt' 3D, /996
Health .nd Hum." Servic", U, S. Dtp....meat or
Vision Resean:h
lltrou&h: GeorP Tech Re$ealdl Corpontion GeorP lnsli~ ofTechnoIotY
lltrough: Medic:at Collqe ofGeorJia Resean:h IDstitute
Medical CollcF of Georgia
T1lnJu&h: University ofGeorgia Researdl Foundation
UnMnity orGecqia
MedieaJ Ubrary MSisWlCe Throu&Jl: Georsia Tech Research COl'pORtion Georsia Institute orTethooloiY
Minority Aca:ss to Raeareh Cmen 01= Albany Stlte University SaVlllllah Slite Univasily
GnnIS fa: Physiciln Assistlnt Trainina PrOIfIm
Di= Medical CoIleee ofGeqil
Grants for FM:IIlty Dcvoclopmcnt in Family Medicine Direct Medical College ofGeorgia
Rum Hc:aIth Medieal Educa.tion DernonSlration Projects Direct ~ Stale University Through; Geor&ia Tech RescaJdI Corpontion
GeorJia Insli~ ofTechnoIo&Y
GlWlts to Stales ror Opention ofQtTIaS ofRIIR1 Hea1th Dircct Human Resoura:s, Department of
Nurse Anesthetisl Education Progruu Direct Medical College: ofGeorgia
HIV Care Formula Grants 01= HUmIII Rcsouroes, Deplmmmt of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURfS

9).867 S
S 9).879
S 93.180
S
S 93.&16
S 93.!95
S 93.906
S
S 93.91)
S 9).916
S 9).917
S

58,479.15 1,432,010.60
-1,410.43 1,419,010.02
111,20).96
12.5,631.52 24,421.43 1$0,066.95
234,6$5.$5
115,164.63
121,n6.26 1I,62fJ.97
1)).40).2)
150,265.68
103,483.44
),269,029.69

C-63

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For t~ FiscQ/ Year Ended 111M 10, /996
Hullb aDd HumaD Suvica., U. S. Ikparlmflll of
GranlS 10 Pn;rride Outpatient Early lmervmtion Savica wilh Ispea 10 HIV Disase
o;~
Medical College of Georgia
Cooperative ....~ts fOf Staib-Based Comprehensive
B~ and CcMcal e-:er Early Deuetion Programs
~
Human Resocuees. 0qIIrtmcnt of
Stholarships fOf Health Professions Students from Disadvalllllged Backarounds Direct Alblny Slate Univenily Annsuong State Collqe
Medical College: of0e0rIia
Demonstnlion Grants 10 SillIes for Communily Scholarships Direct
Human Resocuees. DepartJnmt of
Foprty lnrernatioNl Resevc.h CoIIaboratiot1 ........'Vd
~
Georgia Southern Univenily Through: Medical College of Georgia Research Instilllte
Medical College of Georgia Through: Univenily ofGeorgiallC$earch FOllndalion
Universily ofGeorJ,i.a
Project Grants fOf Renovation Of ConslniCtion at TMiary Perinatal Facilities
Direct Medical Collegc ofOeorgia
ComprdlcnsiYc Residential Dnl& Pmoention and Treatment Projccu for Substanc:o-Using Women and"T'heir Children
0;""
Children and YOlI!h Servkcs, Department of
Cooperative A~ments 10 Suppon Comprehensive Sthool Health Programs 10 Prevent the Spread of}{JV and Other Imporl&Dl Health Problems
~
Education, Dcpwnent of

CFO.
NUMBER

MONETARY EXPENDITURES

9UII S
9UI9 S
9).925 S
S 9),9)1
S 9).934
S
S 9).9)5
S 9).9)7
S 9),9)1

151,950.52
1,174,299.17
),419.00 106,601.00 16)73.00 196,453.00
22,992.00
13,236.54 5,874.14 1,567.11 27,6n.79
)76,661.07
I,On,64U9

S

1&0,114,])

NONMONETARY EXPENDITURES

c- ..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year EndedJune 3D, 1996
Health and Human Sen-itelll, U. S. Department of
HIV Prevention Activities - Health Department Ba.sed Direct Human Resourec:s, Department of
HIV Demonstration. Research, Public and Professional Education Projects
Direct Human Resourec:s, Department of
Research, Treatment and Education Proemns on Lyme Disease in lhe United SUI~
Direct Georgia Southern Univenity
Epidemiologic Research Studies of Acquired Immunodefic~ncy Syndrome (AIDS) and Human ImmunodeflC~ncy Virus (HIV) Infection in Seleeted Population Group$
Direct Georgia SUIte University
Throush: University of Georgia Research Foundation University ofGcorgia
Human Immunodeficiency Virus (HIV}'Aequired Immunodeficiency Virus S)'l'Idrome (AIDS) Surveillance
Direct Human Rcsourec:s, Department of
Assistance Progrwn for Chronic Disease Prevention and Control
Direct Human Resources, Department of
HIV/AIDS and Related Diseues Among Substance Abusers: Community Based Outreach and Intervention
Demonstration Program Direct Medical Collese of Georgia
Demonstnuion Grants to States with Respect to Alzheimer's Disease
Direct Human Resourec:s, Department of
Modification of Trauma Care Component ofSUIte EMS Plan Direct Human Resourec:s, Department of

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITVRES

93.940

93.941

93.942

93.943

5,965,930.50



295,734.81

120,018.87

13,000.00



93.944

93.945

93.949

411,824.51 442,943.75 854,768.26
1,340,269.89
95.744.S6


93.951

93.953


30,996.36 237.402.87 88,403.12

C-65

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

ForrheFiscal YtarEndedJlllldO, 1996
Halltll .... H.... ScrriccI. u. S. Dcpan.c.t or
Ccntcn lGr Ap'icutanI ~ Educ:Ilion and Disalse and
.....Injury Pw.mOon IIId OccupMiMIl RcspiratoI'y Diseue
M..............' DiIordcn EvalUItion and RdIab[liwion HwnIn ~ Deputment o(
..... IHoc:k GrWIlGr ConwIlunity Mental Health Servk:es HIIIIlIIl Resources. Department o(
Block Grtnts (or PMvmtion and Treatment of
Subslance Abuse
""'"Human Resources. Depanrnent o(
Special Minority lnitiatiYes
._.",.... ""'"GcofP Stale UniYefSily
Preventive Health Services - Sexually TralI$IlIined Discasc:s ConltOl Grants
0;""
Human Resources, Department of Mental Health Disaster Assistance and
Emer&encY Mental Health
""'"HIlmIIl Resources. DeP'fUllellI or ~ J>os-1maIl 01'
..... GnMIlOr FMlblilmxntaf~1tlI
affMlity Medicine Medal CoI1cp af<imIP
Cooperative: Agreements for Stlte-Based Diabetes Control Programs and Evaluation ofSurvcillancc SystCn1S
0;""
Human Re:sourtes. Department o(

CFDA NUMBER

MONETARY EXPEI\'DITURES

NONMONETARY EXPENDrruRES


93.958

93.959

320,823.66 6,033,169.30


93.960


93.977

21,459,IIU5
14,842.51 23,311.00 101.220.57


93.912

2,360,184.73



"':..
S 93.984

J~,294:::;:::."'::::'~":"'
50,000.00 1,),946.15

' 93.917
,
93.981

~I~J9~.'~'~2.~92:.. ~""."422",,.78,-

'

~2~O~1.~"~'.~.:.:..

690,948.50
..,

c..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For lhe Fiscal YeaI' EndedJu.ne 30, /996

Hultb and Human Suvicu, U, S, Department or
Senior International Fellowships Direct Allny State Unive",ily Through: Universily ofGeofgia Research Foundation Universily of Georgia

National Hcallh Promotion Direct Human Resources, Department of

Preventive Heallh and Health Services Block Grant

Direct Human Resources. Department of
lIe-_ _"

"""'"

"

Maternal and Child Health Services Block Grant to the States
Direct Human Resources. Depanment of Medical College of Georgia

Other Federal AssisWlCe Direct AJlny State Universily Georgia State Univef$ily Human Resources. Department of Medieai College of Georgia Savannah State Unive",i!)' Universily ofGeofgia Through: Centets for Disease Control Kennesaw State Universily Through: Georgia Mountains ReBional Development Center North Georgia College Through: Georgia Tech Research C~tion Georgia Institute ofTechnology
Through: Morehouse Sehool ofMedieine Fort Valley State University
Through: National Association for Equal Opponunily in Higher Education Fort Valley State University
Through: National Collegiate Athletic Association Savannah State Universi!)'

crDA
NUMBER

MONETARY EXPENDITlJRES

NONMONETARY EXPENDITURES

93.989
,
,
93.990
,
93.991
,
,
93.994
, ,
OFA
,

76,039.47 l4,518.98 110,558.45

54.586.85

5,148,764.93

,

,
5,322,197.93

14,346,385.55 551,725.34
14,898,110.89
291,066.30 654,782.13 61,674.23
-3.00
, 249,311.28
57,632.87 (3)
14,111.83
2,647.68
751,642.18
55.00
9.488.87

577,90 86,936.50

1,359,167.28 1.359,167.28
1,451,842.35 (3)

C67

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For ,& Fiscal YeOI'" Ent/uiJIlM 30, /996
Heall" a.d Hama. Services. U, S. Departmtllt of Other Federal Anistanec Throup: UniversityofConnceticul Kennesaw State Univenity "TllI'ou&h: Univenity of Georgia Resean:h Foundalion University ofQcorgia
AGENCY roTAL
NETroTALAGENCr
Htln Keller Natioul en-Ier Otber Feckni A$sistmce
""'"Human Resourlzs, [)qJanmen1 of
AGENCY TOTAL
Houslncand Urbaa Dtvtlopmtal, U. S. Dtpartmtat of Manufaetured Home ConstnICtion and Safety Stanllatds
0;_
Insuranee, Oep&rtmmt of Throup: National eonfemw;z of S~
"""""",-." <m Bui1dinlCodes
lbrou&ft; Various Mobile Home Manvfac:turen
--..-"
CommUllity DewIopmc:nI Block GfWltslSlate's Program
""'"CommU/lity Affairs, DqlInrnenI of
Emeraency Shelter Grants Propnl
0;_
Housin8 and Finance Authority, Gcof&ia
Supportive HOUSin8 ProgJvn Oirea Human Re:sourus, Dqwtment of

ernA NUMBER

MONETARY EXPENDmJRES

NONMONITARY EXPENDITURES

OFA



11,666.S2

1,056,187.13

3,264,078.02



1,4SI,842.3S



3,042,479,630.4S
.,



31,79S,18J.97
....

2,919,09'2,199.16



31,79S,78J.97

OFA



25.64I.S1 25.64I.S7

14.111


14.221

14.231

14.23S


343,8.28 1,411.SJ
949.1JI.I) 1,JOO,4047.64
79,924,134.0&
1,321,142.00
469,IS4.oo

c ..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For lhe Fiscal Yeat' EmkdJUM 30, 1996
lIousiAClnd UrbaA Devdopmut. U. S. IkplrtmeDt of
Historic:ally Bllldl: Colleges and Universities Program Direct Fort Valky Slate University
HOME Investmall Partnerships Progmn Direct HOWling and Finance Authority, Georlia
HOUlIinl Opportunities ror Pasons with AIDS Dim:t
Housin& IDd Finance Authority, Gcor&iI Fair Housina AssistIncoe Procram - State Itld Loeal
0;_
GoYemcw, OffICe of lhe
Community 0cYd0pmcm: Wcn..sw.ty Propm 0;.., ~ $outbem Uaivasity
Lower Income Housing Assisancc Pro&ram Section 1 Modente Rehabilitation
0;.., Housingand Finance Authority, Georgia
Olhef Fcdaal A5si5lallCe
0''''' Albany Slate University Georlia SlIte Univmity Through: University orGeorgLl Resean::h FOlJndltion
Univmity ofGeorgia
AGENCY roTAL
I_tenor, U. S. IkpartmnC of die
Sport F"15!I Rmlontion 0;.., NatunJ Rcsourecs, 0epIrtmerU or Throup: Univenity ofGcorJA. Re5eardl FOUlll1Won
Uniel'$ity orGeorP
Fish and Wildlire Manaeement AssislallCe Through: University orGeoraia Reseudl FOIUIdation University orGeorJlI

CFOA
NUMBER

MOJl,'tTARY EXPENDmJRES

NONMONETARY
XPE/'Io"DITlIRS

14.237 S
14.239 S
14.241 S
IUOI S
14.$12 S
14.156

10).)86.06 20,158,257.00
325,.270.00 147.123.23 26,102.92

S

40,314,576.00

OFA


172,9.76 42.121.18

3.0)4.64



218.100.58



144,91S.S9J.SI

1S.605 S

15.601


3,m.m.00
1,.210.68 3,726,989.68
-880.00

C-69

SCHEDULE OF FEDERAL FlNANClAL ASSISTANCE

For 1M Fiscal Yror ElIdrdJuM 30, 1996
Interior, U. S. Deplrtment of tbe
Wildlife Restoralion
0;_
Natural Resoun::ts, Dtpmtmtnl or
Endan&eml Spcaes ~
~
NItun1 Re:souR:cs, Depmtmcnl of Throup: Univeo:it}' ofQeorP Rc:scardl FoundItion
Uniwnily oraeo.p
Coastal Wetlands Planning. Protection and Restoration Act Direct NltuBl Rtsourt:ell, Dtpartmtnt or
Otan Vessel Ad:
~
NItunII Resouroes., [)ep&rtmmt of
Assislanoe to SWr Wiler Rrsowa:s Researrh InWtuId
~
GeorP Inslitvte ofTc:dmolocY
Nilional WIltr Resoun:es Rc:seard1 Program Throup: GeorJiI Tech Rescan:h COfJlOI'ation Gtoraillnslilute orTochnology
Elrthquakt HI2arcb Reduetion Prognm Through: Geor&il Tech R.esearclI COl'pORtion Geor'JiIlnstitute of Technology
QmklcicaI Swvey Rcseareh and DUlAoquisition
~
Fort VIlIey SWe University NItIInJ Resouroes., 0rqlInmen1 of
Historic ~Iion FlIIld Grants-In-Aid
0;_
Georgil Stlte University Natural Resources, Department of Through: Glynn County Board of Commissioners Amutronl Stlte CoIlqe Through: Nilional Parlr: Service Annstron& Stile CoIlegc
'Ibrou8b: Univenity ofGeorgia Reseatdl FountiIIion Universily ofGtor&il

eFDA
NUMBER

MONETARY XPENDlTUR5

NONMONETARY EXPENDITUR5

1S.611 S
1S.612 S
S IS.614
S IS.616
S IS.IOS
S 1S,S06
S 15.807
S IS,SOI
S
S
1S.904
S
s

4,501,119.00
20),416.00 14.nU6
217,60.56
160.000,00
2,39).00
96,613.3)
-76.IS
109.321.41
7,412.71 19,.207.17 26.6lO.SI
192.78 I,SlJ,19S.IO
100.00 4,55).79 )9,061.3) I,SS7,IO).00

e70

SCHEDULE or FEDERAL FINANCIAL ASSISTANCE

Far the Fiscal Year Ended June 3D, /996
IQlerior, U. S. Departmut oftbe
National Reaisttr ofHi5Ioric PIaets Throu&h: Georgia Tech Rcseardl COlpOfllion Geor&ia Institute ofTcchnology
Outdoor Recreation - Acquisition, Development and Planning
Di""
Natwal Resources, Department of
Thtou&h: Uni..-en.ityofGcor&ia Rescardl Foundation University ofGcortia
Rtsta.relt InfOrlNltion
Di""
Gcor&ia Southem Univenily
Miptory Bird BandinS and Data Analysis Direct NatunJ Rtsou:es, Department of
Odler FedmII Assiswx:.e
Di""
Fon VaUcy State Univmily GtorJia Institute ofTcduIology QcorSia South-stem College Natural ResoulU$, Department of Secretary ofStale Soil and Water Conservation Commission, State University ofGtorJia
1ll1oup: Gcoraia Tech R.cstardI Corporation
GcorJ,ia InstiIUte ofTcchnolo&Y . N:Muraf ~nep.~of
SlIIe UIIi'renUy orWell Gccqia ~ ....... SoiJm:lW... C~Ccmmmm.sa.
""""' """' llIrooab. Univenily ofGcora" RtsealCh Foundallon Univeniry ofGc:or&ia
AGENCY TOTAL
filET TOTAL AGENCY

CFDA NUMBER

MONETARY EXPENDITURES

15.914

15.916


15.975

15.976

OFA




5,255.93
1,135,145.71 14,25621
1,150.101.99
10,533.30
61,123.00
21,723.99 153.14
16,512.40 43,997.00 31,927.01 11,790.99 266,701.53 70,164.13
'''''.22
<OM." 1,300,656.12 1,773,239.33
13,337,431.55
...,.22
13)7I,524J3

NONMONETARY EXPENDITURES

C71

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For rM Fiscal Yt'ar Eildt'dJullt' 30, 1996
latuDllto1DcvdopmeDt, U. S. AgeaC'Y of Other FedenI A$$istana
""'"fon Valley Swe Univeo;ity : ~orCJeo'1il Sta&e Ualveni
AGENCY TOTAL
.. llVTRA-REl'QRn ENr1TYAC77!'lTI'
NETTOTALAGENCY
JIoP"-U, S. Fritadship Commission OCher Federal AssistallCe Through: Univeo;ity of Georgia Research FOWIdalion UniYCflily ofGeofaia
AGENCY TOTAL
Justice, U, S. Deplor1ment of Juvmile JlISticeand Delinquency Preva'ltionAUocalion 10 Swa
""'"Govtmor. Offsee oflhe
Modical College ofGcorgi. Through: Children.nd Youlh Council ofGtoraia
Brunswick Colleae
f"""I", ........."'"'" or.. 0WdreIl1Dd YOIIlb ScrYica, Dq& ImCill of J.siciII &-*
Title V - Delinqumc:y Prevention Program
""'"Govc:mor, OffICf: ofthc
Pan E - State ChaJIcn&e Activities
0;""
Govtmor, OffICe ofthc

ernA
NUMBER

MONETARY EXPENDITURES

OFA
S S S
S

11,239.10 3,4S9.6O 84,691.70
84,691.70 3,4S9.6O
11,239.10

OFA
S
S

19.986.91 19.916.91

16.540 S
S 16.548
S 16.549
S

1,)63,584.19 17,318.66 14,146 S6
1Q.>7US 103,08.56 1,760,561.92
220.440.82
W,ooo.OO

NONMONETARY EXPENDITURES

en

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended Ju.ne 3D, /996

Juslite, U. S. Dtplrtmtnt or

Justif:e Research, Development and Evaluation Ptoject G~lS Direo.-:t Governor, Office of the

Marie!- Cubans Direct Corn:ctions. Department of

Crime Victim Assistance Direct Governor, OffICe of the

Crime Victim Compensation Direct Governor, Offif:e of the

Drug Control and System Improvement - FOl'muia Gnmt

Direct

Defense, Department of

Governor, Offif:e of the

Investigation, Georgia Bureau of
f"""I'" ",-.""",or.. Conecbons, Departmem or

Invcsliption. Gcor&ia eur-t of

Judieial8rlnclt

Pardons and Paroles, Stile 8c:M! of

_PllbIic Safi

of

Edward Byrne Memorial State and Local Law Enforcement Assistance Discretionary GnmlS Program
Through: CilyofConym Investigation. Georgia Bureau of
.... '... : Education, Departmentor
Violent Offender Incarceration and Truth in Sentencing Incentive Gnnls
Direct Children and Youth Services, Department of
Violence Against Women Fonnula G~1s Direct Governor, Office of the

CFDA NUMBER

MONETARY EXPENDITURES

16.560 S
16.572 S
16.575 S
16.576 S
16.579 S
S 16.580
S
S 16.5S6
S 16.588
S

363,408.78
111,783.24
1,968,014.93
76,000.00
112,803.46 12,240,1l7.07 1.262,22824
327.740.17 1.11".923.56
22....12.53 327.880.55 962.139.10 16.572,664.68
93,214.34 17,791.01 111,005.35
62,1l5.80
403,000.00

NONMONETARY EXPENDITURES

c-n

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FOT t& Fiscal Yt'ar ElUkJ Jww 30, /996

JlLllke, U. S. Dcplrlmeal of
ExecWvc OffICe for Weed and Seed lbrouKh: City of AtIIma Inwstiption, GtorPa Buraou of
Comaions - TnlininJ and StaffOcwlopnCht Throup: FtdmaI ~ lnslitution AJwnahI, Tedutic:allnstitute
Public: Safety and Community Polic:inl Granu Di_ Brunswidc ColleSC
Other Fedenl AssistanQe Di_ Con'cccions, Department of Georgia State Univenity
IrM:stiption, Gcutia Bwau of
Public: Safety, Depmtmem of Secmary of SWf:

AGENCr TOTAL

BNnnAr:tMTr

NETTQTALAGENCY

L.abor, U. S. OepI!n.nlof
Lab force SCIliItics
0;..,
Labor, DqMCIikdl 01
Co . .M ..s WOltin& Conditions Data 0;.., LIbor, DqMtIiM::al of
~Sc:rvicc 0;..,
LIbor, Dq:IwtmenI of
U~_
0;..,
LIbor, Dep.tmalt 01

CFDA NUMBER

MONETARY EXPENDITURES

16.S9S S
16.601 S
16.110 S
OFA S
S S
S

14,6n.SS
4S,S6I.so
1,194.14
10,111.12 9,SS8.07 I,SI4,659.92 22,197.46 1,199.7S 1.611,686.32
n,SIO,4)7.0)
...."
20,239,638.)(1

11.002 S
".ODS S
11.107 S
17=
S

1,957,006.66 10.490.08
20,048,672.60 60,206,701.79

NONMONETARV EXPENDITURES

C74

SCHEDULE OF FEDERAL FlNANClAL ASSISTANCE

FOt't& FiscD/ Y~ar ii(kJ1JuIe 30, 1996
ubor, U. S. Ikpartmtllt of Senior Community Service Employment ProJrwn
Di"" Human Resources. Oepf.rtment of
Trade Adjustment A$Si$tanee WOrktlll Dlre<:1 Labor, Department of
: .Des*1IMaC1I AlbmI)ua TecIulicIllaltltl* CIaoII TecblliclllIliItiUt ....00Ilq0

ernA
NUMBER

MONETARY EXPENDrnJRES

NONMONETARY IOO'ENIlITlJIlS

Employrnatt MId Trmina ADiswlc:e-
Disloc:Med Wod:en
"'""Labor, Deputrnenl of
TechnX:al and Adult Education, Deplnment of

Employment Sefviees and Job Trainina' Pilot and Demonstration Programs
Direct Labor. Oepastmentof

Job Tnlinins Partnenhip Act

Direct

Governor, Off'K:eofthe

Labor, Departmmt of
Mitiwy CoIIqe, GeorP

Sf,V&IIlIah Slate Uniwnity

l1troIlJh; Atwnaha RqionaI Devdopmenl Center

8cft HiJl.lrwin Technieallnstitute

SwalMboro Tcc:bnic:aIlnstlwte
Tbtvu&h: A~ Southern UaiYenity

Ilq:ional Devdopment Center

Oc-;bee Tedmic:allnsliMe
Throu&b: App-lrijan R.t:P-l Commission

Pictats Tedmical Institute
T'IIrouJb; Atlanta RqionaI Commission

CIrroU TedmieallllStitute

Griffm TechnieallnstiMt

, AapMTecbIIicII. . . .

AdacnI AlaTcchraicII1l!lItib*

0pa::IIaD Ta:t.k:IllJlltitule

.

TcdtnicIIlDItiuD

cn:

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

Fort}; FiscQ/ Yf'Dr n.(J;J J~ 3D, 1m

Labor, U. S. Dcpllftmeat of
Job Trainin. Putncnhip Act Throuah: C.S.JU.. Employment and Trlinin& ClIIUOrtium Aui\lSl& Slate Univtnity Throu&,h: City of Atlantlo Private Industty Council Human Resoutt:es, Depanment of Throu&h: City of Columbus Consoliclated Government Columbus Tedlnic:allnstitv.te ThrtlUJb.: Cobb County 80Itd ofConunissionc:rt CIwtahooc;hee Tedmicallnstitv.te Noftb Metro TeehnicallnstilUte
Throu&b: Coosa Valley RqionaI De\'dopn,ellt Center
Carroll Tcdutic:allnstitv.te Coosa ValleyTedmicailnstitv.te
"""'" "'"'" North Metto Technicallnstitute
Pic:kens TedInicaIlnstitv.te Walker Tcdonical ~
lbtou&b: East CenuaI Geof&ia Ernplo)menl
and TmnillI Consortium Athens """ Tedtnk:allnstitute A\I&USU Tedmical[nstiwte Opccboe Tedmic:allnstiDJte Swainsboro Tedlnicallll$titv.te

Through: Georgia Mountloill$

Reaional Development Center

Athelu Am Technical Institute

Through: Heart of Georsia

Regiooal Development Center

Ben HiIllrwin Technicallnstlwte

Heart ofGeorgii Technic:allnstiwte
Middle GeorJ.ia Technic:allnstiWte
._or
A..- TcdmicailDsliQllo
""""'"-"'"'" f4nrioR" ~01
.....a-,Oqw_ol

SCIIIIb GeorP Tedllic:llr.-..

.......

or

lbtough: Lowef 0Iattah00cbee PriYI!e IndUSU)' Council
GeorJia Southwestern College

Through: Metropolitan Mantlo Privale 1n6ustTy Counc:il

Pickens Tedmicallnstiwte

Throu&h: Middle Flint RqionaJ De~1opmen1 Center

Middle Georgia Tec:hnicallnstilute
South Georsia Technical Institute

CFDA NUMBER

MONETARY EXPENDITtJRS

17.250 S

65,116.17
1),)95.76
142,514.99
165,6Sl.95 1',591.14
90,516.70 22),179.51 76)29.2' 12O,2S0.71
55,472.66 219,'01.54
112,120.5) 12.11234 1,.'5.66 151,177.17

4,610.25
4,01'.36 ),015.40 1,022.00
m.43t.lO
........ 1S2.011.37
,... 27.370.5>
"".,.66
72,419.12 )7,406.00 24,327.41 165,111.11

NONMONETARY EXPNDrrtJRES

C 76

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FtY 1M Fiscal Year EndedJu~ 30, 1996
lAbor, U. S. Depllrtmut or
Job Traininl Partnership Ad Thlough: Middle GeoIgiI COIISOI1iwn.lllCOfJlOr1ltd FUnl River Tcchnieallnstitute MICOII Tochniea1lnstitute Middle Georgia Tochnicallnslilute ThlOUgh: North Georgia Private Industry CourICil Dalton College Pickens Tcchnicallnstitute
Through: Northeasl Gcot&ia
Regional Development CcnlCf Athens Area Tochnieallnstitute
Through: RichmondlBur\c lob Traininl AUtboril)' AU&UN Tedmic:IIIlnslitutc
Throup: South GeorP RqionaI DeYdopmcl.t CmlCf
8m Hill-lrwin TedlrlicaIlnslitulC Moultrie Area TocbnieallDstitulC Va100sla Tcdlnic:allnstiWlC
Through: Southeast GeorP
Rq.iorW ~CmlCf Ben Hill-Irwin TechDieallrt$titllte Okercnol:ee Tedlnicallnstitute
Through: South-..est Georgia RcCionll Development CmlCf Albany State Univmily Bainbridge College Corrections, Department of Moultrie Area Tcchnicallnslitute Thomas Tochnicallnslilute
Throulh: Southwcstem Gcorai. Rclional Devt:lopmcnt Center Albany TcdmicallnstitulC Tecbnic:alIlldAduil fdlqtjon, 0qMrImc:Id of Albany Tec:hnic:al J.astituCIt AhImaba TectuticallnsUtuIe Adiens AmI TedJfticaI IIlIbtUte AlIpSQ. Tec:baic:allnslitaee
-"-
8m HiD-lrwin Tcc:bnk:aIlnstituIe CarroU TccbaJc:allJabtuIe ""QIboodlce TcdIaicaIlJIIliIIR CoIUIIIbuI T(Il;bnQIlJlstiMe
eo- VaUcy TcdIaicaI bIAitla
Comctioas, DqwtmciaI of
" " " " " - or M ........ [)qInDcaI
o-p SCMe l1rliwBil)'
GrifIiD TcduIicaIlnslitJ.IlII
LanicrTc:dmk:allnstitWl Macon TechnicallnmlJJ1it
""

<FDA NUMBER

MONETARY EXPENDITURES

NONMONETARY I:XPUo.'DmJRES

17.2SO
s

70,055.55 64,121.89 15,094.07
45,971.15 99,976.12
230,952.65
201,975.07
34.951.15 133,379.05 116.993.67
26,863.22 280.456.23
80,415.42 181,239.68 142,867.16 172,680.86 180,146.11
205,447.17
31,608.73 1S)71.21 19.612.16 49.109.55 41.223.54 42,190.30 100;:12.13 64.611.94 29,645.77 79.714.31 42,772.15 37,930.91 -14,235.79
ill.J6 122,753.11 36,160.24 4',314.17

C-77

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FOt' t& Fiscal Year ENkdJIlM 30, 199&

or Labor, U. S. Ik~rtmut
Job Tnlinin& PartncRhip Act
.....- MoaIlrill AreaTecbnIcII ..... T_ _
-e,..,.-.-.---- - SMi',"an.TedlaicllIIIIdtaID

of

Tbrou&h: Wtse Central Gecqia PrMte IndllStry Council

Canoll TechnicallnstiMe

West Gecqia TeclmicallnstiMe

...... CoNuIlation A&Jeements Labof,~of

......

Women's Special Employment Msistanee 0;""
or Labor, I)epartmefIt
...... Disabled VeteBnl' 0utreIdI P1'ogram (OVOP) Labof, Oep&rtment of
...... VevnLrt Emplo)mmt P'roIJmI Labor, Dept.rtmalt of
...... Loc:al VdI:fWd Emplo)1nezlt Rq:wesenwive Prop1rn Labof, DepIrtmcnt of

emA
NUMBER

MONETARY EXPENDITIJIWI

11..250


15,171.71 ]0,136.95 "',97&93
"-".""-o.u
31,4JZ;C

S 11.504
S 17.600
S
S 17.700
S 11.101
S 17.&02
S 17,&04
S

122,.547.19 3.431.26
52,131,459.13
65,415.09
169,562.01
'-..0
336,164.01
20,774.65
2,464,046.64
5)),92&.-41
1.)36,005.31

NONMONETARY EXPEl'I"DfJUllES

C7S

SCHEDULE OF FEDERAL FlNANClAL ASSISTANCE

FOt' ,& Fiscal Year EIIlkdkM 30, 1996

ernA
NUMBER

MONETARY EXPENDITlJlW

NONMONETARY EXPENDITlJlW

Olbcr Fedenl Assiswlce
01_
Labor, Department o(
Throu&h: Geor&i. Tech Rese:afdl COflIO'1.tion Gcor&ia Institute o(TcchnoiOlY
AGElVCY TQT..u

OFA
s
S

136,322.n 796,071.62 932,394,34

s

165,110,560.20

NET roT..u AGENCY
N.tiH.1 Anotics d Spa Ad..i.mntkMI
AospIce Educalioa Serviocs Propam
~
GeorP Swe Univasity Thn:Ju&h: S.,.oe Tdeseope Scienee lnstitule
Gqia Southweslem Co1Je&e
TcchnolOlY Transfer 01= Qeorcia Southern Univenity
Throu&h: Georsia Tech RC$CafdI Corporation
Georgia lnstiMC orTedlnoIOI)'

S

160.251,166.01

43.C101 S
S 43.002
S
S

10,514.45 31,313.25 41,967.70
1,310.55 3,610,305.62 3,611,616.17

C-19

SCHEDULE OF FEDERAL FlNANClAl. ASSISTANCE

For the Fiscal Year Ended June 30, /996
National Aeronautics and Space Admioutralion
Other Federal AssisWl<:e
0;....
GcotP Soulbcm University GcotP Stlte Univusity
Valdo5ta Stile Univusity
otw",
Throop: ~ Tech Researcll Corporation
0e0rP l/\$liMe ofTecJmoIocy
Through: Lewis Research Center Savannah Stile Univenity
Through: Universities Space Research Association KenllC$lw Stlte Uni~rsity Valdosu Stlte Univenity
Through: University ofGcor&ia Research Foundation Univmity ofGeoraia
AGENCY TOTAl.
'TIl'G A
NETTOTALAGENCr
National Archives and Records Administration
Nuional HislOlical Publiaotions and Records Grants Dirca Sccn:wy ofStlte
Throup: Georsia Tech Rc:scart:h Corporation
GeorPa Institute ofT.IuJoIocY
AGENCY TOTAL
National Foundation on the Am and the lIumaniliu
Promotion oftile Arts Design Arts ThfOOgh: Gcotlia Tech Rcsearc:h Corporation GeorJia l/\$lilute ofTochnolOC)'
Promotion of tile AN AN ill EdllClllion
0;..., Qow:mof, Off.ec of the

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA



6S,79UI 321,714.70
19,.39&.0) 19
2,472.)14.09 214,62S.S7 ' 19,&S&5S &,49).00 471,&14.74
3,60),706.6&
7,257,290.5S 9.60).19
7,247,6&7.36

&9.003




36,754.00 -664.10
36,019.90
36,0&9.90

4S,OOI

0.003


14..3&1.79 70,900,00

C-IO

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For 1M Fiscal Year Ended June 30, 1996
National Foundalion on thc Arts and thc HumaDities
Promotion of the Arts - Slate and Regional Progrwn Direct Go~rnor, orrl of the
nrOu&b: ~.OftlCeorthe Abnham Baldwin A&ricultullf COlJe:p
0c0rIia~ Univusity
Promotion of the Arts OperaMU5~1Theater Through: Georgia Council for the A.rts Georgia Southwestern College
Promotion of the A.rts - Foil: and Trllditional Arts Direct Governor, Office of the
Promotion of the Humanities EJemenwy and Secondary Education in the Humanities
Direct Kennesaw Slate Univenity
Through: Georgia Tech Research COrpol1.tion Georgia Institute ofTechnology
Through: UniversityofCalifomia Georgia Soutltwestem College
Promotion of the Humanities - Federal-Slate Partnership Direct Kennesaw Slilte University Through: Georgia Humanities Council OeKalb College Georgia Colle~ Georgia Soutltern University Jel:ylllslatld State ParI: Authority Middle Georgia College Natuml Resources, Department of Slate University ofWcst Georgia
Promotion oftlte Humanities - Scholarly Publications Direct Univenity ofGrorgia
Promotion of the Humanities Intel'JlfC1ive Research Program
Direct Georgia State Univmity

eroA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

45.<107


4S.0l4

45.015

45.127


45.129


45.132

45.140


616,43397 6S.981.8S 12,.581051 695,009.39
3,416.74
34,500.00
44,733.54 4,995.48 25,696.16 15,425.18
5,500.00 6,000.00
110.94 2,736.00 1,064.70 10,381.14 2,000.00 1,282.96 36,015.74
142.00
9553.57

;,
-

C_II

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year EndedJune 30, 1996
National Foundalion on lb~ Arts and tb~ lIumanities
, _ Promotion oflhe Humanities Division ofPresefvltion aod
Through: National Association for Equal Opportunity in Higher EdlM:ation Albany Stlte University
Promotion oflhe Humanities Highet-Education in the Humanities
Direct University ofGeorsia
Promolion oflhe Humanities Summer Seminars for School Te.ellen
ThTOllgh: University ofGeorsia Research Foundation IJnivenity of Georgia
Institute of Museum Services Through: NationallllStitute for COII$efVlItion ofCulture Georgia College
Other Federal Assistance Direct Gainesville College Georgia Stlte University University of Georgia Through: Gcoraia Endowment for the Humanities Brunswick College Through: Georgia Tech Research COIpOfation Georgia Institute of Technology Through: Georgia Humanities Council Macon College Secretary ofStlte Through: University ofGcorgia Research Foundation IJniversity ofGcorgia
AGENCY TOTAL
.uPOR1JNGEN1'I1TAC7D'lTr.
NET roTAL AGENCY
National Science Foundation
Engineering Grants Through: Georgia Tech Research COrp0r3tion Georgia Institute of Technology

CFDA NIJMBER

MONETARY EXPENDITtJRES

45.149

S 45.150
S 45.151
S 45.301
S OF'
S
S S
S

1,000.00
154,706.71
33,119.23
12.00
2g,590.oo 57,574.88 55,926.59
1,500.00
~.04
1,755.40 1,800.00 -269.11 146,877.72 1,215,120.01
8,S?H2
1,196,544.65

41.041 S

1,136,344.06

NONMONETARY EXPENDlTlJRIS

C -82

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 30, /996
National Science Foundation
Mathematical and Physical Scienees Direct Georgia Southern University Ga:lrgia Slate UnivCI$ity University of Georgia
- -it,,,, - Through: Georgia Tech Research Corporation Georgia Institute orrechnology
_U
Through: University of Georgia Research Foundation University ofGcorg'-
~ien~
Direct Georgia Slate University
Through: Georgia Tech Rcsearth Corporation Georgia Institute orTechnology
Through: University of Georgia Researeh Foundation University ofGa:llJia
Computer and Information Science and Engineering Direct Georgia Southern University Through: Georgia Tech Research Corpor1Ition Georgia Institute orTechnology
Biologial Scicn~ Direct Clayton Slate College Georgia Southern University Georgia Slate University Through: Georgia Tech Research Corporation Georgia Institute orTechnology

emA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

47.049 S
S 47.0.50
S
S 41.070

S 47.074
S
S

4&,655.&2 474.413.19
-2,.500.00 1,630,775.13
31.,5112.86 1\
-438.12 2,221,681.99
2,303.00 1,149,386.62
414.21 1,152,103.&3
165,658.24 2,014,251.23 2,119,915.41
16,459.75 29,139.46 116,889.09 369.419.57 531,907.87

CS)

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FO#' i& FisCQi Year Ellkd Jllne 30, /996

<FDA
NUM.BER

MONETARY EXPEl'mrnnu:s

NONMONETARY EXPENDrnJRES

Soc:ial, BeluovioraJ.. and Economic Seimcell Direct Georgia Stlte Univcnity ThrOllp: Georgia Teeh RestIlCh Corporation Georgia Institute ofTeclmolOIY Throup: National ReseIfdl Council GcorJia StlIte UniYCrsity Throu&h: University ofGcorgia ReseIlclI FOIlndllion
University ofGeorJia

EdIJellion and Hwnan Rcsoun::es

""'"AtnIwn BaklwiD ~ Col1qe

_

.... CoIlq<

AtlanU Meuopoliwl CoIIqe
CoIwnbus Swe University
Geor&ia Swe Univenity
Univcnity ofGeorJia
Throup: GeorP Ted! Researdl Corporation GeorJia InstilUlOfTechnoIoaY
Throup: UniVCl1ity ofGeorJia Rescart:h FoundIIion
Univenity ofGeorJia

Olher Federa.! AuisWlOe
DirCCl Fort Valley Stlte University Georgia Institute ofTcebnolo&Y Georgia StlIte University Kennesaw Stlte University
Savannah Swe University Skmway Institute of~
State Univenity ofWCSI. GeorJia
Univcnity of(kup
Throu&h: 80wln Colkcc VIldo5ta SWe Uniwnity
Throup: Florida AJrieuIuanI and Mechanical Univenity
Albany Swe Uniwnity
Through: Geor&ia Tech ReKIICh Corpontioo Geortia lnstitUle ofTedInolo&Y
Through: IiafbOf 8BrK:h Ooeano&raPhie lnsliMion
Savannah Stile University
Throup: University ofGeorP ReseardI FoundIIion
University of Georgia

s
S 47.076
s
S OFA
s
S

119.57
184,853.73
1l,507.90 1l7,13O.01
336,J1l.21
29,671.00 32,163.00 47,491.11 93,973.32 301,15035 36,927.52
541,939.94
321,62S.41
1,419,641.65
96,95U6 3,043.10
415,161.40 171,744.77 40,714.56 1,235,201.21 36,464.12 523,030.00
104,209.41
92,174.01
2,166,llO.3O
. . . .00
9.150,969.20
14,107,893,08

C"

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FO#' 1M Fiscal Yuu End~dJUM 30, 1996
Natiooal Sc:i~nu Foundatioa
AGENCY TOTAL
ifE.$S: JNT!lA..f1EPOR11NG ENTlTYACTW1T1
NET TOTAL AGENCY
National Surity Acucy Othef Federal Assistance ThrouIJh; Unmnity ofGaqil Rcseattb Founda1ioIl
UniV'miity ol"GeofP
AGENCY TOTAL
Nudtar R~ulatol'J"Commission EnhInee Tcehnology Trarufer and DWeTnination of Nuclear
Enc:r&Y Proccs.s and Safety InfOfll'lltion
Direct
Nawn.! Resour=i, Dcpanmcnt of
AGENCY TOTAL
Penonnd M.n.g~ment.U. S. Offic:~ of lnlCriovemmc:ntal PenonneI Act (lPA) Mobility Program Direct
Medic:al Collc:gt ofGeofP
AGENCYTOTAL

ernA
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

S

29,0&5,&12.16

10,781.97

S

29,015,030.19

OFA
S
S

42,434.59 42.434.59

17.(0)
S S

)1,000.00 31.000.00

21.011 S
S

65.601,16 65,601,16

SCHEDULE OF FEDERAL FlNANClAL ASSISTANCE

For the Fiscal Yt!ar It(k(J JIlM 30, 1996
POital Servke, U, S.
Other Fak:nI Assisllnce
0;,.., ~ 0qlaJtmelU of
GeorJia Southwestern College Gc:orJA Swe UnMl'sily
Umftl"'SiIy ofGeorJia
1llfou&b: Gecqia Tech Rese:an:h Cofpofation
Gecqia trmitute ofTcc:hnoloD Ttupup: Universily ofGeorJia Rese:an:h Foundation
Uniftl"'Sily orGeorgia
AGENCY Jt')TAL
SlIlall Bwam AdmiaisCndOD
Busines5 De-.dopmalt Assistance 10 Small BusiDes:s
0;,.., AUJU$1I Swe Uniyusily
GeorP Collqe GeorP Southern Uniftl"'Sity Gcortia State Uniyusily
Kennesaw State Uniftl"'Sity Macon College University orGeorai.
Small BlI5iDe$s 0tYd0pma.1 Celltel' 0;,..,
GeorP State UnMl'sIty UnMl'sity ofGeof&ia
---,,-- 81_=Idr::caac. -"'"""-""-"'"""""' .".".".."

crnA
NUMBER

MONETARY EXPENDITURES

OfA
S
S S

4,100.00 6,000.00 12.691..52 \55..52
.0.01
312,SS2.10
33S,79S.09
nS,79S.09

S9.00s S
S S9.037
S
S

I,SOC.OO 4,SI9.17 7,014.17 6,01).63 10,291.28 1,106.n I,OIO.SO
31.66S.71
91,111.22 1,6S4,973.21
"",.00
5,SI2.6O 633.62
.6..1.,.1.0...7.3. IW599
121,367.21
2,069,211.46

NONMONETARY EXPENDlTURfS

c..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended JUIV 30, 1996
Smlll BllSineu Admhdslr:1tioll Olller Federal Assisllnce
0;_
Univenity ofGeorP Throup: GeorJiII Tech Reseud1 Corpontion
GeorJia.lnsliuu ofTechnoIo&Y
AGENCr roTAL

NET TOTAL AGENCY
Smithso.iall hastitute 00lCf I'<dcnJ Assiswlee
Throu&b: University ofGeuP Rac:Iteh Foundalion Uniwnity 0(Gcot&ia
AGENCY roTAL
Socill Security Adminlstr:llio. Social Sec:urity. Disability Insunnce
0;_
Human Rcsouta:s, Departmenl or
AGENCY TOTAL
State JllItke Jastil.te Other Federal Assisllnet
0;_
UnivelSily ofGcorgia Through: UnivelSity o(()corgi. Research Foundation
University orGeor&ia
AGENCY TOTAL

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OFA S
s
S

44.53 1I2,63U4 112,679.37
2,220,563.61

S

1,904,489.58

OFA S
S

]1,949.11 ]1.949,11

96,001
S
S

32.176,799.16 32,176,799.76

OFA S
S S

449,]86,08 4,258,76],73 4,708,149.81
4,701,149.11

C11

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For lire Fiscal Year ENJed June 30. 1996
Stale, U. S. Inplrtmeat of Other FedcRl Assi5QIK:C
"""Val60sUl Slate Univmity
AGENCY TOTAL
Teaaeu V.lky Allthority Tmnessee Valley Rcgjon. Valley Apiculnnlll'lStiblte
l1Ifvu&h: Unimny ofGel:qiI R.e:sC.reh Foundation
UnillUSlty ofGcof&jl Other Fedenl Assistlnec
Direct Foresl1y Commission, Stlte Nortb Georgia Collep
UnillUSity ofGeor&ia Throu&h: Univmity ofGeoJ&iI ReseardI Founa.tion
University ofGcofaia
AGENCY TOTAL
Tnnsport.lIon, U. S. Deplrtment of Boaling SafC'l)' Fil\ancial AssisWlCC Direct NItllral Rcsowecs. DepertrnenI of Aviation Ilc$cardt GBnIS Throup: Georgia Tech Research C~tion
GcorJia Institute ofTcclmology
HighWl.y PI.nning and COMlfuttion Direct
Rcvenue.~~ntof
Transponation. Department of
"""""""-, 'Jbtoll&b: NIbnI RcIowca. Dqsblleftlof Qwnahoocbce Tcdlnkallallilulc 'lJnnusiryot"Oecwp

CFDA NUMBER

MONETARY EXPENDITURES

OFA
S
S

5,272.91 5,272.98

"JlO' S
OFA
S
s
S

0.63
16,165.11 1,745.11 41,037,)1
176.08 59.124..31
59.124.94

20.005 S
20.101 S
20.205 S
S

711,.2S0.oo
45,191.16
32,202.16 539,996,177.15
74,076.15 7.061.00 540,110,224.16

NONMONETARY EXPENDITURES

c..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For the Fiscal Year Ended June 3D, /996
TransportJllion, U. S. Department of
Motor Carrier Safety AssisWlCe Program (6) Direct Public Serviec Commission Revenue, Department of
National Recreational TBiis Funding Program
Di~
Natul1lJ Resour=J, Department of
Fcdel1lJ TrIlUit Capital Improvement Grants Direct Transportation, Department of
Federal Transit Technical Studies Grants DiTW. TBnsportation, Department of
Fcdel1lJ Transit Capital and Operating AssisWlCe Formula Grants
Direct Transportation. Department of
Public Transportation for Nonurbanized Areas Direct Transportation, Department of
Capital Assistance Pmgnm for Elderly Persons and Persons With Disabilities
Direct lIuman Rcsour=J, Department of
State and Community Higliway Safety Direct Public Safety, Dcpattmcntof
Through: Gomnor, Offlcc ofthe udicial BlUCh
Through: National As.sociation of Prosecutor Coordinators
Judicial Branch Through: PublIc safety, DcpIrtmentof
Govemor. Office of the Human ResoIIrces, Dcpar1me:ot of
Investiption. GeorP BIlR&U or
Jucf .

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITVRLS

20.218 S S
20.2111 S
20.500 S
20.505 S
20.507 S
20.SOIl S
20.513 S
20.600 S
S

2,187,0611.23 76.153.18
2,263.222.41
83,603.66
1,284.650.90
905,378.67
4,443,718.70
3,590,706.58
1,336,180.73
3,2711,765.52
'~30.73
11,06643 24,n4.13 114,360.31 54.In.11 15,000.00 3,505,050.00

C89

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FOI't& FisCf2J Year Ended JUM 30, /996
Traupor1atioa, U. S. Depar1meat of
Pipeline Safety (6) 0;_ Public ~k:e CommiS3ion
InlCllIgency Hu.ardous Materials Public ScclorTllIining and Planning Grants
Direct Governor, OffICe ofthc
Other Fc:OeraI Assistance
0;_
AJriaittun:. OepIrtmc:nt of Geor&ia IIlst.ituteofTechnoIocY
Throush: Georgia Tech RaeardI Corpcntion
Geor&ia ImtiWte ofToc:hnoIocY
1bn;Jucb: Kmndy Staie Univen;ity Albany State Uniwnity
1'1IfouIb: otrw::e ofSIII&1I and ~ Busines.s
lJtiIiDlion
._"AibinyState UniYmity
Throup: Univen;ity ofGeorcil Rcseareh Foundation Univmity ofGcgil
~
AGENCY TOTAL
IN17tA-REPOITING EN111TA
NET TOTAL AGENCY
Treas_ry, U, S. IHpllr1mtal ofille
Other f<daaI Assiswlce
0;...,
lnvestiplioo. GeorciI Bureau of
Public Safety. Department of
Thfou&h: Geor&ia Ted! Rcseareh CorporlIlion
Georgia Institute ofToc:hnoIocY
Thfou&h: Univmity ofGcof&i.a Research Foundation
Univmity ofGcorgia
AGENCY TOTAL

emA NUMBER

MONETARY EXPENDrrtIRES

NONMONETARY l:XPENDmJRES

20.700 S
20.703

192,560.79

S
OFA
S

141,780.9S
g,IV.03 12,499.10 4,070,II4.S2 21,111.22

21.426.37

19,133.62

42

S

4,243,7S7.28

S

S62,864,277.39

303 63.32

S

S62,.S6I,114.07

OFA
S
S S

22,261.01 39,130.94 I07,2S6.23 39,806.9S 201,%2.13
208,%2.13

c..

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FOI'tM Fiscal Y~ar ENkdJIJM 30. /996
Ullited States Arms Control.lld Disannulcat Accacy 0Ihef Federal A$Si$WIOe
Thll)lleh: Univenily ofOeortia Resean:h Foundation
Univer:sity ofGcor&ia
AGENCY TOTAL
Uaitcd States laronnatioll ACncy EdIlCltional ExdlanF' Graduate StuOenlS
... _-0;"" Gc:<qia SIau: Univmily Educ:alioNl ExchanF' Ulliversity I..ecturer's (Profc:sson)
0;"" Columbus SIau: lhlivenity
Geof&ia SWc Ullivenity
0Ihef Fcdenl A$Si$WIOe 0;"" Gcor&ia Southern Univenily Georgia State University University orGtorJia
AGENCY TOTAL
Vetcnu Affairs, U. S. Ikpartmcat or VdaanS State Domiciliary Care
~
VdaanS Savicz, Slate DtparunaIt of Veu:rans Stile Nl.ning Home Care
0;"" VettIanS Savicz, Stale Depatunent of
VOCIlionaI Rtbabilitation for Disabled Vetcnns 0;"" A!hens Area Tedmieallnstitute Pickens Tec:hnic:allnstitute

CFDA NUMBR

MONETARY EXPEJII"DrTURF.S

OFA S
S

5.622.00 5,622.00

12.001 S
".002
S S OFA S
S S

95,.306.36
6,364.n 331,2S4.34 ).4),619.11
8,089.53 92,390.85 75,463.s.s 175,944.23
614.869.70

64.014 S
64.015 S
64.116 S
S

504 .... U 4
6.129.074.17
4.089.00 1.501.05 5.596.05

NONMo,"ETARY EXl'Ef'mITUJU'.S

C 91

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For 1M Fiscal Year Ended June 30, 1996

CFDA NUMBER

MONETARY EXPENDtTtJRES

NONMONETARY EXPENDITURES

Veterl.l1S Arr.irs, U. S. Deplrtment of

Other FederllI ADistaner;

OFA

Direct

Georgia Institute of Technology

Georgia State University

Medical College of Georgia

VeteBnS Service, State Department of

Through: Georgia Tech Research Corportltion

Georgia IJutitute ofTochnology

AGENCY TOTAL GRAND TOTAL FEDERAL FINANCIAL ASSISTANCE EXPENDITVRES

s

_2,019.75

27,922.01

1,012,077.16

294,269.83

-8,&48.11

S

1,323,400.44

S_ _--"8',,66~'''',.,,1.,,.11O''_

s

5,514,899,516.60

99.818,361.55

s

2,392,410,010.95

699.022.69

NE:T TOTAL FEDEJU.L FINANCIAL ASSISTANCE EXPENDITVRES
MAJOR PROGRAM .DNOTS INTRA-REPORTING ENT1TJ' ACTIVITY

S_...'~,4~I.,,~O~81:,;,~I'~S~.O~S S_-"",3~'~I,.'~10",'~8~8~':.'

C"

NOTES TO TIlE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

For tM Fiscal Y~ar E'.tukd.hute 30, /996

PURPOSE OF THE SCHEDULE

Office ofManagement and Budget (OMB) Circular A-128, Audits ofState and Local GoyemmeDlS. requires a Schedule ofFedcral Financial Assistance reflecting total expenditures for each Federal financial assistance program as identified in the Catalog of Federal Domestic Assistance (CFOA). Significant Federal fmancial assistance programs which have not been assigned a CFDA number have been identified as Other Federal Assistance (OFA).

SIGNIFICANT ACCOUNTING POLICIES

Reportjne Entity -The accompanying schedule includes all Federal financial assistance programs administered by the State of Georgia for the fiscal year ended June 30, 1996. Refer to Appendix "A" for a comprehensive listing of organizational units comprising the reporting entity.

Basis ofPresenIaljon - The accompanying Schedule of Federal Financial Assistance is presented in accordance with OMB Circular A- 128.

A. Federal Financjal Assjstance - Pursuant to the Single Audit Act of t 984 and OMB Circular A-128, Federal fmandal 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 OMS Circular A-128 established

levels of expenditures or expenses used for defining major and non-major Federal fmancial assistance

programs. Major programs for the State of Georgia are those which exceeded $19,000,000.00 in

expendituresldisbursementslissuances for the fiscal year ended June 30, 1996.

BasjsofAccountine - The Schedule of Federal Financial Assistance is prepared using the basis ofaccounting as described in Note I of the Noles 10 the Financial Statements of the General Purpose Financial Statements (See Section B of this Report).

Expenditures and Expenses - 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, intra-reporting activity is deducted to detennine net Federal financial assistance expenditures/expenses.

OIliER

Thejoffowing Notes provide additional pertinent information regarding Federalfinancial assistance. and accordingly, are referenced to specific progranu wilhin lhe body ojthe Schedule.

(l)

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 00

threshold calculations for that organization's Federal financial expenditures.

C -93

NOTES TO THE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

FortM Fiscal Y~ar E'.IuWdJUM 30, 1996

(3)

Federally funded loan programs incurred the following current fiscal year monetary and norunonetary expenditures:

..a.D..A...
D.OII
".m ".on
...",
...'"
9U42
0""
9J.orA 9J.orA
(4)

MONETARY

NONMONETARY

""""""""'"
---..................... ...........s..a-dl,T.......
...--.... D
C 0 S.'
........ . r.IonI ''''' E4laliaoo t r.tiM~,......
, ....... c.p;u,I e-iINIionI
a-n.~ t - f'rotr-

.'" .",......
eM"'U



.~

S 20.191.990.41

,

'.00

, 219.4)1.01

s .]):7(10.00

........"","..".."..""

.

~



..~



2000.lrI7.00

,

-73.1)0.00

,

'.00

""""co"o"n"''''.

n,,.,,,



nS,ul.7J



I.sSl.IM.llll

,

)11,015.99

,

45.19

cu.m.."""'...,
"'"""""



1.247.59UJ

, 1:W)lQ,4Jl).00
, 1.lOS.lXXl,Ollll.OO

,

)7)92.400.61

,

U9.311.2S

"' '"'"H"-"A'""D" <



.....~

1l,1I1.1K.00
, 10.70)06.00

, U61,tnO.J6

,

'.00

..... ~sw-~
, ~ .......,.c..t.o.oIl.-
, , r.Dioooh 'SG.s.ob
, , , , NwIioa SIoodooII a-
, , , , .. """~("I
, ,... , v-.;..y........t-(")

_S.411.oo
s ...... 0
S ....,.9112.00 _74.441.00

'.00 """.00
.00 '00

'.00
)O.JIUI _19.12

4.116.44).44 1,llr1.sn.71
7OS.J041.10 14S,tOt.lS

191.901.00 1".000.00
~
'.00

.. ( ) The monetary amount for this prognun does not equal the monetary amount shown in the schedule.

Nwnerous grants and contracts identified as "Other Federal Assistance" have been combined for reporting

purposes.

Certain programs administered by the Federal government provide goods and services to organizational units ofthe 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.llO lO.lll
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 govmunent provides food stamps to low-income households. The amount offood 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. For the year under
review, lIle total value of food stamps distributed as approved by lIle Department was $708,604,202,00.
The amount reported represents the U, S, Department of Heallil and Human Services assigned value of immunizations for vaccine-preventable diseases to eligible individuals.

c..

NOTES TO THE SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

Ftx'tM FucaJ fraT ENkd.1JlM 30, /996

(5)

This item does not constitute a major Federal fmandal 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)

During the fISCal year ended June 30. 1996, the Georgia DepartmentofHwnan Resources received $36,837,250.68

in cash rebates from infant fonnula manufacturers on sales of formula to participants in the Special Supplemental

Food Program for Women, Infants, and Children (W1C) (CFDA NO. 10.557). Rebate contncts with infant fonnula

manufacturers are authorized by 7 eFR 246.I6(m) as a cost containment measurc. Rebates represent a reduction

of expenditures previously incurred for W1C benefit costs. Thc rebate contract allowed the Department to serve

approximately 76,404 additional persons per month during fiscal year 1996.

(8)

Expenditures for this program at the Department of Corrections were not maintained by separately. Amounts

reflected are revcnue amounts.

C9S

(TillS PAGE INTENTIONALLY LEFT BLANK)

SUMMARY OF FEDERAL EXPENDITURES BY ORGANIZATIONAL UNIT

(fillS PAGE INTENTIONALLY LEFT BLANK)

SUMMARY OF FEDERAL EXPENDITURES BY ORGANIZATIONAL UNIT

For tile Fiscal Ymr Ended Jllne 30, 1996
Adminialntive Servioca, Department of ApiOll1tllrc, I>c:pMtmoat of OUldrcn and youth Scrvica, Ocpartmcftt of Community Main., Dcp.rtmcnt of COfl'CCliOlll, Dcp.1mmt of Defente, ncp.tmc:lot of Education. Dq>.rtmcDt of EnvironmcnlaI F.,ilitiea Authority, GeorgilI
F<lrCdry CammiIMn, Slate
Gove:rnoc, Office of!he: Higher EducWoa AJaiItanllo Corpontion. Georgi.
HouWla and Fm..- Authority, Gcorsia
H_R - . eep.rtmcnt of Induatry, TrtIdc and TouriIm, ~t of InIunn<>e, DepartmezII. of
ID.vcaiptioa, Georzia B~ of
Jclcyll w..d State put; ADthority .h>dioial Brwdl. L.abo<", Department of ~c.aI ~ DepartmezII. of
NlllunI I t - . Department of
P...... and Parola, State Board of Publio Safety, Dcpartmcat of Publio Service Commiaion Publio Tdccommunicationo: Commiaion, GeorgilI Rcg<:nll of !he: Un.ivenity SyIlcm ofGcorgi.. Board of
CoIlega Md Univcnitiea
~Un.ivcnitiea
Gccqia lnalilulc ofTeohnology Go<qia State Un.ivenity
Mcd.ic.al CoIlegl: ofGeorzia
Univenity ofGeorJi.
RcgiouJ Un.ivenitiea
Georzia Southcm Univcnity
Valdoata Stale Univcnity State llniwnitica
Albany State Un.ivcnity
An!lItn:InI State CoIIegl:
Aaipla State Univenity C1aytaol State Collcgl: CoIUll'lbu. Stm Univenity Fort VallC)' Slate Un.ivenity GeorgilI Colle&e
Georzia Southwcatcm Collcgl:
KcnnoMw Slate Un.ivenity North Georgia Collcge S.....-mlIh State Un.ivcnity Southern Collcgl: ofTcohnology State Un.ivcnity of Wed Georgi.

MONETARY EXPENDrrtJR&S

NONMONETARY EXPENDrrtJR&S

$

1&,&51,260.00

$

6,343,50&.6&

2,339,203.7&

1:ll,346.71

96,''',OB.42 2,903,708.46

1,279,896.57 '73,67'.91

19,014,244.&0

533,137,310.72

21,671,791.96

U,I23,'9Il.oo

167,642,606.00

2,291,Us.sO

6.S,131,259.38

30,0'2,251.00

1,31',783,'06.00

62,167,361.00

1,044,436,172.'4

739,243,31'-17

89,924.17

1,504,649.47

',980,207.43

1,064.70

2,114,0'6.26

1'2)4',308.19

2,243,61.5,280.96

38,610,760.14

327,810."

