Single audit report, June 30, 2000

SINGLE AUDIT REFORT
GrA AgOO
A 18 119Q-.2oob
JuNE 30.2000

EIN 58-0973190
SINGLE AUDIT REFORT
JuNE 30~ 2000
Prepared by
GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
RUSSELL W. HINTON. State Auditor
Georgia."s Governors Ma.nsion.
Cover Drawing by Scott Fuss
The capitol of Georgia was moved from Milledgeville to Atlanta in 1868. The present Governor's Mansion, a gracious three-story Greek Revival structure designed by Georgia architect A. Thomas Bradbury, was completed in January 1%8. The 24,000 square foot Mansion contains thirty rooms, most of which are furnished in the Federal Period style, and is surrounded by eighteen acres of wooded grounds. Governor Lester G. Maddox was the first governor to reside in the present Mansion. By law, the Mansion belongs to the people of the State of Georgia.

1USSEL.L. W. HINTON
STATE AUDITOR (404) 656-2174

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

May 14, 2001

To the Citizens of the State of Georgia, The Honorable Roy E. Barnes, Governor of Georgia
and Members of the General Assembly of Georgia
I am honored to present the Single Audit Report ofthe State of Georgia for the fiscal year ended June 30,2000. Organizational units comprising the State of Georgia reporting entity are listed in Appendix "A" of this report.
Federal laws and regulations require that the State undergo an annual audit in conformity with the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget (OMB) Circular A-l33, Audits ofStates, Local Governments, and Non-Profit Organizations. Accordingly, the Single Audit Report ofthe State of Georgia discloses the results ofthe financial operations ofthe State of Georgia report,ing entity, as well as its compliance with requirements applicable to Federal financial assistance programs administered by the State.
The State of Georgia's 10th Single Audit Report is the culmination of extensive planning, coordination, testing and evaluation by many people. I believe that the results ofthis statewide audit provides the users of this report valuable information that will serve to better guide the course ofthe State's future.
Respectfully,
~. ~QQ W.~- R ssell W. Hinton, CPA, CGFM State Auditor

Table of Contents June 30, 2000

SECTION A - GENERAL PURPOSE FINANCIAL STATEMENTS AND

REQUIRED SUPPLEMENTARY INFORMATION

Independent Auditor's Report on General Purpose FinancialStatements

:

General Purpose Financial Statements

Combined Balance Sheet - All Fund Types. Account Groups and Component Units

Combined Statement ofRevenues, Expenditures and Changes in Fund Balances -

All Governmental Fund Types, Expendable Trust Funds and Discretely Presented Component Units

Statement ofFunds Available and Expenditures Compared to Budget - Budget Fund:

Combined Statement ofRevenues, Expenses and Changes in Fund Equity/Fund Balances -

All Proprietary Fund Types, Nonexpendable Trust Funds and Discretely Presented Component Units

Combined Statement ofCash Flows -

All Proprietary Fund Types, Nonexpendable Trust Funds and Discretely Presented Component Units

Statements ofPlan Net Assets - Pension Trust Funds, Investment Trust Fund

and Discretely Presented Component Units

Statement ofChanges in Plan Net Assets - Pension Trust Funds Investment Trust Fund

and Discretely Presented Component Units

Combined Statement ofChanges in Fund Balances ~ College and University Funds

Combined Statement ofCurrent Funds Revenues, Expenditures and Other Changes -

College and University Funds

Notes to the Financial Statements

Required Supplementary Information

Retirement Systems - Required Supplementary Information

AUDITOR'S SECTION

SECTION B - REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

SECTION C - REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

SECTION D - FINDINGS AND QUESTIONED COSTS

Summary ofAuditor's Results

:

Financial Statement Findings

Federal Awards Findings and Questioned Costs

. Page
A-3 A-8 A-i2 A-i 6 A-i8 A-22 A-24 A-26 A-28 A-32 A-33 A-87
B-3
C-3
D-5 D-7 D-33 .

TabLe of Contents June 30, 2000

AUDITEE'S SECTION

SECTION E - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Schedule ofExpenditures ofFederal Awards

Schedule ofCluster Programs

,

SECTION F - AUDITEE'S RESPONSES . Summary Schedule ofPrior Year Findings and Questioned Costs Corrective Action Responses to Current Year Findings and Questioned Costs

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

E-5 E-41
F-5 F-37
AP-3

SECTION A
~NERAL PuR~ FINANCIAL 9rATEMENIS AND
REQUIRED SuPPLEMENTARY INFDR1v1ATION

lUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-R400

INDEPENDENT AUDITOR'S REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS

The Honorable Roy E. Barnes Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the accompanying general purpose financial statements ofthe State of Georgia, as listed in the Table of Contents, as of and for the year ended June 30, 2000. These general purpose financial statements are the responsibility of the State's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We did not audit the financial statements of certain organizations which, combined, represent 5% of the assets and 13% of the revenues of the general fund, 100% of the assets and revenues ofthe capital projects funds, 100% ofthe assets and revenues of the enterprise fund, 64% of the assets and 20% of the revenues of the internal service funds, 72% of the assets of the fiduciary funds and 100% of the pension trust funds revenues, and 5% 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 92% of the assets and 99% ofthe revenues ofthe component unit governmental fund types, 84% of the assets and 96% ofthe revenues of the component unit proprietary fund types and 98% of the assets and 96% ofthe revenues ofthe component unit fiduciary fund types. The financial statements ofthese 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 folIowing paragraphs, we conducted our audit in accordance with auditing standards generalIy accepted in the United States and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The financial statements of the Employees' Retirement System of Georgia, Georgia Lottery Corporation, Georgia Ports Authority, 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 ofother auditors provide a reasonable basis for our opinion.

TheState of Georgia's accounting system is decentralized in nature. The management ofeach organizational unit is responsible for maintaining accounting records pertinent to its operations and each retains complete responsibility and control over their operations, including revenue collections and disbursements. The State's princip'll accounting system, the Phoenix System, is utilized, in whole or in part, by 77 state organizations. This accounting system allows for the accumulation of financial data, by state organization, on a basis of accounting prescribed or permitted by the budgetary statutes and regulations of the State of Georgia. Constitutional and statutory provisions of the State of Georgia do not provide for a position or organizational unit responsible for the preparation of statewide financial statements. It was necessary for staff of the Department of Audits 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. Weare therefore not independent with regard to the preparation of accounting entries required to convert the consolidated budgetary financial statements to general purpose fmancial statements prepared in accordance with generally accepted accounting principles.
As discussed in Note I to the general purpose financial statements, the State ofGeorgia did not maintain adequate systems to account for or to depreciate (when required) fixed assets in conformity with generally accepted accounting principles. We were unable to determine the effect of these limitations on the general purpose financial statements.
As discussed in Note I to the general purpose financial statements, the accounting systems ofthe State ofGeorgia did not facilitate recording encumbrances in conformity with generally accepted accounting principles. Contractual obligations for services performed and for goods that have not been delivered at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. The recognition of encumbrances as expenditures and liabilities is not consistent with generally accepted accounting principles. We were unable to determine the effect of these limitations on the general purpose financial statements.
As discussed in Note I to the general purpose financial statements, revenues for certain expenditure-driven programs were accrued based on the unexecuted portion of contracts for goods and services. These accruals primarily affected the Intergovenunental and Sales and Services revenue categories. We were unable to determine the effect of this departurefrom generally accepted accounting principles on the general purpose fmancial statements.
As discussed in Notes 9 and 10 to the general purpose fmancial 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 I to the general purpose financial statements, the State of Georgia maintained certain pension trust funds on essentially the cash basis of accounting. 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 7 to the general purpose financial statements, we were unable to obtain sufficient evidential matter to satisfy ourselves as to the reasonableness of the accounting estimate of certain liabilities of the risk management funds which are included in the Internal Service Fund.
As discussed in Note I 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 ofrevenues, 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.
A-4

In our opinion, based on our audit and the reports ofother auditors, except for the effects ofthe matters discussed in the preceding paragraphs, the general purpose financial statements referred to in the first paragraph present fairly, in all material respects, the financial position ofthe State of Georgia as of June 30, 2000, and the results of its operations, the cash flows of its proprietary fund types and its nonexpendable trust funds, the changes in net assets of its pension trust funds and investment trust fund, and the changes in fund balances and current funds revenues, expenditures, and other changes of the college and university funds, for the year then ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report dated May 14,2001 on our

consideration of the State of Georgia's internal control over financial reporting and on our tests ofits compliance

with certain provisions of laws, regulations, contracts and grants. Those reports are included in the State of

Georgia Single Audit Report.

'

Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The section entitled'Retirement Systems - Required Supplementary Schedules' within Financial Section, Required Supplementary Information is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, except for the effects of the matters noted above, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole.

The accompanying Schedule ofExpenditures of Federal Awards, located in Section E, is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the general purpose financial statements. Such information 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 stated, in all material respects, in relation to the general purpose fmancial statements taken as a whole.

Respectfully submitted,
~.~
Russ I W. Hinton, CPA, CGFM State Auditor

May 14,2001

A-5

~NERAL PuRFCBE FINANCIAL 9rATEMENIE

The notes to the financial statements are an integral part of this statement. A-8

Fiduciary Fund Type
Trust and Agency

College and University

Account Groups

General

General

Fixed Assets

Lon8'Tenn Debt

Totals(Memorandum
Only)
Primary Government

Discretely Presented Component Units

Governmental Fund Types

Proprietary Fund Types

Fiduciary Fund Types

Totals(Memof1lJldum
Only)
Reportin8 Entity

4,844,120,283 14,610
13,826,200,945 734,247
103,135,000 3,742,705 37,978,553 27,869,653
23,732
260,708

549,876,083 179,673,041 46,985,800
26,862 48,850,359 194,613,589
26,288,366 46,780,941
5,369,332,625

-
3,270,492,172

118,013,985 5,260,828,301

9,148,011,530 14,610
17,948,486,537
2,519,848,389 150,91i714 52,593,064
1,034,271,840 584,085,487 33,797,570 0 714,793 3,353,581 81,890,233 104,384,477
0 0
0 0 6,925 8,077,198 9,015,005,270 0 590,133
118,013,985
5,260,828,30 I

15,382,396 992,977 542,566 105,497
84,093,252 8,680,198

383,551,012 S 136,169,878

6,029,827 S 43,011,575,641

9,552,974,765 14,610
61,097,225,033

72,723,214 19,398,361 984,150,736
96,070,137
2,860,370
3,965,331 3,420,303

289,721,016 179,489,355
60,939

2,592,571,603 460,033,091
1,036,743,800 1,034,271,840
860,187,545 33,797,570 2,860,370 714,793 3,353,581 85,855,564 107,971,216

115,544,638 321,976,423

115,544,638 321,976,423

6,194,863 664,330,607
827,239,525 15,255,508 61,934,168

886,382

6,194,863 664,330,607
6,925 8,077,198 9,927,224,429 15,255,508 62,524,301

118,013,985

5,269,508,499

S 18,844,080,436 S 6,462,427,666 S 3,270,492,172 S 5,378,842,286 S 46,064,887,637 S 109,796,886 S 3,714,785,074 S 43,487,763,160 S 93,377,232,757

S 12,853,219
41,132 1,576,334

264,640,254 110,036,628
7,060,804 28,400,000 3,149,724

336,766,636 6,925
351,244,246

91,932,679 16,760,901
25,998,080 175,061
1,930,459
297,320
550,381,910

231,563,694
4,947,999 5,142,330,593 5,378,842,286

6,448,462 1,424,616,946
350,330,147 436,113,210 2,071,062,742 716,368,919 720,121,295 33,797,570
0 2,860,370
0 0 72,616,427 324,673,380 31,482,757 0 408,799,861 32,316,538 5,881,674 6,925 0 5,143,235,056
11,780,732,279

S 347,152 1,035,684
554

102,004,848 3,197,958
5,051,757 1,928,266

110,382 488,935 7,644,514
9,627,221

604,411
3,225,890 10,5,63,235
43,872,939 529,155
8,629,472 310,359,611
7,464,517 15,557,225
9,421,272 1,438,462,163
1,960,872,719

S 2,968,056
89,127
3,919

6,448,462 1,529,937,002
354,563,789 436,113,210 2,076,114,499 718,386,866 720,121,295
33,797,570 714,793
2,860,370 3,225,890 10,563,235 72,616,427 369,035,254 39,660,345 8,629,472 719, I59,472 39,781,055 21,438,899
6,925 9,421,272 6,581,697,219

3,061,102

13,754,293,321

(continued)

A-9

The notes to the financial statements are an integral part of this statement. A-1O

Fiduciary Fund Type
Trust and Agency

College and University

Account Groups

General

General

Fixed Assets

Long-Term Debt

Totals(Memorandum
Only)
Primary Government

Discretely Presented Component Units

Governmental Fund Types

Proprietary Fund Types

Fiduciary Fund Types

Totals(Memorandum
Only)
Reponing Entity

-S

- S 3,270,492, \72 S

- S 3,270,492,172 S

84,093,252 S

252,419 S

- S 3,354,837,843

5,352,274,404 559,771,352

13,607,970,375 2,859,2g2,737

2,005,973,473

19,609,605 \8,492,836,190
18,492,836,190

5,912,045,756 5,912,045,756

3,270,492,172

5,352,274,404 559,771,352 274,776,431

977,595,773 \13,692,002

39,078,708 8,084,\23 40,693,036 118,013,985 7,231,000 17,770,969 13,607,970,375 17,824,925 24,088,545 2,859,282,737 348,091,05\ 137,g I9,375 855,759,351 551,277,500 205,835,797 63,063,171 11,470,432 2,231,793,118

11,420,615 166,000,000 1,239,661,224
100,000 1,173,223,187 0 $ 31,013,663,186

0

34,2g4,155,358

S
1,100,313,695
92,618,567 543,668,532

388,849

12,741,880

90,000 3,894,868 \1,702,696 16,076,4\3
100,169,665

4,3\7,262 1,753,659,936
1,753,912,355

S 5,352,274,404 559,771,352
1,375,090,126

1,070,214,340 657,360,534

43,484,702,058

39,07g,708 8,084, \23 40,693,036 118,013,985 7,231,000 17,770,969 5.7,092,672,433 17,824,925 24,088,545 2,859,282,737 348,091,051 137,819,375 855,759,351 551,277,500 205,835,797 63,063,171 11,470,432 2,244,923,847

43,484,702,058

11,420,615 166,000,000 \,239,751,224
3,994,868 1,189,243,145 76,268,10 I,593

43,484,702,058 S 79,622,939,436

$ 18,844,080,436 S 6,462,427,666 S 3,270,492,172 S 5,378,842,286 S 46,064,887,637 $ 109,796,886

3,714,785,074 S 43,487,763,160 S 93,377,232,757

A - II

Combined Statement of Revenues, Expenditures
And Changes in Fund BaLances
ALL GovernmentaL Fund Types, ExpendabLe Trust Funds and
DiscreteLy Presented Component Units For the AscaL Year Ended June 30, 2000

General

Revenues: Taxes Licenses and Pennits Intergovernmental Federal Other Sales and Services Fir).es and Forfeits Interest and Other Investment Income Rents and Royalties Contributions and Donations Penalties- and Interest on Taxes Unclaimed Property Other
Total Revenues

$ 12,966,453,323 $ 410,024,861
- 6,473,490,608 25,960,506
609,311,864 246,188,571 261,168,449
15,503,187 274,246,976
8,045,497 45,530,760 14,633,547
.
$ 21,350,558,149 $

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 Accrued Interest on Bonds Retired in Advance Discount on Bonds Retired in Advance Other Debt Service Charges

$

816,464,550 $

6,957,849,312

7,498,521,721-

1,581,318,460

1,443,073,761

453,860,928

203,220,402

49,256,757

Total Expenditures

$ 19,003,565,891 $

Excess (Deficiency) of Revenues Over (Under) Expenditures

$ 2,346,992,258 $

The

notes

to

the

financial

statements

are
-

an

integral

partof. this

s- tatement

A - 12

Primary Government

Governmental Fund Types

Special

Debt

Revenue

Service

$

20,104,343 595,970

20,700,313 $

0

5,767,986 $

434,875,000 288,774,941
570,622 (28,554,793)
5,767,986 $ 695,665,770
14,932,327 $ (695,665,770)

Capital Projects

Fiduciary Fund Type Expendable
Trust

Totals (Memorandum
Only) Primary Government

Component Units Governmental Fund Type

Totals (Memorandum
Only) Reporting
Entity

$

$

190,868,908 $ 13,157,322,231 $

$ 13,157,322,231

410,024,861

410,024,861

86,951,627 52,178
243,358

23,559,600 86,319
131,477,830
2,606,356

6,497,050,208 25,960,506
629,502,526 246,188,571 480,193,876
15,555,365 274,246,976
8,045,497 45,530,760 17,483,261

4,503,227
274,746 284,302 9,468,824

6,497,050,208 25,960,506
634,005,753 246,188,571 480,468,622
15,839,667 283,715,800
8,045,497 45,530,760 17,483,261

$

87,247,163 $ 348,599,013 $ 21,807,104,638 $

14,531,099 $ 21,821,635,737

$

35,867 $

$ 822,268,403 $

243,301

6,958,092,613

75,784,178

7,574,305,899

1,581,318,460

1,443,073,761

309,454,674

763,315,602

203,220,402

49,256,757

337,817,613

337,817,613

52,178 153,142
6,880,611

434,927,178 288,928,083
570,622 (28,554,793)
6,880,611

$

344,939,411 $

385,482,153 $ 20,435,421,211 $

$ 2,626,159 30,084,364

822,268,403 6,958,092,613 7,574;305,899 1,583,944,619 1,443,073,761
763,315,602 . 233,304,766
49,256,757 337,817,613

434,927,178 288,928,083
570,622 (28,554,793)
6,880,611

32,710,523 $ 20,468,131,734

$ (257,692,248) $

(36,883,140) $ 1,371,683,427 $
A-13

(18,179,424) $ 1,353,504,003 (continued)

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 AscaL Year Ended June 30, 2000

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 Capital Leases 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 of Equity Decrease in Inventories

General

Primary Government

Governmental Fund Types

Special . Revenue

Debt Service

$

203,088,295 $

684,087,625 (2,598,649,612)
(62,121,814) 1,205,143 132,817

$ (14,648,447)

601,603,038

$ (1,772,257,546) $

(14,648,447) $

601,603,038 .

$

574,734,712 $

3,394,574,893 (102,492,535)
3,048,186

(48,242) 176,423 (6,077,885)

283,880 $ 4,534,424

(94,062,732) 212,076,717

Fund Balances, June 30

$ 3,863,915,552 $

4,818,304 $ =====1=1=8=,=0=1=3=,9=8=5==

The notes to the financial statements are an integral part of this statement.
A- 14

Capital Projects

Fiduciary Fund Type
Expendable Trust

Totals (Memorandum
Only) Primary Government

Component Units Governmental Fund Type

Totals (Memorandum .
Only) Reporting
Entity

$

$

. (245,388,494)

794,815,522

$

549,427,028 $

3,281,250 $

807,972,583 $
684,087,625
(2,858,686,553) (62,121,814) 1,205,143 132,817 794,815,522

3,281,250 $ (632,594,677) $

$ 37,732,153

807,972,583 37,732,153 684,087,625 (2,858,686,553) (62,121,814)
1,205,143 132,817
794,815,522

37,732,153 $ (594,862,524)

$

291,734,780 $

(33,601,890) $ 739,088,750 $

1,011,090,270
(10,290) (46,845,567)

2,059,135,452

6,681,411,756 (102,492,535)
3,048,186 (10,290)
(46,893,809) 176,423
(6,077 ,885)

19,552,729 $ 758,641,479

(3,476,316)

6,677,935,440 ( 102,492,535)
3,048,186 (10;290)
(46,893,809) 176,423
(6,077,885)

$ 1,255,969,193 $ 2,025,533,562 $ 7,268,250,596 $

16,076,413 $ 7,284,327,009

A - 15

Statement of Funds AvaiLabLe- and Expenditures Compared to Budget Budget Fund For the AscaL Year Ended June 30, 2000

Funds Available
Revenues: State Appropriation Lottery Proceeds Federal Revenues Other Revenues Retained
Total Revenues
Carry-Over from Prior Year: Transfer from Fund Balance

Original Appropriation

Final Budget

Actual

Variance Favorable (Unfavorable)

$ 12,748,012,005 $. 13,581,466,703 $ 13,580,580,795 $

543,000,000

684,527,475

684,527,475

5,137,673,151

6,687,675,775

6,099,116,095

3,942,525,288

5,246,395,481

4,656,522,611

(885,908) 0
(588,559,680) (589,872,870)

$ 22,371,210,444 $ 26,200,065,434 $ 25,020,746,976 $ (1,179,318,458)

2,068,269,728

1,403,152,388

(665,117,340)

Total Funds Available

$ 22,371,210,444 $ 28,268,335,162 $ 26,423,899,364 $ (1,844,435,798)

Expenditures

Administrative Services, Department?f

$

AgricultUral Exposition Authority

. Agriculture, Department of

Agrirama Development Authority

Audits and Accounts, Department of

Banking and Finance, Department of

Building Authority

Community Affairs, Department of

Community Health, Department of

Corrections, Department of

Defense, Department .of

Education, Department of

Employees' Retirement System -

Administrative Expense Fund

Forestry Commission

General Assembly

General Obligation Debt Sinking Fund

Governor, Office of the

Guaranteed Revenue Debt Common Reserve Fund

Human Resources, Department of

Industry, Trade and Tourism, Department of

Insurance, Department of

Investigation, Georgia Bureau of

Judicial Branch

Juvenile Justice, Department of

Labor, Department of

Law, Department of

Natural Resources, Department of

Pardons and Paroles, StateBoard of

Personnel Board, State - Merit System of

Personnel Administration

Public Safety, Department of

Public School Employees' Retirement System-Expense Fund

175,795,564 $ 6,376,576
51,307,592 1,583,290
28,047,379 10,216,029 36,751,334 148,838,239 3,843,360,025 860,850,421 23,220,774 5,961,584,293
5,189,633 41,241,827 30,510,629 475,043,915 45,228,248
0 2,439,473,993
26,897,846 16,811,314 59,472,760 112,457,131 251,536,678 154,658,600 32,477,680 139,353,094 47,926,666
1,292,786,950 127,133,858 18,602,000

382,599,012 $ 6,987,930
62,232,622 1,609,290
27,874,139 10,220,165 42,533,011 251,618,464 6,178,457,080 939,558,632 30,045,437 6,477,071,673
8,564,308 44,504,491 34,545,262 530,297,763 291,619,944
0 2,912,960,194
30,119,162 17,581,711 74,501,950 119,898,625 260,050,418 209,344,121 36,939,385 . 230,649,804 49,397,164
15,271,795 139,515,041
18,602,000

357,082,035 $ 6,988,676
62,188,598 1,281,650
27,272,429 10,155,582 41,493,643 233,862,346 5,797,089,577 882,889,010 27,542,481 6,296,541,218
8,228,187 44,308,542 27,052,587 530,297,763 248,327,593
0 2,674,238,779
29,161,585 16,968,106 73,324,297 119,774,671 247,834,443 172,444,583 35,883,272 . 225,023,998 49,133,580
14,027,024 135,856,132
18,602,000

25,516,977 (746)
44,024 327,640 601,710
64,583 1,039,368 17,756,118 381,367,503 56,669,622 2,502,956 180,530,455
336,121 195,949 7,492,675
0 43,292,351
0 238,721,415
957,577 613,605 1,177,653 123,954 12,215,975 36,899,538 1,056,113 5,625,806 263,584
1,244,771 3,658,909
0

The notes to the financial statements are an integral part of this statement. A - 16

Statement of Funds AvaiLabLe and Expenditures Compared to Budget

Budget Fund

.

For the AscaL Year Ended June 30, 2000

Public Service Commission Public Telecommunications Commission Regents of the University System of Georgia, Board of Revenue, Department of Secretary of State Soil and Water Conservation Commission Student Finance Commission Teachers' Retirement System - Expense Fund Technical and Adult Education, Department of Transportation, Department of Veterans Service, Department of Workers' Compensation, State Board of

Original Appropriation

Final Budget

Actual

Variance Favorable (Unfavorable)

$

12,062,084 $

12,868,049 $

12,606,210 $

261,839

27,861,897

41,091,087

30,026,014

11,065,073

3,527,302,989

3,970,084,400

3,842,161,002

127,923,398

187,586,560

271,936,016

228,003,657

43,932,359

33,376,542

34,061,139

33,749,174

311,965

2,573,545

2,799,185

2,791,233

7,952

264,001,289

254,232,054

254,003,278

228,776

12,222,741

14,169,492

13,582,308

587,184

354,945,290

488,383,442

438,732,057

49,651,385

1,443,697,176

3,699,840,698

1,629,141,020

2,070,699,678

28,961,901

31,654,986

30,345,195

1,309,791

11,884,092

12,044,021

11,911,377

132,644

Total Expenditures

$ 22,371,210,444 $ 28,268,335,162 $ 24,941,926,912 $ 3,326,408,250

Excess of Funds Available over Expenditures

$ 1,481,972,452 $ 1,481,972,452

The notes to the financial statements are an integral part of this statement. A - 17

The notes to the financial statements are an integral part of this statement. A -18

Totals (Memorandum
Only) Primary Government

Component Units Proprietary Fund Types

Totals (Memorandum
Only) Reporting
Entity

$ 1,432,284,958 $ 79,439,990
30,705,977
289,527,718
103,768
$ 1,832,062,411 $

18,626 $ 81,706,251 25,340,712 57,447,159 2,385,883,933
1,635,002 18,225,188

1,432,303,584 161,146,241 25,340,712 88,153,136
2,675,411,651 1,635,002
18,328,956

2,570,256,871 $ 4,402,319,282

$ 278,219,310 $ 186,099,074
1,257,662,930
80,088,508
1,160
1,418,444 892

$ 1,803,490,318 . $

$

28,572,093 $

142,039,374 $ 378,223,988 47,389,831
1,260,497,000
35,771,031 43,276,629

420,258,684 564,323,062 47,389,831 1,257,662,930
80,088,508 1,260,497,000
1,160 37,189,475 43,277,521

1,907,197,853 $ 3,710,688,171

663,059,018 $

691,631,111

$

$
994,328

(39,683)

(409,817)

$

544,828 $

$

29,116,921 $

733,715 $ 41,998,452
801,531 21,838,555 (33,489,548) (15,268,637)
3,235,949
19,850,017 $
682,909,035 $

733,715 42,992,780
801,531 21,838,555 (33,529,231 ) (15,268,637)
2,826,132
20,394,845
712,025,956 (continued)

A -19

CombIned Statement of Revenues, Expenses and Changes In Fund Equity/Fund BaLances ALL ProprIetary Fund Types, NonexpendabLe Trust Funds and DIscreteLy Presented Component UnIts (contInued) For the AscaL Year Ended June 30, 2000

Operating Transfers: Transfers In Transfers from Primary Government Transfers Out Transfers to Primary Government

Primary Government

Proprietaty Fund Types

Enterprise

Internal Service

Fiduciary Fund Type
Nonexpendable Trust

$ 230,000,000 $ 106,747,838 $

(7,500,000)

(15,686,803)

Net Ope~ating Transfers

$ 222,500,000 $

91,061,035 $

0

Net Income

$ 173,671,513 $ 169,005,886 $

557

Excess of Revenues Over Expenditures from Governmental Operations and Expendable
Trust Funds

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

(49,355,793) (273,173)

1,123,071,561 (48,793,764) 10,290

225,382

(1,272,314)

(176,423)

Fund Equity/Fund Balances, June 30

$ 124,042,547 $ 1,242,021,659 $ =====4=9=,5=16=

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

Totals (Memorandum
Only) Primary Government

Component Units Proprietary Fund Types

Totals (Memorandum
Only) Reporting
Entity

$ 336,747,838 $ 0
(23,186,803) 0
$ 313,561,035 $
$ 342,677,956 $

$ 48,599,675 (684,027,000) (635,427,325) $ 47,481,710 $

336,747,838 48,599,675 (23, 1~6,803)
(684,027,000)
(321,866,290)
390,159,666

0
1,073,941,150 (49,066,937) 10,290 0 0 0 0 (176,423) (1,272,314)

354,005
1,652,944,219 4,395,000
46,893,809 4,705,565 98,044 (3,048,186)
(164,230)

354,005
2,726,885,369 (44,671,937) 10,290 46,893,809 4,705,565 98,044 (3,048,186) (176,423) (1,436,544)

$ 1,366,113,722 $ 1,753,659,936. $ 3,119,773,658

A - 21

Combined Statement of Cash Flows ALL Proprietary Fund Types, NonexpendabLe Trust Funds and DiscreteLy Presented Component Units For the AscaL Year Ended June 30, 2000

Cash Flows from Operating Activities: Cash Received from Customers Cash Received from Required Contributions Cash Received from Lease Agreements 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 Lottery Prizes Cash Paid for Scholarships Origination of Program Loans Governmental and Fiduciat)' 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 Prirnaty Government Issuance of Bonds/LoansINotes Contributed Capital HoteVMotel Tax (Net) Operating Transfers Out Operating Transfers to Primat)' Government Repayment of Advances Principal Paid on BondsILoansINotes Interest Paid on Bonds/LoanslNotes Return ofContributed Capital Transfer ofEquity Other Debt Service Payments Other Noncapitalltems (Net)
Net Cash Provided by (Used in) Noncapital Financing Activities
Cash Flows from Capital and Related Financin8 Activities: Issuance ofBondsILoanslNotes Hotel/Motel Tax Received Contributed Capital Sale of Capital Assets Acquisition and Construction ofCapital Assets Principal Paid on Bonds/LoansINotes Interest Paid on BondslLoansINotes Other Debt Service Payments Other Capital and Related Items (Net)
Net Cash Used in Capital and Related Financing Activities
Cash Flows from Investing Activities: Purchase ofInvestments (Net) Interest on Investments
Net Cash Provided by Investing Activities
Net Increase (Decrease) in Casb and Cash Equivalents
Casb and Cash Equivalents, July 1

Primat)' Government

Proprietat)' Fund Types

Enterprise

Internal Service

Fiduciat)' Fund Type Nonexpendable
Trust

Totals(Memorandum
Only) Primat)' Government

Component Units Proprietat)' Fund Types

Totals(Memorandum
Only) Reporting
Entity

$

$

1,237,300,830

295,503,830 $ 190,881,320

(54,529,546) (2,746,491)
(1,267,105,933)

(343,795,698) (94,159,202) ( 15,921,000) (75,693,051)

(87,081,140) $ (43,183,801) $

(892) (1,160)

295,503,830 1,428,182,150
0 0 0 (398,326,136) (96,905,693) ( 1,283,026,933) (75,693,051 ) 0 (1,160) 0 0 0

2,508,610,529
13,471,011 134,051,965' 80,179,565 (487,314,507) (103,729,613)
(1,337,172,000)
(242,723,907) 13,173,730 645,503

(2,052) $ (130,266,993) $ 579,192,276

2,804,114,359 1,428,182,150
13,471,011 134,051,965 80,179,565 (885,640,643) (200,635,306) ( 1,283,026,933) (75,693,051) (1,3.37,172,000)
(1,160) (242,723,907)
13,173,730 645,503
448,925,283

230,000,000

106,747,838 $

(7,500,000)

(15,686,803)

143,056

(176,423)

336,747,838 $ 0 0 0 0
(23,186,803) 0 0 0 0 0
(176,423) 0
143,056

$ 48,599,675 233,365,000 60.077,946
5,134,212
(684,027,000) (107,500)
(240,998,610) (49,951,446) (6,593,331)
(2,842,925) 3,772,010

336,747,838 48,599,675 233,365,000 60,077,946
5,134,212 (23,186,803) (684,027,000)
(107,500) (240,998,610)
(49,951,446) (6,593,331) (176,423) (2,842,925) 3,915,066

$ 222,500,000 $

91,204,091 $

(176,423) $ 313,527,668 $ (633,571,969) $ (320,044,301)

$

$

$

10,290

(5,138,276) (242,857) (39,683)

0$ 0 10,290 0 (5,138,276) (242,857) (39,683) 0 0

3,389,241 $ 16,344,945 20,423,286
358,315 (36,487,336) (20,571,531 ) (35,872.1'31 )
(9,872,685) (330,928)

3,389,241 16,344,945 20,433,576
358,315 (41,625,612) (20,814,388) (35,911,814)
(9,872,685) (330,928)

0

(5,410,526) $

0$

(5,410,526) $ (62,618,824) $ (68,029,350)

130,536.674 8,956,956

23,234,880 44,126,247

$ 139,493,630

67,361,127

274,912,490 $ 109,970,891

28,691.341

56,412,790 $

168,780 9,519
178,299
(176) $ 14,786

153,940,334 53,092,722 207,033,056 $
384,883,205 $ 85,118,917

258,938,052 $ 43,920,334 302,858,386
185,859,869 313,235,781

412.878,386 97,013,056 509,891,442 570,743,074 398,354,698

Cash and Cash Equivalents, June 30

303,603,831 $ 166,383,681 $

14,610 $ 470,002,122 $ 499,095,650 $ 969,097,772

The notes to the financial statements are an integral part of this statement. A - 22

Combined Statement of Cash Flows
ALL Proprietary Fund Types, NonexpendabLe Trust Funds and
DiscreteLy Presented Component Units For the AscaL Year Ended June 30, 2000

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

Primary Government

Proprietary Fund Types

Enterprise

Internal Service

Fiduciary Fund Type Nonexpendable
Trust

Totals (Memorandum
Only) Primary Government

Component Units Proprietary Fund Types

Totals (Memorandum
Only) Reporting
Entity

$ (48,528,584) $

77,100,120 $

557 $

28,572,093

663,059,018

691,63\,111

20,838 $ (9,\48,326)

1,397,606 $ (70,289,055)

(17,887,251) .

(9,620,708) (15,898,391 )
(84,292) 914,123 (26,291)

(1,431,135) 53,018
(213,217) 89,500
(25,364,003)
14,598,333 729,687

(15,300,641 ) 59,823
4,395,457 ( 15,071,879)
2,144
(734,261)
(5) 2,962
(30,513)

(38,552,556) $ (120,283,921) $

-$
(2,609)

1,418,444 $ (79,439,990)
0

38,505,542 $ 47,389,831 (4,853,751)

39,923,986 (32,050,159)
(4,853,75\)

0 0 0 (27,507,959) (15,898,391) 0 (84,292) 914,123 (26,291) 0 0 (16,731,776) 112,84\ 4,395,457 (15,285,096) 91,644 (25,364,003) (734,261) 0 (5) 14,601,295 729,687 (30,513) 0

2,143,695 (1,748,512) (107,258,950) (19,455,367)
(31,961)
(330,614) 236,514 268,213 9,521,014 18,635,104
93,741
2,891,499 1,328,379
284,090
4,462,870 247,611 364,310
(76,560,000)

2,143,695 (1,748,512) (107,258,950) (46,963,326) (15,898,391)
(31,961) (84,292) 583,509 210,223 268,213 9,521,014 1,903,328 206,582 4,395,457 ( 12,393,597) 1,420,023 (25,364,003) (734,261) 284,090
(5) 19,064,165
977,298 333,797 (76,560,000)

(2,609) $ (158,839,086) $ (83,866,742) $ (242,705,828)

Net Cash Provided by (Used in) Operating Activities

(87,081,140) $ (43,183,801) $

(2.052) $ (130,266,993) $ 579,192,2'16 $ 448,925,283

Noncash Investing. Capital. and Financing Activities: Disposal of Fixed Assets Donation of Fixed Assets Interest Earned on Grand Prize Investments and Grand Prizes Payable Refunding Bond Proceeds Deposited Directly into
Escrow Account Restatement of Fixed Assets

$

(299,903) $

(452,691) $

199,721

(45,433,048) (299.903) $ (45,686,018) $

$

(752,594) $

(3,564,067) $

(4,316,661)

199,721

2,324,710

2,524,431

0

18,015,000

18,015,000

0 (45,433,048)

186,010,989

186,0 I0,989 (45,433,048)

0 $ (45,985,921) $ 202,786,632 $ 156,800,711

The notes to the financial statements are an integral part of this statement. A - 23

Statement of PLan Net Assets
Pension Trust Funds, Investment Trust Fund and DiscreteLy Presented Component UnIts
June 30, 2000

Assets
Cash and Cash Equivalents Investments Receivables (Net of Allowances
for Uncollectibles) Interest and Dividends Other
Prepaid Item; Fixed Assets (Net, Where Applicable, of
Accumulated'Depreciation)
Total Assets
UabiUtles
Accounts Payable and Other Accruals SalariesiWithholdings Payable Due to Other Funds Capital Leases Payable
Total Liabilities

Defined Contnbution
Plan

District Attorneys Retirement
Fund

Employees' Retirement
System

Primary Government
Georgia Judicial Retirement System

Legislative Retirement
System

Superior Coun Judges
Retirement Fund

Investment Trust Fund

$

86,016 $

34,829,628

227,000 751,988

2,000

3,759,455 13,188,259,490

102,908,000 15,772,533 23,732

33,218 239,265,228
425,542,

92,871 29,471,916

100,000 1,835,000

2,712,166,125 147,116,612

1,000

$ _ _::.:35:z:,8~9~4,,:::;63::;2:....

2,000

13,310,723,210

239,723,988

29,564,787

1,936,000

2,859,282,737

22,000

2,000

8,097,776 41,132
1,551,334

80,000

15,000 25,000

40,000

22,000 _ _ _-..=l2,"'-000=_ $

9,690,242

80,000

40,000 _ _ _....:4"'0,"'000=_



Fund Balances Re5erved for Pension Benefits and Pool Participants

35,872,632 $====,,;0;;.,$ 13,301,032,968 $

239,643,988 S

29,524,787 S

1,896,000 S 2,859,282,737

(Schedules of fundin8 pr08ress are presented on pages A-89 and A-91)

The notes to the financial statements are an integral part of this statement. A -24

Total
Primary Government

Firefighters' Pension Fund

Jud8es ofthe Probate Courts
Retirement Fund

Component Units Fiduciary Fund Types

Public School

Peace Officers' Annuity and Benefit Fund

Employees Retirement
System

Sheriffs' Retirement
Fund

Superior . Court Clerks'
Retirement Fund

Teachers' Retircmc:nt
System

Total
Component Units

S 2,716,239,685 13,640,777,874

182 412,144,447

103,135,000 16,951,063 23,732
0
16,477,127,354 S

2,939,198 30
337,050 415,420,907

2,788 42,736,807
373,308
606 43,113,509

2,268,915 305,815,643
1,529,549
500,546 310,114,653

157,000 813,485,000
4,000
813,646,000

39,238 S 53,144,146

486,707 40,794,598

3,074,997 41,343,455,000

6,029,827 43,011,575,641

367,961
27,068 53,578,413

21,112 41,302,417

284,511,000 179,485,355
60,909
41,810,587,261

289,721,016 179,489,355
60,939
886,382
43,487,763,160

8,256,776 41,132
1,576,334 0
9,874,242

831 3,919

350,000

2,618,056 S 88,296

2,968,056 89,127 0 3,919

0

4,750

350,000

0

0

2,706,352

3,061,102

16,467,253,112 S

415,420,907

43,113,509 S

310,109,903 S

813,296,000 S

53,578,413 S

41,302,417 S 41,807,880,909 S 43,484,702,058

A - 25

The notes to the financial statements are an integral part of this statement. A- 26

Total Primary Government

Firefighters' Pension Fund

Judges of the Probate founs
Retirement Fund

Component Units - Fiduciary Fund Types

Public School

Peace Officers'

Employees

Sberiffs'

Annuity and Benefit Fund

Retirement System

Retirement Fund

Superior Coun Clerks' . Retirement
Fund

Teachers' Retirement
System

Total Component
Units

374,557,000
0
593,963,296 439,547,829 (11,794,760)
0 3,730,567,876
0 0 0
0
5,126,841,241

1,,606,797 16,363,366 47,126,973
12,781,023 210.359
78,088,518

184,636 462,939 2,018,144
3,106,800

1,479,907 13,491,592 12,128,210
13,503,644

19,817,000
26,546,027 26,947,839
(623,866)

59,796 2,151,369 1,848,932
7,325,288

139,241

3,650 5,915,410

184,274 40,787,627

72,687,000

11,385,385

100,694 650,468 3,214,358 (15,000)
292,573 1,282,361
5,525,454

I, 132,364,625 1,325,886,000 1,494,190,000
(31,874,000)
3,920,566,625

1,155,613,455
16,756,368
1,388,005,037 1,521,137,839
(32,512,866) 71,062,705
0
292,573 139,241 1,282,361
12,781,023
398,283
4,134,956,019

7,338,529 468,056,000 4,240,747,006
15,152,000

1,776,031 12,930,682
209,697

4,731,293,535 S 14,916.410

S

395,547,706

63,172,108

168,695 1,276,057
1,444,752 4,470,658

1,315,685 10,104,821
114,297 11;534,803 29,252,824

575,000 28,774,000
322,000 29,671,000 43,016,000

48Q,627 2,291,746
2,772,373 8,613,012

94,893 2,498,499
2,593,392 2,932,062

9,047,184 1,011,568,000
44,718,000 1,065,333,184 2,855,233,441

13,458,115 1,069,443,805
0 45,363,994
1,128,265,914
3,006,690,105

0 0
395,547,706

0 63,172,108

4,470,658 S

0 29,252,824

43,016,000

0 8,613,012 S

0 2,932,062

3,215,000 S (60,625)

3,215,000 (60,625)

3,154,375 S

3,154,375

2,858,387,816

3,009,844,480

16,071,793,448 (88,042)

352,248,799

38,642,851

280,857,079

770,280,000

44,965,401

38,370,355

38,949,493,093

40,474,857,578 0

16,467,253,112 $ 415,420,907 $ 43,113,509 $ 310,109,903 $ 813,296,000 $ 53,578,413 S 41,302,417 S 41,807,880,909 S 43,484,702,058

A - 27

Combined Statement of Changes In Fund BaLances CoLLege and University Funds For the AscaL Year Ended June 30, 2000

Revenues and Other Additions: Umestricted Revenues Federal Grants and Contracts State Grants and Contracts Loca1 Grants and Contracts Private Gifts, Grants and Contracts Investment Income Endowment Other Sales and Services Interest on Loans Receivable Expended for Plant Facilities Current Funds Plant Funds Unexpended Rene",a1s and Replacements Georgia State Financing and Investment Commission Other Additions (Net) Insurance Recoveries Other Recovery of Prior Year's Cancelled Loans and Collection Costs
Total Revenues and Other Additions
Expenditures.and Other Deductions: Education and General Expenditures Auxiliary Enterprises ExpenditUres Hospital Expenditures Indirect Cost Recoveries Loans Assigned to Federal Government Loan Cancellations and Write-offs Administrative and Collection Costs Expended for Plant Facilities Capitalized Non-Capitalized Other Deductions (Net) Disposals/DeIetions/Adjustments
Total Expenditures and Other Deductions

Current Funds

Umestricted

Restricted

$ 1,347,349,331 $

$ 678,004,085 296,720,782
6,969,410 213,651,447
4,009,497 128,641
5,242,080

2,086,894

93,782

$ 1,349,436,225 $ 1,204,819,724 $

$ 2,476,837,364 $ 1,113,817,676 $

196,806,413

212,972,151

44,799

77,561,759

104,942

$ 2,886,615,928 $ 1,191,529,176 $

Loan Funds
60,395 2,527
331,750 706,187 1,054,695
525,040 2,680,594
68,421 849,685
178,431 "
774,698 1,871,235

The notes to the financial statements are an integral partof this statement. A - 28

Endowment and Similar
Funds

Unexpended

Plant Funds Renewals and Replacements

Investment in Plant

Total (Memorandum
Only)

$

$

$

938,236

832,949

787,585

26,961,003

$

$ 1,347,349,331

679,002,716

297,553,731

6,971,937

12,144,853

253,876,638

5,431,331

22,600 23,360,678

1,252,545

9,463,428 25,448,051
5,242,080 1,054,695

174,021,486

174,021,486

98,452,050 11,382,755 153,308,238

98,452,050 11,382,755 153,308,238

74,840 4,781,092

148,401

74,840 7,110,169

525,040

$

6,218,916 $

56,971,398 $

1,400,946 $ 449,309,382 $ 3,070,837,185

$

$

$

$

$ 3,590,655,040

196,806,413

213,016,950

77,561,759

68,421

849,685

7,681

291,054

98,452,050

11,382,755

109,834,805

13,169,216

4,020,322

17,189,538

303

775,001

133,079,511

133,079,511

$

303 $ 111,628,947 $

15,403,077 $ 133,079,511 $ 4,340,128,177

(continued)

A - 29

Combined Statement of Changes in Fund BaLances College and University Funds (continued) For the Ascal Year Ended June 30, 2000

Transfers Between Funds, Net In (Out) Mandatory Nonrnandatory .
Total Transfers Between Funds
Operating Transfers: Transfers In Transfers Out Transfers to Component Units
Total Operating Transfers
Net Increase (Decrease) in Fund Balances
Fund Balances, July 1
Fund Balances, June 30

Current Funds

Unrestricted

Restricted

Loan Funds

$

(560,926) $

(36,356,934)

$ (36,917,860) $

(567,838) $ (1,495,913)
(2,063,751) $

48,224 37,628
85,852

$ 1,674,979,223 $ (4,554,450)
(27,425,014)

$ 1,642,999,759 $

$

68,902,196 $

107,768,272

$
0$ 11,226,797 $ 87,290,611

0 895,211 61,594,035

$ 176,670,468 $

98,517,408 $

62,489,246

The notes to the financial statements are an integral part of this statement. A - 30

Endowment and Similar
Funds

Unexpended

Plant Funds Renewals and Replacements

Investment in Plant

Total (Memorandum
Only)

$

1,080,540 $

(709,783)

$

370,757 $

$

$

$

$

$

6,589,370 $

122,756,655

$
23,380,969 23,380,969 $
63,644,538 $ 2,301,624
65,946,162 $ 34,669,582 $ 18,429,281

$
15,144,033

$



15,144,033 $

$



782,000 $

$ 1,739,405,761 (2,252,826)
(27,425,014)

782,000 $ 1,923,902 $

$
316,229,871 $

1,709,727,921 440,436,929

37,725,440

5,036,044,533

5,471,608,827

$ 129,346,025 $

53,098,863 $

39,649,342 $ 5,352,274,404 $ 5,912,045,756

A - 31

Combined Statement of Current Funds Revenues, Expenditures and Other Changes CoLLege and University Funds For the AscaL Year Ended June 30, 2000
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 Staff Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units Hospital Expenditures Medical College of Georgia Hospital Georgia Correctional Health Care Georgia War Veterans Nursing Home Mandatory Transfers, Net (In) Out
Total Expenditures and Mandatory Transfers
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)
Net Increase in FUlid Balances
The notes to the financial statements are an integral part of this statement.
A - 32

Current Funds

Unrestricted

Restricted

Total (Memorandum
Only)

$ 599,139,742 $

$ 599,139,742

70,808,900

614,352,485

685,161,385

7,993,644

290,186,323

298,179,967

485,023

6,528,219

7,013,242

14,475,006

193,325,351

207,800,357

125,759

3,337,090

3,462,849

59,485,839

5,817,861

65,303,700

192,751,931

192,751,931

245,469,696

245,469,696

156,613,791

156,613,791

$ 1,347,349,331 $ 1,113,547,329 $ 2,460,896,660

$ 917,475,581 $ 105,301,832 $ 1,022,777,413

296,628,067

266,498,472

563,126,539

166,425,310

72,209,205

238,634,515

249,870,942

8,897,929

258,768,871

125,343,916

4,342,218

129,686,134

401,481,056

34,836,530

436,317,586

214,676,873

105,940

214,782,813

104,935,619

527,816,604

632,752,223

61,815,613 196,386
39,141,416 15,935,589 33,051,933 46,665,476

61,815,613 196,386
39,141,416 15,935,589 33,051,933 46,665,476

212,972,151 560,926

85,868,009 7,985,736 567,838

212,972,151 85,868,009 7,985,736 1,128,764

$ 2,887,176,854 $ 1,114,430,313 $ 4,001,607,167

$

-$

(36,356,934)

2,086,894

1,674,979,223 (4,554,450)
(27,425,014)

$ 1,608,729,719 $

13,616,854 $ (1,495,913)
(11,160)

13,616,854 (37,852,847)
2,075,734

1,674,979,223 (4,554,450)
(27,425,014)

12,109,781 $ 1,620,839,500

$

68,902,196 $

11,226,797 $

80,128,993

Notes to the FinanciaL Statements Index

Note 1 Summary of Significant Accounting Policies

:

Note 2 Other Accounting Disclosures

Note 3 Budgetary Accounting

Note 4 Deposits and Investments

Note 5 Receivables

Note 6 Fixed Assets

Note 7 Risk Management

Note 8 Construction and Other Significant Commitments

Note 9 Operating Leases

Note 10 Capital Leases and Installment Purchases

Note 11 Long-Term Debt

Note 12 Interfund Balances

;

Note 13 Contributed Capital

Note 14 Contingencies

:

Note 15 Subsequent Events

Note 16 Retirement Systems

Note 17 Nonmonetary Transactions

Note 18 . Postemployment Benefits

Note 19 Fund Deficits

Note 20 Major Discretely Presented Component Unit Condensed Financial Statements

Page
A-34 A-45 A-47 A-50 A-57 A-59 A-61 A-62 A-62 A-64 A -65 A-69 A-71
A~72
A-73 A-74 A-80 A-81 A-81 A-82

A - 33

Notes to the FinanciaL Statements June 30, 2000

Note 1. Summary of Significant Accounting Policies

government. In addition, organizations that are fiscally dependent upon the primary government were considered as potential component units.