4,363,233.02

2,379,630.02

247,946.00

1'0,840.06

144,460,413.151 ",3 13,1118.08 1',921,'72.69 144,660,160.49
37,494,066.86 29,'66,792..17
12,772, 1'9.88 3,061,134.1' 2,930,803.11 2,431,060.03 9,1'8,707.30 24,081,04'.32 8,411,062.20 2,129,362.64 2,826,00'.89
912,29U3 13,718,041.91 5,U6,118.06 13,641,747.97

6,432,471.07 5,029,577.42 8,0",791.46 10,504,9U.09
3,437,329.26 1,007,432.41
361,390.97 12,036.S8
701,093.98 39,664.89
'76,204.02 2,089,214.83 2,069,321.24 1,188,032.86
388,170.81 774,168.9' 808,027.10 972,961.37 2,020,6S7.65

C-99

SUMMARY OF nDl.RAL EXPENDITIJRES BY ORGANlZA.TlONAL UNIT

For the Fiscal Year EnJJJlUfe 30. 1996
Colb:p ... v..iwnitia AaIociMe Oep'ec Collep ~ Bal6wia Api<;:uJbnI Colle..
.w..u Metnlpolitan Coller Baiabridse Coller
Bnnwick Collep o.IloIl College o--Co.lle,e DeK.alb Collcac
......"""'" E.tGcarP Collep
Gai-Yille Conop
......""""""'"'" "Mid'd-le GclIrJia CoIkp
SoatIr. Oacqi& CoIlep
W.,... """'"
""""......,.CoIJ<F, o-p
SItioMwaJ r.tilaIe olO= 1 - " "
R-, Dep.1maIl ol
-"'..... SOIiIIlld WtIA e-v.tioae-...... StIU
SIlldali Fz- AIIOority. GcorPa
SIUdall Fe- C_..... GaorJia ToeMi~ -.i AdWt EdacatioIl. 0epIrtaliCIIlI cl
SIP Tccilnical1nllitutcl Alb.ny Toehnic-J bcitute A1t.\11b& Teabnit>allllltihltc AI.beM Iua TedWcallnItituto AuplIo TcdmicallnItitule 8al Hill-Irwin Tcdmicallaltituto
e.m.u Tcdraicallnltitute
o'..."""'chM TccMic:allnditutl: ~ Tcdraic.allDItitutl:
eo- Valky TcdlDiaal1nllitute
FlilIt RieI" TocbIUcaI Inotill:lte Grif6a TcdlaOce1 ~
Hrart ofGcorPa T~ laotiolk
~ TcdIlical1altillltc MIcaI Tcdmcal btitute
J-6ddIe GocarPa Tec1IraicaI. Inotilllto
MwItric ARa Todmi<:al Inotitukl Nor1b Gqia T~ Inotitutc Nortll. Mdz'o Tc:c:bDical1nllitutl:
Oaoed- T~ laItitute
Okef__.... Tcc.bftical Inotitutl: Pidi:_ TcdlnicaI blitutl: s.ndc:rM\Ic Tec:hfticaI blituto South Gqia Tochai~ 1nIlitulo

MONETARY . . . . . . .1TtlRES



2,ZZI.IU." S

2,260."0.61

1,474,094.10

1,271,203.92

1,417,714.0

1,36.,20. . . .

4.742,164.23

457,469.U

1,466,970.11

.U,llUI

937,760.33 2,464.)I3.1S

1,709,111.93

1,111,091.03

5",4S3.13

2,.332,.S03.17 :UI0,S17.74
101,35S.34 72,3'0.76 31S,947.61 1,II7,loa.OO ",113.71 14,747,511.90

1,'TT2,501.14 6U,11S.34
2,078.)17.57 2,923,403.51 1,137,767.S6 1.710,955.16 1.461,0'.63 1,146.471.91 1.405.)06.54 1.137,501.60 1,)92,101.97
756,102.00 936,555.13 2,769,040.71 1,01,715.06 1,171,616.61 1,16s,o".99 714,507.41 1,211,39'2.31 1,019,124.57 1,051,67"'1
1,717.71 1,211,9'26.36

2,439,941.90 3,&30.69
11,UI.31 7,261.92 117,731.10 1,103,617.61

C-l00

SUMMARY OF FEDERAL EXPENDITIJRES BY ORCANlZATIONAL UNIT

For Jl~ Furol Ymr EIikJ JlUI~ 10, 1996
SWC TGnic:.allnllillJlc. SoulhcMlcm TcchaicallnllifJ* Swainobaro TeclmicaIlnItillllCl
n.om.. TllChnicallllllitutc
Vllidolla Tcc.hnical lnatitute Wllikcr Technical. In.t..itutc
Wcat GoorP TceMicallnttitvLII
T~an, I)qwtmImt of Vetennl Serviee. Stalc Dep.rtmc:nl of
GRAND TOTALALL ORGANIZATIONAL UNITS

MONETARY EXPENDITt1Rf.S

NONMONETARY EXPENDrruR.S

s

7JO,722.T1

1,289,8615.45

1,223,101.42

1,411,318.99

1,040,.14.50

941,01 U4

550,241,332.10

1,621.192.34

s

5,5.4,199.516.60 $, _ _"2,):::;92,::::'~IO~.O~I.~O:~;.'

CIOI

SECTIOND
I REPORTS ON INTERNAL CONTROL STRUCTURE

c...f1oLuJr-,.:.J,.4..-,;w.~,.ff.

".JA. I,.". JI. I.., t-

9_1.1 a.f~,

"J ~ /NUj

rfO'"

1..1.J,/,.11..1J-;w .....JI. _

.. .W q.~ ~I~,",",.

-....... ::II.. ~ ,.....J.f

?fM"..Jup -.J 1933 It. 1937. .j.

1940.1.._.W..... w.J-J / - 19411. 1943. JI. _ .!..t.J
_ _ .. ,946.LJJu.J1.!-

t.I.u., .#c-

::II.. t.,..",,- .!..t.J"" ~".

~. 10 __ II.. t.,."..~,. /.;6

/-t!.-...J./...... ::1.4 -J~

,......../-,J....... t. rrw.

c..... s.,...... 1947 wI... II.. (J......

~I.J II..J "" .!..to- _

,IiI.J....1

mtu. .Il..J.....t q...,...

::Jt-.,.- II... - J~ """'f ,........ 1;/ .,-.1

.!..to- _I..tJ.. 3.,.t...J-..f 194. ..J./...... ::1.4 _ 11...,-.t.1.J... w.J

t..I..#c- .. n......t.-194.t._11..~2..... .f""f.t!.-;,_.

CLAUDE L. VICKBRS
STATE AUOlTOR (..eM) e&-.21U

DEPARTMENT OF AUDITS
254 Washington Street.. S.W., SuilC 214 At.lanta, 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 ofGeorgia
We have audited the general purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1996, and have issued our report thereon dated May 16, 1997. 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, 57% of the assets and 20% of the revenues of the internal service
funds, 59% of the assets afthe fiduciary funds and less than 1% of the expendable trust funds revenues and 1000/0 of the pension trust funds revenues, and 9% of the assets and less than 1% of the liabilities of the general fixed assets and generallongtenn debt account groups, respectively. In addition, we did not audit certain discretely presented component units which represent less than 1% of the assets and revenues of the component unit governmental fund types, 82% of the assets and 93% ofthe 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, 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 ofthe United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The financial statements of the Employees' Retirement System of Georgia, Georgia Lottery Corporation, Georgia Ports Authority, Georgia State Financing and Investment Commission, and Teachers' Retirement System ofGeorgia were not audited in accordance with Government AuditingStondards, and accordingly, this report does not extend to those organizations.
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 properly to penn it the preparation of general purpose financial statements in accordance with generally

accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and 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 perfonning our audit of the general purpose financial statements of the State of Georgia for the year ended June 30,1996, 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 detennine 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 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 oftbe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial 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:
(I) Cash and Cash Equivalents Inadequate Bank Reconciliation Procedures Department of Medical Assistance Department of Transportation
(2) RevenueIReceivablesIReceipts Deficiencies in the State Revenue Collections Fund (Overall) Department of Revenue Deficiencies in the Income Tax Division Subsidiary Records Department of Revenue Inadequate Accounting Procedures - Drug Rebate Program Department of Medical Assistance
(3) ExpendiluresILiabililieslDisbursements Deficiencies in the Sales Tax Division Subsidiary Records Department of Revenue Inadequacies in Operation of Workers' Compensation Program Department of Administrative Services
(4) General Ledger Inadequate Accounting Procedures for Jou~al Vouchers Department of Medical Assistance
(5) General Fixed AssetslProperty Management Inadequacies in Operation of Property Management System Various Organizations
0-'

(6) Electronic Data Processing Controls Inadequacies in the Operations and Control Procedures 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 matters involving the internal control structure and its operation that we consider to be material 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, 1996.

(1) RevenuelReceivableslReceipts Deficiencies in the State Revenue Collections Fund (Overall) Department of Revenue

(2) ExpenditureslLiabilitieslDisbursements Deficiencies in the Sales Tax Division Subsidiary Records Department of Revenue

(3) General Fixed AssetslProperty Management Inadequacies in Operation of Property Management System Various Organizations

Individual management letters noting other matters involving the internal control structure and its operation were issued, as necessary, to the management 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.

Respectfully submitted,

~

~.A_~..-4

Claude L. Vickers State Auditor

May 16,1997

D -,

(THIS PAGE INTENTIONALLY LEFT BLANK)

CLAUDE L. V ICKRS
$TATEAUOlTOR
(_)~17.

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

REPORT ON INTERNAL CONTROL STRUcrURE 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 3D, 1996, and have issued our report thereon dated May 16, 1997. 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 16, 1997, 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 (OMS) Circular A128, Audits ofState and Local Governments. Those standards and OMB Circular A-128 require that we plan and pcrfonn 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 and Finance Authority, the Georgia Student Finance Authority, and the University of Georgia. Federal financial assistance activity for these organizations reflect a combined total of$1 ,817,822,206, which comprised approx.imately 23 percent of total Federal assistance activity, including the Federal government's risk in outstanding loan balances, for the State of Georgia as of and for the year ended June 30, 1996. Those internal control structures, including applicable internal administrative controls, were considered by other auditors 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 perfonning our audit for the year ended June 30, 1996, 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 financial statements of the State of Georgia and on the compliance ofthe 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 16, 1997.

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, that transactions are executed in accordance with management's authorization and recorded properly to pennit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that 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 the purposes 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

I. Budget PreparationlExecution 2. Cash and Cash Equivalents 3. Investments 4. Inventories 5. RevenueIReceivableslReceipts 6. ExpenditureslLiabilitieslDisbursements 7. Employee Compensation 8. Fund Equities 9. General Ledger 10. General Fixed AssetslProperty Management

GENERAL REQUIREMENTS

SPEClFIC REQUIREMENTS

I. 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

I. Types of Services Allowed or Unallowed
2. Eligibility 3. Matching, Level of Effort,
andlor Eannarking 4. Special Reporting 5. Special Tests and Provisions

QTHER REQUIREMENTS

1. Claims for Advances and Reimbursements 2. Amounts Claimed and Used for Matching

D

For all of the internal control structure categories listed above, we and other auditors obtained an understanding of the design of relevant policies and procedures and detennined whether they have been placed in operation, and we assessed control risk.
Because of the large number of nonmajor programs and the decentralized administration of these programs, we perfonned procedures to obtain an understanding of the internal control structure policies and procedures relevant to nonmajor programs on a cyclical basis. Our procedures during the current year covered 7% of the nonmajor program expenditures administered by 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, 1996, the State of Georgia expended 90% of its total Federal financial assistance u!lder major Federal financial assistance programs.
We and other auditors perfonned 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 detecting material noncompliance with 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 of the 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:
{I} Cash and Casb Equivalents - Administrative Requirements Inadequate Bank Reconciliation Procedures Department of Medical Assistance Department ofTransportation
(2) RevenueIRtteivablesIRtteipts - Administrative Requirements Inadequate Accounting Procedures - Drug Rebate Program Department of Medical Assistance
{3} General Ledger - Administrative Requirements Inadequate Accounting Procedures for Journal Vouchers Department of Medical Assistance
(4) General Fixed AssetsIProperty Maoagemeot - Admioistrative Requiremeots Inadequacies in Operation of Property Management System Various Organizations
D'

(5) Eledronic Data Processing Controls Inadequacies in the Operations and Control Procedures 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.
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 be reportable conditions and, accordingly would not necessarily disclose all reportable conditions that are also considered to be ma.terial weaknesses as defined above. However, as described in the Schedule of Findings and Improper or Questioned Costs, we and other auditors noted the following matters 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 3D, 1996, and this report does not affect our report thereon dated May 16, 1997.
(I) General Ledger - Administrative Requirements Inadequate Accounting Procedures for Journal Vouchers Department of Medical Assistance
(2) General Fixed AssetslProperty Management - Administrative Requirements Inadequacies in Operation of Property Management System Various Organizations
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.
Rer~
Claude L. Vickers State Auditor
May 16, 1997
0-10

SECTIONE
I REPORTS ON COMPLIANCE
c I /.~ :J.t~.
-..H '-- g.".~,f., 67
01 ~J in 1947 /,~ "tulian
d.. (j.~~L4-"J,4 I. fiEfd..
~ ololfia NJu!J'fIj Il'Om /f.. J..Jh ./Iu, f.1/"", c...~, wI.. Ji.J !,.fi,.... taki"1 olfia in 1946. :11.. (j~"Ii. S"f~'" C.~I 1..& 11..1 IIw
.!.clio.. w<u wu;orufil..Jio-.1and
..JJ.rmun w,.../ on 10 wi,. to ~dal .!.diIJn i,. S.pl."J.,. 1948. ..JJ"rtr14A ,u""..!<U (}.lnrruH' waiil 1955. ..9..
'0 1957, I.. wtmJ If.. nalion ~ capitolto
"'r""~ (l.o,.,ia w .. US 5"110.1,,,.. JJ. ~....,.J u.J 5 ..-.10,. unli! 198'.
:J)"";"'II~ Wai.,.,al. ;""flJi'FIU-fl,
:Jat-J,. ~ .uAliono.!,..~I fi,"/uJ a;JnJ...ct on IJ.. 5._/. '''''dIUpli''j cvmmitt. fi" -...t known f.,,. a.Ji"f JrvijJJ/-warJ 'j....JiiolU in .. cu.1m wuf rationalmannII,..

CLAUDK L. VICKERS
STATE AIJOn'OA
(olCW) 656-2114

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 afthe 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, 1996, and have issued our report thereon dated May 16, 1997. 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 afthe general fund, 100% of the assets and revenues afthe capital projects funds, 57% afthe assets and 20% of the revenues of the internal service funds, 59010 of the assets of the fiduciary funds and less than I% of the expendable trust funds revenues and t 00% ofthe pension trust funds revenues, and 9% 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 less than 1% of the assets and revenues of the component unit governmental fund types, 82% 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. 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 Audiling 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 financial statements of the Employees' Retirement System of Georgia, Georgia Lottery Corporation, Georgia Ports Authority, Georgia State Financing and Investment Commission, and Teachers' Retirement System ofGeorgia were not audited in accordance with Government Auditing Standards, and accordingly, this report does not extend to those organizations.
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 of laws, 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 opinion.

The results ofour tests disclosed the following instance of noncompliance that is required to be reported herein under Government Auditing Standards.

(I) General Fixed AssetsfProperty Management - Administrative Requirements Inadequacies in Operation of Property Management System Various Organizations

We considered this instance of noncompliance in forming our opinion on whether the State of Georgia's general purpose financial 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 16. 1997, on the general-purpose financial statements.

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,

?1-"A4iIr</

.......:t:<.

Claude L. Vickers

State Auditor

May 16, 1997

E

CLAUDE L. VICKERS
STATEAUOlTOA
(404) 6S&-2114

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, 1996, and have issued our report thereon dated May 16, 1997. 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 Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996:

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 II. Audit Distribution/Resolution

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, the Georgia Student Finance Authority, and the University of Georgia. Federal financial assistance activity for these organizations reflect a combined total of $1,817,822,206, which comprised approximately 23 percent of total Federal assistance activity, including the Federal government's risk in outstanding loan balances, for the State of Georgia as of and for the year ended June 30, 1996. Compliance with the requirements 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 solely 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 Supp/ementjorSing/e Audits ojState and Local Governments, except for procedures relating to Monitoring Subrecipients and Audit DistributionlResolution 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 of noncompliance 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 of Georgia. The results of our tests of compliance disclosed the following material instance of noncompliance that is described in the accompanying Schedule of Findings and Improper or Questioned Costs.
(1) Monitoring Subrecipieots Subrecipient Audit Reports and/or Corrective Action Plans Not Received Within Required Time Period
We considered this material instance of noncompliance in fonning our opinion on whether the State of Georgia's 1996 general purpose financial statements are presented fairly, in all material respects, in confonnity with generally accepted accounting principles, and this report does not affect our report dated May 16, 1997, on those financial statements.
Except as described above, the results of our procedures and the procedures of other auditors to detennine compliance indicate that, with respect to the items tested, the State of Georgia 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 infonnation 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 sUbmitte~, ~
~~..-4
Claude L. Vickers State Auditor
May 16, 1997
E-6

CLAUDE L. VICKRRS
STAn;: AlJOITOA
(0ll85&-211.

DEPARTMENT OF AUDITS
254 Washington Slreel, 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, 1996, and have issued our report thereon dated May 16, 1997. 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, 1996. The management of the State is responsible for the State of Georgia's compliance with 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 or percentages of major Federal financial assistance programs:

CFDA NO.

PROGRAM NAME

% AUDITED BY OTHER AUDITORS

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

\4.239 \4.856 66.458 84.032 84.0]8 84.063 84.268

HOME Investment Partnerships Program Lower Income Housing Assistance Program Capitalization Grants for State Revolving Funds Federal Family Education Loans Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loan Program

\()()01o 100% 94% 1()()OIo 21% 6% 28%

$20,758,257 $40,314.576 $10,298,026 $30,052,25 I
$99,685 $5,168,755 $56,959,159

SO SO
$167,642,606 $ 1,]85,783,506
$9,053,072
SO SO

These 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 of compliance with 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 ojState and Local Governments. Those standards and OMB Circular A128 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 compliance with those requirements. We believe that our audit provides
a reasonable basis for our opinion.
As further described in the accompanying Schedule of Findings and Improper or Questioned Costs. the results of our auait procedures for the Block Grants for Prevention and Treatment of Substance Abuse program (CFDA No. 93.959) disclosed that the State of Georgia did not comply with applicable eannarking requirements for the Federal fiscal year ended September 30. 1995.
In addition. the results of our audit procedures disclosed immaterial instances of noncompliance with the requirements referred to above, which are described in the accompanying Schedule of Findings and Improper or Questioned Costs. We considered these instances of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph.
In our opinion, except for the instance of noncompliance with the requirements applicable to the Block Grants for Prevention and Treatment of Substance Abuse program (CFDA No. 93.959) referred to in the fourth paragraph of this report 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. 1996.
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,
CI~~~Viwcke<rs "-~
State Auditor
May 16, 1997
E

CLAUDE L. VICKERS
STATE AUOlTOR
(41)() 6511417.

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 ofGeorgia
and Members ofthe General Assembly of the State ofGeorgia
We have audited the genera) purpose financial statements of the State of Georgia, as of and for the year ended June 30, 1996, and have issued our report thereon dated May 16, 1997. This report was qualified for various departures from generally accepted accounting principles.
In connection with our audit of the fiscal year 1996 general purpose financial statements of the Slate 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 certain nonmajor Federal financial assistance programs for the year ended June 30, 1996. As required by OMS Circular A128, 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, the Georgia Student Finance Authority, and the University of Georgia. Federal financial assistance activity for these organizations reflect a combined total of$1 ,8 17,822,206, which comprised approximately 23 percent of total Federal assistance activity, including the Federal government's risk in outstanding loan balances, for the State of Georgia as of and for the year ended June 30, 1996. Compliance .~ith the requirements by the organizations mentioned above were tested by other auditors whose reports have been fumlished to us. Our report, insofar as it relates to compliance with the requirements referred to above, is based solely upon th,e reports of the other auditors.
With respect l~O the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirl;~'1lents listed in the preceding paragraph. With respect to items not tested, nothing came to our attention that caus.e<! us to believe that the State of Georgia had not complied, in all material respects, with those requirements. Hovv'evcr. the results of our procedures and the procedures of other auditors disclosed immaterial instances ofnoncompl~;ance with those requirements, which are described in the accompanying Schedule of Findings and Improper or Questioned Costs.

This report is intended for the infonnation 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.
Rez~
Claude L. Vickers State Auditor May 16, 1997
E\O

SECTIONF
I FI:-\DIXGS AND LVIPROPER OR QUESTIO;\lED COSTS

.J. f868, g..J. ..J...JIw I~'I
tJl_mpf iJ .1nI.w .,/fic.. ..J.J., wa.:l
d./-J.J;. /,;, ~ f.. ._.<~, L.J t-... ~,..,....J~ t..I., ,f

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w:upla poJiliQlO will..

&

R",t...I. Aft" ~I {,.;.. tI.. ~~

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.._ , ~I.,..J f, ,.J.k _ ... fi. _ .td.J q~;

u. f886..J -oJ...td

f890. .J. 1890, /,. ~f.,..JI, I/" US 5..... ..J........Ju..ffi~.nil'897.

SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS (INCLUDING MANAGEMENT RESPONSES SUBMITTED BY ORGANIZATIONAL UNITS)

(THIS PAGE INTENTIONALLY LEFT BLANK)

FINDINGS AND IMPROPER OR QUESTIONED COSTS
TABLE OF CONTENTS

Fonlw FiJeoJ Yrar EndedJww 30. 1996

ENTITY CODE

ORGANIZATIONAL UNIT

PAGE
NUMBERS

401 40 Ia 408 411 414 414a 415 419 422 427 428 430 440 442 461 466 467 472 472a 474 474a 476 478 484 486 489
503 503a 509 509a 512 5128 518 5188 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- 12

Insurance, Department of ................................................. F 13

Defense, Department of .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F 14

Education, Department of .................................... , .......... F IS

Education, Department of EDP Controls

, .................. , , . , , F- 26

Technical and Adult Education. Department of

F 49

Medical Assistance, Department of ... , . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F 5 I

Governor, Office of the ............................................... F 57

Human Resources, Department of ..................................... F 59

Community Affairs. Department of .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F 63

Judicial Branch

_

_ . . . . . . . . . . . . . . . . . . . . . . .. F 64

Labor, Department of _. _ _ _. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F- 67

Law, Department of

_. _

_........................ F 70

Children and Youth Services, Department of.

_. _. _.................. F 71

Public Safety, Department of

_. _..................... F 73

Corrections. Department of

_.. _. . . . . . . . . . . . .. F 74

Regents of the University System of Georgia, Board of _.................... F 77

Regents of the University System of Georgia, Board of - EDP Controls ............ F 80

Revenue, Department of .................................................. F 81

Revenue, Department of EDP Controls ..................................... F 89

Student Finance Commission, Georgia

F-I13

Secretary of State ......................................................... F115

Transportation, Department of _

F116

Treasury and Fiscal Services, Office of .................................... F1l8

Subsequent Injury Trust Fund Board of Trustees ................. , .. , ......... F119

Colleges and Universities

Georgia Institute of Technology

F120

Georgia Institute of Technology EDP Controls ....................... F121

Georgia State University

F122

Georgia State University EDP Controls

F125

Medical College of Georgia

F126

Medical College of Georgia EDP Controls

_. _.................... _ F129

University of Georgia

_..................................... F130

University of Georgia EDP Controls ............................... F133

Albany State University

Ft34

Annstrong State College ........................................... F137

Augusta State University .............................................. F142

Fort Valley State University ....................................... F143

Fort Valley State University EDP Controls _......................... f-161

Georgia College

_

_..................... F162

Georgia Southern University

_. _

F-163

Georgia Southern University - EDP Controls .. . . . . . . . . . . . . . . . . . . . . . .. F167

Georgia Southwestern College

_............................ F168

Kennesaw State College ............................................ F-169

North Georgia College ......................................... F-170

F S

FINDINGS AND IMPROPER OR QUESTIONED COSTS TABLE OF CONTENTS

For 1M Fiscal Y~ar nd~dJun~ 30. 1996

ENTITY CODE

ORGANIZATIONAL UNIT

PAGE NUMBERS

Colleges and Universilies (con1inued)

548

Savannah State University ......................... F-I72

550

Southern College of Technology ............... _. _................ F-I77

55 I

Valdosta Slate University .......................................... F-178

554

Wesl Georgia, State University of .................................. F-183

561

Atlanta Metropolitan College ............................ F-184

573

Floyd College

F-188

581

Macon College .............................................. F189

584

Middle Georgia College ....................................... F194

587

South Georgia College ........................................ F196

590

Military College, Georgia ...................................... F-198

593

Skidaway Institute of Oceanography ................................. F-203

State Technical Institutes

818

Okefenokee Technicallnstilute ..... _............... F204

819

Wesl Georgia Technicallnstitutt ................................... F-205

820

Albany Technical Institute ...................................... F-210

822

Athens Area Technical Institule

F-213

824

Augusta Technical Institute ........................................ F-214

826

Carroll Technical Institute ......................................... F-216

827

Chattahoochee Technical Instilule .............. F-217

828

Columbus Technicallnstitule .................................... F221

829

Coosa Valley Technical Institute

_.......... F-222

834

Lanier TechnicallnSlitute ................................... F223

835

Macon Technicallnstilute

F224

836

Middle Georgia Technicallnstitule ............................... F225

837

Moultrie Area Technicallnstitule .................................... F228

838

North Georgia Technical Institute ................................. F233

839

North Metro Technicallnstilute

F-234

840

Pickens Technicallnstitule ..................................... F-237

842

South Georgia Technical Institute ................................... F-239

846

Thomas Technical Institute _................................... F-240

848

Valdosta Technical Institute

F-241

849

Walker Technical Institute ...................................... F-242

910

Jekyllistand State Park Authority ..................................... F-243

912

North Georgia Mountains Authority ........................ F-253

913

Lake Lanier Islands Development Authority ................................. F-254

917

Studenl Finance Authority, Georgia ........................................ F255

922

World Congress Center Authority, George L. Smith U, Georgia _........... F-257

923a

Housing and Finance Authority, Georgia - EDP Controls ........................ F-258

926

Agricultural Exposilion Authority, Georgia

" ... _...... F-259

927

Tollway Authority, State ........................................ F-26I

941

GeorgiaNet Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. F-262

947

Peace Officers' Annuity and Benefit Fund of Georgia ........................... F-264

950

Georgia Firemen's Pension Fund ....................................... F-265

958

Golf Hall of Fame, Georgia

F-266

977

Public Telecommunications Commission. Georgia .......................... F-267

F-'

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For tht Fiscal Ytar Endtd 111M 30. 1996

DEPARTMENT OF ADMINISTRATIVE SERVICES STAruS OF PRIOR YEAR FINDINGS AND IMPROPER OR OUESTIONED COSTS

The stalus of findings disclosed in the report for the year ended June 30, 1995. is summarized below:

Audit Control Number

Status ofFjndjne

4019501 4019502 4019503 4019504 401-95-05 4019506 4019507 401-95-08

See Audil Control Number 401-96-01 See Audil Control Number 401-96-02 Corrective Action Implemented See Audit Control Number 401-96-03 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See Audit Control Number 40 1-9604

PRIOR YEARICURRENT YEAR

EXPENDlTURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequacies in Operation of the Workers' Compensation Fund Financial Statements Reportable Condition Audit Control Number 401-96-0 I

The audit report for the year ended June 30, 1995, noted deficiencies in the internal accounting control structure over the Workers' Compensation Fund. For me year under review, our examination included a review of the internal accounting controls used 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 10 verify the accuracy of payments from the Workers' Compensation Fund.

A review of voided Workers' Compensation checks, refunds from claimants and vendors, and 111 workers' compensation claim payments revealed the following deficiencies:

(I)

1,102 checks totaling approximately $390,000.00 were received by the Workers' Compensation Fund

from claimants and vendors to reimburse the fund for overpayments.

(2) Checks issued from the Workers' Compensation Fund were returned by claimants and vendors and were subsequently voided for the following reasons:

(a) 155 duplicate payments to claimants and vendors. (b) 65 overpayments to vendors. (Included in (I) above). (c) 115 issued to wrong claimant or vendor. (d) 41 issued for the wrong amount.

(3) Of the III workers' compensation claim payments reviewed, documentation could not be located for claims lotaling S 1,292.90, and duplicate payments totaling $1,244.08 were made to vendors.

F -1

FINDINGS AND IMPROPER OR QU[STIONED COSTS
F the Fiscal Year &ukd JlIl1t' 30. J996
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEARICURRENT YEAR
Tests of the internal accounling control structure of the Self-Insurance Funds revealed that the Department did not have an adequate system of internal control for detecting either duplicate claim payments or overpayments of the Workers' Compensation Fund. The Department relied on the claimant or vendor to notify the Workers' Compensation $eetion 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 indicaled that these excessive payments were processed and subsequently posted to the proper account. 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 delermine 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 accounting control structure to ensure that transactions and balances relating to the Workers' Compensation Fund are accurate and complete.
Mqnagement Response
We concur with this recommendation. Workers' Compensation is now issuing vendor cheeks for non-medical fee-schedule services to providers on a daily basis rather than the previous weekly check runs. This change in payment processing will further minimize rebilling and the exposure to duplicate processing. Additionally, the Program Associates who enter the payable transaetion have been reassigned to the individual team leaden within the Worken' Compensation unit to better provide training and a more effective line of authority from the previous "pool" format.
Enhancements to the existing imaging system have been designed and will be implemented during Fiscal Year 1997. These enhancements will now allow the system to provide a warning that a potential duplicate transaction exists in the system when the Specialist requests a payment. This will allow the Specialist to verify potential duplicates before authorizing any payment.
During this audit, documentation could not be located to substantiate 51,292.90 in payments made to claimants and vendors. This is a substantial improvement from those found in the FY 95 audit totaling 516,322.97 which was an improvement over the FY 94 audit totaling 534,621.31. This area will continue 10 remain a focus for improved accountability.
In addition, OOAS will have an Internal Audit section under the Business Process Improvement unit. When fully staffed and operational, this new section will be responsible for quality control checks as suggested by the audit point for FY 95.
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Conlrol Number 40196-02
The audit report for the year ended June 30, 1995. 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 also consisted of testing the system for compliance with State laws and regulations. Our review disclosed that the Department did not conduct a physical inventory of its fixed assets al least every two years as required by Slate Property System regulations.
F

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For Ihe Fiscal Year Ended June 30, 1996
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEAR/CURRENT YEAR
In addition, three-hundred (300) equipment items were selected to test the accuracy of the Department's general fixed assets records. These items contained a value of$2,004,615.73 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:
(I) Ninety (90) items totaling $312,129.43 could not be located.
(2) Two (2) items totaling $31,921.97 were surplused, but were not removed from the equipment inventory records.
(3) Twenty-nine (29) items were located in locations other than the location indicated in the equipment inventory records.
(3) Two (2) items did not have decal numbers attached. Items were identified by serial numbers or descriptions.
The Department is required to maintain equipment inventories in accordance with provisions of the State Property System
M.iI.InW. 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 detennine 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 controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.
Management Response
We concur with this recommendation. DOAS has taken actions to ensure better control of equipment assets. During the reorganization ofthe Department effective September I, 1997, the Internal Business Services unit was created to centralize cenain suppon functions previously located in various divisions with DOAS. Within Internal Business Services, a centralized InventorylFacilities sub-unit was created to control all types of DOAS equipment inventories - computer, telecommunications and other personal property. This is the first time that all of the DOAS inventory has been the responsibility of a single office. The InventorylFacilities unit is in the process of creating a group of inventory coordinators throughout the Depanment's geographically dispersed offices. This group of coordinators will receive fonnal training in inventory requirements and methods. The lnventorylFacilities unit will ensure that a bi~annual inventory audit will occur. This inventory is scheduled to occur in the last quarter of Fiscal Year 1997. This new emphasis and centralized control will offer improved controls over the previous decentralized system.
In addition to the above, property insurance coordination and reporting has been assigned to the InventorylFacilities sub-unit. Processing of property insurance claims is, for the first time, being handled by the same group involved in inventory. As a result, it will be possible to have closer coordination of inventory control and those claims involving theft or destruction of inventoried equipment.
A design team has also been activated for the purpose of improving DOAS inventory processes. This design team is examining methods to improve tracking of equipment from the time it is received and placed on an inventory system until the equipment is disposed of by transfer or declared surplus. Issues currently being studied include the following: modification of fonns related to installation or moving of equipment, assigrunent ofequipment for employee use in off-site locations, consolidation of the three
'-9

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For tlw Fiscal )'ror Endrd JUIre 30, 1996
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEARICURRENT YEAR
separate inventory systems currently used for inventory tracking, improvement of accuracy of data entry, and better methods of communicating invenlory-related information.
SPECIAL TESTS AND PROVISIONS Excess Service Charges Assessed to Recipients Federal Financial Assistance Donation of Federal Surplus Personal Property (CFDA 39.003) Audit Control Number 401-96-03
The audit report for they year ended June 30, 1995, 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-CFR I01-44.202(5) and Part VI of the State Plan of Operation state 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% of the acquisition cost of the 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 ofdonated property revealed 2 inSlances at the Atlanta office, 2 instances at the Americus warehouse and I inslance at the Swainsboro warehouse in which service charges assessed to the recipient of surplus property were in excess of35% of 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 financing and service charges as outlined in Federal regulation 4 t CFR-44.202(5) and Part VI of the State Plan of Operation.
Mqnqgement Response
We concur with this finding. The DOAS Surplus Property State Plan of Operation states that service charges will not exceed 35%. There is no requirement from the Federal government that limits this service charge. The State Plan is being updated during Fiscal Year 1997 to remove this restriction. This action will allow for additional expenses such as transportation and refurbishment of equipment to be made in preparation for sale when exceeding the current limit of35%.
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 401-96-04
The audit report for the year ended June 30, 1995. 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 of the Donation of Federal Surplus Personal Property program. For the year under review, errors were again discovered in this report. Federal regulation 41 CFRIOI-44.4902-3040 and Part IV of tile 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 $989,933.41 due to clerical errors. This error was COfTe(;led for informalion disclosed in Note II in the Notes to the Financial Statements which reflects the financial activity of the surplus property program.
Procedures should be established to ensure that the Department accurately reports the balance of the Federal surplus personal property inventory as outlined in Federal regulation 41 CFRIO!-44.49023040 and Part IV of the Stale Plan of Operation.
F - 10

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30. /996
DEPARTMENT OF ADMINISTRATIVE SERVICES
PRIOR YEAR/CURRENT YEAR
Management Resoonse We concur with this finding. Future findings of General Services Administration (GSA) Form 3040 (State Agency Monthly Donation Report of Surplus Property) reports will be reviewed in detail by senior management prior to submission. Periodic checks will be performed to ensure correct posting of data. Automation of this report was completed February I> 1997. DOA$ is currently in the process of reviewing all reports dating back to June 1995. All findings will be noted and reponed to Ihe GSA by April 1> 1997. Additionally, training on the maintenance of the 3040 repon has been implemented.
F-l1

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For flu! Fiscal Year Ended June 30, 1996

DEPARTMENT OF ADMINISTRATIVE SERVICES COMPUTER SERVICES DIVISION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR OUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Aydit Control Nymber

Status ofFjndjni

40Ia-95-01 401a-95-o2 40Ia-95-03 40Ia-95-04 40Ia-95-05 401a-95-06 40Ia-95-07 401a-95-08 401a-95-09 401a-95-IO 401a-95-11 401a-95-12

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F - 12

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For 1M Fueol Yt'at' NJt'd JIUIt'. 30, /996

DEPARTMENT OF INSURANCE STATUS OF PRJOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Statys of Fjnding

408-95-01 408-95-02

Corrective Action Implemented Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARATJONIEXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 408-96-0 I
The total approved budget for the Deparanent of Insurance provided for cumulative expenditures of $17,866,500.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the expenditures for the "common object class-, Regular Operating Expenses, exceeded the authorized expenditure level of 102% of the budgeted amount forthat common object class by $13,593.93. The overexpenditure, which is in violation of Section 54 ofthe Amended Appropriations Act of 1995-1996, occurred because the Department's budget for 1995-1996 did not duly consider revisions to the state chart of accounts which moved certain expenditures from the Computer Charges object class to the Regular Operating Expenses object class effective for fISCal year 1996. An audit adjustment was made (0 correct the Department's accounting records to be consistent with the revised state chart of accounts.
The Department should review its internal control procedures over budget operations which allowed this condition to occur and implement procedures to strengthen those controls.
Mqnaremenl Response
We concur with this recommendation. In December 1996, all changes to the state chart of accounts were reflected in the Department's budget operations. The Department has established controls to ensure that budget operations are maintained in accordance with Section 54 of the Amended Appropriations Act.

F13

Stale a/Coorgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For 1M Fiscal Year Ended June 3D, /996

DEPARTMENT OF DEFENSE
STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESIlONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audi! Control Number

Status of fjndjng

411-95-01 411-95-02 411-95-03

Corre1:!ive Action Implemented Corrective Action Implemented Corrective Action Implemented

F -14

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal YtarEndtdJune30.1996

DEPARTMENT OF EDUCATION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR OUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audjl Control Number

Slaws of Findjng

414-95-01 41495..()2 414-95-03 414-95-04 41495-05 414-95-06 41495-07

See Audit Control Number 41496-01 See Audit Control Number 41496-02 See Audit Control Number 414-96-03 See Audit Control Number 41496..Q4 Correclive Action Implemented COlTtive Action Implemented COlTCclive Action Implemented

PRIOR YEAR

EXPENDITURESILIABILlTIES/OISBURSEMENTS Instructions to Boards of Education Not Consistent With the Official Code of Georgia Financial Statements Finding Resolved Audil Control Number 4149601
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 Annotated Section 20-2-182.
The guidance provided in the above referenced memorandums has resulted in the various boards of education inappropriately expending PDS funds of approximately $2,1 14,000.00 and $4,315,000.00 for the fiscal years ending 1993 and 1994, respectively.
As of June 30, 1996, the Department of Education has adjusted the affected boards of education local fair share for the fiscal year 1993 amount. Additionally, subsequent to June 30, 1996, the Department adjusted the affected boards of education local fair share for the fiscal year 1994 amount.
PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS EXPENDITURESILIABILITIESlDISBURSEMENTS Agency Funds - Deficiencies in Accounting Procedures Financial Statements Audit Control Number 41496-02
The audit report for !he year ended June 30. 1995. noted several deficiencies concerning agency fund cash accounts. For !he 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 control which are in need of corrective action:
(I) Cenain disbursements were not supported by adequate documentation. All disbursements should be supported by adequate documentation 10 demons!t"ate proper disbursement and accounting of funds.

F - IS

0/ State gtlONjia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For 1M Fiscal Yrar ENUdJUM 30. /996
DEPARTMENT OF EDUCAnON
PRIOR YEARICUERENI YEAR
(2) Certain disbursements did not appear to be in compliance with the intent of the fund. Steps should be laken to ensure that records of a fund include documentation stating specific disbursements which are allowable for the fund. A listing of allowable disbursements would reduce the likelihood of questionable disbursements.
(3) Checks were issued to a certain individual for services rendered; however, there was no corresponding W-2's or 1099's issued. Procedures should be implemented to issue W-2's or 1099's to individuals as appropriate.
(4) A check issued from the School Improvement Workshop included one check made payable to and endorsed by the custodian of the account. Measures should be taken to prevent this practice.
(5) All checks issued for the Vocational Education Accounts, Georgia Association ofAmerican Industrial Arts Student Association, Incorporated and Georgia Association of Vocational Industrial Clubs of America were not signed by the custodian of the account. Two checks were not signed by anyone and the remainder of the checks were signed by an authorized signer who is not an employee of the Department of Education. Measures should be taken to ensure that a bonded employee of the Department signs all checks.
(6) Certain disbursements included payments for sales tax. According to the Department's policy and procedures for agency funds, salcs tax should not be paid on an invoice total. Measures should be laken to prevent this practice.
Although the accounting department has sent instructions to the custodians of the agency funds, deficiencies continued to exist. The Department should continue efforts to ensure that proper accounting procedures are utilized in maintaining agency funds.
Afanaeeznent~pQnse
We concur with parts of this recommendation. The deficiencies in the management of trust fund accounts involved the Vocational Education Club Accounts, an Academy for the Blind Account, and two Georgia School for the Deaf Accounts. Although there were fewer findings than in previous years, there should not be any deficiencies in the management of the trust accounts. Infonnation was requested from vocational education and state schools staff, so that Accounting Services personnel could detennine the appropriate corrective action. A follow-up letter was sent to management level personnel outlining the cOlTC(:tive action needed. A meeting was also held with these individuals to go over the deficiencies.
Some ofthe deficiencies involving the Vocational Education Club Accounts are questionable. A number of accounts were cited for expenditures that were not within the intent of the funds. All of the expenditures were reviewed and detennined to be appropriate. The club accounts have a vcry broad range of activities that requires many different l}'pcs of expenditures.
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 ofa single page invoice. Most ofthe individuals are one person companies and have simple billing and accounting procedures. They do not usc multipage prcprinted invoices. Other times, cash register receipts are the only documentation received by custodians or others purchasing itcms for the clubs.
F16

FINDINGS AND IMPROPER OR QUESTIONED COSTS
FOI' 'he Fiscal Yeai' EndedJllne 30. /996
DEPARTMENT OF EDUCAnON
P~ORYEA~~TYEAR
The finding involving checks signed by individuals other than the custodians ofthe accounts has been discussed with the Director ofthe Vocational Education section to reemphasize the requirement that only state employees may be custodians and sign checks. There were procedures in place that would have prevenled the finding, but Vocational Education personnel did not follow them.
The fmding concerning sales tax is also questionable. Many of the purchases made for the club accounts involve stores that are not used to exempt purchases from sales tax, such as restaurants, discount stores, grocery stores, etc. The fact that purchases are
aI;so made by individuals paying with a check or cash, instead of by a field purchase order (FPO), causes difficulty getting the
sales tax exemption. Since the custodians and other individuals purchasing items for the clubs encounter difficulty in getting the sales tax exemption, the procedures established to provide guidance in managing the trust fund accounts are being changed to no longer require sales tax be deducted from purchases. The procedures will only recommend that individuals making purchases for the clubs try to obtain exemption from sales tax when it is possible and practical to do so, such as hotel charges, large purchases, etc.
We appreciate the help of the Department ofAudits has provided in helping the department resolve the trust fund audit findings.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 4149603
The audit report for the year ended June 30, 1995, 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 also consisted of testing the system for compliance with Federal and State laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:
(1) Equipment additions were not reconciled to the general ledger expenditure accounts.
(2) Equipment inventory records for additions were updated incorrectly. Testing ofcurrent year additions revealed twenty-three (23) additions that had been updated onto the equipment inventory reeords incorrectly by the amount of $177,663.06 (net).
(3) Four (4) equipment items acquired through installment purchases were included on the equipment inventory records at an incorrect amount. The difference in the acquisition cost and the amount recorded on the inventory records amounted to $6,997.16.
In addition, threc-hundred-thirty (330) equipment items were selected to test the accuracy ofthe Department's general fixed asset records. These items contained a value of$722,312.62 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:
(I) Twentysix (26) items totaling $64,743.82 could not be located.
(2) Twelve (12) items were located other than the location indicated in the equipment inventory records.
Also, during the physical inspection testing, two (2) items of equipment were located which were not included in the equipment inventory records.
F17

FINDINGS AND IMPROPER OR QUESTIONED COSTS
FOI' (he fiscal Yea, Ended JUrn!1 30. /996
DEPARTMENT OF EDUCATION
PRIOR YEAR/CURRENT YEAR
The Department is required to maintain equipment inventories in accordance with provisions of paragraph 32 ofOMO's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) and the Stale Pmpeav 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 detennine the validity of the total equipment inventory --:aluation contained in the inventory records, which comprises the General Fixed Assets Account Group.
The Department should establish the nessary internal controls to ensure that equipment inventories are maintained in accordance with provisions ofOMO's Common Rule and the State ProPerty System Manual.
Federal Grantor A geodes Affecfed:
U. S. Depanmem of Agriculture U. S. Depanment ofEducalion U. S. Depanment of Health and Human Services
Management Response
We concur with this recommendation. A new procedure is being adopted that requires receiving reports to go through Property Control on their way to Accounting Services for payment. Adopting this procedure by Property Control and Accounting Services should eliminate the noted deficiencies below that was indicated by the Department of Audits: Audit Findings for Fiscal Year
1996,
(I) Equipment additions were not reconciled to the general ledger expenditure accounts.
(2) Equipment inventory records for additions were updated incorrectly. Testing of current year additions revealed twenty-three (23) additions that had been updated onto the equipment inventory records incorrectly by the amount of$I77,663.06 (net).
(3) Four (4) equipment items acquired through installment purchases were included on the inventory records at an incorrect amount. The difference in the acquisition cost and the amount recorded on the invenlory records amounted to 16,997.16.
The Department of Education requires all units to conduct a physical inventory annually. These inventories are monitored by Property Control for timeliness. The inventories are reconciled with all changes to the DOE Property System prior to the end of the current fiscal year. All units are required to notify Property Control when the item(s) they reponed on their annual inventory Ware moved from its current location. The units should complete a Property Inventory Transfer Control fonn if the item(s) are moved to another unit along with the losing and gaining signatures of respective unit supervisors. If the item is moved within the unit, the unit supervisor is required to notify Property Control either by memorandum or e-mail. The movement of equipment within the department is the sole responsibility ofthe unit supervisors to notify Property Control to update the Property Control System to avoid audit exceptions. Failure to do so will result in equipment not being in its proper place as indicated by the ooE Property System. Property Control maintains and monitors new equipment purchases by issuing Receipt of Equipment fonns, DE Form 0513, upon receipt of equipment Field Purchase Order (FPOs) into Internal Suppon's Procurement Office. The Receipt of Equipment form is completed with all equipment indicated on the form that is scheduled to be purchased by the FPO. There are two conditions for the Receipt of Equipment form; the first condition is: if the equipment being purchased is being delivered directly to the unit that initiates the FPO, DOE decal number(s) will be issued and indicated on the Receipt of
F II

FINDINGS AND IMPROPER OR QUESTIONED COSTS

FOI'the Fiscal Year Ended June 30. 1996

DEPARTMENT OF EDUCATION
PRIOR YEAR/CURRENT YEAR

Equipment fonn by Property Control. When the equipment arrives, the unit supervisor will indicate the Serial Number and the Room Number (suite and initials of individual that is using the equipment), sign and date the Receipt of Equipment fonn and return to Property Control. The second condition is: if the equipment is being delivered to Internal Technology for buildingfloading of software, DOE decal numbers will be affixed to the equipment by Internal Technology. When the equipment arrives at the unit, the unit supervisor will indicate the Serial Number and the Room Number (suite and initials of individual that is using the equipment), sign and date the Receipt of Equipment form and return to Property Control. This procedure was developed by the current Agency Property Officer to prevent equipment from arriving into the Department without identification, However, some equipment FPOs fall through the system and eventually equipment is received without proper coding to the DOE Property System as indicated in the deficiency below where two (2) items of equipment were located but were not in the equipment inventory records (DOE Property System).

In addition, three hundred thirty (330) equipment items were selected to test the accuracy of the Department's general fixed assets records. These items contained a value of $722,312.62 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:

(I) Twenty-six (26) items totaling S64.743.82 could not be located.

(2) Twelve (12) items were located other than the location indicated in the inventory records.

Also. during the physical inspection testing, two (2) items were located which were not included in the equipment inventory records.

Please note the following on the twenty-six items that were not located:

Location E18-1 00 Personnel Services/Human Resources

Decal No,

Descrjption

Serial 1#

(I)

0A58829

IBM PC

Unknown

2052

This equipment was identified as missing on 12114/94 by the unit's annual inventory for FY 1995, The equipment was eligible

to be removed from the DOE Property System on 12114196.

(2)

0-7086

Wang PC 280

64084P

2052SR

This equipment was found, after the Auditor's deadline to locate equipment, in the Computer Room. Suite 1558 East Tower.

Location E23200 Careers - Vocational Education

(3)

O-A 12583

66Trackskidder

80STS

999999

This equipment was identified as missing on 11/03194 by the unirs annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11103196.

(4)

OA 12583

Olivetti Calculator

7026776

1752

This equipment was identified as missing on 11/03194 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11103196.

F19

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For lhe Fucal Year Ended June 30. 1996

DEPARTMENT OF EDUCAnON PRIOR YEARICURRENT YEAR

(5)

0A52240

Olivetti Calculator

Unknown

1752

This equipment was identified as missing on 11/03/94 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11/03/96.

(6)

O,-A58819

Stencil Cutter AB Dick Unknown

1770

This equipment was identified as missing on 11/03/94 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11/03/96.

(7)

0A60812

Storage Case wlExp

Unknown

MBROWN

This equipment was identified as missing on 11/03/94 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11/03/96.

(8)

0-A63948

Wang PC

64031P

1752

This equipment was identified as missing on 11/03/94 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11/03/96.

(9)

0-10938

HP LaserJet llD

3022J77501

Equipment is still missing as per property records dated 03/10/97.

1752SM

(10)

0-12498

Tandon Notebook

B5T02AOOl308

1752

This equipment was identified as missing on 11/03/94 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 11/03/96.

(11)

021477

Sharp Copier SF8200 Unknown

1754

This equipment was identified as missing on 02101/96 by the unit's annual inventory for FY 1996. The equipment is still missing

as per property records dated 03/10/97.

(12)

0-25714

Zenith ZNoteflex

4LSBTW004670

1752WT

This equipment was found, after the Auditor's deadline to locate equipment, in Suite 1752 East Tower.

(13)

0-25720

Zenith Z-Noteflex

4LSBTW004675

Equipment is still missing as per property records dated 03/10/97.

1752Wl

(14)

030809

Macintosh Powerbook FC541NRB65R

2062

This equipment was found, after the Auditor's deadline to locate equipment, in Suite 2066 East Tower.

F - 20

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For tM FisCQ/ Year EndedJune JO, /996

DEPARTMENT OF EDUCATION
PRIOR YEARICURRENT YEAR

Location E33-400 Donated Foods

(15)

0-A60229

Wang PC

NW6485

1654

This equipment was identified as missing on 01194194 by the unit's annual inventory for FY 1994. This equipment was eligible

to be removed from the DOE Property System on 01124/96 prior to the Department of Audits arrival to this department and

sryould not have been noted as a deficiency,

Location E54-100 Atlanta Area School for the Deaf

(16)

0A57887

TRS DMP Printer

3003240

CO-REV

This equipment was identified as missing on 02121194 by the unit's annual inventory for FY 1994. This equipment was eligible

to be removed from the DOE Property System on 02121196 prior to the Department of Audits arrival to this department and

should not have been noted as a deficiency.

(17)

OA6J452

Glenco Refrigerator

Unknown

FS341

This equipment was identified as missing on 02112194 by the unit's annual inventory for FY 1994. This equipment was eligible

to be removed from the DOE Property System on 02112196 prior to the Department of Audits arrival to this department and

should not have been noted as a deficiency.

(18)

0-A62385

Southbend Range

70NQL21052

FS34 I

This equipment was identified as missing on 02122/94 by the unit's annual inventory for FY 1994, This equipment was eligible

to be removed from the DOE Property System on 02/22196 prior to the Department of Audits arrival to this department and

should not have been noted as a deficiency.

(19)

0-A62425

Panasonic Camcorder K7H 103845

337

This equipment was identified as missing on 02/24/94 by the unit's annual inventory for FY 1994. This equipment was eligible

to be removed from the DOE Property System on 02/24196 prior to the Department of Audits arrival to this department and

should not have been noted as a deficiency.

(20)

0-3960

Laser 286 PC

MCOIIOl428

GAPfNE

This equipment was identified as missing on 02124195 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 02124197.

(21)

l)..4633

Wang PC 280

3975SX

Equipment is still missing as per property records dated 03/01197.

(22)

04787

IBM Color Monitor

1019728

890

Equipment is still missing as per property records dated 03/10/97.

F - 21

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF EDUCATION
PRIOR YEAR/CURRENT YEAR

(23)

0-10803

Wang PC 381/9

35581Z

Equipment is still missing as per property records dated 03110/97.

(24)

0-19546

Industrial Refrigerator Unknown

PSDUN

The Business Manager at the Atlanta Area School for the Deaf said that in the past when the school was surplusing kitchen

equipment, the decal number was never indicated on the surplus forms.

(25)

0-20237

Powerbook 520

FC5078VJlXN

205

This equipment was found prior to the Auditor's deadline and should not have been noted as a deficiency.

(26)

0-20758

Hot Food Modules

Unknown

FSOOO

This equipment was identified as missing on 02122195 by the unit's annual inventory for FY 1995. The equipment was eligible

to be removed from the DOE Property System on 02122/97.

As noted above, there were six (6) items that the Department of Audits had indicated as not being able 10 locate, however, five (5) items were eligible to be removed !Tom the DOE Property System prior to the Department of Audits arrival to this department and one (I) item was located prior to the Auditor's deadline but was not noted by the Depanment of Audits. With these in mind, the actual number of items not located was 20 items out ofa possible 330 item sample, or 6% of the sample could not be located.

MONITORING SUBRECIPIENTS Subrecipient Audit Reports Not Received Within the Required Time Period Federal Financial Assistance Material Noncompliance Audit Control Number 414-96-04

The audit report for the year ended June 30, 1995, noted that a substantial number of subrecipient audit reports had not been submitted within the time period required by OMB Circular A-128 and A-133. The Circulars state that subrecipients subject to the reporting requirements should submit audit reports no later than thineen 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 Depanment of Education to determine the status of subrecipient audit reports for the year ended June 30, 1995. Of the 468 subrecipients identified on the tracking documents, 150 had not submitted their audits within the thineen month period as required by OMB Circulars A-128 and A-l33. This noncompliance is due to subrecipient audits not being perfonned in a timely manner.

A subsequent review of the status of the ISO audits not submitted by the due date, indicated that 142 of the reports had been submitted by January IS, 1997. It was noted during our examination that the Depanment of Education utilized a program review staff for interim compliance reviews of all subrecipients in accordance with the foregoing provisions of OMS Circulars A-128 and A-133.

F - 22

0/ Slale georgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the FiJcal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION
PRIOR YEAR/CURRENT YEAR
Federal Grantor Agencies Affecred:
U.S. Department of Agriculture Corporation for National and Community Service U.S. Department of Education U.S. Department of Heallh and Human Services U..S. Department of Labor
AfanagententRf1ponse
We concur with this recommendation. Although the Department of Education is responsible for tracking and reviewing the audits on local units of administration (LUAs), the Department of Audits is required by state law to audit the LUAs, because LUAs receive the majority of their funding from the state. In addition to the LVA audits, the Department of Audits has the responsibility to audit all state agencies, commission, 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 of Audits 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 ofthe problem, and realizes there is not currently a viable solution to the finding. The LUA audits are normally completed within a 15-18 month time period. The department has a six-month resolution period to resolve findings in the LUA audits after being received from the Department of Audits.
CURRENT YEAR
BUDGET PREPARATION/EXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 414-96-05
The total approved budget for the Department of Education - "A" Budget unit provided for cumulative expenditures of S4,392,31O,200.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the object class NonQBE Grants - Retirement (H. B. 272 and H. B. 1321) was overspent in the amount ofS 135,226.18. This overexpenditure is in violation of Section 54 of the Amended Appropriations Act of 1995-1996. The overexpendilure was 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 the budget function.
Afal1Qgement Resoonse
We concur with this recommendation. The object class Non-QBE Grants - Retirement (H.B. 272 and H.B. 1321) was overspent in the amount of$135,226.18. The Teachers Retirement System annually bills the department for retirement charges involving local school system personnel. The budget amount can only be an estimate of anticipated expenditures. Since the charges are incurred by local systems, the department has no control over the charges that will occur in this program.
F - 23

Slale o!qeo"ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For fhe Fiscal Year Ended June 30. 1996
DEPARTMENT OF EDUCATION CURRENT YEAR
CASH MANAGEMENT Failure to Amend Agreement for Change in Funding Technique Federal Financial Assistance Child and Adult Care Food Program [CFDA 10.558] Audit Control Number 414-96-06 As part of our examination for the year under review, we examined the Department's funding technique used in implementing 'the Cash Management Improvement Act of 1990. The Agreement effective for the period July I, 1995 through June 30, 1996 applied the zero balance accounting funding technique. During the year under review. the Department ceased using the zero balance accounting funding technique and began using the average clearance technique which is acceptable under Federal regulation 31 CFR Part 205. However, the Department failed to obtain approval from the Financial Management Service for the change in funding technique during fiscal year 1996 prior to implementation. Federal regulation 31 CFR Part 205.9(d) states, as follows:
"A treasury-state agreement may be amended by the mutual written consent of the state and the Financial Management Service." This noncompliance occurred because the Department failed to gain approval from the Financial Management Service when they began using the average clearance technique in April 1996. The Department should ensure any changes ta the agreement made with the Financial Management Service are approved in writing for the applicable fiscal year. Manqgemenr ResoQQ,fe We concur with this recommendation. The department did change the funding technique for the Child and Adult Care Food Program (CACFP) from zero balance accounting ta average clearance technique. The average clearance technique was an approved funding method far other expenditures (accounts payable) in the same bank account used for the CACFP payments. The department was using a PC-based software program from the bank to do electronic fund transfers (EFTs) to CACFP sponsors. The process requires a lot of personnel time to do the entries required for the EFTs and the accounting entries needed in FACS. Because of personnel reduction, the decision was made to stop doing EFTs and have FACS write paper checks. FACS disbursements are made using the average clearance technique. The CACFP was transferred to the Office of School Readiness, effective April 16. 1997. Effective with the FY 97 CACFP claims processing that began November I, 1996, department personnel no longer has responsibility for processing CACFP claims. The Office of School Readiness has been advised to contact the Office of Treasury and Fiscal Services to adopt a funding technique for the account used to disburse CACFP payments.
F24

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For Ihe Fiscal Year EndedJllne 30, 1996

DEPARTMENT OF EDUCAnON CURRENT YEAR

EXPENDlTURESlLIABILITIES/DISBURSEMENTS Failure to File Completion Report Within Required Time Period Financial Statements Audit Control Number 414-96-07

For the year under review, an examination of the Department's compliance with regulations for the Lottery Programs Instructional Technology, Distant Learning-Satellite Dishes, and Technology Installation, revealed that the Department failed to'file a final completion report by the required date for the Service Centers and State Schools in accordance with regulations established by the Department of Education. The fmal completion reports were due on July 31, 1996. The Department submitted the reports for the Service Centers and State Schools on the following dates:

Service Centers Calhoun Gainesville Moultrie Swainsboro
State Schools Atlanta Area School for the Deaf Georgia Academy for the Blind Georgia School for the Deaf

November 22, 1996 November 22. 1996 November 22, 1996 November 22, 1996
October 9, 1996 October 15, 1996 October II, 1996

This deficiency occurred because management failed to ensure timely submission of reports. Appropriate procedures should be implemented by the Department to ensure that completion reports are submitted by the required date.

Manawnent Besoonse

We concur with this recommendation. The completion reports on the Lottery Program - Instructional Technology, Distant Learning-Satellite Dishes, and Technology Installation for the Service Centers and State Schools were late in being prepared. Since Accounting Services personnel disbursed the lottery funds from the grant accounting system, recorded the expenditures in the FACS system for the Service Centers and State Schools, and drew the funds from the treasury, there was never any questions or concerns about the funds being expensed or drawn.

The purpose of the completion reports from local school systems is to ensure that funds are spent and drawn in appropriate time lines. With the lonery funds for the Service Centers and State Schools being handled by department program and accounting personnel, there was not the same need for timely submission of the completion reports. However, in the fUlUre, completion reports on programs involving units within the Department will comply with the same time lines as required by local systems.