With the exception of the departures from generally accepted accounting principles .(GAAP) disclosed in the following paragraphs, the financial statements ofthe State of Georgia have been prepared in conformity with GAAP as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and fmancial reporting principles. The fmancial statements ofthe 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 financial reporting purposes, management has considered both the organizations that comprise the primary government and potential component units. The primary government consists of all the organizations that compose the legal entity of the State of Georgia. All agencies, departments, authorities, commissions, courts, councils, boards, universities, colleges, retirement funds, associations and other funds that are not legally separate 'are, for fmancial reporting purposes, considered part of the primary government. In addition, included within the primary government are organizations which are legally separate but so intertwined with the primary government that they are, in substance, part of the primary government.

As required by GAAP, these fmancial 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 instrunientality 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. The Governor appoints three of the five members of the Board. 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 offarmers' markets. The Board consists of four State officials designated by statute and one member appointed by the Governor.

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 ofGovernmental Accounting and FinanCial Reporting Standards. This Section defines a component unit as a legally separate organization for which the primary government is fmancially accountable and other organizations for which the primary government is not accountable, but for which the nature and the significance of the relationship with the primary government are such that exclusion would cause the 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

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.
Georgia Education Authority (University) (Capital Projects Fund) is a body corporate and politic. The authority is charged with the overall responsibility of the construction and management of housing accommodations, classrooms, laboratories, libraries, dormitories and instructional, administrative and recreational facilities for students, faculty, officers and employees of any institution under control of the Board of Regents. The Board consists offive

A - 34

Notes to the FinanciaL Statements June 30, 2000
Note 1. Summary of Significant Accounting PoIlcies (continued)
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 ofGeorgia (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 who is appointed by the Governor. The system adrriinisters five blended defined benefit pension plans: the Employees' Retirement System Fund, the District Attorneys' Retirement Fund, the Georgia Judicial Retirement System, the Legislative Retirement System, and the Superior Court Judges Retirement Fund. The State provides a substantial amount offunding 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 financial data in columns separate from the financial 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, administrll;tive and recreational facilities for students, faculty, Qfficers 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 Regional Transportation Authority (Governmental Fund Type) is a body corporate and politic. The purpose of the authority is to manage land transportation and air quality within certain areas ofthe State. The Governor appoints the fifteen members of the authority.
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 Governor appoints the nine Board members.
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 the Governor appoints seven members.
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 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

A - 35

-r

Notes to the FinanciaL Statements June 30, 2000

Note 1. Summary of Significant Accounting Policies (continued)
assistance. The Board consists of three State. officials designated by. statute and eight members appointed by the Governor.
Georgia Golf Hall of Fame Authority (Proprietary Fund Type) is a body corporate and politic. The authority was created to construct, operate and manage a facility and related attractions to house the Georgia Golf Hall of Fame. The authority is governed by the fifteen members appointed by State officials to the Golf Hall of Fame Board.
Georgia Higher Education Assistance Corporation (Proprietary Fund Type) is a public authority, body corporate and politic. The corporation was created to improve the higher educational opportunities of eligible students by guaranteeing educational loan credit to students and to parents of students. The corporation is governed by the Board ofCommissioners ofthe Georgia Student Finance Commission. The Board consists of four State officials designated by statute and eleven members appointed by the Governor.
Georgia Highway Authority (P,:oprietary Fund Type) is a body corporate and politic. This authority was created to .build, rebuild, relocate, construct, reconstruct, surface, resurface, layout, grade, repair, improve, widen, straighten, operate, own, maintain, lease and manage roads, bridges and approaches. The Board consists of three State officials designated by statute.
Georgia Housing and Finance Authority (Proprietary Fund Type) is a body corporate and politic. The authority is responsible for facilitating housing and housing fmance, and financing for health facilities and health care services throughout the State. The Governor appoints the sixteen members of the Board.
Georgia International and Maritime Trade Center Authority (Proprietary Fund Type) is a body corporate and politic. The authority was created to develop and promote the growth of the State's import and export markets through its ports and other transportation modes. State officials appoint eight of the twelve members of the Board.
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 ofwhich are utilized to support improvements and enhancements for educational purposes. The corporation is governed by a board of directors composed ofseven members, all ofwhich

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. The Governor appoints all nine members of the Board.
Georgia Ports Authority (Proprietary Fund Type) is a body corporate and politic. The purpose of the authority is to develop and improve the harbors or seaports 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 twelve members, all of which are appointed by the Governor.
Georgia Rail Passenger Authority (Proprietary Fund Type) is a body corporate and politic. This authority is responsible for construction, 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. Of the 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. State officials comprise four of the fifteen members of the Board, and the Governor appoints the remaining eleven.
Geo. L. Smith II Georgia World Congress Center Authority (Proprietary Fund Type) is abody corporate and politic and an instrumentality and public corporation of the State. The authority is responsible for acquiring, constructing, equipping, maintaining and operating the Wodd Congress Center to promote trade shows, conventions and political, musical, educational, entertainment, recreational, athletic or other events. The Governor appoints the eleven members of the Board.

A - 36

Notes to the FinanciaL Statements June 30, 2000
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. State officials appoint the eighteen members of the Board. The Georgia State Financing and Investment Commission must approve the issuance of bonds.
Jekyll Island State Park Authority (Proprietary Fund Type) is a body corporate and politic and an instrumentality and public corporation ofthe 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 manage, preserve and protect 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 Governor appoints the nine members of the Board.
Sapelo Island Heritage Authority (Proprietary Fund Type) is a body corporate and politic. The purpose ofthe authority is the preservation of the cultural and historic values ofHog 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 fmancial 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 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 ofrecord management systems, information, services, supplies and materials for superior court clerks of the State. Of the seven members ofthe Board, the Governor appoints three. The nature ofthis organization is such that it would be misleading to exclude it from the reporting entity.
Georgia Firefighters' 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 St.!lte of Georgia. The Board of Trustees consists of two' State officials designated by statute and three members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Judges ofthe Probate Courts Retirement Fund ofGeorgia (Fiduciary Fund Type) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the judges of the Probate' Courts of the State of Georgia. The Board consists, of one State official designated by statute and six members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Peace Officers' Annuity and Benefit Fund of Georgia (Fiduciary Fund Type) is a multiple-employer, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the peace officers ofthe State of Georgia. The Board of Commissioners 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, defined benefit pension plan established for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The Employees' Retirement System Board of Trustees and two other Governor's appointees not on the Employees' Retirement System Board administer this retirement fund.
Sheriffs' Retirement Fund of Georgia (Fiduciary Fund Type) is a multiple-employer, defined benefit pension plan

Notes to the FinanciaL Statements June 30, 2000

Note 1. Summary of Significant Accounting Policies (continued)

Governmental Fund Types are used to account for all or most of a state's general activities. Governmental fund types include:

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 of the State of Georgia. The Board consists of one State official designated by statute and six members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Teachers Retirement System of Georgia (Fiduciary Fund Type) is a cost-sharing multiple-employer plan created by an act ofthe 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 offunding to this retirement system in the form of employer contributions.

General Fund - The General Fund is used to account for all financial transactions not required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a state government.
Special Revenue Funds - Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for specified purposes.
The primary government special revenue fund is the GeorgiaNet Authority. The GeorgiaNet Authority is responsible for centralized marketing, sales, leasing and licensing of certain public information.
Debt Service Funds - Debt Service Funds are used to account for the payment ofprincipal and interest on general long-term debt.
J
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 ofresources for the payment of principal and interest on general obligation bonds.

B. Fund Accounting
The State of Georgia uses funds and account groups to report on its financial 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 financial resources.
Primary Government - The fmancial statements of the primary government are divided into four fund categories (further divided by fund type) and two account groups, all of which are described below. The four fund categories include governmental, proprietary, fiduciary and college and university funds. The two account groups presented are the general fixed assets account group and the general long-term debt account group.

Capital Projects Funds - Capital Projects Funds are used to account for the acquisition or construction of capital facilities.
Proprietary Fund Types are used to account for activities similar to those found in the private sector, where cost recovery and the determination ofnet 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 financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or' other purposes.
The primary government enterprise fund is the State Employees' Health Benefit Plan, which is administered by the Department of Community Health. The State Employees' Health Benefit Plan is a self-insured program of

A - 38

Notes to the FinanciaL Statements June 30, 2000
Note 1. Summary of Significant Accounting Policies (continued)
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 financing of goods or services provided by one department or agency to other State departments or agencies, or to other governmental entities, on a costreimbursement basis.
Fiduciary Fund Types are used to account for assets held on behalfof 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.
Investment Trust Fund - Investment Trust Funds are used to account for the external portion of a governmentsponsored investment pool.
The primary government investment trust fund is Georgia Fund I, which is administered by the Office of Treasury and Fiscal Services. Georgia Fund I was established to enable local governments to voluntarily invest any idle local moneys.
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 operatio'.ls 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 (I) unrestricted funds over which the college or university retains full control in achieving the institutions' purposes, and (2) restricteq 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. Agency Funds are also used to account for the external portion of college and university fund-sponsored investment pools.
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.
Discretely Presented Component Units - The financial statements ofthe component units, other than the component units which financial statements were blended with the financial statements of the primary gov'ernment 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 of net income is necessary or useful for sound financial management.
Fiduciary Fund Types are used to account for assets held on behalfofoutside parties, including other governments, or on behalf of other funds within the State.

A - 39

Notes to the FinanciaL Statements June 30, 2000

Note 1. Summary of Significant Accounting Policies (continued)
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 financial reporting treatment applied to a fund is determined by its measurement focus'. All governmental funds and expendable trust funds are accounted for using a current fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in . net current assets.
All proprietary funds, nonexpendable trust funds, pension trust funds and investment trust funds are accounted for on a flow of economlc 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 expenditure-driven 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 ofyear-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, pension trust funds and investment trust funds with the exception ofthe following individual pension trust funds which are reported essentially on the cash basis:
Discretely Presented Component Units Fiduciary Fund Types Firefighters' Pension Fund Judges of the Probate Courts Retirement Fund Peace Officers' Annuity and Benefit Fund of Georgia Sheriffs' Retirement Fund of Georgia Superior Court Clerks' Retirement Fund of Georgia
Under the accrual basis ofaccounting, 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 State has elected to follow generally accepted accounting principles prescribed by the GASB and all Financial Accounting Standards Board (FASB) standards issued on or before November 30, 1989.
The College and University Funds are reported using the modified accrual basis ofaccounting (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 of the State of Georgia is prepared on the modified accrual basis utilizing encumbrance accounting with the following 'exceptions: federal and certain other revenues are accrued based on the unexecuted portion of long-term contracts; and intrafund transactions are disclosed as revenue and. expenditures. The budget represents departmental appropriations recommended by the Governor and adopted by the General Assembly prior to the beginning ofthe fiscal year. Annual appropriated budgets are adopted at the departmental level. The appropriated budget covers most governmental funds included in the State reporting entity but excludes the special revenue fund, capital projects funds and certain debt service funds which are not subject to appropriation. The budget includes certain proprietary funds, the college and university funds, and the

A -40

Notes to the FinanciaL Statements June 30, 2000
Note 1. Summary of Significant Accounting Policies (continued)
administrative costs of operating certain public employee retirement systems. All unencumbered annual appropriations lapse at fiscal year end I.lnless otherwise specified by constitutional or statutory provisions. Supplementary a~d amended appropriations may be enacted during the next legislative session by the same process used for original appropriations. Encumbrances are used to indicate the intent to purchase goods or services. Liabilities and expenditures are recorded upon issuance of completed purchase orders. Goods or services need not have been received for liabilities and expenditures to be recorded.
Because the budgetary basis differs from GAAP, budget and actual amounts in the accompanying Statement of Funds Available and Expenditures Compared to Budget - Budget Fund are presented on the budgetary basis. A reconciliation of the excess of funds a,:ailable over expenditures on the budgetary basis at June 30, 2000, to the excess (deficiency) of revenues and other fmancing sources over (under) expenditures and other fmancing uses/net income/net increase (decrease) in plan net assets/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 defined 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 ofthe State ofGeorgia 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 ofTreasury and Fiscal Services as revenues of the 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 ofTreasury 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. The pooled investment fund "Georgia Fund 1" is also available on a voluntary basis to organizations outside of the State reporting entity.
Authorized pool Investments are limited to the following in accordance with State statutes:
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; 7) Obligations ofother political subdivisions ofthe State; and 8) Commercial paper issued by domestic corporations.
Authorized investments are subject to certain restrictions.
Pooled cash and cash equivalents and investments are grouped into portfolios for investment purposes according to the operating needs of the State of Georgia and other pool contributors..
The Primary Liquidity Portfolio is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission (SEC) as an investment company, but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal. Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participants' shares sold and redeemed at the pool's share price, $1.00 per share. Investments are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements.

A -41

Notes to the FinanciaL Statements June 30, 2000
Note 1. Summary of Significant Accounting Policies (continued)
The Secondary Liquidity Portfolio consists of bankers' acceptances, certain U. S. Government securities and repurchase agreements with average investment duration of .62 years; and certificates of deposit with average investment duration of .24 years.
The Extended Term Portfolios consist generally of repurchase agreements and certain U. S. Government Securities which include mortgage-backed securities such as collateralized mortgage obligations and adjustable rate mortgages. These mortgage-backed securities are reported as U. S. Government Securities in the disclosure ofcustodial credit risk (see Note 4). Certain investments in these portfolios are transacted by an external investment management furn under direction ofan investment advisory agreement executed between the Office of Treasury and Fiscal Services and the investment management firm. The agreement directs the investment furn to utilize the Merrill Lynch 1-3 year Treasury Index in managing the average duration of the overall portfolio, excluding cash, to within plus or minus six months of the duration of the Index. The agreement also places limitations on individual security purchases and holdings. As of June 30, 2000, the State had $56,696,758 invested in U. S. agency mortgage-backed securities.
Other organizations of the State ofGeorgia reporting entity invest in a variety offinancial 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 fair value at June 30, 2000.
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 ofthe 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, 2000, the Department held surety bonds in the amount of$35,674,826, and cash bonds in the amount of $11,849,710. These bonds are not recorded on the Combined Balance Sheet.

Securities are held pursuant to statutes, which require licensed msurance companies to deposit securities with the Department ofInsurance prior to issuance ofa certificate of authority to transact insurance, by the Commissioner of Insurance. These securities remain in the name of the licensed insurance company as long as the company has a pending claim in the State ofGeorgia 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, 2000, securities valued at $194,838,699 were held by the Department ofInsurance. These securities are not recorded on the Combined Balance Sheet.
Construction contracts awarded by the Department of Transportation 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, 2000, $51,525,604 in escrow deposits was administered by the Department of Transportation.
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 l-C) have been met. Estimates of allowances for uncollectible receivables have not been made for the majority of receivables included within the financial statements.
G. Interfund Receivables
The short-term portion of balances arising in connection with interfund loans is recorded as interfund receivables/payables.

A -42

Notes to the Financial Statements June 30, 2000
Note 1. Summary of Significant Accounting Policies (continued)
H. Due To/From 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.
I. Advances to Other Funds
Noncurrent portions oflong-term interfund loans receivable are reported as advances and are offset equally by a fund balance reserve account, which indicates that they do not constitute expendable available financial resources, and therefore are not available for appropriation.
J. 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 ofgovenunental 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 purchases or consumption method.
Under the purchases method, a portion ofthe fund balance is reserved for inventories to indicate that it is not available for appropriation. Organizations using 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.

K. Prepaid Items
Payments made to vendors and local govenunent organizations for serviCes that will benefit periods beyond June 30, 2000, are recorded as prepaid items.
L. 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.
M. Fixed Assets
General fixed assets of govenunental 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 expendable 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 ofthe assets owned by the State of Georgia.
All purchased fixed assets are valued at cost or at estimated historical cost. if historical cost is not practically determinable. Certain fixed assets acquired through capital leases in prior years have not been recorded on the fmancial statements at ~he 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

A -43

Notes to the FinanciaL Statements June 30, 2000
Note 1. Summary of Significant Accounting Policies (continued)
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 ofconstruction 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 ofvfllue 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.
N. Compensated Absences
The State's liability for accumulated unpaid annual leave is reported. in the accompanying general long-term debt account group for governmental fund types. These amounts are not shown as a liability in the funds but are recorded as expenditures when paid. In the proprietary fund types and the college and university funds this obligation is reported as a liability in the respective funds.
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the 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 ofemployment. Funds are provided in the appropriation of funds each fiscal year to cover the cost of annual leave of terminated employees.
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Sick leave does not vest with the employee. Unused accumulated sick leave is forfeited upon retirement or termination of employment. However, certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. No liability is recorded for nonvesting accumulating rights to receive sick pay benefits.

O. Deferred Revenue
The State reports deferred revenue on the combined balance sheet. Deferred revenues arise when 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.
P. Mortgage Loans Under Repurchase Agreements
At June 30, 2000, mortgage loans totaling $8,629,472 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. The Authority considers any payment not received within thirty (30) days advanced to the borrower and paid to the lender. 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.
Q. Long-Term Obligations
Long-term debt and other long-term obligations ,are recognized as a liability of a governmental fund when due, or when resources have been accumulated in the debt service fund for payment early in the subsequent fiscal year. Other long-term obligations, with the exception of the long-term portion of some capital leases, are reported in the general long-term debt account group.
Long-term debt expected to be financed from proprietary fund operations are accounted for in those funds.

A -44

Notes to the FinanciaL Statements June 30, 2000
Note]. Summary of Significant Accounting Policies (continued)
R. 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 offmancial resources.
s. Bond Discounts/Premiums/Issuance Costs
In governmental fund types, bond discounts, premiums and issuance costs are recognized in the current period. Bond discounts, premiums and issuance costs for proprietary fund types are deferred and amortized over the term ofthe 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.
T. Interfund Transactions
The State has the following types of interfund transactions:
Quasi-external transactions for services rendered by one fund to another are accounted for as revenues by the . recipient fund and expenditures or expenses by the disbursing fund.
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund' and as reductions of expenditures/expenses in the fund that is reimbursed.
Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity.
Operating transfers are recorded for all other interfund transactions.

u. 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 fmancial 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.
v. Memorandum Only - Total Columns
Total columns on the general purpose fmancial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present fmancial position, results of , operations or cash flows in conformity with GAAP. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
w. Fiscal Reporting Periods
The financial statements include fmancial activity for the Stone Mountain Memorial Association whose fiscal reporting period differs from that of the State of Georgia (July 1, 1999 through June 30, 2000). The applicable fiscal reporting period for the Stone Mountain Memorial Association is the calendar year January 1, 1999, through December 31, 1999.
Note 2. Other Accounting Disclosures
Change in Accounting Policy and Restatements
In fiscal year 2000, certain State organizations implemented GASB Statement 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools." The statement establishes fair value standards for reporting

A -45

Notes to the FinanciaL Statements June 30, 2000
Note 2. Other Accounting Disclosures (continued)
certain investments. This change is reflected as an adjustment to fund equity in the applicable funds.
Accounts receivable related to erroneous payments for Medicaid benefits were reported at gross value prior to fiscal year 2000. During the year under review, a contra-asset valuation account was established to indicate the portion of erroneous Medicaid payments due and estimated to be uncollectible in excess of the $400 statutory limit, which cannot be legally written off. This change is in accordance with GAAP. The beginning fund equity of the general fund has been decreased by $25,000,000.
In prior years, amounts were accrued for some sales taxes before the exchange transaction on which the tax was imposed had occurred. The beginning fund equity of the general fund has been decreased by $109,539,314 in order to report the accrual for sales taxes in accordance with GAAP.
In prior years, refunds of expenditures made for Medicaid benefits were recorded in agency funds until such time as the refund was dispositioned. Financial statements for fiscal year 2000 reported this activity in the general fund. This change in application of an accounting principle is in accordance with GAAP. The beginning fund equity of the general fund was increased by $32,876,981.
In prior years, contributions to the State Health Benefit Plan were recorded on a cash basis, recognizing revenues when received rather than when earned. Financial statements for fiscal year 2000 reported revenues on the accrual basis of accounting. This change is in accordance with GAAP. The beginning fund equity of the enterprise fund has been increased by $955,785.
A reconciliation of the equipment inventory records of the Department of Administrative Services revealed an unidentified difference between the computed balance based on current year purchases/deletions and the actual financial statement balance. The beginning fund equity ofthe internal service funds has been decreased by $45,433,048 for this correction.

In fiscal year 2000, the Merit System of Personnel Administration began depreciating fixed assets in acc<;>rdance with GAAP. The beginning fund equity of the internal service funds has been decreased by $1 ,200,840 for this change in accounting principle.
The beginning fund equity of the Ports Authority has been increased by $4,395,000 to reflect a capitalization ofvarious adjustments of amounts to be refunded, and to recognize construction in progress and contributed capital related to the Savannah River Harbor Deepening project.
Fund balances/fund equity at July 1, 1999, have been . adjuste.d as follows:

Primary Government

General Fund .

Investments Reported at Fair Value

$

Allowance for Doubtful Accounts

. Sales Tax Accrual

Inclusion of Medicaid refund account

Enterprise Fund

Investments Reported at Fair Value

$

Accrual of Contributions Revenue

$

Internal Service Funds

Investments Reported at Fair Value

$

Fixed Assets Correction

Accumulated Depreciation

$

Pension Trust Funds

Investments Reported at Fair Value

$

(830,202) (25,000,000) (109,539,314) 32,876,981 (102,492,535)
(\ ,228,958) 955,785 (273,173)
(2,159,876) (45,433,048)
(1,200,840) (48,793,764)
(88,042)

Discretely Presented Component Units

Proprietary Fund Types

Capital Assets/Contributed Capital

$

4,395,000

A -46

Notes to the FinanciaL Statements June 30, 2000
Note 3. Budgetary Accounting
The Official Code ofGeorgia Annotated (OCGA), Title 45, Chapter 12, Article 4 sets forth the process for the development and monitoring of an appropriated budget for the State of Georgia. Not later than September 1 of each year, the head of each executive branch budget unit must submit estimates of the financial requirements for the subsequent fiscal year to the Office ofPlanning 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 ofPlanning and Budget for the purpose of estimating the total financial 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 ofthe 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 of the subsequent fiscal year together with the total estimated amount of receipts from existing revenue sources, less refunds, anticipated to be collected in the subsequent fiscal year. The Constitution further authorizes the passage of additional Supplementary Appropriation Acts for specific purposes, provided sufficient unappropriated funds are available or additional revenue measures have been enacted. Federal funds received by the State are continually appropriated in the exact amounts and for the purposes authorized and directed by the awarding federal agency.

Internal transfers within a budget unit and between objects of functional or activity budget units are subject to the condition that no State funds shall be transferred for the purpose of initiating a new program area not currently having a State funds appropriation.
The Governor, through the Office of Planning and Budget, requires each budget unit, other than those of the legislative and judicial branches, to submit an annual operating budget based on the activities and functions set forth in the Appropriations Act. Budget units submit quarterly allotment requests, which must be approved in conjunction with quarterly work programs prior to release of appropriated funds. Further monitoring of budget unit activities is accomplished by review of expenditure reports, which are submitted quarterly to the Office of Planning and Budget.
Budget units (i.e., agencies, commissions) of the State are responsible for budgetary control oftheir 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 ofFunds 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 (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing UseslNet IncomelNet Increase (Decrease) in Plan Net AssetslNet Increase in Fund Balances - Current Funds - GAAP Fund Types" appears below.

A -47

Notes to the FinanciaL Statements June 30, 2000
Note 3. Budgetary Accounting (continued)

Excess of Funds Available Over ExpendituresBudget Fund - Budgetary Method
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 Expenditures! Expenses and Related Liabilities
Timing Differences:
Revenues
E;<penditureslExpenses
Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing UseslNet 1ncomeINet Increase (Decrease) in Plan Net AssetslNet Increase in Fund Balances - Current Funds - GAAP Fund Types

Budgetary Fund
Budget

General

Special Revenue

Debt Service

Capital Projects

Primary Enterprise

$ 1,481,972,452 $

-$

-$

-$

-$

( 1,481,972,452)

1,452,117,104 1,252,995,005

283,880

(94,062,732) 291,734,780

(44,754,011)

,r

(2,121,839,286) (12,145,103)

222,398,067 (3,972,543)

3,606,992

$

0$

574,734,712 $ 283,880 $ (94,062,732) $ 291,734,780 $ 173,671,513

A -48

Notes to the FinanciaL Statements June 30, 2000

Government
Internal Service

Financial Statement Fund Types

Expendable Trust

Nonexpendab1e Trust

Pension/Investment Trust

College and University

Discretely Presented Component Units

Governmental Fund Types

Proprietary Fund Types

Fiduciary Fund Types

$

-$

-$

-$

-$

-$

-$

-$

23,514,045 150,182,236

(33,601,890)

200

40,887,015

11,752,864

(1,607,390)

62,625

557

395,547,706

46,231,020

7,858,215

49,608,201

3,009,844,480

(14,648,231)

(40,261,446) 35,686,254
(115,203)

(200)

(711,898)

8,485,294

(18,469) . (95,738)

(58,350)

(407,790) 242,694

(2,000) (60,625)

$ 169,005,886 $ (33,601,890) $

557 $

395,547,706 $ 80,128,993 $

19,552,729 $

47,835,715 $ 3,009,844,480

A -49

Notes to the FinanciaL Statements June 30, 2000
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 ofa 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 ofthe State of Georgia.
2) .Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia.
3) Bonds ofany public authority created by the laws ofthe 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 indebtedD.ess, 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 $645,344,279, and the bank balances were $1,155,152,760. The amounts of these bank balances are classified into three categories ofcredit risk: (1) cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the State or by its agent in the State's name, (2) cash collateralized with securities held by the pledging 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, 2000:

Risk Category
I 2 3

Bank Balance

$

243,605,899

96,323,143

815,223,718

$

1,155,152,760

A-50

Georgia.
Notes to the FinanciaL Statements June 30, 2000
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 Public Telecommunications

Commission

.

$

All Other Component Units

$

Proprietary Fund Types

Environmental Facilities Authority

$

Georgia Housing and

Finance Authority

$

Georgia Higher Education

Assistance Corporation

$

All Other Component Units

$

Fiduciary Fund Types

Peace Officers' Annuity and

Benefit Fund

$

Teachers Retirement

System of Georgia

$

All Other Component Units

$

Risk Categories 2

300,000 $

$

4,783 $

$

2,696,790 $

$

27,104,999 $

$

2,675,967 $ 11,501,159 $

14,041,062 $ 16,798,360 $

298,302 $
5,383,533 $ 412,039 $

$
$ 72,500 $

Funds Held by (for)

Primary

Carrying

3

Bank Balance

Government

Amount

3,541,306 $ $

3,841,306 $ 4,783 $

4,559,311 $ 8,847,900 $

2,800,460 (156,845)

$

2,696,790 $ 263,631,107 $

9,626;167

91,265,295 $ 118,370,294 $

2,896,010 $ 118,893,511

$ 16,622,220 $

16,717,029 $ 44,921,739 $

4,289,738 $ 54,499,090 $

15,835,650 23,072,715

1,996,880 $
$ $

2,295,182 $

32,164,884 $

5,383,533 $ 484,539 $

(60,625) $ 827,739,270 $

2,268,715
3,135,622 528,890

Investments - Investments are stated at fair value, and are summarized and classified as to risk in the following three categories: (1) 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.

A-51

Notes to the FinanciaL Statements June 30, 2000
Note 4. Deposits and Investments (continued)

The carrying amounts and risk categories applicable to the State's investments are listed below:

Primary Government

Type of Investment Commercial Paper Corporate Bonds Municipal Bonds Repurchase Agreements Stocks U.S. Government Securities and
Corporate Obligations
Unclassified Mortgages Mutual Funds Other Unemployment Compensation Funds
Pooled with the U.S. Treasury Total Investments

Risk Categories 2

$

1,760,291 $ 521,896,087 $

3,500,333

16,029,418

4,490,000

3,393,789,555

3,000,000

9,385,886,586

57,835,207

12,221,336,830

57,767,233

$

25,0 I0,763,595 $ 656,527,945 $

3

Carrying Amount

$

523,656,378

19,529,751

4,490,000

3,396,789,555

9,443,721,793

12,279, I 04,063

o$

25,667,291,540

4,628,271 3,284,347
6,721
I ,959,370,645 $ ===2=:7::::,6:::34=,5:::8:=1,::52;:4=

Significant Discretely Presented Component Units

Governmental Fund Types

Type of Investment

Georgia Public Telecommunications

Commission

Commercial Paper

$

Stocks

$ Unclassified

Mortgages

Risk Categories 2

49,980 $

$

176,197

226,177 $

o$

Carrying

3

Amount

$

49,980

176,197

o$

226,177

98,270

$

324,447

A-52

Unclassified Other

2,653,000

$

71,052,882

==::i::::=::i::::==

\

Notes to the FinanciaL Statements June 30, 2000
Note 4. Deposits and Investments (continued)

Fiduciary Fund Types
Teachers Retirement System of Georgia

Type oflnvestment

Risk Categories 2

Repurchase Agreements

$

408,674,000 $

$

Stocks

25,288,274,000

U.S. Government Securities and Corporate Obligations

15,642,757,000

$ 41,339,705,000 $

o$

Unclassified Real Estate

All Other Component Units Corporate Bonds

$

54,517,204 $

$

Investment Accounts

83,787,887

Notes

29,840,127

Stocks

369,084,470

U.S. Government Securities and Corporate Obligations

267,790,175

$

805,019,863 $

o$

Unclassified Mutual Funds
Real Estate

Carrying

3

Amount

$

408,674,000

25,288,274,000

15,642,757,000
o $ 41,339,705,000

3,750,000 $ 41,343,455,000

$

54,517,204

83,787,887

29,840,127

369,084,470

267,790,175

o$

805,019,863

3,334,682

18,942

$

808,373,487

Investments Lending Program - The State is presently involved in a securities lending program with major brokerage fIrms. The State lends equity and fIxed income securities for varying terms and receives a fee based on the loaned securities' value. During a loan, the State continues to receive dividends and interest as the owner of the loaned securities. The brokerage fIrms pledge collateral securities consisting of U. S. Government and agency securities, mortgage-backed securities issued by a U. S. Government agency, and U. S. Corporate bonds. The collateral value must be equal to at least 102% to 110% of the loaned securities value, depending on the type ofcollateral security.

Securities loaned.totaled $22,034,959,000 at June 30, 2000, and the collateral value was equal to 103.9%. The loaned securities are classifIed as category 1 investments in the component units - fIduciary fund types based on the custodial arrangements for the collateral securities. Loaned securities are included in the accompanying Statement of Net Plan Assets since the State maintains ownership. The related collateral securities are not recorded as assets on the Statement of Net Plan Assets, and a corresponding liability is not recorded, since the State does not pledge or trade the collateral securities.

A-54

Notes to the FinanciaL Statements
June 30, 2000
Note 4. Deposits and Investments (continued)
Investment Pools - Separate reports on the State's external investment pools are not issued. Condensed financial statements, inclusive ofexternal and internal participants for the fiscal year ended June 30, 2000, and related categorization ofinvestments are as follows:

. Georgia Fund 1 Statement of Net Assets
June 30, 2000

Cash and Cash Equivalents Investments
Net Assets

$

6,557,651,930

354,788,430

$ ==6,=,9=12::::,4=4=0,=,3=60=

Distribution of Net Assets

Extemal Participant Account Balances

$

2,859,282,737

Internal Participant Account Balances

4,053,157,623

=========== $

6,912,440,360

Georgia Fund 1 Statement of Changes in Net Assets For the Fiscal Year Ended June 30,2000

Additions

Pool Participant Deposits

$

17,263,602,978

Investment Income

369,750,329

Less: Investment Expense Total Additions

(1,481,162)

$

17,631,872,145

Deductions Pool Participant Withdrawals
Net Increase Net Assets

17,347,558,097

$

284,314,048

July I, 1999

6,628,126,312

June 30, 2000

$ ==6,=9=12::::,4=4=0,=36=0=

Because the State does not maintain separate bank accounts for Georgia Fund 1, a separate risk categorization for the Fund's deposits cannot be presented. The carrying amount of Georgia Fund 1 deposits as of June 30, 2000, was $16,955,294. This amount is included in the categorization of deposits of the Primary Government. Investments of Georgia Fund 1 are categorized below. These amounts are included in the categorization of investments of the Primary Government.

Type of Investment

Risk Categories

2

3

Carrying Amount

Commercial Paper

$

$

Repurchase Agreements

2,696,694,924

U.S. Government Securities and Corporate Obligations

3,825,002,462

$ 6,521,697,386 $

373,787,680 $ 373,787,680 $

$

373,787,680

2,696,694,924

3,825,002,462
o $ 6,895,485,066

A-55

Notes to the Flnanctal Statements June 30, 2000
Note 4. Deposits and Investments (continued)
Regents Investment Pool Statement of Net Assets
June 30.2000

Cash and Cash Equivalents Investments Interest Receivable
Net Assets

$

16,595,539

94,225,137

760,277

$ ==1=,,:::,5::8::0,::95::3=

Distribution of Net Assets External Participant Account Balances Internal Participant Account Balances

$

9,957,908

101,623,045

$ ==1=,,:::,5=8=0,=95=3=

Regents Investment Pool Statement of Changes in Net Assets For the Fiscal Year Ended June 30.2000

Additions

Investment Income

Interest

$

4,570,080

Fair Value Increases

5,469,800

Less: Investment Expense Total Additions

(397,667) $ _ _.....;.9,:.;;.64..;;2;.:;,2;.;1~3_

Deductions

Pool Participant Withdrawals

$

29,686,745

Capital Transactions

( 19,325,973)

Total Deductions

$

10;...:.,3;...6-,0';...77_2_

Net Decrease

$

(718,559)

Net Assets

July 1,1999

112,299,512

June 30, 2000

$ ==1=,,:::,5=8=0,=95=3=

Because the State does not maintain separate bank accounts for Regents Investment Pool, a separate risk categorization for the Pool's deposits cannot be presented. The carrying amount ofPool deposits as ofJune 30, 2000, was $17,355,816. This amount is included in the categorization of deposits of the Primary Government. Investments of Regents Investment Pool are categorized below. These amounts are included in the categorization of investments of the Primary Government.

Type of Investment

Corporate Bonds

$

Stocks

U.S. Government Securities and Corporate Obligations

$

Risk Categories 2

$

9,289,705 $

46,874,920

38,060,512

0$

94,225,137 $

Carrying

3

Amount

$

9,289,705

46,874,920

38,060,512

0$

94,225,137

A-56

Notes to the FinanciaL Statements
June 30, 2000
Note 5. Receivables
Primary Government
Receivables by fund type as ofJune 30, 2000, consist of the following:

Governmental Fund Types General Special Revenue Capital Projects
Proprietary Fund Types Enterprise Internal Service
Fiduciary Fund Types Exp~ndable Trust Pension -Trust Agency
College and University Funds

Gross Receivables

Allowance for
Uncollectibles

Net Total Receivables

$ 3,843,197,320 $ 2,293,413 14,229,376

(25,000,000) $ 3,818,197,320 2,293,413 14,229,376

29,951,253 17,261,920

(4,157,556)

25,793,697 17,261,920

65,721,549 120,086,063
4,074,686 383,987,658

(16,422,140) (93,511,048)

49,299,409 120,086,063
4,074,686 290,476,610

$ 4,480,803,238 $ (139,090,744) $ 4,341,712,494

A-57

Notes to the Financial Statements June 30. 2000
Note 5. Receivables (continued)
Significant Discretely Presented Component Units
Receivables of the significant discretely presented component units as of June 30, 2000, consist of the following:
A-58

Notes to the FinanciaL Statements June 30, 2000
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 Improvements Other Than Buildings Machinery and Equipment

Balance July 1, 1999

Retroactive Restatement
of Prior Year Balance

$ 2,071,441,402 $

444,323 $

614,918

1,009,324,417

(228,622,077)

Additions

Retirements

Balance June 30, 2000

129,969;635 $

(2,060) $

2,201,853,300

11,849

(5,999)

620,768

355,245,751

(67,929,987)

1,068,018,104

Total General Fixed Assets

$ 3,081,380,737 $

(228,177,754) $

485,227,235 $

(67,938,046) $

3,270,492,172

The following is a summary of the proprietary fund types and college and university funds fixed assets at June 30, 2000:

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

Proprietary Fund Types

Internal

Enterprise Funds

Service Funds

College and University Funds

$

$

239,663,742 $

3,181,811,691

226,268,928

60,085

150,381,052

1,791,516,587

(20,838)

(14,903,568)

169,735,419

$

39,247 $

375,141.226 $

5,369,332,625

A-59

Notes to the FinanciaL Statements June 30, 2000
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, 2000:

Governmental Fund Types

Georgia

Georgia

Public Telecom-

Regional

munications . Transportation

Commission

Authority

Georgia Ports
Authority

Proprietary Fund Types

Stone

Geo. L. Smith II

Mountain

Georgia World

Memorial Congress Center

Association

Authority

All Other Component
Units

Land and Buildings

$

27,385,661 $

$ 207,715,000 $ 78,747,831 $ 209,402,736 $ 115,024,536

Improvements Other Than Buildings

225,002,000

21,753,253

4,046:872

Machinery and Equipment

56,503,025

204,566

138,704,000

26,238,185

14,653,615

43,533,672

Less: Accumulated Depreciation

(235,136,000)

(39,161,829)

(63,874,740)

(25,967,994)

Construction in Progress

33,543,000

526,160

72,265,973

223,255

Net Fixed Assets

$

83,888,686 $

204,566 $ 369,828,000 $ 88,103,600 $ 232,447,584 $ 136,860,341

Land and Buildings Machinery and Equipment Net Fixed Assets

Firefighters' Pension Fund

Fiduciary Fund Types Peace Orocers' Annuity and Benefit Fu nd

$

152,724 $

310,296 $

184,326

190,250

$

337,050 $

500,546 $

All Other Component
Units
48,786 48,786

As noted in the Summary of Significant Accounting Policies (Note I), 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 ofland and buildings; therefore, the tables above do not represent a comprehensive valuation ofthe assets owned by the State of Georgia.

A - 60

Notes to the FinanciaL Statements June 30, 2000
Note 7. Risk Management
A. Public Entity Risk Pool
The Department of Community Health 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 Department of Community Health 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 Department of Community Health.
A reconciliation of total claims liabilities for fiscal years ended June 30, 2000, and 1999, is shown below:

Unpaid ClaimS and Claim Adjustments July 1
Incurred Claims and Claims Adjustment ExpensesProvisions for Insured Events of the Current Year
Payments - Claims and Claim .Adjustment Expenses Attnbutab1e to Insured Events of the Current Year and of Prior Years

Fiscal Year Ended June 30, 2000

Fiscal Year Ended June 30,1999

$

218,520,779 $

159,758,318

1,242,580,570

993,414,951

(1,267,944,573 )

(934,652,490)

Unpaid Claims and Claim Adj ustments J LU1e 30

$

193,156,776 $

218,520,779

B. Board of Regents Employee Health Benefits Plan
The Board of Regents of the University System of Georgia maintains a program of hea lth 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 ofRegents 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 ofRegents.
A reconciliation of total claims liabilities for fiscal years ended June 30, 2000, and 1999, is shown below:

Unpaid Claims and Claim Adjustments July I
Incurred Claims and Claims Adjustment Expenses Provisions for Insured Events of the Current Year
Payments - Claims and Claim Adjustment Expenses Attributable to Insured Events of the Current Year and of Prior Years

Fiscal Year Ended June 30, 2000

Fiscal Year Ended JLU1e 30, 1999

$

25,300,000 $

21,800,000

178,486,808

159,756,073 .

(175,386,808)

(156,256,073)

Unpaid Claims and Claim Adjustments June 30

$

28,400,000 $

25,300,000

C. Other Risk Management
The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks

A - 61

Notes to the FinanciaL Statements
June 30, 2000

Note 7. Risk Management (continued)
internally and set aside assets for claim settlement. Accordingly, DOAS services claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance 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.
Actuarial valuations were not performed on the Liability Self-Insurance Reserve Fund, Unemployment Compensation Fund or Workers' Compensation Fund for the year ended June 30, 2000. The reported claims liabilities for these funds, totaling $429,838,986, are based on the actuarial valuations at June 30, 1999.
A reconciliation of total claims liabilities for fiscal years ended June 30, 2000, and 1999, is shown below:

Unpaid Claims and Claim Adjustments July I
Incurred Claims and Claims Adj ustment Expenses Provisions for Insured Events of the Current Year
Payments - Claims and Claim Adjustment Expenses AttnbutabJe to Insured Events of the Current Year and of Prior Years

Fiscal Year Ended JlDle 30, 2000

Fiscal Year Ended JlDle 30, 1999

$ 431,717,753 $ 357,293,702

80,088,508

158,694,809

(75,693,051)

(84,270,758)

Unpaid Claims and Claim Adjustments JlDle 30

$

436,113,210 $

431,717,753

June 30, 2000, the undisbursed balance remaining on these agreements approximates $1,531,000,000.

.

.'

Significant Discretely Presented Component

Units

Proprietary Fund Types

At June 30, 2000, the Georgia Ports Authority had commitments for construction projects of approximately $15,700,000.

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 conumtments in accordance with GAAP.
Future minimum commitments for operating leases as of June 30, 2000, 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
2001 2002

78,881,981 17,677,371

Note 8. Constrqction 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

2003 2004 2005 2006 and Subsequent Total Minimum Commitments

16,316,307 15,410,007 15,505,438 52,438,570 $ ===1=96=,2=2=9=,6=74=

A- 62

Notes to the FinanciaL Statements June 30, 2000
Note 9. Operating Leases (continued)
Expenditures for rental of real property and equipment for the year ended June 30, 2000, totaled $81,500,173.

Significant Discretely Presented Component Units
Proprietary Fund Types

Georgia Lottery Corporation Fiscal Year Ended June 30

2001

$

2002

2003

2004

2005

2006 and Subsequent

$

Less: Sublease Revenues

Total Minimum Commitments

$

1,963,000 1,963,000 1,963,000
14,000
5,903,000 (1,148,000) 4,755,000

Expenditures for rental of real property and equipment for the year ended June 30, 2000, totaled $1,650,000.

North Georgia Mountains Authoritv Fiscal Year Ended June 30

2001 2002 2003 2004 2005 2006 and Subsequent
Total Minimum Commitments

$

1,434,982

1,438,486

1,448,954

1,467,011

1,478,380

13,913,523

$ =====2=:1,=:18=1=:,3=36=

State Tollway Authority Fiscal Year Ended June 30

2001 2002 2003 2004 2005 2006 and Subsequent
Total Minimum Commitments

$

692,806

413,000

413,000

413,000

413,000

6,814,500

$ ====== 9,159,306

Expenditures for rental of real property and equipment for the year ended June 30, 2000, totaled $698,657.