F - 25

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
GENERAL CONTROLS
Lack ofSecurity Management Function Reportable Condilion Audit Control Number 414a96-01
.The Department of Education has no security management function to adequately develop and coordinate information security and protection policies and procedures., to monitor and investigate security access violations. and to assure system and application security and controls are addressed in new development projects.
Without adquate security management, important control objectives regarding information protection may not be defined or mel. The risk of data corruption, errors and fraud are increased.
Recommendation:
A security mangement function should be developed for the Department of Educalion. Responsibilities for such a function should include the development and coordination of departmentwide security and data protection policies. monitoring and investigation of unauthorized application level access. and supporting the security and control needs of new application development projects.
Manqument Response
The following items are being implemented:
Physical Securily Some Nctware servers are not in physically secure locations. Netware servers will be laken down and merged to Windows NT servers. These servers are located in a room that requires a password key for access. This password will be changed. During the transition from the current Netware servers to the new NT servers, departmentwide securily and data protection policies will be developed in wrinen format. These policies will be coordinated with the DOE Human Resources Department, addressing this issue for both new employees and terminated employees.
Login Comrols Users will not be required to change passwords at regular inlervals. When users are required to change passwords frequently, they are more likely to choose simple passwords that can be easily guessed. They may also write down passwords in a location where others may have access. Network administrators will still be able to force password changes for users when warranted.
Users will have their connection cleared in the late evening or early morning. This will ensure that users who are absent for an extended period of time do maintain an open connection to the servers.
Users will be required to have a password ofa minimum six (6) characters.
A series of incorrect login attempts will lock a user's account.
Access to Data All mission-critical data will be stored on the Windows NT servers. Access to particular data on the servers will be assigned on an as-needed basis with consultation between Internal Technology and the individual units.
F 26

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended JlIne 30. 1996
DEPARTMENT OF EDUCAnON - EDP REVIEW
CURRENT YEAR
GENERAL CONTROLS
Remote Access to the Servers Windows NT Administration requires remote access to the server. All remote access to servers currently requires user verification in addition to that employed by NT. A further security measure that may be used is to eliminate remote access to a server via TCP/IP.
Internet Access TCP/IP is being installed on all desktops so that DOE personnel have access to the Internet. The Department is investigating firewall software which will protect the internal DOE LAN from unauthorized intrusion via the Internet
Backup The merging of all data from distributed Netware servers to physically concentrated NT servers will facilitate a regular and reliable backup of all mission-critical data on the NT Servers. Backups of all server data will be performed every 24 hours and backup media will be stored in a off-site, secure location. The department is investigating third-party backup software to enhance this process.
Lack of Flexibility in Staffing for Programming/Systems Support Reportable Condition Audit Control Number 414a-96-02
The Technology Services area of the Department of Education must have the ability to hire and retain qualified slaffto develop and maintain efficient, well designed software applications. Most jobs in Technology Services are still classified under the Georgia Merit system. The job descriptions are inflexible and allow little leverage in the department's ability to bid for qualified information services personnel. Merit system pay scales are also not competitive with what outside industry pays information systems professionals with certain skill sets. Consequently, hiring qualified people is difficult and turnover is high. The procedures for hiring contract programmers are so long and tedious that often paperwork cannot be completed before a contract programmer has taken another position elsewhere.
Lack of qualified staff and/or excessive staff turnover can lead to poor productivity levels for information systems staff. This impacts the department's ability to adequately develop new applications, maintain existing systems and use up-to-date technology.
Recommendation:
Technology Services positions which require certain skill sets and technological training should be changed to unclassified positions. Procedures for hiring contract information systems professionals should be simplified to facilitate adequate staffing in a timely manner.
Management Re.mQnse
The department is moving toward standard internal programming software and all programmers will be cross-trained for this software. Any new hires to the staffwill have a current skill set congruent with these standards.
F27

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fuca/ Year Ended June 3D, /996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
GENERAL CONTROLS - GENESIS AND BLACK BOX
Problem Management. Genesis and Black Box Reponable Condition Audit Control Number 414a-96-03
Problem management for Genesis and Btack Box applications is handled cenltally at the help desk in the department's Technology Services area. Help desk personnel take problem calls from the sites after they have been numbered and given priority in the message center. Help desk personnel can often solve problems over the phone, but if necessary, site users make backup tapes and send them in for funher analysis. Help desk personnel load the back-ups on the test system to analyze the problem. They then write up instructions for the solution and forward the instructions to the field supportltrainer. There is only one fieldlsuppon ltainer covering the state. The fietdlsuppon ltainer must apply the fix at the site. The field/suppon trainer goes to the site, applies and tests the fix according to the instructions, signs ofT and returns the documentation to the help desk. Any common fixes are forwarded to programmers for incorporation into the next scheduled maintenance release. Help desk personnel always have a backlog of outstanding problems. The one field support/trainer is behind applying fixes and spends a 101 oftime driving between sites.
Continuous problem backlog and unapplied fixes increases the risk of inaccurate data processing.
Recommendation:
Given the age of the system (9 years), the volume of problems and the lack of connectivity thaI requires on-site application of fixes, the solutions to these problems are either development of system connectivity to allow for on-line problem correction or additional personnel to apply on-site fixes.
MqllQgement Besnonse
The Office of Technology is preparing a request for proposal for a fund accounting system as a GENESIS replacement. The nine year age of GENESIS and its proprietary nature create a volume of problems that would be eliminated with the adoption and implementation of a new fund accounting system which would allow online problem correction.

GENESIS APPLICATION

Transmission Controls Reponable Condition Audit Control Number 414a-96-04

We reviewed file transmission controls at five Genesis local units of administration (LUA) to ensure records ltansmitted from the Genesis application are accurately received and processed by the mainframe system. File transmissions are controlled by various mainframe file transfer verification repons. These verification repons provide verification of transmissions which include:



DE420 QBE budgel and DE420 actual repons which are extracted from the general ledger and transmitted 10 the

financial review application.



DE0046 budget and DE0046 actual financial repons also exltacted from the general ledger and transmined to the

financial review application.

F - 2!

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Yea,. Ended June 30. /996

DEPARTMENT OF EDUCATION EDP REVIEW CURRENT YEAR

GENESIS APPLICATION



data extracted from the Genesis payroll application and transmitted to public school employees retirement system

(PSERS) and teachers' retirement system (TRS).



the DE I06 data transmitted for school nutrition application general and financial detail reports.

findings were noted as follows:

(A) Some mainframe LUA file transfer verification reports do not provide significant meaningful infonnation for LUA personnel to reconcile data transmitted to data received for processing in mainframe applications.

Reports only provide verifications of record counts transmitted and received. At various sites, Genesis users have experienced receiving a transmission acknowledgment of records received by a mainframe application, but then being contacted by DOE that their transmission had not been received. Although retransmission is not a problem, users are concerned about the transmission process, the accuracy and integrity of their data in the mainframe systems' processing cycles, and the financial impact inaccurate data could have on them.

Mainframe file transfer verification reports also include too much mainframe Job Control Language (JCL) which is useless and confusing to the users.

(B) The LUAs do not use a consistent methodology or have guidelines to follow for reconciling Genesis records processed to records received and processed by the various mainframe systems.

(C) Users seem unclear in distinguishing Genesis reports from mainframe reports, since both types of reports print on their Genesis printer.

(D) When the Genesis transmission files are created, only the file name displays on the user screens.

Recommendations:

(A) Mainframe applications that do not produce reports listing dollar amounts to acknowledge the receipt of transmitted data should be changed to include LUA dollar totals, any edit reports, or records accepted or rejected counts, in addition to record counts from the file transfer process. Job Control Language (JCL) on reports should either be eliminated or its usefulness clarified to users.

(B) and (C) When reports are available for use in reconciling Genesis transmissions to records received and processed by the mainframe applications, LUA guidelines and instructions by application need to be developed:

identifying and explaining mainframe application transmission reports and Genesis transmission reports. detailing reconciliation procedures to ensure accuracy and integrity ofthe data received and processed by the mainframe system.

F - 29

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For lhe Fiscal Year Ended June 30. 1996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
GENESIS APPLICATION
(0) When Genesis transmission files are created, record counts should also display on the user screen, in addition to file name. Genesis transmission reports or reports which also produce transmission files should be modified or created to list dollar amount totals for selected fields, in coordination with mainframe report field totals to facilitate system reconciliation.
Managemem Resoonse
The GENESIS Project leader is working with the Department of Administrative Services in developing reports which are more easily interpreted by the user. Dollar amount totals on selected fields will be included for user verification.
Site Level General Controls Reportable Condition Audit Control Number 414a96-05 We reviewed general computer system controls at five Genesis sites to ensure system and data integrity and the ability to recover files and data in a timely manner from a hardware failure.
Findings were noted as follows:
(A) Local units of administration (LUA) reviewed did not have written disaster recovery plans.
(B) All LUAs do not create or retain back-up diskette copies of W2 or 1099 data sent to the IRS, but the information can be recreated from the Genesis system.
(C) Not all of the LUAs reviewed stored back-up data offsite.
Recommendations:
(A) The Department of Education should develop very detailed procedures and guidelines for disaster recovery planning.
(B) The Department of Education should require that all LUAs create back-up copies of data sent to the IRS and store the data in the same media off-site.
(C) The Department of Education should develop specific written procedures and guidelines for backing up production data and files and storing it offsite.
Managemenr Response
The GENESIS Project leader is developing detailed procedures and guidelines for disaster recovery planning for each district. An emergency backup location will be established for each GENESIS site.
The GENESIS Project leader is developing a procedure guideline on W-2 and 1099 data that is forwarded to the IRS. This guideline will include backup instructions and offsite storage instructions for backup media.
F30

Stale o!(jeo'J/ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, /996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
GENESIS APPLICATION
The GENESIS Project leader is developing a procedure guideline for daily, monthly. and annual backup of data for sites. Addressed in the guideline will be a plan for the storing of the backup offsite.
Lack of Security Controls Reportable Condition Audit Control Number 414a~96~06
We reviewed Wang VS operating system and Genesis application level security controls at five sites.
Findings were noted as follows:
(A) The operating system READ security attribute which restricts users to read access only for certain files is not working properly. The READ attribute also allows WRITE capability. This weakness could result in personnel making unauthorized changes to file data.
(B) The Department of Education endorses Genesis application level security recommendations outlined in the Genesis user documenlation. The following exceptions were noted:
A majority of the users did not have security infonnation explaining file class security. Therefore, they did not understand how to properly limit system access or use application level file security.
Sites have set up user-ids and passwords. but most are not using any other security controls. Only one user out of five understood and used security properly.
Procedures for adding and deleting users are not adequate at the sites. Inactive or unknown system users were noted.
One user did nol have a system logon procedure defined in one user security profile. A logon procedure restricts users to a specific menu of options. A user with no logon procedure can access system commands and have unlimited access.
Recommendations:
(A) The Department of Education should contract with appropriate programmers providing Wang VS operating system support to correct the READ attribute problem.
(B) The Department of Education should emphasize the importance of security by issuing a written security policies and procedures document to all sites. The local units of administration (LUA) need to be periodically reminded of the importance of adherence to security policy and procedures and that security should be used as recommended by the Department of Education.
The Department of Education should provide each Genesis site with adequate security reference materials with instructions on how to set-up and maintain system security. System users should periodically review and update security access.
F - 31

Slale of georgia
FINDINGS AND 1M PROPER OR QUESTIONED COSTS
For 1M Fiscal )'rar EndrdJune 30. 1996
DEPARTMENT OF EDUCAnON - EDP REVIEW
CURRENT YEAR
GENESIS APPLICATION
Maaaeemenf Response
The Office ofTechnology Services is preparing a request for proposal for a fund accounting system as a GENESIS replacement which will correct the securily problem. Due to the complexity of the proprietary WANG Operating System, it would not be cost effective to correct this problem on a system that is nine (9) years old. The GENESIS Project Leader is preparing a security g~ideline procedure which will clearly explain the file class security and how to properly limit system access or application level file access. User !D's and passwords and the proper maintenance of these will also be addressed in the guideline procedure. Logon procedures will be outlined and its use in the securily profile defined. A system security maintenance plan will be defined in the guideline.
BLACK BOX APPLICAnON
(used by LUAs that use software other than Genesis to transmit files to the mainframe applications)
Transmission Controls Reportable Condition Audit Control Number414a-96-07
We reviewed transmission controls at two Black Box local units of administration (LUA) to ensure records transmitted from the Black Box systems are accurately received and processed by the mainframe applications. Black Box transmissions are similar to Genesis transmissions detailed in above finding 414a-9604.
Findings were noted as follows:
(A) Some reconciliation reports are only verifications of record counts transmitted and received. Users are concerned about the accuracy and integrity of their data in the mainframe systems' processing cycles, and the financial impact inaccurate data could have on them.
(B) The LUAs do not use a consistent methodology or have guidelines to follow for reconciling records processed to records received and processed by the various mainframe systems.
(C) Users seem unclear in distinguishing Black Box reports from mainframe reports, since both types of reports print on their printer.
(D) The hardware has low memory and slow printers. The low memory can interfere with receipt of file transfer verification reports. The system must be shut down immediately aRer transmission and rebooted to receive a transmission acknowledgment back from the mainframe. Slow printers may also impede the reconciliation process. Printing an entire report can take all day, even for a very small school system.
Recommendations:
(A) Mainframe applications thai do not produce reports listing dollar amounts to acknowledge the receipt of transmitted data should be changed to include system or LUA totals, any edit reports, or records accepted or rejected counts, in addition to record counts from the file transfer process.
F 32

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For Ih~ Fiscal Y~ar nd~d JUfl~ 30. 1996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
BLACK BOX APPLICATION
(B) and (C) When reports are available for use in reconciling Black Box transmissions to records received and processed by the mainframe applications, LUA guidelines and instructions by application need to be developed:
identifying and explaining mainframe application transmission reports and Black Box transmission reports. detailing reconciliation procedures to ensure accuracy and integrity of the data received and processed by the mainframe system.
(D) More memory needs to be added to the Black Box machines. Less expensive "Ink Jet" or "Bubble Jet" printers could be: added to improve print capacity.
Management Response
The GENESIS Project leader is working with the Department of Administrative Services in developing reports for the Black Box sites which are more easily interpreted by the user. Dollar amount totals on selected fields will be included for user verification. During the month of October, 1996, a new pentium. 133 MHZ, computer is being installed at each Black Box District. In addition. a new high speed laser printer is being installed at each district. In collaboration with the Department of Administrative Services, a new solution for file transfer has been established and will be implemented during December, 1996. In addition the GENESIS Project has collaborated with the Department of Administrative Services in adopting a new report generator for Black Box sites that will use a new software solution, Document Direct. The Document Direct software will allow districts the ability to get reports in a more timely and accurate manner and eliminate the previous problems in the transmission and receiving of reports. This software package will be implemented in December, 1996.
Lack of Security Controls Reportable Condition Audit Control Number 414a-96-08
We reviewed security procedures and controls at two Black Box sites.
We noted one inactive employee as a system user.
Recommendation:
Local units of administration (LUA) need to be periodically reminded that security should be used as recommended by the Department of Education. The Department of Education should provide each site with adequate security reference materials with instructions on how to set-up and maintain system security.
Management Ryponse
The GENESIS Project Leader is preparing a security guideline procedure. User ID's and passwords and the proper maintenance of these will also be addressed in the guideline procedure. Logon procedures will be outlined and its use in the security profile defined. A system security maintenance plan will be defined in the guideline.
F))

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCAnON - EDP REVIEW
CURRENT YEAR
CHILD NUTRITION APPLICATION
Manual Entry of Child Nutrition Claim and Sponsor Data Reportable Condition Audit Control Number 414a-96-09
We reviewed the data entry process for the child nutrition application. There are no electronic transmissions of reimbursement claim and sponsor set-up data into the child nutrition system. All data input must be entered manually through the On-line Data Entry (ODE) system. This presents the risk that data may not be entered completely or accurately.
Recommendation:
A method of electronic transmission of claim and sponsor data to the child nutrition application should be developed. Electronic versions of the forms DE 0867 (Claim for Reimbursement) and DE 0857 (Notification of Agreement Approval. Renewal or Change) should be provided to Child and Adult Care Food Program (CACFP) sponsors to use as templates. For those sponsors associated with a local unit of administration (LUA), transmission of data could occur electronically through the Georgia On-line (GO) network from the GENESIS/Black Box systems. Other sponsors could apply for limited access to the network for form transmission, or copy the data to a diskette to be mailed to the DOE. The elimination of manual entry of data into the system would reduce the risk of incomplete or inaccurate data that is processed by the system.
Note: Responsibilityfor processing ofCACFP claims and sponsor information will be transferredfrom the DOE Child Nutrition Claims Unit to the Office ofSchool Readiness within the next few months, at which time the current process will be reevaluated and possibly changed to meet the needs ofthe system and the office.
Managemem Response
This department has been moved to the Office of Child Readiness. However, this finding has been reviewed by appropriate DOAS personnel and direct follow-up will occur with the Office of Child Readiness.
Manual Calculation of Advance Payments to CACFP Sponsors Reportable Condition Audit Control Number 414a-96-10
We reviewed the processing ofadvance payments to the new Child and Adult Care Food Program (CACFP) sponsors for the child nutrition application. Although reimbursement payments are automatically calculated by the child nutrition system. advance payments are manually calculated by child nutrition staff. Advance payments are provided to new program sponsors as a source of cash now until reimbursement checks are received. The advance payment amount is manually calculated, written on the DE 0157. new sponsor set-up fonn. and provided to the data entry operator for entry into the On-line Data Entry system. The manual calculation of reimbursement amounts increases the risk that advance payments may not be accurately calculated.
Recommendation:
A program should be developed, tested, and implemented for the child nutrition application that would automatically calculate advance payment amounts for new sponsors.
F -)4

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For t~ Fiscal Year ndedJu.M 3D, /996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
CHILD NUTRJTION APPLICATION
Manqgement Rwxmse This departmenl has been moved to the Office of Child Readiness. However. this finding has been reviewed by appropriate DOAS personnel and direct follow-up will occur with the Office of Child Readiness.
CHILD NUTRJTION APPLICATION SCHOOL LUNCH CLAIMS APPLICATION
DOAS Maintenance and Support of the Child Nutrition and School Lunch Claims Applications Reportable Condition Audit Control Number 414a-96-11 We reviewed the processing and paymenl of reimbursement claims to Child and Adult Care Food Program (CACFP) sponsors and local school systems.
(I) Due to recenltechnical stafftumover, these systems are maintained almost entirely by the user. (2) Technical documenlation is not regularly updated 10 reflect recent changes or enhancements to the system. (3) Most of the batch processing for these systems requires notification by the Child Nutrition Supervisor before
thejob can be run by DOAS. This creates a risk that batch processing may not always occur on a timely basis. Recommendations:
(I) and (2) DOAS personnel should be trained to support and maintain these applications as needed. Current application documentation should be available as a resource for technical personnel. Documentation should be maintained and updated as needed. Also, technical staff should be cross-trained on several applications so that technical expertise is shared among several application support personnel.
(3) Because of the importance of these applications for fund reimbursement, it is critical that all job processing occur in a timely manner. An automated or predefined schedule should be implemented by DOAS for these applications.
Management Resoorue This department has been moved to the Office of Child Readiness.
F35

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
SCHOOL LUNCH CLAIMS APPLICATION
Application Level Security Reportable Condition Audit Control Number 414a-96-12 We reviewed the processing and payment of reimbursement claims to local school systems by the school lunch application. There is no application level security for the school lunch claims application. All user access is controlled by the RACF operating system security package. Due to the large volume of transactions and the relationship of the application to funding, security should be enhanced to include appropriate application level access controls to reduce the risk of unauthorized access to school lunch payment data. Recommendation: Access to school lunch payment information and reimbursement rates should be controlled at the application level. Mana~ement Response In conferring with the Department of Administrative Services, it was determined that the user id and password is required at the application level.
FACILITIES MANAGEMENT APPLICATION
Derivation of Full Time Equivalent Raw Data Needed for Facilities Management Calculations Reportable Condition Audit Control Number 414a-96-13 We reviewed the facilities management process and the calculation of full-time equivalent (FTE) raw data to derive attendance statistics. FTE raw data from the FTE data collection application on the mainframe is copied onto diskette by the DOE school data collection department. The diskette is provided to facilities management personnel and copied into the facilities management spreadsheets to derive the attendance statistics necessary for facilities calculations. The recalculation of FTE data is a time consuming process and increases the risk that attendance data may not be complete or accurate. Recommendation: Information should be provided to facilities management in a format such that extensive spreadsheet recalculations are not necessary. The availability of such information would reduce the need for multiple derivations and increase the efficiency of the facilities management process.
F - 36

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
FACILITIES MANAGEMENT APPLICATION
ManafJement Response Presently, the Office of Technology Services is assisting the Facilities Management Division in moving all applications to the new Oracle Database that is located on the Windows NT server dedicated to Oracle. The Facilities Management Staffwill receive training in the creation of Oracle Tables. Front end applications will be developed to generate applications and other documents; thus, reducing the need for extensive spreadsheet recalculations.
Verification and Accessibility of Facilities Data Reportable Condition Audit Control Number 414a-96-14 We reviewed attainment and verification of facilities data during the facilities management process. The current facilities management application that resides on the mainframe is quite dated and does not meet the current needs of the Facilities Services Department. Instead, the department has developed their own system consisting of Excel spreadsheets to perform the calculations necessary in assisting the local school systems in preparation of their 5-year facilities plan. Although the Excel spreadsheets facilitate the complex calculation process, they cannot provide the quick access and retrieval of historical and statistical data that is often necessary to prepare the local units of administration (LVA) facilities plan. In a similar way, DOE Facilities Services personnel cannot easily verify the historical and statistical data used by the field consultant during the initial preparation of the plans. This information is often located in other spreadsheet files not hardcopy documents. Lack of verification increases the risk that facilities information may not be complete or accurate. Recommendation: The application should be developed using a relational database which would provide more efficient access, retrieval, and update offacilities information. The application should provide the capability of receiving electronic transmissions of data from other DOE systems, such as FTE data collection, to reduce the need for manual processes. Management Response Presently, the Office of Technology Services is assisting the Facilities Management Division in moving all applications to the new Oracle Database that is located on the Windows NT server dedicated to Oracle. This will allow the Facilities Division to access other DOE data which will also reside in this database such as FTE Data. In addition the Office of Technology is coordinating with the Department of Administrative Services to attempt to get the tax digest of each county in an electronic format from the Department of Revenue.
F - 37

0/ Stale (/eoriJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
FACILITIES MANAGEMENT APPLICATION
Application Level Security Reportable Condition Audit Control Number 414a-96-15
We reviewed the processing of facilities information through the facilities management application.
Access to the facilities management system, which resides on a local area network (LAN), is not restricted at the application level. Therefore, all users having access to the facilities section LAN have the ability to add, modify, or delete any system data. This creates a risk that vital information may be modified or deleted by unauthorized individuals, decreasing the integrity of the facilities management information system.
Recommendation:
Security should be enhanced using the current Novell 3.12 operating system security. Separate directories can be created to store final plan copies and other important information, keeping them safe from unauthorized modifications or deletions. These directories may be restricted using trustee rights and/or attribute security available through Novell. Mana~ement Response All data from the Facilities Management Division server is being transitioned to the new Windows NT server which will address all security requirements.
Lack of Documentation of the Facilities Management Process Reportable Condition Audit Control Number 414a-96-16
The current facilities management process has not been formally documented.
Recommendation:
Current facilities management process should be documented in the form of policies and procedures. Documentation of the process would provide standardization of current facilities procedures and create a resource for field consultants and facilities management personnel. Such documentation should also include security and back up procedures. The development of policies and procedures would reduce the risk that personnel may not be aware of their responsibilities regarding the integrity of facilities information.
Mana'lement Response The Facilities Management processes are being re-done utilizing the Oracle Database with front end applications developed. These procedures will be documented with a procedures manual for all Facilities Management personnel. The following security and backup procedures will be utilized:
F - 38

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW
CURRENT YEAR
FACILITIES MANAGEMENT APPLICATION
Access to Data All mission-critical data will be stored on the Windows NT servers. Access to particular data on the servers will be assigned on an as-needed basis with consultation between Internal Technology and the individual units.
Remote Access to the Servers Windows NT Administration requires remote access to the server. All remote access to servers currently requires user verification in addition to that employed by NT. A further security measure that may be used is to eliminate remote access to a server via TCP!IP.
Internet Access TCP/IP is being installed on all desktops so that DOE personnel have access to the Internet. The Department is investigating firewall software which will protect the internal DOE LAN from unauthorized intrusion via the Internet.
Backup The merging of all data from distributed Netware servers to physically concentrated NT servers will facilitate a regular and reliable backup of all mission-critical data on the NT Servers. Backups of all server data will be performed every 24 hours and backup media will be stored in a off-site, secure location. The department is investigating third-party backup software to enhance this process.
GRANTS MANAGEMENT APPLICATION
Manual Entry ofnon-QBE Grant Allotment Information from the Program Offices Manual Reconciliation of the QBE Spreadsheet to the LVA's Budget Reportable Condition Audit Control Number 414a-96-17
We reviewed the data entry process for the grants management application.
There are no electronic transmissions of non-QBE grant information from the program offices. Schedules are sent to grants management that are manually keyed into a Lotus spreadsheet for storage. This same information also is manually keyed directly into the grants management application to set up allotment amounts. This manual entry of information presents the risk that data may not be entered completely or accurately.
Recommendation:
A method of electronic transmission of non-QBE grant information from the program office directly to the grants management application should be developed. Each program office is connected to the Georgia On-line (GO) network either through Genesis or a Black Box system. An electronic file could be easily created for transmittal over this network. Furthermore, this file should be fed directly into the grants management application, rather than entered into a Lotus spreadsheet for storage. Once the information is entered into the system, a batch job can electronically compare the program office information to the budgets sent to Grants Accounting by each local unit of administration (LVA).
F -39

0/ State (jeorg.ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
GRANTS MANAGEMENT APPLICAnON
Mana~ementResponse The GENESIS Project Leader in collaboration with the Grants Management Director, and the Department of Administrative Services is investigating an on-line program that will address the issue of manual entry and reconciliation of the non-QBE grant information.
Retrieval of Grant Information from the Program Offices Without Confirmation of Receipt Reportable Condition Audit Control Number 414a-96-18 We reviewed the data entry process for the grants management application. There are no turnaround/confIrmation reports sent to the program offices acknowledging that information was actually received. This presents a risk that the information received may be incomplete or inaccurate. Recommendation: A turnaround report containing a summary of the grant information received should be sent to the program offices. The program offices should then compare this report to the information that was actually sent to the Grants Accounting Department. This turnaround report may be sent directly to the program offices over the GO network. Sending a turnaround report would reduce the risk of incomplete or inaccurate data being processed by the system. Mana~ement Response Along with an on-line program, as addressed in response to Control Number 414a-97-17, a confirmation report would become part of the on-line application.
Unapproved Modification ofa Payment Request (Form DE 0147) over the Telephone Reportable Condition Audit Control Number 414a-96-19 We reviewed the processing and payment of payment requests to respective vendors or school systems. After a grant has been established or allocated to each school system, the system must submit a request in order to be paid. This request is submitted on a DE Form 0147. The DE 0147 is submitted once every three months (once a quarter). Several approvals are required for the processing ofa DE 0147 including the signature of the school system's superintendent. However, if a system decides to modify their request, no approvals are necessary. Most modifications are submitted over the phone. This presents the risk that an unauthorized change may be entered into the system.
F -40

0/ State (Jeor'lia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
GRANTS MANAGEMENT APPLICATION
Recommendation: Modifications to payment requests should not be accepted over the telephone. Grants Accounting should require resubmittance of a signed DE 0147 or some other modification form should be produced that requires the superintendent's signature before changes are made. Mana'iJement Response Beginning immediately, any modifications to payment requests will not be accepted over the telephone. Grant Accounting will require a faxed copy of the corrected DE0147 requiring the Superintendent's signature before changes are made.
Application Level Security Reportable Condition Audit Control Number 414a-96-20 We reviewed the processing and payment of grants to school systems. There is no application level security for the grants management application. All user access is controlled by the RACF security package for the mainframe. Due to the large volume of transactions and the fact that the application deals solely with the allocation and disbursement of funding, security should be enhanced to include appropriate application level access controls to reduce the risk of unauthorized access to grant allocation and payment information. Recommendation: Access to grants management information should be controlled at the application level. Mana'iJement Response Grants Management Division with the Department of Administrative Services will ensure that there is application level security for the Grants Management application.
DOAS Maintenance and Support of the Grants Management Application Reportable Condition Audit Control Number 414a-96-21 We reviewed the processing and payment of grants to school systems.
(1) Most of the batch processing is not automated. Grants Management personnel must request DOAS to run most jobs unless they have access to run it themselves.
(2) Technical documentation is not regularly updated to reflect recent changes or enhancements to the system.
F -41

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR GRANTS MANAGEMENT APPLICAnON
Recommendations: (I) Because of the importance of this system for the payment of funding, it is critical that all job processing occur in a timely manner. An automated or predefined schedule should be implemented by DOAS for this system. (2) Current systems documentation should be available as a resource for technical personnel. Documentation should be maintained and updated as needed. Also, technical staff should be cross-trained on several applications so that technical expertise is shared among several applications support personnel.
Management Response The Grants Management Division will collaborate with the Department of Administrative Services in developing an automated payment processing system that is based on a predefmed schedule. The Department of Administrative Services will ensure that documentation will be maintained and updated as needed and that technical support staff will be cross trained on the different applications.
User Documentation of Grants Payment and Management Applications Reportable Condition Audit Control Number 414a-96-22 Internal DOE user documentation for the grants payment and grants management applications does exist, but has not been updated in years. Recommendation: Current documentation of internal user procedures should be available as a resource for any new employee not familiar with the grants accounting process. User documentation should be maintained and updated as needed. Mana~ement Response The Grants Management Division will update its documentation of procedures and ensure that it is available as a resource for any new employee not familiar with the Grants Accounting process. User documentation will be maintained and updated as needed by the Grants Management Division.
F42

0/ State (feorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
GRANT CALCULATION APPLICATION
Access to the Grant Calculation Application Reportable Condition Audit Control Number 414a-96-23 The grant calculation application consists of a series of spreadsheets that perform the complex calculations required for the processing ofQBE grant allotments. The spreadsheet application resides on each user's standalone personal computer. There are four users. The application is not password protected which increases the risk that unauthorized users may gain access to grant allotment data. Recommendation: Given funding issues and the high level of risk associated with this application, the grant calculation process should be secured to protect the integrity of the grant data.
A1ana~ementResponse
The Office of Technology Services in coordination with the Department of Education's Budget office is developing an automated grant calculation program. The program is being developed utilizing Powerbuilder and will very shortly be ported into a network application. At the time the application is ported into a network application, the application and the data will reside on the NT server.
Continuity and Maintenance of Grant Calculation Data Reportable Condition Audit Control Number 414a-96-24 We reviewed the back-up procedures for the grant calculation application. Each of the four users backs up a copy of the grant calculation spreadsheets onto diskette. A daily back-up is also made onto diskette and tape and stored in the Budget Services area. At this time, none of the back-ups are stored in a secured offsite location. This increases the risk that critical grant calculation data may not be recovered in the event of a disaster.
Recommendation: Standard back-up procedures should be developed and implemented to assure daily back-ups are made, secured appropriately both onsite and offsite and back-ups are rotated to assure minimal loss of data in the case of a disaster. A1ana~ement Response Backup procedures will be developed and implemented in the short-term to assure that their will be a minimal loss of data in the case of a disaster. In the long term, the data and application will be moved to the NT Server and will be backed up every 24 hours.
F - 43

0/ State (jeor'Jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR GRANT CALCULATION APPLICATION
User Documentation for the QBE Grant Calculation Process Reportable Condition Audit Control Number 4l4a-96-25 Oocumented policies and procedures have not been developed for the QBE grant calculation process. Lack of policies and procedures increase the risk that personnel are unaware of their responsibilities in maintaining the integrity of grant information. Recommendation: The QBE grant calculation process should be documented in the form of policies and procedures. Documentation of the process would provide standardization of current procedures and create a resource for new users and management personnel. Such documentation should also include security and back-up policies and procedures. Mana~ement Response With the development of the automated QBE Grant Calculation, documented policies and procedures will be developed. This documentation will also include security and backup policies and procedures.
FTE DATA COLLECTION APPLICATION
User Documentation ofFTE Data Collection Application Reportable Condition Audit Control Number 4l4a-96-26 Internal DOE user documentation for the FTE data collection application does exist, but has not been updated in years. Recommendation: Current documentation of internal user procedures should be developed as a resource for any new employees not familiar with the FTE process. User documentation should be maintained and updated as needed. Mana~ement Response The FTE process documentation has been updated during August, 1996. Documentation will be maintained and updated as needed.
F -44

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
FTE DATA COLLECTION APPLICATION
DOAS Maintenance and Support of the FTE Data Collection Application Reportable Condition Audit Control Number 414a-96-27
Technical documentation is not regularly updated to reflect recent changes or enhancements to the application.
Recommendation: Current application documentation should be developed as a resource for technical personnel. Documentation should be maintained and updated as needed. Also, technical staff should be cross-trained on several applications so that technical expertise is shared among several applications support personnel.
Mana<tement ResJlonse The Department of Administrative Services will ensure that documentation will be available as a resource for technical personnel. They will ensure that documentation is maintained and updated as needed. The Department of Administrative Services will also cross train technical staff on the different applications.
FINANCIAL REVIEW SYSTEM APPLICATION
DOAS Support of Financial Review Application Reportable Condition Audit Control Number 414a-96-28
We reviewed the technical documentation and turnaround reporting for the financial review application. (1) Turnaround documents generated at the GENESIS/Black Box sites are often not meaningful and cannot be verified by LUAIRESA personnel for completeness and accuracy. (2) Technical documentation is not regularly updated to reflect recent changes or enhancements to the application.
Recommendations:
(1) Turnaround documentation should be generated and reviewed to ensure that all transmissions sent to the financial review application can be balanced to dollar amounts. Users should be trained to understand and balance turnaround documents.
(2) Current application documentation should be developed as a resource for technical personnel. Documentation should be maintained and updated as needed.
Management Response The GENESIS Project Leader in collaboration with the Department of Administrative Services and the Financial Review Section of the Department of Education will review and improve all turnaround documents to both GENESIS and Black Box sites.
F - 45

0/ State (feorg-ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR
FINANCIAL REVIEW SYSTEM APPLICATION
Through training classes at the technology centers, users will be trained to understand and balance turnaround documents in a more timely and efficient manner.
Financial Analysis and Testing Performed by Financial Review Personnel Reportable Condition Audit Control Number 414a-96-29
Financial review personnel perform analysis and testing manually. The lack of automated procedures increases the risk that information may not be accurate. Although checklists are used to confirm that all of the procedures have been completed, the use of automated procedures could improve efficiency and accuracy.
Recommendation:
Programs should be developed within the financial review application that would automatically perform some of these calculations.
Mana~ement Response
In collaboration with the GENESIS Project Leader, The Department of Administrative Services and the Financial Review Section ofthe Department of Education, a program application will be developed to automatically perform the testing calculations required by the Financial Review Section; thus, improving efficiency and accuracy.
CERTIFICATED PERSONNEL INFORMATION APPLICATION
Manual Inputs and Outputs Reportable Condition Audit Control Number 414a-96-30
We reviewed the certificated personnel information input, processing, and output.
Almost all information processed by the CPI application is input manually by a CPI data entry clerk. This presents the risk that data may not be entered completely or accurately. Also, all reporting sent back and forth between school systems and the CPI department are manually handled.
Recommendation:
A method of electronic transmission of CPI data to and from the school systems should be developed and implemented. All the school systems already have access to the Georgia On-line Network through either Genesis or a Black Box. Therefore, CPI data should be transmitted directly into the CPI application to avoid manual entry of data. Furthermore, all turnaround reports and corrections to them can be electronically transferred over the GO Network. Eliminating manual data entry and manual delivery of reports would reduce the risk of incomplete or inaccurate data that is processed by the system and ensure that transactions are processed in a timely manner.
F -46

0/ State (jeorg-ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR CERTIFICATED PERSONNEL INFORMATION APPLICATION
Mana~ement Response The Office of Technology Services has developed a new electronic reporting system for CPI data. The first electronic transmission of data will be June, 1997.
User Documentation of Certificated Personnel Information Application Reportable Condition Audit Control Number 414a-96-31 Internal DOE user documentation for the Certificated Personnel Information System does exist, but has not been updated in years. Recommendation: Current documentation of internal user procedures should be developed as a resource for employees. User documentation should be maintained and updated as needed. Mana~ement Response In the development of the new electronic transmission ofCPI data, extensive site reports and turnaround documents have been developed that will be a part of this new process which will be implemented June, 1997. A complete user manual is being developed as part of this process.
DOAS Maintenance and Support of the Certificated Personnel Information Application Reportable Condition Audit Control Number 414a-96-32 Technical documentation is not regularly updated to reflect recent changes or enhancements to the application. Recommendation: Current application documentation should be developed as a resource for technical personnel. Application documentation should be maintained and updated as needed. Also, technical staff should be cross-trained on several applications so that technical expertise is shared among several support personnel. Mana~ement Response The Department of Administrative Services will ensure that technical documentation is regularly updated to reflect changes or enhancements to the application.
F -47

0/ State (feor'Jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF EDUCATION - EDP REVIEW CURRENT YEAR STATISTICAL INFORMATION APPLICATION
DOAS Maintenance and Support of the Statistical Information Application Reportable Condition Audit Control Number 414a-96-33 Technical documentation is not regularly updated to reflect recent changes or enhancements to the statistical information application. Recommendation: Current application documentation should be developed as a resource for technical personnel. Documentation should be maintained and updated as needed. Also, technical staff should be cross-trained on several applications so that technical expertise is shared among several support personnel. Mana~ement Response The Department of Administrative Services is currently reviewing the statistical information applications being maintained. A determination will be made if the applications are being used, or whether future use is being planned in the near term. Once a determination is made of the applications to be maintained, the Department of Administrative Services will ensure that applicable documentation is developed and maintained. They will also ensure that technical staff will be cross trained on the maintained applications.
F -48

0/ State (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

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, 1995, is summarized below:

Audit Control Number

Status of Finding

415-95-01 415-95-02 . 415-95-03

Corrective Action Implemented See Audit Control Number 415-96-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Vocational Education - Basic Grants to States [CFDA 84.048] Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 415-96-01

The review report for the year ended June 30, 1995, 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 Administrative Central Office in maintaining their State Property System. Our review disclosed that the Administrative Central Office does not monitor or account for equipment assigned to various public colleges and technical institutes operated by local boards of education.

In addition, equipment items were selected to test the accuracy of the Administrative Central Office's general fixed assets records. Of the forty equipment items selected for physical inspection, the following deficiencies were noted:

(1)

Four items could not be located.

(2)

One item was traded-in, but was not removed from the inventory system.

Also, during the physical inspection testing, thirteen items of equipment were located which .were not included in the equipment inventory records.

The Administrative Central Office is required to maintain equipment inventories in accordance with provisions of paragraph 32 of OMB's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) 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 Administrative Central Office should establish the necessary procedures to ensure that equipment inventories are maintained in accordance with provisions of OMB's Common Rule and the State Property System Manual.

Manar:ement Response

The agency acknowledges this finding. However, in response to the finding that states:

"...the Administrative Central Office does not monitor or account for equipment assigned to various public colleges and technical institutes operated by local boards of education..."

F -49

0/ State (jeorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION PRIOR YEAR/CURRENT YEAR
This agency does review the audit reports for all sub-grantees of Vocational Education (84.048) grants funded by this department. Corrective Action Plans are required when any findings concerning Vocational Funds are cited. It is through this monitoring process that discrepancies in physical inventories, if any, would be brought to this agency's attention. Any discrepancies would have been duly noted and handled appropriately. However, this agency is in the process of removing from our own property records, outdated inventory information associated with the public colleges and locally owned technical institutes. All of the sub-grantees are already required to account for their general fixed assets in a manner consistent with state and federal requirements. In return, this agency will require each of these sub-grantees to submit a complete property inventory listing at June 30 of each fiscal year for all equipment bought with any funds received from this agency. These sub-recipients will be required to certify that these general fixed asset records have been audited on an annual basis and to provide the date of the last physical inventory to substantiate that this is being done at least once every two years. This will relieve the current duplication of sub-recipient inventory records that are now recorded on both the Central Office PROPS system and the sub-recipient's records. All equipment purchases for the central office for fiscal years 1994, 1995 and 1996 are currently being analyzed to determine if they have been properly added to the PROPS system by the Procurement Officer and his staff. Upon the completion of this analysis, the accounting clerk will enter any missing information into PROPS system. The Director of Accounting will then be responsible for reconciling the PROPS inventory balance back to the accounting records. The Procurement Officer and his staff will then conduct a physical inventory to be sure all appropriate items are listed on the physical inventory. These processes are scheduled to be completed by June 30, 1997.
F - 50

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF MEDICAL ASSISTANCE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

419-95-01 419-95-02 419-95-03 419-95-04 419-95-05

Corrective Action Implemented See Audit Control Number 419-96-01 Corrective Action Implemented See Audit Control Number 419-96-02 See Audit Control Number 419-96-03

PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Bank Reconciliation Procedures Medical Assistance Program [CFDA 93.778] Reportable Condition Audit Control Number 419-96-01

The audit report for the year ended June 30, 1995, 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 little improvement in this area. As a result, $492,806.90 of net uncorrected book adjustments remained at June 30, 1996.

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 financial information.

Mana~ement Response

We concur with this fmding. The Department has implemented control procedures to ensure that necessary adjustments identified during the bank reconciliation process are posted to the general ledger in a timely manner. Current records of bank reconciliations and timely related adjustments are available for your review.

REVENUEIRECEIVABLES/RECEIPTS State Revenue Collections Not Remitted on a Timely Basis Financial Statements Audit Control Number 419-96-02

The audit report for the year ended June 30, 1995, noted 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. For the year under review, our examination of the State Revenue Collection procedures noted only limited improvements in this area. Official Code of Georgia Annotated Section 45-12-92 states, in part:

''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... /I

F - 51

State of (}eorfJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF MEDICAL ASSISTANCE
PRIOR YEAR/CURRENT YEAR
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.
Manaf:ement Response
We concur with this fmding. The Department has implemented procedures to ensure that revenue collections are remitted to the Office of Treasury and Fiscal Services (OTFS) on a timely basis by electronic funds transfer. Please note that investment income was earned on the isolated fiscal year 1996 funds whose transfer to OTFS was not timely. This income was subsequently remitted to OTFS. Documentation of these actions is available for your review.
CASH MANAGEMENT Failure to Adhere to Terms of the Cash Management Improvement Act Federal Financial Assistance Medical Assistance Program [CFDA 93.778] Audit Control Number 419-96-03
The audit report for the year ended June 30, 1995, 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 by failing to net refunds and rebates in a timely manner against the daily draws. In the year under review, the Department refunded $224,710.00 to the Office of Treasury and Fiscal Services and implemented procedures to net refunds and rebates against the daily draw on a timely basis to comply with 31 CFR Part 205. 12(b). The procedures implemented, however, did not fully satisfy the requirements as set forth by the terms of the Cash Management Improvement Act. Interest should be calculated for the fiscal year under review and remitted to the Federal government. Procedures implemented should be followed closely to ensure that the refunds and rebates are netted against Federal draws on a timely basis.
Manaf:ement Response
We concur with this finding. Careful adherence to procedures for netting refunds and rebated against Federal draws has resulted in a significantly reduced interest liability. We have calculated and remitted that interest to the Federal government. We have contracted for a study of the costs and benefits associated with procedures necessary to completely eliminate the interest. Documentation of these actions is available for your review.
CURRENT YEAR
REVENUEIRECEIVABLESIRECEIPTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Medical Assistance Program [CFDA 93.778] Reportable Condition Audit Control Number 419-96-04
The Department of Medical Assistance (DMA) is required to manage a Drug Rebate Program administered by the U. S. Department of Health and Human Services' Health Care Financing Administration. The purpose of this program is to collect federally mandated drug rebates from drug manufacturers whose prescription drugs are purchased with Medicaid funds. The Department has contracted with an independent contractor to perform and monitor the billing and collection of these rebates.
F - 52

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF MEDICAL ASSISTANCE CURRENT YEAR

Our review of the program's accounting controls utilized by both the independent contractor and DMA revealed that substantial deficiencies existed. These deficiencies are as follows:

(I) Numerous errors within the billing process were evident. These errors were related to using incorrect

data in the billing process, billing more for rebates than Medicaid had actually paid for the drugs and

truncating billing amounts over seven digits.

(2)

Historical data tracking rebate billing and collection was unavailable.

(3)

Records provided by the Department were not sufficient to enable Management to perform a

reconciliation of cash recorded by the independent contractor with cash collected by the Department.

(4)

Rebates billed, but not collected, were not recorded on the financial statements of DMA.

The deficiencies occurred because management failed to properly monitor the operation of the program and adequately account for rebate activity. The Department should establish procedures to efficiently coordinate the efforts of the independent contractor and implement proper accounting procedures to account for the billing and collection of drug rebates.

Management Response

We concur with this finding. Highlights of our corrective actions are summarized in the Department of Medical Assistance (DMA) Drug Rebate Program audit report prepared by the Department of Audits and dated January 31, 1997. Based on our actions, that report concluded, "DMA should be commended for taking immediate and vigorous action to correct the deficiencies noted in this report as they were identified during the course of this evaluation." We are also preparing a written corrective action summary, stipulated by Georgia Code Section 45-12-178, for the Budgetary Responsibility Oversight Committee.

BUDGET PREPARATI0N/EXECUTlON Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 419-96-05

The total approved budget for budget unit "A" Medicaid Services of the Department of Medical Assistance provided for cumulative expenditures of $3,911 ,513,765.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the expenditures for the "common object class", Regular Operating Expenses, exceeded the authorized expenditure level of 102% of the budgeted amount for that common object class by $83,162.25. The overexpenditure, which is in violation of Section 54 of the Amended Appropriations Act of 1995-1996, occurred because the Department's budget for 1995-1996 did not duly consider revisions to the State chart of accounts which moved certain expenditures from the Equipment and Computer Charges object classes to the Regular Operating Expenses object class effective for fiscal year 1996. Audit adjustments were made to correct the Department's accounting records to be consistent with the revised State chart of accounts.

The Department should review its internal control procedures over budget operations which allowed this condition to occur and implement procedures to strengthen those controls.

Management Response

See Response for Audit Control Number 419-96-06.

F - 53

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996

DEPARTMENT OF MEDICAL ASSISTANCE CURRENT YEAR

GENERAL LEDGER Failure to Properly Utilize State Chart of Accounts Financial Statements Audit Control Number 419-96-06

During the year under review, the Department of Medical Assistance failed to properly utilize the prescribed State chart of accounts as enumerated in the Accounting Procedures and Instructions Manual as published by the State Auditor. Updates effective July 1, 1995, were made to this publication revising the definitions of certain object classes pertinent to computer charges and equipment purchases. Our examination revealed that the Department did not comply with these updates. Audit adjustments were made to correct the accounting records. However, we were unable to identify all equipment reclassifications made necessary by the revision to the State chart of accounts due to the manner in which equipment purchases are recorded in the accounting records.

This condition was caused by management's failure to update the Department's accounting system for revisions to these object classes. Procedures should be implemented to revise the accounting system and posting processes to comply with the established State chart of accounts.

Management Response

We do not concur with these findings. Representatives of both the Office of Planning and Budget and the Legislative Budget Office have substantiated that the expenditures in question were budgeted under other designated line items. Under the exception (for expenditures budgeted under other line items) specified in the Department of Audits memorandum dated June 21, 1994, these items were properly classified. For these items described in the exception, expenditures should be classified based on the line item used for budgeting.

For fiscal year 1997, we have revised our chart of accounts to reflect the interpretation expressed by the Department of Audits in its findings. We have also requested and received copies of all our Department of Audits memoranda used to communicate changes to the chart of accounts. Our chart of accounts incorporates changes described in these memoranda.

GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Medical Assistance Program [CFDA 93.778] Reportable Condition - Material Weakness Audit Control Number 419-96-07

Our examination ofjournal vouchers made during the year under review revealed that the Department's accounting procedures were insufficient to provide for adequate internal control over the journal entry process. The following deficiencies were noted:

(I)

Journal entries were not supported by either adequate documentation or written explanations.

(2)

Journal entries were made to the accounting records without proper supervisory approval.

This condition was the result of management's failure to adequately monitor and document journal entries. The Department should implement procedures to ensure that journal entries are properly approved and documented prior to entry into the accounting system.

F - 54

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

DEPARTMENT OF MEDICAL ASSISTANCE CURRENT YEAR

Mana~ement Response

We concur with this finding. We have implemented procedures to ensure that journal entries are properly approved and documented prior to entry into the accounting system. Fiscal year 1997 journal entries are available for your review.

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Medical Assistance Program [CFDA 93.778] Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 419-96-08

For the year under review, our examination included a review of the internal accounting controls utilized by the Department of Medical Assistance in maintaining their State Property System. This review also consisted of testing the System for compliance with Federal and State laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:

(I)

Equipment additions were not properly updated on the inventory system.

(2)

Equipment deletions were not properly updated on the inventory system.

In addition, a sample of seventy-nine (79) equipment items was selected to test the accuracy of the Department's general fixed asset records. This sample contained a value of $414,332.25 and was selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:

(I)

Eleven (II) items totaling $30,288.24 could not be located.

(2)

Three items totaling $54,935.95 were surplused or traded-in, but were not removed from the

equipment inventory records.

(3)

Three (3) items did not have decal numbers attached. Items were identified by serial numbers.

(4)

Thirty-eight (38) items were located in locations other than the location indicated in the equipment

inventory records.

Also, during the physical inspection testing, six (6) 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 paragraph 32 of OMS's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) and the State PropertY System Manual. The discrepancies identified above were caused by the Commission'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.

F - 55

0/ State (feorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF MEDICAL ASSISTANCE CURRENT YEAR
The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of OMS's Common Rule and the State Property System Manual. Mana~ement Response We concur with this finding. We are in the process of hiring to fill the position responsible for properly maintaining equipment inventory records.
F - 56

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

OFFICE OF THE GOVERNOR STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

422-95-01 422-95-02 422-95-03

Corrective Action Implemented Corrective Action Implemented See Audit Control Number 422-96-01

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 422-96-0 I

The review report for the year ended June 30, 1995, 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 procedures utilized by the Office of the Governor in maintaining their State Property System. This review also consisted of testing the System for compliance with Federal and State 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.

Fifty-two (52) equipment items were selected to test the accuracy of the Department's general fixed asset records. These items contained a value of $184,809 Al and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted at the Georgia Emergency Management Agency, which is administratively attached to the Office of the Governor:

(I)

Eleven (II) items totaling $29,292.21 could not be located.

(2)

Two (2) items totaling $2,869.00 were surplused, but were not removed from the inventory records.

(3)

Two (2) items totaling $2,696.00 were traded-in, but were not removed from the inventory records.

In addition, one (I) item located in the test area was not included on the inventory records.

The Office of the Governor is required to maintain equipment inventories in accordance with provisions of paragraph 32 of OMB's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) 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's Common Rule and the State Property System Manual.

F - 57

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3(), 1996
OFFICE OF THE GOVERNOR
PRIOR YEAR/CURRENT YEAR
Federal Grantor Af:encies Affected:
Federal Emergency Management Agency U. S. Department of Energy U. S. Department of Justice U. S. Department of Transportation
Manaf:ement Response
The agency concurs with the finding.
The finance director has assumed responsibility for property management and has issued agency wide guidelines requiring notification when property is placed in surplus or trade-in. The value of items included in inventory records has been increased to $1,000.00. GEMA personnel will be required to attend property management training class to assure that policies and procedures are understood by those involved and that the information is disseminated throughout the agency.
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Reporting and Budgeting of Expenditures Financial Statements Audit Control Number 422-96-02
In the year under review, the Office of the Governor expended $ I 8,414,2 I9.12 under the Object Class - Per Diem, Fees and Contracts for contracts. Funds budgeted for contracts under Object Class - Per Diem, Fees and Contracts normally contemplate that goods and/or services will be received by the State Agency. However, a random sample of 12 contracts revealed that the Office of the Governor simply provided funds to various parties and received no goods or services in return. The related expenditures totaling $957,635.00 for the 12 items tested should have been charged to a grants object class instead of Per Diem, Fees and Contracts.
The Office of the Governor should perform an extensive review of the fiscal year 1997 budget to ensure that grants are correctly budgeted and recorded in the accounting records.
Manaf:ement Response
The agency concurs with the finding.
Beginning with Fiscal Year 1998 these expenditures will be charged to a newly created "grants" object class. The majority of items, administered by the Criminal Justice Coordinating Council, are subgrants of U.S. Department of Justice funds provided for an increasing variety of criminal justice objectives ranging from better information systems and crime victims' assistance and compensation to Byrne Memorial grants. Other agreements in various units of the Office will be reviewed on a case by case basis by the Director of Administration and charged to the object class which appropriately reflects to whom benefits of such agreements accrue.
F - 58

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF HUMAN RESOURCES STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995 is summarized below:

Audit Control Number

Status of Finding

427-95-0 I 427-95-02 427-95-03 427-95-04

Corrective Action Implemented See Audit Control Number 427-96-01 Corrective Action Implemented See Audit Control Number 427-96-02

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation of Property Management System Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 427-96-01

The audit report for the year ended June 30, 1995, 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 also consisted of testing the system for compliance with Federal and State laws and regulations. Our review noted that equipment additions were not reconciled to the general ledger expenditure accounts.

In addition, three-hundred-sixty-two (362) equipment items were selected to test the accuracy of the Department's general fixed asset records. These items contained a value of $1 ,460,833.21 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:

(1)

Five (5) items totaling $11,977.00 could not be located.

(2)

Ten (10) items totaling $53,876.00 were surplused, but were not removed from the equipment

inventory records.

(3) Nine (9) items were located in locations other than the location indicated in the equipment inventory records.

(4) Forty-eight (48) items did not have decal numbers attached. Items were identified by serial numbers or descriptions.

(5)

Two (2) items were located with the wrong decal attached.

The Department is required to maintain equipment inventories in accordance with provisions of paragraph 32 of OMS's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) and the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories.

F - 59

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

DEPARTMENT OF HUMAN RESOURCES PRIOR YEAR/CURRENT YEAR

The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions ofOMB's Common Rule and the State Property System Manual.

Federal Grantor A~encies Affected:

U. S. Department of Agriculture U. S. Department of Education U. S. Department of Health and Human Services

Management Response

I.

We do not concur. Two items were stolen or missing and were listed in accordance with the State Property System

Manual as missing or stolen items. The manual requires that these items be identified and remain on the system for two

years. They are identified as such and will be deleted as required during the FY98 physical inventory process. Two

items were transferred to another location after the date of the report used by the auditor to conduct the test; the system

had been properly updated in accordance with property management regulations and the state auditor conducting the test

was provided that information during the audit in November 1996. We agree that one item was unlocated and the system

was corrected to reflect the surplus action during the FY 97 inventory.

2.

We agree with this finding. The system was updated to reflect the surpluses during the FY 97 inventory process.

3.

We do not agree with this finding. The auditors used a "room number" field to identify certain locations. For vehicles

and other equipment that is not assigned to a permanent location, we insert a special code (such as a vehicle number) to

identify the piece of equipment as such. These items were identified properly.

4.

We concur with this finding. The department has since purchased special decals for the items identified above (vehicles,

mowers, hospital kitchen equipment) that would adhere better in adverse temperature and moisture conditions.

5.

We agree with this finding. The decals were properly affixed during FY 97 inventory process.

FEDERAL FINANCIAL REPORTS Failure to Submit Required Reports in Timely Manner Federal Financial Assistance Audit Control Number 427-96-02

A review of Federal financial reports submitted by the Department of Human Resources for the Rehabilitation Services Vocational Rehabilitation program (CFDA 84.126), the Child Support Enforcement program (CFDA 93.563), and the Social Services Block Grant program (CFDA 93.667) disclosed that several required reports were not submitted by the due date as listed below:

CFDA

Report

Due Date

Date Submitted

84.126

Quarterly Case Services Report (SF-269) - Quarter Ended 9-30-95

October 30

February 19

84.126

Quarterly Case Services Report (SF-269) - Quarter Ended 6-30-96

July 30

August 15

F - 60

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF HUMAN RESOURCES PRIOR YEAR/CURRENT YEAR

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 9-30-95

October 31

November 8

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 12-31-95

January 31

February 2

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 3-31-96

May 1

May 16

93.563

Quarterly Child Support Enforcement Program Financial Report - Form (OCSE-131) Quarter Ended 6-30-96

July 31

August 15

93.667

Annual Report of Services Federal Fiscal Year Ended 9-30-95

December 30

February 22

Appropriate procedures should be established and implemented by the Department to ensure that each program report is submitted by the due date.

Mana'lement Response

We concur with the recommendation. The state is in the process of implementing a new statewide accounting system. When fully implemented, this will present opportunities for DHR to close the books on a more flexible schedule than we currently have. We are examining these opportunities as well as others resulting from the ongoing efforts to streamline administrative processes in DHR to reduce the time it takes for us to close our books each period. We will continue these activities as well as more closely monitor the preparation of program reports to meet the reporting due dates set by grantors.

CURRENT YEAR

MATCHING, LEVEL OF EFFORT, AND/OR EARMARKING Failure to Meet Earmarking Requirements Federal Financial Assistance Block Grants for Prevention and Treatment of Substance Abuse [CFDA 93.959] Questioned Cost: $314,561.46 Material Noncompliance Audit Control Number 427-96-03

Our examination of the Department of Human Resources compliance with earmarking requirements for the Block Grants for Prevention and Treatment of Substance Abuse (93.959) indicated that for the Federal fiscal year ended September 30, 1995, the Department did not expend or could not document expenditures to meet Federal requirements. Federal statute, 42 USC 300x24(b), requires states to spend no less than 2% but no more than 5% of total Federal funds expended for the above program to provide HIV services at sites at which individuals are undergoing treatment for substance abuse. This condition was caused by the Department's failure to implement procedures to ensure that expenditures meet the minimum expenditure requirements of 42 USC 300x-24(b).

F - 61

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF HUMAN RESOURCES CURRENT YEAR
The Department should implement procedures to ensure that Federal earmarking requirements are met and that compliance is documented in the accounting records. Mana~ement Response We concur with this recommendation. A memorandum of understanding was executed between the DHR Division of Mental Health, Mental Retardation and Substance Abuse and the DHR Division of Public Health on September 18, 1996, transferring federal fiscal year 1996 Substance Abuse Block Grant funds to Public Health to provide HIV services to clients. This agreement and the services delivered will assure the DHR meets the Federal earmarking requirements for FFY 96 Substance Abuse Block Grant.
F - 62

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF COMMUNITY AFFAIRS CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS - Financial Statements MONITORING SUBRECIPIENTS - Federal Financial Assistance Improper Approval of Cash Disbursements to Subrecipients Community Development Block Grant/State Programs [CFDA 14.228] Audit Control Number 428-96-01 For the year under review, we performed tests of controls over the internal control structure established by the Department of Community Affairs for the Community Development Block Grant/State Programs (CDBG). One requirement which was tested related to the responsibility of the Program Director to approve reimbursement requests submitted by subrecipients. Our examination disclosed that the Program Director allowed administrative personnel to have custody over and authority to use a signature stamp to indicate the Program Director's approval of subrecipient reimbursement requests. The failure to properly authorize reimbursements to subrecipients could result in instances of noncompliance with Federal regulations and errors and/or irregularities not being detected in a timely manner. The Department of Community Affairs should establish the necessary internal controls to ensure that authorization to reimburse subrecipients is made by those responsible and that signature stamps, when utilized, are properly secured. Additionally, management should ensure that evidence of proper internal controls have been followed before initiating the transfer of funds to subrecipients. Mana'{ement Response We do concur with the finding. The following internal controls were placed in operation upon notice of the finding. The Grants Manager processes reimbursement requests from subrecipients and forwards to Program Director for review and signature. Program Director signs each reimbursement request (name stamp is not used) and returns signed request to Grants Manager. In case of Program Director's absence, Grantee Services Manager or Compliance Manager are authorized to review and sign subrecipient reimbursement requests. The Grants Manager then forwards the approved signed original subrecipient reimbursement requests to Accounting. The Accountant in charge of preparing disbursements for the Community Development Block Grant Program validates that reimbursement requests contain original signatures from either the Program Director, Grantee Service Manager, or Compliance Manager. If the reimbursement requests do not contain original signature, then the reimbursement request is returned to the Grants Manager for corrective action.
F - 63

0/ State (}eorffia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

JUDICIAL BRANCH STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Findings

436-95-01 436-95-02 492-95-01

See Audit Control Number 430-96-01 Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

EXPENDITURES/LIABILITIES/DISBURSEMENTS Disbursements on Behalf of District Attorneys Financial Statements Audit Control Number 430-96-01

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 of understanding 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 attorneys' 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 15-18-1 0 (c) which provides:

"All fees. jines, andforfeitures, 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, jines, forfeitures, costs and emoluments and remit the same to the county treasury by the fifteenth day ofeach month. II

Further, the Official Code of Georgia Annotated Section 15-18-23 states:

liThe 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. II

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 financial and budgetary control of the governing authority of the counties comprising the judicial circuits. It is the position of the Prosecuting Attorneys' Council that these statutes do not govern the retention and expenditure offunds derived under the terms of the food stamp agreement. In as much as this difference of opinion has not been adequately resolved,

F - 64

State o!(jeorfjia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
JUDICIAL BRANCH PRIOR YEAR/CURRENT YEAR
the State Auditor has requested a legal opinion of the Attorney General with regard to the proper disposition of these funds. As of the date of this report, no response had been received from the Attorney General's Office. Management Response 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 six years no opinion has been forthcoming. Therefore, the Council respectfully requests that the finding be deleted. The finding indicates a possible violation ofO.e.G.A. Section 15-18-IO(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 O.C.G.A. Section 15-18-IO(c) did not apply to the Food Stamp Fraud Program for the reasons which are enumerated below.
The "fees, fines, and forfeiture costs and commissions" formerly allowed district attorneys had been the law of this 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 I, 1977, all district attorneys were placed on state salary. (Ga. Law 1977, p. 1259). O.C.G.A. Section 15-18-10 was also passed and become 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 O.e.G.A. Section 15-18-IO(c), the only reasonable interpretation in the Council's opinion is that only those items which were formerly considered "fees, fines, forfeitures, costs and commissions" come within the statute. Therefore, there could be no "violation" ofO.e.G.A. Section 15-18-10(c). Second, the "fees, fines, forfeitures, 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 O.e.G.A. Section 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.
F - 65

0/ State (jeorCjia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
JUDICIAL BRANCH CURRENT YEAR
GENERAL LEDGER Deficiencies in Accounting Procedures Financial Statements Audit Control Number 430-96-02 The Administrative Office of the Courts (AOC) maintains accounting records for certain functional budgets of the Judicial ~ranch. For the year under review, the general ledger maintained by the AOC did not agree with subsidiary ledgers or source documentation for certain accounts. The general ledger as presented for examination contained incorrect year end balances for accounts receivables, accounts payables, revenue and surplus accounts. Correcting audit adjustments for errors identified during this analysis are included in the Judicial Branch financial statements. Appropriate action should be taken by the AOC to ensure that all subsidiary ledger amounts are complete and correctly posted to the general ledger on a monthly basis. Mana~ement Response The Administrative Office of the Courts (AOC) acknowledges the deficiencies in accounting procedures cited under Audit Control Number 430-96-02. Since May, 1996 the department has increased the number of staff, assigned additional office space, increased the number of terminal accessing State-wide Systems, and purchased new computers in support of the accounting function. We have reconfirmed, reprinted, and redistributed the internal procedures specifying the reconciliations to be made on a daily, semimonthly, monthly, and quarterly basis. We do not expect a recurrence of this problem.
F - 66

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF LABOR STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

440-95-01 440-95-02 440-95-03 440-95-04 440-95-05

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See Audit Control Number 440-96-01 See Audit Control Number 440-96-02

PRIOR YEAR/CURRENT YEAR

FEDERAL FINANCIAL REPORTS Failure to Submit Required Reports in Timely Manner Federal Financial Assistance Job Training Partnership Act [CFDA 17.250] Audit Control Number 440-96-01

The audit report for the year ended June 30, 1995, disclosed that the Department of Labor failed to submit the final close-out financial reports for the Job Training Partnership Act 1992 program year grant agreement within the time required by Federal guidelines. A review of Federal financial reports submitted by the Department of Labor for the Job Training Partnership Act disclosed that final close-out financial reports for the 1993 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 of funds may be made until 90 days after the time limitation for expenditure of JTPA funds ..."

The Department should implement procedures to ensure that all final close-out documents are submitted in a timely manner.

ManafJement Response

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 US Department of Labor (USDOL) March 18, 1996.

The JTPA PY-93 SDA close-outs are all in except Cobb County and Southwest Georgia. In both of these cases the SDA Administrative Entity has changed. The Department is working with both of the previous Administrative Entity's to close out all financial reports, and should be able to submit PY 93 close-outs to USDOL by June 30, 1997.

Based on the above, the Department considers the PY-92 finding resolved.

F - 67

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF LABOR PRIOR YEAR/CURRENT YEAR

ELIGIBILITY Inadequate Documentation to Support Eligibility Determinations Federal Financial Assistance Employment and Training Assistance - Dislocated Workers [CFDA 17.246] Job Training Partnership Act [CFDA 17.250] Amount: $220.00 Audit Control Number 440-96-02

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-three (23) Service Delivery Areas (SDA) within the State of Georgia and 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.

The audit report for the year ended June 30, 1995, disclosed that deficiencies had been found in this area. Questioned costs on the instances of noncompliance found were determined to be $120.00. As of the date of this report, this questioned cost is still unresolved.

Utilizing a numerical precision sample, the files of those participants enrolled during the period of May 1,1995 through April 30, 1996 were examined to determine if established eligibility criteria had been met. From a total of 36,584 newly enrolled participants, an examination of 402 files disclosed the following:

Employment and Training Assistance - Dislocated Workers

One (1) file did not contain adequate documentation to verify citizenship of participant

$ 100.00

Mana'tement 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 if there 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.

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 - 68

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF LABOR CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Internal Accounting Procedures Audit Control Number 440-96-03

Our audit tests revealed that the Department's internal accounting control procedures regarding cash assets were not consistently followed, Noted instances are summarized as follows:

(l) The June 1996 bank reconciliation for the operating account did not agree with the general ledger.

(2)

A deposit in the amount of $95,000.00 was receipted to the administrative account but was not

recorded in the general ledger.

(3)

Audit tests of the month of February 1996 revealed that four (4) of sixteen (16) bank reconciliations

did not indicate that an administrative review was performed to determine that bank reconciliations

were correct and that all required adjustments had been made.

(4)

The Department's policy concerning the voiding of outstanding checks older than six (6) months was

not followed in all cases,

These instances were a result of inconsistencies in ensuring that internal controls were operating effectively over the cash assets of the Department. The Department should monitor its compliance with established internal controls to ensure that monthly bank statements are reconciled with the accounting records, receipts are posted to the general ledger, bank reconciliations are properly approved and outstanding checks are properly voided.

Federal Grantor A~encv Affected:

U, S. Department of Labor

Mana~ement Response

I.

The June 1996 bank reconciliation for the operating account did not agree with the general ledger because of accounting

procedures not being followed. These procedures were reviewed with the current staff to ensure that this does not

happen again.

2.

The deposit of $95,000.00 was recorded in the general ledger in July 1996.

3.

In the future all cash reconciliations will be signed when the administrative review is completed. All of the

administrative reviews were performed during the audit year, but were not signed by the person performing the review.

4.

The procedure of voiding outstanding checks older than six months old has been reviewed with the accounting staff to

ensure that all outstanding checks are voided after they are six months old.

F - 69

0/ State (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF LAW 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, 1995, is summarized below:

Audit Control Number

Status of Finding

442-95-01

Corrective Action Implemented

F - 70

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

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, 1995, is summarized below:

Audit Control Number

Status of Finding

461-95-01 461-95-02 461-95-03 461-95-04

Corrective Action Implemented See Audit Control Number 461-96-0 I Corrective Action Implemented See Audit Control Number 461-96-02

PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Bank Reconciliation Procedures Audit Control Number 461-96-01

The review report for the year ended June 30, 1995, 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, 1996, deficiencies in the payroll bank account reconciliation procedures continued as follows:

(1)

The monthly bank statements 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 amounting to $99,138.89.

The Department should establish the necessary procedures to ensure that the payroll bank account is properly reconciled on a monthly basis, needed adjustments are posted to the general ledger in a timely manner, and the general ledger reflects current financial information.

Federal Grantor Al:encies A[kcted:

U.S. Department of Agriculture U.S. Department of Education U.S. Department of Health and Human Services U.S. Department of Justice

Manal:ement Response

We concur with this recommendation. Procedures were established to reconcile the Department's bank accounts to the general ledger within 15 work days after the information becomes available. 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.

F - 7]

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3n. 1996 DEPARTMENT OF CHILDREN AND YOUTH SERVICES PRIOR YEAR/CURRENT YEAR
INVENTORIES Inadequate Inventory Procedures Financial Statements Audit Control Number 46 I-96-02 The review report for the year ended June 30, 1995, 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 financial statements. For the year under review this condition continued to exist. 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. Mana,?ement Response We concur with the recommendation. The Department has instructed staff that year end supply inventory counts at the State Youth Department Campuses should include all supplies.
F -72

0/ State (JeorfJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF PUBLIC SAFETY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

466-95-01 466-95-02

Corrective Action Implemented Corrective Action Implemented

F - 73

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, /996

DEPARTMENT OF CORRECTIONS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

467-95-01 467-95-02 467-95-03

See Audit Control Number 467-96-01 See Audit Control Number 467-96-02 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 467-96-01

The review report for the year ended June 30, 1995, 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 also consisted of testing the System for compliance with State laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:

(1) Equipment inventory records were not updated for all additions. Testing of current year additions revealed eighteen (18) current year equipment purchases totaling $134,031.00 that had not been entered onto the equipment inventory records at June 30, 1996.

(2) Twenty-eight (28) equipment items acquired through installment purchases totaling $279,425.87 were not included on the equipment inventory records.

(3) Eleven (11) equipment items acquired through installment purchases were included on the equipment inventory records at an incorrect amount. The difference in the acquisition cost and the amount recorded on the inventory records amounted to $85,755.13.

In addition, two-hundred-eighty-four (284) equipment items were selected to test the accuracy of the Department's general fixed asset records. These items contained a value of $1 ,061,193.73 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:

(1) Fifty-nine (59) items totaling $168,977.63 could not be located.

(2) Thirty-one (31) items were located in locations other than the location indicated in the equipment inventory records.

(3) One (1) item totaling $1,200.00 was surplused, but was not removed from the inventory system.

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.

F -74

0/ State r}eorffia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF CORRECTIONS PRIOR YEAR/CURRENT YEAR
The Department should establish the necessary procedures to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.
Manafiement Response
We concur with this recommendation. The Department should maintain equipment inventories in accordance with provisions of the State Property System Manual. The Department's policy has changed concerning the accountability for its inventory. In February, the Department adopted revised operating procedures for property control. These procedures include a secondary computerized inventory tracing system. Starting in April, the Department will train each unit regarding proper entry into the property system. Also, we will allow each unit to request reports from the system to reconcile the items posted to the inventory. Periodically, Central Office Property will audit each of the units for compliance. CASH AND CASH EQUIVALENTS Uncollateralized Time Deposits Financial Statements Audit Control Number 467-96-02 The review report for the year ended June 30, 1995, noted that 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. For the year under review, our examination revealed that the following time deposit was not fully collateralized:
NationsBank of Georgia Certificate of Deposit Amount: $500,000.00 This condition resulted from the Department's failure to ensure that the banks had provided collateral for the balance of the time deposit in excess of the Federal deposit insurance amount of $ 100,000.00. 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.
Manafiement Response
We concur with this recommendation. The $500,000.00 certificate of deposit that was referenced in the report is collateralized by NationsBank. The Department has established procedures to ensure that this function takes place. A statement will be sent to each Chief Probation Officer on a monthly basis for verification that the market values of the securities are sufficient to cover the time deposit. The Department has delegated this responsibility to the Chief Probation Officer in each circuit in which the certificates are held.
F - 75

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D. J996
DEPARTMENT OF CORRECTIONS CURRENT YEAR
EXPENDITURES/LIABILITIESIDISBURSEMENTS Improperly Categorized Per Diem and Fees Financial Statements Audit Control Number 467-96-03 The Official Code of Georgia Annotated Section 45-7-74 requires the State Auditor to prepare a report which contains a detail of the per diem and fee payments made by organizational units of the State of Georgia. Pursuant to this legislation, this report .shows the state agency that made the payments, to whom they were made, the profession of such persons, and the total of the payments by payee. A review of the Department of Corrections per diem and fee listing used in the preparation of the above report disclosed that of the 2,064 individuals paid per diem and fees and reported to the Department of Audits, 84 were classified as physicians when the services rendered were actually for teachers, pharmacists, librarians, secretaries, or other professions. The Department should establish procedures to ensure that individuals reported to the Department of Audits for inclusion in the Report of the State Auditor for Per Diem and Fees are properly classified as to profession. Management Response We concur with this recommendation. The Department has established procedures to ensure that this situation will not recur. The State Chart of Accounts that caused the error in reporting has been closed. The Department has now opened new State Chart of Accounts that properly classify the professionals.
,. - 76

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA 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, 1995 is summarized below:

Audit Control Number

Status of Finding

472-95-01

Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARATION/EXECUTION Overexpenditure of Budget Unit Object Class Regents Central Office and Other Organized Activities, "B" Budget Financial Statements Audit Control Number 472-96-01
The total approved budget for the Regents Central Office and Other Organized Activities, "B" Budget, of the Board of Regents of the University System of Georgia, provided for expenditures totaling $579,981,479.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the object class Capital Outlay was overspent by $8,779,141.41. This overexpenditure is a violation of Section 54 of the Amended Appropriations Act of 1995-1996.
This overexpenditure was the result of the Administrative Central Office's failure to submit budget amendments to the Office of Planning and Budget. The Administrative Central Office should closely monitor its internal control procedures over budget operations to prevent the expenditure of funds in excess of budget approval.
Manar:ement Response
We concur with the audit finding. Procedures for preparing, approving and submitting budget amendments to the Office of Planning and Budget have been reviewed and revised in accordance with audit recommendations. The Budget Director has established new procedures which require recording and verification of dates for receipt, processing and submission of amendments to the Office of Planning and Budget and notification of action to the submitting institution. These new procedures became effective February 15, 1997.
BUDGET PREPARATION/EXECUTION Overexpenditure of Budget Unit Object Class Lottery for Education, "0" Budget Financial Statements Audit Control Number 472-96-02
The total approved budget for the Lottery for Education, "0" Budget, of the Board of Regents of the University System of Georgia, provided for expenditures totaling $72,032,923.00. 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:

F - 77

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA CURRENT YEAR

Board of Regents Central Office

Universities & Colleges

Total Overexpend iture

Georgia Research Alliance

$ 15,834,723.10 $ -922,547.66 $ 14,912,175.44

Capital Outlay - Albany State College

$ 12,434,559.60

0.00 $ 12,434,559.60

These overexpenditures are a violation of Section 54 of the Amended Appropriations Act of 1995-1996.

These overexpenditures were the result of the Administrative Central Office's failure to submit budget amendments to the Office of Planning and Budget. The Administrative Central Office should closely monitor its internal control procedures over budget operations to prevent the expenditure of funds in excess of budget approval.

Manar:ement Response

We concur with the audit finding. Procedures for preparing, approving and submitting budget amendments to the Office of Planning and Budget have been reviewed and revised in accordance with audit recommendations. The Budget Director has established new procedures which require recording and verification of dates for receipt, processing and submission of amendments to the Office of Planning and Budget and notification of action to the submitting institution. These new procedures became effective February 15, 1997.

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 472-96-03

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. This review consisted of an equipment inventory sample of 75 randomly selected items to test the validity and accuracy of the equipment inventory records. The results of our testing procedures disclosed the following deficiencies:

(I)

Six items on the subsidiary equipment records did not include adequate descriptions.

(2) Two items recorded on the subsidiary equipment records had not been delivered by the vendor.

(3) Two items had decal numbers which did not match the decal number on the subsidiary equipment records.

(4) Seven items were not in the locations provided on the subsidiary records. Four items had been moved by employees to different offices without preparing proper transfer documentation. Also, transfer documentation was not prepared for three items transferred to other colleges.

(5) Two items could not be physically located.

(6) One item which was used as a trade-in had not been deleted from the subsidiary inventory records.

F -78

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30. 1996
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA CURRENT YEAR
These deficiencies occurred because of management's failure to adequately monitor the equipment inventory records. The Administrative Central Office should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with the State Property System Manual. Mana~ement Response We concur with the audit finding. The Office ofInformation and Instructional Technology, which is part of the Administrative Central Office, has hired an accounting assistant effective March 17, 1997 who will be responsible for reviewing and revising inventory control procedures and for ensuring that adequate records are maintained for all central office equipment in accordance with the State Property System Manual. This position will be accountable to the Director of Business Services for inventory control purposes. New inventory control procedures will be implemented by June 30, 1997.
F -79

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA - EDP GENERAL CONTROLS
STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

472a-95-01 472a-95-02 472a-95-03 472a-95-04 472a-95-05

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F - 80

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE 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, 1995, is summarized below:

Audit Control Number

Status of Finding

474-95-01

Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARATION/EXECUTION Overexpenditure of Budget Unit Object Class Financial Statements Audit Control Number 474-96-0 I

The total approved budget for the Department of Revenue provided for expenditures totaling $ I05,30 1,129.00. A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the object class Per Diem, Fees and Contracts was overspent by the amount of $44,649.30.

This overexpenditure, which is a violation of Section 54 of the Amended Appropriations Act of 1995-1996, occurred because the Department incorrectly classified certain per diem and fees under the Regular Operating Expenses object class rather than the Per Diem, Fees and Contracts object class. An audit adjustment was made to correct the Department's accounting records which resulted in this overexpenditure.

Subsequent to fiscal year end, the Department took corrective action to identify and reclassify the per diem and fees expenditures in question for fiscal year 1997.

Mana~ement Response

The Department concurs with this finding, and as stated in the Audit Report, we have already taken corrective action to identify and reclassify the per diem and fees expenditures in question for Fiscal Year 1997 and 1998. We have also made the necessary realignment of our budget during the 1997 Legislative Session for the Fiscal Year 1997 Amended Budget and the Fiscal Year 1998 Appropriations Act to eliminate future overexpenditures.

REVENUE/RECEIVABLES/RECEIPTS GENERAL LEDGER Deficiencies in the State Revenue Collections Fund (Overall) Financial Statements Reportable Condition - Material Weakness Audit Control Number 474-96-02

For the year under review, our examination included a review of the internal accounting controls and accounting procedures utilized by the Department of Revenue (Department) in maintaining their State Revenue Collections Fund. Our examination included procedures to provide reasonable assurance that revenue collections received by the Department through either the Mail Cash System (manual deposits by the Department) or the Electronic Funds Transfer Maintenance Unit (electronic fund transfers from taxpayers) were adequately accounted for by the Department's general ledger system maintained by the Central Accounting Unit and were properly recorded in the subsidiary ledger and associated records maintained by the individual tax units and divisions. Our procedures also included a reconciliation of the revenue collections received and subsequently transferred by the

F - 81

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996

DEPARTMENT OF REVENUE CURRENT YEAR

Department to the Office of Treasury and Fiscal Services (OTFS), which acts as the State treasury. The following deficiencies and inappropriate accounting practices were found to exist:

1)

The general ledger system consists of the "Revenue Ledger" and the "Refund Ledger". These

ledgers do not provide for dual-entry accounting for the purpose of recognizing receipts and

disbursements. Dual-entry bookkeeping is the cornerstone of any accounting system and provides

a mechanism to ensure the proper balancing of a general ledger accounting system. Failure to provide

for dual-entry accounting prevents the Department from producing a "balanced" general ledger for

audit.

The general ledger system should be redesigned to provide dual-entry accounting for the purpose of recognizing receipts and disbursements.

2)

The general ledger system did not include separate accounts to identify each type of revenue reported

to and recorded by OTFS; nor did the system contain unique identifying numbers (transmittal

numbers/deposit numbers) for all revenue amounts recorded within the general ledger system. These

deficiencies result in extensive time and effort being required to reconcile the financial activity

between the Department and OTFS.

The general ledger system should be updated to contain the transmittal number and deposit number for each receipt transmitted to and refund requisitioned from OTFS. In addition, the chart of accounts should be expanded to contain a separate account for each revenue type reported to OTFS.

3)

The Central Accounting Unit does not have procedures in place to ensure that necessary corrections

to bank deposits are reported to the individual tax units and divisions. The failure to fully

communicate known adjustments to responsible persons within the Department can result in

inaccurate financial records and possible financial loss to the State.

The Central Accounting Unit should develop and implement procedures to ensure that all adjustments are communicated to the individual tax unit and division responsible for maintaining applicable subsidiary ledgers and associated records.

4)

The Department does not have adequate controls over unprocessed documents relating to tax returns

and various registration applications, and the checks associated with these documents. Unprocessed

documents occur when certain missing or incorrect information is discovered in the Mail Cash

System. At that time, the documents and attached checks are physically removed from the Mail Cash

System and transferred to the appropriate tax unit or division for investigation. There are no logout

or login procedures for these unprocessed documents. Without adequate control procedures, the

unprocessed documents and attachments could be lost or misplaced without knowledge of the

Department and result in monetary loss to the State.

The Department should develop and implement procedures to ensure that all documents are logged when leaving or returning from the Mail Cash System and the individual tax units or divisions. This log should be monitored and periodically reconciled by someone independent of the individuals maintaining the log and any differences should be investigated and resolved in a timely manner.

F - 82

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE CURRENT YEAR

5)

The Department has not established an internal control system whereby the subsidiary ledgers and

associated records properly "roll-up" into the general ledger. As a result, the general ledger system

and the subsidiary ledger system operate independently of each other and are not reconciled

periodically. In addition, there are no consistent cutoff dates established between the two sets of

records. A well designed accounting system provides for general ledger control over subsidiary

ledgers and records and provides for a linkage between the general and subsidiary records. The lack

of controls which ensure a prompt reconciliation of the general ledger and subsidiary records has

resulted in the Department's accounting records in individual tax units and divisions being

inconsistent, and in certain instances being unreconcilable, with the general ledger.

The Department should establish policies and procedures that will establish managerial control for the Central Accounting Unit over the subsidiary ledger and associated records through use of an integrated general and subsidiary ledger system. In addition, consistent cutoff dates should be established between the two systems and all subsidiary ledgers and associated records should be reconciled to the general ledger on a monthly basis.

The deficiencies noted above are a result of the Department's failure to provide for a comprehensive, modern accounting system coupled with strong, clear lines of authority and internal controls. The Department should carefully evaluate each of these deficiencies and take appropriate action to resolve these matters.

Mana~ement Response

I)

The Department concurs that it is not using a dual-entry accounting system for its "Revenue Ledger" and Refund

Ledger." The Department is in the process of purchasing a commercially available accounting package that uses the

double-entry method of accounting to replace our current "Revenue Ledger" and "Refund Ledger."

2)

The Department concurs that its current general ledger system does not include separate accounts to identify each type

of revenue reported to, and recorded, by the Office of Treasury and Fiscal Services (OTFS). In the commercial

accounting package that we plan to purchase, we will include in the chart of accounts, specific accounts identifying each

type of revenue received, and reported by, the Department of Revenue to the OTFS.

3)

The Department concurs that the Central Accounting Unit does not currently have procedures in place to ensure that

necessary corrections to bank deposits are reported to our individual tax units and divisions. One of our requirements

for the commercial accounting package will be that daily transaction lists can be printed for each revenue account so

that we can give a daily copy to the tax divisions.

4)

The Department concurs that it did not have adequate controls over unprocessable documents relating to tax returns and

various registration applications, and the check associated with those documents. The Internal Administration Division

(our processing division) has implemented procedures to ensure that all unprocessable documents are logged when

exiting and reentering to the batches in the Mail Cash System.

5)

The Department concurs that it has not established an internal control system that properly "rolls-up" the subsidiary

ledgers and associated records into the general ledger. The chart of accounts and journals in the accounting software

that we plan to purchase will be designed in such a way as to permit the Department to electronically transfer the daily

revenue collection data directly from the Mail Cash System -- or to manually summary post from the Mail Cash System.

However, at the present time, the individual tax systems are strictly processing systems only, and do not provide

F - 83

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE CURRENT YEAR

accounting information that could be used to reconcile to a subsidiary ledger control account in the general ledger. We are in the process of rewriting the individual tax systems and will design accounting controls into these new systems.

REVENUE/RECEIV ABLES/RECEIPTS GENERAL LEDGER Deficiencies in the Income Tax Division Subsidiary Records Financial Statements Reportable Condition Audit Control Number 474-96-03

For the year under review, our examination included a review of the internal accounting controls and accounting procedures utilized by the Income Tax Division (Division) of the Department of Revenue (Department) for maintaining subsidiary ledgers and associated records. This review revealed deficiencies in the maintenance of subsidiary records by the Division as follows:

1)

The Division does not adequately track data received from both companies and individuals

concerning taxpayer wages, income tax withholdings or estimated payments of Georgia income tax.

Only limited work in regard to individual confirmation of Form W-2 information is performed by the

Department.

As a result of this deficiency, the Division cannot ensure, in all cases, that the withholding amount claimed by the taxpayer on the annual tax return is accurate or that known taxable income is reported as income. This condition resulted due to the Department's failure to design and implement needed procedures, programs or systems.

The Department should design and implement a system that will provide for the systematic reconciliation of income and withholding data received from employers and individuals with Form W-2 and other documents filed with year end individual tax returns.

2)

Tax examiners of the Individual Income Tax Unit and the Withholding Unit of the Division are

responsible for amending tax returns when errors and processing problems are identified as returns

are being processed by the Division. Amendment of the returns involves the tax examiner submitting

adjustments for such items as taxes due and assessment or abatement of interest and penalty amounts.

The Division does not have the necessary controls in place to ensure that all adjustments are processed

in a timely manner, are reviewed and approved by supervisory personnel, and are documented by

adequate supporting documentation.

The failure to process and adequately document adjustments in a timely manner could lead to inaccurate financial records. The lack of timely processing, adequate documentation, and supervisory review and approval for adjustments is the result of the Department not having adequate policies and procedures in place over the adjustment process.

The Department should implement enhancements to the computer system to produce an automated aging report of all returns in process and provide for regular management review of the report to assure that adjustments are made timely, In addition, the Department should ensure that all adjustments are supported by adequate documentation along with supervisory review and approval.

F - 84

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

DEPARTMENT OF REVENUE CURRENT YEAR

3)

The Department uses a batch system to identify and categorize taxes received as the various tax

documents flow through the individual tax units and divisions of the Department. The Withholding

Unit of the Division relies on a manual log book to ensure that all batches are accounted for within

the processing cycle. The accuracy of controlling this voluminous activity relies only on a manual

review of this log book by the Division's management. Also, when the Withholding Unit computer

system's capacity reaches more than 92%, a "purge" program is run. The report that is generated by

the purge program is used by the Withholding Unit to manually identify batches that have not

completed the processing cycle and to initiate a purge of all completed batches. Within 180 days, if

a batch is not acknowledged as either complete or incomplete, the batch is purged whether it is

complete or not. An adequate system of accounting controls would ensure that all batches are

processed by the system prior to purging.

Due to the voluminous activity of the Withholding Unit, the manual process of identifying incomplete batches is tedious and subject to possible error. Without adequate control of the batches, there is a risk that batches will not be processed by the system or batches may be inadvertently purged before being processed resulting in erroneous financial records and a misstatement of income. This condition resulted due to the Department's failure to design and implement needed automated procedures to prevent these deficiencies.

The Department should modify the Withholding Unit's computer system to ensure that all batches are accounted for and processed. The system controls should be improved to automatically identify any unprocessed batches. In addition, periodic reports should be produced and reviewed to identify any outstanding or missing batches and ensure they are properly processed.

Mana~ement Response

I)

The Department concurs that it does not adequately track data received from both companies and individuals concerning

taxpayer wages, income tax withholding, or estimated payments of Georgia income tax. With the passage of House Bill

479, employers are required to submit the W-2 statements along with their annual returns. With the passage of this

requirement, the Department will modify the Withholding Processing System to compile the W-2's from the employers

in a database. This database will be used to verify the employer's annual return, and to detect fraudulent W-2's filed

with individual income tax returns.

2)

The Department concurs that it does not have the necessary controls in place to ensure that all adjustments are processed

in a timely manner, are reviewed and approved by supervisory personnel, and are documented by adequate supporting

documentation. Better internal controls will be incorporated into the redesign of the income tax system. In the

meantime, the Income Tax Division will implement procedures to ensure that all adjustments are supported by adequate

documentation along with proper supervisory review and approval.

3)

The Department agrees that this balancing routine should be automated, but disagrees that the manual balancing routine

is inadequate from a control standpoint. The Income Tax Division's Withholding Unit does not rely solely on a manual

log book to account for all batches. The log book only serves as a batch locator, and the Withholding Unit accounts

for all batches by balancing the Mail Cash System batch control report with the Withholding System batch control

report. These reports are balanced one-to-two times per week, and the supervisor reviews the results of each balancing

routine. Any discrepancies identified in the balancing routine are resolved immediately. With this balancing routine

performed consistently, and reviewed by the supervisor, this should ensure that no batches are lost during a purge of

the system.

F - 85

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE CURRENT YEAR

EXPENDITURES/LIABILITIESIDISBURSEMENTS GENERAL LEDGER Deficiencies in the Sales Tax Division Subsidiary Records Financial Statements Reportable Condition - Material Weakness Audit Control Number 474-96-04

For the year under review, our examination included a review of the internal accounting controls and accounting procedures utilized by the Sales Tax Division (Division) of the Department of Revenue (Department) for maintaining subsidiary ledgers and associated sales tax records, This review revealed deficiencies in the maintenance of subsidiary records by the Division as follows:

I)

The Department has not established a consistent monthly cutoff date for the processing of sales tax

returns for the purpose of remitting sales tax collected on behalf of local governments to the local

governments, A well controlled accounting system should have established cutoff dates for

accounting and reconciliation purposes, This system should provide for twelve equal accounting

periods and for a process that is consistent with enabling legislation.

The failure to have a consistent monthly cutoff date for the processing of sales tax returns has contributed to inconsistent amounts being disbursed to local governments.

The Department should establish a consistent monthly cutoff date for the purpose of processing sales tax returns and remitting amounts due the local governments.

2)

With the implementation of the Centralized Taxpayer Accounting System (CTA) in March 1995, the

accounting for electronic funds transfers (EFT) for sales tax remittances became an automated process

where EFT's are interfaced directly to the CTA system database. A record of each EFT remains on

the CTA database until the corresponding sales tax return is received and processed into the sales tax

system whereby it is interfaced with CTA. The interface process between CTA and the sales tax

system was designed to match the EFT with the sales tax return information and update the data on

the sales tax system in order to be included when the sales tax distribution program was run monthly.

The sales tax distribution program is designed to accumulate sales tax amounts collected for local

governments from all sales tax returns processed for that month for the purpose of distributing those

collections to the local governments. During the first several months after CTA went online, the

process did not accurately match the EFT's with the sales tax return information in the sales tax

system. As a result, the unmatched files remained within the CTA database and were not included

as part of the sales tax distribution program, which resulted in a significant backlog of unprocessed

sales tax returns. The problems with the sales tax distribution system were further compounded by

an apparent under staffing within the Sales Tax Processing Unit to "catch-up" the backlog of

unprocessed sales tax returns.

Because of the problems discussed above, the Division implemented a system of estimating the payments to the local governments in order to maintain a constant flow of funds to the local governments. Once the system's interface problems were corrected, management returned to using the sales tax distribution system to determine the payments due to the local governments. Due to the failure of the sales tax distribution system to provide accurate distribution information for the local governments, payments were made to local governments that were not supported by processed sales

F - 86

0/ State (jeorfJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE CURRENT YEAR

tax returns for those local governments. An adequate system of internal controls requires that EFT receipts be matched with their corresponding sales tax return data and promptly included as part of the sales tax distribution system.

As a result of these deficiencies, the Division could not provide monthly sales tax distribution reports for the State and local governments that could be reconciled to the monthly sales tax returns processed by the Division for fiscal year 1996. The causes of the deficiencies can be attributed to the lack of adequate testing of the eTA system prior to its implementation in March of 1995, the fact that adequate policies and procedures were not in place to identify and resolve unmatched sales tax EFT receipts, and the lack of sufficient staff to process the backlog of sales tax returns in a timely manner.

The Department should design and implement policies and procedures to promptly identify unmatched sales tax receipts with the sales tax returns. All programs and applications being put in place should be thoroughly tested prior to their full implementation. In addition, the staff size of the Sales Tax Processing Unit should be reviewed and an assessment made as to whether the Unit is sufficiently staffed to process sales tax returns in a timely manner.

Mana~ement Response

1)

The Department concurs that the Sales Tax Division did not have in place a consistent monthly cutoff date for the

processing of sales tax returns for the purpose of remitting to the local governments sales tax collected on behalf of local

governments. The Sales Tax Division has established a monthly cutoff date. The cutoff date for each month is the

17th. Sales tax returns fully processed by that date will be included in the distribution checks to the counties and cities

for that month. Distribution checks for local governments will be issued by the 21 st of each month.

2)

The Department concurs that the Sales Tax Division, due to computer program problems that resulted in a significant

backlog of unprocessed sales tax returns, was unable to provide an accurate distribution of sales tax to cities and

counties. The computer program errors that caused the EFT payments and sales tax returns to not match up and flow

through the distribution process were corrected by November 1995. Additionally, the backlog of unprocessed returns

was eliminated up by July 1996 and no further backlogs have occurred. The Sales Tax Division has had procedures in

place since April 1995 to monitor the matching of EFT payments with returns each month. We will continue these

procedures. Iffuture problems arise, we will promptly notify senior management in the department to ensure adequate

resources are applied to resolve these problems. All computer programs and applications are tested prior to

implementation.

The Sales Tax Division is implementing a completely new returns processing system in July 1997 which should provide improved internal controls and accounting systems. Additionally, the new system will feature a capability to optically scan and image returns data, thereby improving the efficiency of the Processing Unit. The need for additional processing staff with this new system does not seem likely.

F - 87

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
DEPARTMENT OF REVENUE CURRENT YEAR
GENERAL LEDGER - Financial Statements FEDERAL FINANCIAL REPORTS - Federal Financial Assistance Differences Between Reimbursement Requests and Subsidiary Ledgers Highway Planning and Construction [CFDA 20.205] Motor Carrier Safety Assistance Program [CFDA 20.218] Audit Control Number 474-96-05 The reimbursement requests completed by the Department of Revenue to claim Federal reimbursement for expenditures on the Highway Planning and Construction grant and Motor Carrier Safety Assistance grant did not agree with the subsidiary ledgers (fund source trial balances) for these programs. A comparison of the reimbursement requests to the fund source trial balances revealed that the reimbursement requests were overstated by $24,558.38. A subsequent reconciliation of the reimbursement requests to the fund source trial balances was performed by the Department and revealed allowable expenditures for the programs charged to incorrect fund source trial balances. This reconciliation identified additional allowable expenditures which resulted in allowable expenditures exceeding the reimbursement requests for these programs by $869.80. OMB's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) provides that the Federal financial reports and claims for advances and reimbursements contain information that is supported by the accounting records from which the financial statements are prepared. This problem was caused by the failure of the Department to adequately monitor the expenditures associated with these programs, the failure to timely identify posting errors made to the individual fund source trial balances for these two programs and by identified errors never being corrected on previously filed reports. The Department should closely monitor all expenditures associated with Federal grants. Those individuals responsible for the administration of the programs and the completion of the reimbursement requests should ensure that these requests are completed using information that is reconcilable with the accounting records.
ManafJement Response
The Department concurs that the Motor Fuel Tax Unit of the Sales Tax Division failed to completely monitor the expenditures associated with the Highway Planning and Construction Grant and the Motor Carrier Safety Assistance Grant. The Motor Fuel Tax Unit will monitor more closely all expenses incurred under each Federal grant and reconcile the expenses to the monthly expenditure reports issued by the Department's Central Accounting Office. Any differences will be reviewed and corrections made as deemed appropriate. Also, when the reimbursement claims are forwarded to the Federal agency for payment, a complete review will be made to ensure that all authorized expenses are included in the claim for reimbursement.
F - 88

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR

SIGNIFICANT WEAKNESSES

SALES AND USE TAX

Unreliability of Return and Distribution Data - Overview

Accounting for sales tax collections and the distribution of sales taxes to the various local entities is performed by the Department ofRevenue's Sales Tax Unit. While the gross sales tax revenues received is accounted for through the Mail Cash and Central Taxpayer Registration (CTR) areas, the actual distribution of the amounts collected, e.g., the breakdown as to the amounts due to the State and the respective local entities, can only be determined as a result of the returns processing and reconciliation, which is the responsibility of the Sales Tax Unit. Effective control over this function is essential to assurt accurate recognition of revenue, both for the State and the many local entities which depend upon sales taxes to meet their operational requirements. No other agency has the degree of information necessary to make the determination of the total sales subject to sales tax, total taxes due, total taxes collected, and the portion of the taxes associated with the respective State and local tax authorities.

It is the Department of Revenue's responsibility to accurately record taxes collected, and to distribute to the local entities, their respective portions of the collections. On approximately the twentieth of each month, the Department of Revenue notifies the Treasury as to the actual collections for the prior month which were collected on behalf of local tax entities, and issues checks payable to the local entities for these amounts.

As a part of this review of the internal controls over the sales tax system, the Department of Audits reviewed the procedures used to perform and administer the collection and distribution of sales taxes to the local entities. The review identified several conditions which the Department of Audits believes represent serious weaknesses in the controls over sales tax revenues.

Summary of Findings During the period of April, 1995 through approximately January, 1996 a significant amount of the sales tax revenues distributed to local entities has been largely based on management's estimates, rather than the result of processing returns. These distributions to local entities are not documented by underlying sales tax returns.

This situation developed partly as a result of a breakdown in the sales tax application following an April 1995 implementation of changes to the interface between the sales tax application and the central taxpayer accounting (CTA) application. Complicating conditions, which predisposed the Sales Tax Unit to a major breakdown in internal controls, included:



Significant integrity problems have been identified with the sales tax application, including inaccurate reports

and system failures.



The Sales Tax Unit's manual procedures are not formally documented (see Williams Commission report).



The user procedures and technical documentation is obsolete and inadequate for effective on-going support

of the system.



The current control procedures over the sales tax return and distribution processes are inadequate to provide

reasonable assurance as to the completeness and accuracy of these processes.



There are no formal procedures to assure the accuracy and effectiveness of systems development initiatives.

Detailed findings and recommendations are as follows:

F - 89

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR

SIGNIFICANT WEAKNESSES

Sales Taxes Distributed Based on Management's Estimates Reportable Condition Audit Control Number 474a-96-0 1

The total amount of sales taxes which are distributed to local entities represents Department of Revenue estimates of collections .attributable to those local entities. These estimates are not formally tracked and reported, resulting in a number of control weakness:



The procedures for distributing and accounting for estimated sales tax collections, do not formally recognize

the estimated distribution (that part of the total distribution which was determined by management's estimates)

as an amount which is in question as to its accuracy. Local entities and the State's general financial accounting

are not advised as to the provisional nature of the distributed amounts.



No formal process is followed to reconcile estimated amounts to actual, allowing the opportunity for inaccurate

amounts to remain un-reconciled indefinitely.



Management is unable to track the performance of the sales tax collection and distribution process.

In those cases where estimated distributions are made, the estimated amounts should be disclosed to the State Treasury and to the local entity receiving the distribution. Formal procedures should be implemented to assure that all estimated distributions are formally recorded and reconciled each month against llctual, system-derived amounts.

Additionally, the net unreconciled estimated distributions should be formally reported monthly in order to provide management with direct feedback regarding the effectiveness of its controls over the collection and distribution process. Outstanding or increasing balances in these estimated distributions would indicate the need for management's attention to assure that problems were being addressed.

Mana~ement Response

We agree with the recommendation. In April 1996, the Division stopped adjusting county tax distributions that were the result of processing problems. In addition, the Division will not resume that practice.

Statutory Authority of Estimated Distributions Reportable Condition Audit Control Number 474a-96-02
Georgia Statutes regarding the collection and distribution of sales taxes allow for the distribution of revenues based on actual amounts collected. The Department of Audits is of the opinion that the practice of distributing sales tax revenues based on estimates of collections, is not in compliance with the authority delegated to the Department of Revenue.
The Department of Revenue should request the Attorney General of Georgia for an opinion and guidance regarding the use of estimates in determining distributions of sales taxes to local entities.

F - 90

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
SIGNIFICANT WEAKNESSES
Mana~ement Response
We agree with the recommendation. However, because the Division stopped adjusting these county tax distributions that were the result of processing problems and plans not to resume that practice, the management decided obtaining the opinion of the Attorney General of Georgia concerning this matter was not necessary.
Lack of Confidence in Sales Tax Application Data Reportable Condition Audit Control Number 474a-96-03
Since April 1995, the sales tax application has failed to provide the Department of Revenue with reliable information. Reliability refers to the degree of confidence users have in the data. To possess reliability data must pass three tests. It must be complete, timely and reproducible. Sales tax return and distribution data has not passed these tests. However, management now believes that the system is operating correctly, but there is little in the way of objective, observable evidence to support placing full reliance on system derived information.
Given the recent history of the sales tax application, and in order to establish an acceptable degree of confidence in the current information, programs are being written to validate the information being provided by the application for fiscal year 1997. The Department of Audits is overseeing the design, testing and implementation of these programs.
Mana~ement Response
We agree with the recommendation. Since July 1996, the Department made changes to the sales tax return system programs and is tracking all returns processed by the mail/cash system through the sales tax return system by batch. Through this batch tracking, if it is revealed that certain returns were not processed in the sales tax return system, then the tax Division would conduct a manual review to locate these transactions. This proposal was successfully conducted last September by the State Auditors in tracking all sales tax transactions processed by the mail/cash system for one day.
The new system, which should by implemented by July 1997, will report data that is complete, timely and reproducible. In the meantime, the Department's internal audit function will pull samples of mail/cash transactions and track those items through the sales tax system.
The Sales Tax Unit's Procedures and Technical Procedures are Inadequate Reportable Condition Audit Control Number 474a-96-04
The combination of manual and programmed procedures for performing the collection, distribution and administration of Georgia sales taxes were initially developed in 1975. Since the time of their original implementation, the documented understanding of the programs and manual procedures has not been maintained. User procedures are not adequate to provide a reference for training and use of the system. Technical documentation no longer provides programming personnel with an adequate understanding of how the system has been designed and programmed. As a result, personnel in the Sales Tax Unit cannot be trained except through significant one-on-one time spent observing and questioning someone who, it is believed, actually knows how the system operates.
F - 91

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR

SIGNIFICANT WEAKNESSES

Similarly, programming personnel are not able to modify some portions of the systems, and are at additional risk of introducing errors when changes to programs must be made.

Documented user procedures for the Sales Tax Unit should be developed immediately. Although there are plans to redevelop much of the current system, the effort to develop such documentation should be worthwhile. Procedures, whose accuracy completeness has been confirmed by all managers and supervisors, will provide the Department of Revenue with:



An understanding of the process adequate to use as reference and training material by unit staff,



An accurate and necessary understanding, or beginning point, for developing a new sales tax system,



The opportunity to improve the effectiveness of the controls within the current environment, and



A beginning point against which procedures for the new system can be effectively compared and contrasted.

Mana~ement Response

According to the Information System Division (ISO) this finding is incorrect. Programming personnel can and do modify these programs. A new sales tax return system is currently being designed and will be implemented in July 1997. This new system will have up-to-date user and technical procedures and other documentation that are already being developed.

INDIVIDUAL INCOME TAX

Completeness and Accuracy ofIndividual Income Tax Reportable Condition Audit Control Number 474a-96-05

The individual income tax application does not have the capability to track wage, income or withholding information reported on the income tax withholding statement (Form W-2). There is also no capability to reconcile this information with that derived from the withholding application. Consequently, the State cannot ensure that taxpayers who have reportable Georgia personal income have filed individual income tax returns, that all taxable income of a taxpayer has been reported accurately, or that the withholding amount claimed by a taxpayer is accurate.

As a compensating control, the Central Audit Division exchanges information with the IRS annually. These procedures are designed to detect high income taxpayers who filed a federal return with a Georgia address but did not file a Georgia return. In addition, the Individual Income Tax Unit uses the CP 2000 application and IRS revenue agents reports to detect differences between federal and Georgia AGI (adjusted gross income). These controls are limited in scope and consequently do not ensure the objectives of completeness and accuracy of input, with respect to the individual income tax application, are met.

In order to independently verify the accuracy and validity of reported income and withholding information we recommend:



The W-2s received by the Individual Income Tax Division should be systematically reconciled with the

withholding returns received by the Withholding Division.



The federal adjusted gross income amount claimed on the Georgia return should be reconciled with the federal

return.

F - <.)2

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
SIGNIFICANT WEAKNESSES
It is likely that the verification process would involve a high degree of cooperation among the Withholding Division, the Individual Income Tax Division, and the IRS.
Management Response
It is true that the Department does not receive W-2 statements from employers and reconcile them back to the employee's reported withheld amount. Legislation is being introduced in this session of the General Assembly requiring employers to submit the W-2 statements along with the return. With the passage of this requirement and the modifications to the current system, the Department will initiate a plan to revise the withholding processing system to systematically assist the Unit personnel in identifying inconsistencies in the reported withheld amounts.
Also, the Department agrees that the federal adjusted income amount claimed on the Georgia return should be reconciled to the federal return. This can be accomplished by developing a program to compare the federal income tax master file tape to the Georgia returns file. The Department will include this feature in a redesigned individual income tax system. Within the next 18 months, the Department will develop a plan that will include the time frames for the development of this new system.
WITHHOLDINGS
No Reconciliation Between the Withholding Returns and the W-2's Reportable Condition Audit Control Number 474a-96-06
The current withholding system does not reconcile the amount of withholding per the taxpaying entities' withholding returns and the amount recorded as being withheld on their employees statement of income taxes withheld, (i.e. Form W-2).
Without this control feature there is very little that the State can do systematically to ensure compliance with the applicable laws. There are compensating controls in the work performed by Central Audit and ad-hoc inquiry by the Withholding department with regard to individual confirmation of W-2 information. These compensating controls are however, extremely limited in scope and do not ensure compliance with applicable laws and completeness and accuracy of input.
This weakness could potentially result in employers withholding taxation from employee payrolls and failing to report the correct amounts. The employees' W-2's could still theoretically be prepared correctly and the State cannot cross reference the information to verify the accuracy. Without a complete reconciliation process the system cannot ensure completeness or accuracy of the withholding information.
The Withholding Section should require all taxpaying entities to submit their W-2's to the State. This information should be captured on an individual basis and reconciled with the total withheld by the withholding entity/employer. This ensures adequate compliance with the tax laws and provides a measure of completeness and accuracy controls over the withholding and the individual income tax applications.
In addition this information could also be used to ensure compliance with the applicable laws with regard to the individual income tax application, (Also refer to the Individual Income tax application audit findings).
F - 93

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR
SIGNIFICANT WEAKNESSES
Mana~ement Response It is true that the Department does not receive W-2 statements from employees and reconcile them back to the employer's reported withheld amount. Legislation is being introduced in this session ofthe General Assembly requiring employers to submit the W-2 statements along with the annual return. With the passage of this requirement, the Department will initiate a plan to revise the withholding processing system to systematically assist the Unit personnel in identifying inconsistencies in the reported withheld amounts. Also, the Department agrees that the federal adjusted income amount claimed on the Georgia return should be reconcile with the federal return. This can be accomplished by developing a program to compare the federal income tax master file tape to the Georgia returns file. The Department will include this feature in a redesigned individual income tax system.
INDIVIDUAL INCOME TAX Lack of Password Controls Reportable Condition Audit Control Number 474a-96-07 The individual income tax application relies solely on a generic identification code for system access with no passwords to authenticate users. Unique user identification codes and passwords are a most basic control technique used to ensure adequate security over an information system. These components act as the "logical keys" to restricted areas and assets, and provide a mechanism to authenticate the identity of the users. Without adequate user identification codes and passwords the integrity of the system and the data is at risk. We recommend that proper password protection is adopted. A unique identification code and password should be assigned to each user. We further recommend that passwords should be at least 8 characters in length, contain at least 1 numeric value, and expire at most every 45 days. Users should be precluded from using any previous passwords. Manar:ement Response The Department agrees with the recommendation, however, this system is out dated and the programs are stand alone programs with no common entry processes. Also, several of the utilization routines are in assembler language, in which the Department does not have expertise. Therefore, the Department has decided not to enhance the current system with better password security but will include such a feature in a redesigned system. Also, it should be noted that the Department already has additional security by limiting specific terminals with system access.
F - 94

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
GENERAL CONTROL WEAKNESSES
Lack of Flexibility in Staffing for Programming/Systems Support Reportable Condition Audit Control Number 474a-96-08
Hiring and retaining qualified staff is very important to the Department of Revenue's Information Systems Division's (ISD) ability to develop and maintain efficient, well-designed software applications. Most jobs in ISD are classified under the Georgia Merit system. The job descriptions are inflexible and allow little leverage in the division's ability to bid for qualified programmers and programmer/analysts. Merit system pay scales are also not competitive with what outside industry pays information systems professionals with certain skill sets. Consequently, hiring qualified people is difficult (12 of 68 permanent positions are unfilled) and turnover is high (37%).
Lack of qualified staff and/or excessive staff turnover can lead to poor productivity levels for information systems staff which impact lSD's ability to adequately develop new applications, maintain existing systems and use up-to-date technology.
We recommend all programmer and programmer/analyst positions within the Information Systems Division of the Department of Revenue are changed to unclassified positions.
Mana~ement Response
The Department agrees with the recommendation. Currently, 35 of68 positions in ISD are classified. The remaining 33 positions are unclassified of which 20 or more of them are currently vacant. As other positions become vacant, they too will be unclassified. Furthermore, the Department has hired a personnel recruiter, on a temporary basis, who will assist the Division in filling the vacant positions.
Need for Increased Emphasis on Adequate Staff Training Reportable Condition Audit Control Number 474a-96-09
Given the changes in information technology and the need to keep qualified personnel up-to-date, training for information systems professionals provides payback in the form of competent and skilled personnel and high productivity. Although staff in the Information Systems Division (ISD) have received some outside training in DB2 (database software), the training budget has been cut in past years when funds are curtailed. Management also indicated the time to train is not given priority when major development projects are under way. ISD is using CASE (computer aided software engineering) tools and prototyping. Continued training in these areas is necessary to have productivity payback.
Continued low priority for training reduces staff effectiveness and efficiency in the long !Un.
We recommend Department of Revenue management emphasize commitment to adequate and cost- effective training for qualified staff in the Information Systems Division.
Mana~ement Response
The Department agrees with the recommendation and has budgeted $25,000 in this fiscal year to begin such training. Also, the Department has contracted with an outside vendor to provide assistance in training the Department's project managers.
F - 95

0/ State (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
GENERAL CONTROL WEAKNESSES
Lack of Strategic Planning Reportable Condition Audit Control Number 474a-96-l 0
Discussions with directors of user divisions and director of the Information Systems Division indicated there was no strategic plan integrating business and information systems needs to provide strategic direction to the Department of Revenue. Efforts are being made by the directors of the department's divisions to initiate this process. Lack of a strategic plan negatively impacts the ability to perform adequate resource planning and budgeting, implement controlled system upgrades at a system level or application level, replace dated technology in a timely and effective manner and maintain good user/information systems relationships.
We recommend efforts towards establishing and maintaining an effective strategic plan are continued and given high priority.
Mana~ement Response
The Department agrees with the recommendations and is taking several steps to correct the current situation. First, the Department had started developing a strategic plan, but decided to delay the final issuance of the plan until the KPMG, Peat Marwick study is completed. The Department will soon incorporate the agreed upon KPMG modernization effort recommendations within the Department's strategic plan and finalize the plan. Second, soon the Department will contract with an outside vendor to assist in the development of an information technology strategic plan. Third, the Department is in the process of creating a Program Management Unit which will have the responsibility of monitoring all modernization projects as well as the efforts involved in implementing the strategic plan. With these plans finalized and the new Program Management Unit operational, the Department will improve significantly in the areas of planning and monitoring new systems development and systems enhancement projects.

Lack of Formal Information Systems Planning, Budget or Business Continuity Plan Reportable Condition Audit Control Number 474a-96-ll

Discussion with the director of the Information Systems Division indicated:



there is no formal resource plan and budget to assist with the planning for facilities, equipment capacity,

network capacity, number of staff required or financial resources required,



there is no business continuity plan to assure orderly recovery of data processing and business unit functions

in case of a disaster,



there is no annual or multi-year plan that identifies major projects and details project expected start and

completion dates, human resource requirements and costs, equipment requirements and costs and software

requirements and costs.

Lack of formal planning, budgeting and project tracking reduces management's ability to provide direction to the information systems function in line with business needs, reduces the effective and efficient use of human and computer resources and doesn't allow management a mechanism to keep projects on track. Although the Computer Services Division of the Department of Administrative Services is developing a disaster recovery plan for the mainframe environment, the lack of business continuity

F - 96

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
GENERAL CONTROL WEAKNESSES
planning at the user level can severely hinder the department's ability to collect and process revenue data for funding state government in case of a disaster.
We recommend management consider initiating formal information systems planning, budgeting and project tracking to coincide with strategic planning efforts now in process. We also recommend department management initiate business continuity planning for the various divisions and information systems to assure timely collection and processing of revenues in case of disaster.
Management Response
The Department agrees with the recommendation and is in the process of developing an overall schedule for the modernization effort which includes redesigning, or modifying every major computer system of the Department. One of the first actions the Department will take is to develop an information technology strategic plan. This plan will guide all future system development and/or enhancement efforts. Furthermore, the Department is currently developing a Program Management Unit which will have the responsibility of reviewing all major projects. These reviews will include review of schedules, the project objectives, budgets and progress of the projects.
Lack of User Involvement on Information Systems Steering Committee Reportable Condition Audit Control Number 474a-96-12
The information systems steering committee consists of the Department of Revenue deputy commissioner, controller, director of intemal audit and the director of Information Systems Division. The committee meets every other week to discuss progress and problems of information systems development and maintenance projects. There are no user representatives on the steering committee.
Information Systems steering committees are most effective at guiding projects to successful and timely completion when senior level user management is involved. Users develop more interest and ownership in their systems when their input is regularly included in a meaningful way. Lack of user representation usually leads to systems out of line with user business needs.
We recommend the steering committee include director or assistant director level representation from major user areas.
Management Response
The Department agrees with the recommendation. With the implementation of the Program Management Unit, the Department will reconsider the make-up and responsibilities of the ISO Committee. Current plans call for this new committee to include managers from the user community.
Information Systems Department (ISO) Access to Production Data Files Reportable Condition Audit Control Number 474a-96-13
Information Systems Department (ISO) personnel have unlimited read and write access to the individual income tax and withholding applications production data files using high level file utilities. These applications contain confidential information
F - 97

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
GENERAL CONTROL WEAKNESSES
and there are no controls to ensure only authorized personnel have read access. There is also no logging of activity with regard to inquiries. In addition there are no procedures in place to detect if unauthorized modifications were made to the data.
We recommend ISO personnel are restricted from production data file access. In cases where access is absolutely necessary management should supervise the activity and ensure the following:
Access is justified, approved, and systematically logged, Access is granted for a specific time period and restricted to the specific file required, and Management should review the changes made prior to being put back into production.
Management Response
The Department does not agree with the recommendation. Currently only senior level programmers and above have the access that is necessary to correct programming problems and produce ad hoc reports. To prevent unauthorized access, the Division controls access through RACF security.
Lack of Adequate User and Technical Application Documentation Reportable Condition Audit Control Number 474a-96-14
In general, other than the mail cash, central taxpayer accounting (CTA) and central taxpayer registration (CTR) applications, applications and surrounding procedures have been extensively modified over an extended period of time and documentation is now out of date or non existent. The lack of adequate applicarion documentation makes maintenance more costly and time consuming. The lack of adequate user documentation creates difficulties in training and makes the organization unnecessarily dependent on specific employees to ensure continuity.
We recommend that all user and technical documentation is updated to reflect the current system. Management should introduce procedures which ensure user and technical documentation is completed as modifications are made.
Management Response
The Department agrees with the recommendation. However, the Department does not have the resources to update user and technical documentation for current systems. For the immediate future, Most ISO resources will be devoted to preparing the systems for the YR 2000 and/or to redesign these systems. As stated earlier, the Department's modernization efforts call for the redesign of all major systems, other than Mail/Cash, CTA and CTR applications. Furthermore, the soon to be developed information technology strategic plan will dictate the documentation requirements for these new systems. Finally, the Program Management Unit will be responsible for ensuring that these requirements are followed.
Lack of Password Expiration Controls Audit Control Number 474a-96-15
Passwords which control access to the applications reviewed are not set to periodically expire. It is generally recognized that the risk of a password becoming compromised increases over time and, in order to maintain the intended effectiveness of the
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FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
GENERAL CONTROL WEAKNESSES
password, it is necessary to change the password regularly. The frequency of the change should reflect the sensitivity or value of the assets being protected by the password control.
We recommend that passwords are set to periodically expire, (at most every 45 days). Users should also be precluded from using previous passwords.
Mana~ement Response
The Department agrees with the recommendation. However, as noted earlier, this system is out dated and the programs are stand alone programs with no common entry processes. Also, several of the utilization routines are in assembler language with which the Department does not have expertise. Therefore, the Department will not enhance the system with better password security but will include such features in a redesigned system. Furthermore, it should be noted that the Department already has additional security by limiting specific terminals with system access.
Absence of Formal Controls Over Systems Development Initiatives Reportable Condition Audit Control Number 474a-96- I6
The quality of the Department of Revenue's information systems is essential to accomplishing the Department's objectives. However, the Department of Revenue does not follow a formal process or method for directing the development and implementation of major system initiatives, and for assuring the quality of systems being placed into production.
The Department of Revenue should adopt formal policies and procedures for managing the systems development and enhancement function. These should include the "full life cycle" of system initiatives, from determining requirements, through implementation and system acceptance, and should include an oversight function to assure that all policies are being followed for all major system development and enhancement projects.
Mana~ement Response
The Department is in the process of recruiting a Program Manager Director for the new Program Management Unit. When the Unit is in place, it will be responsible for ensuring that the technology and resources for the systems development and enhancement functions are in place. In addition, the Department plans to develop an information technology strategic plan prior to any new major system development beginning. This plan should address the quality of systems development.
Determine the Impact of the Year 2000 on the Application Software and Address the Associated Risks Reportable Condition Audit Control Number 474a-96-17
As the year 2000 approaches, a critical issue has emerged regarding how existing application software programs can accommodate this date value. In brief, many existing application software products in the marketplace as well as in-house developed systems were designed to only accommodate a two digit date position which represents the year (e.g., '95' is stored on the system and represents the year 1995). The assumption in the system logic is that the date is within the twentieth century. When the next century arrives (i.e. the year 2000), this assumption will be incorrect, and the logic will not function properly.
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FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
GENERAL CONTROL WEAKNESSES
The efforts and associated costs to address the year 2000 issue can be enonnous as existing application systems will likely require a significant amount of program modifications. We recommend Department of Revenue and Information Systems Division management develop a plan for making appropriate program/system changes to mitigate the potentially devastating effects of the year 2000 on current systems.
Mana~ement Response
The Department agrees with the recommendation. The Department has a Project Year 2000 (YR2K) Committee that includes representatives from each Division. The committee meets on a monthly basis to discuss ideas for dealing with the YR2K and how the Department's computer systems will be handled for Year 2000. The Committee is also in regular contact with DOAS's YR2K Committee through its chairperson, who is also on the DOAS Committee. The Department is also developing a plan to ensure all major systems are YR 2000 complaint and, iffunds and resources are available, redesigning some of the systems. The CTA, CTR, and Mail/Cash systems will not have to be rewritten, but will need modification.
APPLICATION CONTROL WEAKNESSES
INDIVIDUAL INCOME TAX
Manual Batch Controls Reportable Conditions Audit Control Number 474a-96- I8
The Individual Income Tax Unit relies on a manual review of the batch status report to ensure that all batches are accounted for. This process relies on close manual scrutiny by the section manager. With the high volume of batches, there is a high probability that batches can be omitted from processing and not be detected. The omission could result in erroneous taxpayer records, and potentially lead to monetary losses.
We recommend system controls are implemented to ensure all batches are accounted for and processed. The system should provide management with periodic aged reports of outstanding/missing batches. Management should ensure problem batches are promptly investigated.
Mana'iement Response
The Department agrees with the recommendation, and plans to incorporate this feature in the newly designed individual income tax return processing system. However, it should be noted that all batches are clearly marked with batch numbers which indicate to the examiners which batches are the oldest. The examiners are instructed to work the oldest batches first.
Processing of Returns with Errors Reportable Condition Audit Control Number 474a-96-I 9
The current system cannot process returns with incomplete or duplicate social security numbers. These returns are systematically 'rejected' by the system and printed to a "permanent error" report. The error returns are then researched by the tax examiners,
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0/ State (feorffia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996

DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR

APPLICAnON CONTROL WEAKNESSES

assigned unique dummy social security numbers, re-batched by Mail Cash, and re-keyed into the system. The dummy social security number allows the division to track the erroneous and correct data records independently.

The permanent error correction process is prone to error and omissions. There are no controls to ensure permanent errors are completely and accurately captured, aged, or resolved in a timely manner. Without adequate controls there is an increased risk of unauthorized or accidental changes to data. This can result in misstated financial statements, financial losses through erroneous refunds, or be used to conceal fraud or defalcation.

We recommend that systematic controls be implemented to ensure that all permanent error returns are completely and accurately accounted for and processed on time as follows:

+

'Permanent errors' should not be deleted from the system.

+

The application should store all 'permanent error' return data on a file for future re-processing. The file should

supply return information to the error research and correction process, where supervisory review and approval

procedures should be implemented.

+

Management should obtain periodic aging reports of outstanding error batches, and ensure they are promptly

investigated.

Management Response

The Division agrees that systematic controls should be implemented to ensure that all permanent error returns are completed and accurately processed The Department plans to include this feature in the redesigned income tax system. Until these changes are made, the Individual Income Tax Processing Section will continue to monitor the permanent error correction process and the Internal Audit Unit will audit these transactions through sampling.

Authorization and Reconciliation of Adjustments Reportable Condition Audit Control Number 474a-96-20
The tax examiners within the Individual Income Tax Section are responsible for examining the returns and attempting to correct the errors. They also have the authority to change the return data and the amount paid by taxpayer.
Changes to key fields, such as the social security number, tax year, or payment amount, require on-line correction and a BC95 journal adjustment form. The BC95 is sent to Mail Cash where the microfilm payment history file is updated.
Changes made by tax examiners are not reviewed, nor is there any reconciliation process to ensure the modifications are transferred to the microfilm payment history file. Although there is an annual reconciliation of the microfilm payment history file data and the information on the individual income tax system, there are usually between 15,000 and 20,000 unresolved discrepancies. There are also no procedures to ensure the total payments from taxpayers processed through the individual income tax system are reconciled to the amount of actual deposit.
Without proper control procedures, the system cannot ensure accuracy and validity of the return data and amounts received from taxpayers. Erroneous or fictitious transactions could be processed and not detected, resulting in financial losses to the State.