B. Lessor
The State leases certain of its facilities for use by others for terms varying from 1 to 65 years, with the majority ofleases controlled by the State Properties Commission. These leases are accounted for as operating leases; revenues for services provided and for use of facilities are recorded when earned. Minimum future revenues and rentals to be received under operating leases as of June 30, 2000, are as follows:
Primary Government

Fiscal Year Ended June 30
2001 2002 2003 2004 2005 2006 and Subsequent Total Minimum Commitments

$

7,213,767

7,334,208

7,451,153

7,555,106

7,672,417

144,981,732

$

182,208,383

Expenditures for rental of real property and equipment for the year ended June 30, 2000, totaled $1,432,064.

Revenues from rental of facilities for the year ended June 30,2000, totaled $6,954,965.

A - 63

Notes to the Financial Statements June 30, 2000

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

Lake Lanier Islands Development Authority Fiscal Year Ended June 30

2001 2002 2003 2004 2005 2006 and Subsequent
Total Minimum Commitments

$

3,100,000

3,200,000

3,200,000

3,200,000

3,200,000

134,666,667

$ ==1=50::,5=6=6,=66=7=

Revenues from rental of facilities for the year ended June 30, 2000, totaled $3,238,011.

Georgia Ports Authoritv Fiscal Year Ended June 30

2001 2002 2003 2004 2005
2006 and Subsequent
Total Minimum Commitments

$

5,713,000

4,887,000

3,983,000

3,512,000

3,476,000

33,613,000

$ ===55=,=18=4=,0=00=

Revenues from rental of facilities for the year ended June 30,2000, totaled $6,087,784.
Note 10. Capital Leases and Installment Purchases
The State acquires certain property and equipment through multi-year installment purchases or capital leases with varying terms and options. The majority of these

agreements contain fiscal funding clauses in accordance with OCGA 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. If renewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly are considered noncancellable for financial reporting purposes.
Capital leases for the proprietary funds and the college and university funds are reported as a long-term obligation in those funds along with the related assets. Capital leases for the governmental funds are reported in the general long-term debt account group and the related assets are reported in the general fixed assets account group.
As noted in the Summary ofSignificant 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, 2000, future commitments under installment purchases and capital leases were as follows:
Primary Government

Fiscal Year Ended June 30
2001 2002 2003 2004 2005 2006 and Subsequent Total Capital Lease and Installment
Purchase Payments Less: Interest Present Value of Capital Lease and
Installment Purchase Payments
Installment Purchases Capital Leases

$

19,149,249

9,719,418

3,262,498

1,439,390

120,937

$

33,691,492

(2,208,735)

$ ===31=,4=8=2,=75=7=

$

9,023,973

22,458,784

$ ===3=1=,4:::82=,7=5=7=

A- 64

Notes to the FinanciaL Statements June 30, 2000
Note 10. Capital Leases and Installment Purchases (continued)

Significant Discretely Presented Component Units
Governmental Fund Types
Georgia Public Telecommunications Commission Fiscal Year Ended June 30

2001 2002 2003 2004 2005 2006 and Subsequent
Total Installment Purchase Payments
Less: interest
Present Value of Installment Purchase Payments

$

2,090,466

2,086,580

2,083,804

1,651,626

654,154

$

8,566,630

(922,116)

$

7,644,514
==i:::::::::::=

Proprietary Fund Types
Georgia Student Finance Authority Fiscal Year Ended June 30

2001 2002 2003 2004 2005 2006 and Subsequent
Total Installment Purchase Payments
Less: Interest
Present Value of Installment Purchase Payments

$

417,103

$

417,103

(60,138)

$ ===3=5=6=,9=65=

Geo. L. Smith II Georgia World Congress Center Authority
Fiscal Year Ended June 30

2001 2002 2003 2004 2005 2006 and Subsequent

$

164,575

Total Installment Purchase Payments

$

164,575

Less: Interest

(22,699)

Present Value ofinstallment Purchase Payments

$

141,876

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.

Interest Rates

General Government 1.25% - 8.00% $

General Government -

Refunding

2.40% - 6.30%

Amount 4,529,890,000
609,680,000

$ 5,139,570,000

A - 65

Notes to the Financial Statements June 30, 2000
Note 11. Long-Term Debt (continued)
Annual debt service requirements to maturity for general obligation bonds are as follows:

Fiscal Year Ended June 30
2001 2002 2003 2004 2005 Thereafter

Principal

$

303,900,000 $

314,750,000

317,280,000

349,840,000

359,460,000

3,494,340,000

$

5,139,570,000 $

Interest
294,630,08 I $ 276,195,831 257,917,604 238,338,533 216,812,821 1,042,484,928
2,326,379,798 $

Total
598,530,081 590,945,831 575,197,604 588,178,533 576,272,821 4,536,824,928
7,465,949,798

General State Bonds. All General State Bonds ofthe 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. Umedeemed General State Bonds at June 30, 2000, were $15,505 with accumulated interest of$II,475.
Revenue Bonds. At June 30, 2000, $155,555,000 of outstanding general obligation bonds (including prior

years' refundings), and $425,000 of outstanding Georgia Education Authority (University) revenue bonds (including prior years' defeasances) are considered defeased.
Changes in Long-Term Liabilities. During the year ended June 30, 2000, the following changes occurred in liabilities reported in the general long-term debt account group:

Compensated Absences Claims and Judgements Capital Leases and Installment Purchases General Obligation Debt General State Bond Debt Long-Tenn Notes

Balance July I

Retroactive Restatement
of Prior Year Balance

$ 219,453,524 $

$

697,979

7,005,857

(60,499)

4,779,730,000

15,505

2,797,266

Additions $
435,970 794,715,000

Reductions

Eamedand Utilized (Net)

Balance June 30

$

12,110,170 $ 231,563,694

(697,979)

(2,433,329)

4,947,999

(434,875,000)

5,139,570,000

15,505

(52,178)

2,745,088

$ 5,009,700,131 $

(60,499) $ 795,150,970 $ (438,058,486) $

12,110,170 $ 5,378,842,286

A- 66

Notes to the FinanciaL Statements June 30, 2000
Note 11. Long-Term Debt (continued)
Significant Discretely Presented Component Units
Governmental Fund Types
.Defeased Debt. AtJune 30, 2000, $260,000 ofoutstanding Georgia Education Authority (Schools) revenue bonds (including prior year's defeasances) are considered defeased.
Proprietary Fund Types
Long-Term Operating Debt. Long-term operating debt has been issued by the Georgia Student Finance Authority. This debt consists ofa financing agreement with SunTrust Bank with an outstanding balance at June 30, 2000, of $6,500,000.

Purpose
Georgia Student Finance Authority

Interest Rates

Amount

Varies Based on Market Rates $

6,500,000

Long-~erm operating debt requirements to maturity are as follows:

Fiscal Year Ended June 30

Georgia Student Finance Authority

Principal

Interest

Total

2001

$ 6,500,000 $ =====$ 6,500,000

Interest varies based on market rates and therefore is not available for this schedule.

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 ofunamortized discounts, of $788,213,882 and $188,615,000 at the Georgia Housing and Finance Authority and the Geo. L. Smith II Georgia World Congress Center Authority, respectively, at June 30, 2000, are as follows:

Purpose .
Georgia Housing and Finance Authority Financing the Purchase of Sirigle Family Mortgage Loans for Eligible Persons and Families of Low and Moderate Income within the State of Georgia
Financing the Purchase of Hospital Equipment and Facilities by Eligible Hospitals
Geo. L. Smith II Georgia World Congiess Center Authority Construction of the Georgia Dome'Stadium

Interest Rates
2.95% - 9.25%
5.50% - 6.00%

$

787,755,882

$

458,000

$

188,615,000

A - 67

-----------------....,----------------~-~---_._------

Notes to the FinanciaL Statements June 30, 2000
Note 11. Long-Term Debt (continued)
Revenue bond debt service requirements to maturity are as follows:

Fiscal Year Ended June 30

Georgia Housing and Finance Authority

Principal

Interest

Total

2001 2002 2003 2004 2005 Thereafter Unamortized Discount Future Accretion of Capital Appreciation Bonds

$

12,540,000 $

15,565,000

16,880,000

18,505,000

20,556,722

738,967,441

(123,913)

(35,134,368)

$

787,755,882 $

45,182,889 $ 44,115,489 43,312,460 42,411,653 41,417,504 522,748,540
-123,913
35,134,368
774,446,816 $

57,72i,889 59,680,489 60,192,460 60,916,653 61,974,226 1,261,715,981
1,562,202,698

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

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, 2000, was $458,000. The bonds bear interest at an adjustable daily rate with interest payable on a monthly basis. The interest rate basis is subject to change, at the election of the Authority, to a weekly, monthly,

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

Geo. L.' Smith II Georgia World Congress Center Authority

Fiscal Year Ended June 30

Principal

Interest

2001 2002 2003 2004 2005 Thereafter

$

$

5,005,000

5,310,000

5,645,000

6,000,000

166,655,000

$

188,615,000 $

5,415,553 $ 10,687,212 10,384,019 10,055,369 9,706,019 86,589,316
132,837,488 $

Total
5,415,553 15,692,212 15,694,019 15,700,369 15,706;019 253,244,316
321,452,488

A - 68

Notes to the FinanciaL Statements
June 30, 2000
Note 11. Long-Term Debt (continued)
De/eased Debt. At June 30, 2000, $77,430,000 of outstanding Tollway Authority revenue bonds (including prior years' defeasances) are considered defeased.

Note 12. Interfund Balances
Interfund assets and liabilities at June 30, 2000, consist of the following:
Interfund Receivables:

Receivable Fund

Payable Fund

Interfund Receivable

Interfund Payable

Capital Projects Funds

Proprietary Fund Types Discretely Presented Component Units

$

3,353,581

Georgia State Financing and Investment Commission (Capital Projects Funds) interfund receivables from Stone Mountain Memorial.Association (Proprietary Fund Types - Discretely Presented Component Units) do not reconcile due to the difference in fiscal reporting periods (See Note I).

$ =====3,=22=5=,8=90=

Notes to the FinanciaL Statements June 30, 2000
Note 12. Interfund Balances (continued)
Due From/To Other Funds:

Receivable Fund

Payable Fund

General Fund

Proprietary Fund Types Discretely Presented Component Units

Internal Service Funds

General Fund

Internal Service Funds

Pension Trust Funds

Internal Service Funds

College and University Funds

Internal Service Funds

Governmental Fund Types Discretely Presented Component Units

Internal Service Funds

Proprietary Fund Types Discretely Presented Component Units

Proprietary Fund Types Discretely Presented Component Units General Fund

Proprietary Fund Types Discretely Presented Component Units Capital Projects Funds

Due From

Due To

$

361,151 $

361,151

29,071,512

29,071,512

1,576,334

1,576,334

3,149,724

3,149,724

110,382

110,382

243,260

243,260

2,231,526

2,231,526

628,844

628,844

$

37,372,733 $

37,372,733

Advances From/To Other Funds:

Receivable Fund General Fund Capital Projects Funds

Payable Fund
Agency Funds
Proprietary Fund Types Discretely Presented Component Units

Advance To

Advance From

$

6,925 $

6,925

8,077,198

9,421,272

$

8,084,123 $

9,428,197

Georgia State Financing and Investment Commission (Capital Projects Funds) advances .to Stone Mountain Memorial Association (Proprietary Fund Types - Discretely Presented Component Units) do not reconcile due to the difference in fiscal reporting periods (See Note I).

A-70

Notes to the FinanciaL Statements June 30, 2000
Note 13. Contributed Capital
During the year, contributed capital increased by the following amounts:
Primary Government

SOURCE General Obligation Bond Proceeds/
Fixed Assets Contributed by Primary Government Contributed Capital July 1, 1999
Contributed Capital June 30, 2000

Department of Administrative
Services

Internal Service Funds Georgia Building Authority (Regular)

Correctional Industries
Administration

Total

$

$

10,290 $

53,384,666

220,235,527

$

53,384,666 $

220,245,817 $

$ 1,145,948
1,145,948 $

10,290 274,766,141
274,776,431

Significant Discretely Presented Component Units

Proprietary Fund Types

SOURCE

Georgia Environmental
Facilities Authority

General Obligation Bond Proceeds/Capital Outlay Contributed by Primary Government

$

20,000,000 $

Contributions from Federal Government

4,705,565

Contributions from Other Sources

General Obligation Bond Proceeds/Capital Outlay Returned to Primary Government

Net Additions

$

24,705,565 $

Contributed Capital July I, 1999

583,825,504

Restatement of Prior Year Balance

Georgia Ports
Authority

Georgia World Congress Center Authority

All Other Component
Units

24,064,000 $

$

2,829,809

(597,000) 23,467,000 $ 246,576,794
5,899,000

80,000

18,044

80,000 $ 71,353,860
450,000

(2,451,186) 396,667
143,559,305

Contributed Capital June 30, 2000

$

608,531,069 $

275,942,794 $

71,883,860 $

143,955,972

A -71

Notes to the Financial Statements June 30, 2000
Note 13. Contributed Capital (continued)
Contributed Capital/Residual Equity Transfers for the fiscal year ended June 30, 2000, are as follows:

Receiving Fund General Fund
Internal Service Funds Proprietary Fund Types - Discretely
Presented Component Units 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 Fund General Fund Capital Projects Fund
Other Sources

Received

Contributed

$

3,048,186 $

3,048,186

10,290

10,290

48,242

48,242

46,845,567

46,845,567

$

49,952,285 $

49,952,285

4,803,609

$

54,755,894 $

49,952,285

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 proc~edings would not have a material adverse effect on the fmancial condition of the State, with the following exceptions:

Primary Government
A suit was filed March 13, 1998, by DeKalb County against the State of Georgia, the Department ofRevenue, Zell Miller (in his official capacity as Governor), and T. Jerry Jackson(in his official capacity as Revenue Commissioner) (collectively, "the State") in connection with the State's collection and distribution of a speciallqcal option sales tax in effect in DeKalbCounty since July 1997. DeKalb's complaint, as amended, seeks an accounting, mandamus, injunctive relief, declaratory judgment, unjust enriclunent, bailment, inverse condemnation, and a determination that OCGA section 48-8-67 is unconstitutional. The complaint, as amended, seeks damages of$27,700,000. Subsequently, DeKalb County has Ore-estimated its alleged damages as $12,000,000. DeKalb County's action was dismissed by the trial court, and this dismissal was affirmed in part and reversed in part by the Georgia Supreme Court in an order

A -72

Notes to the FinanciaL Statements June 30, 2000
Note 14. Contingencies (continued)
dated February 22, 1999. The Supreme Court's decision remands to the trial court the accounting claim on the . question of whether the Department of Revenue made reasonable efforts to identify county tax proceeds that have been determined by the Department to be unidentifiable to any county. The resolution of this case is anticipated by the beginning of April, 2001.
A financial institution has filed suit for refund ofsales taxes based upon alleged bad debts on installment sales contracts purchased from motor vehicle dealers. The suit seeks a refund of approximately $300,000. The total amount of all similar pending administrative claims for refund (for the years 1991-2000) is approximately $46,000,000. After the filing ofcross-motions for summary judgment in the original case, the Superior Court ruled in favor of the Defendant State Revenue Commissioner. On appeal, the Georgia Court ofAppeals ~ffirmed. The defendant's petition for certiorari is pending in the Georgia Supreme Court.
Contract claims in the amount of approximately $15,000,000 have been made against the Board of Regents of the University System of Georgia in connection with construction at the Children's Medical Center in Augusta, Georgia. The delay, equitable adjustment, and design claims were made by 30 subcontractors and the construction . manager. The total project cost is $55,000,000. Several subcontractors have filed suits against the Construction Manager, with the Construction Manager filing corresponding third-party complaints against the Board of Regents. The State has reached settlement on two claims and has successfully negotiated a settlement with two other subcontractors before suit was filed. The State expects to reach a favorable settlement with all subcontractors. For the disputes with the construction manager, the State has filed. fourth party complaints against the architect.
Construction on the Animal Health Research Center at the University of Georgia has generated an $8,200,000 delay, equitable adjustment, and design claim from the contractor. The State believes it has significant counterclaims to assert against the contractor. The parties are now completing the discovery phase and are looking toward a court-approved mediation.

A number ofGeorgia Medicaid provider hospitals filed suit on grounds of breach of contract and unconstitutional takings for additional Medicaid reimbursement for state fiscal year 1997. The complaint seeks over $7,000,000 from the State of Georgia. The trial court ruled in favor of the State with respect to the unconstitutional takings claim but ruled against the State on the breach of contract claim, holding that the State had violated the federal statute commonly known as the "Boren Amendment." The Georgia Court of Appeals affirmed the trial court's decision. A petition for certiorari filed by the State is now pending before the Georgia Supreme Court... A decision of the Georgia Supreme Court adverse to the State could result in a loss as large as $13,000,000.
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, untii the State's rate of annual losses (defaults) exceeded five percent (5%). In the event of future adverse loss experience, the State could be liable for up to (1) 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-two percent (22%) of the outstanding balance of loans in repayment status at the beginning of each year which were disbursed on or after October 1, 1993.
Note 15. Subsequent Events
Primary Government
General Obligation Bonds Issued
The State issued General Obligation Bonds in the amount of $301,175,000 on July 1, 2000 (Series 2000B and 2000 C); and in the amount of $266,105,000 on October 1, 2000 (Series 2000D).
Proceeds from these bonds will be used for the purpose of fmancing various capital outlay projects.

A -73

Notes to the FinanciaL Statements June 30, 2000
Note 16. 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 1992 for the purpose ofproviding retirement allowances for State employees who are not members of a public retirement or pension system. GDCP is administered by the Employees' Retirement System (ERS) Board of Trustees.
Membership . As of June 30, 2000, participation in GDCP is as follows:

Active Plan Members
Terminated Employees Entitled to Benefits but not yet Receiving Benefits

27,883'
52,534 80,417

Benefits A member may retire and elect to receive periodic payments after attainment ofage sixty-five (65). The payments will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $3,500 credit to his/heraccount, the Board has the option of requiring a lump sum distribution to the member. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary.
Contributions Members are required to contribute seven and one-half percent (7.5%) of their annual 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 by the Georgia General Assembly in 1949 for the purpose of providing retirement benefits to the district attorneys of the State of Georgia. DARF is directed by its own Board of Trustees. The' Boards 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, 2000, DARF had ten (10) 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 calendar year immediately prior to the person's retirement, whichever is greater.
Contributions and Vesting Member contributions were five percent (5.0%) of their annual salary plus an additional two and one-half percent (2.5%) for the spousal coverage benefit ifelected. 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.
Employees' Retirement System ofGeorgia
Plan Description
Organization and Purpose Employees' Retirement System of Georgia ("ERS") is a single-employer, defmed benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation.

A -74

Notes to the Financial Statements
June 30, 2000
Note 16. Retirement Systems (continued)
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan ("SRBP") of ERS. SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code ("IRC") as a portion of ERS. The purpose of the SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.
Membership As of June 30, 2000, participation in ERS is as follows:

Retirees and Beneficiaries Currently Receiving Benefits
Active Plan Members
Terminated Employees Entitled to Benefits but not yet Receiving Benefits

24,506 72,176
53,182 149,864

As ofJune 30, 2000, two hundred forty-eight (248) members were eligible to participate in the SRBP of ERS.
Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.
Under both the old and new plans, a member may retire and receive normal retirement benefits after completion of ten (10) years of creditable service and attainment of age sixty-

five (65). Additionally, there are certain provisions allowing for retirement after twenty-five (25) years of creditable service regardless of age.
Retirement benefits paid to members are based upon the monthly average of the member's highest twenty-four (24) consecutive calendar months 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 plan are four percent (4.0%) ofannual compensation up to $4,200 plus six percent (6.0%) of annual compensation in excess of$4,200. Under the old plan, the State pays member contributions in excess of one and one-fourth percent (1.25%) of annual compensation. Under the old plan, these State contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan are one and one-fourth percent (1.25%) of annual compensation. The State is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation.
Under the SRBP, employer contributions of$2,279,000 and retirement payments of $2,335,000 are included in the Statement of Changes in Plan Net Assets for the year ended June 30, 2000. Cash of$79,000 and employer receivable of $202,000 are included in the Statement ofPlan Net Assets at June 30, 2000.
Members become vested after ten (10) years ofmembership 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.
The employer contributions are projected to liquidate the unfunded actuarial accrued liability within forty (40) years based upon the actuarial valuation at June 30, 1999.

A -75

-

Notes to the FinanciaL Statements June 30, 2000
Note 16. Retirement Systems (continued)

Georgia Judicial Retirement System

Plan Description

Organization and Purpose

The Georgia Judicial Retirement System ("GJRS") is a

system created to serve the members and beneficiaries ofthe

Trial Judges and Solicitors Retirement Fund, the Superior

Co~ Judges Retirement System and the District Attorneys'

Retirement System (collectively the "Predecessor

Retirement Systems"). As ofJune 30,1998, any person who

was an active, inactive or retired member or beneficiary of

the Predecessor Retirement Systems was transferred, to

GJRS in the same status effective J~ly 1,1998. All assets of

the Predecessor Retirement Systems were transferred to

GJRS as of July 1, 1998.

.

GJRS is a multiple-employer cost-sharing defined benefit pension plan established by the Georgia General Assembly for the purpose of providing retirement allowances for trial judges and solicitors of certain courts in Georgia, and their survivors and other beneficiaries, superior court judges of the, State of Georgia, and district attorneys of the State of Georgia. GJRS is administered by the ERS Board of Trustees and three (3) other trustees not on the ERS Board.

Membership As of June 30, 2000, participation in GJRS is as follows:

Retirees and Beneficiaries Currently Receiving Benefits'
Active'Plan Members
Terminated Employees Entitled to Benefits but not yet Receiving Benefits

116 ,421
18 555

Benefits ~e normal retirement for GJRS is age sixty (60) with SIxteen (16) years of creditable service; however, a member may retire at age sixty (60) with a minimum often (10) years of creditable service.

Retirement benefits paid to members are computed as si~ty

six and two-thirds percent (66 2/3%) of annual salary plus

one percent (1 %) for each year of credited service over

sixteen (16) years, not to exceed twenty-four (24) years.

Early retirement benefits paid to members are computed as

the pro rata portion of the normal retirement benefit based

on service not to exceed sixteen (16) years. 'Death

disability, and spousal benefits are also available.

'

Contributions and Vesting Members are required to contribute seven and one-half percent (7.5%) of their annual 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 GJRS Board of Trustees.

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 an otherwise vested member terminates and withdraws hislher member contributions, the member forfeits all rights to retirement benefits.

The employer contributions are projected to liquidate the actuarial accrued funding excess within seventeen (17) years based upon the actuarial valuation at Ju~y 1,1999.

Legislative Retirement System
Plan Description
Organization and Purpose Legislative Retirement System ("LRS") is a singleemployer, defined benefit plan established by the Georgia . Ge~eral Assembly in 1979 for the purpose of providing retIrement allowances for all members of the Georgia General Assembly. LRS is administered by the ERS Board of Trustees.

A -76

Notes to the FinanciaL Statements June 30, 2000
Note 16. Retirement Systems (continued)
Membership As of June 30, 2000, participation in LRS is as follows:

Retirees and Beneficiaries Currently

191

Receiving Benefits

Active Plan Members

209

Terminated Employees Entitled to Benefits

but not yet Receiving Benefits

123

523

Benefits A member's normal retirement is after eight (8) years of creditable service and attainment of age sixty-five (65), or eight (8) years of membership service (4 legislative terms) and attainment of age sixty-two (62). A member may retire early and elect to receive a monthly retirement benefit after completion of eight (8) years of membership service and attainment of age sixty (60); however, the retirement benefit is reduced by five percent (5.0%) for each year the member is under age sixty-two (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 and three-fourths percent (4.75%) of annual compensation. Employer contributions are actuarially determined and approved and certified by the Board.
Members become vested after eight (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.

Superior Court Judges Retirement Fund
Plan Description
Organization and Purpose The Superior Court Judges Retirement Fund ("SCJRF") is a single-employer, defined benefit pension plan established by the Georgia General Assembly in 1945 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 Boards of Trustees for ERS and SCJRF entered into a contract for ERS to administer the Plan effective July 1, 1995.
Membership As of June 30, 2000, participation in SCJRF is as follows:

Retirees and Beneficiaries Currently

Receiving Benefits

33

Active Plan Members

2

Terminated Employees Entitled to Benefits

but not yet Receiving Benefits

4

39

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%) oftheir 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%) of the member's annual salary. Additional employer contributions are not actuarially determined but are provided on an as-needed basis to fund current benefits.

A -77

Notes to the FinanciaL Statements June 30, 2000
Note 16. Retirement Systems (continued)
Regents Retirement Plan
Plan Description
Organization and Purpose The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan established and administered by the Board of Regents ofthe 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 contributions are five percent (5.0%) of the earnable compensation, as established by the Board of Trustees of the Teachers' Retirement System. Employer contributions are 8.79% of the participating employee's earnable compensation. Employer contributions are established by statute and may be amended only by the General Assembly of the State of Georgia.
Amounts attributable to all plan contributions are fully vested and non-forfeitable.
Significant Discretely Presented Component Units
Teachers' Retirement System ofGeorgia
Plan Description
Organization and Purpose The Teachers' Retirement System of Georgia ("TRS") is a cost-sharing multiple-employer plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised ofactive and retired members and ex-officio State employees is ultimately responsible for the administration ofTRS.
On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan ofthe Georgia Teachers ("SRBP"). '

SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code ("IRC") as a portion ofTRS. The purpose of the SRBP is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July I, 1997, all members and retired former members in TRS are eligible to participate in the SRBP whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
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 are eligible for membership.
As of June 30, 2000, participation in TRS is as follows:

Retirees and Beneficiaries Currently Receiving Benefits
Active Plan Members
Terminated Employees Entitled to Benefits but not yet Receiving Benefits

47,105 191,908
33,006 272,019

As ofJune 30, 2000, twenty-one (21) members were eligible to participate in the SRBP ofTRS.
Benefits A member is eligible for normal service retirement after thirty (30) years of creditable service, regardless of age, or after ten (10) years of service and attainment of age sixty (60). A member is eligible for early retirement after twentyfive (25) years of creditable service.
Normal retirement (pension) benefits paid to members are equal to two percent (2.0%) of the average of the member's two (2) highest paid consecutive years of service multiplied by the number of years of creditable service up to forty (40) years. Early retirement benefits are reduced by the lesser of one-twelfth (1/12) of seven percent (7.0%) for each month the member is below age sixty (60), or by seven percent (7.0%) for each year or fraction thereof by which the member has less than thirty (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. Death, disability and spousal benefits are also available.

. A -78

Notes to the FinanciaL Statements June 30, 2000
Note 16. Retirement Systems (continued)
Contributions and Vesting TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees.
Contributions required by the annual actuarial valuation are as follows:

Member
Employer: Normal Unfunded Accrued Liability Expenses

5.00%
8.79% 2.35% 0.15% 11.29%

Under the SRBP, employer contributions of $176,000 and retirement payments of $118,000 are reflected in the Statement of Changes in Plan Net Assets for the year ended June 30, 2000.
Members become fully vested after ten (10) years ofservice. If a member terminates with less than ten (10) years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest.
The employer contributions at a rate of2.3~% are expected to liquidate the unfunded accrued liability over approximately seven (7) years on the assumption that the aggregate amount ofunfunded accrued liability contribution will increase by three and one-quarter percent (3.25%) each year.

A -79

Notes to the FinanciaL Statements June 30, 2000
Note 17. Nonmonetary Transactions
Primary Government
The State ofGeorgia received donated goods for its use and for distribution to other qualifying organizations outside

the State reporting entity under the following programs: .

Program
Agriculture, U.S. Department of Food Distribution Program Temporary Emergency food Assistance Program
Health and Human Services, U.S. Department of Childhood Immunization Grant
Preventive Health Services - Sexually Transmitted Disease Control Grants
Project Grants and Cooperative Agreements for Tuberculosis Control Programs

Value of Inventory Received

Value of Inventory Reported at June 30, 2000

$

27,256,341

$

$

4,166,822

$

54,9(15 2,335,307

$

28,866,212

$

$

192,398

$

$

130,635

$

The value of donated commodities received and distributed is not reported as revenues and expenses on the combined statement of revenues, expenditures and changes in fund balances. Information is not available to determine the items used within the State and the items distributed to (or held for) other qualifying organizations outside the State reporting entity.
In addition, the Georgia Department of Administrative Services operates the Donation ofFederal 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, 2000, is not reported on the combined balance

sheet. The changes in Feoeral surplus personal property inventory during the fiscal year ended June 30, 2000, were as follows:

Balance July I, 1999 Additions
Property Received
Deductions Property Donated and Other Distributions
Balance June 30, 2000

$

4,773,136

5,377,752

$

10,150,888

6,598,155

$

3,552,733

A - 80

Notes to the FInancIaL Statements June 30, 2000
Note 17. 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 ofHuman Resolirces 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 ~tamps distributed as approved by the Department was $493,263,910.
Significant Discretely Presented Component Units
Governmental Fund Types
Donated support of volunteer services and other sources totaling $29,235 was provided to the Georgia Public Telecommunications Commission during the year ended June 30, 2000. 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 18. Postemployment Benefits
In addition to the pension benefits described in Note 16, the State of Georgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to Title 45, Chapter 18 ofthe 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 ofGeorgia 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 contribute to the health insurance fund based upon amounts

recommended by the State Personnel Board and set forth in the Appropriations Act. The State Health Benefit Plan is funded on a "pay-as-you-go" basis. Expenses of the Plan include provisions for incurred but not reported claims. As of June 30, 2000, there were 57,450 employees who had retired and were receiving postretirement health care benefits through the State Health Benefit Plan. For the fiscal year ended June 30, 2000, the State recognized expenditures of $262,314,234, which was net of retiree contributions of$59,847,576.
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 ofthe Board ofRegents to pennit employees ofthe University System eligible for retirement or that become permanently 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 ten years ofservice 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, 2000, the University System recognized expenditures of $21,462,316, which was net ofparticipant contributions of $6,149,553.
Note 19. Fund Deficits
The following organizations had deficit balances at June 30, 2000.
Primary Government
Internal Service Funds
Workers' Compensation Fund - At June 30, 2000, the Fund had an unreserved retained earnings deficit of $77,881,781.

A -81

Notes to the Financial Statements June 30, 2000
Note 19. Fund Deficits (continued)
Significant Discretely Presented Component Units
Proprietary Fund Types
Lake Lanier Islands Development Authority - At June 30, 2000, the Authority had an unreserved retained earnings deficit of$15,417,850.
Lottery Corporation - At June 30, 2000, the Authority had a reserved retained earnings deficit of $3,837,000.

Note 20. Major Discretely Presented Component Unit Condensed Financial Statements
The condensed financial statements ofthe major discretely presented component units of the State of Georgia reporting entity are presented below. "Major" component units, for purposes of this presentation, have been determined by giving consideration to each component units' significance relative to the other component units and the nature and significance of its relationship to the primary government. Condensed financial statements for all nonmajor discretely presented component units are presented in the aggregate.

A - 82

Gorgm
Notes to the Financial Statements
June 30, 2000

Note 20. Major Discretely Presented Component Unit Condensed Financial Statements (continued)

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

Georgia Education Authority (Schools)

Governmental Fund Types

Georgia

Georgia Public

Regional

Telecommunica-

Transportation

tions Commission

Authority

$

669,402 $

8,317,623 $

8,036,411 $

83,888,686

204,566

8,615,027

65,171

$

669,402 $

100,821,336 $

8,306,148 $

$

$

110,382 $

$

608,816

227,825

8,615,027

65,171

$

0$

9,334,225 $

292,996 $

$

$

83,888,686 $

204,566 $

388,849

669,402

7,209,576

7,808,586

$.

669,402 $

91,487,111 $

8,013,152 $

$

669,402 $

100,821,336 $

8,306,148 $

Total
17,023,436 84,093,252
8,680,198 109,796,886
110,382 836,641 8,680,198 9,627,221
84,093,252 388,849
15,687,564 100,169,665 109,796,886

REVENUES EXPENDITURES

$

36,746 $

14,366,747 $

127,606 $

14,531,099

$

o$

30,084,364 $

2,626,159 $

32,710,523

EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER)

EXPENDITURES

$

Operating Transfers from Primary Government

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FfNANCING SOURCES OVER (UNDER) EXPENDITURES $

FUND BALANCES, JULY I

FUND BALANCES, JUNE 30

$

36,746 $

(15,717,617) $ 27,425,014

(2,498,553). $ 10,307,139

( 18,179,424) 37,732,153

36,746 $ 632,656 669,402 $

11,707,397 $ (4,108,972) 7,598,425 $

7,808,586 $ 0
7,808,586 $

19,552,729 (3,476,316) 16,076,413

A - 83

Notes to the FinanciaL Statements June 30, 2000

Student Finance Authority

Geo L. Smith II Georgia World Congress Center
Authority

All Other Discretely Presented
Proprietary Fund Types

Total

$

416,342 $

$

372,169,540

51,853,535

44,089,653

3,285,770

232,447,584

$

375,871,652 $

328,390,772 $

628,844 S 260,178,961
26,804,542 213,297,204
500,909,551 S

2,860,370 1,786,48 I,609 1,108,046,531
827,239,525
3,724,628,035

$

S

52,319 S

3,893,179

30,311,164

319,486,308

204,141,396

$

323,379,487 $

234,504,879 $

375,985 S 27,452,223 144,498,056 172,326,264 $

604,411 179,687,854 1,790,423,415 1,970,715,680

$

$

25,537,653 26,954,512

S

52,492,165 $

$

375,871,652 $

$ 71,883,860
475,689 21,526,344
93,885,893 S 328,390,772 $

S

252,419

143,955,972

1,100,313,695

23,938,146 160,689,169

92,618,567 543,668,532

328,583,287 $

12,741,880 4,317,262 1,753,912,355

500,909,551 S 3,724,628,035

$

1,653,668 S

21,557,361 $

52,370,200 S 2,385,883,933

25,340,712

25,340,712

1,635,002

1,635,002

6,998,978

36,589,904

43,305,810

157,397,224

S

8,652,646 $

58,147,265 S

122,651,724 S 2,570,256,871

$

481,550 $

45,082,101

S

45,563,651 S

S

(36,911,005) S

(92,090)

41,675,165

S

4,672,070 $

9,142,247 $ 53,478,149 62,620,396 $
(4,473,131) $
4,687,649
214,518 $

8,128,244 S 108,355,341 116,483,585 S

35,771,031 1,871,426,822 1,907,197,853

6,168,139 S 663,059,018

(1,534,859) 5,806,494 10,439,774 S

19,850,017 (635,427,325)
47,481,710

354,005

47,820,095

93,553,383
80,000 37,992

317,949.068
396,667 (202,222)

) ,652,944,219 4.395,000 48,649,232 (164,230)

S

52,492,165 $

93,885,893 S

328,583,287 S ),753,659,936

A - 85

(This page intentionally left blank)

REQUIRED SuPPLEMENTARY INFORl\.1ATION

(This page intentionally left blank)

Required Supplementary Information June 30, 2000
Retirement Systems - Required Supplementary Schedules

Primary Government

Schedule ofFunding Progress
(Thousands of Dollars)

Actuarial Valuation
Date

Actuarial Value of Plan Assets
(a)

ERS

6/30/96

$

6,140,080

6/30/97

7,432,306

6/30/98

8,613,575

6/30/99

.9,848,723

Actuarial Accrued Liability ("AAL")Entry Age
(b)
$ 7,243,105 8,159,345 9,093,758 9,695,614

Unfunded AAL/(Funding
Excess) (b-a)

$

1,103,025

727,039

480,183

(153,109)

Funded Ratio (alb)

Annual Covered Payroll
(c)

84.8% $ 91.1% 94.7% 101.6%

1,968,714 1,977,928 2,055,966 2,152,072

GJRS

7/1/98

$

160,171 $

117,771 $

7/1/99

183,249

129,233

(42,400) (54,016)

136.0% $ 141.8%

26,226 29,594

LRS (I) 6/30/95

$

6/30/97

6/30/98

6/30/99

13,137 $ 18,197 20,375 22,679

13,860 $ 18,086 19,272 20,129

723 (Ill) (1,103) (2,550)

94.8% $ 100.6% 105.7% 112.7%

2,186 2,340 2,363 2,411

Unfunded AAL/(Funding
Excess) as a Percentage of Covered Payroll
(b-a)/c(
56.0% 36.8% 23.4% (7.1%)
(161.7%) (182.5%)
33.1% . (4.7%) (46.7%) (105.8%)

Infonnation is shown only for the plans and years available in accordance with the parameters ofGASB 25. Additional infonnation will be added as data become available.
(I) Actuarial valuations were perfonned biennially prior to July I, 1998

Schedule ofEmployer Contributions
(Thousands of Dollars)

ERS
GJRS LRS

Year Ended June 30
1996 1997 1998 1999
1999
1996 1997 1998 1999

State Annual Required Contribution

$

271,342

282,249

286,794

304,461

$

694

$

164

159

164

84

Percentage Contributed
100.0% 100.0% 100.0% 100.0%
100.0%
100.0% 100.0% 126.0% 108.0%

Infonnation is shown only for the plans and years available in accordance with the parameters ofGASB 25. Additional infonnation will be added as data become available.
A - 89

I

Required Supplementary Information June 30, 2000
Retirement Systems - Required Supplementary Schedules (continued)
Notes to Required Supplementary Schedules
Schedule ofFunding Progress . The actuarial value ofassets recognizes a portion ofthe difference between the fair value ofassets and the expected actuarial value of assets, based on the assumed valuation rate of return. The amount recognized each year is 20% of the difference between fair value and expected actuarial value.
Schedule ofEmployer Contributions The required employer contributions and percent ofthose contributions actually made are presented in the schedule. As the GJRS was created beginning July 1, 1998, no employer contribution trend information is available.
. Actuarial Assumptions The information presented in the required supplementary schedules was determined as part ofthe actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation is presented in the following table:

Actuarial Valuation Date Actuarial Cost Method Amortization Method
Remaining Amortization Period Asset Valuation Method Actuarial Assumptions:
Investment Rate of Retum Projected Salary Increases Post-Retirement Cost-of-Living Adjustment

ERS June 30, 1999 Entry Age Level percentage of
pay,open 40 years 5-year smoothed market
7.0% (I) 5.2%9.0% (I) None

GJRS July I, 1999 Entry Age Level percentage of
pay, open 17 years 5-year smoothed market
7.0% (I) 5.5% (I) None

LRS June 30, 1999 Unit Credit Level dollar, open
nfa 5-year smoothed market
7.0% (I) nfa 3% annually

(I) Includes inflation rate of 3.50%

A -90

Required SuppLementary Information June 30, 2000
Retirement Systems - Required Supplementary Schedules (continued)
Significant Discretely Presented Component Units
Schedule ofFunding Progress
(Thousands of Dollars)

Actuarial Valuation
Date

Actuarial Value of Plan Assets
(a)

Actuarial Accrued Liability ("AAL")Entry Age
(b)

Unfunded AAL/(Funding
Excess) (b-a)

Funded Ratio (alb)

Annual Covered Payroll
(c)

Unfunded AAL/(Funding
Excess) as a Percentage of Covered Payroll
(b-a)/cl

TRS

6/30/95

$ 16,335,944 $ .19,771,740 $

3,435,796

6/30/96

18,750,568

22,163,755

3,413,187

6/30/97

22,496,125

24,895,047

2,398,922

6/30/98

27,894,985

28,798,984

903,999

. 6/30/99

31,832,431

32,763,470

931,039

82.6% $ 84.6% 90.4% 96.9"10 97.2%

4,712,292 5,086,924 5,467,905 5,951,898 6,832,674

72.9% 67.1% 43.9% 15.2% 13.6%

Infonnation is shown only for the plans and years available in accordance with the parameters ofGASB 25. Additional infonnation will be added as data become

available.

.

Schedule ofEmployer Contributions
(Thousands of Dollars)

Year Ended June 30

TRS

1994

1995

1996

1997

1998

1999

State Annual Required Contribution

$

512,429

556,522

600,766

652,928

710,409

776,178

Percentage Contributed
100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Infonnation is shown only for the plans and years available in accordance with the parameters ofGASB 25. Additional infonnation will be added as data become available.

A -91

Required SuppLementary Information June 30, 2000

Retirement Systems - Required Supplementary Schedules (continued)

Notes to Required Supplementary Schedules

Schedule ofFunding Progress The actuarial value of assets recognizes a portion of the difference between the market value of assets and the expected actuarial value ofassets, based on the assumed valuation rate ofreturn. The amount recognized each year is 20% ofthe difference between market value and expected actuarial value. The actuarial value of assets is limited to a range between 80% and 120% ofmarket value.
Schedule ofEmployee Contributions The required employer contributions and percent of those contributions actually made are presented in the schedule.
Actuarial Assumptions The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation is presented in the following table:

Actuarial Valuation Date
Actuarial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation Method
Actuarial Assumptions: Investment Rate of Return Projected Salary Increases
Inflation Rate
Post-Retirement Cost-of-Living Adjustments

June 30, 1999 Entry Age Level percentage of pay, open 7 years 5-year smoothed market
7.00% 3.25% - 6.00% 3.25%
3% annually

A -92

SECTION B
REIDRT ON CbMPLlANCE AND ON INTERNAL CbNTROL OVER FINANCIAL REIDRTING BASED ON AN AUDIT OF FINANCIAL 9rATEMENrS PERFORMED IN ACXDRDANCE "WITH Q:)VERNMENT AUDITING
9rANDAR.DS

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-H400

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Roy E Barnes Governor of Georgia
and Members of the General Assembly of the State of Georgia
We have audited the financial statements ofthe State of Georgia as ofand for the year ended June 30, 2000, and have issued our report thereon dated May 14, 2001. This report was qualified for various departures from generally accepted accounting principles.
We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller Gyneral of the United States.' The financial statements of the Employees' Retirement System ofGeorgia, Georgia Lottery Corporation, Georgia Ports Authority, and Teachers'. Retirement System of Georgia were not audited in accordance with Government Auditing Standards, and accordingly, this report does not extend to those organizations. We did not audit the financial statements of certain organizations which, combined, represent 5% of the assets and 13% of the revenues of the general fund, 100% ofthe assets and revenues ofthe capital projects funds, 100% of the assets and revenues of the enterprise fund, 64% of the assets and 20% of the revenues of the . internal service funds, 72% of the assets of the fiduciary funds and 100% of the pension trust funds revenues, and 5% 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 92% of the assets and 99% of the revenues of the component unit governmental fund types, 84% of the assets and 96% of the revenues of the component unit proprietary fund types and 98% of the assets and 96% of the revenues of the component unit fiduciary fund types. The financial statements ofthese 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 amollnts included for those financial statements, is based solely upon the reports of the other auditors.

Compliance As part of obtaining reasonable assurance about whether the State of Georgia's financial statements are free ofmaterial misstatement, we and other auditors performed tests ofits compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly we do not express such an opinion. The results of our and other auditors' tests disclosed the. following instances of noncompliance that are required to be reported under Government Auditing Standards and which is described in the Financial Statementisections ofthe accompanying schedule ofFindings and Questioned Costs.

(1) General Fixed Assets/Property Management Inadequacies in Operation of Property Management System Various Organizations

FS-40 1-00-01 FS-414-00-06 FS-427-00-01 FS-428-00-02 FS-462-00-0 1 FS-'466-00-0 1 FS-467-00-01

FS-484-00-02 FS-503-00-01 FS-528-00-0 1 FS-539-00-01 FS-550-00-02 FS-561-00-03 FS-590-00-02

FS-819-00-02 FS-823-00-01 FS-830-00-01 FS-8504-00-0 1 F S-8 524-00-03 FS-8544-00-0 1 FS-8564-00-0 1

FS-8584-00-01 FS-8604-00-0 1 FS-8664-00-0 1 FS-8724-00-0 1 FS-8764-00-0 1 FS-8804-00-0 1

(2) Budget Preparation/Execution Overexpenditure of Budget Unit Object Class FS-472-00-03 - Board of Regents of the University System of Georgia FS-472-00-04 - Board of Regents of the University System of Georgia
Internal Control Over Financial Reporting In planning and performing our audit, we and other auditors considered the State ofGeorgia's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider t6 be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgment, could adversely affect the State of Georgia's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. The following reportable conditions are described in the Financial Statement sections of the accompanying schedule of Findings and QuestionedCosts.
(1) Accounting Controls (Overall) Inadequate Operations and Control Procedures over the Phoenix System FS-40 1-00-02 - Most Appropriated Agencies

B-4

(2) Budget PreparationlExecution Overexpenditure of Budget Unit Object Class FS-472-00-03 - Board of Regents of the University System of Georgia FS-472-00-04 - Board of Regents of the University System of Georgia

(3) Cash and Cash Equivalents Inadequate Accounting Procedures FS-414-00-04 - Department of Education FS-419-00-02 - Department of Community Health FS-474-00-01 - Department of Revenue FS-823-00-01- Atlanta Technical Institute FS-826-00-0 1 - Carroll Technical Institute FS-840-00-01 - Appalachian Technical Institute Drawdown of Lottery Funds in Excess of Current Operating Needs FS-476-00-02 - Georgia Student Finance Commission

(4) Revenue/Receivables/Receipts Inadequate Accounting Procedures FS-419-00-0 1 - Department of Community Health FS-478-00-01 - Secretary of State Deficiencies in the State Revenue Collections Fund (Overall) FS-474-00-02 - Department of Revenue FS-478-00-02 - Secretary of State Deficiencies in the Income Tax Division Subsidiary Records FS-474-00-03 - Department of Revenue

(5) Fund Equities Inadequate Accounting Procedures FS-414-00-04 - Department ofEducation

(6) General Ledger Inadequate Accounting Procedures FS-478-00-01 - Secretary of State

(7) General Fixed AssetslProperty Management Inadequacies in Operation of Property Management System Various Organizations

FS-40 1-00-0 1 FS-414-00-06 FS-427-00-01 FS-428-00-02 FS-462-00-0 1 FS-466-00-0 1 FS-467-00-01

FS-484-00-02 FS-503 -00-0 1 FS-528-00-01 FS-539-00-01 FS-550-00-02 FS-561-00-03 FS-590-00-02

FS-8 19-00-02 FS-823 -00-01 FS-830-00-01 FS-8504-00-0 1 FS-8524-00-03 FS-8544-00-01 FS-8564-00-0 1

FS-8584-00-01 FS-8604-00-0 1 FS-8664-00-0 1 FS-8724-00-01 FS-8764-00-0 1 FS-8804-00-0 1

B-5

A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the f1nancial 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 over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, of the reportable conditions described above, we consider the following items to be material weaknesses.