F - 101

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
We recommend all adjustments to payment amounts be made within the Mail Cash Section, where an adequate audit trail should be kept. More importantly, a system generated report should be introduced to reconcile adjustments to the actual bank deposits on a monthly basis. Payment amounts from taxpayers should not be changed by the Individual Income Tax section.
We recommend that changes to return data are reviewed and authorized by the Individual Income Tax Section. The authorization process should include appropriate supervisory or peer review procedures. All adjustments should reconcile to the microfilm payment history file and discrepancies investigated and resolved.
Manaf:ement Response
The Department agrees that better internal controls should be in effect and will incorporate better internal controls in the redesigned income tax systems. In the meantime, both Divisions will document procedures concerning this process. Also, the Internal Audit Unit will conduct audits to identify discrepancies and the reasons for such discrepancies through sampling. Furthermore, according to lSD, Income Tax Division personnel does not have system authority to change mail/cash payment information. Only Mail/Cash personnel can make corrections in the mail/cash system. While the Income Tax examiners can change the amount of payment that was entered from the tax return into the income tax system, the system will not allow the batch to be released unless the batch total in the mail/cash system balances with the batch total in the income tax system.
Bank Deposit Corrections Reportable Condition Audit Control Number 474a-96-21
Bank deposit corrections usually occur when payments from taxpayers are incorrectly captured by the Mail Cash Section. The bank notifies the Mail Cash Section of the correction to be made. Currently, there is no control to ensure all bank adjustments are communicated to the Individual Income Tax Section. Without adequate controls there is potential risk bank adjustments are not recorded resulting in inaccurate financial records and possibly financial loss to the State.
We recommend system controls are implemented to ensure all bank adjustments are made to the individual income tax application. Control procedures should include a periodic reconciliation of the bank deposits and the total of payments processed through the individual income tax application.
Manaf:ement Response
The Department agrees with the recommendation. Notification and reconciliation procedures for Bank Corrections should be incorporated in the Department's new Image Processing System which should be operational in April 1997. The Internal Administration Division will also develop procedures for notifying divisions concerning bank deposit corrections.
Logging of Changes to Data Audit Control Number 474a-96-22
Tax examiners are frequently required to make adjustments to tax assessments. These changes are tracked using a unique two digit identification code which the examiner voluntarily keys into the individual income tax application. The two digit
F - 102

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
identification code is used to ensure an adequate audit trail and to match changes made to the responsible examiner. There are no controls to ensure the examiners key in the correct code. A complete and accurate audit trail is essential to ensure transactions can be traced back to the individual responsible in the event oferror or intentional defalcation. This function ensures the process is "policed" and provides some assurance over data integrity. We recommend that the system automatically log all changes by users' identification code. This log should also be periodically reviewed to ensure functions are performed by authorized users. Management should investigate and resolve instances of unusual activity. Mana"ement Response The Department agrees that the system should automatically log all changes with the users' ID, rather than the users' manually inputting their ID. The Department will incorporate this feature in the redesigned income tax system. In the meantime, the Department will review procedures that are in place to determine if better controls can be incorporated in these manual procedures. In addition, the Internal Audit Unit will conduct routine audits through sampling.
Timeliness of Processing Reportable Condition Audit Control Number 474a-96-23 The current individual income tax application provides no batch control reports to ensure batches are processed in a timely manner. Management relies on a manual count of outstanding batches to estimate the timeliness of processing. Without adequate controls over the timeliness of processing, the State may incur monetary loss in the form of interest. The lack of timely information may contribute to inappropriate management decisions and interruption of cash flows. We recommend management implement a combination of system controls and manual procedures to ensure processing is completed promptly. This should include automated periodic reports which show the aging of all outstanding batches, and procedures for regular management review. Manaf:ement Response The Department agrees that system controls are needed to ensure income tax returns are processed in a timely manner. However, the Division believes the manual procedures for assigning work are adequate for ensuring batches are processed in the proper sequence. These procedures include "first in-first out" (FIFO) method. The batch numbers that are assigned to each batch indicate to the examiners which batch to work first.
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0/ State (/eorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
AMENDED INDIVIDUAL INCOME TAX
Lack of Supervisory Review and Approval of Return Modifications Audit Control Number 474a-96-24
Within the amended returns process tax examiners are required to modify the State's records to correct problems on returns. These procedures may include research into complex technical issues, assessment and abatement of interest and penalties, and changes to key entry errors. The primary control point over this process is the supervisory review and approval of all adjustments, which include the abatement of interest and penalties, by senior tax examiners. During high volume periods this review process is not done. Without adequate supervisory review and approval there is an increased risk of erroneous and fictitious adjustments which may fail to be detected in further validation procedures.
During high volume periods when it is impractical to review all returns, we recommend the implementation of a system generated report which selects a suitable sample of returns for review. The report should allow for the creation of reporting thresholds and provide sufficient information to trace questionable activity to the individual responsible.
Manar:ement Response
The Department disagrees with this fmding. The Division maintains that amended returns are reviewed 100% of the time. The Section does have supervisory review of examination activities as well as review of all credits and debits prior to interfacing to the central taxpayer accounting system. In 1994, the Department experienced a large receipt of amended returns due to retroactive passage of certain federal tax laws. During this period some of the examination procedures were relaxed, but at no time was supervisory review compromised. This processing season the Division will implement a quality control program for tax examination. A written procedure is available upon request and the results of the quality assurance program will be documented later. The Internal Audit Unit will begin to conduct audits to ensure compliance.
Timeliness of Processing Reportable Conditions Audit Control Number 474a-96-25
The current amended review application provides limited controls to ensure adjustments are processed in a timely manner. It is important management monitor processing and ensure that possible exceptions are dealt with on a timely basis. Lack of timeliness controls may lead to financial loss to the State in the form of interest, which may be otherwise avoidable, and inaccurate information in financial management reports.
We recommend management implement a combination of systematic and procedural enhancements which include automated aging reports of all returns in process and procedures for regular management review.
Manar:ement Response
The Department agrees that systematic aging reports are needed to monitor the processing for amended returns. Currently the Unit uses the FIFO method for assigning returns. Also the supervisors control the distribution of work by making sure oldest work is done first. The Department will document procedures and Internal Audit Unit will conduct routine audits to ensure compliance.
F - 104

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
WITHHOLDING
Lack of Control over Unprocessed Returns and Checks Reportable Condition Audit Control Number 474a-96-26
The Mail Cash Section cannot capture withholding returns where the taxpayer has recorded an invalid withholding identification number. The returns and checks, if applicable, are therefore physically transferred to the Withholding Unit for investigation. The documents are however, not adequately accounted for at any stage of the transfer.
Without adequate monitoring procedures, checks and returns could be lost or misplaced resulting in monetary loss to the State.
We recommend that all documents, including checks, are logged when leaving or returning from the Mail Cash and Withholding Sections. The log should be maintained on the system and allow input from Mail Cash and Withholding sections. The log should be monitored and periodically reconciled by a responsible individual, preferably outside of the above mentioned sections. Differences should be appropriately investigated and resolved.
Mana~ement Response
Internal Administration Division has developed a micro computer program for tracking checks sent from it to other divisions. It contains sufficient infonnation to identify the taxpayer, and check the number, amount, date received, division sent to, date sent, and date returned from processing. It is our intent to provide each division with the infonnation if the check has not been returned for processing within five (5) working days.
Manual Batch Controls Reportable Condition Audit Control Number 474a-96-27
The Withholding Unit relies on a manual log book to ensure all batches are accounted for within the processing cycle. The accuracy of this procedure relies on the close scrutiny by department management. The high volume of batches increases the likelihood that missing batches are not accounted for.
Without adequate monitoring of batches there is a risk that batches are not processed by the application. This could potentially result in erroneous financial records and lead to an overstatement or understatement of income. Failure to process the transactions may further result in erroneous delinquency or other notices. These actions are time consuming to correct and may be potentially damaging to the Departments' public image.
We recommend that the system be modified to provide infonnation to ensure that all batches are accounted for and processed. Management should obtain periodic reports which identify the outstanding/missing batches and ensure they are appropriately processed.
F - 105

0/ State (jeorCjia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICAnON CONTROL WEAKNESSES
ManafJement Response
The Income Tax Division agrees that this balancing routine should be automated, but disagrees that the manual balancing routine is inadequate from a control standpoint. The Unit does not rely solely on a manual log book to account for all batches. The log book serves as a batch locator, and the Unit accounts for all batches by balancing the mail cash system batch control report with .the withholding system batch control report. These reports are balanced one to two times per week, and the supervisor reviews the results of each balancing routine. Any discrepancies identified in the balancing routine are resolved immediately. With this balancing routine performed consistently, and reviewed by the supervisor, the Division ensures that no batches are lost during a system purge.
Manual Identification of Unprocessed Batches Reportable Condition Audit Control Number 474a-96-28
When the system capacity reaches greater than 92%, a weekly 'purge' program is run producing a report, (report 7620). The report is used by the Withholding Unit to identify unprocessed batches and to initiate a purge of complete batches. If a batch is not 'acknowledged' (i.e. a review session is not initiated for the batch) within 180 days, the batch is purged regardless of whether it is complete or not.
The manual process of identifying incomplete batches is tedious and prone to error. Unidentified or unacknowledged batches could be inadvertently purged before being processed. This could result in erroneous information and lead to an overstatement or understatement of income.
We recommend system controls are improved to automatically identify incomplete (i.e. unprocessed) batches. Management should also obtain periodic reports which systematically identify the incomplete batches and ensure they are appropriately processed.
ManafJement Response
The Division agrees that the balancing routine is tedious, but does not agree that it is prone to error since any discrepancies are resolved immediately. However, the Division agrees with the recommendation that system controls should be improved. Due to inadequate resources the Department does not want to incorporate these changes in the current system, but will add them to the new system. In the meantime, Internal Audit Unit will conduct audits to determine if the current procedures should be improved.
Reconciliation of Amounts Paid with Cash Receipts Reportable Condition Audit Control Number 474a-96-29
Monthly and quarterly withholding cash receipts data is stored in two files: the receipts (or BCRM) file and the Remit Pro file. The original input of these files takes place in the Mail Cash Section. The amounts receipted in the Remit Pro file are used to make deposits to the bank and the amounts receipted in the receipts file are used within the Withholding Unit. Tax examiners
F - 106

State of (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
within the Withholding Unit have the ability to change the amount recorded in the receipts file. This could occur for example, when a data entry key error has occurred and needs to be modified.
Changes made by tax examiners are not reviewed or reconciled to ensure these modifications match the actual deposits. Discrepancies are not detected by the withholding application and could result in erroneous or fictitious transactions being processed.
We recommend no changes are made to the receipts file by the Withholding Section. All adjustments should be made either within the Mail Cash Section or Centralized Taxpayer Accounting Section and resolved as part of an error handling process which ensures complete authorization and an adequate audit trail. These procedures also ensure adequate segregation of duties.
ManafJement Response
The Division agrees with the recommendations that system controls should be improved. However, the Department does not plan to incorporate these changes in the current system due to more processing needs, but will incorporate them in the new system. In the meantime, Internal Audit Unit will conduct audits to determine if the procedures can be improved.
Authorization and Review of Journal Entries Reportable Condition Audit Control Number 474a-96-30
Journal entry adjustments are submitted by the tax examiners without adequate documentation, supervisory review, or management approval. Adjustments include changes to taxes due, corrections of errors (misallocation), and assessment or abatement of interest and penalties. The lack of adequate controls may lead to unauthorized transactions being processed.
We recommend that management review and authorize all or an appropriate sample ofjournal entries. The process should also include a review of the relevant supporting documentary evidence.
ManafJement Response
The Division agrees with the recommendations that system controls should be improved. However, due to inadequate resources and time the Department does not want to incorporate these changes in the current system, but plans to add them in the new system. In the meantime, Internal Audit Unit will conduct audits to determine if the current procedures can be improved and will also perform routine audits of this function.
Lack of Password Controls Reportable Condition Audit Control Number 474a-96-31
Applications within an information systems environment are primarily protected from unauthorized use by user identification codes and passwords. The Withholding application relies on a generic identification code and password to authenticate users. In addition passwords under the application itself are formulated as follows: a three digit number which describes their security
F - 107

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICAnON CONTROL WEAKNESSES
level, (200 for data entry, 300 for supervisors, or 400 for management), and the last four digits of their social security number. Passwords do not expire and the use of the social security number precludes the users from changing their passwords periodically.
The effectiveness of passwords as the "logical keys" to restricted areas and assets, or to authenticate the identity of a person, is dependent upon the password remaining secret, known only by the individual or group to whom it is assigned. It is generally recognized that the risk of a password becoming compromised increases over time and, in order to maintain the intended effectiveness of the password, it is necessary to change the password regularly. The frequency of the change should reflect the sensitivity or value of the assets being protected by the password control.
The use of the last four digits of the individuals social security number is of particular concern. It is not inconceivable for unauthorized persons to have knowledge of a social security number and use this to gain access to the system.
We recommend that proper password controls are adopted. The generic user identification code and password should be replaced by unique user identification codes and passwords. We recommend passwords should be at least 8 characters in length, contain at least I numeric value and expire at most every 45 days. Users should be precluded from re-using previous passwords. Social security numbers should not be used as passwords as this information is relatively easy to obtain and precludes making periodic changes to the password.
ManafJement Response
The Division agrees with the recommendation, however, this system is out dated and the programs are stand alone programs with no common entry process. The Department does not want to enhance the system with better password security but will include such features in a redesigned system. In the meantime, the supervisor has agreed to periodically change the passwords and not to use any portion of the employee's SSN as part of the password.
Timeliness of Error Correction Reportable Conditions Audit Control Number 474a-96-32
The current system does not have control mechanisms for detecting and resolving error conditions (i.e., incorrect account numbers) in a timely manner. Without adequate controls over the timeliness of error handling, management cannot ensure that accurate information is reflected in financial management reports. Inaccurate information may lead to inappropriate management decisions. The lack of controls over timeliness can also lead to an interruption of cash flows and a poor public image.
The Withholding Unit management should implement procedures to ensure that all errors are followed up promptly. We recommend a combination of systematic controls and manual procedures are developed which include aging reports of all errors, and procedures for regular management review.
ManafJement Response
The Division agrees with the recommendations that system controls should be improved. However, because of inadequate resources the Department cannot incorporate these changes in the current system, but will add them in the new system. In the meantime, Internal Audit Unit will conduct audits to determine if the procedures can be improved.
F - 108

0/ Slale (feor'lia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICAnON CONTROL WEAKNESSES
SALES AND USE TAX
Weakness in Controls over Completeness Reportable Condition Audit Control Number 474a-96-33
Returns are received through the Mail Cash process, sorted into batches and forwarded to the Sales Tax Unit for further processing. It is important to assure that all of the returns received are subsequently processed through the Sales Tax Unit. A report (RISTl 0 10) is provided to the sales tax supervisor listing all the batches created by the mail cash process. Another report identifies all batches processed by the Sales Tax Unit. However, confirming that all batches created by Mail Cash have been successfully processed is a tedious, manual process. Given the high volume of returns being processed, this process is not effective.
Returns which require significant research ("fatal errors") must be removed from their original batches and re-grouped into new "error batches". During this regrouping of returns, some returns may become misplaced or lost, and "fall out" of the controls over returns.
The Sales Tax System should enhance or replace the current RTSTl 0 I0 report of processed batches with a single, complete report of the current status of all batches. This should allow the sales tax supervisor to easily identify any non-complete batches.
Additionally, more effective procedures should be implemented to assure that all returns are tracked by the system from initial capture until final resolution. For example, rather than physically sorting "error returns" into new batches, the system should track individual problem returns by its original reference number and assign a status to these returns, based on the type of problem or error condition. Staff could be assigned responsibility for working certain problem types, and management reports should be provided showing total numbers of error returns, by error and by age. Where "error" returns needed to be suspended for research, the suspended amount of the return could be used to balance the original batch.
This process would reduce the handling of returns and would eliminate the need to routinely return "error batches" through the mail cash process to be re-microfilmed. The system could provide operators with a list of all outstanding error returns, and Management could receive regular "aging" reports to assure that error returns were being processed in a timely manner.
By focusing on balancing of "money batches" and electronic funds transfer (EFT) returns, management would achieve assurance that totals processed by the Sales Tax Unit agrees to the amounts deposited by mail cash or received through central taxpayer accounting (CTA). By emphasizing the batch control and aging of "error" returns, management could gain assurance regarding the timeliness of the processing of returns.
ManafJement Response
The Division agrees with the recommendation. Effective July 1996 all batches processed by the mail/cash system are being tracked through the sales tax system. Additionally, the new sales tax return system will track each document which should resolve this issue.
F - 109

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
Unreconciled Special Miscellaneous Account Balances Reportable Condition Audit Control Number 474a-96-34
In the sales and use tax application, each county has a sales tax account which is unrelated to any specific business entity. These accounts are referred to as "special miscellaneous" sales tax accounts. Management of the Sales Tax Unit has indicated that the "special miscellaneous" sales tax accounts are used as suspense accounts. For example, if a new taxpayer remits sales tax to the State before registration information is processed, the taxpayer will not have a sales & use tax identification number. The system processes the return under the "special miscellaneous" sales tax account, and would later reverse the transaction to the taxpayer's correct account when their identification number becomes available. Outstanding balances on these accounts are theoretically the result of timing differences and should be resolved in subsequent accounting periods.
We noted that large outstanding balances have occurred in "special miscellaneous" accounts. The system is designed to retain 24 months of historical data in these accounts, and old balances are being "rolled off' after this period. These balances are of particular concern since they may represent accounts receivable and accounts payable balances.
We recommend the immediate implementation of system changes to prevent outstanding accounts receivable and accounts payable information from being lost. In addition, the Sales and Use Tax Section should adopt formal policies and procedures to manage and monitor the "special miscellaneous" sales tax accounts. All accounts should be periodically reconciled and discrepancies investigated. All journal entries effecting the "special miscellaneous" accounts should also be adequately reviewed.
Mana~ement Response
The Division agrees with the recommendation. The new sales tax return system will assign a temporary State Taxpayer Identification Number to each "miscellaneous" return for processing and audit trail purposes. With the new system, there will no longer be a need to place these returns in a suspense file.
Lack of Password Controls Reportable Condition Audit Control Number 474a-96-35
Applications within an information system environment are primarily protected from unauthorized use by user identification codes and passwords. The sales tax application relies on a generic identification code and password to authenticate users. The password is not set to expire periodically.
The effectiveness of passwords as the "logical keys" to restricted areas and assets, or to authenticate the identity of a person, is dependent upon the password remaining secret, known only by the individual or group to whom it is assigned. It is generally recognized that the risk of a password becoming compromised increases over time and, in order to maintain the intended effectiveness of the password, it is necessary to change the password regularly. The frequency of the change should reflect the sensitivity or value of the assets being protected by the password control.
We recommend that proper password controls are adopted. The generic user identification code and password should be replaced by unique user identification codes and passwords. We recommend passwords should be at least 8 characters in length, contain at least I numeric value and expire at most every 45 days. Users should be precluded from re-using previous passwords.
F110

0/ State (/eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW
CURRENT YEAR
APPLICATION CONTROL WEAKNESSES
Manaf:ement Response
The Department agrees with the recommendation. However, this system is out dated and the programs are stand alone programs with no common entry process. Also, several of the utilization routines are in assembler language with which the Department does not have expertise. Therefore, the Department will not enhance the system with better password security but, will include such features in a redesigned system. Also, it should be noted that the Department already had additional security by limiting specific terminals with system access.
Data Overflow on the Sales Tax Activity File Reportable Condition Audit Control Number 474a-96-36
The sales tax activity file, (DST920), is the primary data depository for detailed sales tax return data within the application. The file capacity is limited to 2,496 batches at any point in time. Where the volume of batches "in process" exceed the 2,496 limit, the detailed return information is not saved. As a result, the return data details must be re-keyed by the Sales Tax Unit. Although there are compensating controls, which ensure the totals per the returns agree to the previously captured batch totals, the detail information is nevertheless prone to errors and omissions.
The above mentioned weakness limits the application's ability to maintain adequate data integrity. In addition, without adequate monitoring procedures, returns could be processed erroneously and result in monetary loss to the State.
We recommend the immediate implementation of system changes to ensure the return details are saved and that data integrity is maintained by increasing the size of the activity file.
Management Response
The sales tax activity file does have a file capacity of 2,496 batches, however, the payment amount is the only detailed return information that is not saved. This information is easily entered by the data entry operator and, if it is entered incorrectly, the sales tax system will denote an out-of-balance condition before the operator can release the batch.
CENTRAL TAXPAYER REGISTRATION
Lack of Control over Unprocessed Checks Reportable Condition Audit Control Number 474a-96-37
The Mail Cash Section cannot capture payment information in situations where the taxpayer does not have a state tax identification (ST!) number. Applications for registration and checks are therefore physically transferred to the Central Taxpayer Registration (CTR) Unit for a STI number to be assigned. The documents are however, not adequately accounted for at any stage of the transfer.
Without adequate monitoring procedures, these checks and registration applications could be lost or misplaced resulting in monetary loss to the State.
F - III

State of(jeorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fisc,i! Year Ended June 30, 1996
DEPARTMENT OF REVENUE - EDP REVIEW CURRENT YEAR APPLICATION CONTROL WEAKNESSES
We recommend that all documents, including checks, are logged when leaving or returning from the Mail Cash and CTR Sections. The log should record sufficient infonnation to enable .later identification. The log should be monitored and periodically reconciled by a responsible individual, preferably outside of the above mentioned sections. Differences should be appropriately investigated and resolved. Mana~ement Response The Department agrees with the recommendation. The Internal Administration Division has implemented a system to track all checks pulled from the process and sent to the tax division. The Internal Audit Unit will ensure compliance by conducting an audit and sampling the logged functions.
Field Agent's Inappropriate Access to CTR Data Reportable Condition Audit Control Number 474a-96-38 Field agents have the capability to add, change, and delete data within the central taxpayer registration (CTR) database. This functionality is difficult to control and reduces the CTR Section's ability to maintain data integrity. All field agents' CTR activities are logged on a report which is reviewed by a CTR supervisor daily. Although this is a compensating control, the review process cannot reasonably assess the validity of the modifications made. The lack of adequate controls may lead to unauthorized or inappropriate transactions. We recommend field agents be restricted to inquiry only on the CTR application. Manq~ement Response The Division disagrees with this recommendation. This capability was given to the field agents to provide better taxpayer services. The "capability to add, change and delete data within the CTR database" allows agents to speed up certain actions requested by taxpayers. In addition, for internal control purposes a maintenance transaction entered into CTR can be tracked to the employee making such a transaction.
F - 112

0/ State (jeorCfia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA STUDENT FINANCE COMMISSION

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, 1995, is summarized below:

Audit Control Number

Status of Finding

476-95-01

Corrective Action Implemented

CURRENT YEAR

BUDGET PREPARATION/EXECUTION Overexpenditure of Budget Unit Object Classes Financial Statements Audit Control Number 476-96-01

The total approved budget for the Georgia Student Finance Commission provided for expenditures of $41,797,442.00 in Budget unit "A", and $161,240,172.00 in Budget Unit "B". A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicated that 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:

"A" Student Finance Commission Equipment Telecommunications

$

964.41

$ 77,514.72

In addition, the following object class was overspent by the amount as indicated below:

"B" Lottery for Education Hope Financial Aid - Books

$ 3,618,504.73

These overexpenditures are in violation of Section 54 ofthe Amended Appropriations Act of 1995-1996. These 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 offunds in excess of budget approval, and implement those procedures to strengthen the controls over the budget function.
Manafiement Response
We concur with this recommendation.
Budget Unit "A" - Student Finance Commission
The excess equipment and telecommunications costs resulted from 1) a lack of encumbrance information from the accounting information system in place during fiscal 1996 which prevented timely detection of budget overruns and 2) invoices from fiscal year 1993 to 1995 totaling $60,252 that were received during 1996. Those prior year invoices had not been recorded in the applicable fiscal year and were, therefore, applied against the 1996 budget.

F - 113

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIA STUDENT FINANCE COMMISSION CURRENT YEAR
Effective July 1, 1996, the Director of Administrative Services installed a new general ledger software application which will provide for the recognition of any possible overruns in excess of 102% of the common object class during the fiscal year. The new general ledger software and new encumbrance accounting system will allow appropriate actions to be taken to ensure that such overruns will not occur in the future.
Budget Unit "B" - Lottery for Education Schools which receive H.G.P.E. funds are required to determine the correct allocation of the funds between tuition, books and fees on a quarterly basis. Until these reconciliations are received from the schools, the preliminary allocation of H.G.P.E. disbursements will cause these object classes to differ from actual object class expenditures. The Director of Grants and Scholarships Division instituted a new reconciliation process which was implemented in fiscal 1996; however, the reconciliations were not received from the schools on a timely basis. We are investigating alternative reconciliation procedures. We have requested a meeting with the representatives of the Department of Technical and Adult Education, the Board of Regents, and the Department of Audits before the end of fiscal 1997 to develop reconciliation procedures which will allow the proper allocation ofH.G.P.E. funds to the correct object classes in a timely manner.
F114

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

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, 1995, is summarized below:

Audit Control Number

Status of Finding

478-95-01

Corrective Action Implemented

F - 115

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

DEPARTMENT OF TRANSPORTATION 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, 1995, is summarized below:

Audit Control Number

Status of Finding

484-95-01

Corrective Action Implemented

CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Bank Reconciliation Procedures Reportable Condition Audit Control Number 484-96-01

For the year ended June 30, 1996, the Department of Transportation's accounting procedures were not sufficient to provide for adequate control over the bank reconciliation process. Audit procedures and interviews with personnel of the Department revealed that bank reconciliations of the Payroll Account were not performed for the months of December, 1995 through June, 1996. As a result, as of June 30, 1996, our examination of the Payroll Account identified an unreconciled difference of $913,316.19 between the amount recorded on the general ledger and the bank statement.

The Department should establish the necessary procedures to ensure that bank reconciliations for the Payroll Account are timely reconciled on a monthly basis. The Department should take action to identify the unreconciled difference and make adjustments to the accounting records where appropriate.

Federal Financial Assistance ProfJYams Affected:

20.205 20.500 20.505 20.507 20.509 81.041

Highway Planning and Construction Federal Transit Capital Improvement Grants Federal Transit Technical Studies Grants Federal Transit Capital and Operating Assistance Formula Grants Public Transportation for Nonurbanized Areas State Energy Conservation

Mana<tement Response

We concur with this finding. The account has since been reconciled and there were no required adjustments to any accounting records. The Office of General Accounting has taken steps to assure all bank accounts are reconciled in a timely manner so this problem will not occur again.

F - 116

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
DEPARTMENT OF TRANSPORTATION CURRENT YEAR
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 484-96-02 For the year under review, two-hundred-thirty-four (234) equipment items were selected to test the accuracy of the Department's general fixed assets records. These items were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:
(1) Twelve (12) items were located in locations other than the location indicated in the property inventory records.
(2) Six (6) items totaling $19,015.65 could not be located. Also, during the physical inspection testing, one (1) item of equipment was located which was not included in the equipment inventory records. The Department of Transportation is required to maintain equipment inventories in accordance with 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 of the State Property System Manual. Mana~ement Response We concur with this recommendation. The Department does have procedures in place for the maintenance of property inventory and each major unit has a property control coordinator identified to carry out that task. The Department will conduct internal audits to insure that the property inventory procedures are carried out correctly in the future and inventory coordinators will be required to verify their inventory periodically. It should be noted that the items identified in the finding have been corrected and are correctly inventoried.
F - 117

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

OFFICE OF TREASURY AND FISCAL 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, 1995, is summarized below:

Audit Control Number

Status of Finding

486-95-01 486-95-02 486-95-03

See Audit Control Number 486-96-01 Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR

ALLOWABLE COSTS/COST PRINCIPLES Inadequate Documentation of Direct Cost Claim Reimbursement Federal Financial Assistance Cash Management Improvement Act Questioned Cost: $36,320.57 Audit Control Number 486-96-01

The audit report for the year ended June 30, 1994 noted that the Office of the 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 CFR205 .14(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 $27,366.56 of personnel costs claimed for actual time by two personnel who were involved in part with the implementation of CMIA and (2) $8,954.01 of nonpersonnel costs claimed for the acquisition and use of a 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 ofOMB Circular A-87.

The Office advised us that it received verbal assurance from the U.S. Treasury that no documentation of personnel costs was required. In its view, Federal regulations indicate that direct costs associated with CMIA implementation were not governed by OMB Circular 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, 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.

Manaf:ement Response

We concur with the conclusion reached in this finding 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 finding, 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 - 118

State of (JeorfJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

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, 1995, is summarized below:

Audit Control Number

Status of Finding

489-95-01

See Audit Control Number 489-96-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Financial Statements Audit Control Number 489-96-01

The review report for the year ended June 30, 1995, 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) Expenditures/Liabilities/Disbursements

(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.

Manafiement Response

Our agency consists presently of 27 positions but only 23 positions at the end of the fiscal year 1996. To separate accounting functions in such a small agency and with the few positions would not be cost effective.

F - 119

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA INSTITUTE OF TECHNOLOGY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

503-94-09 503-95-01 503-95-02

Corrective Action Implemented See Audit Control Number 503-96-01 Corrective Action Implemented

PRIOR YEAR

ELIGIBILITY Deficiencies in Awarding/Disbursing Student Financial Aid Federal Financial Assistance Federal Perkins Loan Program [CFDA 84.038] Questioned Cost: $659.00 Audit Control Number 503-96-01

The audit report for the year ended June 30, 1994, disclosed deficiencies in awarding and disbursing financial 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 of the expected family contribution. The Institute has contacted the grantor agency; however, no response has been received as of the date of th is audit.

The audit report for the year ended June 30, 1995, noted that one student was underpaid from the Federal Pell Grant Program (CFDA 84.063). During the year under review, payment of$94.00 was made by the Institute to the student.

Mana~ement Response

We concur with this finding. In February 1997, the Institute made payment to the Department of Education in the amount of $659.00. We consider this matter closed.

F - 120

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA INSTITUTE OF TECHNOLOGY - EDP GENERAL CONTROLS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

503a-95-0 1 503a-95-02 503a-95-03 503a-95-04 503a-95-05 503a-95-06 503a-95-07 503a-95-08 503a-95-09 503a-95-10 503a-95-11 503a-95-l2 503a-95-13 503a-95-14 503a-95-15

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F - 121

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

509-95-01 509-95-02 509-95-03

Corrective Action Plan Implemented See Audit Control Number 509-96-01 Corrective Action Plan Implemented

PRIOR YEAR/CURRENT YEAR

EXPEND ITURES/LIAB ILITIES/D ISBURSEMENTS Excessive Fee Waivers Financial Statements Audit Control Number 509-96-01

The audit reports for the years ended June 30, 1994 and June 30, 1995, 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:

OUARTER

LIMIT OF FEE WAIVERS
ALLOWED

ACTUAL FEE WAIVERS
GRANTED

FEE WAIVERS IN EXCESS OF LIMIT

Summer Quarter 1995

167

197

30

Fall Quarter 1995

167

200

33

Winter Quarter 1996

173

178

5

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.

Manafiement Response

We concur with this recommendation. During the March 1996 meeting, the Board of Regents adopted a tuition policy recommendation to allow institutions up to an additional I% for out-of-state fee waivers for special cases, such as superior out-ofstate students in selected programs, and/or additional international students. This policy was in effect for Spring Quarter 1996 as evidenced by the University's compliance during this period. The procedures in place at the University ensure that student fee waivers for out-of-state tuition of international students do not exceed limits established by the Board of Regents.

F - 122

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA STATE UNIVERSITY CURRENT YEAR

GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Audit Control Number 509-96-02

For the year under review, an examination of the University's general ledger revealed that significant entries were not recorded in the accounting records. The fol1owing deficiencies were noted:

(1)

In accordance with an agreement between the Board of Regents and the Office of Planning and

Budget, annual payments are to be made from Auxiliary Enterprises and Student Activities to

Resident Instruction. These payments are for the purpose of replacing State Appropriations which

have been real10cated by the Legislature for debt service on capital projects (parking decks and

student center) funded by general obligation bonds. The University failed to make the appropriate

transfers totaling $1,076,657.00 to Resident Instruction which consisted of $723,420.00 from

Auxiliary Enterprises and $353,237.00 from Student Activities.

(2) An agreement for the University to purchase land for $1,094,000.00 from the City of Atlanta consisted of a cash payment of $650,000.00 and an in-kind credit in favor of the City for $444,000.00. This credit will be utilized to pay tuition for City employees and to pay for services plOvided by the University. The University recorded the land purchase based on the $650,000.00 cash payment; however, an entry to recognize the in-kind credit as a liability was not made to the accounting records.

(3)

Auxiliary Enterprises utilized $2,271,387.00 from Student Activities for the Olympic Village

dormitories (Project G-88). The recognition of this transaction as a loan was not recorded in the

accounting records.

These deficiencies occurred because ofmanagement's failure to adequately monitor the University's accounting records which resulted in an incomplete and inaccurate presentation of the financial statements. Audit entries to correct these deficiencies were made to the accounting records as a part of our examination. Procedures should be implemented by the University to ensure that al1 financial transactions are properly recorded to accurately reflect the financial position of the University.

Mana~ement Response
We concur with this recommendation. The University recorded the entries to correct the items noted in the report. Additional1y, the University is now booking quarterly entries to record debt service requirements. During the 1996-97 fiscal year, the University restructured management ofthe accounting and finance activities. This restructuring included hiring in March 1997 a University Comptrol1er --- a position that was vacant during the previous fiscal year. The comptrol1er's division is developing a comprehensive written closing procedure to ensure that the University's year end financial statements are prepared in a timely and accurate manner. This procedure will be available for examination.

F123

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIA STATE UNIVERSITY
CURRENT YEAR
FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 509-96-03
At June 30, 1996, Auxiliary Enterprises had a net deficit fund balance of $528,700.36. This deficit is directly attributable to expenditures of$3,711,387.00 in the current year by the University on the Olympic Village dormitories (Project G-88). 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 finance its operations". The University should budget and provide for adequate funds to cover this deficit.
Manar:ement Response
We concur with this recommendation. As noted in the audit report, the deficit in Auxiliary Enterprises is directly attributable to the University's acquisition of the Olympic Village -- an unusual, nonrecurring event. University management are instituting programmatic changes to ensure that Auxiliary Enterprises operate on a self-supporting basis.
SPECIAL TESTS AND PROVISIONS Exit Counseling Not Conducted Federal Financial Assistance Federal Direct Student Loans [CFDA 84.268] Federal Perkins Loan Program [CFDA 84.038] Audit Control Number 509-96-04
Federal regulations (34 CFR 682.604) require Georgia State University to conduct in-person exit conferences with Federal loan recipients who are graduating or will otherwise be enrolled less than half-time. Federal regulations also require the University to document that the exit conference was held. For the year under review, our examination revealed that Georgia State University did not conduct in-person exit counseling for a total of twelve students (out of 50 students sampled) who either graduated or who were enrolled at less than half-time status. Nine out of the twelve students received both a Federal Direct Student Loan and a Federal Perkins Loan. The other three students received only Federal Direct Student Loans. Federal regulations allow the University to mail exit counseling information to loan recipients only in cases in which the students do not attend the exit conference or the students withdrew from school without the University's prior knowledge. Our examination also revealed that the University did not maintain documentation in the students' files to show that exit counseling information had been mailed to the students.
The University should ensure that all students requiring exit counseling are properly identified and that exit counseling is conducted and documented as required by Federal regulations.
Manar:ement Response
We concur with this recommendation. The University has mailed exit interview packets to those students identified in the audit as not receiving exit counseling. University systems programmers are developing reports to assist in identifying all students requiring counseling. This new programming is slated for testing April 1997 and should be operational before year end. Procedures have been changed to ensure that students requiring counseling are properly identified and that exit counseling is conducted and documented as required by Federal regulations.
F - 124

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA STATE UNIVERSITY - EDP GENERAL CONTROLS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

509a-95-01 509a-95-02 509a-95-03 509a-95-04 509a-95-05 509a-95-06 509a-95-07 509a-95-08 509a-95-09

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F - 125

State of (JeorCJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MEDICAL COLLEGE OF GEORGIA STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

512-95-01 512-95-02

See Audit Control Number 512-96-01 See Audit Control Number 512-96-02

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 512-96-0 I

The audit report for the year ended June 30, 1995, disclosed deficiencies in Medical College of Georgia's equipment inventory records. For the year under review, an equipment inventory sample of 73 randomly selected items was utilized to test the accuracy and validity ofthe equipment inventory records. The results of our testing procedures disclosed that fifteen (15) items, with a total cost of$100,612.39 were not located.

In addition to the unlocated items noted above, additional audit procedures disclosed the following deficiencies:

(1) Equipment inventory items in use with a cost of$2,262,235.87 did not have decals and were not on the inventory records.

(2) Equipment inventory items in storage at the College with a cost of$203,353.34 did not have decals and were not on the inventory records.

(3) Equipment inventory items with a cost of $29,956.89 were identified as received by College personnel, but were not on the equipment inventory records.

(4) A variance of $897,119.94 remained unidentified between the College's general ledger and the subsidiary equipment inventory records.

Management stated 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.

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 the location of equipment items is properly identified, decals are affixed to all equipment inventory items, inventory items are entered on the records in an accurate and timely manner and subsidiary equipment records are accurately reflected in the accounting 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.

F - 126

State of (/eorC;ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
MEDICAL COLLEGE OF GEORGIA
PRIOR YEAR/CURRENT YEAR
Mana~ement Response
The attached summary of events and timeliness concerning asset management planning and inventory control demonstrates the efforts of MCG to address these discrepancies continuously noted by the state auditor since 1994. All of this work has not improved our position with respect to the state audit, however, these efforts have positioned us to make significant progress during the coming year and within three years eliminate this qualification.
An inventory management speciality firm, Facilities Development, Inc., was engaged by MCG to conduct an institution wide equipment inventory and materials management analysis beginning in January 1996 and concluded their initial phase in March with a comprehensive inventory which included eight recommendations to strengthen the institution property management system. This report has served as a guide to address the "systems" problems and accountability issues, departmental and individual, that must be included in the development of institutional policies and procedures for movable equipment.
A Multidiscliplinary Task Force representing senior management from the respective budget units and Internal Accounting will be initiated to review and validate the FDI recommendations and structure an achievable correction plan. This plan will be forwarded to the State Auditor for review and inclusion in the MCG file.
DRUG-FREE WORKPLACE ACT Failure to Include Required Provision in Drug-Free Workplace Policy Federal Financial Assistance Audit Control Number 512-96-02
The audit report for the year ended June 30, 1995, disclosed that the College's drug-free workplace policy did not include all of the required provisions of the Federal Drug-Free Workplace Act of 1988. For the year under review, our examination revealed that the College's drug-free workplace policy again failed to include 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. This condition results in noncompliance with the Federal Drug-Free Workplace Act of 1988.
The institution has taken steps to amend the policy in effect to include this required provision; however, the policy's amended draft has not gone to the executive committee nor been signed by the College's president.
The College should implement a drug-free workplace policy which contains all of the required provisions.
Federal Grantor A~encies Af]ected:
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
MCG has taken action to include this required provision in the drug-free workplace policy and will secure timely routing to correct this discrepancy.
F - 127

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1996
MEDICAL COLLEGE OF GEORGIA CURRENT YEAR
CASH AND CASH EQUIVALENTS Uncollateralized Deposits Financial Statements Audit Control Number 512-96-03 At June 30, 1996, Medical College of Georgia failed to have its 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 procedures to monitor the collateralization of deposits to ensure compliance at all times with State laws governing deposits. Mana~ement Response The respective banking institutions have initiated appropriate internal procedures to insure proper collateralization and coverage as set forth in the MCG investment guidelines.
F - 128

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MEDICAL COLLEGE OF GEORGIA - EDP GENERAL CONTROLS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

512a-95-01 512a-95-02 512a-95-03 512a-95-04 512a-95-05 512a-95-06 512a-95-07

FolIow-up wiII be performed in Fiscal Year 1998 FolIow-up wiII be performed in Fiscal Year 1998 FolIow-up wiII be performed in Fiscal Year 1998 Follow-up wiII be performed in Fiscal Year 1998 FolIow-up wilI be performed in Fiscal Year 1998 FolIow-up wiII be performed in Fiscal Year 1998 Follow-up wiII be performed in Fiscal Year 1998

F -129

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

UNIVERSITY OF GEORGIA (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized as follows:

Audit Control Number

Status of Finding

518-95-01 518-95-02

Corrective Action Implemented Corrective Action Implemented

CURRENT YEAR

EXPENDITURESILIABILITIES/DISBURSEMENTS Failure to Submit Reports in a Timely Manner Financial Statements Audit Control Number 518-96-01

Condition: Approximately 4% of the reports relating to grants selected for testing were not filed timely. This percentage represents 1 of 25 techn ical reports related to grants selected for review.

The following table lists the technical reports filed improperly:

Bud2et Number

Date Due

Date Submitted

1O-31-RE336-381

12-01-95

1-01-96

Criteria: Attachment H ofOMB Circular A-I 10 establishes requirements for monitoring and reporting program performance.

Effect: 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 finding 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.

As noted by the dates, one report was submitted late. A system is in place to remind and follow up with principal investigators to submit reports timely.

(*) FEDERAL COMPLIANCE REQUIREMENTS OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS
F - 130

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

UNIVERSITY OF GEORGIA (*) CURRENT YEAR

EXPENDITURES/LIABILITIES/DISBURSEMENTS - Financial Statements FEDERAL FINANCIAL REPORTS - Federal Financial Assistance Failure to Submit Required Reports in a Timely Manner Federal Hatch Program [CFDA 10.203] Medical Assistance Program [CFDA 93.778] Audit Control Number 518-96-02

Condition: Approximately 12% of the reports relating to grants selected for testing were not filed timely. This percentage represents 3 of the 25 technical reports related to grants selected for review.

The following table describes the reports not filed timely:

Budl:et Number

Date Due

Date Submitted

25-26-GC329-00 1

12-01-95

12-21-95

1O-31-RE344-112 10-31-RE344-112 10-31-RE344-112 10-31-RE344-112 10-31-RE344-112 1O-31-RE344-112 1O-31-RE344-112 10-31-RE344-112 10-31-RE344-112 10-31-RE344-112

08-07-95 09-08-95 11-07-95 12-07-95 01-08-96 02-07-96 03-07-96 05-07-96 06-08-96 07-08-96

09-12-95 09-12-95 11-17-95 12-13-95 01-12-96 02-12-96 03-13-96 05-15-96 07-03-96 08-06-96

26-31-RE357-126

11-15-95

12-06-95

Criteria: Attachment H ofOMB Circular A-II0 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 finding 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 financial 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 - 131

Slale of (Jeorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
UNIVERSITY OF GEORGIA (*) CURRENT YEAR
ELIGIBILITY Failure to Report Eligible Recipients Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 518-96-03 Condition: The University did not report four eligible Pell grant recipients for the 1995-96 academic year by the deadline for reimbursement. The amounts due from the DOE total $2,237. Criteria: The University must report both the names and amounts of Pell grants to the DOE for the academic year 1995-96 by September 30, 1996 for reimbursement. Cause: The failure to report these four eligible Pell grant payments was due to the reporting method changing from paper documents to electronic reporting. Effect: The University did not receive reimbursement for these eligible Pell grant disbursements. Recommendation: The DOE should reimburse the University $2,237 for these 1995-96 Pell expenditures, and the University should strive to ensure that all Pell grants are reported to the DOE for reimbursement in a timely manner. The University's Response: Programs and procedures have been modified to detect these errors by the reporting deadline.
(*) FEDERAL COMPLIANCE REQUIREMENTS OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS
F - 132

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996

UNIVERSITY OF GEORGIA - EDP GENERAL CONTROLS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

518a-95-01 518a-95-02 518a-95-03 518a-95-04 518a-95-05 518a-95-06 518a-95-07 518a-95-08

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F - 133

State of (feorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

ALBANY STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OF QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

521-95-01 521-95-02 521-95-03 521-95-04 521-95-05 521-95-06

Finding Deleted Corrective Action Implemented See Audit Control Number 521-96-01 Corrective Action Implemented See Audit Control Number 521-96-02 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 521-96-01

The audit report for the year ended June 30, 1995, disclosed that Albany State University had $418,424.91 in student accounts receivable which were not supported by approved fmancial aid. On June 30, 1996, the balance had increased to $431,898.58. This condition occurred due to management's failure to obtain approved documentation to support fmandal aid before disbursement of funds. 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 receivables should be made on at least a quarterly basis, and no student should be granted a deferment without having approved financial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.

For the year under review, a sample of fifty student accounts was examined. This examination disclosed that five (5) student loan files could not be provided for review. This condition occurred because files have been moved several times since the 1994 flood. Management should continue efforts to locate these student files.

Mana~ement Response

The Business Office has reviewed the procedures used by the Financial Aid Office to assign aid to students, along with the required support documentation. Additionally, the institution has entered into an agreement with KPMG Peat Marwick, to provide consulting Services regarding this issue, as well as to provide training for the Financial Aid Office staff on the proper procedures for making fmancial aid awards. The review and revised procedure should eliminate aid being awarded to students who have not completed all necessary documents. The new procedures should be completed within the first quarter of FY 98.

F134

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
ALBANY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
FUND EQUITIES Deficits to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 521-96-02
The audit report for the year ended June 30, 1995, disclosed that Intercollegiate Athletics had a deficit fund balance of $175,235.28. At June 30, 1996, a deficit of$133,626.48 continued to exist. This deficit is the result of the University'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 "will be placed on a self-supporting basis, and the State will not make an appropriation to finance its operations."
The University should take appropriate action to fund this deficit.
A4ana~ementResponse
The Athletic Director, the Business Office and the Vice President for Fiscal Affairs have developed a plan of action to control the operations of the Athletic Program, so that expenditures would not exceed revenues within the current fiscal year. Additionally, a plan to reduce the current deficit has been developed.
CURRENT YEAR
FEDERAL FINANCIAL REPORTS Inadequate Control Procedures Federal Financial Assistance Pell Grant Program [CFDA 84.063] Title III Program [CFDA 84.031] Audit Control Number 521-96-03
Our examination of the Title III Program (CFDA 84.031) and Pell Grant Program (CFDA 84.063) funded through the U. S. Department of Education revealed the following deficiencies:
(1) Cumulative expenditures for the Title III Program for the five-year grant period ended September 30, 1992, were inaccurately reported on the University's Federal Cash Transaction Reports (Form PMS 272-A), resulting in total overclaims of$35,820.00 which remained on hand at June 30, 1996.
(2) Cumulative expenditures for the Title III Program for the five-year grant period beginning October 1, 1992, were inaccurately reported on the University's Federal Cash Transaction Reports (Form PMS 272-A), resulting in total underclaims of $170,336.95 at June 30, 1996.
(3) The University failed to properly reconcile expenditures recorded on the accounting records for the Pell Grant Program for the fiscal years 1993, 1994, 1995 and 1996 to expenditures reported on the Federal Cash Transactions Report (Form PMS 272-S), resulting in deficit balances totaling $23,414.91 at June 30,1996.
The deficiencies identified were a result of management's failure to adequately reconcile reports filed to general ledger records.
F - 135

0/ State (feorgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
ALBANY STATE UNIVERSITY
CURRENT YEAR
The University should implement procedures to ensure that reported expenditures are reconciled to the University's formal accounting records. The University should reflect necessary adjustments for the Title III Program on the Federal Cash Transaction Report (Form PMS 272-A), including a reduction of $35,820.00 in expenditures reported for the Title III Program ended September 30, 1992, and an increase of $170,336.95 in expenditures reported for the Title III Program beginning October 1,1992, resulting in a net request for reimbursement of$134,516.95. Audit adjustments in the amount of$23,414.91 were made to fund the deficit balances existing in the Pell Grant Program.
,Mana~ement Response
The institution has implemented procedures to ensure that reported expenditures are reconciled to the institution's formal accounting records. Additionally, the institution will reflect necessary adjustments for the Title III Program on the Federal Cash Transaction Report (Form PMS 272-A), including a reduction of$35,820.00 in expenditures reported for the Title III Program ended September 30, 1992, and an increase of $170,336.95 in expenditures reported for the Title III Program beginning October I, 1992, resulting in a net request for reimbursement of$135,516.95.
ELIGIBILITY Satisfactory Academic Progress Federal Financial Assistance Pell Grant Program [CFDA 84.063] Federal Direct Student Loan [CFDA 84.268] Questioned Cost: $3,237.91 Audit Control Number 521-96-04
For the year under review, a sample of 41 students receiving financial aid was examined. This examination revealed one case in which a student was awarded fmancial aid but did not satisfy the University's requirement for satisfactory academic progress. The student continued to receive financial aid subsequent to being placed on academic probation.
This resulted in the student receiving $1,557.91 Pell Grant funds and $1,680.00 Federal Direct Student Loan funds for which he was not eligible. This overpayment occurred due to the University's failure to monitor and evaluate the student's eligibility for financial assistance.
Procedures should be implemented by the University to ensure that student's fmancial aid eligibility is monitored. The University should contact the U. S. Department of Education regarding the resolution of these questioned costs.
Mana~ement Response
The Director of Financial Aid, the Director of Financial Operations and the Vice Presidents for Student Affairs and Fiscal Affairs will develop and implement procedures, along with KPMG Peat Marwick, to ensure that students' financial aid eligibility is monitored. Additionally, the Director of Financial Aid will contact the U. S. Department of Education regarding the resolution of the questioned costs.
F - 136

0/ State (jeorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

ARMSTRONG 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, 1995, is summarized below:

Audit Control Number

Status of Finding

524-91-01 524-91-03 524-91-08 524-91-14 524-95-01 524-95-02 524-95-03 524-95-04 524-95-05 524-95-06

Finding Deleted Finding Deleted Finding Deleted Finding Deleted No Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 524-96-01 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

Mana~ement Response

Audit Control Number 524-95-01

This fmding refers to Fiscal Year 1994 auxiliary enterprises student receivables which were not supported by approved financial aid. The University has turned these accounts over to a collection agency.

Audit Control Number 524-95-02

This fmding refers to a federal grant from the First District Regional Educational Service Agency that was not expended within the grant period. The University 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.

PRIOR YEAR

AUDIT DISTRlBUTIONIRESOLUTION Improper Reimbursements/Payroll and Payroll Distribution Federal Financial Assistance Job Training Partnership Act [CFDA 17.250] Findings Deleted Audit Control Number 524-91-01 Audit Control Number 524-91-03

The audit report for the year ended June 30, 1988, called attention to $32,298.87 in JTPA funds for costs claimed under two JTPA contracts, $1,538.00 reimbursed for a portion of the JTPA Project coordinator's salary which was used to meet the required inkind contribution and $8,000.00 for the JTPA Project coordinator's salary which was undocumented. As of June 30, 1996, the College had not received fmal directives from the Georgia Department of Education and the Savannah/Chatham Private Industry Council relative to their request as to resolution of the above questioned costs.

F - 137

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
ARMSTRONG STATE COLLEGE
PRIOR YEAR
Reference to this finding will be deleted from audit/review reports in subsequent years. However, Armstrong State College is not relieved of their responsibility to resolve these questioned costs with the grantor agencies.
AUDIT DISTRIBUTIONIRESOLUTION Theft of Student Financial Aid Funds Federal Financial Assistance Stafford Loan Funds [CFDA 84.032] Finding Deleted Audit Control Number 524-91-08
The audit report for the year ended June 30, 1990, disclosed that two student financial aid loan checks totaling $1,622.50 were stolen and a Student Financial Aid Office employee had allegedly submitted a falsified Stafford Loan application and had received $4,000.00 in Stafford Loan Funds. The College notified the Board of Regents, and the Georgia Bureau ofInvestigation was called in to conduct an investigation. As of June 30, 1996, the College had not received a response from the U. S. Department of Education.
Reference to this finding will be deleted from audit/review reports in subsequent years. However, Armstrong State College is not relieved of their responsibility to resolve this finding with the grantor agency.
AUDIT DISTRIBUTIONIRESOLUTION Incorrect Student Financial Aid Procedures Federal Financial Assistance Pell Grant Program [CFDA 84.063] Finding Deleted Audit Control Number 524-91-14
The audit report for the year ended June 30, 1990, disclosed that the College could not provide evidence that two repayment amounts totaling $43.00 were properly made to the correct Title IV (Pell Grant) account as required by Federal regulations (34 CFR 668.21). As of June 30, 1996, the College had not received a response regarding resolution of the finding from the U. S. Department of Education.
Reference to this finding will be deleted from audit/review reports in subsequent years. However, Armstrong State College is not relieved of their responsibility to resolve this finding with the grantor agency.
PRIOR YEAR/CURRENT YEAR
GENERAL LEDGER Unsupported Financial Statements - Investment in Plant Financial Statements Audit Control Number 524-96-01
The audit report for the year ended June 30, 1995, disclosed that the [mancial 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, 1996. In addition, the College was not able to provide subsidiary equipment inventory records as of June 30, 1996. Subsidiary equipment inventory records were provided as of August 31, 1996, which were used to reconcile to the June 30, 1996 equipment inventory amount. Extensive procedures were necessary to reconcile and identify the changes in the equipment inventory records. Additions, deductions, and adjustments were reflected in an aggregate amount on the College's financial statements.
F - 138

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
ARMSTRONG STATE COLLEGE
PRIOR YEAR/CURRENT YEAR
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.
Mana~ement Response
This finding refers to deficiencies in equipment inventory records. The present accounting system does not provide for an equipment inventory ledger that is subsidiary to the general ledger; consequently, it is difficult to and time consuming to manually reconcile these two records. This finding 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 finding refers to the difficulty of identifying and reconciling additions, deletions, and transfers of equipment items. This will continue to be difficult until we have an equipment inventory that is subsidiary to the general ledger.
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Salary Listing Not Reconciled to General Ledger Financial Statements Audit Control Number 524-96-02
For the year under review, tests of payroll procedures revealed that the salary listing as submitted by Armstrong State College to the Georgia Department of Audits did not reconcile to the College's general ledger. An unlocated difference of $3,520.00 existed at June 30, 1996. This deficiency occurred as a result of management's failure to reconcile salary information on a quarterly basis.
The College should establish controls to ensure that the salary listing submitted to the Georgia Department of Audits is reconciled with the general ledger.
Mana~ement Response
This fmding refers to the failure to reconcile quarterly salary reports to the general ledger. Controls have been implemented to prevent this failure from happening again.
CASH AND CASH EQUIVALENTS Uncollateralized Deposits Financial Statements Audit Control Number 524-96-03
As of June 30, 1996, the College failed to have two certificates of deposit 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 with State Laws governing deposits and investments.
Mana~ement ResIJonse
This fmding refers to the failure to have certificates of deposit fully collateralized. Procedures have been implemented to insure certificates are collateralized.
F - 139

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

ARMSTRONG STATE COLLEGE CURRENT YEAR

GENERAL LEDGER H.O.P.E. Program Reconciliation Report Not Reconciled to Accounting Records Financial Statements Audit Control Number 524-96-04

For the year under review, the College's RO.P.E. Scholarship Program reconciliation report which was provided to the Georgia Student Finance Commission did not reconcile with the accounting records as indicated below:

Report Item

Per RO.P.E. Reconciliation

Per Accounting
Records

Difference

Amount Disbursed to School

$1.533,073.00

$1.542,515.00

$ 9,442.00

Amount Awarded to Students

$1.521.565.00

$1.589,013.27

$ 67,448.27

The differences occurred because management failed to reconcile accounting records to the H.O.P.E. Scholarship Program reconciliation report at year end.

Procedures should be established to ensure that the H.O.P.E. Scholarship Program reconciliation report is reconciled to the College's formal accounting records and that documentation is maintained supporting this reconciliation.

Mana~ement Response

This finding refers to the failure to reconcile the HOPE Scholarship report to the accounting records. Procedures have been established to ensure this report is reconciled to the accounting records with sufficient documentation.

GENERAL LEDGER Unearned Revenue Not Supported by Detail Listing Financial Statements Audit Control Number 524-96-05

For the year under review, the College could not provide a detail listing of unearned revenue - summer quarter fees as of June 30, 1996. A detail listing is necessary to support the amounts recorded on the accounting records and financial statements. This condition occurred because management could not produce the report on the new Banner Registration!Accounting System.

The College should implement procedures to ensure that a detail listing of unearned revenue which supports amounts recorded in the accounting records is available.

Mana~ement Response

This finding refers to the failure to provide a detail listing of unearned revenue for summer quarter from the Banner student information system. This fmding cannot be resolved at the institutional level because the Banner student information system is maintained by the Office ofInstruction and Information Technology.

F140

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
ARMSTRONG STATE COLLEGE CURRENT YEAR
ELIGIBILITY Overpayment of Student Financial Aid Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Cost: $472.00 Audit Control Number 524-96-06 For the year under review, an examination of student financial aid files for the Pell Grant Program (CFDA 84.063) revealed overpayments of$I,333.00 to four students. These errors were caused by changes in student enrollment status, miscalculations of the quarterly Pell grant awards, and management's failure to review student grant awards before disbursement was made. In the subsequent period, two of the four students had repaid their overpayments totaling $861.00. The College should contact the U. S. Department of Education regarding resolution of the remaining $472.00 of questioned costs.
A1ana~ementResponse
This finding refers to $472.00 in questioned costs for the Pell Grant program. The U.S. Department of Education has been contacted about this cost to determine satisfactory resolution.
F -141

State of (JeorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
AUGUSTA STATE UNIVERSITY CURRENT YEAR
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT General Ledger Not Supported by Subsidiary Records Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 527-96-01
Areview of the subsidiary equipment inventory records revealed that an unidentified variance of$14,253.58 existed between
the subsidiary equipment inventory records and the general ledger at June 30, 1996. The University was unable to provide a reconciliation to account for the difference. This difference was a result of management's failure to properly reconcile the subsidiary equipment inventory records to the general ledger. The University should implement procedures to ensure that the accounting records are reconciled to and supported by the subsidiary equipment inventory records.
A1ana~ementResponse
Weconcur with the recommendation contained in your February 19, 1997 correspondence. Procedures have been established to reconcile general ledger accounts with subsidiary equipment inventory records. The reconciliation will be performed by the Comptroller's office at least once per year and prior to the preparation of the Annual Financial Report.
F -142

0/ State (jeorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

FORT VALLEY STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

533-92-01 533-93-12 533-93-13 533-94-13 533-94-14 533-94-15 533-94-16 533-94-17 533-95-01 533-95-02 533-95-03 533-95-04 533-95-05 533-95-06 533-95-07 533-95-08 533-95-09 533-95-10 533-95-11 533-95-12 533-95-13 533-95-14 533-95-15 533-95-16 533-95-17 533-95-18 533-95-19

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 533-96-01 See Audit Control Number 533-96-02 Corrective Action Implemented See Audit Control Number 533-96-03 No Corrective Action Implemented Corrective Action Implemented See Audit Control Number 533-96-06 See Audit Control Number 533-96-08 Corrective Action Implemented See Audit Control Number 533-96-10 Corrective Action Implemented Corrective Action Implemented See Audit Control Number 533-96-04 See Audit Control Number 533-96-05 See Audit Control Number 533-96-07 No Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 533-96-09 No Corrective Action Implemented

Manaf:ement Response

Audit Control Number 533-94-13

We have received a fmal determination on this fmding from the U. S. Department of Education. The University has reimbursed the U. S. Department of Education $450 for the Title IV over award.

Audit Control Number 533-94-14

We have received a fmal determination on this fmding from the U. S. Department of Education. The comments from DOE stated that "the institution provided documentation of the changes and stated that each case was reviewed on an individual basis. Therefore, no further action or reimbursement is required."