(1) Accounting Controls (Overall) Inadequate Operations and Control Procedures over the Phoenix System FS-40 1-00-02 - Most Appropriated Agencies

(2) Cash and Cash Equivalents Inadequate Accounting Procedures FS-414-00-04 - Department of Education FS-419-00-02 - Department of Community Health FS-474-00-01 - Department of Revenue FS-823-00-01 - Atlanta Technical Institute FS-826-00-01 - Carroll Technical Institute FS-840-00-01 - Appalachian Technical Institute

(3) RevenuefReceivablesfReceipts Inadequate Accounting Procedures FS-419-00-0 1 - Department of Community Health Deficiencies in the State Revenue Collections Fund (Overall) FS-474-00-02 - D~partment of Revenue Deficiencies in the Income Tax Division Subsidiary Records FS-474-00-03 - Department ofRevenue

(4) Fund Equities Inadequate Accounting Procedures FS-414-00-04 - Department of Education

(5) General Fixed AssetslProperty Management Inadequacies in Operation of Property Management System Various Organizations

FS-40 1-00-0 1 FS-414-00-06 FS-427-00-01 FS-428-00-02 FS-462-00-0 1 FS-466-00-0 1 FS-466-00-0 1

FS-467-00-01 FS-484-00-02 FS-503-00-01 FS.,528-00-0 1 FS-539-00-01 FS-550-00-02 FS-561-00-03

FS-590-00-02 FS-819-00-02 FS-823-00-01 FS-830-00-01 FS-8504-00-01 FS-8524-00-03 FS-8544-00-01
B-6

FS-8564-00-01 FS-8584-00-0 1 FS-8604-00-0 1 FS-8664-00-0 1 FS-8724-00-0 1 FS-8764-00-01 FS-8804-00-0 1

This report is intended solely for the information and use of management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
. Respectfully submitted,

May 14, 2001

Rus II. W. Hinton, CPA, CGFM State Auditor.

B-7

SECTIONC
REFDRT ON CbMPLIANCE VVITl-I REQUIREME~APPLICABLE TO EACH
MAnR PR~AND ON INTERNAL CbNTROL OVER CbMPLIANCE IN ACXDRDANCE
VVITl-I OMB CIRCULAR k I 3 3

l.USSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta; Georgia 30334-8400

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133

The Honorable Roy E. Barnes Governor of Georgia
and Members of the General Assembly of the State of Georgia

Compliance We have audited the compliance of the State of Georgia with the types of compliance requirements
u.s. described in the Office ofManagement andBudget (OMB) Circular A-133 Compliance Supplement
that are applicable to each of its major federal programs for the year ended June 30,2000. The State of Georgia's major federal programs are identified in the summary of auditor's results section of the
accompanying schedule ofFindings and Questioned Costs. Compliance with the requirements oflaws,
regulations, contracts ard grants applicable to each of its major federal programs is the responsibility of the State of Georgia's management. Our responsibility is to express an opinion on the State of Georgia's compliance based on our audit. We did not audit the following major federal programs or percentages of federal programs:

CFDA NO.

PROGRAM NAME

66458 66.468

. Capitalization Grants for State Revolving Funds
I
Capitalization Grants for Drinking Water State Revolving Fund

93.767 State Children's Insurance Program

Medicaid Cluster

Student Financial Aid Cluster Research ~d Development Cluster

Ofo AUDITED BY OTHER AUDITORS
99% 1000/0 100% 99% 82% 86%

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

$32,922,585

$243,882,042

$9,700,922

$12,128,493

$39,009,955

$0

$2,650,918,686

$0

$425,516,394

$1,571,719,256

$275,178,877

$0

The programs listed above were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to compliance requirements for these programs, is based solely upon the reports of the other auditors.

Except as discussed in the following paragraph, we conducted our audit ofcompliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material affect on amajor federal program occurred. An audit includes examining, on a test basis, evidence about the State of Georgia's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the State of Georgia's compliance with those requirements.
Other auditors were unable to obtain sufficient documentation supporting compliance for the Research and Development Cluster at the Georgia Institute of Technology with requirements governing cash management; Davis,;,Bacon Act; matching, level of effort, earmarking; period of availability of federal funds; program income; reporting; and subrecipient monitoring that are applicable to contract nos. EAAHOI-00-DAI0I-0004, XXXXXX-98-C-8121, XXXXXX-97-C-8089 and 98-6863 of the U.S. Department of Defense as these contracts and all matters pertaining to them are classified by the U. S. Department of Defense, and other auditors did not have security clearance to perform any procedures with respect to these contracts; nor were other auditors able to satisfy themselves as to the Georgia Institute of Technology's compliance with the aforementioned requirements with respect to contract nos. EAAHO 1-00-DA101-0004, XXXXXX-98-C-8121, XXXXXX-97-C-8089 and 98-6863 by other auditing procedures.
As described in finding numbers FA-533-00-01, FA-533-00-02, FA-533-00-03, FA-548-00-03, in the accompanying schedule of Findings and Questioned Costs, the State of Georgia did not comply with' requirements regarding Eligibility that is applicable to the Student Financial Aid Cluster. Compliance with such requirements is necessary, in our opinion, for the State ofGeorgia to comply with requirements applicable to this program.
As described in finding number FA-548-00-04 in the accompanying schedule ofFindings and Questioned Costs, the State of Georgia did not comply with requirements regarding Equipment and Real Property Management that is applicable to the Higher Education - Institutional Aid program. Compliance with such requirements is necessary, in our opinion, for the State of Georgia to comply with requirements applicable to this program.
In our opinion, based on our audit and the reports of other auditors, except for the effects ofthe matters discussed in the preceding paragraphs, the State of Georgia complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 1999. However, the results of our and other auditors' auditing procedures disclosed the . following instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-I33 and which are described in the Federal Awards sections of the accompanying schedule of Findings and Questioned Costs.

Activities Allowed or Unallowed FA-8524-00-0I Allowable Costs/Cost Principles

Equipment and Real Property Management
FA-4I4-00-0 I FA-427-00-04

FA-503-00-02 FA-503-00-03 FA-503-00-04 FA-548-00-0 I FA-8524-00-02 FA-8524-00-03
Cash Management
FA-8524-00-04
Davis-Bacon Act
FA-548-00-02
Eligibility
FA-427-00-0I FA-427-00-02 FA-427 -00-03

Matching, Level of Effort, Earmarking
FA-550-00-01
Period of Availability of Federal Funds
FA-548-00-05
Reporting
FA-503-00-05 FA-503-00-06 FA-5 18-00-01 FA-5 18-00-02 FA-52I-00-OI FA-533-00-04 FA-550-00-02 FA-57 1-00-01 FA-9I8-00-0I

Subrecipients Monitoring
FA-414-00-02 FA-4 14-00-03 FA-414-00-04
Special Tests and Provisions
FA-521-00-02 FA-52 1-00-03 FA-530-00-0 I FA-533-00-05 FA-548-00-06 FA-548-00-07 FA-550-00-03 FA-550-00-04

Internal Control Over Compliance The management ofthe State of Georgia is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. We did not consider the internal control structures applicable to the federal programs listed in the table in paragraph one. Those internal control structures 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 programs ofthe organizations mentioned previously is based solely upon the reports of the other auditors.
In planning and performing our audit, we and other auditors considered the State of Georgia's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-B3.

C-s

We and other auditors noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters corning to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect the State of Georgia's ability to administer a major federal program in accordance with applicable requirements of laws, regulations, contracts and grants. Reportable conditions are described in the Federal Awards section ofthe accompanying schedule of Findings and Questioned Costs.

Activities Allowed or Unallowed
FA-8524-00-0 I
Allowable Costs/Cost Principles
FA-419-00-02 FA-503-00-02 FA-503-00-03 FA-503-00-04 FA-548-00-0 I FA-8524-00-02 FA-8524-00-03
Cash Management
FA-8524-00-04
Davis-Bacon Act
FA-548-00-02
Eligibility
FA-419-00-0 I FA-427 -00-01 FA-427-00-02 FA-427 -00-03 FA-533-00-01 FA-533-00-02 FA-533-00-03 FA-548-00-03

Equipment and Real Property Management

FA-414-00-01 FA-427-00-04 FA-548-00-04

Matching, Level of Effort, Earmarking

FA-550-00-0 I

Period of Availability of Federal Funds

FA-548-00-05

Reporting

FA-503-00-05

FA-503-00-06

FA-5 I8-00-0 I

FA-5 I8-00-02

.

FA-521-00-01

FA-533-00-04

FA-550-00-02

FA-571-00-0 I

FA~918-00-0 I

Subrecipients Monitoring
FA-4 I4-00-02 FA-414-00-03 FA-414-00-04
Special Tests and Provisions
FA-419-00-03 FA-52 1-00-02 FA-52 1-00-03 FA-530-00-0 I FA-533-00-05 FA-548-00-06 FA-548-00-07 FA-550-00-03 FA-550-00-04

A material weakness is a condition in whic~ the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program 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 over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, of the reportable conditions described above, we consider finding numbers FA-533-00-01, FA-533-00-02, FA-533-00-03, FA-548-00-03 to be material
weaknesses.

C-6

This report is intended solely for the information and use ofmanagement, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone <;:>ther than these specified parties.
Respectfully submitted,
...oo ~ ~.4:l-~ ~~sell W. Hinton, CPA, CGFM State Auditor May 14, 2001
C-7

SECTIOND
FrNDINGE AND QuE~ONEDQ:srs

~y OF AUDITOR'S RESULTS

Summary of Auditor's ResuLts For the Fiscal Year Ended June 30, 2000

Financial Statements

Type of auditor's report issued:

Qualified

Internal control over financial reporting:

Reportable Condition identified?

Yes

Reportable Conditions identified considered to

be material weaknesses?

Yes

Noncompliance material to financial statements noted?

Yes

Federal Awards

Internal control over major programs:

Reportable Condition identified?

Yes

Reportable Conditions identified considered to

be material weaknesses?

Yes

Type of auditor's report issued on compliance for major programs: Qualified

Any audit findings disclosed that are required to be reported in

accordance with Circular A-133, Section .51O(a)?

.

Yes

Identification of major programs:

CFDANumbers
10.550 10.557 10.558
14.228 14.239
17.225
66.458 66.468
84.002 84.031 84.048 84.340 93.268 93.558 93.563
93.667 93.767

Name of Federal Program or Cluster Food Stamp Cluster Child Nutrition Cluster Food Distribution Special Supplemental Food I>rogram for Women, Infants and Children Child and Adult Care Food Program Section 8 - Tenant-Based Cluster Community Development Block Grant/State's Program Home Investment Partnerships Program Employment Services Cluster Unemployment Insurance JTPA Cluster Highway Safety Cluster Capitalization Grants for States Revolving Funds Capitalization Grants for Drinking Water State Revolving Fund Student Financial Aid Cluster Adult Education - State Grant Program Higher Education - Institutional Aid Vocational Education - Basic Grants to States Class Size Reduction Immunization Grants Temporary Assistance for Needy Families Child Support Enforcement Child Care and Development Cluster Social Services Block Grant State Children's Insurance Program Medicaid Cluster Disability Insurance/SSI Cluster Research and Development Cluster

D-5

Summary of Auditor's ResuLts For the Ascal Year Ended June 30, 2000

Dollar threshold used to distinguish between Type A and Type B programs - $22,706,169.00

Auditee Qualified as low-risk auditee

No

D-6

FINANCIAL 9rATEMENT FINDING

Findings and Questioned Costs For the Ascal Year Ended June 30,2000

FINANCIAL STATEMENT RELATED FINDINGS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS

FINDING CONTROL NO.

ORGANIZATIONAL UNIT

PAGE NO.

ACCOUNTING CONTROLS (OVERALL)

FS-40 1-00-02

Administrative Services, Department of

BUDGETPREPARAnONmXEcunON

FS-472-00-03

Regents of the University System of Georgia, Board of

FS-472-00-04

Regents of the University System of Georgia, Board of..

CASHAND CASH EQUIVALENTS

FS-414-00-04

Education, Department of

FS-419-00-02

Community Health, Department of

FS-474-00-01

Revenue, Department of

FS-476-00-02

Student Finance Commission, Georgia

Technical Institutes

FS-823-00-0 1

Atlanta Technical Institute

FS-826-00-0 1

Carroll Technical Institute

FS-840-00-0 1

Appalachian Technical Institute

REVENUES/RECEIVABLES/RECEIPTS

FS-419-00-0 1

Community Health, Department of

FS-474-00-02

Revenue, Department of.

FS-474-00-03

Revenue, Department of

FS-478-00-01

Secretary of State

FS-478-00-02

Secretary of State

FUND EQUInES FS-414-00-04

Education, Department of

GENERAL LEDGER FS-478-0-01

Secretary of State

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT

FS-40 1-00-01

Administrative Services, Department of

FS-414-00-06

Education, Department of

FS-427-00-01

Human Resources, Department of.

FS-428-00-02

Community Affairs, Department of..

FS-462-00-0 1

Natural Resources, Department of..

FS-466-00-01

Public Safety, Department of

FS-467-00-01

Corrections, Department of

FS-484-00-02

Transportation, Department of.

Colleges and Universities

FS-503-00-0 I

Georgia Institute of Technology

FS-528-00-0 1

ClaYton College and State University

FS-539-00-0 I

Georgia Southern University

FS-550-00-02

Southern Polytechnic State University

FS-561-00-03

Atlanta Metropolitan College

FS-590-00-02

Georgia Military College

D-11
D-18 D-19
D-12 D-15 D-19 D-22
D-27 D-28 D-29
D-13 D-20 D-21 D-22 D-23
D-12
D-22
D-I1 D-13 D-16 D-16 D-17 D-17 D-18 D-24
D-25 D-25 D-26 D-26 D-26 D-27

D-9

FIndIngs and QuestIoned Costs For the AscaL Year Ended June 30, 2000

FINANCIAL STATEMENT RELATED FINDINGS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS

FINDING CONTROL NO.

ORGANIZATIONAL UNIT

PAGE NO.

FS-8 I9-00-02 FS-823-00-0 I FS-830-00-0 1
FS-8504-00-0 1 FS-8524-00-03 FS-8544-00-0 1 FS-8564-00-01 FS-85 84-00-0 1 FS-8604-00-0 1 FS-8664-00-0 1 FS-8724-00-0 1 FS-8764-00-0 I FS-8804-00-0 1

Technical Institutes

West Georgia TechniCal Institute

Atlanta Technical Institute :

DeKalb Technical Institute

Regional Educational Service Agencies

Northwest Georgia Regional Educational Service Agency

North Georgia Regional Educational Service Agency

Pioneer Regional Educational Service Agency

Metropolitan Regional Educational Service Agency

Northeast Georgia Regional Educational Service Agency

West Georgia Regional Educational Service Agency

Oconee Regional Educational Service Agency

~

Chattahoochee-Flint Regional Educational Service Agency

Heart of Georgia Regional Educational Service Agency

First District Regional Educational Service Agency

D-27 D-27 D-28
D-29 D-30 D-30 D-30 D-30 D-31 D-31 . D-31 D-32 : D-32

D-IO

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
DEPARTMENT OF ADMINISTRATIVE SERVICES
Finding Control Number: FS-401-00-01 .GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
Our examination included a review of the internal accounting controls used by the Department of Administrative Services in maintaining their property management system. This review also included testing the system for compliance with State laws and regulations. This testing revealed that equipment additions were not reconciled to the general ledger expenditure accounts.
In addition, one-thousand-seven-hundred-fifty-three (1,753) equipment items were selected to test the accuracy of the Department's property management records. These items contained a value of $11,380,991.08 out of a population of $122,050,763.47 and were selected for the purpose oflocating the equipment as recorded in the inventory records. Twohundred-ninety-two (292) of the sample items totaling $1,375,013.71 could not be located.
Also, during the physiCal inspection testing, one-hundred-thirty-four (134) 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 State laws and regulations. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories.
It should be noted that since creation of the Division of Support Services/Asset Management, the Department's inventory procedures have improved. However, the Department should continue to review the controls in place and implement procedures to ensure the equipment inventory records are maintained in accordance with State laws and regulations.
Finding Control Number: FS-401-00-02 ACCOUNTING CONTROLS (OVERALL) Inadequate General Controls
For fiscal year 2000, most appropriated agencies comprising the reporting entity of the State of Georgia transitioned to a new accounting system. The previous legacy system was a mainframe, flat-file based system that had evolved over three decades to meet the financial accounting needs of the State of Georgia. Beginning fiscal year 2000, the State of Georgia placed into production a client-server, database system, hereinafter referred to as the Phoenix System.
The management of the individual agencies that comprise the State of Georgia reporting entity, is responsible for establishing and maintaining adequate operations and control procedures over the Phoenix System. The objectives of these policies and procedures are to provide management with reasonable, but not absolute, assurance that the Phoenix System has adequate controls in place and that those controls are operating effectively. Our responsibility was to gain an understanding of these controls in planning and performing our audit.
In gaining that understanding, we encountered control weaknesses that resulted from the transition to the Phoenix System, most notably occurring during the early months of implementation. As a result, we concluded that there was more than a relatively low risk that financial and other forms of data presented for audit may not be accurate, complete or valid.
Data integrity was at risk because each Phoenix entity maintains control over their own accounting processes. Reconciliations were not consistently performed due to lack of understanding of the system, and the unavailability of queries and reports necessary to perform these procedures. The confidentiality of data was at risk because controls were not always in place to safeguard this data against unauthorized use, disclosure, modification, or deletion. Specifically, appropriate frrewalls to detect or prevent unauthorized access to the Phoenix System were not always in place during the fiscal year. Adequate separation of duties was not provided through proper development and assignment of operator security classes nor were automated controls applicable to ordering and receiving goods consistently utilized.
D-II

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
Additionally, response time performance issues of the Phoenix System and individual agency network environments resulted in the suspension of audit edits.
To mitigate these risks, the State of Georgia hired consultants to assist in writing queries, reports and business processes to assist agencies in reporting accurate and reliable information. To further reduce the risk of receiving inaccurate or incomplete information, the state should consider taking a statewide, coordinated, consistent approach toward securing and controlling computerized information system and related technology. This will ensure that the Phoenix System will be secure and will aid in the promotion of accurate and complete reporting of data in a more efficient manner. Consideration should also be given to requiring all entities that comprise the state'sreporting entity to use the Phoenix System, centralize all business processes with the state of Georgia, and make the necessary changes to the system to provide for budget basis as well as GAAP basis financial statements.
DEPARTMENT OF EDUCATION
Finding Control Number: FS-414-00-04 CASH AND CASH EQUIVALENTS FUND EQUITIES Inadequate Accounting Procedures (Overall)
Accounting procedures of the Office of School Readiness (Office) were insufficient to provide adequate internal controls over Cash and Cash Equivalents, Revenues/Receivables/Receipts, Expenditures/Liabilities/Disbursements and Fund Equities control categories as noted below:
Cash and Cash Equivalents
1. A review of the June 30, 2000 bank reconciliations indicated numerous reconciling items in the following accounts:
Operating Account: Reconciling items totaling $5,133,302.97 (net) were identified on the June 2000 bank reconciliation. Of these reconciling items, $37,218.02 were carried over from the prior fiscal year. The remaining items occurred throughout the current fiscal year. The reconciling items consisted of payni.ents recorded on the general ledger but not clearing the bank, withdrawals (ACH) clearing the bank but never recorded on the general ledger, ACH items returned but not recorded on the 'general ledger, and manual journal entries posted to the general ledger but the activity was not on the bank statement. Audit adjustments were made for $1,232,691.61 (net) leaving $3,900,611.36 (net) not adjusted in this report.
Operating Account for Manual Checks: Reconciling items totaling $150,430.94 (net) were identified on the June 2000 bank reconciliation. All of these items were from the current fiscal year activity. These reconciling items consisted of checks clearing the bank but never recorded on the general ledger and transfers of money from the Office of School Readiness' (Office) other Operating Account but never recorded on the general ledger. An audit adjustment was made for $64,617.01 leaving $215,047.95 (net) not adjusted-in this report.
2. Subsequent to June 30, 2000, the Director of the Office of School Readiness resigned. The Director's resignation was effective on August 15, 2000, but the Director's signature continued to be used for all disbursements through November 2000. The Office should ensure that a current bonded employee signs all checks.
D-12

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000

FINANCIAL STATEMENT FINDINGS

Fund Equities

1. The general ledger at June 30, 2000 had not been reviewed at the program level in order to determine the correct amount of reserves or surplus. Numerous audit adjustments were necessary to reflect the overall financial status of the Office. The following accounts were adjusted as follows:

Per Book

Per Audit

Reserves Surplus

$ 5,722,822.65 $34,749,357.64

$34,692;369.97 $ 1,120,778.20

These deficiencies occurred because of management's failure to establish procedures to analyze and reconcile balances on the general ledger with supporting records. The failure to monitor the general ledger could lead to inaccurate financial records.

The Office should establish appropriate procedures to ensure that the general ledger is posted, balanced and reviewed on a montWy basis and that detailed records supporting the general ledger are complete, accurate and reliable.

Finding Control Number: FS-414-00-06 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

Our examination included a review of the internal accounting controls utilized by the Department of Education (Department) and the Office of School Readiness (Office) in maintaining their State Property System and also included testing the system for compliance with State laws and regulations. A number of conditions relating to inappropriate accounting practices were found to exist and have been identified in detail within the Federal Awards Findings and Questioned Costs, finding control number FA-414-00-0 1.

The Department and the Office are required to maintain equipment inventories in accordance with provisions of State laws and regulations. The discrepancies identified were caused by the Department's and the Office's failure to follow guidelines for maintaining equipment inventories.

The Department and the Office should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with State laws and regulations.

DEPARTMENT OF COMMUNITY HEALTH (*)

Finding Control Number: FS-419-00-01 REVENUES/RECEIVABLES/RECEIPTS Federal Receivables Could Not be Verified

Criteria:

Generally Accepted Accounting Standards require that proper support be maintained for all recorded receivables. The State of Georgia "Accounting Procedures Manual" dated effective July 1, 1999, pages 1-6-1 and 1-6-2, requires the recording of Federal funds at an expenditure level adequate to establish that the funds have not been used in violation of Federal laws and regulations. These records must provide for the identification of individual grants, expenditures, and revenues from such grants, unobligated grant balances and grant assets and liabilities. The accounting records must support the preparation of required Federal financial reports and support Federal program matching requirements. A separate fund source must be established for each grant received under Federal programs and each Federal fund source must have the Federal

(*) THIS ORGANIZATIONAL UNIT WAS AUDITED BY OTHER AUDITORS D-13

Findings and Questioned Costs
For the Ascal Year Ended June 30, 2000

FINANCIAL STATEMENT. FINDINGS

Condition: Context:
Cause: Effect:

program's Catalog of Federal Domestic Assistance (CFDA) number listed on the accounting system.

Federal "Rules and Procedures for Funds Transfers," 31 CFR Part 205 of the Department of

Treasury allows for "Zero balance accounting" or the "Estimated clearance" method of

electronically transferring Federal funds for grant administration, grant programs, and

intergovernmental relations.

.

Proper supporting documentation could not be located for Federal receivables on the State of Georgia, Department of Community Health's (the "Department" or "DCR") general ledger at June 30,2000.

The Federal receivables on the Department's books at June 30, 2000, could not be verified by the supporting documentation provided by the Department. The following .. deficiencies and inappropriate accounting practices were found to exist:

1) The Federalreceivables do not appear to have been reconciled in a timely manner. Open items dated back to March 31, 1993, for the predecessor agency (DMA)..

2) Based on managements' representation, excessive revenues/receivables were .recorded to some Federal programs to facilitate the posting of cash deposits. These excess revenues/receivables were not properly reversed at year-end. Accordingly, -Federal revenues/receivables did not properly match the expenditures/expenses recorded for these programs..

3) . Federal program collections under the Federal Government's Cash Management Improvement Act, 31 CFR Part 205, could not be traced to specific allocations of expenditures between State and Federal match. This policy caused the Department to inherit reconciling items from its predecessor agency (DMA) in the amount of $11 ,0 17,846.54 for the period of March 31, 1993, through September 30, 1994. The Department cannot be certain that these reconciling items can be recovered from the Federal Cash Management program during fiscal year ending June 30, 2001.

4) At year-end, three draws totaling $12,005,286.05 that - would have reduced Federal receivables, were funded from State funds. This was caused by overspending the Federal grant for the quarter. A supplemental grant was received soon after the quarter closed.

5) Electronic transfers of Federal cash for the' month of June 2000 were not recorded as credits against the Federal receivables as of June 30, 2000, and were not adjusted prior to closing the Department's books.

The Department does not appear to adequately utilize the capabilities of the PeopleSoft accounting system. In addition, the Department did not perform reconciliation of Federal receivables in a timely manner prior to closing its books. The Department does not appear to have recorded Federal collections in accordance with the written policy, which requires them to be credited against Federal receivables. Based on managements' representation, the percentages of Federal program expenditure checks were estimated at the time of clearance by the bank. Federal versus State match percentages were not adjusted to actual prior to closing the books, and in some instances it appears they have not been adjusted for several years. We were unable to test thevalidity of the prior year differences.

The Department has not complied with the State and Federal accountability requirements, and has not maintained proper support for all recorded receivables. Failure to credit the Federal
D-14

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000

FINANCIAL STATEMENT FINDINGS

receivables collected in a timely manner causes the monthly internal reports to be misleading and creates undue hardships on accounting personnel at year-end when the cut-off is required to be in accordance with generally accepted accounting principles. Failure to comply with the State and Federal accountability requirements could lead to undetected misappropriation of funds or delays in finding potential fraud.

Questioned Cost:

None

Recommendation:

We recommend that the Department follow good accounting practices and the State policies and procedures in recording revenues, receivables, and reserves. The Federal receivables should be reconciled monthly. The PeopleSoft accounting system should be utilized without entries that override the controlled features in the system.

In addition, we recommend that the Department obtain daily access to its cash accounts on deposit and record electronic transfers of Federal funds as they occur. Sources and uses of cash should be reconciled at the program level at least quarterly.

We further recommend that the Department perform a complete analysis of its Federal receivables, comparing earned grants and entitlements, with authorized expenditures and State versus Federal matches. Upon completion of the analysis, we recommend the Department contact the State and request that the State consider amending its agreement with the Federal Treasury to allow the Department to utilize the "Estimated Clearance", rather than the "Zero balance accounting" method of funding Medical Assistance Payments. The estimated clearance method should provide the Department with actual matches of State and Federal funds.

Finding Control Number: FS-419-00-02 CASH AND CASH EQUIVALENTS Cash Accounts are not Adjusted on a Timely Basis

Criteria:

State Accounting Procedures Manuals and Generally Accepted Accounting Principles require proper cut-off of cash and cash equivalents at month-end and year-end. The State of Georgia Accounting Procedures Manual, Section 3-1-3, requires that cash be accounted for in accordance with generally accepted accounting principles (GAAP). State organizations included in the Appropriations Act must account for cash equivalents and investments in conformity with both the State's budgetary basis of accounting and GAAP. All State organizations should not only insure that cash in bank account titles are correct by type of account (payroll, operating, etc.) but also that the account title includes the correct bank name.

Condition:

Cash recorded in the general ledger did not reflect a proper' cut-off of cash receipts and disbursements as required by GAAP.

Context:

The Department prepares bank reconciliation's and proofs of cash on a monthly basis. However, the general ledger cash accounts are not adjusted on a timely basis for reconciling items. During performance of auditing procedures, several reconciling items were found, which if not recorded, would adversely effect the general purpose financial statements as of June 30, 2000.

Cause:

Many items identified through the bank reconciliation process, as needing to be recorded on the Department's general ledger; were not booked prior to close of the fiscal year.

Effect:

The Department has not complied with State policies and procedures in recording revenues and expenditures in accordance with the budgetary method of accounting nor with GAAP. Failure to credit the Federal receivables in a timely and proper manner causes the monthly internal reports to be misleading and creates undue hardships on accounting personnel at year-end when the cut-off is
D-15

Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FINANCIAL STATEMENT FINDINGS

required to be in accordance with GAAP. Failure to comply with the State accountability requirements could lead to undetected misappropriation of funds or delays in finding potential fraud.

Questioned Cost:

None

Recommendation:

We recommend that the Department obtain daily access to its cash accounts on deposit and record all EFT's as they occur. We further recommend that the Department record all future transactions on a gross and not a net of debits and credits basis.

In addition, we recommend that accounting personnel attend additional training on the capabilities and utilization of PeopleSoft and on recording of revenues and expenditures on a GAAP basis of accounting, which is a requirement of the State of Georgia and the Govenunental Accounting Standards Board (GASB) in its opinion number 34, to be implemented next year.

DEPARTMENT OF HUMAN RESOURCES

Finding Control Number: FS-427-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

Our examination included a review of the internal accounting controls utilized by the Department of Human Resources in maintaining their State Property System and also included testing the system for compliance with State laws and regulations. .A number of conditions relating to inappropriate accounting practices were found to exist and have been identified in detail within the Federal Awards Findings and Questioned Costs, finding number FA-427-00-04.

The Department is required to maintain equipment inventories in accordance with provisions of State laws and regulations. The discrepancies identified were caused by the Department's failUre to follow guidelines for maintaining equipment inventories.

The Department should establish the necessary. internal controls to ensure that equipment inventories are maintained in . accordance with State laws and regulations.

DEPARTMENT OF COMMUNITY AFFAIRS

Finding Control Number: FS-428-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System

Our examination included a review of the internal accounting controls utilized by the Department of Community Affairs in

maintaining their property management system. The following conditions relating to inappropriate accounting practices

were found to exist:

.

1. Equipment purchases totaling $ 310,583.03 for Fiscal Year 2000 were not added to the equipment inventory records in accordance with State property management policies.

2. In addition to the amounts reported in the prior year management report (Finding Control Number FS428-99-02), equipment purchases totaling $ 746,760.68 for Fiscal Year 1999 were not added to the equipment inventory records in accordance with State property management policies.
The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with State property management policies.

D-16

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000

FINANCIAL STATEMENT FINDINGS

DEPARTMENT OF NATURAL RESOURCES

Finding Control Number: FS-462-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

Our examination included a review of the internal accounting controls utilized by the Department of Natural Resources in maintaining their property management system. This review also included 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 inventory records for additions were updated incorrectly. Testing of current year additions revealed one (1) addition that had been updated onto the equipment inventory records incorrectly by the amount of$6,174.00.

In addition, two-hundred-ninety-three (293) equipment items were selected to test the accuracy of the Department's property management records. These items contained a value of $1,355,715.02 out of a population of $70,669,611.31 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:

(1) Forty-seven (47) items totaling $112,166.14 were surplused, but were not removed from the equipment inventory records.

(2) Six (6) items totaling $23,482.35 could not be located.

(3) Seventeen (17) items were found in locations other than the location indicated in the equipment inventory records.

Also, during the physical inspection testing, twenty-nine (29) 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 State laws and regulations. The discrepancies identified were caused by the Department's failure to follow guidelines for maintaining equipment inventories.

The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with State laws and regulations.

DEPARTMENT OF PUBLIC SAFETY

Finding Control Number: FS-46~-OO-Ol GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

Our examination included a review of the internal accounting controls utilized by the Department of Public Safety in maintaining their State Property System and also included testing the system for compliance with State laws and regulations. The following condition relating to inappropriate accounting practices was found to exist:

Equipment additions were not reconciled to the general ledger expenditure accounts.

D-17

Findings and Questioned Costs For the fiscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
The Department is required to maintain equipment inventories in accordance with provisions of State laws and regulations. The deficiency identified was caused by the Department's failure to follow guidelines for maintaining equipment inventories.
The Department shOl1ld establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with State laws and regulations.
DEPARTMENT OF CORRECTIONS
Finding Control Number: FS-467-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
Our examination included a review of the accounting system utilized by the Department of Corrections in maintaining their State Property System and also included tests of the system for compliance with State laws and regulations. The following conditions were noted as a result of our testing:
(1) Equipment additions were not reconciled to the general ledger expenditure accounts.
(2) Equipment inventory records were not updated for all additions. Testing of fifty-eight (58) current year additions totaling $2,245,078.79 out of a population of $6,563,678.41 revealed four (4) current year equipment purchases totaling $303,479.82 that had not been entered onto the equipment inventory records at June 30, 2000.
In addition, a sample of seven-hundred-sixty-five (765) equipment items was selected to test the accuracy of the Department's property management records. These items contained a value of $2,009,723.11 out of a population of $86,697,1-18.26 and were selected for the purpose of locating the equipment as recorded in the inventory records. Fortythree (43) items totaling $77,337.63 could not be located.
The Department is required to maintain equipment inventories in accordance with provisions of the State Property Management System Manual as published by the Department of Administrative Services. The discrepancies -identified above were caused by the Department's failure to follow established guidelines for maintaining equipment inventories.
The Department should establish the necessary internal controls and implement procedures to ensure the equipment inventory records are maintained in accordance with the State Property Management System Manual.
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA
Finding Control Number: FS-472-00-03 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Resident Instruction, "A" Budget
The total approved budget for the Resident Instruction, "A" Budget, of the Board of Regents of the University System of Georgia, provided for expenditures totaling $3,160,839,836.00. 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 $64,776,809.42. This overexpenditure is a violation of Section 58 of the Amended Appropriations Act of 1999-2000.
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.
D-18

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000

FINANCIAL STATEMENT FINDINGS

Finding Control Number: FS-472-o0-04 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Regents Central Office and Other Organized Activities, "B" Budget

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 $716,421,667.00. 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:

Capital Outlay Operating Expenses:
Sponsored Operations

$ 385,344.93 $ 5,307,330.98

These overexpendituresare a violation of Section 58 of the Amended Appropriations Act of 1999-2000.

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.

DEPARTMENT OF REVENUE
Finding Control Number: FS-474-o0-01 CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures
Our examination included a review of the internal accounting controls and accounting procedures utilized by the Department of Revenue (Department) to provide for adequate internal contro"t over assets of the Department. The following deficiencies and inappropriate accounting practices were found to exist:
1) The Department did not provide for adequate separation of employee duties in the performance of maintaining and reconciling three (3) bank accounts.
2) The General Fund Transfer Account was not reconciled to the appropriate accounts on an ongoing basis. Accounting errors, incorrect postings and bank statement cut-off dates not. consistent with general ledger cut-off dates contributed to the discrepancies.
3) Bank reconciliations for eight (8) of thirty-eight (38) bank accounts were not formally approved during the test month of June 2000.
4) The June 30, 2000, bank reconciliations were not prepared timely fOf the following two (2) bank accounts: Bank of America - Payroll Account and Bank of America - General Operating Account.
5) Reconciling items identified during the bank reconciliation process were not corrected in a timely manner. A review of the bank reconciliations indicates that there were $292,468,964.64 in reconciling items dating from October 1997 that were not corrected as of June 30, 2000. However, as of December 31, 2000, $254,161,419.23 of the reconciling items had been corrected, leaving a balance of $38,307,545.41.
6) The Department of Revenue does not have a formal policy concerning the voiding of outstanding checks. The Bank of America - Payroll Account contains outstanding checks dating back to March 1993.
These deficiencies were a result of the Department's failure to adequately manage cash assets of the Department. D-19

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
The Department should establish internal controls to ensure that employees' duties are adequately segregated and montWy bank statements. are reconciled with the accounting records on a timely basis. The Department should also establish procedures to identify and appropriately account for outstanding and/or stale-dated checks. In addition, the Department should examine the necessity of each bank account in an effort to reduce the number of bank accounts.
Finding Control Number: FS-474-00-02 REVENUES/RECEIVABLES/RECEIPTS Deficiencies in the State Revenue Collections Fund (Overall)
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. This 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 ledgers and associated records maintained by the Divisions and individual tax units. Our procedures also included a reconciliation of the revenue collections received and subsequently tran.sferred by the Department to the Office of Treasury and Fiscal Services (OTFS), which acts as the State Treasury. The following deficiencies and inappropriate practices were found to exist:
I) 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. Dualentry 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 inhibits 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. 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 by OTFS.
3) 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 is no consistent cut-off date 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 the Divisions and individual tax units being inconsistent, and in certain instances not reconcilable with the general ledger.
The Department should establish policies and procedures that will establish managerial control for the Central Accounting Unit over the subsidiary ledgers and associated records through use of an integrated general and subsidiary ledgers system. In addition, consistent cut-off 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.
D-20

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
4) The Department has not established an internal control system that requires cash receipts and disbursements to be posted to the "Revenue Ledger" and the "Refund Ledger" in the accounting period in which they occur, allowing discretionary shifting of cash receipts and disbursements between accounting periods. This "shifting of funds" is inconsistent with the Cash Receipts and Disbursements basis of accounting and compounds the problems associated with reconciling the general ledger system and the subsidiary ledgers and associated records maintained by the Divisions.
State Revenue. Collections Funds are maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations of the State of Georgia. The Department should develop and implement procedures to ensure that cash receipts and disbursements are recorded in the "Revenue Ledger" and the "Refunds Ledger" at the time of occurrence, as required by the Cash Receipts and Disbursements basis of accounting. In addition, the Department should develop and . implement procedures to ensure that posting dates in the "Revenue Ledger" and the "Refund Ledger" are consistent with the posting dates in the subsidiary ledgers and associated records.
The deficiencies noted above are a result of the Department's failure to provide for a comprehensive, modem accounting system integrated 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.
Finding Control Number: FS-474-00-03 REVENUES/RECEIVABLES/RECEIPTS Deficiencies in the Income Tax Division Subsidiary Records
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 the following 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 confmnation 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 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 systematic controls in place to ensure that all adjustments are processed in a timely manner.
The lack of timely processing is the result of the Department not having automated system controls to age the amended returns in process. The failure to process adjustments in a timely manner could lead to inaccurate financial records.
The Department should implement enhancements to the computer system to produce an automated aging report of all returns and provide for regular management review of the report to assure that adjustments are made in a timely manner.
D-21

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
GEORGIA STUDENT FINANCE COMMISSION
Finding Control Number: FS-476-00-02 CASH AND CASH EQUIVALENTS Drawdown of Lottery Funds in Excess of Current Operating Needs
Our examination noted that the Georgia Student Finance Commission requested and received Lottery for Education appropriation allotments in excess of current operating needs periodically throughout the fiscal year. As a result, the Commission earned interest totaling $1,667,675.38. Section 50-17-51 (c) of the Official Code of Georgia Annotated designated the Director of the Office of Treasury and FiscalServices (OTFS) as the cash management officer for the State. In this capacity, the Director is responsible for the efficient and effective utilization of the State's cash resources. The Commission's practice of drawing Lottery funds from OTFS in excess of current operating needs limits the ability of the Director of OTFS to maximize investment earnings for the State's Lottery Funds.
Commission management should develop and implement policies and procedures to minimize the amount of time between the drawdown of the appropriation allotment and the cash disbursements of Lottery funds.
SECRETARY OF STATE
Finding Control Number: FS-478-00-01 REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Accounting Procedures (Overall)
During the period under review, the accounting procedures of the Secretary of State's office were not sufficient to provide for adequate controls over the Agency's general ledger. The following deficiencies were noted:
(1) Examination of the general ledger indicated that the Agency failed to provide for adequate fund accountability, which resulted in the following:
All transactions related to the State appropriations allotment for the "B" budget unit was recorded on. the "A" budget unit's general ledger. The State Revenue Collections Fund general ledger maintained by the Agency included activity which should have been accounted for within the general ledger for the Budget Fund. Activity that should have been recorded inthe Trust and Agency Funds general ledgers was recorded in both the Budget Fund and State Revenue Collections Fund general ledgers. The Agency failed to provide for adequate accountability within each budget unit for each program.
As a result of these deficiencies, extensive procedures were required to determine ending balances of various Federal, State and locally donated reserves and state surplus as of June 30, 2000.
Accurate fund and program accountability are essential in maintaining accurate and reliable financial statements on a budget unit, fund and program basis. Periodic monitoring is critical to the identification of errors and unusual or unexpected activity.
Management of the Secretary of State should ensure that the general ledger is acc.urately maintained and monitored. Procedures should include periodic analyses of fund balances at the program and budget unit level.
(2) An examination of State appropriation allotment revenue and accounts receivable indicated that the Agency's procedures did not provide for periodic reconciliations of State appropriation allotment activity
D-22

~~~~------
Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
to information provided by the Office of Treasury and Fiscal Services. This deficiency resulted in the appropriation allotment revenue and accounts receivable being materially misstated.
Extensive analysis was required to reconcile the State appropriation allotment revenue and receivable balances to those reported by the Office of Treasury and Fiscal Services. The above misstatements were corrected by auditor adjusting entries.
Management of the Secretary of State should ensure that State appropriation allotment revenue and accounts receivable balances are periodically reconciled to amounts available through the Office of Treasury and Fiscal Services.
(3) Examination of accounts receivable and accounts payable balances included on the Agency's general ledger revealed that Agency personnel did not routinely reconcile balance sheet accounts to relevant accounting system modules and did not periodically determine the validity of outstanding balances. These conditions resulted in the following:
Accounts receivable and accounts payable balances reflected on the Agency's general ledger were not supported by detail on relevant accounting system modules. Balances existing at the end of the prior fiscal year remamed on the general ledger and/or the relevant accounting system module at fiscal year end. We were unable to determine the validity of these balances.
Periodic reconciliations of the general ledger to subsidiary records are an essential element of any accounting system. These reconciliations provide management with the necessary assurances that subsidiary records accurately represent the financial activity and balances reflected in the general ledger.
Management of the Secretary of State should ensure that reconciliations are performed and that any variances noted are resolved in a timely manner. Additionally, the validity of accounts receivable and accounts payable remaining outstanding for extended periods of time should be determined and resolved on a regular basis in order for general,Jedger balances to include only earned revenues and/or valid obligations of the Agency.
Prior to fiscal year end, the Secretary of State began the process of evaluating accounting controls and personnel to address the conditions noted above.
Finding Control Number: FS-478-00-02 REVENUE/RECEIVABLES/RECEIPTS Deficiencies in Accounting for State Revenue Collections
During the 'period under review, the accounting procedures of the Secretary of State's office were not sufficient to provide for adequate controls over the recording and remittance of State Revenue Collections funds to the Office of Treasury and Fiscal Services (OTFS) as follows:
(I) The Agency failed to make timely remittances of State Revenue Collections to the OTFS as required by the Official Code of Georgia Annotated, Section 45~12-92 which states, in part, as follows:
"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 on or before the fifteenth day of each month for the immediately preceding month's collections... No allotment of funds shall be made to any budget unit which has failed to comply fully with this Code section."
D-23

Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FINANCIAL STATEMENT FINDINGS

The Agency made four transfers of revenue collections to OTFS during the period under review. A cash balance remained in the Agency's Revenue Collections Fund at fiscal year end. This balance was remitted to OTFS in the subsequent fiscal year.
(2) The Secretary of State's office provides the citizenry of the State the opportunity to pay certain State Revenue Collections through the internet and contracts with another State organization to collect and remit the same to OTFS. During the year under review, the Secretary of State's office failed to record and reconcile these certain collections and remittances until fiscal year end.
Management of the Secretary of State should establish procedures necessary to ensure that adequate records are maintained for its collecting units to ensure that all funds collected are recorded and remitted in a timely manner. Procedures should also be established to ensure periodic reconciliation of collections to remittances to the Office of Treasury and Fiscal Services.
Prior to fiscal year end, the Secretary of State began the process of evaluating accounting controls and personnel to address the conditions noted above. .

DEPARTMENT OF TRANSPORTATION

Finding Control Number: FS-484-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

Our examination included a review of the internal accounting controls utilized by the Department of Transportation in maintaining their State Property Management System and also included testing the system for compliance with State laws and regulations. The following conditions relating to inappropriate accounting practices were foUnd to exist:

(I) Equipment additions were not reconciled to the general ledger expenditure accounts.

(2) Equipment inventory records for additions purchased' with Federal funds were not maintained in a manner that could be tested.

(3) Equipment inventory records for deletions of items originally purchased with Federal funds were not

maintained in a manner that could be tested.

.

In addition, one thousand one hundred and forty-six (1,146) equipment items were selected to test the accuracy of the Department's property management records. These items contained a value of $3,127,301.97 out of a population of $46,452,171.71 and were selected for the purpose of locating the equipment as recorded in the inventory records. Our examination revealed that eighteen (} 8) items totaling $36,018.17 could not be located.

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 State laws and regulations. The discrepancies identified were caused by the Department's failure to follow guidelines for maintaining equipment inventories.

The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with State laws and regulations.

D-24

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
GEORGIA INSTITUTE OF TECHNOLOGY
Finding Control Number: FS-503-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
During the performance of equipment inventory testing, we selectively examined the underlying documentation that supported the Jnstitute's additions and deletions to the equipment inventory records. We examined the documentation for one hundred and thirty one (131) equipment items noted by the Institute as having been disposed of and five (5) equipment items reported by the Institute as having been stolen. The following deficiencies were noted:
(1) Four (4) items had no documentation to support the disposal of equipment.
(2) Forty one (41) items shown as disposed of by the Institute did not have the Department of Administrative Services Disposal Report on file.
(3) There were no stolen or missing equipment reports on file to support removing from inventory the five (5) items noted as stolen by the Institute.
These discrepancies occurred because of management's failure to ensure that proper documentation was maintained to support additions and deletions to the equipment inventory records. The Institute should evaluate its procedures and strengthen internal accounting controls over the equipment inventory process.
CLAYTON COLLEGE AND STATE UNIVERSITY
Finding Control Number: FS-528-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The internal accounting control procedures for the property management system utilized by Clayton College and State University were not adequate. The following deficiencies were noted regarding the University's records for equipment inventories:
(1) A variance of $267,696.30 remained unidentified between the University's general ledger and the subsidiary equipment inventory records.
(2) A variance of $32,597.18 remained unidentified between the equipment additions and general ledger expenditure accounts.
(3) Additions totaling $11,439.95 recorded at June 30, 1999, for accounts payable were not properly updated for description, serial number, decal number, acquisition date and cost, and reference to physical location.
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.
D-25

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
GEORGIA SOUTHERN UNIVERSITY
Finding Control Number: FS-539-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The accounting procedures of the University were insufficient to provide adequate control over the Property Management System. An equipment inventory sample of 129 randomly selected items utilized to test the accuracy and completeness of the University's general fixed assets records revealed the following deficiencies:
(1) Two items with a total cost of $18,412.00 could not be located. (2) One item with a cost of $3,460.00 was returned to the vendor, but no supporting documentation was
available and the item had not been removed from the equipment records. (3) Five donated items were not decaled nor placed on the equipment records.
It was also noted that a complete physical inventory of equipment had not been taken by the University within the past two years.
These discrepancies occurred because the University's internal control procedures regarding additions/deletions/transfers and physical equipment inventory counts were not operating properly. The University should establish appropriate procedures to strengthen internal accounting controls to ensure that assets are safeguarded against loss from unauthorized use or disposition.
SOUTHERN POLYTECHNIC STATE UNIVERSITY
Finding Control Number: FS-550-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Reconcile Equipment Inventory Records to Accounting Records
The University was unable to reconcile the equipment inventory records to amounts recorded on the accounting records. This deficiency occurred because of management's failure to adequately monitor the subsidiary equipment inventory records. The University should take a complete physical inventory of equipment and make appropriate adjustments to the accounting records as necessary. In addition, management should establish appropriate procedures to strengthen internal controls and to ensure that assets are safeguarded against loss from unauthorized use or disposition.
. ATLANTA METROPOLITAN COLLEGE
Finding Control Number: FS-561-00-03 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Reconcile Subsidiary Equipment Records to Accounting Records
For the year under review, the College failed to properly reconcile the subsidiary equipment records to amounts recorded on the accounting records. This deficiency occurred because of management's failure to adequately monitor the s~bsidiary equipment inventory records. The College should establish appropriate procedures to ensure that the subsidiary equipment records are accurately reconciled to the accounting records and that appropriate adjustments are recorded on the accounting records.
D-26

----------------
FIndIngs and QuestIoned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
GEORGIA MILITARY COLLEGE
Finding Control Number: FS-590-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The College was unable to provide subsidiary fixed assets records or other historical cost evidence supporting the balance for general fixed assets. Proper internal controls necessitate the maintenance of subsidiary records for general fixed assets along with periodic comparisons of physical counts with those subsidiary records.
This condition resulted from management's failure to adequately monitor and implement procedures to ensure that all general fixed assets are properly recorded and accounted for.
The College should take appropriate action to provide for an adequate property management system for general fixed assets, which would include subsidiary records that reflect an inventory of land, buildings, and equipment owned by the College. Such records should include but may not be limited to (1) acquisition date, (2) acquisition cost, (3) estimated replacement cost, (4) location and description, and (5) identifying number. Detailed records should be maintained for all deletions and additions to the Plant Fund. The College should also implement procedures to periodically reconcile physical inventory counts of fixed assets to the subsidiary records.
WEST GEORGIA TECHNICAL INSTITUTE
Finding Control Number: FS-819-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Property Management Procedures
The June 30, 2000, AM409 Report (General Ledger Inventory Report) contained several equipment items purchased in a prior year that appeared to be materially overstated in regard to acquisition cost. An estimated amount of $522,560.00 was determined to be overstated. This problem occurred because management failed to record equipment items at historical cost in accordance with the State Property System Manual. West Georgia Technical Institute should establish controls to ensure that equipment inventories are maintained in accordance with the State Property System Manual. In addition, accounting personnel should review the inventory records to determine the proper valuation of equipment items.
ATLANTA TECHNICAL INSTITUTE
Finding Control Number: FS-823-00-01 CASH AND CASH EQUIVALENTS GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Deficiencies in Accounting Procedures
The Institute failed to maintain their financial records on a program/project basis which contributed to the poor condition of the general ledger and supporting accounting records.. The following deficiencies were noted as summarized below:
Cash and Cash Equivalents
Bank reconciliations for the operating, Pell, Hope and Student Government Association accounts were not properly completed for the year under review. Extensive efforts were made to accurately reconcile cash. However, due to the poor- condition of the accounting records, cash could not be properly reconciled from the bank balances to the general ledger. Our review of the accounting records disclosed $597,531.27_of outstanding checks and $25,821.00 of outstanding deposits, which were not included on various bank reconciliations. Based on the work performed by the Department of Audits, it was necessary to increase the general ledger cash accounts
D-27

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
by $956,741.99 in the Budget Funds and to decrease the general ledger cash accounts by $1,721,701.57 in Agency Funds.
General Fixed Assets
The Institute failed to properly record equipment balances transferred from Atlanta Public Schools. Also, the Institute has failed to take a physical inventory of equipment for the past three years and could not provide a reconciliation of additions or deletions for fiscal year 2000. The Institute should implement necessary controls to ensure that equipment inventories are properly maintained.
The lack of adequate overall controls, as discussed above led to current year expenditures exceeding funds available by $604,651.31. The lack of controls occurred because management failed to ensure that proper internal control procedures were implemented for basic accounting procedures. Management should establish necessary changes to provide for an adequate system of internal controls to provide reliable accounting records.
CARROLL TECHNICAL INSTITUTE
Finding Control Number: FS-826-00-01 CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures
Accounting procedures of Carroll Technical Institute were insufficient to provide adequate internal controls over the Cash and Cash Equivalents control categories as noted below:
(1). The monthly ba.nk statements were not reconciled inatimely manner for the operating, Hope and payroll accounts. At June 30, 2000, there was an unreconciled variance between the general ledger and the bank statement of $209,996.86 for the operating account, $78,210.13 for the Hope account and $472.75 for the payroll account.
(2) Numerous errors were reflected on the bank reconciliations which could not be identified.
These conditions occurred because of management's failure to establish procedures to analyze and reconcile cash balances on the general ledger with supporting records.
The Institute should establish 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. The Institute should establish procedures which ensure that cash and cash equivalents are adequately safeguarded.
DEKALB TECHNICAL INSTITUTE
Finding Control Number: FS-830-00-0l GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
Our examination of the Institute's property records revealed the following deficiencies at June 30, 2000:
1) Asset purchases totaling $627,368.85 in Fiscal Year 2000 were not added to the equipment inventory records in accordance with State Property Management System Manual.
2) Assets totaling $58,920.00 that were acquired through capital lease agreements prior to Fiscal Year 2000 were not added to the equipment inventory records.
D-28

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
3) A physical inventory of equipment has not been performed since Fiscal Year ended June 30, 1997. The State Property Management System Manual requires the Institute to perform an inventory every 2 years.
These deficiencies occurred because the Institute did not establish appropriate procedures to ensure that subsidiary Fixed Asset records are maintained and updated on a timely basis.. This results in the property management records of the Institute being incomplete and not in accordance with generally accepted accounting principles. Property records should be reconciled to the general ledger and supporting documents should be maintained by the Institute. The Institute should review all purchases of equipment and ensure that they have been added to the General Fixed Assets Account Group.
APPALACHIAN TECHNICAL INSTITUTE
Finding Control Number: FS-840-00-01 CASH AND CASH EQUIVALENTS Deficiencies in Accounting Procedures
The financial accounting information presented for examination was In exceedingly poor condition. Numerous deficiencies were noted as follows:
Bank reconciliations for the operating, payroll, equity and Pell accounts were not performed for any month during the year under review. Early in the year, the Institute contracted with a local accounting firm to reconcile bank accounts. Extensive efforts were made to accurately reconcile cash. However, due to the poor condition of the accounting records, cash could not be properly reconciled from the bank statement balances to the general ledger. Additional work performed by the Department of Audits in conjunction with information provided by the accounting firm resulted in necessary adjustments to cash of $1,519,942.32 in the Budget Fund and $1,652:864.18 in Agency Funds.
The lack of adequate overall controls as discussed above led to current year expenditures exceeding funds available by $67,658.27. These deficiencies occurred because management failed to ensure that proper internal control procedures were implemented for basic accounting procedures. Management should establish necessary changes to provide for an adequate system of internal controls to provide reliable accounting records.
NORTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8504-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Northwest Georgia Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
D-29

Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8524-00-03 GENERAL FIXEIJASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The North Georgia Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
PIONEER REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8544-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Pioneer Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8564-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Metropolitan Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the fmancial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location, and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets . Account Group.
NORTHEAST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8584-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Northeast Georgia Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish ~ccounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These
D-30

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS
subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location, and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8604-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The West Georgia Regional Educational Service Agency does not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8664-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Oconee Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location, and de"scription. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8724-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Chattahoochee-Flint Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
D-31

Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FINANCIAL STATEMENT FINDINGS HEART OF GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8764-00-01 GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group The Heart of Georgia Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting control and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
FIRST DISTRICT REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8804-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group The First District Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
D-32

FEDERAL AVVARDS
FrNDING AND QuESTIONED Q:srs

Federal Awards Findings and Questioned Costs Table of Contents For the Fiscal Year Ended June 30, 2000

ENTITY CODE

ORGANIZATIONAL UNIT

414 419 427
503 518 521 530 533 548 550 571 918 8524

Education, Department of.

Community Health, Department of

Human Resources, Department of

Colleges and Universities

Georgia Institute of Technology

University of Georgia

Albany State University

Columbus State University

Fort Valley State University

Savannah State University

Southern Polytechnic State University

Georgia Perimeter College

:

Higher Education Assistance Corporation, Georgia

North Georgia Regional Educational Service Agency

PAGE NO.

D-36 D-40 D-42

D-44

D-48

D-49

D-51

D-51

D-56

:

D-60

:.D-61

D-61

D-62

D-35

FederaL Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
DEPARTMENT OF EDUCATION
Finding Control Number: FA-414-00-01 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
Our examination included a review of the internal accounting controls utilized by the Department of Education (Department) and the Office of School Readiness (Office) in maintaining their property management system. This review also included testing the system for compliance with Federal laws and regulations. The following conditions relating to inappropriate accounting practices were found to exist:
I. Equipment additions for both the Department and the Office were not reconciled to the general ledger expenditure accounts.
2. The total additions and deletions listed on the General Ledger Reconciliation Detail/Summary Report from Asset Management for both the Department and the Office did not agree with the General Fixed Asset Account Group (GFAAG) trial balance by Business Unit.
3. Equipment inventory records for additions were updated incorrectly for both the Department and the Office. Testing of current year additions revealed thirty-seven (37) additions were updated onto the equipment inventory records incorrectly by an amount of $204,930.53. Eight (8) of those items in the amount of $38,450.98 were related to the Department of Education. The remaining twenty-nine (29) items in the amount of $166,479.55 were related to the Office of School Readiness. A review of the Office's additions Fevealed that ninety-five (95) items with a description of computers were added to the equipment inventory records at a cost of $1.00 each.
4. Equipment inventory items at the Department were deleted from the inventory system without adequate supporting documentation or proper authorization. Testing of current year deletions revealed two (2) items in the amount of $2,165.00 that had been deleted from the inventory records without supporting documentation.
5. Four (4) equipment items acquired through installment purchases at the Department 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 $1,678.92 (net). These same equipment items
. were identified in the prior year report as being recorded incorrectly and had not been corrected.
In addition, four-hundred-seventy-five (475) equipment items were selected from certain locations to test the accuracy of the Department's property management records. These items contained a value of $1,496,165.15 out of a population of $8,566,924.15 and were selected for the purpose of locating the equipment as recorded in the inventory records. The general fixed assets of the Department amounted to $46,530,787.73. The following deficiencies were noted:
1. Twenty-two (22) items totaling $48,213.05 could not be located.
2. Four (4) items were found in locations other than the location indicated in the equipment inventory records.
3. One (1) item was found that was recorded as missing on the 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 and Office are 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
D-36

FederaL Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
(Conunon Rule). The discrepancies identified above were caused by the Department's and the Office's failure to follow guidelines for maintaining equipment inventories.
The Department and Office should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of OMB's Conunon Rule.
Major Federal Programs/Awards Affected:
U. S. Department of Education Title I Grants to Local Educational Agencies - CFDA No. 84.010 Special Education Cluster Special Education - Grants to States - CFDA No. 84.027 Special Education - Preschool Grants - CFDA No. 84.173
Federal Agencies With Other Affected Programs:
U. S. Department of Agriculture U. S. Department of Education U. S. Department of Defense
Finding Control Number: FA-414-00-02 SUBRECIPIENT MONITORING Failure to Establish Administration Agreement/Contracts Vocational Education - Basic Grants to States (CFDA 84.048)
The Technology/Career Education Division of the Georgia Department of Education (GDOE) did not have established written agreements or contracts in place to assure that Vocational Education - Basic Grants to States (Perkins III) program funds earmarked for State Administration and Leadership program activities were properly administered. Our review revealed the following:
1. There was no formal agreement between the Technology/Career Education Division of GDOE and the North Georgia Regional Educational Service Agency (RESA) to define the responsibilities of the RESA as a fiscal agent of Perkins III funds. For fiscal year 2000, the Technology/Career Education Division of GDOE provided the RESA with Perkins III funds, of which $225,325.00 was earmarked for State Administration purposes and $481,904.00 was earmarked for Leadership program purposes.
According to OMB Circular A-133 and provisions of P.L. 105-332, a written agreement should have been in place to describe the specific activities to be carried out by the RESA relative to vocational education programs funded with Perkins III funds.
The Technology/Career Education Division of GDOE should establish a formal agreement" with the RESA to ensure that RESA responsibilities as fiscal agent are clearly defined.
2. The Technology/Career Education Division of GDOE gave approval to the RESA to make payments to two contractors totaling $82,222.50 during fiscal year 2000. The RESA also paid the two contractors $4,013.94 for reimbursement of travel expenses. It was noted that there was no written contractual agreements executed with the two contractors detailing the services to be performed, the amount of compensation to be paid or the period the services were to be performed. The RESA made monthly payments to the contractors based on Technology/Career Education Division of GDOE approved contractor invoices.
We further found that Technology/Career Education Division gave the RESA approval to make periodic payments to a vendor for monthly services associated with the planning and operation of a related
D-37

Federal Awards Findings arid Questioned Costs For the Ascal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
vocational instruction program. For the fiscal year 2000, the vendor was paid $15,996.00. We were advised that Technology/Career Education Division managed the negotiations with the vendor for the services to be rendered and the cost of providing such. However, we foUnd no written contract between the vendor and Technology/Career Education Division relative to the monthly services to be provided, documentation of the services to be provided, compensation for the services rendered by the vendor and other applicable terms required by State policy and law. Furthermore, the vendor was not required to submit documentation of the services provided during the period covered by each invoice.
Procedures should be implemented to assure that fully executed current contracts are in place that clearly define the work/services to be performed, the amount and terms of compensation, and other related provisions which would assure that funds are paid for appropriate purposes and that services were rendered.
Finding Control Number: FA-414-00-03 SUBRECIPIENT MONITOlID-JG Approval for Improper Expenditure Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00
The following direct costs approved by the Technology/Career Education Division and charged by the North Georgia Regional Educational Agency (RESA) to the Vocational Education - Basic Grants to States (Perkins III) funds either did not conform to OMB Circular A-87 requirements or lacked sufficient documentation to support charges to the program:
1. During the year under review, Technology/Career Education Division gave the RESA approval to purchase administrative computer equipment totaling $8,978.00 with Perkins III Administration funds. This expenditure does not appear to be a proper charge to the program in accordance with cost allowability criteria defined in OM~ Circular A-87.
Provisions of OMB Circular A-87 require that a cost charged directly to a Federal award should be directly related to the program. The Technology/Career Education Division approved the expenditure for the primary purpose of the RESA to acquire the computer equipment to up-grade RESA computer hardware to facilitate accounting software required by the Georgia Department of Education (GDOE). Such a cost was not totally and directly related to Perkins III.
The Technology/Career Education Division of GDOE should implement measures to assure that only expenditures related to the Perkins III program are approved as a direct expenditure to the program. GDOE should consult with the U. S. Department of Education to resolve and, if applicable, refund the Perkins III funds expended for this unallowable cost.
2. During fiscal year 2000, the Technology/Career Education Division of GDOE officials approved a payment of $9,200.00 to a vendor for preparation of instructional materials, delivery of administrative/vocational handbooks and audio/video material. The invoice was dated June 15, 2000. Technology/Career Education Division of GDOE officials and RESA personnel were unable to provide sufficient documentation that the materials 'were delivered by the vendor as indicated on the invoice. Without proper documentation that services were rendered by the vendor, the payment to the vendor and charges to Perkins III funds are unallowable.
It should be noted that the vendor is an immediate family member of the RESA's bookkeeper who handles the Perkins III accounting records 'and payments made from those accounts. It was also disclosed that the address and the telephone number on the vendor's invoice was that of an accounting business which is operated by the RESA's bookkeeper and that same immediate family member. Provisions included in GDOE's policy manual, Financial Management For Georgia Local Units of Administration, indicate that. officials must avoid all situations in which their public actions may be
D-38

FederaL Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
affected by or come into conflict with their personal interests. Officials should also be wise to avoid situations that, even though legally permissible, place them into a conflict of interest situation.
Given the circumstances surrounding this transaction, GDOE officials should take action to review this transaction to determine if the transaction was appropriate or if an inappropriate activity occurred. Without substantial documentation that services were in fact delivered, the $9,200.00 should be refunded to the Perkins III program.
Finding Control Number: FA-414-00-04 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period
As part of our examination, we reviewed tracking documents used by the Department of Education and Office of School Readiness to determine the status of subrecipient audit reports for the year ended June 30, 1999. Of the four-hundredsixteen (416) subrecipients identified on the tracking documents, two-hundred-ninety-two (292) had not submitted their audits within the nine-month period as required by OMB Circular A-133. This noncompliance is due to subrecipient audits not being performed in a timely manner.
A subsequent review of the status of the two-hundred-ninety-two (292) audits not submitted by the due date indicated that all had been submitted by January 11, 2001. It was noted during our examination that the Department of Education and.the Office of School Readiness utilized a program review staff for interim compliance reviews of all subrecipients in accordance with the provisions ofOMB Circular A-133.
Major Federal Programs/Awards Affected:
U. S. Department of Agriculture Food Distribution - CFDA 10.550 Child Nutrition Cluster School Breakfast Program - GI:PA 10.553 National School Lunch Program - CFDA 10.555 Special Milk Program - CFDA 10.556 Summer Food Service Program - CFDA 10.559 Child and Adult Food Care Program - CFDA 10.558
U. S. Department of Education Vocational Education - Basic Grants to States - CFDA No. 84.048 Class Size Reduction - CFDA No. 84.340
Federal Agencies With Other Afftcted Programs:
U. S. Department of Agriculture Corporation for National and Community Service U. S. Department of Defense U. S. Department of Education U. S. Department of Health and Human Services
D-39

FederaL Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

DEPARTMENT OF COMMUNITY HEALTH (*)

Finding Control Number: FA-419-00-01 ELIGIBILITY Deficiency in File Maintenance Medicaid Cluster Program
Medical Assistance Program (CFDA 93.778)

Criteria:

The State Medicaid agency determines participant eligibility in accordance with requirements defined in the approved State plan (42 CFR section 431.10). The plan includes requirements to assign rights to medical support and payments from any third party and to cooperate in various proceedings (State Plan Under Title XIX of the Social Security Act: Attachment 2.6-A (6) and 42 CFR 433.145 1912 of the Act).

Condition:

The State contracts with county offices of the Department of Family and Children Services (DFACS) to document and properly determine applicants' eligibility. To test the adequacy of these policies, we examined recipient case files at DFACS offices across the state. Our testing of cases files disclosed certain deficiencies in documentation as follows: four cases files could not be located when requested. Two cases required verification by alternative procedures.

Context:

Number

Dollars

Percentage of item
o ulation

Percentage of dollar o ulation

Tested Questioned
items Total
population

240 4
300,000 est.

$ 1,038,659

$

0

$2,549,742,882

0.08% 1.66% 100.00%

0.004% 0.00%
100.00%

Cause:

The county staff does not always follow documentation policies and requirements for Medicaid participant case files.

Effect:
Questioned cost: Recommendation:

The deficiencies in documentation may indicate a problem with the eligibility determination process. The Medicaid program relies on the accuracy of the process to determine those recipients on which payments to providers for services rendered should be made. This matter represents a deficiency in the operation of the internal control system that could adversely affect the organization's ability to meet grant compliance requirements.
None
Quality control procedures need to be reviewed to incorporate additional steps to improve record documentation regarding participant eligibility.

(*) THIS ORGANIZATIONAL UNIT WAS AUDITED BY OTHER AUDITORS D-40

Federal Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FEDERAL.AWARDS FINDINGS
Finding Control Number: FA-419-00-02 ALLOWABLE COSTS/COST PRINCIPLES Inadequate Recoupment Procedures Medicaid Cluster Program
Medical Assistance Program (CFDA 93.778)

Criteria:

Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (OMB Common Rule) Subpart C, section 20(b)(3) states: "Effective control and accountability must be maintained for all grant and subgrant cash, real and personal property, and other assets. Grantees and subgrantees must adequately safeguard all such property and must assure that it is used solely for authorized purposes."

Condition:

The State made payments to providers with the intent to recover payment against claims in process. The State does not appear to have adequate procedures to account for and safeguard these receivables. There does not appear to be adequate policies concerning collection of payments from providers. Substantive testing revealed the recoupment percentage in the system was unsupported by documentation and was incorrect per inquiry for one receivable. It was also noted that collection period policies were not documented or communicated adequately.

Context:

Number Dollars

Percentage of item
o ulation

Percentage of dollar o ulation

Tested Questioned
Items Total
population

7

$ 271,327

$ 50,000

27

$ 1,237,654

25.93% 14.28% 100.00%

21.92% 18.00% 100.00%

Cause:

Management did not have procedures to review and verify the status of provider receivables.

Effect:

The balance due from a provider was not returned to the Medicaid Agency in a timely manner.

Questioned Cost:

None

Recommendation:

Management should develop more complete written procedures to safeguard funds advanced to providers that include documentation of authorizations and supervisory review procedures.

Finding Control Number: FA-419-00-03 SPECIAL TESTS AND PROVISIONS Inadequate Controls over EDS System Medicaid Cluster Program
Medical Assistance Program (CFDA 93.778)

Criteria: Condition:

OMB Circular A-133 section 4-93.778 N.3 states: "The State agency must establish and maintain a program for conducting periodic risk analyses to ensure that appropriate, cost effective safeguards are incorporated into computer systems."
The Department contracts with an accounting firm to perform a review of the internal controls at Electronic Data System ("EDS"), Clarkston. In their report on controls dated December 3, 1999,
D-41

FederaL Awards Findings and Questioned Costs For the FiscaL Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Context:

for the period May 1, 1999 to October 31, 1999, Ernst & Young found control deficiencies significant enough to qualify their report. In a subsequent report for the period of May 1, 2000 through October 31, 2000, on which Ernst & Young issued its report dated November 30, 2000, it described the controls "are suitably designed to provide reasonable assurance that the control objectives would be achieved if the controls were complied with satisfactorily, and the user organization applied the controls contemplated in the design of the EDS Clarkston's controls".
The above referenced, December 3, 1999, report included non-achievement of control objectives for the following items:
Controls provide reasonable assurance that computer operations are scheduled, processing problems are resolved, and backups of data are made regularly,
Controls provide reasonable assurance that the EDS network is secure from unauthorized access and that access to the GOAL production files and REI system are restricted to authorized employees with no incompatible duties,
Controls provide reasonable assurance that claims transactions are completely and accurately submitted to the computer and processed through the weekly financial cycle.

Cause: Effect: Questioned Costs: Recommendation:

EDS Clarkston did not follow all procedures and policies to achieve the control objectives deemed necessary for the period of July 1, 1999 through April 30, 2000.
The lack of reliable controls raises the risk of non-allowable costs being charged to the Federal program during the period of July 1, 1999 through April 30, 2000.
None
The Department should require that EDS Clarkston comply with the necessary controls contemplated in the design of its controls that had been placed in effect as of October 31, 2000, to meet the control objectives above.

DEPARTMENT OF HUMAN RESOURCES

Finding Control Number: FA-427-00-o1 ELIGffiILITY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558) Questioned Cost: $12,573.00

Our examination included a review of ninety-nine (99) client case files from the Temporary Assistance to Needy Families Program (TANF) at certain county Department of Family and Children Services (DFACS) offices to determine if benefit payments were made within program guidelines. These items contained a value of $189,869.00 out of a sample population of 70,830 cases totaling $136,864,151.24. Our examination revealed that one client folder could not be located and seven client files were incomplete which resulted in $12,573.00 of known questioned costs. These errors were caused by DFACS management's failure to ensure that information required by the Department of Human Resources "Economic Support Services Manual" were included and maintained in client files at the county Department of Family and Children Services offices.

Failure to properly maintain client files can result in direct material effects on the financial statements. The Department of. Human Resources should ensure that procedures are in place to provide for proper maintenance of client files and that all required data for eligibility determination is included in the file.

D-42

FederaL Awards Findings and Questioned Costs' For the Fiscal Year Ended June 3D, 2000
FEDERAL AWARDS FINDINGS
Finding Control Number: FA-427-00-02 ELIGIBILITY Deficiencies in File Maintenance Child Care Cluster
Child Care and Development Block Grant (CFDA 93.575) Child Care Mandatory and Matching Funds of the Child Care and Development Fund (CFDA 93.596) Questioned Cost: $11,768.00
Our examination included a review of one-hundred-nine (109) benefit transactions from the Child Care Program at certain county Department of Family and Children Services (DFACS) offices to determine if benefit payments were made within program guidelines. These items contained a value of $80,714.55 out of a sample population of $46,136,257.25. Our examination revealed that four client folders could not be located and sixteen payments did not meet program requirements which resulted in $11,768.00 of known questioned costs. These errors were caused by DFACS management's failure to ensure that information required by the Department of Human Resources "Childcare and Parent Services Manual" were included and maintained in client files at the county Department of Family and Children Services offices.
Failure to properly maintain client files can result in direct material effects on the fmancial statements. The Department of Human Resources should ensure that procedures are in place to provide for proper maintenance of client files and that all required data for eligibility determination is included in the file.
Finding Control Number: FA-427-00-03 ELIGIBILITY Deficiencies in File Maintenance Food Stamp Cluster (CFDA 10.551 and 10.561) Questioned Cost: $12,946.00
Our examination included a review of seventy-eight (78) client case files from the Food Stamp Program at certain county Department of Family and Children Services (DFACS) offices to determine if benefit payments were made within program guidelines. These items contained a value of $176,137.00 out of a sample population of 70,118 cases totaling $144,406,007.00. Our examination revealed that one client folder could not be located and six client files were incomplete which resulted in $12,946.00 of questioned costs. These errors were caused by DFACS management's failure to ensure that information required by the Department of Human Resources "Economic Support Services Manual" were included and maintained in client files at the county Department of Family and Children Services offices.
Failure to properly maintain client files can result in direct material effects on the financial statements. The Department of Human Resources should ensure that procedures are in place to provide for proper maintenance of client files and that all required data for eligibility determination is included in the file.
Finding Control Number: FA-427-00-04 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
Our examination included a review of the internal accounting controls utilized by the Department of Human Resources in maintaining their property management system and also included testing the system for compliance with Federal laws and regulations. This review revealed that equipment additions were not reconciled to the general ledger expenditure accounts.
In addition, 581 equipment items were selected at certain locations for testing the accuracy of the Department's general fixed asset records. The sample items contained a value of $2,393,763.45 out of a population of 9,820 items totaling $23,837,483.95 at the tested locations and were selected for the purpose of locating the equipment. Total general fixed assets of the Department amounted to $393,141,972.78. The following deficiencies were noted:
D-43

FederaL Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
1. Sixty (60) items totaling $173,267.30 could not be located.
2. Thirty-five (35) items totaling $377,617.87 were surplused, but were not removed from the equipment inventory records.
3. Thirteen (13) items located utilizing serial numbers did not have decal numbers attached.
4. Two (2) items were located with the wrong decal attached.
5. Six (6) items totaling $15,497.00 were documented as missing, but were not included in the missing category on the equipment inventory records.
6. Two (2) items totaling $3,835.00 were removed for a redistribution program, but were not removed from the inventory records.
The department 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 State laws and regulations. The discrepancies identified above were caused by the Department's failure to follow guide~ines for maintaining equipment inventories.
The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of OMB's Common Rule and State laws and regulations.
Major Federal Programs/Awards Affected:
u. S. Department of Agriculture
Food Stamps - CFDA 10.551/561 Special Supplemental Food Program for Women, Infants and Children - CFDA 10.557 U. S. Department of Health and Human Services Immunization Grants - CFDA 93.268 Temporary Assistance for Needy Families - CFDA 93.558 Child Support Enforcement - CFDA 93.563 Child Care and Development Fund Cluster - CFDA 93.575/596 Social Services Block Grant - CFDA 93.667 Social Security Administration
Disability Insurance/Supplemental Security Income Cluster - CFDA 96.001/006
GEORGIA INSTITUTE OF TECHNOLOGY (*)
Finding Control Number: FA-503-00-02 ALLOWABLE COSTS/COST PRINCIPLES - RESEARCH AND DEVELOPMENT CLUSTER Overhead Expense Pools: Understated Fringe Benefit Accrual Variance
Condition presented in the audit report:
The audit questioned cost of $174,177 (Atlanta $153,373, Field-Site $8,721, Arlington $4,883, Huntsville $7,200) representing understated fringe benefit accrual variance. No exception is taken to the balance of proposed laboratory overhead expenses. Because the questioned costs are not expressly unallowable, they are not subject to penalty.
(*) CERTAIN FEDERAL COMPLIANCE REQUIREMENTS FOR THE RESEARCH AND DEVELOPMENT CLUSTER OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS.
D-44

Georgia.
FederaL Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
Recommendation presented in the audit report: To prevent future occurrences of this nature, we recommend that fringe benefit expense allocable to labor charged to other units of the Institute be removed from the expense pool before the GTRI fringe benefit rate is calculated. Finding Control Number: FA-503-00-03 ALLOWABLE COSTS/COST PRINCIPLES - RESEARCH AND DEVELOPMENT CLUSTER DCAA 00-2 G&A Expense Pool: Understated Fringe Benefit Accrual Variance Condition presented in the audit report: The audit questioned cost of $124,456 representing understated fringe benefit accrual variance. No exception is taken to the balance of the proposed general and administrative expenses. Because the questioned costs are not expressly unallowable, they are not subject to penalty. Recommendation presented in the audit report: To prevent future occurrences of this nature, we recommend that fringe benefit expense allocable to labor charged to other units of the Institute be removed from the expense pool before the GTRI fringe benefit rate is calculated. Finding Control Number: FA-503-00-04 ALLOWABLE COSTS/COST PRINCIPLES - RESEARCH AND DEVELOPMENT CLUSTER DCAA 00-3 G&A Allocation Base: Understated Fringe Benefit Accrual Variance and Unallowable Costs Excluded from G&A Allocation Condition presented in the audit report: Questioned costs represent understated fringe benefit accrual variance in the amount of $165,839 and unallowable costs excluded from the G&A allocation base in the amount of$105,497. Recommendation presented in the audit report: To prevent future occurrences of this nature, we recommend that a step be added to the GTRI indirect rate study Work Plan that requires confirmation that all unallowable costs properly includable in any indirect rate cost base is indeed in that base. Finding Control Number: FA-503-00-05 REPORTING -RESEARCH AND DEVELOPMENT CLUSTER GT 00-1 Reports Not Submitted in a Timely Manner Statement of Condition
Numerous reports required by grant and contractual agreements entered into by GTRC and various Federal agencies were not filed on time, as specified in the grant and contractual agreements. The reports not on time for the grants and contracts tested by the audit are as follows:
. D-45

FederaL Awards Findings and Questioned Costs For the FIscaL Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Agency

CFDA

Contract No.

GTRC/GIT Ref. No.

Report

Date Due

U.S. Dept. of

Defense

12.100

U.S. Dept. of

Defense

12.100

U.S. Dept. of

Defense

12.100

U.S. Dept. of

Defense

12.100

U.'S. Dept. of

Defense

12.100

U.S. Dept. of

Defense

12.300

U.S. Dept. of

Defense

12.300

U.S. Dept. of

Defense

12.300

U.S. Dept. of

Defense

12.300

U.S. Dept. of

Defense

12.800

U.S. Dept. of

Defense

12.800

U.S. Dept. of

Defense

12.800

U.S. Dept. of

Defense

12.800

U.S. Dept. of

Defense

12.910

NASA

43.000

NASA

43.000

National Science Foundation 47.070

National Science Foundation 47.04.1

Environmental Protection

Agency

66.500

U.S. Dept. of

Energy

81.049

U.S. Dept. of Health and Human Svc.

93.279

DAAH04-96-1-0008 E-16-X95

DAAB07-99-C-K530 A-6100

DAAB07-99-C-K530 A-6100

DAAB07-98-D-H501 A-5965

DAAB07-98-D-H50 I A-5965

NOOI74-98-D-00370001

A-5780

NOOI64-99-C-0020 E-25-V39

NOO I 64-99-C-0020 E-25-V39

NOO I64-99-C-OQ20 E-25-V39

F-33615-98-C-1341 E-21-K59

F-33615-98-C-1341
F09603-99-G-00040006
F09603-99-G-00040006

E-21-K59 A-6095 A-6095

F49620-97-1-05 I9

E-21-J74

NCC 2-945 NGT 5-40023

E-16-N29 E-16-N59

ESI-9818828

C-36-652

REC-9876 I 68

C-50-696

R826372
DE-FG02-96ER 45562

G-35-W62 M-26-647

I ROIDAI1541OIAI

G-33-X91

Interim Progress Report covering 01/0 I/99 - 12/31/99

03/31/00

Quarterly Progress Report covering

09/30/99 - 12/31/99

01/14/00

Quarterly Progress Report covering

01/0 I/00 - 03/31/99

04/14/00

Safety Assessment Report/B004

08/30/99

Human Factors Final Report/B003
Progress, Status & Mgmt Report covering 11/01/99 - 11/30/99
Monthly Stanis Report covering 06/0 I/99 - 06/30/99
Monthly Status Report covering 04/0 I/00 - 04/30/00
Monthly Status Report covering 05/01/00 - 05/31/00
Status Report! A002 covering 05/01/99 - 07/31/99

01/31/00 12/20/99 07/15/99 05/15/00 06/15/00 08/25/99

Project Planning Chart! A006

10/25/99

Bi-Monthly Status Report covering

11/01/99 -12/31/99

01/20/00

Bi-Monthly Status Report covering

03/0 I/00 - 04/30/00

OS/20/00

Annual Progress Report covering 08/01/98 - 07/31/99

09/01/99

Annual Penonnance Report covering

01/01/99-12/31/99

10/31/99

Renewal PKG Report

11/01/99

Annual Progress Report covering 09/01/99 - 08/31/00

06/30/00

Annual Progress Report covering 06/0 I/99 - 05/31/00

02/28/00 .

Annual Progress Report covering 04/0 I/99 - 03/31/00