F -143

State of (Jeorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
FORT VALLEY STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS
Audit Control Number 533-94-15 We have received a final determination on this fmding from the U. S. Department of Education. The University has reimbursed the U. S. Department of Education $264 for the Title IV over award. Audit Control Number 533-94-16 We have received a final determination on this finding from the U. S. Department of Education. The agency stated "Since the SARIESAR was in the students' file, we are not requiring reimbursement." Audit Control Number 533-94-17 We have received a fmal determination on this fmding from the U. S. Department of Education. The agency stated "We are not requiring reimbursement at this time. However, the auditor, during the next scheduled review, must comment on this finding in the "Prior Audit" section of the next scheduled review." Audit Control Number 533-95-05 The College concurs with this fmding. We have assigned responsibility for reconciliation of the Departmental Federal Assistance Financing System clearing account to the Grant and Contract Accountant. 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 will implement procedures to insure that this account reconciles to zero. Audit Control Number 533-95-16 We do not concur with this fmding. We have contacted the U. S. Department of Education and are awaiting a fmal determination on our response to the fmding. We have strengthened our policies and procedures in this area to throughly document and clarify actions taken on all adjustments to expected family contributions for special circumstances. Audit Control Number 533-95-17 We have reimbursed the Pell for the questioned costs identified in the finding. While the University has not received final determination from the Department of Education, this action should resolve the fmding with the grantor agency has been resolved with the U. S. Department of Education. Audit Control Number 533-95-19 The institution has reimbursed the program funds affected by the miscalculation and adjusted the effected. We changed the form used to calculate program refunds and we have trained fmancial aid counselors to handle the changes.
F -144

0/ State (jeorgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
FORT VALLEY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 533-96-01
The audit report for the year ended June 30, 1995, reported that the University 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, the University made some improvements regarding separation of employee duties, but still did not achieve an adequate degree of internal control.
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.
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 A~encies Affrcted:
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 of Housing and Urban Development U. S. Department oflnterior U. S. Department of Labor U. S. Department of Transportation
Mana~ement Response
We do not concur with the above recommendation. During the year under review, we reassigned various functions in the Department of Accounting Services to enhance internal controls. The Grants Accountant I was assigned the responsibility of making bank deposits. Responsibility for reconciling the payroll and student refund accounts was assigned to the Staff Assistant. We revised the GJ form and all Journal Entries were approved by the Director of Accounting Services or the Accounting Supervisor. We believe that the implementation of these revised procedures strengthened internal controls in the area of cash management. As we stated in our response to the 1995 audit report, a copy of the revised procedures and the GJ forms are available for review.
F - 145

Stale of(}eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
FORT VALLEY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 533-96-02
The audit report for the year ended June 30, 1995, stated that the University's accounting procedures were insufficient to provide for adequate internal control over the cash accounts and the bank reconciliation process. During the year under review, some attempts were made by the University personnel to strengthen the accounting procedures over the bank accounts; however, the following deficiencies were noted:
(I) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.
(2) The payee was manually altered on several computer generated checks such that the University was included as a payee in order to allow the University to endorse the checks, deposit them in the University's cash accounts and apply the proceeds against student receivables.
(3) Hand drawn payroll checks, which replaced old outstanding checks, were issued with the same check numbers as the checks they replaced. The old outstanding checks were not voided in the accounting system and the replacement checks were never entered into the system.
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 University. The University should implement appropriate procedures and controls to ensure that needed adjustments are recorded on a timely basis. The University should discontinue the practice of altering preprinted checks and should record all checks issued in the accounting system.
A1ana~ementResponse
We concur with the recommendation. The following steps have been taken to correct this situation; 1) The Director of Accounting Services has been instructed that all reconciling items must be accounted for in the month in which they are discovered. 2) The Director and his staff have been instructed to immediately cease the practice of altering student checks to include the University as a payee. 3) The Director and his staff have been instructed that before the issuance ofa replacement check the old outstanding check must be voided. The replacement checks must be referenced to the original check and the number of the replacement must not be ordered.
REVENUEIRECEIVABLESIRECEIPTS Improper Student Accounts Receivable Financial Statements Audit Control Number 533-96-03
The audit report for the year ended June 30, 1995, disclosed that the University had material receivable balances that were accumulated prior to the Summer Quarter 1995. A review of the student accounts receivable of $575,876.18 at June 30, 1996, revealed that $526,337.22 was accumulated prior to the Summer Quarter 1996. The $526,337.22 consisted of receivables of $465,816.64 incurred during the fiscal years 1969 to 1995 and $60,520.58 of current year receivables for Fall Quarter 1995, Winter Quarter 1996 and Spring Quarter 1996 fees. There is no provision in the policies of the Board of Regents for deferments of student accounts without the student having approved documentation of financial aid at the time of registration.
F - 146

0/ State (Jeorgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
FORT VALLEY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
Procedures should be implemented by the University 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 financial aid. Outstanding receivables incurred by current students should be collected and correctly posted prior to the award of any additional aid.
Mana~ement Response
We concur with the recommendation. In February 1997 the University implemented the following policies relative to Student Accounts Receivable: A monthly history report is printed. This report is reviewed by the Student Accounts Manager and the Director of Accounting Services to ensure that all payments on student accounts are correctly posted. Deferments are only given to those students who have approved fmancial aid. All students with an outstanding balance will receive a bill along with a letter demanding payment at least quarterly. The University uses a collection agency for accounts more than a year old.
GENERAL LEDGER Agency Fund Deficits Financial Statements Audit Control Number 533-96-04
The audit report for the year ended June 30, 1995, reported there were several agency funds that had deficit balances totaling $4,106.29. At June 30, 1996, the agency funds included deficit balances of $1 0,813 .68. These deficit balances were created by the University disbursing funds prior to or in excess ofthe receipt of funds and in the failure of the University to correct posting errors. Several of the funds have been in deficits for over nine years.
The University should implement procedures to monitor the individual agency funds and to ensure that all funds have been received prior to disbursement. The University should seek reimbursement of all deficit balances from the organizations involved and review the funds to determine that all disbursements are posted to the proper funds.
Mana~ement Response
We concur with this recommendation. The University has assigned responsibility for the Agency funds to an Accounting Supervisors. Those funds that were not true agency funds have been closed. Also, we have sent out a letter to every organization, whose fund shows a deficit balance, seeking reimbursement of these funds. Additionally procedures are now in place to ensure the fund balances are verified prior to any disbursements.
GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Dormant Restricted Funds Audit Control Number 533-96-05
The audit report for the year ended June 30, 1995, disclosed that sixty-four projects in the Restricted Funds had no activity during the prior fiscal year. At June 30, 1996, twenty-two projects existed that had no activity in the fiscal year. These twenty-two consisted of fifteen Federally funded projects, two state funded projects and five privately funded projects with a total fund balance of$133,383.24. It was noted that the grant period had ended for seventeen of the twenty-two projects. OMB Circular A-110 (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.
F - 147

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
FORT VALLEY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
These donnant accounts are a result of management's failure to properly monitor the activity occurring in the Restricted Funds and failure to return excess funds promptly to the grantor when the project is complete. The University should implement procedures that provide for proper monitoring of the Restricted Funds to ensure that funds are returned to the Federal grantor when the project is complete. The University should contact the grantors to detennine if the donnant accounts are to be returned to the appropriate agencies.
Federal Grantor A~encies Affected:
National Science Foundation U. S. Agency of International Development U. S. Department of Agriculture U. S. Department of Education U. S. Department of Health and Human Services
Mana~ement Response
We concur with this recommendation. The Grants and Contracts Accountant has analyzed donnant accounts. Also the grantor agencies have been contacted and any funds that are required will be returned. We have infonned all principal investigators that the University must adhere to the requirements ofOMB Circular A-110 and return funds to the Federal grantor unless P.I. provides documentation of an extension.
GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Unsupported Financial Statements Perkins Loan Program [CFDA 84.038] Audit Control Number 533-96-06
The audit report for the year ended June 30, 1995, reported that the general ledger for the Perkins Loan Program was not reconciled to the University's billing agency's statements. Federal regulations (34 CFR 674.19) require institutions to establish, maintain and reconcile monthly program and fiscal records that correctly identify each student's account and status. For the year under review, the University's accounting records were again not reconciled to the University's billing agency's statements and were found to be inadequate. The following deficiencies were noted:
(1) Interest and other income was improperly recorded as principal collections 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) Loans made and recorded on the accounting records during the fiscal year were not reconciled to either the billing agency's statements or the University's financial aid office.
(4) Payments received on loans previously assigned to the Federal government were incorrectly recorded as a further reduction to the outstanding notes receivable balance on the general ledger.
(5) Several other adjustments were improperly posted to the accounting records and never corrected by the University.
F - 148

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, J996
FORT VALLEY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
These deficiencies occurred because of management's failure to maintain accurate and complete accounting records of the Perkins Loan Program as required by Federal regulations. Additionally, the University failed to reconcile the general ledger to the monthly accounting statements provided by the University's billing agency. To correct the accounting records, each day's activity was traced by the auditors from the billing agency's daily records to the University's general ledger to determine the validity of the posting. Numerous audit adjustments were required to correct the University'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 University were given instructions in the proper accounting procedures which include 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'i:ement Response
We concur with this recommendation. Steps have been taken to ensure that the small adjustments required to reconcile the accounting records with the subsidiary statements (Eduserv) are made. The Perkins Loan Accountant has the responsibility for reconciling the accounting records to the subsidiary statements. Adjusting entries are posted to the accounting records monthly. The Director of Accounting Services will monitor and approve all entries by the Director of Accounting Services. These procedures should strengthen the controls over the Perkins Loan record keeping.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT General Ledger Not Supported by Subsidiary Records Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 533-96-07
The audit report for the year ended June 30, 1995, reported an unidentified difference of $47,366.75 between the subsidiary equipment inventory records and the balance on the general ledger. At June 30, 1996, an unidentified difference of $12,488.92 existed between the subsidiary equipment inventory records and the balance on the general ledger. The University was unable to provide a reconciliation to account for the difference.
This difference was a result of management's failure to properly record the inventory transactions on the subsidiary records and their failure to reconcile the subsidiary equipment inventory records to the general ledger. The University should implement procedures to ensure that the accounting records are reconciled to and supported by the subsidiary equipment inventory records.
Mana't:ement Response
We concur with this recommendation. The University has reconciled the differences identified between the subsidiary records and the general ledger. Also a monthly reconciliation procedure is being implemented to ensure that the general ledger and the subsidiary equipment listing agree with each other. This procedure should eliminate any discrepancies in the future between the accounting records and the subsidiary equipment records.
F -149

State of (jeor'Jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

FORT VALLEY STATE UNIVERSITY PRIOR YEAR/CURRENT YEAR

FEDERAL FINANCIAL REPORTS Reports Not Reconciled to Accounting Records Federal Financial Assistance Perkins Loan Program [CFDA 84.038] Audit Control Number 533-96-08

The audit report for the year ended June 30, 1995, disclosed that expenditures reported on the Fiscal Operations and Application to Participate (FISAP) Report submitted by Fort Valley State University to the U. S. Department of Education did not reconcile with the accounting records. For the year under review, the FISAP submitted October 1, 1996, for the fiscal year ending June 30, 1996, was reviewed and this report again did not reconcile with the accounting records as indicated below:

FISAP Report Item

FISAP Report

Accounting Records

Difference

Funds Advanced to Students Federal Capital Contributions Institutional Capital Contributions Collection Costs

$ 5,759,922.00 $ 3,313,703.00 $ 404,639.00 $ 182,634.00

$ 5,762,789.45 $ 3,313,869.95 $ 398,051.47 $ 184,728.71

$ -2,867.45 $ -166.95 $ 6,587.53 $ -2,094.71

Federal regulations (34 CFR 674.19) require the University to ensure that the information is accurate and reconciled to the accounting records. The University 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.

Management Response

We concur with this recommendation. Since all of the discrepancies noted between the FISAP report and the general ledger relates to the Perkins Loan Program the University will ensure that the Perkins Loan records are completely reconciled to the Ledger prior to 6/30/97. A detailed reconciliation will be prepared for any adjusted amounts and maintained as a part of the supporting documentation.

FEDERAL FINANCIAL REPORTS Failure to Return Reports in a Timely Manner Federal Financial Assistance Federal Direct Student Loan Program (CFDA 84.268) Audit Control Number 533-96-09

The audit report for the year ended June 30, 1995, reported that the University 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 682.605 and 682.610). In the year under review, the University again failed to return the Student Status Confirmation Reports to the appropriate agency within thirty days of receipt of the report.

This noncompliance resulted from management's failure to verify that Student Status Confirmation Reports were returned within 30 days of receipt. The University should implement procedures to verify that the Student Status Confirmation Reports are returned within 30 days of receipt by the University personnel as required.

F - 150

State of (jeor'jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
FORT VALLEY STATE UNIVERSITY
PRIOR YEAR/CURRENT YEAR
Mana~ement Response
We concur with this finding. The institution has transferred the responsibility for completing the enrollment verification rosters/procedures from the Registrar's Office and assigned the tasks to the Financial Aid Office. This change in procedure will address the urgent nature of the reports. This department will better understand the reporting requirements and handle it more efficiently. As a result, we do not anticipate any further problems in this area.
SPECIAL TESTS AND PROVISIONS In-Person Entrance and Exit Counseling not Conducted Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Federal Direct Student Loan Program [CFDA 84.268] Audit Control Number 533-96-10
The audit report for the year ended June 30, 1995, 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 fifteen 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.
For the year under review, an examination of fifty-four Federal Direct Student Loan recipients revealed that two student's files did not contain the required entrance interview documentation and four students' files did not contain the required exit interview documentation. Federal regulations (34 CFR 682.604) require institutions to conduct in-person entrance counseling prior to the release of the first disbursement of the proceeds of the first Stafford loan made to the borrower for attendance at the school. The Federal regulations require the University to conduct in-person exit counseling with each Stafford 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 financial aid file.
Subsequent to completion of field work, the University provided documentation that entrance and exit interviews had been conducted. However, the documentation was not provided when requested during the course of field work. The University 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.
Mana~ement Response
We do not concur with this fmding. The auditors cited six cases where they determined that either the required entrance interview or exit interview counseling had not taken place. The auditors were shown and given copies of the entrance interview materials. Additionally, copies were given to them of approval leave of absence forms for the four students who were out of school for a quarter or taking a less than half-time load.
F - 151

0/ State (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
FORT VALLEY STATE UNIVERSITY
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Maintain Documentation of Multi-Year Leases Financial Statements Audit Control Number 533-96-11
An examination of the University's expenditures revealed that the University had entered into several mUlti-year capital and operating lease agreements for office equipment. The University was unable to provide the original agreements that would contain the payment schedules, imputed interest rate and any provision requirements for several of the leases. The University could not document which payments made to the lessors were for which lease.
The University should implement controls to ensure that all contracts entered into by the University are documented in the University's files. These files should include the original agreements and all related provisions. The University should request a copy of the original agreements and provisions from the contractors and determine that all payments are properly documented.
Mana'tement Response
We concur with this fmding. The Procurement Manager has been given the responsibility for capital and operating leases. She is currently in the process of securing original documents for all capital and operating leases for all leased equipment on campus. It is expected that this task should be completed by May 30, and copies of all documentation will be on hand at the University's Offices for inspection.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 533-96-12
For the year under review, an equipment inventory sample of fifty randomly selected items was utilized to test the accuracy and validity of Fort Valley State University's equipment inventory records. The results of our testing disclosed the following:
(1) Seven items were found in a different location than recorded on the inventory records.
(2) Three items were discovered without identifying decals.
(3) One item had the wrong identifying decal attached.
(4) One item that had been reported as stolen was on the equipment inventory.
These deficiencies occurred because of management's failure to adequately monitor the subsidiary equipment inventory records. The University should establish appropriate procedures to strengthen internal accounting controls and to ensure that assets are safeguarded against loss from unauthorized use or disposition.
Mana'tement Response We concur with this fmding. The Director of Auxiliary and Support Services has distributed written procedures to all personnel responsible for equipment inventory and strengthen our interdepartment transfer procedures to insure that transfers are documented. In addition to the comprehensive inventory checks, the University has implemented periodic checks of inventory items to verify location, identifying decals and that no unauthorized use or disposal occurs.
F - 152

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

FORT VALLEY STATE UNIVERSITY

CURRENT YEAR

TYPES OF SERVICES/ALLOWED OR UNALLOWED Improper Calculation of Cost of Attendance Federal Financial Assistance Audit Control Number 533-96-13

For the year under review, an examination of the financial aid records of fifty-five students receiving Federal student financial aid revealed three students whose cost of attendance was improperly calculated. Title IV of the Higher Education Act of 1986 requires an institution to determine a student's financial need by using an approved system of need analysis based on the cost reasonably necessary for the student's attendance. In the three instances identified, improper budgets or inaccurate calculations were used to determine the cost of attendance.

The University should implement procedures to ensure that the cost of attendance is properly determined for all recipients of Federal student financial aid. The University should contact the U. S. Department of Education regarding resolution of this fmding.

Federal Financial Assistance Pro~rams Affected:

84.007 84.033 84.063 84.268

Supplemental Educational Opportunity Grant College Work-Study Program Pell Grant Program Federal Direct Student Loan Program

Mana~ement Response

We do not concur with this finding. The auditors cited three cases where they contend that an improper calculation of cost of attendance had occurred. Fiscal 1996 was the first year of using a new system to generate the student's budget. It was explained and documented in the respective student's file that the budget listed was a contained amounts generated as result of a computer error and the budget was not used for any of the students in determining their cost of attendance. The corrected budget was generated off the system. Additionally, actual budgets used were present in the folders as well as appropriate award information that was within the actual limits imposed and not that of the computer error.

The computer system problem was corrected and efforts were made to provide new notices for all the students that had been caught in the problem. However, no over awards from actual cost of attendance had taken place and manual sheets were available at the time of audit inspection.

TYPES OF SERVICES/ALLOWED OR UNALLOWED Disbursement in Excess of Cost of Attendance Federal Financial Assistance Questioned Cost: $19,802.03 Audit Control Number 533-96-14

For the year under review, an examination of the fmancial aid records of fifty- five students receiving Federal student financial aid revealed that seven students were awarded and disbursed $19,864.53 of financial aid in excess of student's predetermined fmancial need based on the estimated cost of attendance. Title IV of the Higher Education Act of 1986 states that an institution must coordinate the Title IV programs with other Federal and non-Federal programs of student financial aid it administers and must establish controls to preclude the awarding of assistance in excess of student's fmancial needs. Federal regulations (34 CFR

F - 153

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, J996
FORT VALLEY STATE UNIVERSITY
CURRENT YEAR
674.14) provide for an allowance of up to $300.00 in excess of a student's predetermined financial need before an institution is required to adjust the student's award.
In the seven instances identified, only one student was awarded less than the $300.00 allowance. The other six students were disbursed $19,802.03 of fmancial aid in excess of the student's predetermined cost of attendance. These overpayments resulted from the University's failure to include all financial aid awarded in determining the individual student's need.
Procedures should be implemented by the University to ensure that students are not awarded or disbursed financial aid in excess of their cost of attendance. The University should contact the grantor agencies regarding the resolution of this finding and the questioned costs of$19,802.03. Federal Financial Assistance Pro~rams Afftcted: 84.063 Pell Grant Program 84.069 Grants to States for State Student Incentives 84.268 Federal Direct Student Loan Program Mana~ement Response We concur in part with this fmding. The institution has established procedures to ensure that the Financial Aid Office is notified of awards received through other departments. A copy of awards and/or checks are sent to the Financial Aid Office and student awards are adjusted to comply with federal regulations.
In two cases we take exception to the auditors finding, our research shows that one student was an independent student on a twelve month budget of$16,160, and EFC of "0" awarded $13,078 and had an unmet need of$3,082. The other exception is for the one student who was originally awarded a $2,625 federal direct loan which was canceled in its entirety. The student's other awards were composed of the Pell Grant and various scholarships and although this total exceeded her established financial need, none of the programs fell in the category for over award violations.
ELIGIBILITY Funds Disbursed While Enrolled in Excess Remedial Hours Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Cost: $4,461.00 Audit Control Number 533-96-15
For the year under review, an examination of the financial aid records and class schedules of fifty-three students receiving Pell Grants revealed ten students who were awarded and disbursed $4,461.00 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 ten 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.
F154

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
FORT VALLEY STATE UNIVERSITY
CURRENT YEAR
This questioned cost and noncompliance resulted from management's failure to properly monitor the number of remedial hours taken by financial aid recipients. The University 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 University should contact the grantor agency regarding the resolution ofthis fmding and the identified questioned cost of $4,461.00.
Manar:ement Response
We concur with audit findings in this area. The Financial Aid Office uses reports from the institutions computer system to determine compliance with the forty-five hours of remedial hours. The system in determining total credit for student did not distinguish between coding of the College preparatory courses offered for credit and those taken by students to satisfy the CPC requirement. In the cases sited this created a problem in accurately determining total number of remedial hours taken by the student.
The institution has modified computer application to include a distinguishing code courses when taken to meet the CPC requirement. Additionally, the ten students involved in this finding have been notified of their program refund status and collection activities have begun.
ELIGIBILITY Improper Determination of Enrollment Status Federal Financial Assistance Pell Grant Program [CFDA 84.063] Federal Direct Student Loan Program [CFDA 84.268] Questioned Cost: $4,294.00 Audit Control Number 533-96-16
For the year under review, an examination of the fmancial aid records and class schedules of fifty-five students receiving Federal fmancial aid revealed three students who were awarded and disbursed $4,294.00 Title IV assistance in excess of allowable limits for their enrollment status. Federal regulations (34 CFR 690.63) and The Federal Student Financial Aid Handbook state that student's Pell Grant Payment for each payment period is calculated by determining the student's enrollment status for the term. Based upon that enrollment status the award is determined by Payment and Disbursement Schedules established by the U. S. Department of Education.
In the three 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 based on their enrollment status resulting in overpayments ofPell Grants for $981.00.
In addition, one of the students was awarded and disbursed $3,313.00 of Federal Direct Student Loans even though they were enrolled at less than half-time status. Federal regulations (34 CFR 668.7) require that a Federal Direct Student Loan recipient at a minimum be enrolled at half-time status.
These questioned costs and noncompliance resulted from management's failure to properly monitor the enrollment status of financial aid recipients. The University should implement procedures to ensure that the enrollment status of financial aid recipients is monitored to prevent disbursement of Title IV funds to those students who are ineligible. The University should contact the grantor agency regarding the resolution of this finding and the identified questioned cost of $4,294.00.
F - 155

0/ State (leorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
FORT VALLEY STATE UNIVERSITY
CURRENT YEAR
A1ana~ementResponse
We concur with this finding. A review of the student's records indicated that each student had intended full-time enrollment for the periods in question and were so awarded. Each student began the enrollment period on a full-time basis and payment was current at that time. Each student reduced their course load after the payment period and early in the respective quarters. As a result their academic transcripts did not reflect the withdrawn courses, nor was the Financial Aid Office notified of the changed enrollment.
to rectify this problem of maintaining eligibility, institutional policies and procedures have changed to immediately reduce payments for early reductions before refunds are disbursed. The Business Office now runs a program to verify the enrollment status of each student receiving fmancial aid prior to disbursement. If a student's enrollment status changes between the award and disbursement date, the financial aid office is immediately notified. The student financial aid is not disbursed until documentation is received confirming the student's enrollment status. The University will contact the grantor agency for resolution of the questioned cost.
ELIGIBILITY Inadequate Documentation of Dependency Status Adjustments Federal Financial Assistance Federal Direct Student Loan Program [CFDA 84.268] Audit Control Number 533-96-17
For the year under review, an examination of thirty-one student financial aid files for students receiving Unsubsidized Stafford Loans identified sixteen instances where the student's dependency status had been adjusted due to special circumstances as determined by the financial aid administrator. The Higher Education Act Amendments of 1992 allow for the adjustment of a student's dependency status in unusual circumstances. This legislation specifies that the reason for the adjustment must relate to a student's special circumstance on an individual basis, and must be documented in the student's financial aid file. Also, Chapter Two of The Federal Student Financial Aid Handbook defines special circumstances as conditions that differentiate an individual student, not conditions that exist for a whole class of students.
Of the sixteen instances identified, all were found to be adjusted to enable the students to borrow under the Unsubsidized Loan Program. A dependent student is eligible to borrow under the Unsubsidized Loan Program only if it is determined that the student's parents can't obtain Direct PLUS Loan because they have an adverse credit history. Only four of the student's files contained documentation indicating this to be the case. The fmancial aid administrator stated that many of the student's dependency status were adjusted because the student's were eligible for the maximum amount of Pell Grants indicating the parent's inability to borrow funds. It was noted that two of the student's who received Unsubsidized Stafford Loans due to the dependency change were disbursed funds in excess of their predetermined need as stated elsewhere in this section.
The University should implement procedures to ensure that adjustments to a student's dependency status are clearly identified and meet the criteria and defmition of special circumstances as required by the Higher Education Act Amendments of 1992. The documentation used in determining the dependency adjustment should be placed in the student's financial aid file. The University should contact the U. S. Department of Education regarding resolution of this finding.
A1ana~ement Response
We do not concur with the fmding. In each case identified by the auditors, professional judgement was exercised on an individual basis according to each student's situation. Financial need beyond that of available funds was determined according to prescribed law. Also according to law in this area, it was determined that, although the need existed, the family, due to either adverse credit
F156

State of (feorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
FORT VALLEY STATE UNIVERSITY
CURRENT YEAR
history or no resources, was not able to borrow a PLUS loan for the student to meet the un-met need. This fact was documented in each folder. The institution serves a high-need population. The only available funds for packaging were those of the unsubsidized loan program. The regulations state that the Financial Aid Director may exercise professional judgement in such circumstances.
ELIGIBILITY Student Financial Aid in Excess of Maximum Time Frame Federal Financial Assistance Questioned Cost: $10,340.00 Audit Control Number 533-96-18
For the year under review, an examination of the fmancial aid records and transcripts of fifty-five students receiving assistance through the Title IV, Higher Education Act revealed that one student received Title IV assistance in excess of the maximum time frame allowable. The Higher Education Act Amendments of 1992 and Chapter Four of The Federal Student Financial Aid Handbook state that a student must maintain satisfactory academic progress to be eligible to receive student fmancial aid under the Title IV programs, unless the school uses its discretion to waive the satisfactory academic progress requirement. No documentation of a waiver for this requirement could be found in the student's file. The requirements further state that a student is eligible for Federal financial aid only if making sufficient progress toward graduation and the maximum time frame may not exceed 150 percent of the published length of the program for full-time students. For Fort Valley State University, the maximum time frame as published is six years.
In the instance identified, the student was awarded fmancial aid for nine years and was disbursed Title IV funds for eight years. As a result of the University's failure to monitor the student's academic progress in the year under review, the student received $1,800.00 in Federal Supplemental Educational Opportunity Grants, $5,000.00 in Federal Direct Student Loans, $1,200.00 in Perkins Loans and $2,340.00 in Pell Grants for which they were not eligible.
This questioned cost and noncompliance resulted from management's failure to monitor the academic progress of financial aid recipients before disbursing financial aid to the students. The University should implement procedures to ensure that each financial aid recipient is maintaining satisfactory academic progress according to the standards set forth in the University's handbook before disbursing any fmancial assistance. The University should contact the grantor agency regarding the resolution of this finding and the questioned costs of $10,340.00.
Federal Financial Assistance Prowams Affected:
84.007 Supplemental Educational Opportunity Grant 84.038 Perkins Loan Program 84.063 Pell Grant Program 84.268 Federal Direct Student Loan Program
Mana~ement Response
We do not concur with this finding. The situation cited by the auditors was one of mitigating circumstances and documented throughout the student's folder, although not clarified as a continuation at the time of the audit. However, this particular student's situation was under quarterly monitoring as a special case by the Vice President for Academic Affairs. Due to the student's personal background situation, military injuries in Desert Storm, and change of academic major at a late date, the institution considered him worthy of extended time, as his transcript so indicated. We have gathered all pertinent data and compiled it into
F - 157

0/ State (}eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

FORT VALLEY STATE UNIVERSITY

CURRENT YEAR

one file from the various offices, as well as documentation that the student, with extensive help from various institutional services, progressed over-time from an average 1.67 GPA to a 3.55 GPA, completing all requirements for graduation Spring, 1996.

ELIGIBILITY Satisfactory Academic Progress Not Maintained Federal Financial Assistance Audit Control Number 533-96-19

For the year under review, an examination of the University's satisfactory academic progress procedures for student financial aid recipients revealed that of fifty-five students tested, seven students were not in compliance with the University's published satisfactory academic progress policies. The Higher Education Act Amendments of 1992 and Chapter Four of The Federal Student Financial Aid Handbook state that a student must maintain satisfactory academic progress to be eligible to receive student fmancial aid under the Title IV programs, unless the school uses its discretion to waive the satisfactory academic progress requirement. No documentation of a waiver for this requirement could be found in the students' files. The requirements further state that a student is eligible for Federal financial aid only if they are making sufficient progress toward graduation and the maximum time frame may not exceed 150 percent ofthe published length of the program for full-time students. For Fort Valley State University, the maximum time frame as published is six years.

The regulations require that the school must divide the maximum time frames into increments that cannot exceed one year. The University's policies require a student to successfully complete at least one-sixth of the total number of hours required for their undergraduate program each year. The University's policies state that a student's probationary period of aid cannot exceed two quarters and that a specified grade point average must be achieved unless the student has successfully appealed his financial aid suspension.

In the seven instances identified, three students were found to have been on probationary status for longer than two terms without documentation of a successful appeal. Four students were found to be far below the required incremental measurement required for their length of attendance.

The University should implement procedures to ensure that each financial aid recipient is maintaining satisfactory academic progress according to the standards set forth in the University's handbook before disbursing any financial assistance. The University should review the student's records to determine that they are still eligible for student fmancial aid.

Federal Financial Assistance Pro~rams Affected:

84.007 84.038 84.063 84.268

Supplemental Educational Opportunity Grant Perkins Loan Program Pell Grant Program Federal Direct Student Loan Program

A1ana~ementResponse

We do not concur with this finding. Satisfactory Academic Progress (SAP) reviews are made at the end of the Spring quarter, with allowances for Summer enrollment before suspension takes place. The auditors were informed of this policy. Beginning the 95-96 school year appeals were approved for the same period. The auditors were given this information and requested not to use the old catalog since the latest one had not been received from the printing company. Further, an analysis of the cases cited by the auditors revealed the following:

F - 158

State of (Jeor'Jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
FORT VALLEY STATE UNIVERSITY
CURRENT YEAR
The two students cited for incremental measurement violation had complied with requirements at the end of the Summer '95 period, preceding Fall '95. Therefore no fmancial aid suspension was warranted. Two students had been suspended from financial aid at the end of Spring '95, had appealed their suspensions and been approved for 95-96, and documentation was available in the respective student's records attesting to action taken. Two students began the 1995-96 school year in compliance of satisfactory academic progress. During the course of the school year academic problems prevailed. However, as long as the institution allowed the students to re-enroll during this period, no action was warranted until the end of the 95-96 school year.
As a result of all the aforestated information, we do not concur with audit findings in this area.
ELIGIBILITY Statement of Educational Purpose Not Signed Federal Financial Assistance Audit Control Number 533-96-20
For the year under review, an examination of fifty-five student financial aid files of students receiving Title IV financial aid revealed one instance where a student's file did not contain a signed Statement of Educational purpose. The Higher Education Act Amendments of 1992 require a student to sign a Statement of Educational Purpose certifying that they will use the funds only for educational funds before any Title IV funds can be awarded or disbursed. The regulations require that the statement be completed each year and included in the student aid file.
This noncompliance occurred because management failed to properly monitor the student financial aid files. The University should implement the necessary procedures to ensure that all required certifications are completed before a student is awarded fmancial aid. The University should contact the grantor agency regarding the resolution of this finding.
Federal Financial Assistance Pro~rams Affected:
84.007 Supplemental Educational Opportunity Grant 84.063 Pell Grant Program 84.268 Federal Direct Student Loan Program
A1ana~ementResponse
We concur with the auditors fmdings. The Financial Aid Office has strengthened it's monitoring procedures to assure that all required certifications are completed and filed before a student is awarded fmancial aid. The statement in question has been located and copy of the same will be available to the auditors for review.
SPECIAL TESTS AND PROVISIONS Financial Aid Transcript Not Requested Federal Financial Assistance Pell Grant Program [CFDA 84.063] Federal Direct Student Loan Program [CFDA 84.268] Audit Control Number 533-96-21
For the year under review, an examination of fifty-five Federal fmancial aid recipients revealed that one student's file who previously attended other eligible institutions did not contain the required financial aid transcripts from those institutions or any documentation indicating that the University had requested a fmancial aid transcript. Federal regulations (34 CFR 668.19) state for students applying for any Title IV program, the institution must obtain a financial aid transcript if the student previously attended another eligible institution, and maintain the transcript on file. Until an institution receives a fmancial aid transcript from each eligible institution attended, the institution may disburse Pell or Campus-based funds to the student for one payment period only and may originate but not disburse Federal Direct Student Loans. The student was disbursed Pell and Federal Direct Student Loans for two payment periods.
F - 159

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
FORT VALLEY STATE UNIVERSITY CURRENT YEAR
This noncompliance occurred because management failed to ensure that all eligibility requirements were met for the student financial aid recipient. The University should implement the necessary procedures to ensure that all required documents are obtained and placed in the financial aid folders. The University should contact the grantor agency regarding the resolution of this finding. Mana~ement Response We concur with the auditors finding in this area. The Financial Aid Transcript (FAT) for the student cited has been received, reviewed and placed in the student's file. The University has strengthened its monitoring procedures to ensure that all required documents are obtained and placed in the financial aid folders. SPECIAL TESTS AND PROVISIONS Funds Disbursed in Excess of Annual Limits Federal Financial Assistance Perkins Loan Program [CFDA 84.038] Questioned Cost: $159.00 Audit Control Number 533-96-22 For the year under review, an examination of the fmancial aid records of fourteen students receiving Perkins Loans revealed that one student was awarded Perkins Loans in excess of the maximum annual amount allowed for undergraduates of $3,000.00 as established by the U. S. Department of Education. The student was awarded and disbursed $3,159.00 of Perkins Loans during the year. This questioned cost and noncompliance resulted from management's failure to properly award Perkins Loans within the annual limits. The University should implement procedures to ensure that all awards are in compliance with the published regulations. The University should contact the grantor agency regarding the resolution of this fmding and the identified questioned cost of $159.00. Mana~ement Response We concur with the auditors findings. The Perkins Loan Program will be reimbursed for the amount cited. The institution's computer-system has been updated with stricter controls to assure future compliance.
F -160

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

FORT VALLEY STATE UNIVERSITY - EDP GENERAL CONTROLS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

533a-95-01 533a-95-02 533a-95-03 533a-95-04 533a-95-05 533a-95-06 533a-95-07

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F161

State ot {}eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIA COLLEGE CURRENT YEAR
MATCHING, LEVEL OF EFFORT, AND/OR EARMARKING Untimely Institutional Capital Contribution Deposit Federal Financial Assistance Perkins Loan Funds [CFDA 84.038] Audit Control Number 536-96-01 Federal regulation (34 CFR 674.19) requires colleges to deposit their institutional capital contributions to the Perkins Loan fund prior to or at the same time the College deposits any Federal capital contribution. During the year under review, one of the College's institutional capital contribution deposits was made five months after the deposit of the Federal capital contribution. This noncompliance is a result of an oversight on the College's part. The College should implement procedures to ensure that funds are deposited as required by Federal regulations. Mana'lement Response We concur with this recommendation. Training procedures have been amended to include instructions on the timing of institutional matching requirements for Federal Capital Contributions. With this modification in place, an oversight should not occur when there is a change in personnel.
F -162

0/ State (Jeorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996
GEORGIA SOUTHERN UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OF QUESTIONED COSTS

The status offmdings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

539-95-01 539-95-02 539-95-03

See Audit Control Number 539-96-01 Corrective Action Implemented See Audit Control Number 539-96-02

PRIOR YEAR

REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 539-96-01

The audit report for the year ended June 30, 1995, disclosed that Georgia Southern University had $70,333.83 in student accounts receivable which were either incurred prior to Summer Quarter 1995, or had no approved fmancial aid. This balance decreased to $53,500.25 as of June 30, 1996. 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

We concur with this recommendation. Georgia Southern University is following 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, have 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. As noted in the audit fmding, the accounts receivable has decreased $16,833.58 in fiscal year 1996 due to implementation of collection procedures.

PRIOR YEAR/CURRENT YEAR

FEDERAL FINANCIAL REPORTS Institutional Payment Summary Reports Not Submitted on a Timely Basis Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 539-96-02

The audit report for the year ended June 30, 1995, disclosed that Georgia Southern University failed to submit a required Institutional Payment Summary (IPS) Report during the appropriate time period. For the year under review, special reporting requirements of the Pell Grant Program for the University included submission of the Institutional Payment Summary Report

F - 163

Slale of (JeorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA SOUTHERN UNIVERSITY PRIOR YEAR/CURRENT YEAR

to the U. S. Department of Education during six reporting periods. Georgia Southern University failed to submit the required reports during the following periods:
July 1, 1995 - October 15,1995 October 16, 1995 - December 15, 1995
The University should implement procedures to ensure that Institutional Payment Summaries are submitted on a timely basis.
Management Response
We concur with this recommendation. The Department of Financial Aid now submits the Institutional Payment Summary every 30 days, due to new reporting requirement from the Department of Education. This process is now a part of the Financial Aid Departmental Calendar, and is ajob responsibility which alternates between two staff members: (1) The report is sent. (2) The staff member checks to be sure it has been sent (confIrmed by receipt of the PCON fIle from the Department of Education). (3) After seven (7) working days, if the PCON fIle has not been received, the staff member contacts the Department of Education and resends if necessary.
CURRENT YEAR

FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary (SPS) Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 539-96-03

For the year under review, our examination of the fIscal year 1995 Pell Grant Program disclosed that the University's authorized Pell Grant award amount was $5,187,126.00. The University incurred a total of$5,267,373.00 Pell Grant expenditures per the fIscal year 1995 Fiscal Operations Report and Application (FISAP) or $80,247.00 in excess of the authorized amount reflected on the Student Payment Summary (SPS) report. In order to be reimbursed for those Pell Grant payments, the University, in conformity with Federal statutes, is responsible for certifying the validity of those payments to the U. S. Department of Education. The Federal agency can then institute an upward adjustment to the fIscal year 1995 authorized amount in order to make the funds available to the University.

A review was conducted to reconcile the amount of Pell Grant expenditures reflected in the University accounting records and those reflected on the SPS reports. The review of supporting documentation maintained by the University disclosed the following relative to Pell Grant expenditures made to students during the year ended June 30, 1995:

GROUP

AMOUNT

DESCRIPTION

$ 73,054.00

Pell Grant payments made to (54) students who were not included, or were included for a lesser amount in U. S. Department of Education SPS report.

2

$ 250.00

Payment made to (I) student in excess of their eligible amount.

F -164

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA SOUTHERN UNIVERSITY CURRENT YEAR

For those students who received Pell Grant awards in Group I above, a review was performed of the University records and student files to ascertain the accuracy of the Pell Grant awards. Based on the review. $73,054.00 reflects valid fiscal year 1995 Pell Grant program payments recorded on the University's accounting records but this amount was not reflected on the SPS report. According to Federal provisions, the University is entitled to seek an increase in the presently approved fiscal year 1995 authorization to recover the $73,054.00 of valid Pell Grant program payments.

The University should initiate steps to obtain U. S. Department of Education's approval to increase the amount of the fiscal year 1995 Pell Grant authorization in support of the $73,054.00 in Pell Grant program expenditures made by the University, and should obtain reimbursement for the $250.00 in questioned cost reflected in Group 2 above. In addition, the University should identify the remaining variance of $7,443.00 which exists between the accounting records and the SPS report.

Mana~ement Response

We concur with this finding. This finding is the first step as required in U.S. Department of Education Dear Colleague Letter 94-14. Using data collected by the State Audit Department, the Controller will submit a request to the U.S. Department Education for approval of the reopening of award year 94-95 for submission of Pell SPS files not previously submitted. Collection procedures have been implemented on the $250.00 questioned cost in Group 2 of the audit finding. The University has identified the $7,443 remaining variance and collection procedures from applicable students have been implemented.

FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Audit Control Number 539-96-04

For the year under review, the University's fourth quarter fiscal year 1996 Federal Cash Transaction Report (Form PMS 272-A) could not be reconciled between reported "cash on hand end of period" and ending cash per the University's accounting records as indicated below:

Report Date

Cash on Hand End of Period Reported on Form PMS 272-A

Cash per Accounting
Records

Difference

June 30, 1996

$ -790,685.60

$ -350,999.77

$ 439,685.83

The $ 439,685.83 difference consists, in part, of a $600,000.00 wire fund transfer on February 13, 1986, omitted on the Federal Cash Transaction Report (Form PMS 272-A) by the U. S. Department of Education.

The University should implement procedures to ensure that all Federal Cash Transaction Reports are reconciled to the University's formal accounting records, and documentation should be maintained reflecting this reconciliation. The University should contact the U. S. Department of Education regarding this unreconciled difference.

F - 165

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA SOUTHERN UNIVERSITY CURRENT YEAR

Federal Financial Assistance Pro~rams A[fected:

84.007 84.033 84.044 84.047 84.063 84.094 84.153

Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Talent Search Upward Bound Federal Pell Grant Program Harris Fellowships Business and International Education

Mana~ement Response

We concur with the finding. The monthly reconciliation report has been modified to identify variances in accounting records and the Federal Cash Transaction Report on a program by program basis. A copy of the reconciliation report and supporting documentation is maintained with the University's copy of the monthly Federal Cash Transaction Report. Any variances other than timing, are communicated in writing to the department responsible for taking corrective action with the U.S. Department of Education.

SPECIAL REPORTING Direct Loan Reconciliation Procedures Federal Financial Assistance Federal Direct Student Loan Program [CFDA 84.268] Audit Control Number 539-96-05

In accordance with the Federal Direct Student Loan Program Direct Loan School Guide, the Direct Loan reconciliation procedures require a monthly cash management reconciliation. For the year under review, the University's Federal Direct Loan Program cash management reconciliation had not been reconciled at June 30, 1996, as indicated below:

Reported Amount

Servicer Amount

Accounting Records

$ 402,326.00

$ 548,588.00

$ 12,443.00

Management was unable to provide a reconciliation of the above reported amounts.

The University should implement procedures which ensure all data reported to the service center is reconciled to the service center reports and the University's formal accounting records on a monthly basis.

Mana~ement Response

We concur with this finding. Database programs are being developed to compare individual Direct Loan disbursements in the accounting records to disbursements in the financial aid award system. Reports from this program that identify variances in the two systems will allow reconciliation of Direct Lending cash balances in the award system to actual cash in the account records. This reconciliation will be completed by June 30, 1997 with monthly reconciliations performed subsequent to that date.

F - 166

0/ State (.}eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA SOUTHERN UNIVERSITY - EDP GENERAL CONTROLS STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

539a-95-01 539a-95-02 539a-95-03 539a-95-04 539a-95-05 539a-95-06

Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998 Follow-up will be performed in Fiscal Year 1998

F - 167

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA SOUTHWESTERN 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, 1995, is summarized below:

Audit Control Number

Status of Finding

542-92-10 542-93-06 542-95-01 542-95-02 542-95-03 542-95-04 542-95-05

Corrective Action Implemented Finding Deleted Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

F - 168

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
KENNESAW STATE UNIVERSITY CURRENT YEAR
REVENUE/RECEIVABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 543-96-01 An examination of student accounts receivable at June 30, 1996 revealed that $178,371.23 of receivables were not supported by approved financial aid. This condition occurred because of management's failure to obtain approved documentation to support financial aid before disbursement offunds. There is no provision in the policies ofthe Board of Regents for deferments of student accounts without the student having approved documentation of financial 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 financial aid. It is recommended that legal means be used to collect all accounts receivable, if necessary. Manaf:ement Response The institution agrees with the finding, in so much as a limited number of students enrolled in the University's Masters of Experienced Professionals Program were allowed deferment of fees without the proper supporting documentation required by Regents Policy Number 704. The process for collecting Masters of Experienced Professional student fees has been completely restructured. The policies developed are designed to ensure that the university is in compliance with regents policy. The number of students who owe fees has been reduced to four. These student's accounts have been placed for litigation.
F - 169

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

NORTH GEORGIA COLLEGE 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, 1995, is summarized below:

Audit Control Number

Status of Finding

545-95-01

See Audit Control Number 545-96-01

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 545-96-0 I
The review report for the year ended June 30, 1995, 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 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 financial statements are accurate and complete.
Federal Grantor Agencies Affected:
Environmental Protection Agency Tennessee Valley Authority U. S. Department of Defense U. S. Department of Energy U. S. Department of Education U. S. Department of Human Resources
Management Response
(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 July 1, 1997.

F - 170

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30. /996
NORTH GEORGIA COLLEGE PRIOR YEARJCURRENT 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, 1997. (3) General Fixed Asset/Property Management Records keeping and surplus property management should be separated. Item (2) above addresses this finding also. The part time position in the Strategic Plan will also be utilized to separate these functions.
F - 171

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

SAVANNAH STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Findings

548-95-01 548-95-02 548-95-03 548-95-04

See Audit Control Number 548-96-0 I See Audit Control Number 548-96-02 See Audit Control Number 548-96-03 Corrective Action Implemented

PRIOR YEAR

REVENUE/RECEIVABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 548-96-0 I

The review report for the year ended June 30, 1995, disclosed that Savannah State University had $53,973.09 in student accounts receivable which were not supported by approved financial aid. On June 30, 1996, the balance had decreased to $47,832.90. There is no provision in the policies of the Board of Regents for deferments of student accounts without the student having approved financial 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 financial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.

Manaf:ement Response

The University concurs with this recommendation. The University will continue to use the services of its local collection agency to assist with the collection of student accounts receivable. Delinquent accounts are assigned to the Collection Agency quarterly. The University 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 University will write off uncollectible debts of $1 00 or less under House Bill 1536 (codified as O.C.G.A. Section 50-16-17) as of June 30,1996.

The University will continue to use the Financial Aid Deferment Memo form to assist with managing 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 a Financial Aid Deferment.

F - 172

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
SAVANNAH STATE UNIVERSITY PRIOR YEAR/CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Deficit Cash Balance Financial Statements Audit Control Number 548-96-02
The review report for the year ended June 30, 1995, disclosed that Savannah State University had a negative fund balance of $133,898.56 in the Restricted Funds - Naval Science Scholarship Account that was not supported by a valid accounts receivable. On June 30, 1996, the account had a negative fund balance of $135,938.56. The negative balance occurred because the University awarded Naval Science Scholarships without obtaining funding approval.
The University should implement procedures to fund this deficit and ensure that Naval Science Scholarships are not awarded until funds are available. Mana~ement Response The University concurs with this recommendation. The University will continue to apply a portion of its annual General Scholarship funds to the Naval Science Scholarship account annually until the deficit is paid. The University will cease charging scholarships to this account. FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 548-96-03
The review report for the year ended June 30, 1995, disclosed that Intercollegiate Athletics had a deficit fund balance of $318,347.18. At June 30, 1996, a deficit of$208,044.30 continued to exist. This deficit is the result of the University'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 finance its operations". The University should take appropriate action to fund this deficit. Mana~ement Response The University concurs with this recommendation. The University's Athletic program realized a surplus balance of $11 0,302.88 as of June 30, 1996. This balance was 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. In fact, the University is projecting its Athletic program to realize a surplus balance of$25,000 to $50,000 as of June 30, 1997. This surplus and future surpluses will be applied to the deficit until it is paid in full. The University will also continue to increase external athletic fund raising efforts to assist with the deficit and day-to-day operations of the Athletic program.
F - 173

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
SAVANNAH STATE UNIVERSITY
CURRENT YEAR
CASH AND CASH EQUIVALENTS Uncollateralized Deposits Financial Statements Audit Control Number 548-96-04
At June 30, 1996, the University failed to have its certificates of deposit fully collateralized as provided for by the Official Code of Georgia Annotated Section 50-17-59.
this noncompliance occurred due to management's failure to adequately monitor the collateralization of balances at individual banks. The University should implement adequate procedures to monitor the col1ateralization of bank balances to ensure compliance at all times with State Laws governing deposits.
Manar:ement Response
The University concurs with this recommendation. On April 15, 1997, the Vice President for Business and Finance sent a letter to the Vice President of Carver Bank notifying him that certificates of deposits handled by the Bank are under collateralized. The Director of Financial Services will be responsible for fol1owing up with bank officials to ensure that the appropriate action is taken. The Director will also be responsible for monitoring the col1ateralization of certificates of deposits quarterly.
INVENTORIES Inadequate Supply/Resale Inventory Records Financial Statements Audit Control Number 548-96-05
A review of the supply/resale inventory records as of June 30, 1996, revealed that the internal accounting control procedures for the supply and resale perpetual inventory system were deficient. The following is a summary of the deficiencies:
(I) The University does not have written policies and procedures for the concession, bookstore, and plant operations inventories.
(2) The method used for physical inventory counts for the bookstore inventory and plant operations inventory at fiscal year end were ineffective and therefore could not be relied upon.
These deficiencies are a result of management's failure to have written policies and procedures and to ensure inventories are properly maintained. The University should develop and implement procedures to ensure that inventories are properly maintained and that physical inventory counts are performed in a reliable manner.
Manaf:ement Response
The University concurs with this recommendation. On February 20 and 24, 1997, the University developed and implemented written policies and procedures to ensure that inventories are properly maintained for the concession, bookstore, and Plant Operations inventories. A copy of the written procedures are incorporated in the University's Business Operating Procedures Manual.
F - 174

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

SAVANNAH STATE UNIVERSITY CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT General Ledger Not Supported by Subsidiary Records Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 548-96-06

A review of the subsidiary equipment inventory records as of June 30, 1996, revealed that an unidentified variance of $364,089.76 existed between the subsidiary equipment inventory records and the general ledger. The University was unable to provide a reconciliation to account for the variance.

This variance was a result of management's failure to properly record inventory transactions on the subsidiary records and their failure to reconcile the subsidiary equipment inventory records to the general ledger. The University should implement procedures to ensure that the subsidiary equipment inventory records are reconciled to the general ledger accounting records.

Mana~ement Response

The University concurs with the recommendation. The Director of Business Services is responsible for preparing a monthly reconciliation of the equipment inventory records to the general ledger accounting records. The Director will work very closely with the Director of Financial Services to ensure that capitalized expenditures are not overstated or duplicated.

The equipment reconciliation will be reviewed and approved by the Vice President for Business and Finance monthly.

FEDERAL FINANCIAL REPORTS Federal Cash Transactions Report Not Reconciled to Accounting Records Pell Grant Program [CFDA 84.063] Federal Financial Assistance Audit Control Number 548-96-07

For the year under review, our examination of the University's Federal financial reports disclosed that the expenditures reported through June 30, 1996, on the Federal Cash Transactions Report (Form PMS 272-A) were not in agreement with the accounting records as indicated below:

Grant Program

Expenditures Per
Report (PMS 272-A)

Expenditures Per
Accounting Records

Difference

Pell FY96

$3,272,759.44

$3,495,774.64

$ -223,015.20

The $223,015.20 difference for the FY 96 Pell Grant Program was the result of management's failure to reconcile reports to the U. S. Department of Education with the accounting records.

The University should implement procedures to ensure that reported expenditures are reconciled to the University's formal accounting records. The University should contact the Federal grantor agency regarding resolution of the unreconciled difference.

F - 175

0/ State georgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 3D, 1996
SAVANNAH STATE UNIVERSITY CURRENT YEAR
Mana~ement Response The University concurs with this recommendation. The University has implemented procedures to ensure that reported expenditures are reconciled to the University's formal accounting records. The Accounting Clerk is responsible for reconciling the Pell Grant expenditures recorded on the general ledger to the PMS272-A Expenditure Report. The report will be reviewed and approved by the Director of Contracts and Grants before the report is fprwarded to the Department of Education.
F - 176

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
SOUTHERN COLLEGE OF TECHNOLOGY
CURRENT YEAR
FUND EQUITIES - Financial Statements ADMINISTRAT1VE REQUIREMENTS - Federal Financial Assistance Deficit Fund Balance Pell Grant Program [CFDA 84.063] Audit Control Number 550-96-01
Our review ofPell Grant Program receivables at June 30, 1996, revealed that the College had improperly recorded receivables of $15,471.40. An adjusting entry was made to correct the receivables which resulted in a deficit of $15,471.40 in the fiscal year 1995 Pel! Grant Program. This deficit fund balance is the result of Pel! Grant awards being made to students without submitting award information and receiving award approval through the Student Payment Summary Report process. The College should contact the Board of Regents and the grantor agency regarding funding of this Pel! Grant Program deficit.
Mana~ement Response
We concur with this finding and recommendation. In February, 1997, the University's Internal Auditor performed an independent review of the "Federal Pel! Grant Program Student Payment Summary" report submitted to the U. S. Department of Education (USDOE) for the 1994-1995 program year. This review compared the detail of payments made by the USDOE to the disbursements made by the University on a student-by-student basis. Differences were noted on fifty-three students which supports the $15,471.40 receivable identified by the State Auditor. Based on information in the student's file, we believe that these awards identified were proper and are submitting our review to the USDOE for reimbursement of the receivable.
REVENUE/RECE1VABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Financial Statements Audit Control Number 550-96-02
An examination of student accounts receivable at June 30, 1996, revealed that $38,683.00 were not supported by approved financial aid. This condition occurred because of management's failure to obtain approved documentation to support financial 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 documentation of financial 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 financial aid. It is recommended that legal means be used to collect all accounts receivable, if necessary.
Mana~ement Response
We concur with this recommendation and intend to pursue all legal means available to insure that all balances are collected or students are denied further access to the University. Further, the University will insure that a guarantee of aid exists and that an award letter is issued before deferring fees. In any event, unauthorized fees deferrals will not recur.
F - 177

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

VALDOSTA STATE UNIVERSITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

551-95-0 I 551-95-02 551-95-03 551-95-04 551-95-05 551-95-06 551-95-07 551-95-08 551-95-09 551-95-10 551-95-11

Finding Deleted See Audit Control Number 551-96-03 Corrective Action Implemented See Audit Control Number 551-96-01 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See Audit Control Number 551-96-04 Finding Deleted See Audit Control Number 551-96-02 No Corrective Action Implemented

Mana~ement Response

Audit Control Number 551-95-11

We agree with your recommendation. Procedures are currently in place to ensure the proper calculation of refunds.

PRIOR YEAR

AUDIT DISTRIBUTION/RESOLUTION Inadequate Accounting Procedures Financial Statements Audit Control Number 551-96-01

The audit report for the year ended June 30, 1995, noted that the accounting procedures of Valdosta State University were found to be inadequate in several areas. For the year under review, the University implemented procedures to improve the quality of the accounting records. However, an examination of Restricted Fund accounts receivable at June 30, 1996 revealed $65,786.06 that remained unsupported by appropriate documentation.

The University should review these unsupported accounts receivable to determine their validity and take appropriate action to resolve these accounts.

Management Response

We agree with your recommendation. We will continue our review ofthese accounts receivable and will fund any accounts not supported by appropriate documentation.

F - 178

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
VALDOSTA STATE UNIVERSITY
PRIOR YEAR
AUDIT DISTRIBUTION/RESOLUTION Disbursement in Excess of Need Federal Financial Assistance Federal Family Education Loans [CFDA 84.032] Questioned Cost $729.60 Audit Control Number 551-96-02
The audit report for the year ended June 30, 1995, disclosed that one student was disbursed a total of $729.60 in Federal Family Education Loans in excess of the eligible award. During the year under review, a refund of $729.60 was requested from the student but had not been received as of the date of this audit.
Reimbursement of $729.60 should be secured and deposited into the University's operating account.
Mana~ement Response
We agree with your recommendation. We have formally requested repayment from this individual and have received no reimbursement as of this date.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 55 1-96-03
The audit report for the year ended June 30, 1995, disclosed that Valdosta State University did not provide for adequate separation of duties in the performance of accounting functions and related procedures pertaining to the control category Expenditures/Liabilities/Disbursements. For the year under review, our audit noted no improvement regarding adequate separation of employee duties for the control category Expenditures/Liabilities/Disbursements. 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 A~encies A{fected:
National Aeronautics and Space Administration National Science Foundation U. S. Department of Education U. S. Department of Energy U. S. Department of Health and Human Services U. S. Department of State
F - 179

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

VALDOSTA STATE UNIVERSITY PRIOR YEAR/CURRENT YEAR

Manafiement Response

We agree with your recommendation. We have reassigned duties to achieve compliance in the segregation of duties.

ELIGIBILITY Deficiencies in Awarding/Disbursing Student Financial Aid Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Cost $167.00/$267.00 Audit Control Number 551-96-04

The audit report for the year ended June 30, 1995, disclosed deficiencies in the University's compliance with Federal requirements relative to awarding and disbursing student financial aid. The following deficiencies continued to exist during the year under review:

(1)

The prior year report noted that one student received student financial aid in excess of her eligible

award, which resulted in an overpayment of$167.00 from the Pell Grant Program. This overpayment

was not resolved during the year.

(2)

The prior year report noted that one student did not receive all the student financial aid for which she

was eligible, which resulted in an underpayment of $67.00 of Pell Grant Program funds. This

underpayment was not resolved during the year under review.

For the year under review, an examination of fifty students receiving Pell Grants revealed that one transfer student was not disbursed student financial aid in accordance with her eligible award, which resulted in an underpayment of$200.00. 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 the University mistakenly relying on incorrect calculations received from another institution instead of the U. S. Department of Education's schedules.

The University should establish procedures to ensure that financial 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.

Manafiement Response

(1)

We agree with your recommendation. We have delivered a letter requesting repayment to the student.

(2)

We agree with your recommendation. Appropriate award letters will be issued as soon as the Pell Program authorizes

this institution to do so. We continually struggle with the challenge of incorrect data reported to the Pell Program by

other institutions which conflict with data submitted by our institution. The new NSLDS database will assist in

alleviating this problem.

F - 180

0/ State (feorg-ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
VALDOSTA STATE UNIVERSITY CURRENT YEAR
SPECIAL REPORTING Failure to Submit Institutional Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 551-96-05 Special reporting requirements of the Pell Grant Program (84.063) for Valdosta State University included submission of the Institutional Payment Summary (IPS) report to the U. S. Department of Education during six periods for the year under review. Valdosta State University failed to submit a report for the period December 16, 1995 through February 15, 1996. This deficiency occurred as a result of managements failure to ensure that reports were submitted for the required reporting periods.
The University should implement procedures to ensure that all IPS reports are submitted on a timely basis.
Mana~ement Response We agree with this recommendation. We did submit a report on November 30, 1995. Virtually no activity occurred between this submission and the Winter Quarter disbursement to students in late January (which was included in our next submission). Since schools are now required to report payments within thirty days we are sending in reports on a monthly basis. SPECIAL TESTS AND PROVISIONS Failure to Delay Loan Proceeds Federal Financial Assistance Federal Direct Student Loans [CFDA 84.268] Audit Control Number 551-96-06 For the year under review, our examination revealed four instances in which the University did not delay the disbursement of funds to first-year, 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 inadequate procedures to monitor disbursements. The University should implement the necessary procedures to ensure that distributions of loan proceeds are in accordance with the Federal Student Financial Aid Handbook.
Mana~ement Response We agree with this 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.
F - 181

Stale of (feorCJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
VALDOSTA STATE UNIVERSITY
CURRENT YEAR
SPECIAL TESTS AND PROVISIONS Disbursement in Excess of Cost of Attendance Federal Financial Assistance Federal Direct Student Loan Program [CFDA 84.268] Questioned Cost: $1,765.00 Audit Control Number 551-96-07
For the year under review, an examination of the financial aid records of fifty students receiving Federal Direct Student Loans revealed that two students were awarded and disbursed $1,765.00 in Stafford Loans in excess of the student's estimated cost of attendance. Federal Regulations (34 CFR 682.204) state that in no case maya Stafford Loan exceed the student's estimated cost of attendance for the period of enrollment for which the loan is intended. These overpayments occurred due to the University miscalculating the cost of attendance for the students based on four quarters of attendance instead of actual attendance of three quarters during the academic year.
Procedures should be implemented by the University to ensure that students are not disbursed fmancial aid in excess of their cost of attendance. The University should contact the U. S. Department of Education regarding the resolution of these questioned costs.
ManafJement Response
We agree with this recommendation. We do not agree with this finding. These are not overpayments. On the respective loan applications the students indicated they wanted a loan for four quarters. We adjusted their pattern of attendance and loan amounts based on these indications.
It is not considered an overpayment and no adjustment is necessary nor possible if a student indicated intentions to attend two or more quarters during the year and does not follow through with these intentions. It is impossible to predict the future actions of students so we must base our awards on student reported data. The awards were based upon the student's intentions but disbursement did not take place unless the student was in attendance for that quarter. The aid was disbursed accurately.
SPECIAL TESTS AND PROVISIONS Exit Counseling Not Conducted Federal Financial Assistance Federal Direct Student Loans [CFDA 84.268] Audit Control Number 551-96-08
For the year under review, an examination of fifty loan recipients identified four loan recipients who should have received exit counseling. For two of the four loan recipients, no documentation was available to verify that the required exit counseling had been conducted. Federal Regulations (34 CFR 682.604) require institutions to conduct and maintain documentation of exit counseling. This condition occurred due to a lack of exit counseling forms maintained by the University.
The University should ensure that all students requiring exit counseling are properly identified and that exit counseling is conducted and documented as required by Federal regulations.
Manaf:ement Response
We agree with your recommendation. Exit counseling materials for the Direct Loan Program are furnished by the U.S. Department of Education. We were unable to replenish our supply until December 1996 and are in the process of completing exit loan information packets to all students who are no longer in attendance.
F - 182

0/ State (Jeorfl.ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. J996

STATE UNIVERSITY OF WEST GEORGIA STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995 is summarized below:

Audit Control Number

Status of Finding

554-95-01 554-95-02

Corrective Action Implemented Corrective Action Implemented

F - 183

0/ State (feorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, J996

ATLANTA METROPOLITAN COLLEGE STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the review report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

561-95-01 561-95-02

See Audit Control Number 561-96-01 See Audit Control Number 561-96-02

PRIOR YEAR/CURRENT YEAR

FUND EQUITIES - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Deficit Fund Balance Pell Grant Program [CFDA 84.063] Audit Control Number 561-96-01

The review report for the year ended June 30, 1995, noted that the College had a deficit of $30,436.00 in the fiscal year 1994 Pell Grant Program. This deficit balance increased to $34,363.31 at June 30, 1996, as a result of adjustments by the College. This condition was the result of the College incurring Pell Grant expenditures in excess of the approved grant award.

The College should take appropriate action to secure funding for the fiscal year 1994 Pell Grant Program deficit of$34,363.31.

A1ana~ementResponse

We concur with this fmding. The College has contacted the U.S. Department of Education in an effort to fund this Fiscal Year 1994 Pell Grant Program deficit by having the authorized amount for the Fiscal Year 1994 Pell Grant Program increased by $34,363.31. We explored all options available to us in this regard without success.

The College has also contacted the Board of Regents regarding the funding of this deficit and will continue to explore all reasonable options available to the College to fund this deficit.

FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 561-96-02

The review report for the year ended June 30, 1995, noted that the Student Payment Summary (S.P.S.) report for the U. S. Department of Education indicated that the College incurred $1,204,864.00 in fiscal year 1995 Pell Grant Program expenditures. However, the College actually incurred a total of $1 ,316,368.20 in Pell Grant Program expenditures. For the year under review, the College obtained an upward adjustment of$40,845.00 from the U. S. Department of Education after certifying the validity of these payments. An unfunded balance of $64,595.20 for the Pell Grant Program remained at June 30, 1996, after various adjustments by the College.