04/30/00

Technical Progress Report covering

02/15/99 - 11/14/99

11/14/99

Annual Progress Report covering 01/20199 - 11130199
D-46

09130199

Date Mailed
04/03/00 01/31/00 04/29/00 02/03/00 02/03/00 01/24/00 07/16/99 OS/22/00 06/27/00 09/01/99 11/05/99 01/31/00 OS/26/00 09/30/99 01/10/00 11/11/99 10/13/00 03/24/00 07/05100 11113/00
10101/99

FederaL Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Criteria The reporting compliance requirement requires the submission of certain reports in accordance with the grants and contracts entered into by GTRC, which contain specific dates and deadlines for submission. Frequently, these reports are the only required output of a given contract and, consequently, should be filed on time.

Effect As all of the reports listed above were ultimately filed, the effect of untimely filing is the possible delay of other projects which were related to GTRC and GIT grants and contracts.

Cause The typical cause of untimely filing, as stated to us by GTRC and GIT personnel, was the.unavailability of data necessary for the completion of the required reports.

Recommendation Efforts should be made by GTRC and GIT to ensure that all required contractual deliverables are submitted to the contracting agencies by the specified due dates.

Questioned Cost As all of these reports were' ultimately submitted, no costs are questioned.

Finding Control Number: FA-503-00-06 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS REPORTING -RESEARCH AND DEVELOPMENT CLUSTER GT 00-2 Failure to Submit Report Required by Special Contract Provisions

Statement of Condition A report required by a grant and contractual agreement entered into by GTRC and a federal agency does not appear to have' .been filed as required by the special provisions of the contract. The following report was not submitted to the sponsoring agency by GTRC:

Agency

CFDANo.

Contract No.

GTRC/GIT Ref. No.

Report

U.S. Dept. of Energy

81.000

PO AO-6162

E-21-Z79

Letter of Notification concerning Limitation of Costs Clause

Criteria The special tests and provisions compliance requirement requires adherence to unique provisions of each contract that could have a direct and material effect on the major program. Special provisions for the contracts noted above include the Limitation of Cost Clause, which requires a letter of notification to be sent to the sponsoring agency when total costs incurred will exceed a specified percentage of the total obligated funding.

Effect

GTRC and GIT's system for ensuring adherence to special provisions that require timely and proper filing of documents

was not operating adequately with respect to these reports" The required report was not submitted in accordance with grant

or contract requirements, consequently the special tests and provisions compliance requirement has not been met with

respect to this report.

.-

Cause Human errors and oversight caused this report to not be submitted.

D-47

FederaL Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Recommendation GTRC and GIT should establish a procedure to ensure that special provisions are adequately reviewed and monitored, and that required reports are submitted to the appropriate agency in a timely fashion.
Ouestioned Costs No costs are questioned with respect to this finding.

UNIVERSITY OF GEORGIA (*)

Finding Control Number: FA-518-00-01 REPORTING Research and Development Cluster Technical Reports Not Properly Filed for subrecipient awards from the University of Georgia Research Foundation, Inc.

Condition: 6 of the 50 expenditures selected for testing included technical reports which were not filed timely.

The following table lists the technical reports not filed timely:

Budget Number

Grant Number

CFDA#

Date Due

Date Submitted

10-21-RR548-017 10-21-RR549-092 10-21-RR549-141 10-21-RR551-065 25-21-RC293-224 25-21-RC299-226

NSF9527468 ER20220 RR05351
NSF9527957 A135591C
96-35302-3771

47.000 81.000 93.371 47.000 .93.856 10.206

OS/28/1999 03/15/2000 06/01/2000 04/30/2000 . 04/01/2000 01/15/2000

09/16/1999 04/05/2000 06/19/2000 06/23/2000 OS/25/2000 08/23/2000

Criteria: Attachment H of OMB Circular A-II0 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 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 that 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.

Finding Control Number: FA-518-00-02 REPORTING Research and Development Cluster Financial Reports Not Properly Filed for Federal Awards Direct to the University

Condition: 5 of the 50 expenditures selected for testing included technical reports which were not filed timely.

(*) FEDERAL COMPLIANCE REQUIREMENTS OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS
D-48

FederaL Awards Findings and Questioned Costs For the FiscaL Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

The following table lists the technical reports not filed timely:

Budget Number

Grant Number

CFDA#

Date Due

Date Submitted

10-31-RE216-075 1O-31-RE216-075 1O-31-RE216-075 10-31-RE263-168 10-31-RE581-297

9900992 9900992 9900992 427-93-91973 427-93-01609

84.027 84.027 84.027 93.558 10.561

07/10/2000 07/10/2000 07/24/2000 07/25/2000 07/30/2000

08/11/2000 08/24/2000 08/24/2000 08/14/2000 08/11/2000

Criteria: Attachment H of OMB Circular A-II0 establishes requirements for monitoring and reporting program performance.

Effect: The University failed to comply with the applicable financial 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 1992, are being adhered to. The University should consider developing a monthly report that lists all delinquent technical reports. This list should be reviewed by University personnel in order to monitor the timeliness of technical reporting.

ALBANY STATE UNIVERSITY
Finding Control Number: FA-521-00-01 REPORTING Report Not Reconciled Student Financial Aid Cluster Program
The University is required to reconcile their Federal Direct Loan accounts, including cash balances, and submit a reconciliation to the Direct Loan Servicing Center at least once a month. Our examination revealed that monthly amounts reported by the University did not reconcile to the general ledger of the University. This deficiency was a result of management's failure to adequately reconcile reports submitted to the accounting records on a monthly basis. Federal regulations (34 CFR 668.161) require the University to ensure that all required reports are accurate and reconciled as necessary.
The University should implement adequate controls to ensure that reports are accurately completed and supported by the accounting records. Detailed reconciliations should be prepared monthly for any variances and maintained as part of the supporting documentation.
Federal Programs/Awards Affected
Student Financial Aid Cluster Program U. S. Department of Education Federal Direct Student Loan Program (CFDA 84.268)

D-49

-'
FederaL Awards Findings and Questioned Costs For the FiscaL Year Ended June 30. 2000
FEDERAL AWARDS FINDINGS.
Finding Control Number: FA-521-00-02 SPECIAL TESTS AND PROVISIONS Deficiencies in Disbursement Notification Process Student Financial Aid Cluster Program
Federal regulations (34 CFR 668.165(a require 'an institution to follow rules and procedures for notifying recipients of disbursements of Federal Direct Loan funds. These regulations require the University to notify recipients of Federal Direct Loan disbursements within thirty days before or after disbursement of funds. Notification is to include the amount the borrower can expect to receive, date of disbursement, how funds will be disbursed, and the borrower's right to cancel all or part of the loan. Disbursement includes crediting students' accounts, as well as disbursing excess checks. The University failed to have procedures in place to ensure compliance with these regulations. This deficiency resulted in management's failure to provide proper notification of Federal Direct Loan disbursements to recipients.
The University should implement procedures to ensure that disbursement notification is provided to Federal Direct Loan recipients in accordance with federal regulation 34 CFR 668.165(a).
Federal Programs/Awards Affected
Student Financial Aid Cluster Program U. S. Department of Education Federal Direct Student Loan Program (CFDA 84.268)
Finding Control Number: FA-521-00-03 SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $1,188.75
An examination of the University's student financial aid refund process was performed for five students who received all failing and/or incomplete grades, for Spring Semester 2000. Attendance records as well as statements from instructors were used to ascertain if the students had dropped out and were due a refund. Our examination revealed two out of the five students received financial aid but did not appear to have attended class at all or had ceased attendance prior to the end of the refund period. Failure by management to implement procedures to determine the last day of attendance to identify "unofficial" withdrawal for these students resulted in a questioned cost of$1,188.75.
Aprojection of these errors to the total population resulted in a likely questioned cost in excess of $10,000.00.
\.
. The University should implement procedures to ensure that refunds are calculated for all "unofficial" withdrawals. The University should contact the U. S. Department of Education regarding resolution of this fmding.
Federal Programs/Awards Affected
Student Financial Aid Cluster Program U. S. Department of Education Federal Direct Student Loan Program (CFDA 84.268)
D-50

FederaL Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
COLUMBUS STATE UNIVERSITY
Finding Control Number: FA-530-00-01 SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process . Student Financial Aid Cluster Program Questioned Cost: $2,158.00
An examination of the University's student financial aid refund process was performed for eight students who received all failing and/or incomplete grades, for Spring Semester 2000. Attendance records as well as statements from instructors were used to ascertain if the students had dropped out and were due a refund. Our examination revealed three out of the eight students did not appear to have attended class at all or had ceased attendance prior to the end of the refund period. The failure of management to implement proper procedures to determine the last day of attendance to identify "unofficial" withdrawals resulted in a questioned cost of$2,158.00.
A projection of these errors to the total population resulted in a likely questioned cost in excess of $1 0,000.00.
The University should implement procedures to ensure that refunds are calculated for all "unofficial" withdrawals. The University should contact the U. S. Department of Education regarding resolution of this fmding.
Federal Programs/Awards Affected
Student Financial Aid Cluster Program U. S. Department of Education Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
FORT VALLEY STATE UNIVERSITY
Finding Control Number: FA-533-00-01 ELIGIBILITY Improper Disbursement of FSEOG Funds Student Financial Aid Cluster Program Questioned Cost: $47,199.00
For fiscal year 2000, it was noted that eighty-five students received $47,199.00 in Federal Supplemental Educational Opportunity Grant (FSEOG) funds that did not receive Federal Pell Grants. Federal regulations (34 CFR 676.10) state that an institution shall award FSEOG funds to those students with the lowest expected family contributions who will also receive Federal Pell Grants. If the institution has FSEOG funds re.maining after awarding FSEOG funds to all Federal Pell Grant recipients at the institution, the institution shall award the remaining FSEOG funds to those eligible students with the lowest expected family contributions who will not receive Federal Pell Grants. It appears very unlikely that the eighty-five students that received FSEOG funds were entitled to the funding because the University had 1,326 students having a higher need, as these students received Pell Grants but did not receive FSEOG funds. The University could not provide documentation that the lowest expected family contributions of these 1,326 students were considered prior to awarding the FSEOG funds to non-Pell recipients.
This questioned cost of$47,199.00 was a result of management's failure to properly award FSEOG funds to those students with the lowest expected family contribution who also received Federal Pell Grants. The University should contact the U. S. Department of Education regarding resolution of these questioned costs.
D-51

Federal Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
Federal Programs/Awards Affected: Student Financial Aid Cluster Program
U. S. Department of Education Federal Supplemental Educational Opportunity Grant (CFDA 84.007) Federal Pell Grant Program (CFDA 84.063)
Finding Control Number: FA-533-00-02 ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18
A sample of seventy-five financial aid files was selected to determine if financial aid was properly calculated and disbursed to eligible students. The items sampled contained financial aid disbursements of $1,039,538.91 out of a population of $16,224,438.64. Our examination revealed that forty-five students received funds in excess of their eligible need totaling $266,139.18 as shown below:
(1) Thirteen students were not in compliance with the University's published satisfactory academic progress policies. Federal regulations (34 CFR 668.32 and 668.34) state that a student must maintain satisfactory academic progress to be eligible to receive financial assistance under the Title IV programs. The noncompliance with established published standards of satisfactory progress is as follows:
(a) The University's policy states that a graduate student must maintain a grade point average of 3.0 or . higher. Four students were found with a grade point average below the required grade point average.
(b) The University's policy states that undergraduate students must maintain cumulative grade point . averages at various levels throughout their college career. Five students were found with grade point averages below the required grade point average for their educational level.
(c) The University's policy states that the maximum time frame an undergraduate student is allowed to successfully complete a course of study is 150% of required hours for the selected course of study or six academic years, whichever come first. Four students were found that had not successfully completed their course of study within the required time frame.
This noncompliance resulted in questioned'costs of$166,712.00.
(2) Eighteen students had no remaining need after the expected family contribution was deducted from their cost of attendance, however they were disbursed Federal Direct Subsidized Loans and Federal Supplemental Educational Opportunity Grants ,and were allowed to earn Federal College Work-Study wages. Students that receive these loans and wages must demonstrate fmancial need as described in Federal regulations (34 CFR 673.5, 34 CFR 674.9, 34 CFR 675.9 and 34 CFR 685.200). This noncompliance resulted in questioned costs of$30,790.18.
(3) Six students' cost of attendance was adjusted without the necessary documentation or a reasonable explanation for the adjustment. Federal regulations require that all adjustments based on professional, judgment be reasonable and fully documented. This noncompliance resulted in questioned costs of $16,000.00.
(4) One student, who was also an employee of the University, received fmancial aid during the year using financial information that conflicted with information in their employment personnel file. The auditor was unable to determine which information was correct. This noncompliance resulted in questioned costs of $13,000.00.
D-52

FederaL Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
(5) Three students classified by the Financial Aid Office as graduate students were taking undergraduate classes and paying undergraduate fees. This misclassification resulted in the University disbw'sing Federal Direct Student Loans for which the students did not qualify. This noncompliance resulted in questioned costs of$9,841.00.
(6) One student received Federal Direct Student Loans and did not appear to meet the requirements for "ability to benefit" regulation. The student in question is an eighty-six year old male who was enrolled in the University's Education Program. Federal regulation (34 CFR 685.214) states that a student's eligibility to borrow is to have been falsely certified by the school, if the school certifies the eligibility of a student who, because of age, would not meet the requirements for employment in the occupation for which the training program supported by the loan was intended. This noncompliance resulted in questioned costs of $8,500.00.
(7) One student's file did not contain a PLUS loan application, however the student received a PLUS award and disbursement. Federal regulation (34 CFR 668.24) states that the institution should maintain application data submitted to the lender by the institution on behalf of the student or parent. All files presented for audit should be complete and support all aid awarded. This noncompliance resulted in questioned costs of$7,825.00.
(8) Two students' dependency status was adjusted without the. necessary documentation or a reasonable explanation for the adjustment. Federal regulation (34 CFR 685.203) requires that all adjustments based on professional judgment be reasonable and fully documented. This noncompliance resulted in questioned costs of$7,555.00.
(9) One student received Federal financial aid funds when the student was in default status at the time of the award and disbursement of funds. Federal regulation (34 CFR 668.32) states that "A student is eligible to receive Title IV, REA program assistance if the student is not in default, and certifies that he or she is not in default, on a loan made under any Title IV, REA loan program". This noncompliance resulted in questioned costs of$5,916.00.
(10) Nine students received other financial aid that was not considered in their financial need calculation. Federal regulation (34 CFR 673.5) states that the institution must consider those resources it can reasonably anticipate at the time it awards funds. When these resources were considered, disbursements over the student's need resulted and are included in category (2) above.
The above instances of noncompliance resulted from weaknesses in the internal control procedures over the Federal Student Financial Aid Cluster Program. The following weaknesses were noted:
Procedures were not in place at the time of the disbursement to ensure that student financial aid files were complete and properly maintained.
Procedures were not in place at the time of the disbursement to ensure that the financial aid office was monitoring the student's progress throughout the award year.
Procedures were not being followed or were not in place to ensure all resources were considered when awards were made to students.
Procedures were not in place at the time of the disbursement to ensure that student financial aid awarded to friends and relatives of the employees of the Financial Aid Department were reviewed by an independent member of management.
The weaknesses identified in the Federal Student Financial Aid Cluster Program were a result of management's failure to perform a risk assessment of the critical areas of the program and to implement appropriate controls in the fmancial aid
D-53

Federal Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

department. The University should contact the U. S. Department of Education regarding the resolution of these questioned costs.

Federal Programs/Awards Affected:

Student Financial Aid Cluster Program U. S. Department of Education Federal Supplemental Educational Opportunity Grant (CFDA 84.007) Federal Family Education Loan Program (GFDA 84.032) Federal Work-Study Program (CFDA 84.033) Federal Perkins Loan Program (CFDA 84.038) Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)

Finding Control Number: FA-5J3-00-03 ELIGIBILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $50,741.74

A sample of seventy-five fmancial aid files was selected to determine if fmancial aid was properly awarded and disbursed to eligible students. Federal regulation (34 CFR 668.165) states that "before an institution disburses Title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program". The files sampled disclosed twenty-four instances where students received financial aid in excess of their award as shown below:

(1) Twenty-two students received Federal work-study wages when either the institution failed to notify the

student of the award or the student received Federal work-study wages in excess of their award. This

noncompliance resulted in questioned costs of$74,651.92.

.

(2) One student received a Federal Direct Student Loan; however, the institution failed to notify the student of the award. This noncompliance resulted in questioned costs of$8,116.00.

(3) One student received a Federal Family Education Loan, however the institution failed to notify the student of the award. This noncompliance resulted in questioned costs of$2,500.00.

Of the questioned cost described above, $34,526.18 resulted in students receiving funds in excess of their eligible need and therefore is included in finding FA~533-00-02, which leaves a net amount of $50,741.74 in unduplicated questioned costs.

These questioned costs resulted from management's failure to notify students of their fmancial aid awards before disbursing funds to students. At the time of the disbursement, procedures were not in place to ensure that students are notified of awarded fmancial aid before disbursements are made and that disbursements do not exceed individual awards. The University should contact the U. S. Department of Education regarding the resolution of these questioned costs.

Federal Programs/Awards Affected:

Student Financial Aid Cluster Program U. S. Department of Education Federal Family Education Loans (CFDA 84.032) Federal Work-Study Program (CFDA 84.033) Federal Direct Student Loan Program (CFDA 84.268)

D-54

Federal Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
Finding Control Number: FA-533-00-04 REPORTING Reports Not Reconciled Student Financial Aid Cluster Program
For the year under review, expenditures reported on several of the required reports for Federal Financial Assistance programs submitted by the University to the U. S. Department of Education were not reconciled as follows:
The Pell RFMS Miscellaneous Year to Date Report dated November 15,2000 and the Statement of Account, which reports Federal Pell Grant Program expenditures for the year, were not reconciled to the accounting records.
The Fiscal Operations and Application to Participate (FISAP) report had amounts reported for the Federal Work-Study Program expenditures that did not reconcile to the accounting records.
The University did not reconcile the Federal Direct Loan Program monthly to the accounting records in accordance with Section 2 of The Blue Book.
Federal regulations (34 CFR 675.19, 685.309, 690.81 and 690.83) require the University to ensure that reported information is accurate and reconciled as necessary. The deficiencies identified were a result of management's failure to adequately reconcile reports submitted to the accounting records.
The University should implement adequate controls to ensure that all reports submitted to the U. S. Department of Education are accurately completed and supported by the accounting records. Detailed reconciliations should be prepared for any variances and maintained as part of the supporting documentation.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Program U. S. Department of Education Federal Work-Study Program (CFDA 84.033) Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
Finding Control Number: FA-533-00-05 SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures Student Financial Aid Cluster Program
The internal control procedures of Fort Valley State University were found to be inadequate over the Federal Work-Study Program. The following weaknesses were noted in the program:
Procedures were not in place to ensure that students had recei~ed a Federal work-study award and/or signed a work agreement prior to being allowed to work and receive wages.
Procedures were not in place to ensure that time sheets were always approved or approved only after the last date indicated as worked on the time sheet.
Procedures were not in place to ensure that the supervisor's name on the time sheet was actually signed by the supervisor.
The weaknesses identified in the program were a result of management's failure to perform a risk assessment of the critical areas of the program and to implement appropriate controls in the Financial Aid Department. The University should
D-55

FederaL Awards Findings and Questioned Costs For the FiscaL Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

develop and implement policies and procedures to ensure adequate controls over the program. Also, the University should develop and implement a monitoring process to ensure that the controls are being followed.

Federal Programs/Awards Affected:

Student Financial Aid Cluster Program U. S. Department of Education Federal Work-Study Program (CFDA 84.033)

SAVANNAH STATE UNIVERSITY

Finding Control Number: FA-548-00-01 ALLOWABLE COSTS/COST PRINCIPLES Time and Effort Report Deficiencies Higher Education - Institutional Aid (CFDA 84.031)

For the year under review, our examination of forty-three time and effort reports for five employees revealed the following deficiencies: .

1) One report lacked the employee's signature.

2) One report was signed more than twelve months after the period.

3) Three reports were signed more than ninety days after the period.

4) Six reports lacked date of approval.

5) Seven reports lacked approval.

OMB Circular A-21, requires that activity reports or other payroll documents used as original documentation for payroll

and payroll charges be prepared and signed by the employee and the responsible official when salaries are charged to a

Federal program.

.

The above conditions occurred because of management's failure to ensure all time and effort reports were properly prepared by employees. Management should ensure that complete time and effort reports are prepared by all employees whose salaries are charged to a Federal program. Time and effort reports should contain all required elements so that management can rely on the reports to support accounting and payroll records.

Finding Control Number: FA-548-00-02 DAVIS-BACON ACT Payment of Prevailing Wage Rates Not Monitored Higher Education - Institutional Aid (CFDA 84.031)

For the year under review, it was noted that the University did not monitor the wages paid by one contractor for working on a Title III construction project. Federal regulations, as reflected in Appendix A to 34 CFR 74, require that all laborers employed by the contractor who work on construction contracts in excess of $2,000.00 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates).

This condition resulted from management's failure to ensure that all individuals at the University were aware of their

responsibilities regarding the Davis-Bacon Act and requirements of the Davis-Bacon Act were being met. The University

should take steps to ensure that wages paid for construction projects financed with Federal funds are monitored and are in

compliance with the provisions of the Davis-Bacon Act.

.'

D-56

FederaL AWi.lrds Findings and. Questioned Costs For the Ascal Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Finding Control Number: FA-548-00-03 ELIGIBILITY Overpayment of 'Student Financial Aid Weaknesses in Internal Control Structure Student Financial Aid Cluster Program Questioned Cost: $8,105.39
A sample of forty student files was selected to determine if financial aid was properly calculated, awarded and disbursed to eligible students.' The items sampled contained financial aid disbursements of $623,884.19 out of a population of $13,963,059.99. Ot,r examination revealed that four students received overpayments totaling $8,105.39 as shown below.
(1) Two students were disbursed a total of $5,386.00 in excess of need, based on estimated cost of attendance. Title IV of the Higher Education Act of 1986 states that an institution must coordinate Title IV programs with other Federal and non-Federal student financial aid programs it administers and must establish controls to preclude the awarding of assistance in excess of a student's financial need. The errors were caused by management's failure to review awards before disbursements were made.
(2) One student received a refund in excess of the correct amount by $1,155.39. This error resulted from management's failure to review refund calculations prior to disbursement of funds.
(3) One student was disbursed $1,564.00 of Federal Work-Study Program funds in excess of the approved grant award. This error was caused by management's failure to monitor the student's disbursements.
A projection of these errors to the total population resulted in likely questioned cost in excess of $1 0,000.00.
The University should develop and implement policies and procedures to ensure adequate controls over the eligibility process are in place and that student financial aid awards are properly reviewed and approved prior to disbursement. Also, the University should develop and implement a monitoring process to ensure that the controls are being followed. The University should contact the U. S. Department of Education regarding resolution of these questioned costs.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Programs U. S. Department of Education Federal Supplemental Education Opportunity Grant (CFDA 84.007) Federal Work-Study Program (CFDA 84.033) Federal Perkins Loan Program (CFDA 84.038) Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
Finding Control Number: FA-548-00-04 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Higher Education - Institutional Aid (CFDA 84.031) Questioned Costs: $10,030.12

For the year under review, our examination included a review of the internal accounting controls utilized by the University in maintaining their property management system and testing the system for compliance with Federal laws and regulations. The following conditions existed:

1. The University failed to maintain a property management system that identified Federal equipment

purchases by Federal grant award number. This deficiency is system-wide and affects all Federal

awards.

.

D-57

Federal Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
2. The University was unable to ensure appropriate Federal agencies were notified when disposing of . equipment due to inadequacies in identifying equipment by fund source and grant award number in the property management records.
3. The Title III Equipment Inventory Report, as presented for audit purposes by the University's Title III Office, contained numerous errors and omissions. The Report listed numerous incorrect locations; incorrect, missing or duplicated University decal numbers; and various omissions of Federal Share percentage, dates of purchase, purchase prices, and manufacturer's serial numbers.
4. A sample of 53 equipment items was examined. This examination revealed that two items could not be found. One scanner, purchased in March 1997 for $835.00, could not be located. Also, one Tangent computer could not be located. The computer was acquired in July 1995 for $3,165.00.
5. One printer, purchased from Federal funds in June 1999 ata cost of$1,298.12, remained in its original shipping container. This condition was also noted in the audit report for June 30, 1999.
6. Two computers, totaling $4,732.00, were not being utilized by the Title III program for which they were acquired. This deficiency was noted in the audit report for June 30, 1998 and June 30; 1999. University personnel assert that the computers were being used in the Title III program as required. However, our examination noted that the computers were not being used in the Title III program as alleged by the University.
The University failed to have internal controls in place and operational to ensure compliance with Federal requirements for equipment as set forth in 34 CFR 74 and OMB Circular A-110, Subpart C.34. The University should establish policies and procedures to ensure that equipment purchases are identified by fund sources and grant award numbers, property records are maintained in accordance. with Federal requirements and physical inventories are conducted. Also, the University should establish policies and procedures to ensure equipment purchases are' utilized for the program acquiring the equipment. The U. S. Department of Education should review these matters and determine appropriate action by the University to resolve this finding.
Finding Control Number: FA-548-00-05 PERIOD OF AVAILABILITY Deficit Fund Balances Student Financial Aid Cluster Program
At June 30, 2000, the University's Fiscal Year 1999 Federal Pell Grant Program had a deficit fund balance 'of $120,189.79 and the Fiscal Year 1998 Federal Direct Loan Program had a deficit fund balance of $18,592.96. These deficit fund balances are a result of management's failure to establish controls to ensure that funds are not disbursed without proper authorization.
The University should implement procedures to ensure that funds are available to cover valid expenditures. In order to be reimbursed for these excess expenditures, the University, in coilformity with Federal statutes, must certify the validity of these payments to the U. S. Department of Education.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Programs U. S. Department of Education Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
D-58

Genrgia.
Federal Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
Finding Control Number: FA-548-00-06 SPECIAL TESTS AND PROVISIONS Deficiencies in Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $2,770.17
Our examination of the University's student financial aid refund process revealed the following deficiencies:
(1) Refund amounts were not applied to the appropriate student financial aid programs for four out of eight students s'elected for refund testing. Three students' were issued refund checks rather than management correctly applying the refunds to the Federal Direct Student Loan Program resulting in questioned cost of $1,800.17. One student was not disbursed a refund and management failed to charge back the $970.00 refund to a Federal Direct Student Loan Program.
(2) The University does not calculate a refund for students who do not officially withdraw from the University nor does the University maintain records to ascertain if a student has dropped out and a refund is due. This deficiency was caused by management's failure to implement procedures to determine if a refund of institutional charges is required in accordance with Federal Regulation 34 CFR 668.22.
The projection of questioned cost could not be readily determined. However, the likely questioned costs are believed to exceed $10,000.00.
The University should implement procedures to ensure that refunds are correctly calculated and applied to the appropriate accounts in a timely manner. Refunds should be calculated:for all "unofficial" withdrawals. The University should contact the U. S. Department of Education regarding resolution of this finding.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Programs U. S. Department of Education Federal Supplemental Education Opportunity Grant (CFDA 84.007) Federal Work-Study Program (CFDA 84.033) Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
Finding Control Number: FA-548-00-07 SPECIAL TESTS AND PROVISIONS Failure to Disclose Federal Funding in Public Announcement Higher Education - Institutional Aid (CFDA 84.031)
During the year under review, the University issued one bid solicitation that did not disclose the dollar amount of Federal funds for the project and the percentage of the total cost of the project to be fmanced with Federal funds as required by Attachment S of the Federal Grant Award. Management should review Attachment S of the Federal Grant Award and comply with the. conditions under Public Law 105-78, Sec. 508..
D-59

FederaL Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
SOUTHERN POLYTECHNIC STATE UNIVERSITY
Finding Control Number: FA-550-00-01 MATCHING, LEVEL OF EFFORT AND/OR EARMARKING REQUIREMENTS. Failure to Provide Institution Capital Contribution Student Financial Aid Cluster Program
Federal Perkins Loan Program (CFDA 84.038)
For the year under review, the University failed to provide matching funds for the Institution Capital Contribution for the Federal Perkins Loan Program as required by Federal Regulations (34 CFR 674.19).
This condition occurred because management failed to adequately monitor controls to ensure that matching requirements were met. Management should establish appropriate procedures to strengthen internal controls and to ensure that matching requirements are met.
Finding Control Number: FA-550-00-o2 REPORTING Failure to Reconcile Program Reports Student Financial Aid Cluster Program
For the year under review, amounts reported by the University on the following reports to the U. S. Department of Education were not reconciled as follows:
I) The Pell Year to Date Data and the Pell Electronic Statement of Account (ECOA) were not reconciled to the accounting records.
2) Federal Perkins Loan Program Institutional Capital Contribution and Repayments of Capital to Institution reported on the Fiscal Operations and Application to Participate (FISAP) report were not reconciled to the accounting records.
Federal Regulations (34 CFR 668.24 and 690.83) require the University to ensure that financial information reported is accurate and reconciled to the accounting records. Management should ensure that reports are reconciled to the accounting records prior to being submitted to the U. S. Department of Education.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Program U. S. Department of Education Federal Perkins Loan Program (CFDA 84.038) Federal Pell Grant Program (CFDA 84.063)
Finding Control Number: FA-550-00-03 SPECIAL TESTS AND PROVISIONS Exit Counseling Not Conducted Student Financial Aid Cluster Program
For the year under review, the University failed to provide exit counseling for students who withdrew or dropped below half-time status. Federal regulations require the University to conduct exit counseling for each Perkins or Direct Loan borrower shortly before the student graduates or drops below half-time status.
Management should implement policies and procedures to ensure that the University is properly conducting all required exit counseling and maintaining adequate documentation.
D-60

FederaL Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Federal Programs/Awards Affected:

Student Financial Aid Cluster Program U. S. Department of Education Federal Perkins Loan Program (CFDA 84.038) William D. Ford Federal Direct Loan Program (CFDA 84.268)

Finding Control Number: FA-550-00-04 -SPECIAL TESTS AND PROVISIONS Failure to Reconcile Program Reports Student Financial Aid Cluster Program
William D. Ford Federal Direct Loan Program (CFDA 84.268)

For the year under review, Federal Direct Loan program reports were not properly reconciled to the University's accounting records. Also, loan information contained in these reports was not accurately submitted to the Federal Direct Loan Servicer on a monthly basis. As a result, the Loan Origination Center's Direct Loan Account Statement, which the Loan Servicer produces from the information provided, could not be reconciled to the University's accounting records as required by Federal Regulations (34 CFR 685.102 (b), 685.301 and 685.303).

These deficiencies were the result of management's failure to properly report and reconcile Direct Loan activity in accordance with Federal Regulations. The University should implement adequate controls to ensure that the reconciliations and required reporting are completed on a timely basis and supported by the accounting records.

GEORGIA PERIMETER COLLEGE

Finding Control Number: FA-571-00-01 REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Federal Pell Grant Program (CFDA 84.063)

For the 1998-99 award year, the Student Payment Summary (SPS) report and the Statement of Account, which report Federal Pell Grant Program expenditures for the year were not reconciled to the accounting records. Federal regulations require the College to ensure that reported information is accurate and reconciled as necessary. This deficiency was a result of management's failure to adequately reconcile required reports to the accounting records.

The College should implement adequate controls to ensure that all reports submitted to the U. S. Department of Education are accurately completed and supported by the accounting records. Detailed reconciliations should be prepared for any variances and maintained as part of the supporting documentation.

GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION (*)

Finding Control Number: FA-918-00-01 REPORTING Report Data Submitted to ED was Unverifiable with the Loan's Holder of Record

Federal Program Information:

84.032 - Federal Family Education Loan Program

Criteria:

Data submitted to ED in the September 30 Form 1130 should be supported by the books

and records.

(*) THIS ORGANIZATIONAL UNIT WAS AUDIrED BY OTHER AUDITORS

D-61

Federal Awards Findings and Questioned Costs For the Ascal Year Ended June 30, 2000

FEDERAL AWARDS FINDINGS

Condition: Questioned Costs: Context:
Recommendation:

Information in "the Corporation's records was unverifiable with the loan's Holder of Record.
N/A
Out of 25 loans tested: 1 loan totaling $2,500 was unverifiable with the loan's Holder of Record.
Information reported in Section E of Form 1130 (Loan Portfolio Status) for the period ending September 30th contains information which was unverifiable. This may create a variance between the Corporation's records and those of the loan's Holder of Record.
We recommend that the Corporation reconcile their records with the lenders to resolve any differences. We also' recommend that the Corporation continue to implement procedures to notify holders of the loans to update the Corporation's records in a timely manner.

NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FA-8524-00-01 ACTIVITIES ALLOWED OR UNALLOWED Failure to Es.tablish Administration Agreement/Contracts Vocational Education - Basic Grants to States (CFDA 84.048)
The RESA did not have established written agreements or contracts in place to assure that the Vocational Education - Basic Grants to States (Perkins III) program was properly administered. Our review revealed the following:
1. There was no formal agreement between the Georgia Department of Education (GDOE) and the North Georgia Regional Educational Service Agency (RESA) to defme the responsibilities of the RESA as a fiscal agent of the Perkins III funds. For fiscal year 2000, GDOE provided the RESA with Perkins III funds, of which $225,325.00 was earmarked for State Administration purposes and $481,904.00 was earmarked for Leadership program purposes.
Our review noted that GDOE provided the State Administration and Leadership funds to the RESA through an amendment to an approved application with the RESA to perform an apprenticeship program that was supported with non-Federal funds. The RESA primarily served as a fiscal agent for GDOE in managing the State Administration and Leadership program activities,. which essentially involved the RESA establishing a fund account for each of these two program activities, requesting and receiving funds and making payments against the fund accounts based on GDOE approved invoices. As the RESA performed fiscal agent duties for the State Administration and Leadership programs, GDOE directed the program and carried out related responsibilities.
According to OMB Circular A-133 and provisions of P.L. 105-332, a written agreement should have been in place to describe the specific activities to be carried out by the RESA relative to vocational education programs funded with Perkins III funds. It was noted that neither the provisions of the GDOE approved apprenticeship agreement nor any separate written agreement between GDOE and the RESA provided for the specific duties and responsibilities of the RESA as a fiscal agent.
. Management should establish a formal agreement with the Georgia Department of Education to ensure that the RESA's responsibilities as fiscal agent are clearly defined.
2. The RESA made payments to two contractors totaling $82,222,50 for contracted services during fiscal year 2000. The RESA also paid the two contractors $4,013.94 for reimbursement of travel expenses. It
D-62

FederaL Awards Findings and Questioned Costs. For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
was noted that there was no written contractual agreement.s executed with the two contractors detailing the services to be performed, the amount of compensation to be paid or the period the services were to be performed. The RESA made monthly payments to the contractors based on GDOE approved contractor invoices. It was also noted that for the July 1, 1998 through June 30, 1999 period there was an executed contract between the RESA and each contractor on behalf of GDOE and payments made to each of the contractors in FY 2000 appeared to be based on rates of the July 1, 1998 through June 30, 1999 written agreements.
Procedures should be implemented to assure that fully executed current contracts are in place that clearly define the work/services to be performed, the amount and terms of compensation and other related provisions which would ensure that funds are paid for appropriate purposes.
Finding Control Number: FA-8524-00-02 ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00
The following direct costs charged to Vocational Education - Basic Grants to States (Perkins III) funds, either did not conform to OMB Circular A-87 requirements, or lacked sufficient documentation to support charges to the program:
1. During the year under review, the RESA purchased administrative computer equipment totaling $8,978.00 with Perkins III Administration funds. Even though this expenditure was approved by GDOE, the expenditure does not appear to be a proper charge to the program in accordance with cost allowability criteria defined in OMB Circular A-87.
Provisions of OMB Circular A-87 require' that a cost charged directly to a Federal award be directly related to the program. The RESA's primary purpose for acquiring the computer equipment was to upgrade its computer hardware to facilitate accounting software required by the Georgia Department of Education (GDOE). Such a cost was not totally and directly related to Perkins III activities and accordingly, should be allocated to Federal awards as an indirect cost. The RESA has an approved indirect cost plan that it uses to recover indirect costs associated with' the administration of Federal awards.
This deficiency occurred because management did not conform to cost principles contained in OMB Circular A-87. The RESA should implement procedures to ensure that expenditures funded with Perkins .III program funds meet the criteria ofOMB Circular A-87.
The Georgia Department of Education should review this matter and take appropriate action. to resolve and, as applicable, refund the Perkins III funds expended for this unallowable cost.
2. During fiscal year 2000, the RESA made payment of $9,200.00 to a vendor for preparation of instructional materials, delivery of administrative/vocational handbooks and audio/video material. The invoice was dated June 15, 2000. RESA andGDOE officials were unable to provide sufficient documentation that the materials were delivered by the vendor as indicated on the invoice. Without proper documentation, that services were rendered by the vendor, the payment to the vendor and charges to Perkins III funds are unallowable.
It should be noted that the vendor is an immediate family member of the RESA's bookkeeper who handles the Perkins III accounting records and payments made from those accounts. It was also disclosed that the address and the telephone number on the vendor's invoice was that of an accounting business which is operated by the RESA's bookkeeper and that same immediate family member. Provisions included in GDOE'spolicy manual; Financial Management For Georgia Local Units of .
D-63

Federal Awards Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
Administration, indicate that officials must avoid all situations in which their public actions may be affected by or come into conflict with their personal interests. Officials should also be wise to avoid situations that, even though legally permissible, place them into a conflict of interest situation.
Given the circumstances surrounding this transaction, RESA and GDOE officials should review this matter and take action to determine if the transaction was appropriate or if an irregularity has occurred. Refund of $9,200.00 to the GDOE may be required.
Finding Control Number: FA-8524-00-03 ALLOWABLE COSTS/COST PRINCIPLES Improper Indirect Cost Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $38,608.00
An examination of the Vocational Education - Basic Grants to States program (Perkins III) at North Georgia Regional Educational Service Agency (RESA) revealed excessive and unallowable costs being charged to the Federal program through an indirect cost rate.
In accordance with OMB Circular A-87, costs can be charged to the Perkins III funds as long as they are necessary and reasonable. For the RESA, indirect costs are claimed against Federal grants through a GDOE approved indirect cost rate. Such a rate is applied to those Federal funds where the RESA carries out program and administrative responsibilities of the grant. For FY 2000, GDOE approved an 8.06% indirect cost rate for the RESA.
Our review noted the RESA performed as a fiscal agent for administering State Administration and Leadership programs activities supported with Perkins III funds while the Georgia Department of Education (GDOE) carried out the program related responsibilities for these activities. As fiscal agent for these two program activities, the RESA was allowed to claim indirect costs at a negotiated 6.9% indirect cost rate through a GDOE approved budget. The RESA also served as fiscal agent for the Georgia Vocational Staff Development Consortium. The Consortium was also funded with Perkins III funds designated for Secondary School Programs. As a fiscal agent for this program activity, the RESA was allowed to claim indirect costs at a negotiated 7.45% indirect cost rate through a GDOE approved budget. The RESA claimed a total of $69,081.78 against these three program activities in fiscal year 2000. The GDOE approved rate of 8.06% would have been permitted if the RESA carried out all the program services and administrative functions for these three program activities instead of merely acting as a fiscal agent. Neither the RESA nor GDOE was able to provide documentation justifying that the two negotiated indirect cost rates would result in necessary and reasonable costs incurred by the RESA. Indirect costs charged by the RESA to the State Administration, Leadership and Consortium funds should have been based on a lower indirect cost rate commensurate with the costs incurred by the RESA in performing its duties as a fiscal agent.
Additionally, Section 124 of P.L. 105-332 specifically prohibits the use of Leadership funds for administrative purposes and accordingly the $30,768.00 of indirect cost charged by the RESA to the Leadership funds are unallowable. Furthermore, the RESA charged $23,840.00 of indirect costs to Perkins III Secondary School Program funds for serving as fiscal agent for the Consortium. Section 135(d) of P.L. 105-332 states that no more than 5% of Perkins III Secondary School Program funds may be used by an entity for administrative costs. Since the RESA claimed indirect costs based on the 7.45% indirect cost rate, which exceeded the maximum of 5%, the RESA overcharged $7,840.00 to these funds.
The RESA and GDOE should evaluate, determine and document an appropriate indirect cost rate for fiscal agent responsibilities performed by the RESA. Such a rate should result in a reasonable amount that would be charged to State Administration and Secondary School program activities supported with Perkins III funds. With regard to Leadership funds, the United States Department of Education should be consulted to determine if indirect costs or another acceptable means can be used to charge Leadership Program funds for costs associated with a fiscal agent. The Georgia Department of Education should review this matter and take appropriate steps to resolve the unallowable and/or excessive indirect costs charged to Perkins III program funds.
D-64

FederaL Awards Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
FEDERAL AWARDS FINDINGS
Finding Control Number: FA-8524-00-04 CASH MANAGEMENT Excessive Cash Balances Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $12,719.20 A review of cash management procedures and internal controls for the Vocational Education - Basic Grants to States program (CFDA 84.048) disclosed that cash draws utilizing DE Form 147,- "Quarterly Report of Expenditures and Estimated Requirement for Grant Funds", were made advance of immediate cash needs, resulting in the accumulation of excessive ending monthly cash balance for all twelve months during the year under review. In accordance with A-102 Common Rule paragraph 21(h)2(1), interest earned on advances by local government grantees is required to be submitted promptly to the Federal grantor agency. Up to $100.00 per year may be kept for administrative expenses. The Vocational Education - Basic Grants to States program earned interest amounting to $12,819.20 of which $12,719.20 should have belm remitted to the Georgia Department of Education. The interest earned on these program . funds was recorded in the RESA's General Fund. Management should become familiar with the Federal regulations for the Vocational Education program in order to develop adequate control procedures to ensure that the cash drawdowns of the Vocational Education Program are made based on immediate cash needs. The excessive interest earnings totaling $12,719.20 should be refunded to the Georgia Department of Education.
D-65

SECTIONE ScHEDULE OF EXPENDITURES OF
FEDERAL AVVAR.I:S

ScHEDULE OF EXPENDITURES OF FEDERAL Avv~

Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30,2000

Agriculture, U. S. Depart ment of
Agricultural Research - Basic and Applied Research Through: University of Georgia Research Foundation
Plant and Animal Disease. Pest Control, and Animal Care Direct
Wildlife Services Through: University of Georgia Research Foundation
Forestry Incentives Program Direct
Cons~rvation Reserve Program Direct
Market News Direct
Inspection Grading and Standardization Direct
Market Protection and Promotion Direct
Grants for Agricultural Research, Special Research Grants Direct Through: University of Georgin Research foundation

CFDA NUMBER
10.001 10.025 10.028 10.064 10.069 10.153 10.162 10.163 10.200

Cooperative Forestry Research Direct
Payments to Agricultural Experiment Stations Under the Hatch Act
Direct
Grants for Agricultural Research Competitive Research Grants
Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

10.202 10.203 10.206

Food and Agricultural Sciences National Needs Graduate Fellowship Grants
Direct
1890 Institution Capacity Building Grants Direct
Higher Education Challenge Grants Direct Through: E I Dupont Through: Texas Tech University

10.210 10.216 10.217

Buildings and Facilities Program Direct
Biotechnology Risk Assessment Research Through; University of Georgia Research Foundation
Funds for Rural America - Research, Education, and Extension Activities
Direct Through: North Carolina State University

10.218 10.219 10.224

Rural Self-Help Housing Technical Assistance Direct

10.420

PASS-THROUGH ENTIn' IDENTIFYING
NUMBER 5866027018
Various
Various
Various