The College should take appropriate action to secure funding for the fiscal year 1995 Pell Grant Program deficit of$64,595.20.

F - 184

0/ State (leorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
ATLANTA METROPOLITAN COLLEGE PRIOR YEAR/CURRENT YEAR
Management ResJlonse We concur with this fmding. The College has contacted the U.S. Department of Education in an effort to fund this Fiscal Year 1995 Pell Grant Program deficit by having the authorized amount for the Fiscal Year 1995 Pell Grant Program increased by $64,595.20. We explored all options available to us in this regard without success. The College has also contacted the Board of Regents regarding the funding of this deficit and will continue to explore all reasonable options available to the College to fund this deficit.
CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Accounting Records Financial Statements Audit Control Number 561-96-03 For the year under review, the accounting procedures of the College were insufficient to provide for adequate internal control over the bank reconciliation process. The following deficiencies were noted:
(1) The monthly bank reconciliations for the operating account were not performed in a timely marmer. (2) Book errors disclosed through the bank reconciliation process were carried as reconciling items for
extended periods of time. These deficiencies were the result of management's failure to implement the 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 required adjustments are recorded on a timely basis. Management ResJlonse We concur with this fmding. Internal controls and procedures have been developed to ensure that bank statements are reconciled with the accounting records monthly and that required adjustments are recorded on a timely basis. The absence of the Director of Accounting Services for an extended period of time was the primary cause of the problem noted in the findings; therefore, in December 1996, the College began to utilize the services of a temporary staffing agency for bank reconciliation work. By January 1997, all bank statements received to date had been reconciled with the accounting records, and appropriate adjustment made. Since that date bank reconciliations have been performed on a monthly basis and the required adjustments recorded on a timely basis.
F - 185

State of(feorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
ATLANTA METROPOLITAN COLLEGE
CURRENT YEAR
FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 561-96-04
For the year under review, the Student Payment Summary (S.P.S.) report for the U. S. Department of Education indicated that the College incurred $1,295,672.00 in Federal Pell Grant Program expenditures. This amount represented the College's authorized amount of the Federal Pell Grant award for the fiscal year 1996 Pell Grant Program. However, the College actually incurred a total of$I,407,432.14 in Pell Grant Program expenditures or $111,760.14 in excess ofthe authorized amount. In order to be reimbursed for the excess Pell Grant expenditures, the College in conformity with Federal statutes, must certify the validity ofthese payments to the U. S. Department of Education. The Federal agency can then institute an upward adjustment of the fiscal year 1996 authorized amount in order to make the funds available to the College.
Mana~ement Response
We concur with this fmding. On February 25, 1997, the College mailed to the U.S. Department of Education, Audit Resolution Branch documents which certified the validity ofthe $111,760.14 in Pell Grant expenditures which were made to eligible students in excess of the authorized amount of $1 ,295,672.00. When the U.S. Department of Education receives the State of Georgia Single Audit Report, we expect that the fiscal year 1996 authorized amount will be increased to the level of our total expenditures.
SPECIAL TESTS AND PROVISIONS Overpayments to Federal Financial Aid Recipients Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Costs: $1,050.00 Audit Control Number 561-96-05
For the year under review, an examination of records oftwenty-five students who received Pell Grants revealed that three students were overpaid a total of$I,050.00 as a result of changes in their enrollment status. Federal regulations (34 CFR690.80) state that if the student's enrollment status changes from one academic term to another term within the same award year, the institution shall recalculate the Pell Grant award for the new payment period. These questioned costs occurred because the College failed to recalculate the student awards after the students dropped classes during the drop/add period.
The College should establish procedures to ensure that fmancial aid awards are calculated in accordance with appropriate Federal regulations. Reimbursement of$I,050.00 should be secured for refund to the Pell Grant Program.
Mana~ementResponse
We do not concur with this fmding. Initially we concurred with the fmding as stated, that three students had been overpaid a total of $1,050.00 as a result of changes in their enrollment status. After more extensive investigation, it has been revealed that during the terms in question, these students' enrollment status did not change from their initial enrollment.
F186

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
ATLANTA METROPOLITAN COLLEGE CURRENT YEAR
Student Number One We concur with the amount of overpayment ($282.00) for student number one during the Fall Quarter 1995. However, the overpayment was not the result of a change in enrollment status as stated in the finding, but due to an administrative miscalculation made by the Financial Aid Office. We, however, do not concur with the overpayment ($332.00) for student number one during Winter Quarter 1996. The auditor based his finding with the understanding that this student was enrolled for five (5) credit hours. Our review of the student's academic record shows that he was enrolled for fifteen (15) hours and received the correct award amount.
Student Number Two We do not concur with the overpayment ($158.00) for student number two during Winter Quarter 1996. The auditor based his finding with the understanding that this student was enrolled for five (5) credit hours. Our review of the student's academic record shows that she was enrolled for fifteen (15) hours and received the correct award amount.
Student Number Three We concur with the overpayment ($150.00) for student number three during Fall Quarter 1995. However, the overpayment was not the result of a change in enrollment status, but due to an administrative miscalculation made by the Financial Aid Office. We, however, do not concur with the overpayment ($132.00) for student number three during Winter Quarter 1996. The auditor based his fmding with the understanding that this student was enrolled for ten (10) hours. Our review ofthe student's academic record shows that she was enrolled for twelve (12) credit hours and received the correct amount. The College has started the process of securing Pell Grant Program refunds from the two students who received overpayments totaling $564.00. Each student will be notified by certified mail of his or her obligation to the Pell Grant Program. These students will not have access to their academic records (transcripts, etc.) until their fmancial obligation to the Pell Grant Program has been paid.
F187

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
FLOYD COLLEGE CURRENT YEAR
FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 573-96-01
For the year under review, the Student Payment Summary (SPS) report to the U. S. Department of Education indicated that the College incurred $ I, I73,872.00 in Federal Pell Grant Program expenditures. This amount represented the College's authorized amount of the Federal Pell Grant award for fiscal year 1996. However, the College's accounting records reflected $1,183,690.00 in fiscal year 1996 Pell Grant program expenditures or $9,818.00 in excess of the authorized amount. In order to be reimbursed for the excess Pell Grant program 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 provide appropriate adjustments of the fiscal year 1996 authorized amount in order to make the funds available to the College.
ManafJement Response
The college is reviewing and double checking the Student Payment Summary (SPS) report submitted to the U.S. Department of Education. Also, the College is verifying the accounting records to assure accuracy ofPell disbursements in the proper fiscal year dealing with Summer Quarter 1995. Once the excess Pell Grant expenditures have been certified, the Federal agency will be notified to adjust the fiscal year 1996 authorized amount so funds will be made available to the College. SPECIAL REPORTING Institution Payment Summary Report Not Submitted Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 573-96-02
The College failed to submit the Institutional Payment Summary (IPS) report to the U. S. Department of Education for the report period June 16, 1996 through August 15, 1996, as required by regulations set forth in The Blue Book. Management claims that this condition was the result of an oversight by the Financial Aid office. The College should implement procedures to ensure that all IPS reports are submitted in accordance with Federal reporting requirements.
ManafJement Response
The College concurs with this fmding. Due to a change in key personnel, the submittal of the Institutional Payment Summary (IPS) report to the U.S. Department of Education for the report period June 16, 1996 through August 15, 1996 was overlooked. Changes and procedures have been instituted to prevent this from reoccurring.
F188

0/ State (}eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MACON 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, 1995, is summarized below:

Audit Control Number

Status of Finding

581-92-01 581-95-01 581-95-02 581-95-03 581-95-04 581-95-05 581-95-06

No Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See Audit Control Number 581-96-02 See Audit Control Number 581-96-01 Corrective Action Implemented See Audit Control Number 581-96-03

Management Response

Audit Control Number 581-92-01

Macon College has initiated action to liquidate the fund assets and transfer the loan balance to the U.S. Department of Education. We have finally received a positive response to our numerous inquires and anticipate that the final liquidation will occur this summer.

PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 581-96-01

The review report for the year ended June 30, 1995, reported that the College's accounting procedures were insufficient to provide for adequate internal control over the bank reconciliation process. For the year under review, the College's accounting procedures continued to be insufficient. The following deficiencies were noted:

(1) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.

(2) The monthly bank statements for the payroll account and operating account were not reconciled to the general ledger resulting in unidentified variances of $3,302.41 and $3,341.75, respectively, 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.

F189

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
MACON COLLEGE
PRIOR YEAR/CURRENT YEAR
Mana~ement Response
Macon College has strengthened and will continue to strengthen our internal controls. To address the current concerns we have taken the following steps:
General Operating Account - At year end this account showed $3,341.75 more on the Bank Balance than was reflected in the General Ledger Cash account. To prevent future deficiencies we are now utilizing SunTrust's NETS program. This program will provide us with timely information concerning any electronic fund transfer that is posted to our account. Evidence now exists that "paper" notification cannot be depended upon.
Payroll Account - At year end this account showed $3,302.41 less on the Bank Balance than was reflected in the General Ledger Cash account. To resolve this problem we have contacted the System Payroll Support Office, in Athens, to assist in determining what is creating the differences we are fmding between the Payroll Account Transfer and the Monthly Payroll document JPAY58.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 581-96-02
The review report for the year ended June 30, 1995, 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 of28 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) One item selected to be traced to its location was found to have been listed twice on the inventory.
(2) The College did perform a reconciliation of the subsidiary equipment records to the accounting control records. However, an entry was made to the accounting control records for $242,217.60 in order to balance to the subsidiary equipment records. This entry could not be documented except as an attempt to balance the subsidiary records to the accounting records.
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.
Mana~ement Response
Macon College has spent exhaustive hours rebuilding our inventory records and inventory procedures. These efforts have resulted in the necessary action of recording negative accounting entries to balance our subsidiary records to the accounting records.
We now believe that our internal controls have been strengthened enough to ensure that the college's assets are properly safeguarded.
F - 190

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MACON COLLEGE PRIOR YEAR/CURRENT YEAR

SPECIAL REPORTING Report Not Reconciled to Accounting Records Federal Financial Assistance Audit Control Number 581-96-03

The review report for the year ended June 30, 1995, disclosed that expenditures reported on the Fiscal Operations and Application to Participate (FISAP) Report submitted by Macon College to the U. S. Department of Education on October 1, 1994 did not reconcile with the accounting records. For the year under review, the FISAP Report submitted October 1, 1995, was reviewed and this report again did not reconcile with the accounting records as indicated below:

FISAP Report Item

FISAP Report

Accounting Records

Difference

PELL GRANT PROGRAM (CFDA 84.063) Expenditures

$ 1,619,566.00

$ 1,619,702.55 $ -136.55

PERKINS LOAN PROGRAM (CFDA 84.038) Cash on Hand Defaulted Loan Principal Assigned to U. S. Government Federal Capital Contributions Canceled Cost-Principal and Interest Other Costs

$

944.00

$ 17,505.00 $ 82,206.00

$ 1,171.00

$

66.00

$

885.81

$ 17,508.95 $ 82,026.00

$ 1,052.82

$

68.34

$ 58.19
$ -3.95 $ 180.00
$ 118.18 $ -2.34

SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT (CFDA 84.007)
Administrative Cost Allowance Funds to Recipients

$

120.00

$ 86,941.00

$

0.00

$ 87,061.00

$ 120.00 $ -120.00

FEDERAL WORK STUDY PROGRAM (CFDA 84.033) Expenditures

$ 57,774.00

$ 61,660.00 $ -3,886.00

Federal Regulations require the College to ensure that information reported is accurate and reconciled to the accounting records. These differences between the accounting records and the FISAP Report were not reconciled. The College should ensure that all data reported on the FISAP is reconciled with its formal accounting records prior to submission to the U. S. Department of Education.

Mana~ement Response

Macon College has implemented a new AccountinglFinancial Aid/Student Records software program (BANNER), which enables us to reconcile federal funds accounts in a more accurate and timely fashion. This software program will provide an increased flexibility in reconciling Accounting/Financial Aid expenditures on a quarterly and/or monthly basis.

F -191

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
MACON COLLEGE
CURRENT YEAR
CASH MANAGEMENT Excessive Cash Balance Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 581-96-04
A review of cash management procedures for the Pell Grant Program disclosed that the College made a cash draw in excess of immediate need. Macon College used the ACH/EFT method to drawdown funds which are maintained in a EDPMS Cash Control account in Agency funds. 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. The excessive cash balance at June 30, 1996 of $34,305.20 was the result of an oversight in requesting more funds than needed for federal expenditure reimbursement.
Procedures should be implemented by the College to ensure that requests for cash draws do not exceed the immediate need.
Afana~ementResponse
Macon College's Federal cash balance reflected an excessive requirement due to an account number error in our new computer system, BANNER. This error has been identified and corrected in the BANNER System and with the Department of Education.
TYPES OF SERVICES/ALLOWED OR UNALLOWED Awards Not Based on Correct Enrollment Status Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Cost: $1,119.00 Audit Control Number 581-96-05
For the year under review, an examination of twenty-five student fmancial aid files of students receiving Pell Grants identified two instances where the student's award was not adjusted based on a change in enrollment status. These students originally registered for classes then either never attended a class or formally dropped classes before the third day of the quarter. In order to determine whether these were isolated instances or a weakness in the College's procedures, an additional four student fmancial aid files were selected based on the noted problem criteria. Ofthose four students it was noted that no adjustment of the students' award was made for two of the students when they reduced their hours from originally registered for classes.
These questioned costs resulted from management's failure to adjust awards when a student reduced their hours before the third day of the quarter. Procedures should be implemented to ensure that student awards are based on their correct enrollment status.
Afana~ement Response
Macon College has implemented a new relational database (BANNER), which enables us to closely monitor all reductions in course loads and/or withdrawals as they happen. Given this new system we are able to make the appropriate recalculations to awards in a timely manner as compared to the past system.
F - 192

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1996
MACON COLLEGE CURRENT YEAR
SPECIAL TESTS AND PROVISIONS Refund not Credited in a Timely Manner Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 581-96-06 F,or the year under review, an examination of the College's refund procedures disclosed that a refund of institutional costs paid from the Pell Grant Program was not credited within 30 days as required by Federal regulation (34CFR668.22). This noncompliance was the result of an oversight of the accounting office. The College should ensure that refunds of institutional costs paid from Federal student fmancial aid funds are credited to Federal accounts within required time frames. Mana~ement Response Macon College has implemented a new AccountinglFinancial Aid/Student Records software program (BANNER), which enables us to track all refunds on a weekly basis, and return those funds to their federal accounts.
F - 193

0/ State (/eorffia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

MIDDLE GEORGIA 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, 1995, is summarized below:

Audit Control Number

Status of Finding

584-91-006 584-95-01 584-95-02 584-95-03 584-95-04

No Corrective Action Implemented See Audit Control Number 584-96-01 Corrective Action Implemented Corrective Action Implemented Finding Deleted

Mana~ement Response

Audit Control Number 584-91-006

We concur with this recommendation. This was a minor exception in the financial 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

REVENUEIRECEIVABLESIRECEIPTS Student Accounts Receivables Not Supported by Financial Aid Financial Statements Audit Control Number 584-96-01

The review report for the year ended June 30, 1995, reported that Middle Georgia College had $19,600.32 in student accounts receivable which were not supported by approved financial aid. On June 30, 1996, the balance had increased to $39,273.54 in student accounts receivable which were not supported by approved financial 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. 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 financial 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. Part of the identified fmding is a continuing exception. About half of these accounts are several years old with the likelihood of collection becoming more and more remote. However, the significant increase in receivables for FY 96 was due to failure of the college to secure completed promissory notes from students. Middle Georgia College is now requiring the completion of the promissory note prior to deferral of fees.

F -194

State of (feorfJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996

MIDDLE GEORGIA COLLEGE CURRENT YEAR

FEDERAL FINANCIAL REPORTS Reports Not Reconciled to Accounting Records Federal Financial Assistance Supplemental Educational Opportunity Grant [CFDA 84.007] Federal Work Study Program [CFDA 84.033] Audit Control Number 584-96-02

For the year under review, amounts reported on the Fiscal Operations and Application to Participate (FISAP) Report submitted by Middle Georgia College to the U. S. Department of Education on September 29, 1995, did not reconcile with the accounting records as indicated below:

FISAP Report Item

FISAP Report

Accounting Records

Difference

SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT (CFDA 84.007)

Total Funds to Recipients Non-Federal Share to Recipients Federal Share to Recipients Administrative Cost Allowance

$ 86,787.00 $ 23,580.00 $ 63,207.00 $ 3,689.00

$ 85,699.00 $ 21,424.75 $ 64,274.25 $ 4,284.93

$ 1,088.00 $ 2,155.25 $ -1,067.25 $ -595.93

FEDERAL WORK STUDY PROGRAM (CFDA 84.033)

Institutional Share of Eamed Compensation Federal Share ofEamed Compensation Administrative Cost Allowance

$ 11,996.00 $ 62,108.00 $ 4,356.00

$ 18,664.80 $ 56,000.34 $ 3,636.98

$ -6,668.80 $ 6,107.66 $ 719.02

Federal regulations (34CFR 674.19 and 675.19) require the College to ensure that fmancial information reported is accurate and reconciled to the accounting records.

The differences between the accounting records and the FISAP 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.

Manartement Response

We concur with this recommendation. The Financial Aid Office and the Business Office are working together to reconcile the differences. A detailed audit has determined the correct amount of SEOG Funds to recipients. A correction of the 1994-95 FISAP report is being made. Also, the Financial Aid Office has began the practice of reconciling SEOG and Pell Financial Aid Reports to the college accounting records on a monthly basis rather than quarterly, as done before.

F - 195

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

SOUTH GEORGIA 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, 1995, is summarized below:

Audit Control Number

Status of Finding

587-95-01 587-95-02

No Corrective Action Implemented See Audit Control Number 587-96-01

Manar:ement Response

Audit Control Number 587-95-01

South Georgia College submitted and implemented a corrective action plan to eliminate further occurances of the problem cited in this recommendation after the fiscal year 1994 audit. Subsequent audits have revealed no further problems, however, this recommendation involved a federal program and the college continues to await a response from the U.S. Department of Education.

PRIOR YEAR/CURRENT YEAR

FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Financial Statements Audit Control Number 587-96-01

The review reports for the years ended June 30, 1994 and June 30, 1995, noted that Auxiliary Enterprises, excluding Intercollegiate Athletics, had net deficit fund balances of$22,172.38 and $24,694.00, respectively. 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 finance its operations". As of June 30, 1996, the College had a net deficit fund balance in the Auxiliary Enterprises, excluding Intercollegiate Athletics, of$128,414.94. 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.

Manar:ement Response

We concur with this recommendation. The current operating position of Auxiliary Enterprises has been deteriorating as the residential student population decreased. Current operating deficits have been supported by prior years' reserves for these fiscal years. As can be seen in the. table below, we have reduced direct operating expense to a level almost equal to that of fiscal year 1993 when revenues were some $160,000 higher than fiscal year 1996. Indirect expenditures which include utilities, however, have been less controllable and continue to increase. We have elected to combine the operations of two dorms into one in order to reduce both direct and indirect expenses. In an effort to attract a larger residential population we have also elected to eliminate the mandatory meal plan requirement for dorm students beginning with Summer Quarter 1997.

F - 196

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996
SOUTH GEORGIA COLLEGE PRIOR YEAR/CURRENT YEAR

FY 96

FY 95

FY 94

FY 93

Dorm Occupancy

124

168

156

207

OPERAT1NG INCOME Sales and Service Less: Cost of Goods Sold

781,036.50 -283 152.16

899,990.66 921,426.04 942,842.27 -256717.49 -354766.56 -316528.84

GROSS OPERATING INCOME

497884.34 643273.17 566659.48 626313.43

OPERATING EXPENDITURES Direct Indirect

364,008.39 222 135.71

386,444.14 382,605.24 361,642.74 206883.48 200717.73 191407.89

TOTAL OPERATING EXPENDITURES

586144.10 593 327.62 583 322.97 553050.63

OPERATING INCOME/DEFICIT

-88,259.76

49,945.55 -16,663.49 73,262.80

Interest Income

II 881.51

9287.94

7 130.54 10000.00

NET INCOME/DEFICIT

-76.178.25

59233.49 -9532.95 83262.80

F - 197

0/ State (jeorlfj-ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA MILITARY 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, 1995 , is summarized below:

Audit Control Number

Status of Finding

590-95-01 590-95-02

See Audit Control Number 590-96-01 See Audit Control Number 590-96-02

PRIOR YEAR

FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 590-96-01
The audit report for the year ended June 30, 1993, noted that the College reported $747,859.00 in fiscal year 1993 Pell Grant expenditures on the Student Payment Summary report which was filed with the U. S. Department of Education. However, the College actually incurred a total of$802,135.00 in Pell Grant Program expenditures or $54,276.00 in excess of the authorized amount reflected on the SPS report.
During fiscal year 1994, the College initiated the appropriate steps in conformity with Federal statutes for obtaining approval from U. S. Department of Education to increase the fiscal year 1993 Pell Grant authorization by $54,276.00. During fiscal year 1996, the U. S. Department of Education (USDOE) approved the increase in the 1993 Pell grant award; however, USDOE subsequently rescinded this approval pending outcome of a program review. As of the date of this audit, this matter had not been resolved.
Mana~ement Response
We concur with this finding. All findings contained in the USDOE program review were resolved in April 1997. With this resolution, the Associate Vice President of Business Affairs will again request the USDOE to increase the level of Pell grant authorization for the fiscal year ending June 30, 1993. This request will be forwarded to USDOE no later than May 31, 1997.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies In Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 590-96-02
The audit reports for the years ended June 30, 1989 through June 30, 1995, 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. For the year under review, the College was unable to provide subsidiary fixed asset records or other historical cost evidence supporting the balances reported for general fixed assets.

F - 198

0/ State (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIA MILITARY COLLEGE
PRIOR YEAR/CURRENT YEAR
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 of land, 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~ement Response
We concur with the recommenJation regarding land and building, however, the College has subsidiary records that reflect equipment owned by the C:>lIege. These records include: 1) description; 2) date acquired; 3)acquisition cost; 4) estimated replacement cost; and 5) location. Equipment with value of$I,OOO 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. Also, a new inventory system will be put in place during Fiscal Year 1998 to replace the existing system.
Iffunds are available, the Vice President for Business Affairs will obtain outside, professional assistance during this year in an effort to address this recommendation.
CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 590-96-03
For 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 were not performed for the payroll account until after fiscal year end.
(2) The monthly bank statements were not reconciled with amounts recorded on the general ledger and included unidentified variances for every reconciliation. An unidentified variance of $2,707.97 remained at June 30, 1996.
These deficiencies were the result of management's failure to establish 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.
F - 199

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 3D, 1996

GEORGIA MILITARY COLLEGE CURRENT YEAR

Management Response

We concur with the finding and recommendation. The Controller established procedures that require a reconciliation between the general ledger, the payroll accounts, and the payroll reports provided by a third party payroll processor. The procedure will require that all voids against the "direct deposit" payroll account be reconciled monthly with the "check" payroll account into which the voids are credited. In addition, manual checks, not included in the current month reports provided by the processor, will be reconciled against the "check" payroll account. The "check" payroll account will then be reconciled against the general ledger monthly. These procedures have been instituted retroactive to January I, 1997.

REVENUE/RECEIVABLES/RECEIPTS Inadequate Controls Over Accounts Receivable Financial Statements Audit Control Number 590-96-04

For the year under review, audit tests revealed that Georgia Military College did not have adequate subsidiary records to support accounts receivable balances reported on the financial statements. The subsidiary records for accounts receivable were found to be incomplete and were not reconciled with the general ledger control account.

This condition occurred because management failed to provide procedures for balancing subsidiary records with the general ledger. Georgia Military College should establish controls to ensure that the accounts receivable reported in the financial statements are properly supported by subsidiary records.

Management Response

We concur with this finding and recommendation. Georgia Military College does have the necessary subsidiary records to support our accounts receivable balances as reported but those records do not exist within the current automated, accounting system - they exist as external, paper resources and are not easily reconciled to the general ledger. The Controller has established procedure to insure that the subsidiary records are reconciled to the accounts receivable shown in the general ledger on a periodic basis during the year.

The full implementation of our integrated financial and student system will facilitate this reconciliation. This implementation will be completed during Fiscal Year 1998.

REVENUE/RECEIVABLES/RECEI PTS Deficiencies in Collection of Tuition and Fees Financial Statements Audit Control Number 590-96-05

For the year under review, an examination of the procedures for collecting tuition and fees by Georgia Military College were found to be inadequate in several areas. The following deficiencies were noted:

(I)

Secondary school students may select from four repayment plan options, all of which require payment

in full by April 30th of each fiscal year. However, an unpaid balance of $8,035.62 remained due

from secondary school students at year end.

F - 200

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA MILITARY COLLEGE CURRENT YEAR

(2)

College students are required to pay tuition and fees during registration unless financial aid is

pending, In those situations the College requires that students sign a 30 day promissory note at the

beginning of each quarter until financial aid is received. However, students are not required to renew

these notes during the quarter after the initial 30 day period has expired. If financial aid is not

forthcoming, these notes have no standard repayment terms. An unpaid balance of $827,596. I 7

remained due from College students at year end.

As a result of these deficiencies, a total of $382,625.94 for student accounts receivable was written off as uncollectible. In addition, $280,000.00 reported as Allowance for Doubtful Accounts represents approximately 34% of outstanding student accounts receivable for Georgia Military College at year end.

Procedures should be strengthened by the College in regard to collecting student accounts receivable. 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.

Mana'l:ement Response

We concur with the findings and recommendations.

Secondary school student accounts are now reviewed monthly and letters are forwarded to the parents/guardians whose child(ren)'s accounts are in arrears. We do place all accounts in collection by the end of the school year if all balances are not paid. The balance cited for Fiscal Year 1996 represents slightly less than I% of all tuition and fees charged for that fiscal year and those delinquent accounts were placed in collection during May 1996.

A major portion of the cited $827,596.17 cited results from the past policy at one distant learning center of allowing the students to establish extended payment terms. That policy has been terminated and the location expects to have all old accounts either collected or placed in collections by June 30, 1997. Another major portion of the receivable is the result of another distant learning center's failure to collect full payment at the beginning of each term. That policy has now been changed and the center has been directed to follow the amended policy. During late Fiscal Year 1996 and continuing in Fiscal Year 1997, we have been more stringent in monitoring past due accounts and placing those accounts in collection. As a part of that program, we verify balances and notify former students with an overdue balance, by certified maiL that collection action will be initiated should they fail to pay their balance immediately.

The Vice President for Business Affairs has also recently established a program to review early in each term promissory notes. This review results in a demand to pay immediately as applicable and/or a letter detailing the necessary steps required to complete a students financial aid papers. Starting Spring quarter 1997, the Vice President for Business Affairs now bars students from enrollment if they have failed to meet their financial responsibilities or obtain the financial aid indicated as stated with in the promissory note.

I - 2IJ!

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
GEORGIA MILITARY COLLEGE CURRENT YEAR
FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pel1 Grant Program [CFDA 84.063] Audit Control Number 590-96-06 For the year under review, the Student Payment Summary (SPS) report for the U. S. Department of Education reflected that the Col1ege made $1,106,384.00 in Federal Pel1 Grant Program expenditures. This amount represented the Col1ege's authorized amount for the Pel1 Grant award for fiscal year 1996. However, the Col1ege actual1y incurred a total of$1,147,397.00 in 1996 Pel1 Grant Program expenditures or $41,013.00 in excess of the authorized amount. In the subsequent fiscal year, the Col1ege was reimbursed for the total Pel1 Grant Program expenditures of $1,147,397.00; however, the Pel1 Grant authorization was not increased and remains at $1,106,384.00. The U. S. Department of Education should review this matter to determine the proper amount of authorization and funding for which Georgia Military College is eligible.
ManafJement Response
We concur with this finding and recommendation. The Associate Vice President for Business Affairs is currently preparing a submission to the USDOE requesting that our Fiscal Year 1996 Pel1 Grant authorization be increased by $41,013.00. Prior to submission the Georgia Department of Audits will verify our request. This request should be completed by May 31, 1997 and submitted to USDOE by June 30, 1997.
F -202

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

SKlDAWAY INSTITUTE OF OCEANOGRAPHY 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, 1995, is summarized below:

Audit Control Number

Status of Finding

593-95-01

See Audit Control Number 593-96-0 I

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 593-96-01

The review report for the year ended June 30, 1995, 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) Expenditures/Liabilities/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~encies Affected:

National Science Foundation U. S. Department of Commerce U. S. Department of Energy U. S. Department of Navy U. S. Environmental Protection Agency

Mana~ement Response

This is the same continuing problem related to the scale of our operation that has produced this finding for several years. Skidaway Institute is a very small operation (60 employees) with a total fiscal affairs staff of three. This size staff makes 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.
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.
I remain open to workable suggestions for improvement in separation of duties and will continue to make improvements where possible.

F -203

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For lhe Fiscal Year Ended June 30, 1996

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, 1995, is summarized below:

Audit Control Number

Status of Finding

818-95-01 818-95-02

Corrective Action Implemented See Audit Control Number 818-96-01

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 818-96-01

The review report for the year ended June 30, 1995, noted that equipment additions to the Institute's general fixed assets were not reconciled to the general ledger expenditure accounts in a timely manner. In the year under review, no improvement in this deficiency was evident. Current year equipment purchases of $259,157.47 were not recorded on the subsidiary equipment inventory records as of June 30, 1996.

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.

Manaf:emenl Response

Okefenokee Technical Institute concurs with this finding. During Fiscal Year 1996, our staff continually utilized the "PROPS/FACS Reference Number Exception Report #8150," which compares the Property records with our Accounting records, and the "Reference Numbers Paid in FACS Report #8140" to keep abreast of equipment that needed to be put on our Equipment records. These two reports were utilized as our reconciliation between general fixed assets and the general ledger, and we strove to add equipment to our Property records as soon as possible after payment. However, during FY 96, Okefenokee Technical Institute was involved in a $2.7 million expansion of its facilities, also adding new programs. Additionally, staff turnover for the Equipment Inventory responsibility and the related training time increased the difficulty in assuring timely additions to the Property records.

As stated in the prior audit, although our process was not an actual "Property Reconciliation" in the style prescribed in the "Reconciliation of Purchases to Additions To Equipment Inventory" form which requires utilizing the Report 8140 mentioned above and the "Transaction History File Report #8113," which indicates the changes that have been made to the Property records, our procedures enabled us to at all times know what equipment items still needed to be added to inventory. We acknowledged that a large portion of paid equipment items were not placed on our Property records by year ended; however, we knew which items these consisted of and proceeded to add the bulk of these equipment items to our Property records soon after the year ended. They were all on the Property records by October 1, 1996.

We continue to utilize the available PROPS/FACS reports and are updating our property records on a more timely basis this year. now that our expansion is complete and our staff is once again stable. We will also complete the "Reconciliation of Purchases To Additions To Equipment Inventory" form for audit purposes to show that we are reconciled for Fiscal Year 1997, in accordance with the State Property System Manual.

F - 2().:j

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

WEST 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, 1995, is summarized below:

Audit Control Number

Status of Finding

819-95-01 819-95-02

See Audit Control Number 819-96-0 I See Audit Control Number 819-96-02

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 819-96-0 I

The report for the year ended June 30, 1995, 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/Liabilities/Disbursements control category. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. 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 financial 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 categories, and implement those procedures to strengthen the internal controls over the accounting functions.

Federal Grantor Ai:encies Afftcted:

U. S. Department of Agriculture U. S. Department of Education U. S. Department of Health and Human Services U. S. Department of Labor

Manai:ement Response

We are continually improving our procedures to further satisfy the separation of duties requirement. Plans for further separation of duties and improved procedures are being developed. By the end of the current fiscal year, complete resolution of this finding will be obtained.

r - 205

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
WEST GEORGIA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 819-96-02
The review report for the year ended June 30, 1995, reported that West Georgia Technical Institute made cash draws in advance of immediate cash needs for the PeU Grant Program. A review of the cash management procedures for the year under review disclosed that a cash draw was again made in advance of immediate cash needs, resulting in the accumulation of an excessive cash balance. On October 4, 1996, West Georgia Technical Institute used the ACH/EFT method to drawdown funds which were disbursed on November 14, 1996. Federal cash drawdowns should not exceed the immediate need. For institutions using the ACH/EFT method, immediate need is defined as need for a three-day period.
The excessive balances are a result of management's failure to adequately forecast the cash needs of the program. Procedures should be implemented by the Institute to ensure that requests for cash draws do not exceed the immediate need.
Management 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. This information is provided by the Financial Aid Office.
(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 was December 1, 1995. The Accounting Manager is responsible for implementation.
(5) Since implementation, this finding has not reoccurred.
CURRENT YEAR
CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Audit Control Number 819-96-03
For the year under review, it was noted that West Georgia Technical Institute's accounting procedures did not provide adequate internal control over the bank reconciliation process. The accounting procedures related to cash were found to be deficient as follows:
(1) The monthly bank statements for aU accounts were not reconciled correctly for any month of the fiscal year. In addition, the bank statements for all accounts were not reconciled at June 30, 1996. Adjustments were necessary to reconcile the accounting records with bank statements.
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0/ State (}eorfJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
WEST GEORGIA TECHNICAL INSTITUTE
CURRENT YEAR
(2) Book errors disclosed through the bank reconciliations process were carried as reconciling items for extended periods of time.
These conditions occurred because management did not implement appropriate procedures and controls to ensure that all bank statements were reconciled to the general ledger on a timely basis and that reconciling items were identified and corrected promptly. 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 Ag-encies Afftcted:
U. S. Department of Agriculture U. S. Department of Education U. S. Department of Health and Human Services U. S. Department of Labor
Manag-ement Response
West Georgia Technical Institute is implementing appropriate procedures and controls to ensure that all bank statements are reconciled to the general ledger on a timely basis and that all reconciling items are identified and corrected.
(1) All bank deposits and disbursements for each month are posted to the financial accounting system (FACS).
(2) Reconciling items requiring journal entries are being posted on a timely basis.
(3) Adequate detail of any adjustments are being kept on a monthly basis.
(4) Beginning March 1997, all bank statements will be reconciled to the general ledger within ten working days of receipt of bank statements. The Vice President of Administrative Services will approve all bank reconciliation. The Accounting Manager is responsible for completing all bank reconciliation.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 819-96-04
For the year under review, equipment inventory records for West Georgia Technical Institute's general fixed assets were deficient as follows:
(1) Equipment records are not updated for additions in a timely manner. A portion of fiscal year 1996 purchases in the amount of $1,477,060.44 were not added to the equipment subsidiary records.
(2) A physical inventory of equipment has not been performed in over 2 years.
F - 207

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996
WEST GEORGIA TECHNICAL INSTITUTE CURRENT YEAR

These deficiencies occurred due to management's failure to ensure that equipment inventory records were properly updated and management's failure to conduct a biannual physical inventory. The Institute should establish the necessary controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.

ManafJement Response

West Georgia Technical Institute is implementing appropriate procedures and controls to ensure that all equipment purchases are added to the fixed asset inventory control system (PROPS) on a timely basis. A complete physical inventory will be performed on a yearly basis.

(1)

Fixed asset inventory procedures are being written and implemented this fiscal year.

(2)

Additional staffing has been reassigned to work in this area. The functions of receiving the item. delivering to

appropriate location, and assigning an inventory decal will now be centralized.

(3)

Equipment received and paid for will be added to PROPS within a 30 day time period. A reconciliation of

PROPS to the accounting system (FACS) will be done on a monthly basis.

(4)

A physical inventory is currently being performed and will be completed by June 30. 1997. The Accounting

Manager is responsible for the reconciliation and accounting for fixed assets.

FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 819-96-05

For the year under review, "expenditures and cash on hand end of period" reported on the Institute's final monthly fiscal year 1996 Federal Cash Transaction Report - Status of Federal Cash to the U. S. Department of Education could not be reconciled to the accounting records as indicated below:

Report Date

Cash on Hand End of Period Reported on Form PMS 272

Ending Cash per Accounting
Records

Difference

June 30, 1996

$ 38,282.00

$ 18,252.19

$ 20.029.81

Report Date

Net Cash Expenditures
Form PMS 272-A

Net Cash Expenditures Per Records

Difference

June 30, 1996

$ 328,467.00

$ 362.582.64

$ 34.115.64

This difference occurred due to the failure of management to ensure that accounting records were reconciled to records maintained by the Financial Aid Office which were used to prepare the Federal Cash Transaction Report.

F - 208

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

WEST GEORGIA TECHNICAL INSTITUTE CURRENT YEAR

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 Response

West Georgia Technical Institute is implementing appropriate procedures and controls to ensure that:

(I)

All Federal Cash Transaction Reports are reconciled to the Institute's formal accounting records.

(2)

All documentation supporting reconciliation will be maintained,

(3)

The Institute is working with the grantor agency regarding these unreconciled differences,

(4)

All variances will be reconciled to The Pell Grant Program and supporting documentation kept on file by June 30,1997,

The Accounting Manager is responsible for this reconciliation,

F - 209

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

ALBANY 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, 1995, is summarized below:

Audit Control Numbers

Status of Finding

820-94-07 820-95-01 820-95-02 820-95-03 820-95-04 820-95-05 820-95-06 820-95-07 820-95-08

No Corrective Action Implemented Corrective Action Implemented See Audit Control Number 820-96-01 Corrective Action Implemented See Audit Control Number 820-96-02 See Audit Control Number 820-96-03 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

Mana~ement Response

Audit Control Number 820-94-07

This issue was thought to be a part of another finding and resolved in a prior response to the Department of Education, The FY96 Audit Review identified this issue to be unresolved and repayment of funds due to the Department of Education,

Payment was made to USDA Administration Collections on March 21, 1997 on Check #820014852 in the amount of$4, 115.70.

This issue is the result ofa problem that occurred in FY93/94 Federal Financial Assistance Award Year. Refund procedures are presently in accordance with the provisions of Section 485 of the Higher Education Amendment of 1992.

PRIOR YEAR/CURRENT YEAR

INVENTORIES Inadequate Resale Inventory Records Financial Statements Audit Control Number 820-96-01

The review report for the year ended June 30, 1995, disclosed that the Institute's internal accounting procedures relating to the costing of resale inventories were deficient. For the year under review, some improvements were noted; however, tests revealed that inventory was not properly updated for new costs when items were purchased.

This condition occurred because management failed 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.
Mana~ement Response

Effective Spring Quarter 1997, Albany Technical Institute has implemented an Average Costing Method of resale inventory. At this time all current inventory prices were updated to reflect an average cost calculating to reflect an average cost calculation for all existing inventory and a spreadsheet devised to calculate new costs when items are purchased.

F - 210

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
ALBANY TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
The Bookstore coordinator will be responsible for completing the updates on costs for the resale inventory. The Accounting Manager will verify the price updates each quarter.
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Equipment Inventory Records Vocational Education - Basic Grants to States [CFDA 84.048] Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 820-96-02
The review report for the year ended June 30, 1995, disclosed that the equipment inventory records for Albany Technical Institute's general fixed assets were deficient. For the year under review, tests revealed that the equipment inventory records continued to be materially deficient as follows:
(l) Equipment inventory records were not updated for all current year additions.
(2) A sample of twenty equipment items selected from the subsidiary equipment inventory records for physical examination disclosed two missing items.
(3) Capital leases of equipment were not properly recorded in the equipment inventory records.
These deficiencies occurred due to 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.
Mana'{ement Response
The physical inventory will now be completed on an annual basis. Effective March, 1997, a reconciliation of the Property Inventory Records will be completed monthly to ensure an ongoing process of updating the records for all additions and deletions.
The Accounting Manager and the Property Management Clerk will be responsible for the monthly reconciliation process. Verification of above will be completed by the Vice President of Administrative Services.
FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 820-96-03
The review reports for the years ended June 30, 1994, and June 30, 1995, disclosed that the Federal Cash Transaction Report Status of Federal Cash submitted by the Albany Technical Institute to the U. S. Department of Education reflected differences of $11,348.82 and $203.20 respectively, between reported "cash on hand end of period" and ending cash per the Institute's accounting records.
F - 211

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

ALBANY TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR

For the year under review, "cash on hand end of period" reported on the Institute's final monthly fiscal year 1996 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 PMS 272

Ending Cash per Accounting
Records

Difference

June 30, 1996

$==-=96~2==.0~0

$ -13,056.58

$ 12,094.58

This difference occurred due to failure to reconcile records maintained by the Financial Aid Office used to prepare the Federal Cash Transaction Report with those of 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.

ManafJement Response

An account reconciliation with the Department of Education was completed just prior to our FY 96 Audit Review. The Department of Education required verification from the State of Georgia, Department of Audits. Upon completion of this review, an adjustment was made to our Winter Quarter 1997 PELL drawdown to balance the Federal Cash Transactions Report.

Procedures have been in place to reconcile the Federal Cash Transactions Reports to the Institute's formal accounting records since FY 96.

F - 212

0/ State {]eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

ATHENS AREA TECHNICAL INSTITUTE STATUS OF PR10R YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

822-95-01

See Audit Control Number 822-96-01

PRIOR YEAR/CURRENT YEAR

REVENUEIRECEIVABLES/RECEIPTS Unsupported Student Accounts Receivable Financial Statements Audit Control Number 822-96-01

At June 30, 1995, Athens Area Technical Institute had $6,681.64 in student accounts receivable for tuition and fees which were not supported by approved financial aid at the time of registration. The Institute made no collections during the year under review, leaving a balance of $6,681.64 at June 30, 1996.

Deferring payment of tuition and fees without approved financial 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.

Management Response

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 financial 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 fact that we incurred no increase in unsupported accounts receivable.

F - 213

0/ State (jeorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

AUGUSTA 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, 1995, is summarized below:

Audit Control Number

Status of Finding

824-95-01 824-95-02

See Audit Control Number 824-96-01 See Audit Control Number 824-96-02

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 824-96-01

The review report for the year ended June 30, 1995, disclosed that the equipment inventory records for the Institute's general fixed assets were inadequate. For the year under review, a test often items selected for physical examination revealed that one of the items on the inventory could not be located and a second item was on the inventory with an incorrect acquisition cost.

The Institute should follow established procedures to ensure that equipment inventory records are maintained in accordance with the State Property System Manual.

Mana'jiement Response

To improve on the efficiency of the equipment inventory records, the property clerk has examined the inventory process and completed a new physical inventory; thereby, updating all equipment changes in order to reconcile 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 clerk when changes occur.

REVENUES/RECEIVABLES/RECEIPTS Inadequate Accounting Control Procedures Financial Statements Audit Control Number 824-96-02

The review reports for prior years 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:

(I)

As of June 30, 1996, the "Other" accounts receivable category shown on the Combined Balance Sheet

(Statutory Basis) included $140.45 in student receivables outstanding from fiscal year 1995,

$1,446.65 in student receivables outstanding from fiscal year 1992, $2,873.46 in student receivables

outstanding from fiscal year 1991, and $22,663.41 in student receivables outstanding from fiscal year

1990.

In numerous instances, these receivables were not supported by adequate documentation to determine if the amounts recorded were actually earned by the Institute.

F - 214

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. J996
AUGUSTA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
(2) As of June 30, 1996, the "Other" accounts receivable category shown on the C;:ombined Balance Sheet (Statutory Basis) included $9,256.36 in checks returned for insufficient funds. Included in this amount were $8,686.51 from fiscal year 1995 or earlier.
(3) As of June 30, 1996, the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis) included $589.89 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." 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, 1996, the "Other" accounts receivable category shown on the Combined Balance Sheet (Statutory Basis) included $2,993.57 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 the students were ineligible.
Deferring payment of tuition and fees without approved financial 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.
Mana~ement Response
(1) Outstanding receivables are monitored throughout the year and attempts are made to collect monies owed to the Institute.
(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 removed 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 was eliminated.
(4) The Financial Aid Office eligibility determination has been improved upon through the utilization of the Banner Financial Aid System 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 - 215

0/ State (jeorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

CARROLL 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, 1995, is summarized below:

Audit Control Number

Status of Finding

826-95-01 826-95-02 826-95-03

Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

F - 216

0/ State (jeor'}ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

CHATTAHOOCHEE 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, 1995, is summarized below:

Audit Control Number

Status of Finding

827-95-01 827-95-02 827-95-03 827-95-04 827-95-05 827-95-06 827-96-07

No Corrective Action Implemented Corrective Action Implemented No Corrective Action Implemented See Audit Control Number 827-96-01 Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented

Management Response

Audit Control Number 827-95-01

The Institute has not been able to secure reimbursement of the salary overpayment from the former employee. The fmal paycheck to this employee in the amount of $2,520.04 has been held by the business office leaving a balance of $640.96 due.

Audit Control Number 827-95-03

The administrative relief that was granted to the Institute by the U. S. Department of Education for the 1994-95 Federal PelI Grant student award data submission deadline on February 23, 1996 was revoked on November 21, 1996. The Institute is currently folIowing the procedures outlined by GEN-94-14 to receive credit for awards made by the institution that were not previously recognized by the Department of Education. This process will be completed before the end of the current fiscal year, alIowing the institution to make both the upward and downward adjustments to the individual student records necessary to reconcile PelI Grant Program expenditures to the U. S. Department of Education for the 1994-95 award year.

PRIOR YEAR/CURRENT YEAR

FEDERAL FINANCIAL REPORTS Failure to Submit Institutional Payment Summary Report Federal Financial Assistance PelI Grant Program [CFDA 84.063] Audit Control Number 827-96-01

The review report for the year ended June 30, 1995, noted that Chattahoochee Technical Institute failed to submit an Institutional Payment Summary (IPS) report during one specified reporting period as required by regulations set forth in The Blue Book of the U. S. Department of Education.

For the year under review, Chattahoochee Technical Institute again failed to submit IPS reports for the required reporting periods of July 1, 1995 - October 15,1995 and October 16,1995 - December 15, 1995. Management claims that this condition was the result of an oversight by the Financial Aid office. The Institute should implement procedures to ensure that alI IPS reports are submitted in accordance with Federal reporting requirements.

F - 217

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
CHATTAHOOCHEE TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
Mana~ement Response
The Institute concurs with this fmding. The Institute has established 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. The business office accountant will obtain copies of the 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, the accountant will notify management in the Financial Aid office that a report must be submitted prior to the last date in the respective date range.
CURRENT YEAR
ADMINISTRATIVE REQUIREMENTS Lack of Administrative Capability Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 827-96-02
For the year under review, our tests of the internal control structure for administering the Pell Grant program indicated that the Institute has a lack of administrative capability based on the standards in 34 CFR 668.16. Federal regulations require that the Institute administer the Pell Grant program with adequate checks and balances in its system of internal controls. We noted deficiencies in the following control categories:
(1) Federal Financial Reports (2) Types of Services/Allowed or Unallowed (3) Eligibility
This condition resulted from the failure of management of Chattahoochee Technical Institute to provide an adequate system of internal controls for the Pell Grant program. Appropriate controls should be implemented and monitored by the Institute to ensure that the Pell Grant program is in compliance with the applicable rules and regulations.
Manaf:ement Response
The Institute has taken administrative and organizational steps necessary to correct current deficiencies in the system of internal controls for the Pell Grant program and to strengthen its overall process of administering Title IV funds. The president of the Institute has appointed a task force team to evaluate all phases ofthe Financial Aid Office, including staff, staff assignments and duties, procedures, review of records and departmental organization. Recommendations from this task force have resulted in additional staffing for the department, including an additional management position, as well as additional assistant counselors. Procedures have been established to ensure the timely and accurate reporting of federal financial reports and the proper granting of student Pell Grant awards based on student eligibility.
F - 218

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
CHATTAHOOCHEE TECHNICAL INSTITUTE
CURRENT YEAR
FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 827-96-03
For the year under review, the Student Payment Summary (SPS) report for the U. S. Department of Education indicated that the Institute incurred $549,454.00 in Federal Pell Grant program expenditures. This amount represented the Institute's authorized amount of the Federal Pell Grant award for fiscal year 1996. However, the Institute's accounting records reflected $562,402.75 in fiscal year 1996 Pell Grant payments or $12,948.75 in excess of the authorized amount. In order to be reimbursed for the excess Pell Grant program expenditures, the Institute in conformity with Federal Statutes, must certify to the U. S. Department of Education the validity of these payments. The Federal agency can then make appropriate adjustments of the fiscal year 1996 authorized amount in order to make additional funds available to the Institute.
Mana~ement Response
The Institute concurs with this fmding. A downward adjustment of$6,453.75 will be made to the accounting records in FY 97 to reduce the expenditures in the Pell Grant fund. The remaining $6,495.00 in disbursements reported on the accounting records, but not on the Student Payment Summary report for the U. S. Department of Education, will need to be certified in order to make the appropriate adjustments to the Institute's authorized amount for FY 96. The Institute will initiate the process to obtain the U. S. Department of Education's approval to increase the amount of the FY 96 Pell Grant authorization following the guidelines ofGEN-94-14.
TYPES OF SERVICES/ALLOWED OR UNALLOWED Award not Properly Calculated Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Costs: $484.00 Audit Control Number 827-96-04
For the year under review, an examination of the records of twenty-five students who received Pell Grants revealed that one student was overpaid a total of $484.00. 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 each award year by the U. S. Department of Education. The financial aid office awarded the overpayment to the student based on an incorrect expected family contribution.
The Institute should establish procedures to ensure that financial aid awards are made in accordance with appropriate Federal regulations. Reimbursement of $484.00 should be secured for refund to the Pell Grant program.
Mana~ement Response
The Institute concurs with this finding. As a part of strengthening the system of internal controls for the Pell Grant program, procedures have been established to ensure that the grant awards are properly calculated in accordance with federal regulations. All Pell Grant awards are reviewed by the Director of Financial Aid or the Coordinator of Student Services to ensure accuracy. Action has been taken to collect the Pell overpayment from the student for refund to the Pell Grant program.
F - 219

State of (}eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
CHATTAHOOCHEE TECHNICAL INSTITUTE
CURRENT YEAR
ELIGIBILITY Ineligible Student Receiving Student Aid Federal Financial Assistance Pell Grant Program [CFDA 84.063] Questioned Costs: $146.00 Audit Control Number 827-96-05
,For the year under review, an examination of the records of twenty-five students who received Pell Grants revealed that one student was overpaid a total of$146.00. Federal regulations (34 CFR 668.7, 668.16 and 690.75) state that a student should maintain satisfactory academic progress to be eligible to receive a Pell Grant payment. The overpayment to the student was for the 1996 Spring quarter for which the student had become ineligible due to not maintaining satisfactory academic progress in accordance with the Institute's policy. This questioned cost occurred because the financial aid office failed to adequately monitor the student's academic progress.
The Institute should establish procedures to ensure that financial aid awards are made in accordance with appropriate Federal regulations. Reimbursement of $146.00 should be secured for refund to the Pell Grant program.
Manar:ement Response
The Institute agrees with this fmding. The institution has implemented a new satisfactory academic progress policy, along with internal controls, to suspend financial aid for students who fall below the required standards. A Financial Aid Advisory Committee has been established to rule on student's appeals for financial aid reinstatement. Action has been taken to collect the $146.00 from the student for refund to the Pell Grant program.

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

COLUMBUS 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, 1995, is summarized below:

Audit Control Number

Status of Finding

828-95-01

Corrective Action Implemented

F - 221

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

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, 1995, is summarized below:

Audit Control Number

Status of Finding

829-95-01

Corrective Action Implemented

CURRENT YEAR

GENERAL LEDGER Agency Fund Overpayments Financial Statements Audit Control Number 829-96-01

At June 30, 1996, Coosa Valley Technical Institute had deficit fund balances in the Fiduciary Fund Type-Agency Funds which included $474.30 for the D.T.A.E. Activities Fund and $1,747.72 for the Student Insurance Fund. These deficit balances are the result of disbursing funds in excess of receipt of funds. Payment should not be made in excess of collections for Agency Funds.

Appropriate action should be taken by the Institute to secure reimbursement of these overpayments.

Manar:ement Response

DTAE Activity Funds - With an implementation date of July 1, 1997, participants cost paid out of the fund will be monitored to insure that total reimbursement is also paid into the fund. Where possible both the document decreasing the fund and the document reimbursing the fund will be submitted to the Administrative Office at the same time. As for the $474.30, a responsible attempt to go back to prior years to determine where overage took place will be accomplished. However prior to 6/30/97, Live Work will be used to cover the $474.30, if necessary.

Malpractice Insurance Fund - Part of the recurring problem with this fund has to do with the manner in which it operates. We have a timing difference, collection issue, and an estimating problem to contend with. One time annual premiums for this Malpractice Insurance are estimated prior to students enrolling. Students at various quarters in their studies and during the registration process are assessed the fee to cover their premium cost.

Starting July 1, 1997, both the payment of the fees and the payment of the premiums will be processed through Miscellaneous Income project. Collection of fees will be monitored to insure collection is sufficient to cover premiums. Premiums will be paid on a quarter basis based on students who have registered for the quarter. We are working with the insurance provider for quarter rate to be paid.

F - 222

0/ State (Jeor';}ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

LANIER 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, 1995, is summarized below:

Audit Control Number

Status of Finding

834-95-01

Corrective Action Implemented

F -223

0/ Slale (jeorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MACON 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, 1995, is summarized below:

Audit Control Number

Status of Finding

835-95-01

Corrective Action Implemented

F - 224

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MIDDLE 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, 1995, is summarized below:

Audit Control Number

Status of Finding

836-94-04 836-95-01 836-95-02 836-95-03 836-95-04

No Corrective Action Implemented See Audit Control Number 836-96-01 Corrective Action Implemented Corrective Action Implemented No Corrective Action Implemented

Manar:ement ResIJonse

Audit Control Number 836-94-04

See Response to Audit Control Number 836-95-04.

Audit Control Number 836-95-04

We concur with this recommendation.

Appropriate internal controls have been implemented to ensure that personnel paid from split funding sources (combination of federal, state, and/or local) are paid at the percentages indicated on their monthly time sheet and not from predetermined budgeted percentages. The payroll technician receives monthly time sheets reflecting hours/percentages worked and allocates funding sources accordingly.

The U.S. Department of Education and the Job Training Partnership SDA have been repeatedly contacted regarding this finding and Middle Georgia Technical Institute is awaiting their desired resolution to this finding. Upon receipt of this resolution, appropriate corrective action will be taken.

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Control Procedures Audit Control Number 836-96-0 I

The review report for the year ended June 30, 1995, 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:

(A) An examination of the general ledger and journal entries revealed the following:

(1) The subsidiary records for accounts receivable and accounts payable did not agree to the amounts reported in the general ledger.
(2) In several instances, the activity of the individual fund sources was closed into the improper fund balance account.
(3) Numerous journal entries recorded in the accounting records lacked evidence of proper authorization. (4) Many journal entries were posted to improper accounts which required additional entries to correct.

F - 225

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
MIDDLE GEORGIA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
(5) On several occasions, in an attempt to correct accounts between fund sources, the Institute posted only a portion of a journal entry which improperly adjusted the cash balance on the accounting records.
(B) A review of the Institute's cash accounts revealed several deficiencies in the reconciling of the accounts to the general ledger amounts. The following deficiencies were noted in the preparation of the reconciliations and the related adjustments:
(I) The monthly bank reconciliations were not performed in a timely manner to enable the posting of adjustments in the proper accounting period.
(2) The monthly bank statement of the general operating account was not reconciled to the Institute's accounting records during the fiscal year. Unidentified variances ranging from $50.03 to $6,216.88 were left unreconciled each month.
(3) The outstanding check list used by the Institute for their reconciliation of the June 30, 1996, general operating account included two checks totaling $1,835.16 which had already cleared the bank during the year, and six checks totaling $853.69 that had been voided in the accounting system during the fiscal year.
(4) The outstanding check list for the June 30, 1996, operating account failed to include $2,826.04 of checks that had been outstanding for several years and had been previously included on ten of the twelve monthly reconciliations.
(5) Three checks totaling $141.76 were outstanding as of June 30, 1996, but were not included in the outstanding check list used on the reconciliation.
(6) Cash receipt totals were adjusted by the Institute on the accounting records for several months after the receipts were received, even though the original totals were correct and funds had already been deposited in the bank.
(7) At June 30,1996, an unidentified variance of $347.35 was included on the reconciliation for the general operating account by the Institute. Audit adjustments were made to the accounting records which reduced the unreconciled difference to $178.42.
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 the bank statements are reconciled to the accounting records monthly and that needed adjustments are recorded on a timely basis. The Institute should continue to examine the general operating account to determine the adjustments needed to correct the cash balance. All journal entries should be reviewed, approved and properly documented prior to posting to the general ledger.
Federal Grantor A~encies Affected:
U. S. Department of Education U. S. Department of Health and Human Services U. S. Department of Labor
F - 226

0/ State (jeorq-ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1996
MIDDLE GEORGIA TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR
Management Response We concur with tliis recommendation: These findings occurred because the Vice President for Administrative Services did not monitor the Business Office activities closely enough. The Vice President for Administrative Services was replaced in October of 1996 by MGT to ensure that the general ledger is posted, reviewed and balanced on a monthly basis and that subsidiary records properly support the general ledger. Prior to entry into the accounting system, all journal entries are now reviewed by the Vice President with the new accountant, which was replaced by MGT in January, 1997. All journal entries will have supporting information attached to back up the entries and signed offby the Vice President for Administrative Services. The discrepancies for the fiscal year 1996 will be resolved and the correcting entries will be made in fiscal year 1997. Procedures have been put in place for the new accountant to reconcile the FY97 cash accounts on a timely basis and to report any discrepancies to ensure proper posting of any adjustments on a monthly basis.
F - 227

0/ State (JeorCJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

MOULTRIE AREA 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, 1995, is summarized below:

Audit Control Number

Status of Finding

837-95-01 837-95-02 837-95-03 837-95-04

See Audit Control Number 837-96-01 See Audit Control Number 837-96-03 See Audit Control Number 837-96-02 See Audit Control Number 837-96-04

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 837-96-01

The review report for the year ended June 30, 1995, stated that Moultrie Area Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures. For the year under review, the Institute did not achieve an adequate degree of internal control for the following control categories:

(1) Budget Preparation/Execution

(6) Expenditures/Liabilities/Disbursements

(2) Cash and Cash Equivalents

(7) Employee Compensation

(3) Inventories

(8) General Ledger

(4) Revenue/ReceivableslReceipts

(9) General Fixed Assets/Property Management

(5) Procurement

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. 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 - 228

0/ Slale (leorgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
MOULTRIE AREA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
Mana~ement Response
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 an accounting manager who was added August I, 1996. With the additional staff, we should achieve separation of duties in FY97.
CASH AND CASH EQUIVALENTS - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Audit Control Number 837-96-02
The review report for the year ended June 30, 1995, reported that Moultrie Area Technical Institute's accounting procedures did not provide adequate internal control over the bank reconciliation process. For the year under review, the accounting procedures related to cash were again deficient, as shown below:
(1) The monthly bank statement for the general operating account was not reconciled at June 30, 1996.
(2) Book errors disclosed through the bank reconciliation process were either posted to the wrong bank account or were carried as reconciling items for extended periods of time.
(3) Bank charges for nonsufficient funds were noted in the Institute's operating account.
(4) A petty cash fund of $100.00 was noted for which the Institute failed to maintain general ledger control.
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 A~encies Affected:
U. S. Department of Education U. S. Department of Labor
Mana~ement Response
We concur there were deficiencies in bank reconciliation processes. The bank reconciliations were completed during the field audit. New procedures were established on January 15, 1996 to create a new spreadsheet that was error free, however personnel refused to use the new format and was dismissed from employment on May 7, 1996. Other individuals were assigned the task to accomplish these reconciliations and were unable to accomplish the task due to the errors which had been made by the previous employee on the books. A person in management completed this assignment in October 1996. Corrections will be made to the books in April 1997 and future reconciliations wil1 be done on a timely basis with supervisor review or by supervisor.
F -229

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996
MOULTRIE AREA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 837-96-03
The review reports for the years ended June 30, 1992, June 30, 1993, June 30, 1994 and June 30, 1995, disclosed that the Federal Cash Transaction Report - Status of Federal Cash submitted by Moultrie Area Technical Institute to the U. S. Department of Education reflected differences of$4,313.06, $11,520.75, $14,399.37 and $5,642.00, 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 of period" reported on the Institute's final monthly fiscal year 1996 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, 1996

$==-==4==.3:f::69=::!.0~0 $ -46.369.00

$ 42,000.00

This difference occurred because records maintained by the Financial Aid Office of the Institute were used to prepare the Federal Cash Transaction Report, and these records were not reconciled to the formal accounting records maintained in the Business Office. Additionally, necessary general ledger adjustments to the formal accounting records were not made by the Institute.

Procedures should be established to ensure that all Federal Cash Transaction 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 Response

We concur with the recommendation. Procedures have been established as of December 15, 1996 to balance and pay back to the U. S. Department of Education for SEOG repayment of $24,660.00 in which cash was drawn twice erroneously. We also paid back an overpayment of $575.00 and $147.00 on students who were ineligible to receive Pell grant. The Institute will 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 again 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.

F230

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
MOULTRIE AREA TECHNICAL INSTITUTE
PRIOR YEAR/CURRENT YEAR
SPECIAL TESTS AND PROVISIONS Student Financial Aid Overpayment Federal Financial Assistance Pell Grant Program [CFDA 84.063] Amount: $722.00 Audit Control Number 837-96-04
The review report for the year ended June 30, 1995, noted that a review of thirteen student financial aid files revealed that one student received $575.00 in excess of the amount ofthe student's eligibility. For the year under review, an examination of fifteen student financial aid files disclosed payments totaling $147.00 to a student who was ineligible to receive Pell Grant Funds.
These deficiencies were 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 overpayments from the students.
Mana~ement Response
Procedures have been established as of December 15, 1996 to better monitor the disbursement ofPell Grant funds and to ensure that students will not receive Pell awards in excess of their eligibility. Action has been taken to collect the Pell overpayment from the student and will continually be pursued. The monies have been returned to the U. S. Department of Education as mentioned in the response above.
CURRENT YEAR
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 837-96-05
A review of the cash management procedures for the Pell Grant Program disclosed that in one instance a cash draw was made in advance of immediate cash needs. On May 31, 1996, Moultrie Area Technical Institute used the ACH/EFT method to drawdown funds which were disbursed on June 21, 1996, a period of twenty-one days. Federal cash drawdowns should not exceed the immediate need, which for institutions using the ACH\EFT method is defined 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.
Mana~ement Response
Procedures have been established and a new employee hired as of August 2,1996 to ensure three-day requirement for funds on hand is met. This has been maintained by preparing all necessary paperwork and entry into the system before funds are drawn down from the U. S. Department of Education. Excess cash balances have been returned to the U. S. Department of Education.
F - 231

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
MOULTRIE AREA TECHNICAL INSTITUTE CURRENT YEAR
ELIGIBILITY Disbursements in Excess of Need Federal Financial Assistance Federal Work Study Program [CFDA 84.033] Amount: $310.00 Audit Control Number 837-96-06 For the year under review, an examination of the records of fifteen students who received financial aid revealed that one student received $310.00 of Federal Work Study Program funds in excess of financial aid need. This condition occurred due to management's failure to consider the impact ofPell Grant, Supplemental Education Opportunity Grant, and Hope Grant funds received by the student. The Institute should establish procedures to ensure that student financial aid is properly coordinated between student financial aid programs and contact the grantor agency regarding the overpayment. Mana~ement Response The Institute has established procedures effective January 1, 1997 to ensure that student financial aid is properly coordinated between student financial aid programs. The grantor agency will be contacted regarding the overpayment.
F -232

State of (jeor'jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

NORTH 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, 1995, is summarized below:

Audit Control Number

Status of Finding

838-95-01 838-95-02

Corrective Action Implemented See Audit Control Number 838-96-01

PRIOR YEAR/CURRENT YEAR

GENERAL LEDGER Agency Funds - Inadequate Accounting Records Financial Statements Audit Control Number 838-96-01

The review report for the year ended June 30, 1995, disclosed that North Georgia Technical Institute maintains a student loan program funded by the Georgia Electrification Council. As of June 30, 1996, this fund had a cash balance of$3,610.33 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.

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 final disposition of the principal balance had not been made.

Mana~ement Response

North Georgia Technical Institute will contact the Southeastern Electrification Council (previously the Georgia Electrification Council) to determine if any of the debtors are licensed electricians or HVAC contractors. If any of these debtors are on their list, we will attempt to obtain updated addresses as well as their license numbers. We will then attempt to collect the outstanding loan balance and any accrued interest. Ifwe are unsuccessful in our efforts to collect the amount due, we will send a letter that will inform the debtor that we will notify the State Construction Licensing Board if we do not receive payment. The State Construction Licensing Board has the ability to reprimand or suspend the individual's license if they deem necessary. This will be completed by June 30, 1997.

F - 233

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
NORTH METRO TECHNICAL INSTITUTE CURRENT YEAR
GENERAL LEDGER Agency Fund Overpayments Financial Statements Audit Control Number 839-96-0 I
At June 30, 1996, North Metro Technical Institute had a deficit balance of $6,041.34 in the Fiduciary Fund Type - Agency Funds - HOPE Scholarship Program, This deficit balance is the result of disbursing funds in excess of available funds, Payments should 110t be made in excess of collections for Agency Funds.
Appropriate action should be taken by the Institute to secure reimbursement of this overpayment. Mana~ement Response With the advent of Banner AIR, we feel that most of our problems will be eliminated. In the past, there have been handwritten lists, typed lists, and numerous operating systems to enter data in both Financial Aid and Administrative Services. Of course, this left room for human error. It is still our contention that the deficit balance in the Hope Scholarship Program should be paid from local funds (i.e., tuition).
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Improper Recording of Capital Lease Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 839-96-02
For the year under review, an examination of the General Fixed Assets Account Group disclosed that the Institute failed to record assets acquired through a capital lease on the equipment inventory records. The Accounting Procedures and Instruction Manual issued by the State Auditor instructs State agencies (which includes technical institutes) to record assets acquired through capital lease agreements at the fair market value at the time of purchase. The Institute failed to add the capital lease to the records during the fiscal year even though the liability had been incurred and payments had already been made on the lease.
This condition occurred because management disregarded the provisions of the State regulations regarding capital leases. The Institute should establish controls to ensure that equipment inventories are maintained in accordance with the aforementioned manual. Mana~ement Response Administrative Services was not aware that a leased copier should be included on North Metro Tech's inventory. The copier will be added to inventory at fair market value.
F234

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

NORTH METRO TECHNICAL INSTITUTE CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Failure To Perform Equipment Inventory Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 839-96-03

For the year under review, an examination of inventory records indicated that a physical inventory of equipment had not been taken since the 1993 fiscal year at North Metro Technical Institute. Provisions of OMB - Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) and the State Property System Manual require that a complete equipment inventory be taken at least once every two years.

This condition occurred because management claimed they were unaware of the two year requirement. The Institute should establish procedures to ensure that equipment inventories are maintained in accordance with provisions of OMB's Common Rule and the State Property System Manual.

Federal Financial Assistance Pro~rams A(fected:

10.OFA 17.250 84.002 84.007 84.033 84.048 84.063 93.561

Other Federal Assistance Job Training Partnership Act Adult Education - State-Administered Basic Grant Program Supplemental Educational Opportunity Grants Work-Study Program Vocational Education - Basic Grants to States Pel! Grant Program Job Opportunities and Basic Skills Training

Mana~ement Response

A physical inventory is in process at this time.

FEDERAL FINANCIAL REPORTS Incorrect Student Payment Summary Report Federal Financial Assistance Pel! Grant Program [CFDA 84.063] Audit Control Number 839-96-04

A review of the Student Payment Summary (SPS) report for state fiscal year 1996 indicated that the Institute incurred $202,296.00 in Pel! Grant Program expenditures. This amount represented the institute's authorized amount of the Pel! Grant award for FY96. However, the Institute incurred $204,783.50 in FY96 Pel! Grant payments or $2,487.50 in excess of the authorized amount reflected on the SPS report. In order to be reimbursed for the excess Pel! Grant expenditures, the Institute i'n conformity with Federal Statutes, 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 FY96 authorized amount in order to make the funds available to the Institute.

F - 235

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
NORTH METRO TECHNICAL INSTITUTE
CURRENT YEAR
Management Response
At the present time, the Financial Aid Director is in process of seeking reimbursement of excess expenditures. As with the Hope deficit finding, we feel that the emergence of Banner A/R will help us to reduce the majority of our issues.
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized federal Financial Assistance Vocational Education - Basic Grants to States [CFDA 84.048] Questioned Cost: $40,860.00 Audit Control Number 839-96-05
A review of salaries charged to the Vocational Education Program - Basic Grants to States program of the Institute revealed that expenditures of $40,860.00 for one employee were not supported by time and attendance or equivalent 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.
This condition resulted from management's failure to maintain time and attendance records for salary charges of this employee. Appropriate internal controls should be established by the Institute to ensure that all salary charges of employees 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 agency concerning resolution of this finding.
Management Response
Time and attendance records are required by the agency for federally funded salaries. The employee in question had completed this documentation, but there was an omission of the supervisor's signature. Consequently, the supervisor has signed the required time sheets.
SPECIAL REPORTING Institutional Payment Summary Reports Not Submitted Federal Financial Assistance Pell Grant Program [CFDA 84.063] Audit Control Number 839-96-06
The Institute failed to submit the Institutional Payment Summary (IPS) report to the U. S. Department of Education for the period July I, 1995 through December 15, 1995. Failure to meet the established reporting deadlines may result in administrative action by the U. S. Department of Education under 34 CFR part 668 (G). The grantor may fine the institution and limit or terminate its participation in the Federal Pell Grant Program.
This condition occurred because the Institute disregarded reporting requirements of The Federal Student Financial Aid Handbook. The Institute should contact the grantor agency concerning resolution of this finding.
Management Response
As of this date, proper deadlines have been implemented.
F - 236

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

PICKENS 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, 1995, is summarized below:

Audit Control Number

Status of Finding

840-93-02 840-95-01 840-95-02 840-95-03

No Corrective Action Implemented See Audit Control Number 840-96-01 Corrective Action Implemented 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.

On November 21, 1996 we obtained permission to remove GA-34649 from our inventory records and Pickens Tech will continue to obtain transaction numbers before removal of items from our campus.

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation of Duties Audit Control Number 840-96-01

The review report for the year ended June 30, 1995, disclosed that Pickens Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures. For the year under review, internal controls were again deficient for the following control categories:

(1) General Fixed Assets/Property Management

(2) ExpenditureslLiabilities/Disbursements

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 A~encies 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 - 237

FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 3D, 1996
PICKENS TECHNICAL INSTITUTE PRIOR YEAR/CURRENT YEAR
Manaf:ement Response The lack of personnel in the Business Office precludes complete separation of duties. During 1997, a complete study of internal control affecting Expenditures/Liabilities/Disbursements for Pickens Technical Institute will be conducted, with the possibility of involving personnel from other departments to be investigated.
F - 238

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

SOUTH GEORGIA 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, 1995, is summarized below:

Audit Control Number

Status of Finding

842-95-01

Corrective Action Implemented

F -239

Slale of (ieoPflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. J996

THOMAS 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, 1995, is summarized below:

Audit Control Number

Status of Finding

846-95-01 846-95-02

Corrective Action Implemented Corrective Action Implemented

F - 240

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
VALDOSTA TECHNICAL INSTITUTE CURRENT YEAR
GENERAL LEDGER Accounting System Deficiency Financial Statements Audit Control Number 848-96-01 For the year under review, the accounts payable subsidiary ledger was not reconciled with the general ledger as presented for examination. As of the end of fieldwork, neither the Valdosta Technical Institute nor the Georgia Department of Technical and Adult Education could determine the cause of the variance between the subsidiary ledger and the general ledger. Management should determine the validity of the accounts payable, establish procedures to ensure that controls over electronic data processing are adequate and reconcile the subsidiary ledger to the general ledger. Mana~ement Response We concur with your accounts payable finding. The general ledger control account should be reconciled with the subsidiary ledgers in a timely (monthly) manner. We concur that our accounts payable personnel should have been aware of the $100 discrepancy. However, as of February 24,1997, Statewide Systems has not been able to determine what caused the $100 discrepancy. Additionally, during the December '96 month end reconciliation, we found that a similar occurrence has transpired. One of the three detail reports from the expense subsidiary ledger does not agree with the other two detail reports nor the general ledger control account. Statewide Systems has not been able to offer an explanation. The accounts payable duties have been reassigned effective December 1, 1996 and the work will be evaluated every 30 days. We are waiting the results of the analysis by the Statewide Systems before making any corrective entries locally.
F -241

State of (}eorfJ.ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, J996
WALKER TECHNICAL INSTITUTE
CURRENT YEAR
EXPENDITURES/LIABILITIESIDISBURSEMENTS - Financial Statements ALLOWABLE COSTS/COST PRINCIPLES - Federal Financial Assistance Improper Travel Reimbursements Vocational Education - Basic Grants to States [CFDA 84.048] Amount: $110.00 Audit Control Number 849-96-01
For the year under review, an examination of the Institute's travel expenditures was performed to test the validity and accuracy of the expenditure transactions. The expenditures examined revealed the following exceptions:
(1) Charges totaling $95.00 were paid to various employees for tips and gratuities even though the maximum allowable charges for meals had been claimed. Taxes and tips are reimbursable; however, they should be included in the total meal cost subject to the authorized limits.
(2) A miscellaneous charge of$15.00 for a book for the Institute's Library was claimed by an employee even though there was no supporting documentation. Receipts/invoices for miscellaneous expenses should accompany the travel expense statement.
These exceptions occurred because management failed to comply with the State of Georgia - Statewide Travel Regulations. Internal controls should be implemented by the Institute to ensure that all travel expenditures are reviewed for proper documentation and compliance with travel regulations prior to payment.
The Institute should secure reimbursement of $11 0.00 for deposit to the Budget Fund. A portion of these questioned costs were funded from Federal sources; therefore, the Institute should contact the grantor agency for proper disposition of these funds.
Mana~ement Response
December 11, 1996 a Faculty and Staff meeting was held and the following topics were discussed:
1. Reimbursement of meal expenses
2. Miscellaneous travel expenses
The fIrst topic included policy related to daily maximum allowable expense, and the point that this is not a per diem account, but a maximum allowable amount that need not be supported by a receipt. It was also pointed out that taxes and tips are allowable expenses, however, they should be included in the total expense for the meal which is subject to the authorized limits.
The second topic involved clarifIcation regarding reimbursement for stationery, supplies, or duplicating services which are requested on a travel statement. It was made clear that receipts/invoices must accompany the travel expense statement.
The business offIce staff was at this meeting and has received training regarding the policies in question. All travel expense statements will be reviewed for proper documentation and compliance with travel regulations prior to payment. The Vice President of Administrative Services or the Directory of Accounting will initial each travel expense statement to ensure this compliance.
Walker Technical Institute will secure reimbursement of $110.00 for deposit to the Budget Fund before May 31, 1997. The reimbursement will be funded by Live Work revenue.
F -242

0/ State (Jeorg.ia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

JEKYLL ISLAND STATE PARK AUTHORITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

910-95-01 910-95-02 910-95-03 910-95-04 910-95-05 910-95-06 910-95-07 910-95-08

See Audit Control Number 910-96-01 See Audit Control Number 910-96-02 See Audit Control Number 910-96-03 See Audit Control Number 910-96-04 See Audit Control Number 910-96-05 See Audit Control Number 910-96-06 See Audit Control Number 910-96-07 See Audit Control Number 910-96-08

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 910-96-01

The review report for the year ended June 30, 1995, reported that the Jekyll Island State Park Authority could not provide a subsidiary detail of equipment owned by the Authority. During fiscal year 1996, the Authority compiled a detailed listing of equipment for the purpose of including a General Fixed Assets Account Group in the financial statements.

For the year under review, our examination included a review of the accounting system utilized by the Jekyll Island State Park Authority in maintaining their State Property System. This review also consisted of testing the System for compliance with State laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:

(1) In most instances, equipment inventory records did not include the date the equipment was acquired.

(2) Equipment inventory records did not include the identifying number assigned by the Authority. Subsequent to June 30, 1996, the Authority added identifying numbers to the equipment inventory records.

In addition, forty-nine (49) equipment items were selected to test the accuracy of the Authority's general fixed asset records. These items contained a value of $370,557.44 and were selected for the purpose of locating the equipment as recorded in the inventory records. Three (3) items totaling $12,052.00 could not be located.

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 procedures to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.

F - 243

State of (}eorgia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

JEKYLL ISLAND STATE PARK AUTHORITY PRIOR YEAR/CURRENT YEAR

Mana~ement Response
As noted in the finding, we have established a property system and we will continue to refine it. Since the system has just been established, acquisition dates for assets on hand prior to establishment of the system cannot be determined.

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Financial Statements Audit Control Number 910-96-02

The review report for the year ended June 30, 1995, 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 review ofthese 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

(4) Employee Compensation

(2) RevenuelReceivableslReceipts

(5) Inventories

(3) Expenditures/Liabilities/Disbursements

(6) General Ledger

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 internal control over the accounting functions.

Mana~ement Response

The accounting department is under reorganization which shall be complete by 6/30/97. The reorganization should allow additional segregation of duties.

CASH AND CASH EQUIVALENTS Accounting /Internal Control Deficiencies Financial Statements Audit Control Number 910-96-03

The review report for the year ended June 30, 1995, 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 the status of prior year deficiencies which were not corrected during the year under review:

Income Account (1) For the year ended June 30, 1995, 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 adequate documentation. Unsupported journal entries to cash results in a lack of control to safeguard assets.

F -244

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
JEKYLL ISLAND STATE PARK AUTHORITY PRIOR YEAR/CURRENT YEAR
(2) For the year ended June 30, 1995, the income bank account could not be reconciled to the general ledger. For the year under review, the income bank account was reconciled to the general ledger. However, the Authority failed to make necessary correcting entries disclosed through the reconciliation process to the general ledger in a timely manner. This deficiency resulted from the Authority's lack of supervision over the bank reconciliation function.
(3) For the year ended June 30, 1995, delays of up to five days were noted in depositing receipts in the bank. For the year under review, the Authority continued to make deposits in an untimely manner. Numerous delays were again noted in depositing receipts in the bank. This deficiency occurred because of management's failure to ensure cash receipts were deposited on a timely basis.
Petty Cash A petty cash count performed by the prior year auditors revealed a shortage of $200.00. During fieldwork for the fiscal year 1996 review, petty cash counts performed by the auditors revealed only immaterial variances. However, petty cash counts performed by the Authority at fiscal year end revealed significant variances at several petty cash locations. These variances resulted in the Authority increasing petty cash by $1,100.00 (net) to account for unsubstantiated shortages/overages in petty cash accounts. The Authority should develop policies and procedures for bank accounts to ensure that: (1) journal entries made to the general ledger contain adequate explanations and supporting documentation; (2) accounting functions are properly supervised; (3) deposits are made in a timely manner; and (4) petty cash counts are made during the fiscal year to verify proper accountability and accuracy of amounts reported on the Authority's general ledger.
Mana~ement Response Income Account
(1) Our procedures do not allow journal entries without documentation. Our monthly close-out may require accepting unidentified deposits until research locates the source of the deposit. Additionally, support of some deposits may be filed in a manner that better allows management to access the information such as lease payments and hotel tax deposits.
(2) The correcting entry was made late specifically because of our attention to the reconciliation function. It took an extended time period to correctly identify the amount in question.
(3) I accept the findings with the qualification that it was a one-time error and of a totally immaterial amount.
Petty Cash Your finding documents staff attention to ensuring accuracy and accountability.
F -245

0/ State (1eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
JEKYLL ISLAND STATE PARK AUTHORITY
PRIOR YEAR/CURRENT YEAR
INVENTORIES Inconsistencies in Accounting for Resale Inventory Financial Statements Audit Control Number 910-96-04
The review report for the year ended June 30, 1995, reported that the Authority provided items for resale which were not included in the Authority's perpetual inventory system. For the year under review, the Authority included alcoholic beverages and food for resale in the Authority's perpetual inventory system as required. However, the Authority did not include concessions and souvenirs for resale in the Authority's perpetual inventory system.
This deficiency occurred because of management's failure to account for resale inventories for concessions and souvenirs in a manner consistent with other resale inventories. The Authority should determine and document the materiality of all resale inventories and ensure that such inventories are accounted for in a consistent manner.
Mana~ement Response
Your finding again documents our progress. The inventories not kept perpetually are being considered for the materiality.
GENERAL LEDGER Detailed Listing of Salaries Not Reconciled Financial Statements Audit Control Number 910-96-05
The review report for the year ended June 30, 1995, disclosed that the listing of salary payments made to employees as reported to the Georgia Department of Audits did not reconcile with the amounts recorded as salaries in the general ledger as presented for examination. For the year under review, the salary amounts submitted to the Georgia Department of Audits again did not reconcile with the amounts recorded as salaries in the general ledger. A comparison of the amounts submitted to the Department to the general ledger disclosed a difference of$38,216.38. An analysis of this difference resulted in corrections being made to the listing submitted to the Department in the amount of $38,333.00. The remaining difference of $114.64 is reflected as an unlocated variance on the "Reconciliation of Salaries and Travel" schedule of this report. The Authority should ensure that the quarterly reports submitted to the Georgia Department of Audits are balanced to the general ledger.
Mana~ement Response
We will make adjustments to future quarterly reports so that this will not happen again.
EXPENDITURES/LIABILITIESIDISBURSEMENTS Voucher Sample Exceptions/Improper Expenditures Financial Statements Audit Control Number 910-96-06
The review report for the year ended June 30, 1995, reported that the internal accounting control procedures for the disbursing function for the Jekyll Island State Park Authority were deficient. For the year under review, deficiencies continued to exist. An examination of 166 expenditure vouchers was performed to test the validity and accuracy of the expenditure transactions.
F246

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

JEKYLL ISLAND STATE PARK AUTHORITY PRIOR YEAR/CURRENT YEAR

The vouchers examined revealed the following deficiencies:

(1) One voucher was paid without the bid process being followed. (2) Five vouchers were paid from a copy and/or fax copy rather than an original invoice. (3) Eight vouchers did not contain an invoice. (4) One voucher was paid from a credit card statement without supporting documentation. (5) Eighty vouchers lacked purchase orders. (6) One travel voucher was paid without a required travel reimbursement expense form. (7) Eight vouchers lacked receiving signatures. (8) Two vouchers could not be located. (9) One travel voucher was paid with no explanation on the travel reimbursement expense form. (10) The following expenditures were determined to be unallowable and in violation of Article III, Section
VI, Paragraph VI of the Constitution of the State of Georgia which provides, in part, as follows:

..... the General Assembly shall not grant or authorize extra compensation to any public officer, agent, or contractor after the service has been rendered or the contract entered into. "

EXPENDITURE CATEGORYtpURPOSE
Supplies and Materials Expenditure for hot chocolate, coffee, creamer and sugar for employees. Get well flower arrangement and coffee filters for employees. Employee meal. Two shirts for employee gifts.
Other Operating Expenses Employee Incentives Employee Christmas party including banquet and band. Christmas gifts to employees. Food and beverage employees outing. Employee Committee Golf Tournament prizes. Halloween prizes for employees.

AMOUNT
$ 114.05 27.66 15.63 55.00
9,276.34 1,499.61
390.00 148.73 100.00

$11.627.02
(11) The following expenditures were considered to be either undocumented, excessive, or questionable as to legality:

EXPENDITURE CATEGORY/ITEM
Supplies and Materials Expenditure paid from a credit card statement without supporting documentation. Unsupported expenditure for golf accessories. Overnight accommodations and meals for Tournament Tough Camp paid without supporting documentation.
Travel Travel reimbursement expenditures in excess of State travel regulations.

AMOUNT
$ 30.73 54.00
588.96 740.79

$ 1.414.48

F -247

State of (/eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

JEKYLL ISLAND STATE PARK AUTHORITY PRIOR YEAR/CURRENT YEAR

In addition, an analysis of Other Operating Expenses revealed unallowable expenditures as follows:

EXPENDITURE CATEGORY/PURPOSE

AMOUNT

Other Operating Expenses Employee Incentives Awards for employees Gifts and prizes for employees - Other Parties - Food, Beverages and Supplies Christmas Other Luncheon

$ 597.10 162.32
463.71 169.81 355.48

$ 1.748.42

These conditions occurred because of management's failure to establish and implement controls over the disbursing function and to comply with State laws and regulations. All expenditures should be supported by proper documentation including purchase orders, original invoices, receiving signatures, required travel reimbursement expense forms and bid procedure documentation. The Authority should implement procedures to ensure that expenditures are reviewed for accuracy, proper documentation, and compliance with State laws and regulations prior to payment and recording of such expenditures in the financial records.

Mana~ement Response

We will work to improve our disbursing function and establish Board policies to guide us in making expenditures necessary for conducting our business by 6/30/97.

EXPENDITURESILIABILITIES/DISBURSEMENTS Failure to Maintain Temporary Employee Retirement Subsidiary Ledger Financial Statements Audit Control Number 910-96-07

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. The review report for the year ended June 30, 1995, disclosed that investment earnings were not allocated to the individual accounts for the fiscal year. In addition, the Authority could not produce a subsidiary ledger of participating employees for the TERP funds at June 30, 1995. For the year under review, the investment earnings for three months of the fiscal year were not allocated to the individual accounts, and again the Authority could not produce a subsidiary ledger of participating employees for the TERP funds at June 30, 1996. However, the Authority did provide a subsidiary ledger for examination which included activity through August 1996. The Authority's reconciliation of the August 1996 subsidiary ledger to the general ledger liability account revealed an unidentified variance of $5, 187.24.

These deficiencies were a result of management's failure to establish procedures for maintaining the subsidiary ledger of participating employees and to provide adequate supervision to ensure plan requirements are being met. The Authority should ensure the subsidiary ledger of participating employees is reconciled to the general ledger on a monthly basis.

F248

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
JEKYLL ISLAND STATE PARK AUTHORITY
PRIOR YEAR/CURRENT YEAR
Mana~ement Response
I accept this finding in total and have eliminated this process from our operations.
EMPLOYEE COMPENSAnON Accounting/Internal Control Deficiencies Financial Statements Audit Control Number 910-96-08
For the year ended June 30, 1995, the accounting procedures and internal controls of the Jekyll Island State Park Authority were found to be inadequate in the area of employee compensation. For the year under review, deficiencies continued to exist. The following is an analysis of deficiencies associated with employee compensation noted during this review:
(1) For the year ended June 30, 1995, the Authority paid bonuses to three individuals without proper supporting documentation and could not document formal approval of the percentages used in the calculation of the bonuses which resulted in overpayments in the amount of$33,232.45. For the first six months of the year under review, the Authority continued to pay bonuses using the same calculation utilized in the prior year, resulting in an overpayment of $3,272.07. For the months of January and February, 1996, the Authority did not pay bonuses. In March 1996, the Authority implemented a new bonus plan which was formally approved by the Board in June 1996. For the months of March through June, 1996, bonuses were correctly calculated based on the accounting records and the new approved percentage.
(2) For the year ended June 30, 1995, a new position was created by the Director of Human Resources without Board approval. The position was exempt from overtime yet the individual received overtime payments throughout the fiscal year. During the year under review, the Authority continued to pay overtime through December, 1995. This condition existed because of management's failure to obtain approval for the new position and to pay according to the individual's employment contract.
(3) For the year ended June 30, 1995, the Authority did not have a Board approved temporary pay scale. During the year under the review, approval of the temporary pay scale was not obtained. However, in the subsequent period the Authority'S temporary pay scale was formally approved by the Board.
(4) For the year ended June 30, 1995, the FICA and Federal withholdings liability accounts in the general ledger were overpaid. During the year under review, the FICA, State, and miscellaneous withholding liability accounts were overpaid. Unsupported journal entries were made to reduce the overpayments. The overpayments are the result of management's failure to monitor and maintain accurate accounting records.
(5) For the year under review, the Authority paid the Internal Revenue Service (IRS) penalties and interest in the amount of $4,970.08. The penalties and interest are the results of management's failure to deposit Federal payroll taxes on a timely basis as required by IRS regulations.
F -249

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
JEKYLL ISLAND STATE PARK AUTHORITY
PRIOR YEAR/CURRENT YEAR
(6) Based on a sample of 36 employees, 3 employees were overpaid in the cumulative amount of $189.71. One overpayment was the result of an employee working in two departments with separate time cards and claiming the same hours worked for both departments. Other overpayments resulted from an erroneous calculation and the lack of supporting documentation in the personnel files for pay adjustments. The overpayments are the result of management's failure to review time cards, to correctly calculate hours worked and to adequately maintain personnel files.
(7) The payroll sample of 36 employees also revealed the following: (1) one personnel file did not contain documentation for the hourly rate of pay; (2) one personnel file could not be located; (3) two job classifications were not on the temporary pay scale; and (4) one employee's pay exceeded the maximum amount for the job classification. These conditions occurred because of management's failure to adequately maintain personnel files, to obtain approval for new positions from the Board and to comply with the Job Classification List-Grade Order approved by the Board.
(8) For the year under review, payments reported by the Authority to the Employees' Retirement System of Georgia (ERS) on the ERS Annual Reporting Form did not reconcile with the amount recorded on the Authority's general ledger by an amount of $7,376.11. This condition occurred because of management's failure to ensure amounts reported to the ERS were documented by the accounting records.
(9) For the year under review, certain employees were allowed to submit time sheets four to six days before the end of the pay period. This condition occurred because of management's policy to allow time sheets to be submitted before the end of the pay period.
The Authority should develop policies and procedures to ensure that: (1) all new positions are approved by the Board and are paid according to their positions; (2) the general ledger payroll withholding liability accounts are corrected and monitored throughout the year to ensure that funds are correctly disbursed; (3) Federal payroll taxes are deposited on a timely basis; (4) time sheets and cards are properly examined and any overpayments are reimbursed; (5) personnel files are adequately maintained and contain documentation for all adjustments and changes; (6) ERS payments are correctly recorded on the general ledger; and (7) the practice of allowing time sheets to be submitted before the end of a pay period is discontinued. In addition, the Authority should review bonuses paid during fiscal year 1995 and 1996 to ensure that individuals were not overpaid and should formally document this review.
Mana'lement Response
I accept this rmding and correcting actions are in process. Among the actions are the replacement of the staff who received the questioned bonuses and reorganizing our payroll operations to bring it under the control of the accounting department.
F -250

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
JEKYLL ISLAND STATE PARK AUTHORITY
CURRENT YEAR
REVENUEIRECEIVABLESIRECEIPTS AccountinglInternal Control Deficiencies Financial Statements Audit Control Number 910-96-09
For the year under review, the accounting and internal controls of Jekyll Island State Park Authority were found to be inadequate in the area of cash receipts. The following matters came to our attention as a result of our examination.
The accounting department utilizes an offline computer generated spreadsheet to record the daily sales and receipting process from the various receipting locations. The totals from this spreadsheet are posted to the general ledger on a monthly basis by journal entry. A sample of four daily sales transaction reports from each receipting location was selected and traced into the spreadsheet referred to above. The following deficiencies were noted:
(1) Three receipting locations failed to provide documentation to support daily sales transaction reports.
(2) Ten of twelve locations were unable to provide daily cash register tapes for individual cash transactions.
Further testing of the receipting process was performed and is summarized as follows:
(1) On a daily basis, Morgan's Grill and Blackbeard's Restaurant, which are operated by the Authority, used prenumbered receipts for each restaurant check. With the exception of void receipts and receipts to document employee discounts, all prenumbered receipts were discarded at the close of business after balancing the cash.
Testing of employee food discounts at Morgan's Grill and Blackbeard's Restaurant revealed that discounts for food and beverage employees included 100% discounts on food and alcoholic beverages and that this discount was applied to evening and weekend meals. Discounts of this nature are considered to be a gratuity (improper expenditure) unless they are part of an employee compensation package and are reported as compensation in accordance with IRS regulations. A sample of four days 100% discounted meals for certain individuals determined that the daily average was $43.11. The discounts for food and beverage employees were not recorded in the formal accounting records.
The Authority records, by journal entry, certain 100% meal discounts as "interdepartmental transfers and house charges" through revenues and expenditures. An analysis of these journal entries for eleven months of the fiscal year revealed the Authority recorded revenues and expenditures of $6,610.30 for employee meals including their guests, employee parties, and meals for various other individuals. Supporting documentation for August 1995 journal entries totaling $4,684.41 could not be located by the Authority for review.
(2) The Authority maintains a guard house to monitor traffic coming onto and leaving Jekyll Island and charges a parking fee for visitors to the island. The Authority does not have a system in place to control revenues received for daily admissions.
F - 251

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
JEKYLL ISLAND STATE PARK AUTHORITY CURRENT YEAR
(3) Summer Waves utilized two sources of information to prepare the daily sales transaction reports: (I) cash register tapes; and (2) prenumbered receipts. The prenumbered receipts were used for group and discount tickets and were not included in the totals on the cash register tapes. The prenumbered receipts were not maintained in numerical sequence. Examination of 137 prenumbered receipts for a 30 day period revealed 36 missing receipts.
(4) The Convention Center maintains files for each event which utilize their services. Examination of files for three convention engagements disclosed alcoholic beverages used during functions were not inventoried before and after the operation of cash bars. Additionally, the Authority did not perform any analysis or calculations to determine the reasonableness of receipts from sales of alcoholic beverages. Our analysis of expected sales for the three engagements, based on the number of individuals attending the functions and the purchase of alcoholic beverages for those functions, revealed significant shortages. One convention engagement had exhibitors who required electrical and equipment rentals. Documentation for the billing of charges associated with electrical and equipment rentals was not available for review. Only deposits slips were in the file to support these charges. Prenumbered receipts were not maintained in numerical sequence.
(5) The accounting department does not consistently issue prenumbered receipts to revenue collecting locations. Receipts are written on a ledger sheet on a weekly basis. The ledger sheet had some supporting documentation, however, not all receipts on the sheet were supported.
As a result of the aforementioned deficiencies, fraud or irregularities could have occurred without being detected. These deficiencies were the result of management's failure to implement and monitor accounting and internal control procedures relating to cash receipts. The Authority should review each locations' receipting procedures and develop accounting and internal control procedures which provide for accountability of cash receipts to reduce the risk of fraud or irregularities occurring and to ensure safeguarding of Authority assets. Mana~ement Response I accept this finding with the qualification that the nature of our operations requires reliance upon department management to ensure the safe guarding of our receipts. Each operation has procedures in place that facilitates a true accounting of the activity taking place. I will continue to refine our process and purchase cash registers where needed. Additionally, the reorganization of the accounting department will allow opportunities for the internal audit of cash receipts.
F - 252

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

NORTH GEORGIA MOUNTAINS AUTHORITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OF QUESTIONED COSTS

The status of the finding disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

912-95-01

Corrective Action Implemented

F - 253

0/ State (/eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
LAKE LANIER ISLANDS DEVELOPMENT AUTHORITY CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS EMPLOYEE COMPENSATION Failure to Submit Salary and Travel Listing to the State Auditor Financial Statements Audit Control Number 913-96-01 For the year ended June 30, 1996, the Lake Lanier Islands Development Authority failed to submit a listing of salaries and travel to the State Auditor's Office as required by Official Code of Georgia Annotated Section 50-6-27 which states, in part, as follows:
"Each office, institution, board, department, commission, authority, university, college, and local board ofeducation is required and directed to submit to the state auditor, in a format prescribed by the state auditor, a listing ofall personnel ofsuch office, institution, board, department, commission, authority, university, college, or local board of education showing name, title or functional area, salary, and travel expense for each individual... " The failure to submit a listing of salaries and travel results in their exclusion from the "Report of the State Auditor - Personal Services, Travel Expense and Reimbursed Expenses" published by the State Auditor's Office. This deficiency occurred because the Authority was not aware of the change in the law for fiscal year 1996 which required authorities to submit listings of salaries and travel to the State Auditor's Office for publication. The Authority should implement procedures to ensure that salary and travel listings are submitted to the State Auditor's Office in a timely manner and are balanced to the general ledger. Mana~ement Response This is to advise you that we concur with tl:e amount, content and presentation of the above referenced finding. The corrective action implemented to resolve this item includes the quarterly filing of our Salary and Travel Listing with the Department of Audits as well as a quarterly reconciliation to the general ledger. The reconciliation is attached to the file copy of our Salary and Travel Listing submission.
F -254

0/ Stale (/eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA STUDENT FINANCE AUTHORITY (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

917-95-01 917-95-02 917-95-03

See Audit Control Number 917-96-01 Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

FEDERAL FINANCIAL REPORTS Report Not in Agreement with Accounting Records Federal Financial Assistance Federal Family Education Loan Program [CFDA 84.032] Audit Control Number 917-96-01

Amounts reported on the June 30, 1996 and June 30, 1995 Form 799 did not agree with amounts recorded on the general ledger as student loan activity. 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 the differences represent appropriate reconciling items. Adjustments to student accounts should be made as appropriate to resolve differences.

Mana~ement Response

We concur with this recommendation.

Reports will be produced during Fiscal Year 1997 which enumerate differences that exist between the Form 799 and trial balances. These trial balances will then be reconciled to the general ledger. However, because the Form 799 is a quarterly report, the reconciliation to the trial balance can only by performed quarterly, not monthly.

CURRENT YEAR

MONITORING SUBRECIPIENTS Failure to Monitor Subrecipients Federal Financial Assistance Student Incentive Program [CFDA 84.069] Audit Control Number 917-96-02

Georgia Student Finance Authority (the Authority) has delegated responsibility for complying with requirements of the Student Incentive Grant program to the participating institutions. However, as the primary recipient of the program funds, the Authority remains responsible for the proper administration of the program.

The Authority performed two reviews in fiscal year 1996 and one review in fiscal year 1995 of institution procedures and records to verify that the institutions are in compliance with program requirements. We believe the Authority should perform additional reviews to ensure compliance.

(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F255

Slale of (Jeorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS For the Fiscal Year Ended June 30, 1996
GEORGIA STUDENT FINANCE AUTHORITY (*) CURRENT YEAR
ManafJement Response
We concur with the recommendation. However, beginning with the 1996-1997 award year, the State of Georgia stopped participating in the Federal State Student Incentive Grant (SIG) Program. The 1998-1999 award year may be the last year of the program. Since only renewal students are receiving SIG, we do not plan to increase our program review efforts.
(*) THE AUDIT OF THIS ORGANIZATIONAL UNIT WAS PERFORMED BY OTHER AUDITORS
F - 256

0/ Slale (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGE L. SMITH, II - GEORGIA WORLD CONGRESS CENTER AUTHORITY CURRENT YEAR
INVESTMENTS Noncompliance with Bond Covenants Financial Statements Audit Control Number 922-96-01 At June 30, 1996, the George L. Smith, II Georgia World Congress Center Authority had funds, which were designated to retire Series 1990 Revenue Bonds (Domed Stadium Project), invested in certain securities which were not in accordance with the governing bond covenants. Covenants of these revenue bonds defme certain criteria for the types of "permitted investments" in which funds pledged to retire debt and related interest may be invested. Acting as revenue bond Trustee for the Authority, the Bank of New York had invested $37,649,417.95 and $115,007.1 0 in the Nations Treasury Fund Class B and Fidelity Treasury Portfolio II, respectively at June 30, 1996. These investments are considered open-end mutual funds. Certain investment types listed in the prospectus for these mutual funds do not meet the criteria stipulated in the bond covenants for permitted investments. This condition was a result of the Authority's failure to adequately monitor its investment activities. The Authority should implement procedures to more closely monitor its investing practices and ensure that the revenue bond Trustee is aware of specific investment requirements contained in the bond covenants.
A1ana~ementResponse
We concur with this fmding. In August and September, 1996, the Georgia World Congress Center (GWCC) contacted the Trustee Bank regarding these investments and instructed the bank's representative to put the GWCC's funds into permitted investments only. This action by the bank will take place during fiscal year 1996-1997.
F - 257

0/ State (jeorffia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA HOUSING AND FINANCE AUTHORITY - EDP REVIEW (*) STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of fmdings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

923a-95-01 923a-95-02 923a-95-03 923a-95-04 923a-95-05 923a-95-06 923a-95-07 923a-95-08 923a-95-09 923a-95-10 923a-95-11 923a-95-12 923a-95-13 923a-95-14 923a-95-15

No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996 No follow-up performed in Fiscal Year 1996

(*) THE FISCAL YEAR 1995 EDP REVIEW WAS PERFORMED BY OTHER AUDITORS
F - 258

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA AGRICULTURAL EXPOSITION AUTHORITY STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

926-95-01 926-95-02

See Audit Control Number 926-96-0 I See Audit Control Number 926-96-02

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Financial Statements Audit Control Number 926-96-0 I

The review report for the year ended June 30,1995, 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

(4) Employee Compensation

(2) Revenue/Receivables/Receipts

(5) General Ledger

(3) Expenditures/Liabilities/Disbursements

(6) General Fixed Assets/Property Management

During the year under review, the Authority corrected its accounting procedures such that accounting activity was recorded in accordance with State policies.

The Authority should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above categories, and implement those procedures to strengthen the controls over the accounting function.

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 objective is to maintain a system of internal accounting controls which would include organizational arrangements that would provide an appropriate division 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 financial 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. Furthermore, the addition of staff solely to merit an enhanced level of organizational effectiveness, Le., to allow an improvement in the separation of duties and responsibilities, would not be cost justified, especially during a time of government streamlining, downsizing, and redirection. The Authority 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.

F259

State of (feorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
GEORGIA AGRICULTURAL EXPOSITION AUTHORITY PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 926-96-02
The review reports for the years ended June 30, 1994, and June 30, 1995, noted that equipment additions were not properly reconciled to the general ledger accounts resulting in unidentified variances of $8,240.94 and $76,729.46 respectively. For the year under review, the equipment subsidiary inventory records were updated to include $13,686.92 of these prior year amounts. However, the equipment records were again deficient and these deficiencies are noted as follows:
(1) Equipment inventory records were not updated for purchases in a timely manner.
(2) Equipment additions to the equipment inventory subsidiary records for purchases made were not adequately reconciled to the general ledger expenditure accounts resulting in an unidentified variance of$I,222.03.
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.
Mana~ement Response
Significant effort is being directed towards correcting our equipment inventory records. As stated in the audit fmding, $13,686.92 of prior year amounts were 1,lpdated to the equipment records. We are continuing to research prior years discrepancies. However, it is felt that a significant portion of the amount in question represents items costing less than $1,000, and as such should have been recorded to Object Class 012, "Regular Operating Expenses". The expenditures in this classification do not have to be recorded to the Authority's subsidiary records. 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 FY94's audit response. These recommendations consisted of re-assigning the responsibility of equipment inventory from the Maintenance Director to the AdministrativelPurchasing 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 equipment inventories.
F - 260

State of (1eorlJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

STATE TOLLWAY AUTHORITY 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, 1995, is summarized below:

Audit Control Number

Status of Finding

927-95-01

Corrective Action Implemented

CURRENT YEAR

INVESTMENTS Noncompliance with Bond Covenants Financial Statements Audit Control Number 927-96-01

At June 30, 1996, the State Tollway Authority had funds, which were designated to retire Series 1991 State of Georgia Guaranteed Revenue Bonds (Georgia 400 Project), invested in certain securities which were not in accordance with the governing bond covenants.

Covenants of these revenue bonds defme certain criteria for the types of "permitted investments" in which funds pledged to retire debt and related interest may be invested. Acting as revenue bond Trustee for the Authority, the Bank of New York had invested $19,217,361.70 in the Nations Treasury Fund Class B portfolio at June 30, 1996. These investments are considered open-end mutual funds. Certain investment types listed in the prospectus for these mutual funds do not meet the criteria stipulated in the bond covenants for permitted investments. This condition was a result of the Authority's failure to adequately monitor its investment activities.

The Authority should implement procedures to more closely monitor its investing practices and ensure that the revenue bond Trustee is aware of specific investment requirements contained in the bond covenants.

Manaftement Response

The State Tollway Authority concurs with this recommendation. In January 1997, the Authority established procedures to ensure that the investments of the revenue bond Trustee are "permitted investments" under the covenants of the Series 1991 State of Georgia, Guaranteed Revenue Bonds (Georgia 400 Project). A copy of the procedures are incorporated in the Authority's Policy and Procedures Manual and are available for examination. The current investments by the Trustee will be redirected, in a timely manner, by the Authority into permitted investments under the above stated bond covenants.

F261

State of (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30. 1996
GEORGIANET AUTHORITY
CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Bank Reconciliation Procedures Financial Statements Audit Control Number 941-96-0 I
For the year ended June 30, 1996, the GeorgiaNet Authority's accounting procedures were not sufficient to provide for adequate control over the bank reconciliation process. The following deficiencies were noted:
(1) The bank statements for the operating account 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.
The Authority 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 financial information.
Management Response
We concur with the recommendation of preparing monthly bank reconciliations and recording general ledger activity on a timely basis to reflect current financial information. In January 1997, the Authority began preparing monthly bank reconciliations concurrent with closing of the fiscal month. Reconciling differences requiring general ledger adjustment will be recorded during the next fiscal month.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 941-96-02
For the year under review, our examination included a review of the internal accounting controls utilized by the GeorgiaNet Authority in maintaining their State Property System. This review consisted of testing the system for compliance with State laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:
(1) Equipment additions were not reconciled to the general ledger expenditure accounts.
(2) Equipment purchases for the "KIOSK" project represents approximately $1.1 million dollars of the General Fixed Assets Account Group reflected in this report. The Authority does not maintain subsidiary equipment inventory records for the KIOSK project. As a result, testing could not be performed.
In addition, a sample of equipment items was selected to test the accuracy of the Authority's general fixed asset records. Of the 101 equipment items selected for physical inspection, two items did not have decal numbers attached. Items were identified by serial numbers or descriptions.
F -262

State of (}eorftia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIANET AUTHORITY CURRENT YEAR
The Authority is required to maintain equipment inventories in accordance with the State Property System Manual. The discrepancies identified above, were caused by the Authority'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 Authority should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual. Manaftement Response We concur with the recommendation of reconciling equipment additions to the general ledger expenditure accounts. We also concur with the recommendation of maintaining a subsidiary equipment inventory record of KIOSK equipment. During the audit, the Authority reconciled all FY 1996 non-KIOSK equipment purchases to the general ledger and presented a balanced inventory listing to the auditors which was accepted into the audit workpapers as an accurate but untimely listing. Due to time constraints stemming from personnel turnover, the Authority was unable to complete a similar listing of KIOSK equipment prior to the end of the audit. The auditors were provided with an incomplete listing of KIOSK equipment which did not show location, value of the equipment, and some decal or serial number information. Such information was available within the accounting records but had not been reconciled or compiled into a single inventory listing. The Authority will compile all necessary inventory information into a single balance listing by June 30, 1997. Also by June 30, 1997, the Authority will establish a written procedure for inventory processing, accounting and reconciliation which will be in accordance with the State Property Manual as it pertains to the Authority.
F263

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA 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, 1995, is summarized below:

Audit Control Number

Status of Finding

947-95-01

See Audit Control Number 947-96-01

PRIOR YEAR

EXPENDITURESILIABILITIES/DISBURSEMENTS Retirement Benefit Overpayments Financial Statements Audit Control Number 947-96-01

The review report for the year ended June 30, 1995, noted an outstanding balance of overpayments to certain members in the amount of$5,054.64, which was a result of errors made in the calculation of retirement benefits. In the year under review, the Annuity and Benefit Fund received $1,622.58 in overpayment recoveries.

The remaining outstanding balance of$3,432.06 is being recovered through deductions from the monthly benefits paid to those individuals involved.

Mana&ement Response

We agree with the Findings Report in the Peace Officers' Annuity and Benefit Fund audit for the year ending June 30, 1996. The following corrective action is being taken:

The remaining outstanding balance of $3,432.06 is being recovered through deductions from the monthly benefits paid to those individuals involved.

F -264

0/ State (jeor'Jia
FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30, 1996

GEORGIA FIREMEN'S PENSION 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, 1995, is summarized below:

Audit Control Number

Status of Finding

950-95-01

See Audit Control Number 950-96-01

PRIOR YEAR

EXPENDITURESILIABILITIESIDISBURSEMENTS Retirement Benefits Overpayments Financial Statements Audit Control Number 950-96-01

The financial report for the year ended June 30, 1995, noted an outstanding balance of $5,315.50 for overpayments of retirement benefits to deceased members. The Pension Fund recovered $183.50 of these overpayments during the year under review. The remaining balance of $5, 132.00 is being recovered in monthly payments from the survivors of those members involved.

Mana~ement Response

As mentioned in the finding, we are attempting to recover these overpayments. A default judgement has been granted in our favor against the individual involved.

F - 265

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA GOLF HALL OF FAME STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

958-95-01 958-95-02

Corrective Action Implemented Corrective Action Implemented

F -266

FINDINGS AND IMPROPER OR QUESTIONED COSTS

For the Fiscal Year Ended June 30. 1996

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status of Finding

977-95-01 977-95-02

See Audit Control Number 977-96-01 See Audit Control Number 977-96-02

-PRIOR YEAR/CURRENT YEAR

GENERAL LEDGER Inadequate Documentation of Manual Journal Entries Financial Statements Audit Control Number 977-96-01

The audit report for the year ended June 30, 1995, reported that the Georgia Public Telecommunications Commission's accounting procedures were not sufficient to provide for adequate control over the manual journal vouchers and related procedures. For the year ended June 30, 1996, deficiencies with the manual journal vouchers and related pwcedures continued as follows:

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 evidence of review or approval by appropriate

supervisory personnel.

3.

Documentatitm for certain manual journal entries were missing from the files.

These deficiencies noted above were caused by a lack of internal controls over manual journal 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~ement Response

We concur with the audit finding and recommendation for correction. 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 the Director of Administrative Services 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 Accounting Officer to be maintained in a sequential file.

F -267

FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION
PRIOR YEAR/CURRENT YEAR
GENERAL LEDGER General Ledger not in Balance with Subsidiary Ledgers Financial Statements Audit Control Number 977-96-02
The audit report for the year ended June 30, 1995, disclosed that the Commission's general ledger did not agree with applicable subsidiary records. For the year ended June 30, 1996, this condition continued to exist. At June 30, 1996, 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 manuallournal entries.
The Accounting 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
We concur with the audit finding and recommendation for correction. Before each subsidiary ledger is closed for the month, the Accounting Officer will make a comparison with the general ledger to determine if there 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. The Director of Administrative Services will sign a copy of the monthly reconciliation.
CURRENT YEAR
REVENUEIRECEIVABLES/RECEIPTS Deletion of Accounts Receivable without Complete Documentation Financial Statements Audit Control Number 977-96-03
For the year ended June 30, 1996, the Georgia Public Telecommunications Commission made a determination that prior year accounts receivable in the amount of$32,873.85 had been recorded in error and deleted these receivables from the general ledger. However, documentation provided by the Commission only supported an adjustment of receivables in the amount of$23,118.39. Documentation supporting the remaining balance of $9,755.46 was found to be incomplete.
The Georgia Public Telecommunications Commission should establish controls to ensure that future accounts receivable are accurately recorded and fully documented as to source and purpose. Amounts set-up as accounts receivable in error should be corrected only after adequate research and documentation. Write-off of receivables should be made only as authorized by Official Code of Georgia Annotated Section 50-16-18.
F - 268

0/ State (JeorCJia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 30, 1996
GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION
CURRENT YEAR
Mana~ement Response
We concur with the audit fInding and recommendation for correction. Accounts receivables will be recorded on the books upon receipt of documentation as to the source, purpose and amount of the receivable. If it is found that a receivable was recorded in error after adequate research and documentation, approval must be obtained from the Accounting OffIcer before the item is removed from the books. All write-offs of receivables will only be made as authorized by OffIcial Code of Georgia Annotated Section 50-16-18.
GENERAL FIXED ASSf;TSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 977-96-04
For the year under review, our examination included a review of the internal accounting controls utilized by the Georgia Public Telecommunications Commission in maintaining their State Property System. This review also consisted of testing the System for compliance with State laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:
(1) Equipment inventory records were not updated for additions in a timely manner. The fIscal year end reconciliation prepared by the Commission revealed a reconciling item of$3,194,243.87 for fIscal year 1996 additions that had not been entered onto the equipment inventory records at June 30, 1996.
(2) Equipment inventory records for additions were updated incorrectly. A random sample of twenty-one (21) current year additions revealed eight (8) equipment items that had been updated onto the equipment inventory records incorrectly by the amount of $56,084.00. These 8 items had an acquisition cost of$11,728.00, but were entered as $67,812.00.
A subsequent review of the Commission's fIscal year end reconciliation revealed an additional reconciling item of$127,689.50 for errors in updating fIscal year 1996 additions. (The $56,084.00 noted above is included in the $127,689.50 reconciling item.)
(3) Equipment inventory records were not updated for all additions. During testing for current year additions, auditors discovered two (2) current year equipment purchases totaling $3,589.00 that had not been entered onto the equipment inventory records at June 30, 1996.
In addition, a random sample offorty-six (46) equipment items was selected to test the accuracy of the Commission's general fIxed asset records. This random sample contained a value of $2,617,995.59 and was selected for the purpose of locating the equipment as recorded in the inventory records. The following defIciencies were noted:
(1) Three (3) items totaling $311,398.00 could not be located. Two of these items totaling $310,000.00 were surplused, but were not removed from the equipment inventory records.
(2) Three (3) items did not have decal numbers attached. Items were identifIed by serial numbers.
F - 269

State of (/eorflia
FINDINGS AND IMPROPER OR QUESTIONED COSTS
For the Fiscal Year Ended June 3D, 1996
GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION CURRENT YEAR
(3) Two (2) items were located in locations other than the location indicated in the equipment inventory records.
(4) One (I) item was listed on the equipment inventory records with an incorrect decal number. The Commission is required to maintain equipment inventories in accordance with provisions of the State Property System Manual. The discrepancies identified above were caused by the Commission'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 Commission 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 Response We concur with the audit finding and recommendation for correction. Equipment purchases will be placed on the inventory records for prior FY96 and current year equipment purchases will be placed on the inventory records as the items are received. Any necessary corrections for items on the inventory records will be made and l' reconciliation will be performed to verify corrections. A complete inventory will be taken to verify that all equipment is recorded correctly on the inventory records and that all items which are suppose to have decals do have decals. Documentation will be maintained for all items removed from inventory. The Commissioner will maintain equipment inventories in accordance with provisions in the State Property System Manual.
F270

SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL GRANTOR AGENCY

(THIS PAGE INTENTIONALLY LEFT BLANK)

SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL AGENCY

For the Fiscal Year Ended June 3D, 1996

CFDA NUMBER

ORGANIZATIONAL UNIT NAME

Agriculture, U. S. Department of

10.203 10.558

University of Georgia Education, Department of

Education,U. S. Department of

84.007 84.007 84.007 84.007 84.031 84.032 84.032 84.032 84.033 84.033 84.033 84.033 84.038 84.038 84.038 84.038 84.038 84.044 84.048 84.048 84.048 84.048 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.063 84.069 84.069 84.126 84.268

Fort Valley State College Georgia Southern University Macon College Middle Georgia College Albany State University Fort Valley State College Student Finance Authority, Georgia Valdosta State University Fort Valley State College Georgia Southern University Middle Georgia College Moultrie Area Technical Institute Fort Valley State College Georgia College Georgia Institute of Technology Georgia State University Macon College Georgia Southern University . Albany Technical Institute North Metro Technical Institute Technical and Adult Education, Department of Walker Technical Institute Albany State College Albany Technical Institute Annstrong State College Atlanta Metropolitan College Chattahoochee Technical Institute Floyd College Fort Valley State College Georgia Military College Georgia Southern University Macon College Moultrie Area Technical Institute North Metro Technical Institute Savannah State University Southern College of Technology University of Georgia Valdosta State University West Georgia Technical Institute Fort Valley State College Student Finance Authority, Georgia Hwnan Resources, Department of Albany State University

F -273

ENTITY NUMBER

NUMBER OF
FINDINGS

QUESTIONED COST

518

$

0.00

414

0.00

533

3

539

1

581

1

584

1

521

1

533

1

917

1

551

1

533

1

539

1

584

1

837

1

533

5

536

1

503

1

509

1

581

1

539

I

820

1

839

1

415

1

849

1

521

2

820

1

524

1

561

4

827

5

573

2

533

8

590

1

539

2

581

4

837

3

839

2

548

1

550

1

518

1

551

2

819

2

533

1

917

1

427

1

521

1

1,800.00 0.00 0.00 0.00 0.00 0.00 0.00
729.60 0.00 0.00 0.00
310.00 1,359.00
0.00 659.00
0.00 0.00 0.00 0.00 40,860.00 0.00 110.00 1,557.91 0.00 472.00 1,050.00 630.00 0.00 9,302.48 0.00 0.00 1,119.00 722.00 0.00 0.00 0.00 0.00 267.00 0.00 3,264.55 0.00 0.00 1,680.00

SUMMARY OF FINDINGS APPLICABLE TO SPECIFIC CFDA NUMBERS BY FEDERAL AGENCY

For the Fiscal Year Ended June 30, 1996

CFDA NUMBER

ORGANIZATIONAL UNIT NAME

Education, U. S. Department of (continued)

84.268 84.268 84.268 84.268

Fort Valley State College Georgia Southern University Georgia State University Valdosta State University

General Services Administration

39.003

Administrative Services, Department of

Health and Human Services, U. S. Department of

93.563 93.667 93.778 93.778 93.959

Human Resources, Department of Human Resources, Department of Medical Assistance, Department of University of Georgia Human Resources, Department of

Housing and Urban Development, U. S. Department of

14.228

Community Affairs, Department of

Labor, U. S. Department of

17.246 17.250

Labor, Department of Labor, Department of

Transportation, U. S. Department of

20.205 20.205 20.218 20.500 20.505

Revenue, Department of Transportation, Department of Revenue, Department of Transportation, Department of Transportation, Department of

TOTAL QUESTIONED COSTS - FEDERAL AGENCIES OTHER QUESTIONED COSTS

TOTAL QUESTIONED COSTS

ENTITY NUMBER

NUMBER OF
FINDINGS

QUESTIONED COST

533

9

$

23,330.00

539

1

0.00

509

1

0.00

551

3

1,765.00

401

2

0.00

427

1

427

1

419

5

518

1

427

1

0.00 0.00 0.00 0.00 314,561.46

428

0.00

440

1

440

2

100.00 120.00

474

0.00

484

0.00

474

0.00

484

0.00

484

0.00

$

405,769.00

36,320.57

$

442,089.57

F -274

ApPENDIX "A"
I ORGANIZATIONAL UNITS

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY
For the Fiscal Year Ended June 30, 1996
ORGANIZATIONAL UNIT
Administrative Services, Department of Agricultural Exposition Authority, Georgia Agriculture, Department of Agrirama Development Authority, Georgia Audits and Accounts, Department of (*) Aviation Hall of Fame, Georgia 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 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 Judicial Branch Labor, Department of Lake Lanier Islands Development Authority Law, Department of Lottery Corporation, Georgia (*) Medical Assistance, Department of Music Hall of Fame Authority, Georgia
(*) Audits of these organizational units performed by other auditors.
AP-3

CONTROL NUMBERS
401 926 402 940 404 483 406 494
900 903 904 905 461 428 921 467 411 914 414
906 907 928 409 420 496 445 941 958 422 918 924 923 959 427 429 408 471
910
430 440
913
442 973 419
929

LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY
For the Fiscal Year Ended June 30, 1996
ORGANIZATIONAL UNIT
Natural Resources, Department of North Georgia Mountains Authority Pardons and Paroles, State Board of Pension Funds
District Attorneys Retirement System Employees' Retirement System of Georgia
Regular (*) Defined Contribution Plan (*) Legislative Retirement System (*) Public School Employees' Retirement System (*) State Employees' Assurance Department (*) Trial Judges and Solicitors Retirement System (*) 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 (*) Superior Court Judges Retirement System Teachers' Retirement System of Georgia (*) Personnel Board, State - Merit System of Personnel Administration Ports Authority, Georgia(*) Public Safety, Department of Public Service Commission Public Telecommunications Commission, Georgia Rail Passenger Authority Regents of the University System of Georgia, Board of Colleges and Universities Research Universities Georgia Institute of Technology Georgia State University Medical College of Georgia University of Georgia Regional Universities Georgia Southern University Valdosta State University State Universities Albany State University Armstrong State College Augusta State University Clayton State College Columbus State University Fort Valley State University Georgia College Georgia Southwestern College Kennesaw State University North Georgia College Savannah State University
(*) Audits of these organizational units performed by other auditors.
AP-4

CONTROL NUMBERS
462 912 465
946
416
N/A N/A
468
N/A N/A
950 949 947 951 948 945 482 460 916 466 470
977
960
472
503 509 512 518
539 551
521 524 527 528 530 533 536 542 543 545 548

State of (feorflia
LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY
For the Fiscal Year Ended June 30, 1996
ORGANIZATIONAL UNIT
Colleges and Universities (continued) State Universities (continued) Southern College of Technology West Georgia, State University of Associate Degree 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
Removal of Hazardous Materials, Agency for Revenue,Departmentof Sapelo Island Heritage Authority Secretary of State Seed Development Commission, Georgia Soil and Water Conservation Commission, State Sports Hall of Fame Authority Sports Hall of Fame Board Stone Mountain Memorial Association (*) Student Finance Authority, Georgia (*) Student Finance Commission, Georgia Subsequent Injury Trust Fund Board of Trustees Superior Court Clerks' Cooperative Authority, 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 Carroli Technical Institute Chattahoochee Technical Institute Columbus Technical Institute Coosa Valley Technical Institute
(*) Audits of these organizational units performed by other auditors.
AP-5

CONTROL NUMBERS
550 554
557 561 562 563 569 570 571
572
573 575 576 581 584 587 589
590 593 497 474 942 478 919 480 944 495 911 917 476 489 955 415
820 821 822 824 825 826 827 828 829

0/ State (jeorftia
LISTING OF ORGANIZATIONAL UNITS COMPRISING THE STATE OF GEORGIA REPORTING ENTITY
For the Fiscal Year Ended June 30, 1996
ORGANIZATIONAL UNIT
State Technical Institutes (continued) 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
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
847 831 833 834 835 836 837 838 839 844 818 840 817 842 843 845 846 848 849 819 927 484 486 488 490
922

(*) Audits of these organizational units performed by other auditors.
AP-6