98-38411-6727 1300/4973-01 95392102663
Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

21,000 (R) 544,149 (R) 74,506 (R) 139,500 301,289 31,112 2,469,473
3,021 1,013 (R) 2,932,804 (R) 2,933,817 714,181 (R)
4,264,555 (R)
24,374 (R) 1,839,070 (R) 1,863,444
343 (R) 2,443,743
41,934 (R) 24,808 (R)
528 (R) 67,270 36,367 (R) 109,866 (R)
70,723 (R) 845 (R)
71,568 102,903

E-5

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

or Agriculture, U. S. Department
Cooperative Agreements with States for lntraslate Meat and Poultry Inspection Direct
Cooperative Extension Service Direct Through: North Carolina State University Through: University of Georgia Research Foundation Through: University of Nebraska-Lincoln

CFDA NUMBER
10.475 10.500

Food Distribution Direci
Food Stamps (FSC) Direct
School Breakfast Program (CNC) Direct
National School Lunch Program (CNC) Direct
Special Milk Program for Children (CNC) Direct
Special Supplemental Food Program for Women, Infants, and Children Direci
Child and Adult Care Food Program Direct
Summer Food Service Prog;amJor Children (CN~) Direct
State Administrative Expenses for Child Nutrition Direct
State Administrative Matching Grants for Food Stamp Program (FSC) Direct
Nutrition Education and Training Program Direct
Commodity Supplemental Food Program Through: University of Georgia Research Foundation
Emergency Food Assistance Program (Administrative Costs) (HAC)
Direct
Emergency Food Assistance Program (Food Commodities) (EFAC) Direct
Nutrition Program for the Elderly (Commodities) Direct
WlC Farmers' Market Nutrition Program (FMNP) Direct
Forestry Research Direct Through; University of Georgja Research Foundation

10.550 10.551 10.553 10.555 10.556 10.557
10.558 10.559 10.560 10.561
10.564 10.565 10.568
10.569
10.570 10.572 10.652

PASS-THROUGH ENTITY IDENTIFYING
NUMBER 99-0263-19 97-0496-29 LM/63-121-16814
43-3198-1-0886
Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

3,284,886 11,728,.550 (R)
12,828 (R) 211 (R)
1,200 (R) 11,742,789
49,868
58,948,266 197,852,940
26,616
147,004,459 (Z) 57,902,053 10,174,521 (R) 4,090,827
62,953,022 28,622 25 (R)
916,701
2,866,641 94,310 101,500 (R)
_558, 176 (R) 659,676

27,261,079 (4) 493,263,910
3,909,805

E-6

~ia.
Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

Agriculture, U. S. Department of
Cooperative Forestry Assistance Direct Through: University of Georgia Research Foundation

eFDA NUMBER
10.664

National Forest - Dependent Rural Communities Direct
Technical Assistance and Training Grants Direct
Rura! Development Grants Direct
Rural Cooperative Development Grants Direct
Resource Conservation and Development Direct
Agricultural Statistics Reports Direct
Scientific Cooperation Program Direct Through: University of Georgia Research Foundation

10.670 10.761 10.769 10.771 10.901 10.950 10.961

International Training. Foreign Participant Direct
Other Federal Assistance Direct Through: Auburn University Through: Nonh Carolina State University Through: Southern U. S. Trade Association Through: Texas A&M University Through: University of Alaska Through: University of Florida Through: University of Georgia Research Foundation Through: University of Maryland Through: Various Other States

10.962 10.XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
Various
Various
97-046-03 5599-603 570053 UAF95-oo56-MOD4 lA4790 Various Z554204 Various

AGENCY TOTAL
Commerce, U. S. Department of
Trade Adjustment Assistance Through: Georgia Tech Research Corporation
Geodetic Surveys and Services (Geodesy and Applications of the National Geodetic Reference System) Through: University of Georgia Research Foundation
lnteJjurisdictional Fisheries Act of 1986 Direct
Sen Grant Support Direct Through: University of Georgia Research Foundation Through: University of Puerto Rico Grant College Program
Coastal Zone Management Administration Awards Direct

11.313 11.400 11.407 11.417
11.419

GMRC-97-3 II 0 Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,178,204 (R) 164.986 (R)
2,343,190
4,321
167,978
10,702
123
17,488
42,485
18,923 12,407 (R) 31,330
2,902 (R)
18,206,107 (R) 3,212 7,169 (R) 7,674 (R)
33,OJ7 (R) 18,624 (R) 3,407 (R) 2,013,148 (R)
102 (R) 26,318 (R) 20,318,798
597,727,596

524,434,794

906,361 (R)
1,102 (R)
312,157
33,421 (R) 1,135,366 (R)
1,777 1,170,564
1,173,917

E-7

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 3D, 2000

Commerce. U. S. Department of
Coastal Zone rvlanagement Estuarine Research Reserves Direct Through: University of Georgia Research Foundation

CFDA NUMBER
11.420

Undersea Research Through: University of Georgia Research Foundation
Marine Fisheries Initiative Direct
Cooperative Fishery Statistics Direct
Marine Research - Regional Programs Direct Through: University of North Carolina at Wilmin!:.'1on

11.430 11.433 11.434 11.464

Atlantic Coastal Fisheries Cooperative ~vlanagemenl Act Direct
Coastal Ocean Program Through: University of Georgia Research Foundation
Telecommunications and lnformation Infrastructure Assistance Program Direct
Measurement and Engineering Research and Standards Through: Georgia Tech Research Corporation
Advanced Technology Program Direct Through: University of Georgia Research Foundation

11.474 11.478 11.552 11.609 11.612

Other Federal Assistance Direci Through: Georgia Tech Research Corporation Through: Universil)' of Georgia Research Foundation

I I XXX

AGENCY TUTAI.
Defense, U. S. Department of
Navigation Projecls DireCT
Collaborative Research and Development Direct
Basic and Applied Scienlific Research Direct Through: Georgia Tech Research Corporalion Through' .University of Georgia Research Foundalion
National Guard Mililary Operations and Maintenance (O&M) Projects
Direct
M.iJitary Medical Research and Development Through: University of Georgia Research Foundation

12.107 12.114 12.300
12.401 12.420

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

NA870R0284
NA960POO05 95-01043 Various

189,000 15,268 (R)
204,268
-I (R)
30,973
45,550
62,527 (R) 22,803 (R) 8>,330
31,940
47,790 (R)
94
44,233 (R)
76,176 55,082 (R) 131,258
352,659 (R) 4,691,454 (R)
133,748 (R) 5,177,861
9,363,397

Various
E-8

217,432

64.785 (R)

521,112 (R) 22,863,233 (R)
211,277 (R)

$

23,595,622

16,501,615 76,754 (R)

\
\\ ,
\

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

Defense, U. S. Department of
Community Economic Adjustment Direct
Basic. Applied. and Advanced Research in Science and Engineering
Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

CFDA NUMBER

Air Force Defense Research Sciences Program Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

Mathematical Sciences Grants Program Through: Georgia Tech Research Corporation ~rough: University of Georgia Research Foundation

Research and Technology Development Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

Other Federal Assistance Direct Through: Academy of Applied Science Through: Georgia Tech Research Corporation Through: Gulf South Research Corporation Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

PASSTHROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

AGENCY TOTAL
Housing and Urban Development. U. S. Department or
Housing Counseling Assistance Program Direct
Manufactured Home Construction and Safety Standards Direct Through: National Conference of States on Building Codes Through: Various Mobile Home Manufacturers
Community Development Block Grants/Small Cities Program (ESCq
Direct Through: City ofWamer Robins
Community Development Block Grants/State's Program Direct
Emergency Shelter Grants Program Direct
Supportive Housing Program Direct
HistoricaJly Black Colleges and Universities Program Direct

14.169 14.171
14.219
14.228 14.231 14.235 14.237
E-9

273,334
492,829 10,021
1,022,064 1,524,914
3,306,625 24,375
3,331,000 39,151,420
1,886,238
96,476
94,862

NONMONETARY EXPENDITURES

.-------------------------------~~--~------- - - - - - - -

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

Hou5ing and Urban Development, U. S. Department or
HOME lnvestment Partnerships Program Direct
Housing Opportunities for Persons v.ith AIDS Direct
Fair Housing Assistance Program State and Local Direct
Community Development Work-Study Program Direct
Section 8 Rental Voucher Program (SSTBC) Direct
Section 8 Rental Certific.te Program (S8TBC) Direct
Lead-Based Paint Hazard Control in Privately-Owned Housing
Direct
Other Federal Assistance Direct Through: City of Albany Through; Georgia Tech Research Corporation

CFDA NUMBER
14.239 14.241 14.401 14.512 14.855 14.857 14.900
14.XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
B-96-MC-13-0001

AGENCY TOTAL
Interior, U. S. Department ofthe
Aid To Tribal Governments Through: Georgi. Tech Research Corpor.tion
Sport Fish Restor.tion (!'WC) Direct
Environmental Contaminants Direct
Wildlife Restor.tion (!'WC) Direct
Endangered Species Conservation Direct
Cooperative Endangered Species Conservation Fund Through: State ofTennessee
Wildlife Conservation and Appreciation Direct
Administrative Grants for Federal Aid In Sport Fish and Wildlife Restoration
Direct Through: University of Georgia Research Foundation
Assistance to State Water Resources Research Institutes Through: University of Georgia Research Foundation
u.s. Geological Survey - Research and Data Acquisition
Direct Through: University of Georgia Research Foundation

15.020 15.605 15.607 15.611 15.612 15.615 15.617 15.618
15.805 15.808

GU-96-0231 0-00
1434HQ97RU0155II Various Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

24,192,412 1,099,205 568,624 28,350 6,287,254
56,805,393
471,227 .532,837 (R)
52,594 35,064 (R) 620,495 136,431,204

8,510 (R) 4,255,048
1,307 (R) 3,944,776
247,881 4,579 (R) 7,755
7,490 (R) 11,922 (R) 19,412 34,912 (R) 131,808 8,584 (R) 140,392

E - 10

Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2000

Interior. U. S. Department of the
National Spatial Data Infrastructure C~perative Agreements Program Direct
Historic Preservation Fund Grants-In-Aid Direct Through: University of Georgia Research Foundation

eFDA
NUMBER
15.809
15.904

Outdoor Recreation Acquisition, Development and Planning Direct
National Center for Preservation Technology and Training Through: UmversityofVirginia
Other Federal Assistance Direct Through', Georgia Tech Research Corporation Through: University of Georgia Research Foundation

15.916 15.923 15.XXX

PAss-rnROUGH ENTITY IDENTIFYING
NUMBER
CA5890-5-9020
Various

AGENCY TOTAL
Justice, U. S. Department of
Americans With Disabilities Act Technical Assistance Program
National Trust for Historic Preservation
Juvenile Accountability Incentive Block Grants Direct
Juvenile Justice and Delinquency Prevention Allocation to States
Direct
National Institute for Juvenile Justice and Delinquency Prevention
Direct
Victims of Child Abuse Direct
Title V - Delinquency Prevention Program Direct
Pan E Slate Challenge Activities Direct
Stale Justice Statistics Program ft?r Statistical Analysis Centers Direct
Justice Research, Development, and Evaluation Project Grants Direct
Crime Victim Assistance Direct
Crime Victim Compensation Direct
Byrne formula Grant Program Direct
Edward Byrne Memorial State and local Law Enforcement Assistance Discretionary Grants Program
Direct

16.108 16.523 16.540 16.542 16.547 16.548 16.549 16.550 16.560 16.575 16.576 16.579 16.580
E - II

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10,935
1,192,567 (R) 71,889 (R)
1,264,456
34,058
7,954 (R)
536,977 (R) 640,144 (R) 827,596 (R) 2,004,717
11,986,692

-86 (R) 7,332,385 1,779,206
260,890 287,990 247,824 264,707 68,000 347,601 10,289,717 641,980 15,687,062 39,438

Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2000

Justice, U. S. Department of
Drug Court Discretionary Grant Program Direct
Violent Offender Incarceration and Truth in Sentencing Incentive Grants Direct
Violence Against Women Formula Grants Direct
Rural Domestic Violence and Child Victimization Enforcement Granl Program
Direct
Local Law Enforcement Block Grants Program Direct
Residential Substance Abuse Treatment for State Prisoners Direct
Executive Office for Weed and Seed Direct
Local Firefighling and Emergency Services Training Direct
Corrections Training and Staff Development Through: Federal Correctional Institution
Bulletproof Vest Partnership Program Direct
Public Safety Partnership and Community Policing Grants Direct
Troops to COPS Direct
Enforcing Underage Drinking La\\>S Program Direct
Other Federal Assistance Direct Through: Children & Youth Coordinating Council Through: Community Research Associates, Incorporated Through" National White Collar Crime Commission

CFDA NUMBER
16.585 16.586
16.588 16.589
16.592 16.593 16.595 16.599 16.601 16.607 16.710 16.711 16.727 16.XXX

AGENCY TOTAL
Labor, U. S. Department of
Labor Force Statistics Direct
Compensation and Working Conditions Data Direct
Employment Service (ESC) Direct
Unemployment lnsurance Direct
Senior Community Service Employment Program Direct
Trade Adjustment Assistance - Workers Direct

17.002 17.005 17.207 17.225 17.235 17.245

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

$
9811698050014 97LFCXKOO 1

13,856
984,494 5,518,687
42,620 964,289 34U42
29,800 5,088
104,312 103,207 281,104 24,971 680,854 922,613
17,822 (R) 136,262
4,477 1,081,174 47,423,512

1,587,150 58,600
26,371,585 336,347,635 (I)
1,976,111 14,647,728

E - 12

ScheduLe of Expenditures of FederaL Awards For the AscaL Year Ended June 30, 2000

or Labor, U. S. Depar(m~nt

Employment and Training Assistance Dislocated Workers (JC)
Direct

Employment Services and Job Training - Pilot and Demonstration Programs
Direct

Job Training Partnership Act (JC)

Direct

.

Through; Appalachian Regional Commission

Through: Atlanta Regional Commission

Through' Atlanta Workforce Development Agency

Through: C.S.R.A. Employment

and Training Consortium

Through: City of Columbus Consolidated Gcvemment

Through: Coosa Valley Regional Development Center

Through: DeKalb Private Industry Council Through; East Central Georgia Employment and Training Consortium Through: lower Chattahoochee Private Industry Council Through: Middle Flint Regional Development Center Through: Middle Georgia Consortium. Incorporated Through: Northeast Georgi3
Regional Development Center Through: RichmondlBurke Job Training Authority Through; South Georgia Regional Development Center Through; Southeast Georgia
Regional Development Center Through: Southwest Georgia
Regional Development Center Through: West Central Georgia Private Industry Council

eFDA
NUMBER
17.246 17.249 17.250

Welfare-to-Work Grants to States and Localities

Direct

'

Through: East Central Georgia Consortium

Through: Northeast Georgia

Regional Development Center

17.253

Workforce Investment Act Direct
One-Stop Career Center Initiative Through: Southeast Georgia Regional Development Center
Occupational Safety and Health - Susan Harwood Training Grants
Direct
Consultation Agreements Direct
Mine Health and Safety Grants Direct
Disabled Veterans' Outreach Program (DVOP) (ESC) Direct
Local Veterans' Employment Representative Program (ESq Direct
Other Federal Assistance Direcl
A(;NCY TOTAL

17.255 17.257
17.502
17.504 17.600 17.801 17.804 I7. XXX

PASS-T1lROUGII ENTITY IDENTIFYING
NUMBER
01-97-14-993 01-9714-714
99Ven-01

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

16,910,655
145,783
37,450,259 (R) 6,764
209,791 96,669 58,985
2q8,42 I 569,465 251,808 149,163 240,648 121,361 80,127 1,418,741 307,399 114,714 336,614 779,026 653,750 286,725
16,571 43,357,001
12,253,619' 199,348 111,222
12,564,189
2,287
15,356
14,591
53,335.
201,724
1,792,881
1,372,373
988,268 (R)
458,407,252

E - 13

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

State, U. S. Department of
Other Federal Assistance Direct
AGENCY TOTAL
Transportation, U. S. Department or
Boating Safety Financial Assistance Direct
Highway Planning and Construction (HPCC)
Direct
Highway Training and Education Direct
National Motor Carrier Safety Direct
Recreational Trails Program Direct
Railroad Safety Direct
Local Rail Freight Assistance Direct
Federal Transit - Capital Improvement Grants (FTC) Direct
Federal Transit - Metropolitan Planning Grants Direct
Federal Transit - Formula Grants (FTC) Direct
Formula Grants for Other Than Urbanized Areas Direct
Capital Assistance Program for Elderly Persons and Persons With Disabilities Direct
Slale and Community Highway Safety (HSq Direct
Pipeline Safety Direct
Interagency Hazardous Materials Public Sector Training and Planning Grants Direct
Other Federal Assistance Direct Through: Atlanta Regional Commission Through: Georgia Tech'Research Corporation Through: Office of Small and Disadvantaged Business Utilization Through: South Carolina State University Through: University of Georgia Research Fooodation

CFDA NUMBER
19.XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,267,641 (R) 2,267,641

AGENCY TOTAL

E - 14

CkJrg1B.
Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2000

Treasury, U. S. Department orlhe
Other Federal Assistance Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

CFDA NUMBER
21.XXX

PASS-TIlROUGH ENTITV IDENTIFYING
NUMBER
FTP0991758

AGENCY TOTAL
Postal Service, U. S. Other Federal Assistance Direct
AGENCY TOTAL
Appalachian Regional Commi5Sion Appalachian Regional Development Direct Appalachian Area Development Direct Appalachian State Research, Technical Assistance, and Demonstration Projects Direct
AGENCY TOTAL
Equal Employment Opportunity Commission Employment Discrimination - Tide VII of the Civil Rights Act of 1964 Direct
AGENCY TOTAL
General Services Administration Donation of Federal Surplus Personal Property Direct
AGENCY TOTAL
National AeronautiC! and Space Administration Aerospace Education Services Program Direct Through: University of Alabama Through: University of Georgia Research Foundabon
Technology Transfer Direct Through: Georgia Tech Research Corporation

22.XXX
23.001 23.002 23.011
30.001
39.003
43.001 43.002

98VSUOOI GC04500Z1852

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

32,895 72 (R)
15,866 (R) 48,833
48,833

10,700 10,700

93,661 93,001
136,592 323,254

1,279,282 1,279,282

109,752 109,752
83,068 (R) 3,538 (R) 5,000 (R) 91,606
2 (R) -4,024 (R) -4,022

5,377,752 5,377,752

E - 15

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

National Aeronautics and Space Administration
Other Federal Assistance Direct Through: Georgia Tech Research Corporation Through: LcVlI;s Research Cenler Through: Space Telescope Science Institute Through: United Negro College Fund Through: Universities Space Research Associ~tion Through: University of Georgia Research Foundation

CFDA NUMBER
43.XXX

PASSTHROUGH ENTITY IDENTIFYING
NUMBER
GO-07825.0 1-9M Various

AfiEN(Y TOTAl.
National Foundation on the Arts and the Jlumaniries
Promotion of the Arts - Grants to Organizations and Individuals
Direct
Promotion of the Arts - Partnership Agreements Direct Through: DeKalb Council for the Arts
Promotion of the Humanities - Federal/State Partnership Direct Through: Georgia Humanities Council
Through: University of Georgia Research Foundation
Promotion of the Humanities Division of Preservation and Access
Through: University of Georgia Research Foundation
Promotion of the Humanities Fellowships and Stipend~ Direcl Through: Georgia Tech Research Corporation Through University of Georgia Research Foundation
Promotion of the Humanities - Education Development and Demonstration Direct Through: University of Califomi a
State Library Program Direct
Institute ofl\.'luseum and Library ServicesNational Leadership Grants Direct
Other Federal Assistance Direct Through' <;Jeorgia Council for the Arts Through: Georgia Humanities Council Through Georgia Tech Research Corporation Through: National Trust for Historic Preser..'ation

45.024 45.025 45.129
45.149 45.160
45.162
45.310 45.312 45.XXX

GHC-16-565 GHC-98-048G
98-095G PA-23 19598 PA-3538399
98-112G

AGENCY TOTAl.

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

289,387 (R) 8,353,374 (R)
306,924 (R) 8,940
59,612 14,024 (R) 372,037 , (R)
9,404,298
9,491,882

30,590
368,647 2,000
370,647
5,133 21,749
1,565 -12 (R)
5,000 (R) 33,435
15,866 (R)
10,428 3,750 30,000 (R) 44,178
86,351 30,431 116,782
2,276,027
52,585 (R)
43,920 (R) 110,524 (R)
781 (R) 72,332 (R) -7,912 (R) 219,645
3,159,755

E - 16

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

National Science Foundation
Engineering Grants Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation
Mathematical and Physical Sciences Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research FowlClation
Geosciences Direct Through: Georgia Tech Research CorpOration Through: University of Georgia Research FOlU1dation
Computer and Infonnation Science and Engineering Direct Through: Georgia Tech Research Corporation
Biological Sciences Direct Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute Through: University ofGeorgia Research Foundation
Social, Behavioral, and Economic Sciences Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation
Education and Human Resources Direct Through: Education Development Center, Incorporated Through: Georgia Tech Research Corporation
Polar Programs Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation
Other Federal Assistance Direct Through: Ronda Agricultural and Mechanical University Through: Georgia Tech Research Corporation Through: Swarthmore College Through: University of Georgia Research Foundation

CFDA NUMBER
47.041 47.049 47.050 47.070 47.074
47.075 47.076 47.078 47.XXX

PASS-TIfROUGH ENTITY IDENTIFYING
NUMBER
97-0304-01
CI6459
Various
Various
97-98 DUE-9850299
383761 C9549 REC96 I8223 Various

AGENCY TOTAL

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

14,697 (R) 9,444,973 (R)
19,468 (R)
9,479,138
1,065,993 (R) 3,268.189 (R)
8.101 (R) 4,342,283
143,668 (R) 1,237,087 (R)
12,998 (R)
1,393,753
407,902 (R) 3,549,699 (R)
3,957,601
463,798 (R) 106,973 (R) 86,743 (R) 297,330 (R)
954,844
173,709 (R) 420,TI4 (R)
3,897 (R) 598,380
510,737 (R) 11,793
1,037,460 (R) 1,559,990
67,022 (R) 2,871 (R)
69,893
3,364,931 (R) 63,384
2,675,510 (R) 10,702 (R)
9,861,342 (R) 15,975,869
38,331,751

E - 17

ScheduLe of Expenditures of FederaL Awards For the fiscaL Year Ended June 30, 2000

Small BU5ines5 Administration Small Business Development Center Direct Other Federal Assistance Direct
AGENCY rOTAL
Smithsonian Institllte Other Federal Assistance Through: University of Georgia Research Foundation
A GENCY TOTAL
Tennessee Valle)' Authority Other Federal Assistance Direct
AGENCY TOTAL
Veterans Affairs, U. S. Department of Veterans State Domiciliary Care Direct Veterans State Nursing Home Care Direct Veterans State Hospital Care Through: University of Georgia Research Foundation Veterans Educational Assistance Direci Post-Vietnam Era Veterans' Educational Assistance Direct Other Federal Assistance Direct Through: Georgia Tech Research Corporation

erDA NUMBER
59.037 59. XXX
60.XXX
62. XXX
64.014 64.015 64.016 64.111 64.120 64.XXX

AGENCY TOTAL
Environmental Proteclion Agency
State Indoor Radon Grants Direct
Construction Grants for Wastewater Treatment Works Direct
State Underground Water Source Protection Direct
Construction Management Assistance Direct

66.032 66.418 66.433 66.438

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,378,757 (R) 59,030 (R)
2,437,787

T993PC00133000

_ _ _ _ _...:1~3:...9 (R) 139

7,893 7,893

RSCHAGREE

714,763 8,864,547
9,903 (R) 371,734
227 1,103,540 (R)
51,070 (R) 1,154,610 11,115,784

62.293 4,380 92,719
330,127

E - 18

Schedule of Expenditures of Federal Awards For the FiscaL Year Ended June 30, 2000

Environmental Protection Agency
Water Quality Management Planning Direct Through: Florida Department of Environmental Protection Through: Florida Fish & Wildlife Conservation Commission

CFDA NUMBER
66.454

Capitalization Grants for State Revolving Funds Direct
Nonpoint Source Implementation Grants Direct
Wetlands Protection Development Grants Direct
National Pollutant Discharge Elimination System Related State Program Grants
Direct Through: University of Georgia Research Foundation

66.458 66.460 66.461 66.463

Capitalization Grants for Drinking Water State Revolving F~d Direct
~dship Grants Program for Rural Communities Direct
Environmental Protection - Consolidated Research Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

66.468 66.470 66.500

Performance Partnership Grant Direct
Surveys, Studies, Investigations and Special Purpose Grants Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

66.605 66.606

Training and Fellowships for the Environmental Protection Agency Through: Georgia Tech Research Corporation
One SlOP Reporting Direct
Consolidated Pesticide Enforcement Cooperative Agreements Direct
rv TSCA Title State Lead Grants - Certification of Lead-
Based Paint Professionals Direct
Pollution Prevention Grants Program Direct
Superfund State Site Specific Cooperative Agreements Direct
leaking Underground Storage Tank Trust Fund Program Direct

66.607
66.608 66.700 66.707
66.708 66,802 66.805

PASS-THROUGIl ENTm' IDENTIFYING
NUMBER MR234 99030
CP984533-98-D
Various
827759-01

MONETARY EXPENOITURES

NONMONETARY EXPENDITURES

4,535,206 34.840 (R) 60,945 (R)
4,630,991
32,922,585 (3)
76,855 (R)
229,832
139,914 41,033 (R) 180,947
9,700,923 (3)
25,875
67,477 (R) 1,772,301 (R)
799,411 (R) 2,639,189
8,670,424
655,729 20,494 (R) 9,721 (R)
685,944
80,027 (R)
128,030
723,425
297:154 114,153
1,126,199
1,375,479

243,882,042 (3) 12,128,493 (3)

E - 1'9

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

Environmental Proteclion Agency
Solid Waste Management Assistance Direct Through: University of Georgia Research Foundation

eFDA NUMBER
66.808

Environmental Education Grants Direct
Other Federal Assistance Direct Through: Geo-rgia Tech Research Corporation Through: University of Georgia Research Foundation Through: WWETCO, LLC.

66.951 66. XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
X 198444-98-0
Various CX825769-01-0

AGENCY TOTAL
Energy, U. S. Department of
State Energy Program Direct
Weatherization Assistance for Low-Income Persons Direct
Office of Science Financial Assistance Program Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation
Conservation Research and Development Through: Georgia Tech Research Corporation
Renewable Energy Research and Development Through: (oosonium Plant Biotech Research Through: University of Georgia Research Foundalion
Nuclear Energy, Reactor Systems, Development, and Tcehnolo)'
Direct
Other Federal Assistance Direct Through: Georgia Tech Research Corporation Through' Medical College of Georgia Research Institute Through: Nationallnstitute for Petroleum and Energy Research Through: Southern States Energy Board Through: University of Georgia Research Foundation Through: Wackenhut Services. Incorporated

81.041 81.042 81.049
81.086 81.087
81.095 8 I.XXX

Various
Various Various
G4P51609 Various

AGENCY TOTAl.

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

540 22,219 (R) 22,759
1,086
138,611 (R) 2,306,991 (R)
531,962 (R) 29,489 (R)
3,007,053
67,128,449

256,010,535

740,392
2,049,294
145,717 (R) 1,845,058 (R) 1,950,151 (R) 3,940,926
11,976 (R)
20,716 (R) 91,154 (R) 111,870
523,085
1,094,011 (R) 3,672,889 (R)
261,561 (R) 1,775
112,198 12,618,723 (R)
101,307 (R) 17,862,464
25,240,007

E - 20

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

United States Information Agency
College and University Affiliations Program Direct
Other Federal Assistance Direct
AGENCY TOTAL
Federal Emergency Management Agency
Hazardous Materials Training Program for Implementation of the Superfund Amendment and Reauthorization Act (SARA) of 1986
Direct
Community Assistance Program - State Support Services Element (CAP-SSSE)
Direct
State Disaster Preparedness Grants Direct
Radiological Instrumentation Direct
Hazard Mitigation Assistance Direct
Emergency Management - State and Local Assistance Direct
Mitigation Assistance Direct
Flood Mitigation Assistance Direct
Crisis Counseling Direct
Di~er Unemplo)11lent Assistance Direct
Individual and Family Grants Direct
Public Assistance Grants Direct
Disaster Housing Program Direct
Hazard Mitigation Grant Direct
National Dam Safety Program Direct
Project Impact - Building Disaster Resistant Communities Direct
Emergency Management Performance Grants Direct
Other Federal Assistance Through: Georgia Tech Research Corporation ThrOugh: University of Georgia Research Foundation

CFDA NUMBER
82.011 82.XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

20,743 289,309 (R) 310,052

AGENCY TOTAL

Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2000

Education, U. S. Department of
Adult Education State Grant Program Direct
Federal Supplemental Educational Opponunity Grants (SFA) Direct
Title I Grants to Local Educational Agencies Direct
Migrant Education - Basic State Grant Program Direct Through: Southern Pine Migrant Educational Agency

eFDA
NUMBER
84.002 84.007 84.010 84011

Title I Program for Neglected and Delinquent Children Direct
Undergraduate International Studies and Foreign Language Programs
Direct Through: Georgia Tech Research Corporation

84.013 84.016

International: Overseas ~ Group Projects Abroad Direct
International: Overseas - Doctoral Dissertation Through: University of Georgia Research Foundation
Special Education - Innovation an~.Development Direct
Early Education for Children ~th Disabilities Through: University of Kansas
Services for Children with Deaf~Blindness Direct
Special Education ,Grants to States (SEC) Direct
Special Education ~ Personnel Development and Parent Training
Direct
Higher Education - Institutional Aid Direct
Fed~ral Family Education Loans (SFA) Direct
Federal Work-Study Program (SFA) Direct
Federal Perkins loan Program Federal Capital Contributions (SFA)
Direct
TRIO - Student Support Services (TRIO) Direct
TRIO - Talent Search (TRIO) Direct
TRIO - Upward Bound (TRIO) Direct
Vocational Education ~ Basic Grants to States Direct
Federal Pel! Grant Program (SFA) Direct

84.021 84.022 84.023 84.024 84.025 84.027 84.029
84.031 84.032 84.033 84.038
84.042 84.044 84.047 84.048 84.063

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
P022Aoo0038 H024D7oo28

E - 22

MONETARY EXPENDITURES

NONMONETARY EXPENDITuRES

8,909,301 6,922,347 209,623,468 5,374,300
23,095 5,397,395 2,033,706
11,135 -856 (R)
10,279 93,920
1,043 (R) 127,345 (R) 34,891 (R)
-7,002 106,511,188
68,824 (R) 4,312,035 (R) 30,531,592 (3) 7,867,019 (R)
548,460 (3) 1,612,431 (R) 1,411,844 (R) 2,682,101 (R) 29,178,381 118,492,388

1,528,483,000 (3) 38,846,251 (3).

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

Education. U. S. Department of
TRIO - Educational Opportuni!)' Centers (TRIO) Direct
Special Education - Postsecondary Education Programs for Persons with Disabilities Through: University of Tennessee
Special Education - Program for Severely Disabled Children Direct
Fund for the Improvement of Postsecondary Education Direct Through: Harold Washington College

CFDA NUMBER
84.066 84.078
84.086 84.116

Minority Science and Engineering Improvement Direct
Rehabilitation Services 4 Vocational Rehabilitation Grants
toS~tes
Direct Through: Georgia Tech Research Corporation

84.120 84.126

Rehabilitation 1.oog-Term Training Direct
National Institute on Disability and Rehabilitation Research Through: University of Georgia Research Foundation
Migrant Education College Assistance Migrant Program Direct
Business and International Education Direct
Training Interpreters for Individuals who are Deaf and Individuals \1r'ho are Deaf-Blind Through: University of Tennessee
Rehabilitation Services - Client Assistance Program Direct
Immigrant Education Direct
Eisenhower Mathematics and Science Education State Grants
Through: Muscogee County Board of Education Columbus State University
Independent Living.- State Grants Direct
Special Education - Preschool Grants (SEC) Direcl
Rehabilitation Services Independent Living Services for Older Individuals Who are Blind
Direct
Special Education Grants for Infants and Families with Disabilities Direct
Byrd Honors Scholarships Direct
Safe and Drug-Free Schools and Communities - State Grants Direct

84.129 84.133 84.149 84.153 84.160
84.161 84.162 84.164

PASS-THROUGH ENTin' IDENTIFYING
NUMBER 8666-02-03
HI33G980023-99 7835-03-03

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

872,093 (R)
28,337 61,737 84,683 (R) 11,669 96,352 77,763
63,504,059 311,854 (R)
63,815,913 142,632 (R) 73,469 (R) 173,721 49,991
8,272 32.594 2,272,880

E - 23

Schedule of Expenditures of Federal Awards For the fiscaL Year Ended June 3D, 2000

Education. U. S. Department of
Supported Emplo)ment Services for Individuals with Severe Disabilities Direct
Adult Education - National Leadership Activities Direct
Bilingual Education Support Services Direct
Education for Homeless Children and Youth Direct
Graduate Assistance in Areas of National Need Direci Through: Georgia Tech Research Corporation

eFDA NUMBER
84.187
84.191 84.194 84.196 84.200

Even Slart - State Educational Agencies Direct
Fund for the Improvement of Education Direct
Capilal Expenses Direct
McNair Post-Baccalaureate Achievement (TRIO) Direci
Centers for International Business Education Through: Georgia Tech Research Corporation
Assistive Technology Direct
Income Contingent Loan Program Direct
Special Projects and Demonstrations for Providing Vocational Rehabilitation Services to lndividuals "1th Severe Disabilities Direct
Tech-Prep Education Direct
Literacy Programs for Prisoners Direct
Rehabilitation Training - Continuing Education Direct
Rehabilitation Training State Vocational Rehabilitation Unit In-Service Training Direct
Federal Direct Loan (SFA) Direct
Goals 2000 - State and Local Education SYSlemic Improvement Grants Direct
Eisenhower Professional Development State Grants Direct Through: Georgia Tech Research Corporation

84.213 84.215 84.216 84.217 84.220 84.224 84.226 84.235
84.243 84.255 84.264 84.265
84.268 84.276
84.281

Charter Schools Direct

84.282

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

E - 24

Gleorgia.
Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30. 2000

Education, U. S. Department of
Innovative Education Program Strategies Direct
National Institute on Student Achievement. Curriculum, and Assessment
Through: University of Georgia Research Foundation
Nationa! Institute on the Education of AtR.jsk Students Through: University of Georgia Research Foundation
Technology Literacy Challenge Fund Grants Direct
Special Education State Program Improvement Grants for Children with Disabilities Direct
Special Education - Research and Innovation to Improve Services and Results for Children with Disabilities
Direct Through: Florida State University

CFDA NUMBER
84.298 84.305
84.306 84.318 84.323
84.324

Special Education - Personnel Preparation to Improve Services and Results for Children with Disabilities
Direct
Special Education - TechnicaJ Assistance and Dissemination to Improve Services and Results for Children with Disabilities
Direct
Advanced Placement Incentive Program Direct
Grants to States for Incarcerated Youth Offenders Direct
Comprehensive School Reform Demonstration Direct
Gaining Early Awareness and Readiness for Undergraduate Programs
Direct
Teacher Quality Enhancement Grants for States and Partnmhips
Direct
Class Size Reduction Direct
Preparing Tomorrows Teachers to Use Technology Direct
Other Federal Assistance Direct Through: City of Atlanta Board of Education Through: Clinch County Through: Georgia Tech Research Corporation Through: Hart County Board of Education Through: National Writing Project Corporation Through: Screven County Through: Stewan County Board of Education Through: University of Georgia Research Foundation

84.325 84.326 84.330 84.331 84.332 84.334 84.336 84.340 84.342 84.XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER Various
RJ06F60 158-97 H324R990055
Various

AGENCY TOTAL

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10,625,802
208,275 (R)
64,854 (R)
10,474,009
1,098,824
250,890 (R) 28,202 (R)
279,092
455,818 (R)
146,080
399,000
195,139
3,708,098
136,646
2,382,535
29,721,983
1,346,870
481,796 (R) 18,339 (R) 20,612 (R)
602,695 (R) 20.842 (R) 48,197 19,933 (R) 21,340 (R) 90,816 (R)
1,324.570 994,987,231

1,567,466,810

E - 25

ScheduLe of Expenditures of FederaL Awards For the Ascal Year Ended June 30,2000

Consumer Prodl1c1 Safety Commission, U. S.
Other Federal Assistance Direct
AGENCY TOTAl.
National Archives and Records Administration
National Historical Publications and Records Grants Direct
Other Federal Assistance Direct
AGENCY TOTAl.
Health and Human Services, U. S. Department of
State and Territorial Minority HlV/AIDS Demonstration Program Direct
Special Programs for the Aging ~ Tille VII, Chapter J Programs for Prevention of Elder Abuse, Neglect, and Exploitation Direct
Special Programs for the Aging. Title VII, Chapter 2 Long-Term Care Ombudsman Services for Older Individuals Direct
Special Programs for the Aging - Title Ill. Part F - Disease Prevention and Health Promotion Services Direct
Special Programs for the Aging - Title ill, Part B Grants for Supportive Services and Senior Centers (AC)
Direct
Special Programs for the Aging - Title Ill, Part C Nutrition Services (AC) Direct
Special Programs for the Aging. Title Ill, Part 0 - In-Home Services for Frail Older Individuals
Direct
Special Programs ~or the Aging Title IV - Training, Research and Discretionary Projects and Programs Direct
Food and Drug Administration Research Direct Through: University of Georgia Research Foundation

CFDA NUMBER
87.XXX
89.003 89.XXX

Maternal and Child Health Federal Consolidated Programs Direct
Biological Response to Environmental Health Hazards Through: University of Georgia Research Corporation
Project Grants and Cooperative Agreements for Tuberculosis Control Programs
Direct
Grants for Technical' Assistance Activities Related 10 the Block Grant for Community Mental Health Services - Technical Assistance Centers for Evaluation Direct

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,424 2,424
76,573 (R) 8,478
85,051

Schedule of Expenditures of Federal Awards For the FiscaL Year Ended June 30, 2000

Health and Human Services, U. S. Department or
Oral Diseases and Disorders Research Through: Medical College of Georgia Research Institute Through: University of Georgin Research Foundation

CFDA NUMBER
93.121

Nurse Anesthetist Traineeships Through: Medical College of Georgia Research Institute
Emergency Medical Services for Children Direct
Primary Care Services - Resource Coordination and Development Primary Care Offices
Direct
Injury Prevention and Control Research and State and Community Based Programs
Direct Through: University of Georgia Research Corporation

93.124 93.127 93.130 93.136

Financial Assistance for Disadvantaged Health Professions Students
Direct
Projects for Assistance in Transition from Homelessness (PATH)
Direct
I-DV Demonstration Pro gram for Children, Adolescents, and Women Direct
Grants for State Loan Repayment Direct
International Cooperative Biodiversity Groups Program Through: University of Georgia Research Corporation
Human Genome Research Direct Through: Georgia Tech Research Corporation

93.139 93.150 93.153 93.165 93.168 93.172

Research Related to Deafness and Communication Disorders Direct Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute

93.173

Nursing Education Opportunities for Individuals from Disadvantaged Backgrounds
Direct
Allied Health Projects Direct
Hwnan Health Studies - Applied Research and Development Direct
Research and Training in Alternative Medicine Through: Medical College of Georgia Research Institute
Hansen's Disease National Ambulatory Care Program Direct
Family Planning. Services Direct

93.178
93.191 93.206 93.213 93.215 93.217

PASS-THROUGH ENTITY IDENTIFYING
NUMBER DE09761
OCCR415604-0 1
TWO 1009

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

937,092 (R) 171,995 (R) 1,109,087
7,392 107,572
108,409
193,952 330,449 (R) 524,401
16,192 (R)
328,950
484,293 64,194
549,170 (R) 90,775 98,482 (R) 189,257 267,519 (R) 134,166 (R) 27,985 (R) 429,670
1,026 36,814 51,664 (R) 113,930 (R) 211,097 6,229,881

E - 27

Georg1a
Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30,2000

HeDlth Bnd Human Services, U. S. Department of
Health Care Systems Cost and Access Research and Development Grants
Direct Through: Medical College of Georgia Research Institute

eFDA NUMBER
93.226

Indian Health Service - Health Management Development Program Direct Through: Medical College of Georgia Research Institute

93.228

Traumatic Brain Injury Direct
Abstinence Education Direct
Policy Research and Evaluation Grants Direct
State Rural Hospital Flexibility Program Direct
Mental Health Research Grants Direct Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

93.234 93.235 93.239 93.241 93.242

New Pilotlnnovative Food Safety Projects Direct
Health Centers Grants for Migrant and Seasonal Farmworkers Direct
Occupational Safety and Health Research Grants Through: University of Georgia Research Foundation
Immunization Grants Direct
Alcohol National Research Service Awards for Research Training Through: University of Georgia Research Foundation
Alcohol Research Programs Through: University of Georgia Research" Foundation
Drug Abuse National Research Service Awards for Research Training
Direct Through: Georgia Tech Research Corporation

93.245 93.246 93.262 93.268 93.272
93.273 93.278

Drug Abuse Research Programs Direct Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research institute Through: University of Georgia Research Foundation
Mental Health Research Career/Scientist Development Awards Direct Through: University of Georgia Research Foundation

93.279 93.281

PASS-THROUGH ENTIn' IDENTIFYING
NUMBER
Various OH373701
Various Various
Various Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

533,496 172,931 (R) 706,427
116,952 652 (R)
117,604
115,585
1,324,668
52,141
91,218
1,064,726 (R) 371,413 (R) 991,375 (R)
2.427,514
1,777
464,803
70,283 (R)
6,099,039
152,425 (R)
701,292 (R)
17,475 (R) 11,370 (R) 28.845
330,151 (R) 555,248 (R) 588,791 (R) 432,252 (R) 1,906,442
53,045 134,136 (R) 187,181

28,866,212 (4)

E - 28

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

Health and Human Service!, U. S. Department of
Mental Health National Research Service Awards for Research Training
Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

CFDA NUMBER
93.282

Centers for Disease Control and Prevention Investigations and Tethnical Assistance Direct Through: University of Georgia Research Foundation

93.283

Nurse Practitioner and Nurse-Midwifery Education Programs Direct
Comparative Medicine Direct Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

93.298 93.306

Health Professions Student Loans, Including Primary Care Loans/Loans for Disadvantaged Students (SFA)
Direct
ProfessionnJ Nurse Traineeships Direct
Nursing - Special Projects Direct
Nursing Research Direct
Nursing Student Loans (SFA) Direct
Biomedical Technology Direct Through: Georgia Tech Research Corporation Through' University of Georgia Research Foundation

93.342
93.358 93.359 93.361 93.364 93.371

Grants for Graduate Training in Family Medicine Direct
Research lnfrastructure Through: University of Georgia Research Foundation
Academic Research Enhancement Award Through: University of Georgia Research Foundation
Cancer Cause and Prevention Research Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation
Cancer Treatment Research Through: Medical College of Georgia Research Institute
Cancer Biology Research Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

93.379 93.389 93.390 93.393
93.395 93.396

PASS-THROUGH ENTIn' IDENTIFYING
NUMBER MHI1755 Various
RRI1733
RR05351A RRI1473A
Various Various CA64462A

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

16,173 1,705 16,493 (R)
34,371
9,235,074 81,596 (R)
9,316,670
335,224
1,662,306 (R) 218,197 140,476 (R)
2,020,979
-335,264 (3)
293,231
8,624
337,600 (R)
9,907 (3)
4,926 (R) 285,515 (R) 1,088,398 (R) 1,378,839
171,475
48,499 (R)
13,094 (R)
143,868 (R) 109,845 (R) 50,527 (R) 304,240
612,601 (R)
196,679 (R) 55,083 (R) 251,762

3,212,393 (3) 1,177,612 (3)

E - 29

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

Health and Human Ser",ice5. U. S. Department of
Cancer Research Manpo",'CT Through: University of Georgia Research Foundation
Cancer Control Through: Medical College of Georgia Research Institute
Family Preservation and Support Services Direci
Temporary Assistance for Needy Families Direct
Family Support Payments to States - Assistance Payments Through: University of Georgia Research Foundation
Child Support Enforcement Direct
State Legalization Impact Assistance Grants Direci
Refugee and Entrant Assistance - State Administered Programs
Direct
Low-Income Home Energy Assistance Direct
Community Services Block Grant Direct
Community Services Block Grant - Discretionary Awards Through: National Collegiate Athletic Association
Community Services Block Grant Discretionary Awards ~ Community Food and Nutrition
Direct
Child Care and Development Block Grant (Ceq
Direct Through: Georgia Child ~are Council

CFDA NUMBER
93.398 93.399 93.556 93.558 93.560 93.563 93.565 93.566
93.568 93.569 93.570 93.571
93.575

Refugee and Entrant Assistance - Discretionary Grants Direct
Refugee and Entrant Assistance - Targeted Assistance Direct
State Court Improvement Program Direct
Community-Based Family Resource and Suppon Grants Direct
Family Violence Prevention and Services/Grants for Banered Women's Shelter - Discretionary Grants
Direct
Child Care Mandatory and Matching Funds of the Child Care and Development Fund (CCC)
Direct
Grants to States for Access and Visitation Programs Direct

93.576 93.584 93.586 93.590 93.592 93.596 93.597

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

CA68072-04 427-93-91231

96,340 (R)

154,874 (R)

1,507,743

229,229,696

$

171,796 (R)

76,588,100

-30,238

11,043,635 12,759,701 13,746,376
134,029

42793-71554&01724 427-93-17429

83,352
56,289,272 44,792 42,595 12,130
56,388,789
696,774
1,288,876
151,424
642,986

107,902

66,646,427 -6,201

E - 30

Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2000

Health Bnd Human Services, U. S. Department of
Head Start Direct Through: Ninth District Opportunity, Incorporated Through: University of Georgia Research Foundation

eFDA NUMBER
93.600

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
Various

Adoption Incentive Payments Direct
Developmental Disabilities Basic Support and Advocacy Grants Direct Through: Georgia Council on Development Disabilities Through: Georgia Tech Research Corporation

93.603 93.630

Developmental Disabilities Projects of National Significance Direct
Children's Justice Grants to States Direci
Child Welfare Services - State Grants Direct
Adoption Opportunities . Direct
Foster Care - Title IV-E Direct
Adoption Assistance Direct
SociaJ Services Block Grant Direct Through: City of Albany

93.631 93.643 93.645 93.652 93.658 93.659 93.667

1200-006-20-00-012-3000

Child Abuse and Neglect State Grants Direct Through: University of Georgia Research Fowuiation

93.669

000121

Child Abuse and Neglect Discretionary Activities Direct
Family Violence Prevention and Services/Grants for Banered Women's Shelters - Grants to States and Indian Tribes Direct
Community-Based Prevention Program Direct
Independent Living Direct
State Children's Insurance Program Direct .
Medicare - Hospital Insurance Direct
Medicare 4 Supplementary Medical Insurance Direct
State Medicaid Fraud Control Units (Me) Direct

93.670 93.671
93.672 93.674 93.767 93.773 93.774 93.775

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,912,833 (R) 34,200 34,485 (R)
2,981,518
202,029
1,829,456 (R) 114,802 (R) 4 (R)
1,944,262
109,73 I (R) 482,707
15,672,849
105,226
48,755,025
22,255,564
76,075,955 99,456
76,175,411
428,864 6,929 (R)
435;793
135,193
1,814,774
606,709
1,179,456 39,009,955 4,089,275 17,842,046 2,678,838

E - 31

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

Health and 1I1Iman Services. U. S. Department of
State Survey and Certification of Health Care Providers and Suppliers (MC) Direct
Medical Assistance Program (J\'1C) Direct
Heahh Cnre Financing Research. Demonstrations and Evaluations Direct Through: Medical College of Georgia Research Institute

CFDA NUMBER
93.777
93.778 93.779

Scholarships for Students of Exceptional Financial Need (S.FA) Direct
Cell Biology and Biophysics Research Direct Through: Georgia Tech Research Corporation Through" Medical College of Georgia Research lnstitule Through: University of Georgia Research Foundation

93.820 93.821

Health Careers Opportunity Program Direct Through: Howard University

93.822

Basic/Core Area Health Education Centers Direct
Heart and Vascular Diseases Research Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

93.824 93.837

Lung Diseases Research Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

93.838

Blood Diseases and Resources Research Direct Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute

93.839

Arthritis. Musculoskeletal and Skin Diseases Research Through: Medical College of Georgia Research Institute
Diabeles. Endocrinology and Metabolism Research Through: Medical College of Georgia Research Instilute Through: University of Georgia Research Foundation

93.846 93.847

Digestive Diseases and Nutrition Research Direct . Through: Medical College of Georgia Research InSTitute Through: University of Georgia Research Foundation

93.848

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
Various ID 18MB0277302
Various Various
Various DK47246

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,654,866 2,645,584,9B2

2BO,756 2.444 (R)
283,200

49,794

375,934 (R) 371 (R)
155,065 (R) 1,291,723 (R)
1,822,351

186,338 4,114
190,452

1,393,624

209,997 5,594,599
48,882

(R) (R) (R) .

5,853,478

216,321 (R) 362,591 (R)
578,912

146,071 (R) 263,640 (R) 20B,465 (R)
618,176

92,131 (R)

93,826 (R) 347,631 (R)
441,457

176,961 (R) 912,827 (R) 251,741 (R)
1,341,529

E - 32

Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2000

Health and Human Services. U. S. Department ~f
Resource and Manpower Development in the Environmental Health Sciences Through: University of Georgia Research Foundation
Grants for Faculty Development in Family Medicine Direct
Rural Health Medical Education Demonstration Projects Direct
Grants 10 States for Operation of Offices of Rural Health Direct
Nurse Anesthetist Education Programs Direct
JollY Care Formula Grants Direct
Grants to Provide Outpatient Early Intervention Services with Respect to HlV Disease Direct
Cooperative Agreements for State-Based Comprehensive Breast and Cervical Cancer Early Detection Programs
Direct
Scholarships for Health Professions Students from Disadvantaged Backgrounds (SFA) Direct
Healthy Start Initiative Direct
Center for Medical Rehabilitation Research Through: University of-Georgia Research Foundation
Demonstration Grants to States for Community Scholarships Direct
Fogarty International Research Collaboration Award Direct Through; University of Georgia Research Foundation

CFDA NUMBER

Cooperative Agreements to Support Comprehensive School Health Programs to Prevent the Spread of HIV and Other Important Health Problems
Direct
HIV Prevention Activities Health Department Based Direct
HIV Demonstration, Research. Public and Professional Education Projects
Direct
Epidemiologic Research Studies of Acquired Immunodeficiency Syndrome (AIDS) and Human Immunodeficiency Virus (HlV) Infection in Selected Population Groups Through: University of Georgia Research Foundation
Human Immunodeficiency Virus (HlV)/Acquired Immunodeficiency Virus Syndrome (AIDS) Surveillance Direct
Assistance Program for Chronic Disease Prevention and Control
Direct

93.940 93.941 93.943
93.944 93.945

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
U64/CCU409687

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

194,423 6,327,459
55,294
268,522 (R) 845,617 288,769

E - 34

Georgia
Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

Health and Human Services, U. S. Department of
Demonstration Grants to States with Respect to Alzheimer's Disease Direct
Agricultural Health and Safety Programs Through: University of Georgia Research Foundation
Block Grants for Community Mental Health Services Direct
Block Grants for Prevention and Treatment of Substance Abuse
Direct Throu~: University of Georgia Research Foundation

eFDA NUMBER
93.951
93.956 93.958 93.959

Health Administration Traineeships and Special Projects
Program
Direct

93.962

Preventive Health Services: Sexually Transmitted Diseases Control Grants Direct

93.977

Mental Health Disaster Assistance and Emergency Mental Health Direct

93.982

Academic Administrative Units in Primal)' Care Direct

93.984

Cooperative Agreements for StateBased Diabetes Control PTograms and Evaluation of Surveillance Systems
Direct

93.988

Senior International Fellowships Through: Medical College of Georgia Research Institute

93.989

Preventive Health and Health Services Block Grant Direct

93.991

Maternal and Child Health Services Block Grant to the Siaies Direcl

93.994

Adolescent Family Life - Demonstration Projects Direct

93.995

Other Federal Assistance

93.XXX

Direct

Through: American Council on Education

Through: Georgia Council on Development Disabilities

Through: Georgia Tech Research Corporation

Through: National Association of Equal Opportunity in Higher Education

Through: National Collegiate Athletic Association

Through: Southwest Georgia Community Health Institute

Through: University of Connecticut

Through: University of Florida Through: University ofGeorgia R~arch Foundation

Through: U. S. - Ukraine Foundation

Through: Virginia Tech

Through: World Learning. Incorporated

PASS-THROUGH ENTIn' IDENTIFYING
NUMBER 427-93-42057
Various
M3433 I Various CR-I9295-425215

AGENCY TOTAL

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

395,150
(R)
7,779,054
41,040,069 26,906
41,066,975
24,679
2,784,423
45,480
190,018
186,440
\8,9\8
6,813,299
16,623,288
-101 (R)
530,167 (R),(3) 25,099 (R) 16 (R)
2,841,160 (R) 7.764
23,904 1,019
16,838 (R) 951 (R)
4,785,406 (R) 23,730 (R) 5,222 12,885 (R)
8,274)61
3,559,184,623

192,398
640,613 (3) 640,613 34,219,863

E - 35

Schedule of Expenditures of Federal Awards For the AscaL Year Ended June 30, 2000

CFDA NUMBER

Corporation ror National Rnd Community Service

Learn and Serve America School and Community Based Programs Direct

94.004

AmeriCorps Direct Through: The Georgia Commission for National/Community Service

94.006

Planning and Program Development Grants Direct
Training and Technical Assistance Direct
. Foste; Grandparent Program (FGCC) Direct
Senior Companion Program (FGCC) Direct
AGENCY TOTAL
Social Security Administration Social Security - Disability Insurance (DIlSSI) Direct
AGENCY TOTAl.
State Justice Institute Other Federal Assistance Direct
AGENCY TOTAl,
Japan-V. S. Friendship Commission Other Federal Assistance Through: University of Georgia Research Foundation
AGENCY TOTAL
GRAND TOTAL EXPENDITURDi OF FEDERAL AWARDS

94.007 94.009 94.011 94.016
96.001
98.XXX
99.XXX

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

908,261 3,960,199
63,098 (R) 4,023,297
3,225 777,000
2,000 134,370 5,848,153

48,457,095 48,457,095

3,101 3,101

14,206 (R) 14,206 7,009,721,316

2,388,789,036

E - 36

Notes to the ScheduLe of Expenditures of FederaL Awards For the AscaL Year Ended June 30,2000

PURPOSE OF THE SCHEDULE
Office ofManagement and Budget (OMB) Circular A-l33, Audits ofStates, Local Governments, and Non-Profit Organizations, requires a Schedule of Expenditures of Federal Awards reflecting total expenditures for each Federal fmancial assistance program as identified in the Catalog of Federal Domestic Assistance (CFDA).

SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity - The accompanying schedule includes all Federal financial assistance programs administered by the State of Georgia for the fiscal year ended June 30,2000. Refer to Appendix "A" for a comprehensive listing of organizational units comprising the financial reporting entity.

Basis of Presentation - The accompanying Schedule ofExpenditures ofFederal Awards is presented in accordance with OMB Circular A-133.

A.

Federal Financial Assistance - Pursuant to the Single Audit Act Amendments of 1996 and OMB Circular A-l33,

Federal financial assistance is defined as assistance that non-Federal entities receive or administer in the form of

grants, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest

subsidies, insurance, food commodities, direct appropriations, and other assistance, but does not include amounts

received as reimbursements for services rendered to individuals for Medicare and Medicaid.

B.

Major Programs - The Single Audit Act Amendments of 1996 and OMB Circular A-l33 established a risk-based

approach for defining Major Federal financial assistance programs. This approach resulted in 24 of 32 Type A

programs and 4 Type B programs being selected as major programs for the State of Georgia. For the fiscal year

ended June 30, 2000, a Type A program is defined as any Federal program which exceeded $22,706,169 in

expenditures/disbursements/issuances.

Basis of Accounting - The Schedule ofExpenditures ofFederal Awards is prepared using the basis of accounting as described in Note 1 of the Notes to the Financial Statements of the General Purpose Financial Statements (See Section A 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 ofreporting expenditures/expenses results in an overstatement of the aggregate level of Federal expenditures/expenses. Therefore, net Federal expenditures/expenses is reported in the schedule.
OTHER

Thefollowing Notes provide additional pertinent information regarding Federalfinancial assistance.

(1) Expenditures for these programs includes Federal, state and/or other funds. In addition, the Unemployment Insurance program (CFDA NO. 17.225) includes Federal expenditures of$59,858,598 and State expenditures of$276,489,037.

(2) During the fiscal year ended June 30, 2000, the Georgia Department of Human Resources received $50,834,130 in cash rebates from infant formula manufacturers on sales offormula to participants in the Special Supplemental Food Program for Women, Infants, and Children (WIC) (CFDA NO. 10.557). Rebate contracts with infant formula manufacturers are authorized.by 7 CFR 246.l6(m) as a cost containment measure. Rebates represent a reduction of expenditures previously incurred for WIC benefit costs. The rebate contract allowed the Department to serve approximately 85,640 additional persons per month during fiscal year 2000.

E - 37

Notes to the ScheduLe of Expenditures of FederaL Awards For the Fiscal Year Ended June 30, 2000
(3) Federally funded loan programs incurred the following current fiscal year monetary and nonmonetary expenditures:

(**) The monetary amount for this program does not equal the monetary amount shown in the schedule. Numerous grants and

contracts have been combined for reporting purposes.

.

(4) 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.

10.550 10.551
93.268

The reported amounts, incurred by four organizational units of the State, represent the U. S. Department of Agriculture assigned value of the donated commodities for the Food Distribution Program.
The Federal government provides food stamps to low-income households. The amount offood stamp benefits a household receives depends on the household's size and fmancial circumstances. The Georgia Department of Human Resources is responsible for determining eligibility for participation in the Food Stamp Program. For the year under review, the total value of food stamp benefits distributed as approved by the Department was $493,263,910.
The amount reported represents the U. S. Department of Health and Human Services assigned value of immunizations for vaccine-preventable diseases to eligible individuals.

E - 38

Notes to the ScheduLe of Expenditures of FederaL Awards For the fiscaL Year Ended June 30, 2000

(5) Cluster programs are detailed on the Schedule ofCluster Programs and identified as follows on the Schedule ofExpenditures ofFederal Awards:

(AC) (CCC) (CNC) (DI/SSI) (EFAC) (ESC) (ESCC) (FTC) (FWC) (FSC) (FGCC) (HPCC) (HSC) (JC) (MC) (R) (S8TBC) (SEC) (SFA) (TRIO)

Aging Child Care Child Nutrition Disability Insurance/SSI Emergency Food Assistance Employment Service CDBG - Entitlement and (HOO-Administered) Small Cities Federal Transit Fish and Wildlife Food Stamp Foster Grandparent/Senior Companion Highway Planning and Construction Cluster Highway Safety Job Training Partnership Act Medicaid Research and Development Section 8 Tenant-Based Special Education Student Financial Aid TRIO

(6) Circular A-I3 3 requires the Schedule ofExpenditures ofFederal Awards to include, to the extent practical, an identification of the total amount provided to subrecipients from each Federal program. Major programs expenditures presented in the schedule account for approximately 80% of total Federal expenditures for the State ofGeorgia. Provided below is the amount of major programs awards provided to subrecipients:

CFDA NUMBER
10.558 14.228
66.458 66.468 84.002 84.048 84.340 93.558
93.667

GRANT PROGRAM
Child Nutrition Cluster Child and Adult Care Food Program Community Development Block Grants/State's Program Job Training Partnership Act Cluster Capitalization Grants for State Revolving Funds Capit3lization Grants for Drinking Water State Revolving Funds Adult Education - State Grant Program Vocational Education - Basic Grants to States Class Size Reduction Temporary Assistance for Needy Families Child Care Cluster Social Services Block Grant Research and Development Cluster
Total

AMOUNT PROVIDED TO SUBRECIPIENTS

$

266,362,376

57,211,672

37,799,928

465,584

31,853,594

9,588,072

2,634,009

12,897,099

29,721,983

2,469,875

42,595

106,733

25,633,696

$

476,787,216

E - 39

;===----------~-~==~=====~,----~~----~~~~~----~-- --~------~
(This page intentionally left blank)

ScHEDULE OF CLUSTER PR~s

G:orgia.
Schedule of Cluster Programs For the Fiscal Year Ended June 30, 2000
Aging Cluster (AC) Special Programs for the Aging - Title 1II, Part B Grants for Supportive Services and Senior Centers Special Programs for the Aging - Title 1II, Part C Nutrition Services
Child Care Cluster (CCC) Child Care and Development Block Grant Child Care Mandatory and Matching Funds of the Child Care and Development Fund
Child Nutrition Cluster (CNC) School Breakfast Program National School Lunch Program Special Milk Program for Children Summer Food Service Program for Children
Disability Insurance/SSI Cluster (DIISSI) Social Security - Disability Insurance
Emergency Food Ass.istance Cluster (EFAC) Emergency Food Assistance Program (Administrative Costs) Emergency Food Assistance Program (Food Commodities)
Employment Service Cluster (ESC) Employment Service Disabled Veterans' Outreach Program (DVOP) Local Veterans' Employment Representative Program
CDBC - Entitlement and (HUD-Administered) Small Cities Cluster (ESCC) Community Development Block Grants/Small Cities Program
Federal Transit Cluster (FTC) Federal Transit - Capital Improvement Grants Federal Transit - Formula Grants

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.044 $
93.045
$

7,496,196 9,636,600 17,132,796

93.575 $ 93.596
$

56,388,789 66,646,427 123,035,216

10.553 $ 10.555 10.556 10.559
$

58,948,266 197,852,940
26,616 10,174,521
267,002,343

96.001 $

48,457,095

10.568 $
10.569
$
17.207 $ 17.801 17.804
$

916,701 $
916,701 $
26,371,585 1,792,881 1,372,373
29,536,839

3,909,805 3,909,805

14.219 $
20.500 $ 20.507
$

3,331,000
1,052,051 4,695,525 5,747,576

E - 43

Schedule of Cluster Programs For the FiscaL Year Ended June 30, 2000
Fish and Wildlife Cluster (FWC)
Sport Fish Restoration Wildlife Restoration
Food Stamp Cluster (FSC)
Food Stamps State Administrative Matching Grants
for Food Stamp Program
Foster Grandparent/Senior Companion Cluster (FGCC)
Foster Grandparent Program Senior Companion Program
Highway Planning and Construction Cluster (HPCC)
Highway Planning and Construction
Highway Safety Cluster (HSC)
State and Community Highway Safety
Job Training Partnership Act Cluster (JC) Employment and'Training Assistanc~ -
Dislocated Workers Job Training Partnership Act
Medicaid Cluster (MC)
State Medicaid Fraud Control Units State Survey and Certification of Health Care Providers
and Suppliers Medical Assistance Program
Research and Development Cluster (R)
Agricultural Research - Basic and Applied Research Plant and Animal Disease, Pest Control, and Animal Care Wildlife Services Grants for Agricultural Research, Special Research Grants Cooperative Forestry Research Payments to Agricultural Experiment Stations Under the
Hatch Act Grants for Agricultural Research -
Competitive Research Grants Food and Agricultural Sciences National Needs Graduate
Fellowship Grants Higher Education Challenge Grants

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

15.605 $ 15.611
$

4,255,048 3,944,776
8,199,824

10.551 10,561
$
$

$ 62,953,022 62,953,022 $

493,263,910 493,263,910

94.011 $ 94.016
$

2,000 134,370
136,370

20.205 $

740,605,375

20.600 $

5,397,832

17.246 $
17.250
$

16,910,655 43,357,000
60,267,655

93.775 $ 93.777
93.778
$

2,678,838
2,654,866 2,645,584,982
2,650,918,686

10.001 $ 10.025 10.028 10.200 10.202 10.203
10.206
10.210
10.217--

21,000 269,208
74,506 2,933,817
714,181
4,264,555
1,863,444
343 67,271

E -44'

Schedule of Cluster Programs For the Fiscal Year Ended June 30, 2000
Research and Development Cluster (R) Buildings and Facilities Program Biotechnology Risk Assessment Research Funds for Rural America - Research, Education, and Extension Activities Cooperative Extension Service Summer Food Service Program for Children Commodity Supplemental Food Program Forestry Research Cooperative Forestry Assistance Scientific Cooperation Program International Training - Foreign Participant Other Federal Assistance Trade Adjustment Assistance Geodetic Surveys and Services (Geodesy and Applications of the National Geodetic Reference System) Sea Grant Support Coastal Zone Management Estuarine Research Reserves Undersea Research Marine Research - Regional Programs Coastal Ocean Program Measurement and Engineering Research and Standards Advanced Technology Program Other Federal Assistance Collaborative Research and Development Basic and Applied Scientific Research Military Medical Research and Development Community Economic Adjustment Basic, Applied, and Advanced Research in Science and Engineering Air Force Defense Research Sciences Program Mathematical Sciences Grants Program Research and Technology Development Other Federal Assistance Other Federal Assistance Aid.To Tribal Governments Environmental Contaminants Cooperative Endangered Species Conservation Fund Administrative Grants for Federal Aid in Sport Fish and Wildlife Restoration Assistance to State Water Resources Research Institutes U.S. Geological Survey - Research and Data Acquisition Historic Preservation Fund Grants-In-Aid National Center for Preservation Technology and Training Other Federal Assistance Americans With Disabilities Act Technical Assistance Program Other Federal Assistance Job Training Partnership Act Other Federal Assistance Other Federal Assistance Other Federal Assistance Other Federal Assistance
E - 45

Schedule of Cluster Programs For the Ascal Year Ended June 30, 2000
Research and Development Cluster (R) Aerospace Education Services Program Technology Transfer Other Federal Assistance Promotion of the Humanities - Federal/State Partnership Promotion of the Humanities ~ Division of Preservation and Access Promotion of the Humanities - Fellowships and Stipends Institute of Museum and Library Services National Leadership Grants Other Federal Assistance Engineering Grants Mathematical and Physical Sciences Geosciences Computer and Information Science and Engineering Biological Sciences Social, Behavioral, and Economic Sciences Education and Human Resources Polar Programs Other Federal Assistance Small Business Development Center Other Federal Assistance Other Federal Assistance Veterans State Hospital Care' Other Federal Assistance Water Quality Management Planning Nonpoint Source Implementation Grants National Pollutant Discharge Elimination System Related State Program Grants Environmental Protection - Consolidated Research Surveys, Studies, Investigations and Special Purpose Grants Training and Fellowships for the Environmental Protection Agency Solid Waste Management Assistance Other Federal Assistance Office of Science Financial Assistance Program Conservation Research and Development Renewable Energy Research and Development Other Federal Assistance Other Federal Assistance Other Federal Assistance Undergraduate International Studies and Foreign Language Programs International: Overseas - Doctoral Dissertation Special Education - Innovation and Development Early Education for Children with Disabilities Special Education - Personnel Development and Parent Training Higher Education - Institutional Aid Federal Work-Study Program TRIO - Student Support Services TRIO - Talent Search TRIO - Upward Bound
E - 46

Schedule of Cluster Programs
For the Ascal Year Ended June 30, 2000
Research and Development Cluster (R) TRIO - Educational Opportunity Centers Fund for the Improvement of Postsecondary Education Rehabilitation Services - Vocational Rehabilitation Grants to States Rehabilitation Long-Term Training National Institute on Disability and Rehabilitation Research Graduate Assistance in Areas of National Need Centers for International Business Education Special Projects and Demonstrations for Providing Vocational Rehabilitation Services to Individuals with Severe Disabilities Rehabilitation Training - State Vocational Rehabilitation Unit In-Service Training Eisenhower Professional Development State Grants National Institute on Student Achievement, Curriculum, and Assessment National Institute on the Education of At-Risk Students Special Education - Research and Innovation to Improve Services and Results for Children with Disabilities Special Education - Personnel Preparation to Improve Services and Results for Children with Disabilities Other Federal Assistance National Historical Publications and Records Grants Food and Drug Administration - Research Biological Response to Environmental Health Hazards Oral Diseases and Disorders Research Injury Prevention and Control Research and State and Community Based Programs Financial Assistance for Disadvantaged Health Professions Students International Cooperative Biodiversity Groups Program Human Genome Research Research Related to Deafness and Communication Disorders Human Health Studies - Applied Research and Development Research and Training in Alternative Medicine Health Care Systems Cost and Access Research and Development Grants Indian Health Service - Health Management Development Program Mental Health Research Grants Occupational Safety and Health Research Grants Alcohol National Research Service Awards for Research Training Alcohol Research Programs Drug Abuse National Research Service Awards for Research Training Drug Abuse Research Programs Mental Health Research Career/Scientist Development Awards Mental Health National Research Service Awards for Research Training Centers for Disease Control and Prevention - Investigations and Technical Assistance

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

84.066 $ 84.116 84.126
84.129 . 84.133
84.200 84.220 84.235
84.265
84.281 84.305
84.306 84.324
84.325
84.XXX 89.003 93.103 93.113 93.121 93.136
93.139
93.168 93.172 93.173 93.206 93.213 93.226
93.228 -
93.242 93.262 93.272
93.273 93.278
93.279 93.281
93.282
93.283

392,950 63,376
311,854 73,672 73,469 197,548
267,658
214,035
102,158 1,357,800
208,275 64,854
279,092
300,380 1,242,369
3,395 443,105
92,230 1,109,087
330,449
16,192 549,170 98,482 429,670
51,664 113,930
172,931
652 2,427,513
70,283
152,425 701,292
28,845 1,906,443
134,136
16,493
81,596

E - 47

Schedule of Cluster Programs For the AscaL Year Ended June 30, 2000
Research and Development Cluster (R) Comparative Medicine Nursing Research Biomedical Technology Research Infrastructure Academic Research Enhancement Award Cancer Cause and Prevention Research Cancer Treatment Research Cancer Biology Research Cancer Research Manpower Cancer Control Family Support Payments to States - Assistance Payments Head Start Developmental Disabilities Basic Support and Advocacy Grants Developmental Disabilities Projects of National Significance Child Abuse and Neglect State Grants Health Care Financing Research, Demonstrations and Evaluations Cell Biology and Biophysics Research Heart and Vascular Diseases Research Lung Diseases Research Blood Diseases and Resources Research Arthritis, Musculoskeletal and Skin Diseases Research Diabetes, Endocrinology and Metabolism Research Digestive Diseases and Nutrition Research Kidney Diseases, Urology and Hematology Research Clinical Rese~ch Related to Neurological Disorders Allergy, Immunology and Transplantation Research Microbiology and Infectious Diseases Research Pharmacology, Physiology, and Biorelated Chemistry Research Genetics and Development Biology Research Population Research Center for Research for Mothers and Children Aging Research Vision Research Minority Access to Research Careers Resource and Manpower Development in the Environmental Health Sciences Scholarships for Health Professions Students from Disadvantaged Backgrounds Center for Medical Rehabilitation Research Fogarty International Research Collaboration Award Epidemiologic Research Studies of Acquired Immunodeficiency Syndrome (AIDS) and Human Immunodeficiency Virus (HIV) Infection in Selected Population Groups

erDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.306 $ 93.361 93.371 93.389 93.390 93.393 93.395 93.396 93.398 93.399 93.560 93.600 93.630
93.631 93.669 93.779
93.821 93.837 93.838 93.839 93.846 93.847 93.848 93.849 93.853 93.855 93.856 93.859
93.862 93.864 93.865 93.866 93.867 93.880 93.894
93.925
93.929 93.934 93.943

1,802,783 337,600
1,378,839 48,499 13,094
304,240 612,601 251,762 96,340 154,874 171,796. 529,462
286,270 70,529 6,929
2,444 1,822,351 5,853,478
578,912 503,262 92,131 441,457 1,341,529 437,090 1,071,823 878,436 4,416,141
1,884,050 1,437,634
362,736 3,334,223 1,370,682 1,513,415
10,787
4,690
140,659 21,801 55,740
268,522

E - 48

Geurg1a
Schedule of Cluster Programs For the Fiscal Year Ended June 30, 2000
Research and Development Cluster (R)
Agricultural Health and Safety Programs Adolescent Family Life - Demonstration Projects Other Fed~ral Assistance AmeriCorps Other Federal Assistance
Section 8 Tenant-Based Cluster (S8TBC)
Section 8 Rental Voucher Program Section 8 Rental Certificate Program
Special Education Cluster (SEC)
Special Education - Grants to States Special Education - Preschool Grants
Student Financial Aid Cluster (SFA)
Federal Supplemental Educational Opportunity Grants Federal Family Education Loans Federal Work-Study Program Federal Perkins Loan Program Federal Capital Contributions Federal Pell Grant Program Federal Direct Loan Health Professions Student Loans, Including Primary Care Loans/Loans for Disadvantaged Students Nursing Student Loans Scholarships for Students of Exceptional Financial Need Scholarships for Health Professions Students from Disadvantaged Backgrounds
TRIO Cluster (TRIO)
TRIO - Student Support Services TRIO - Talent Search TRIO - Upward Bound TRIO - Educational Opportunity Centers McNair Post-Baccalaureate Achievement

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.956 $ 93.995 93.XXX 94.006 99.xXX
$

4 -101 7,777,452 63,098 14,206
275,178,877

14.855 $ 14.857
$
84.027 $ 84.173
$

6,287,254 56,805,393
63,092,647
106,511,188 9,425,373
115,936,561

84.007 $ 84.032 84.033 84.038
84.063 84.268 93.342
93.364 93.820 93.925
$

6,922,347 30,531,592 $
7,867,019
548,460 118,492,388 261,106,636
-335,264 9,907
49,794
323,515
425,516,394 $

1,528,483,000 38,846,251
3,212,393 1,177,612
1,571,719,256

84.042 $ 84.044 84.047 84.066 84.217
$

1,612,431 1,411,844 2,682,101
872,093 330,374
6,908,843

E - 49

SECTION F
AUDlTEE'S RESFONSES

SuMMARy ScHEDULE OF PRIOR YEAR
FINDINGE AND QJEsrrONED ~

Summary ScheduLe of Prior Year Findings and Questioned Costs For the Ascal Year Ended June 30, 2000

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

COMMENTS

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

Department ofAdministrative Services

FS-401-98-01 Further Action Not Warranted

FS-401-99-01 Unresolved

See Comments - Page F-ll

Department ofEducation

FS-414-98-04 Previously Reported Corrective Action Implemented

FS-414-99-04 Partially Resolved

See Comments - Page F-ll

Department ofTechnical and Adult Education

FS-415-98-03 Previously Reported Corrective Action Implemented

*Department ofCommunity Health

FS-419-98-01 Partially Resolved

See Comments - Page F-13

Department ofHuman Resources

FS-427-98-02 Further Action Not Warranted

FS-427-99-01 Unresolved

See Comments - Page F-14

Department ofCommunity Affairs

FS-428-99-02 Partially Resolved

See Comments - Page F-16

Department ofLabor

FS-440-99-01 Previously Reported Corrective Action Implemented

Department ofNatural Resources

FS-462-98-01 Further Action Not Warranted

FS-462-99-02 Unresolved

See Comments - Page F-16

Department ofCorrections

FS-467-98-01 Further Action Not Warranted

FS-467-99-01 Partially Resolved

See Comments - Page F-17

Department ofRevenue

FS-474-98-02 Further Action Not Warranted

FS-474-98-03 Further Action Not Warranted

FS-474-98-05 Further Action Not Warranted

FS-474-99-01 Partially Resolved

See Comments - Page F-17

FS-474-99-02 Partially Resolved

See Comments - Page F-18

FS-474-99-03 Unresolved

See Comments- Page F-18

FS-474-99-05 Previously Reported Corrective Action Implemented

Georgia Student Finance Commission

FS-476-99-01 Unresolved

See Comments - Page F-18

Department of Transportation

FS-484-98-01 Further Action Not Warranted

FS-484-99-02 Partially Resolved

See Comments - Page F-19

Georgia Institute of Technology

FS-503-99-0 1 Partially Resolved

See Comments - Page F-19

Clayton College and State University

FS-528-98-03 Further Action Not Warranted

FS-528-99-02 Unresolved -

See Comments - Page F-21

Georgia Southern University

539-96-01 Partially Resolved

See Comments -Page F-24

FS-539-98-02 Unresolved

See Comments - Page F-24

Kennesaw State University

543-96-01 Partially Resolved

See Comments - Page F-25

F-5

Summary Schedule of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30,2000

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS -

Savannah State University

548-96-01 Further Action Not Warranted

Southern Polytechnic State University

FS-550-99-02 Partially Resolved

Atlanta Metropolitan College

561 ~96-0 1

Unresolved

561-96-02 Unresolved

Floyd College

FS-573-97-02 Partially Resolved

FS-573-97-04 Partially Resolved

Georgia Military College

FS-590-98-09 Further Action Not-Warranted

FS-590-99-01 Partially Resolved

West Georgia Technical Institute

FS-8 19-99-03 Partially Resolved

Albany Technical Institute

FS-820-98-01 Previously Reported Corrective Action Implemented

FS-820-99-01 Previously Reported Corrective Action Implemented

Augusta Technical Institute

FS-824-97-02 Partially -Resolved

Columbus Technicallnstitute

FS-828-98-01 Further Action Not Warranted

FS-828-99-01 Previously Reported Corrective Action Implemented

DeKalb Technical Institute

FS-830-98-02 Partially Resolved

Moultrie Area Technical Institute

FS-837-99-01 Previously Reported Corrective Action Implemented

Appalacian Technical Institute

FS-840-98-03 Partially Resolved

Peace Officers' Annuity and Benefit Fund ofGeorgia

947-96-01

Previously Reported Corrective Action Implemented

Georgia Public Telecommunications Commission

FS-977-98-04 Previously Reported Corrective Action Implemented

FS-977-99-03 Previously Reported Corrective Action Implemented

Northwest Georgia Regional Educational Service Agency

FS-8504-98-01 Further Action Not Warranted

FS-8504-99-0 1 Unresolved

North Georgia Regional Educational Service Agency

FS-8524-98-01 Further Action Not Warranted

FS-8524-99-01 Unresolved

Pioneer Regional Educational Service Agency

FS-8544-98-01 Further Action Not Warranted

FS-8544-99-01 Unresolved

Metropolitan Regional Educational Service Agency

FS-8564-98-01 Further Action Not Warranted

FS-8564-99-0 1 Unresol ved

F-6

COMMENTS
See Comments - Page F-27 See Comments - Page F-28 See Comments - Page F-28 See Comments - Page F-28 See Comments - Page F-29 See Comments - Page F-29 See Comments - Page F-29
See Comments - Page F-29
See Comments - Page F-30
See Comments - Page F-31
See Comments - Page F-32 See Comments - Page F-32 See Comments -- Page F-32 See Comments - Page F-32

Georgia.
Summary ScheduLe of Prior Year Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

Northeast Georgia Regional Educational Service Agency FS-8584-98-01 Further Action Not Warranted FS-8584-99-01 Unresolved West Georgia Regional Educational Service Agency FS-8604-98-01 Further Action Not Warranted FS-8604-99-01 Unresolved Oconee Regional Educational Service Agency FS-8664-98-01 Further Action Not Warranted FS-8664-99-01 Unresolved Chattahoochee-Flint Regional Educational Service Agency FS-8724-98-01 Further Action Not Warranted FS-8724-99-01 Unresolved Heart ofGeorgia Regional Educational Service Agency FS-8764-98-01 Further Action Not Warranted FS-8764-99-01 Unresolved First District Regional Educational Service Agency FS-8804-98-01 Further Action Not Warranted FS-8804-99-0 I Unresolved

COMMENTS
See Comments - Page F-32 See Comments - Page F-33 See Comments - Page F-33 See Comments - Page F-33 See Comments - Page F-33 See Comments - Page F-33

F-7

Summary Schedule of Prior Year Findings and Questioned Costs
For the Ascal Year Ended June 30, 2000

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Department ofEducation FA-414-98-01 Further Action Not Warranted FA-414-98-02 Further Action Not Warranted FA-414-99-01 Partially Resolved FA-414-99-02 Previously Reported Corrective Action Implemented FA-414-99-03 Unresolved Department of Technical and Adult Education FA-415-98-0 I Previously Reported Corrective Action Implemented FA-415-99-01 Further Action Not Warranted FA-415-99-02 Partially Resolved *Department ofCommunity Health FA-419-98-0 I Partially Resolved Department ofHuman Resources FAA27-98-01 Further Action Not Warranted FA-427-98-02 Further Action Not Warranted FA-427-98-03 Further Action Not Warranted FA-427-99-01 Partially Resolved FA-427-99-02 Partially Resolved FA-427-99-03 Partially Resolved FA-427-99-04 Unresolved FA-427-99-05 Previously Reported CorreCtive Action Implemented Department ofLabor FA-440-98-01 Previously Reported Corrective Action Implemented FA-440-98-02 Previously Reported Corrective Action Implemented FA-440-99-0 I Previously Reported Corrective Action Implemented FA-440-99-02 Previously Reported Corrective Action Implemented Department ofNatural Resources FA-462-99-0l Previously Reported Corrective Action Implemented FA-462-99-02 Previously Reported Corrective Action Implemented Georgia Institute of Technology FA-503-99-02 Previously Reported Corrective Action Implemented FA-503-99-03 Previously Reported Corrective Action Implemented FA-503-99-04 Previously Reported Corrective Action Implemented FA-503-99-05 Previously Reported Corrective Action Implemented FA-503-99-06 Previously Reported Corrective Action Implemented FA-503-99-07 Previously Reported Corrective Action Implemented FA-503-99-08 Previously Reported Corrective Action Implemented Georgia State University FA-509-98-01 Previously Reported Corrective Action Implemented FA-509-99-0 I Previously Reported Corrective Action Implemented University ofGeorgia FA-51 8-99-01 Previously Reported Corrective Action Implemented FA-518-99-02 Previously Reported Corrective Action Implemented FA-518-99-03 Previously Reported Corrective ~ction Implemented

COMMENTS
See Comments - Page F-II See Comments - Page F-12
See Comments - Page F-13 See Comments - Page F-13 See Comments - Page F-14 See Comments - Page F-14 See Comments - Page F-14 See Comments - Page F-15 See Comments - Page F-15 See Comments - Page F-15

F-8

Summary ScheduLe of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

Albany State University

FA-52l-98-0l Partially Resolved

FA-52l-98-02 Partially Resolved

FA-521-99-0l Partially Resolved

FA-52l-99-02 Previously Reported Corrective Action Implemented

FA-52l-99-03 Partially Resolved

Armstrong Atlantic State University

FA-524-99-01 Previously Reported Corrective Action Implemented

FA-521-99-02 Previously Reported Corrective Action Implemented

FA-521-99-03 Previously Reported Corrective Action Implemented

Augusta State University

FA-527-99-01 Partially Resolved

Fort Valley State University

533-96-14 Unresolved

533-96-15 Unresolved

533~96-16

Unresolved

533-96-18 . Unresolved

533-96-19 Unresolved

FA-533-98-02 Unresolved

FA-533-98-03 Unresolved

FA-533-98-04 Unresolved

FA-533-98-05 Partially Resolved

FA-533-98-06 Unresolved

FA-533-98-07 Partially Resolved

FA-533~98-08 Partially Resolved

FA-533-98-09 Partially Resolved

FA-533-99-01 Unresolved

FA-533-99-02 Unresolved

FA-533-99-03 Unresolved

FA-533-99-04 Unresolved

FA-533-99-05 Unresolved

FA-533-99-06 Unresolved

FA-533-99-07 Unresolved

FA-533-99-08 Partially Resolved

Savannah State University

FA-548-98-02 Unresolved

FA-548-98-03 Further Action Not Warranted

FA-548~98-04 Unresolved

FA-548-98-05 Partially Resolved

FA-548-98-07 Unresolved

FA-548-99-01 Unresolved

FA-548-99-02 Unresolved

FA-548-99-03 Unresolved

FA-548-99-04 Previously Reported Corrective Action Implemented

FA-548-99-05 Unresolved

FA-548-99-06 Previously Reported Corrective Action Implemented

FA-548-99-07 Unresolved

F-9

COMMENTS
See Comments - Page F-20 See Comments - Page F-20 See Comments - Page F-20
See Comments - Page F-20
See Comments - Page F-20
See Comments - Page F-2l See Comments - Page F-21 See Comments - Page F-21 See Comments - Page F-21 See Comments - Page F-22 See Comments -Page F-22 See Comments - Page F-22 See Comments - Page F-22 See Comments- Page F-22 See Comments - Page F-22 See Comments - Page F-23 See Comments - Page F-23 See Comments - Page F-23 See Comments - Page F-23 . See Comments - Page F-23 See Comments - Page F-23 See Comments - Page F-23 See Comments - Page F-23 See Comments - Page F-24 See Comments - Page F-24 See Comments - Page F-24
See Comments - Page F-25
See Comments - Page F-25 See Comments - Page F-25 See Comments - Page F-25 See Comments - Page F-26 See Comments - Page F-26 See Comments - Page F-26
See Comments - Page F-26
See Comments - Page F-26

Summary Schedule of Prior Year Findings and Questioned CostS For the Fiscal Year Ended June 30, 2000

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

FA-548-99-08 Previously Reported Corrective Action Implemented FA-548-99-09 Previously Reported Corrective Action Implemented FA-548-99-10 Unresolved Southern Polytechnic State University FA-550-98-01 Further Action Not Warranted FA-550-99-0 I Partially Resolved FA-550-99-02 Partially Resolved Valdosta State University 551-96-04 Previously Reported Corrective Action Implemented State University of West Georgia FA-554-97-0I Further Action Not Warranted FA-554-97-02 Further Action Not Warranted Atlanta Metropolitan College 561-96-02 Unresolved 561-96-04 Partially Resolved 561-96-05 Partially Resolved West Georgia Technical Institute 819-96-02 Further Action Not Warranted Augusta Technical Institute FA-824-98-0 I Partially Resolved FA-824-99-0 I Partially Resolved Chattahoochee Technical Institute 827-95-03 Partially Resolved 827-96-03 Partially Resolved 827-96-04 Previously Reported Corrective Action Implemented FA-827-97-03 Partially Resolved Columbus Technical Institute FA-828-97-01 Previously Reported Corrective Action Implemented DeKalb Technical Institute FA-830-98-0 I Partially Resolved FA-830-98-02 Previously Reported Corrective Action Implemented Moultrie Area Technical Institute 837-96-03 Previously Reported Corrective Action Implemented Savannah Technical Institute FA-841-98-01 Unresolved FA-841-98-02 Unresolved FA-841-99-0 I Previously Reported Corrective Action Implemented FA-841-99-02 Previously Reported Corrective Action Implemented Georgia Higher Education Assistance Corporation FA-918-99-01 Previously Reported Corrective Action Implemented
*Audit Follow-up was performed by Other Auditors.

COMMENTS
See Comments - Page F-26 See Comments - Page F-27 See Comments - Page F-27
See Comments - Page F-28 See Comments - Page F-28 See Comments - Page F-28
See Comments - Page F-29 See Finding FA-824-98-01 See Comments - Page F-30 See Comments - Page F-30 See Comments - Page F-30
See Comments - Page F-31
See Comments - Page F-31 See Comments - Page F-31

F-IO

Auditee's Response

Summary ScheduLe of Prior Year Findings and Questioned Costs

For the Ascal Year Ended June 30, 2000

'

AUDITEE'S COMMENTS
DEPARTMENT OF ADMINISTRATIVE SERVICES
Finding Control Number: FS-401-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with the fIDding. A reconciliation statement is under review and action is being taken for correction. As previously noted in our prior response to this fIDding, recommendations have resulted in the creation of the Division of Support Services/Asset Management, with responsibilities over General Fixed Asset inventories. The Department created and staffed the Division of Support Services/Asset Management in June of 1999. Since its creation and staffing, some of the measures that have taken place and that will be introduced in the near future are:
(1) The identification of property coordinators within each entity/location. (2) Full physical inventory taken in the first quarter of fiscal year 2000. (3) Manually convert inventory information into the new Asset Management System, to be completed in the
spring of 2000. (4) Monthly reconciliation of the inventory listing to the financial records. (5) Timely updates of additions and deletions. (6) Identification of accountable assets at the initiation of the procurement process. (7) Update Department policies and procedures, to be completed in the spring of 2000.
Implementation of the above internal controls will help the Department ensure equipment inventory records are maintained in accordance with the State Property Management System Manual.
DEPARTMENT OF EDUCATION
Finding Control Number: FS-414-99-04 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
See our corrective action/responses to fIDding number FA-414-99-01.
Finding Control Number: FA-414-99-01 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
Department ofEducations' Response
A. 1. This, primarily, resulted in equipment paid in Accounting Services and the DE Form 0513, Receipt of Equipment form, not received from initiating units until after June 30, 1999, along with changes on invoices after the receiving report was received in Accounting Services. Also, unit's failure to follow through with changes on invoices associated with field purchase orders to Property Control.
2. This resulted in changes on invoices after the receiving report was received in Accounting Services.
B. I. Failure by unit to properly account for their inventory whether the item was moved by an employee of the unit or Technology Services.
2. Equipment not controlled properly will result in surprise findings of equipment.
F-II

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the FiscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
3. A unit who fails to properly inventory equipment or inventories completed quickly will result in equipment being indicated as "missing". This is a result of poor inventory inspection techniques by the unit.
4. These recordings in the comments column of the property record were added after the FY 1999 Physical Inventory but prior to the FY 2000 Physical Inventory. These entries will be validated by proper documentation during the upcoming FY 2000 Physical Inventory period, which will commence at midFebruary 2000.
5. DOE decals had been removed by unknown circumstances, but new decals were affIxed to this equipment at time of inspection sample.
6. This equipment was purchased in 1991 and had been identified by the SIS coordinator by SIS documentation. It was found during this inspection sample that the description was incorrect and was corrected on the DOE Property System. The twenty (20) items of equipment found were for equipment under the $1,000 threshold for capturing on the DOE Property System.
Office ofSchool Readiness' Response
We concur with these findings. The OffIce of School Readiness has a limited amount of real property (as defined by Georgia Law), but steps have been taken to address the audit finding dealing with equipment inventory. FY99 was a transition year of new accounting systems and responsibilities for the OffIce of School Readiness (OSR). Since this Audit, OSR has defined more clearly that OSR does have complete and total control of inventory maintenance, both physical and computerized inventory records. We have recently separated and assigned the responsibility for asset management to a new section with two. staff positions. Monthly reconciliations will be performed to assure the balance of the fixed asset inventory records with the general ledger purchases. A physical inventory count will be performed annually, and equipment custodians will be assigned and held accountable for the safekeeping of OSR fixed assets through the employee performance evaluation process.
These steps will put OSR in position to meet. the guidelines established by the Georgia Department of Administrative Services (DOAS) for fixed asset management and the OMB's Common Rule governing the Uniform Administrative Requirements for Grants. Management audits have already confirmed the improvements from implementing these internal controls.
Finding Control Number: FA-414-99-03 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period
Department ofEducations' Response
Although the Department of Education is responsible for tracking and reviewing the audits of 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 LUA audits, the Department of Audits has the responsibility to audit all state agencies, commissions, etc. The LUAs are audited after the state agencies, commissions, etc. Because the LUAs are audited last and the large number of LUAs to be audited, the Department of Audits cannot complete the audits in the time period required by OMB Circular A-133. The U.S. Department of Education is aware of the 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.
F-12

Audltee's Response Summary Schedule of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
Office ofSchool Readiness' Response
In response to this audit finding which detail 346 audits not received before the nine-month Federal deadline, the Office of School Readiness (OSR) has received documentation of 163 participants that belong to OSR. Eighty-three (83) participants are for profit entities and are not subject to the A-B3 requirement. Therefore, they should not have been included in the calculation.
The audits for nonprofit organizations that are subject to the OMB Circular A-133 deadline includes school systems. These audits are performed by the Georgia Department of Audits and Accounts (DOAA) and are not completed and submitted to the Boards of Education in a timely manner as stated in the finding. It concerns OSR that we would receive a finding from DOAA, when DOAA makes it impossible for us to get the audit before the deadline. The exclusion of those fifty-four (54) organizations in this fmding would lessen our noncompliance.
Based on the 163 items of noncompliance provided, OSR should have been cited for twenty-six (26). OSR has and will continue to take steps to meet our Federal and State requirements.
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION
Finding Control Number: FA-415-99-02 SUBRECIPIENT MONITORING Inadequate Internal Controls and Compliance Deficiencies
1. The Department of Technical and Adult Education (DTAE) sent out memorandums to all library systems requesting a copy of the Corrective Action Plans (CAPS) for the Fiscal Year 1998, which would include the Fiscal Years 1996 and 1997 CAPS. We are currently collecting the Corrective Action Plans and will forward them to the Department of Audits upon receipt. DTAE has taken steps to ensure that all Corrective Action Plans are submitted from subrecipients in a timely manner.
2.b. The Department of Technical and Adult Education sent a letter dated March 17, 2000, to the D.. S. Department of Education (USDOE) responding to the Audit. No response has been received from USDOE.
DEPARTMENT OF COMMUNITY HEALTH
Finding Control Number: FS-419-98;'Ol EXPENDITURES/LIABILITIESIDISBURSEMENTS Deficiencies in Operation of Medicaid Claims Process System
See response to finding control number FA-419-98-01.
Finding Control Number: FA-419-98-o1 ALLOWABLE COSTS/COST PRINCIPLES Deficiencies in Operation of Medicaid Claims Process System Questioned Costs: $1,108,829.50
The Department has recouped the full amount owed by eight of the nine Community Service Boards mentioned in the 1998 Single Audit Report. The Department's attempted recoupment of the amount owed by the other Community Service Board is being appealed through. the State's administrative review process.
F-B

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
DEPARTMENT OF HUMAN RESOURCES
Finding Control Number: FS-427-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
See our corrective action/responses to finding number FA-427-99-04.
Finding Control Number: FA-427-98-01 ELIGffiILITY Improper Benefit Payments Temporary Assistance to Needy Families (CFDA 93.558) Questioned Cost: $1,688.00
The Federal agency never requested this payment, so no payment was made. Discussions were held between the DHR Funds Management reporting staff and the U. S. Department of Health and Human Services (HHS). HHS was to bill the Department if repayment was to be required. No billing was received from HHS.
Finding Control Number: FA-427-98-02 ELIGIBILITY Improper Benefit Payments Child Care and Development Block Grant (CFDA.93.575) Child Care Mandatory and Matching Funds of the Child Care and Development Fund (CFDA 93.596) Questioned Cost: $2,345.00
The Federal agency never requested this payment, so no payment was made. Discussions were held between the DHR Funds Management reporting staff and the U. S. Department of Health and Human Services (HHS). HHS was to bill the Department if repayment was to be required. No billing was received from HHS.
Finding Control Number: FA-427-99-01 ELIGIBILITY Deficiencies in File Maintenance Temporary Assistance for Needy Families (CFDA 93.558) Questioned Cost: $11,525.00
The corrective action plan developed in response to the fiscal year 1999 audit was fully implemented. The plan required the following:
1) The implementation of a system for "case record reading to be completed by county supervisory staff to monitor policy compliance.
2) The assignment of State office TANF consultants to each field coordination area. The role of the consultants has been, and continues to be, to monitor the degree to which their counties are complying with program requirements. This is accomplished through regular visits to the field, completing second level case record reviews, providing training as needed and conducting regularly scheduled meetings with supervisory staff. Emphasis has been placed on the importance of documentation.
3) The monitoring of counties' ability to locate case records and the development of plans to organize records in those counties that experience problems in the management of hard copy records.
F-14

Audltee's Response Summary ScheduLe of Prior Year findings and Questioned Costs For the Ascal Year Ended June 30, 2000
AUDITEE'S COMMENTS
Finding Control Number: FA-427-99-02 ELIGIBILITY Deficiencies in File Maintenance Child Care Cluster Child Care and Development Block Grant (CFDA 93.575) Child Care Mandatory and Matching Funds of the Child .Care and Development Fund (CFDA 93.596) Questioned Cost: $8,470.00
The state has increased the child care consultant staff by three. All state level child care staff are assigned to monitor county child care operations as specified in field areas. Staff review case records, vendor files and assist counties as needed to improve the child care program. During the past year, all supervisors were trained in child care, all workers attended conferences where child care workshops were held and quarterly supervisors' meetings were held.
January 2001, the state added five more field consultants to the section. This allows a consultant per DHR region. The expectation is that counties will receive more technical assistance, monitoring and training which should result in a high level of case accuracy and expenditures.
Second level case record reviews by supervisors will continue. State level consultants will continue to monitor the completion of second level case reviews for corrections and accuracy.
The-Evaluation and Reporting section administrative unit now reviews records and provide feedback. Field consultants will use these results as indicators of technical assistance needs.
Finding Control Number: FA-427-99-03 ELIGIBILITY Deficiencies in File Maintenance Food Stamps (CFDA 10.551) State Administrative Matching Grants for Food Stamp Program (CFDA 10.561) Questioned Cost: $12,803.00
All corrective actions previously reported were implemented as designed. The audit for the fiscal year ending June 30, 2000 indicates file maintenance deficiencies remain. Additional corrective actions to address these deficiencies will be taken in fiscal year 2001, as follows;
1) Statewide reminders that all earned income records must have supervisory review.
2) Statewide corrective action meeting for caseworkers and supervisors, workshops covering case documentation and record maintenance requirements.
3) Statewide release ofa revised documentation requirements package.
Finding Control Number: FA-427-99-04 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The status of each element in the "Corrective Action Plan" is detailed below.
1) Division and Office property coordinators will be required to insure compliance with policies and procedures regarding property.
Existing policies and procedures are currently being reviewed with the DHR Policy Coordinator. Review is scheduled for completion on March 15, 2001. Policy and procedures will be updated as necessary
F-15

Audltee's Response Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the Fiscal Year Ended June 30, 2000
AUDITEE'S COMMENTS
based on review. Division and Office property coordinators will be provided with these policies and procedures and provided adequate training to insure compliance.
2) DHR will require all locations to complete a physical inventory prior to June 30, 2000.
This inventory is 70% .complete. Notification is being prepared for submission to Division and property coordinators advising them of specific delinquent reports and providing them with a March 15, 2001 deadline for compliance.
3) Division and Office property coordinators will be required to reconcile property on hand with property as recorded in the Property Asset Management System.
It has been determined that total compliance is a very involved and complicated process. Steps to complete this process will be discussed at the February 2001 Quarterly meeting with Division and Office property coordinators and an action plan for completion will be formulated.
4) DHR Office of Facilities and Support will meet with property coordinators on a quarterly basis to assure that reconciliations are completed, that surplus property is so indicated and to further train coordinators on an ongoing basis.
Meetings are scheduled for: February 2001 May 2001 August 2001 November 2001 Meetings for 2002 will be scheduled at the November 2001 meeting.
DEPARTMENT OF COMMUNITY AFFAIRS
Finding Control Number: FS-428-99-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
In prior years, the Department has never received a finding in this area because of its strong internal controls. This finding is due to the conversion to the PeopleSoft system. All efforts were made to bring the Department's inventory current in the PeopleSoft system. Surplus items were still not deleted as of June 30, 2000. They will be deleted from the PeopleSoft system by January 31, 2001.
DEPARTMENT OF NATURAL RESOURCES
Finding Control Number: FS-462-99-02 GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequaci~s in Operation of Property Management System
Steps are being taken to ensure that all surplus items are removed from the equipment inventory records when the documentation is received and that all inventory items have the proper decal and are recorded in the property management system in accordance with the "State Property System Manual". To further ensure these steps are being followed those duties are being removed from the person who has been responsible for inventory management over the past several years and are being reassigned to others. We are in the process of conducting complete inventories at all office sites throughout the state and making the appropriate entries into the asset management system from these inventories. This process (the complete inventories) was started in June 2000. We anticipate it will take twelve (12) to eighteen (18) months to complete
F-16

Audltee's Response Summary Schedule of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
. all inventories and get the property management system completely accurate and up to date.
DEPARTMENT OF CORRECTIONS
Finding Control Number: FS-467-99-01 GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
Part 1 - Field units are still required to add equipment onto the inventory system. Now that the Department has adopted PeopleSoft, all purchases can be traced back to a purchase order in PeopleSoft. With the new reconciliation process, it can be determined, by the Property Control Section, in a more timely manner when items need to be added.
Part 2 - An official property audit is required to be conducted once a year at each facility or central office section, and items that cannot be located are determined as missing and noted. Facilities' budgets are now being charged the replacement costs for missing control items. This should help cut down on the number of missing items. Missing computer items continue to be an ongoing problem for the department. New procedures and guidelines have been established for OIT staff to follow,concerning the tracking of equipment.
DEPARTMENT OF REVENUE
Finding Control Number: FS-474-99-0l CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures
We concur with this finding. Since the end of the fiscal year, bank reconciliation duties have been reviewed. This review is ongoing and will continue through subsequent periods. An accountant has been hired to reconcile bank accounts and to identify and resolve outstanding reconciling items.
1. Accounts will be reviewed and employee's duties revised where feasible.
2. New procedures will be developed for the reconciling of the General Funds Transfer Account in the PeopleSoft system.
3. Procedures. call for all bank reconciliations to be reviewed by the Accounting Director. The accounts were inadvertently given directly to the auditors prior to my approvaL Employees within Central Accounting have been reminded of the procedure.
-4. The Accountant hired to reconcile the accounts is working towards having all accounts reconciled by the end of the month following the bank statement closing date. All Departmental accounts will be current prior to the end of the fiscal year.
5. We are working with the banks to identify and correct all reconciling items.
6. The majority of the outstanding checks continue to be attributed to large volume accounts which are full reconciliation accounts maintained by the bank and Local Option Accounts. We will work with the banks on speeding up their write-off procedures. The Local Option Account checks have not been negotiated due to pending litigation.
7. We are currently reviewing both Federal retirees accounts, and these funds will be transferred to the State Treasury where appropriate.
F-17

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000

AUDITEE'S COMMENTS

Finding Control Number: FS-474-99-02 REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Deficiencies in the State Revenue Collections Fund (Overall)

We concur with the finding.

In response to deficiency 1, -2, 4, and 5, the Department is currently working on implementing a new dual-entry

bookkeeping application within the PeopleSoft system for the recognition of receipts and disbursements. Our current plan

is to implement the new application by the end of the fiscal year 2000.

.

In response to deficiency 3, procedures to notify all responsible Division personnel of known adjustments, in a timely manner, are in place. Rejected electronic funds transfers are posted as returned items on the CTA system within two days of notification by the bank. NFS and returned checks are similarly posted to the CTA system. Once posted, notices are sent to the taxpayer and the original check to CTA.

Finding Control Number: FS-474-99-03 REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Deficiencies in the Income Tax Division Subsidiary Records

Management Response - Deficiency 1
We concur with this finding. Phase 2 of the withholding system plans for the capture of data from the W-2 information filed by employees via magnetic media. A high level pilot project to compare the total withholding shown on the individuaL returns to the W-2 information from employers is planned late in Phase 2 of the individual system rewrite project. The breakdown of the employers W-2 magnetic filings by Social Security Numbers will be compared to the total withholding shown on the individual returns. The resulting information will be used in post audit review. The pilot project will be at a high level, using only information from employers filed magnetically and the total withholding from individual returns. At this time, limited resources prohibit further data entry ofW-2 information, both from employers and individual taxpayers. Methods of capturing more of the information through electronic means will be explored in the future.
Management Response - Deficiency 2
In the second phase of the redesign of the withholding and individual systems, there will be adequate system controls to track adjustments to ensure that all are processed in a timely manner. The systems will be designed to produce automated - aging reports for regular management review to assure that adjustments are made timely.

GEORGIA STUDENT FINANCE COMMISSION
Finding Control Number: FS-476-99-01 CASH AND CASH EQUIVALENTS Drawdown of Lottery Funds in Excess of Current Operating Needs
The difficulty in complying with O.e.G.A. 50-17-51 (c) has been the timing requirements in implementing the policy decision to provide Lottery funds to schools the day following a drawdown request. Specifically, on certain given days, we have processed over $20,000,000.00. The timing requirements to transfer funds fro,m OTFS to the agency's bank account and then, in turn, to disburse those funds to the schools, made it necessary to maintain a balance in the Lottery fund account that would provide an allowance for several days. In addition, until this past year the program was undergoing substantial funding allowance changes that made it very difficult to accurately estimate the timing and the amount of requests from the schools.

F-18

Audltee's Response Summary Schedule of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
Beginning with Fiscal Year 2000, the agency has been able to greatly reduce the average amount of funds drawn down from OTFS. The average monthly balance of allotment funds in GSFC bank accounts for the fIrst six months of Fiscal Year 2000 has dropped to approximately $26,000,000.00 from an average of over $66,000,000.00 in Fiscal Year 1999.
In order to further decrease appropriation allotments, as of April 1, 2000 the agency will be implementing a change in the request/disbursement process. As of that date GSFC will keep a minimal amount of funds in its Lottery account. Each business day, the GSFC Accounting Unit will receive a report of disbursement requests from the schools. GSFC will use that report as the basis for requesting funds from OTFS. Funds will be transferred from OTFS to GSFC and GSFC will disburse funds to the schools on the next day. While this change in process will increase the time from request to disbursement by one business day, it will allow OTFS to keep a maximum amount of funds in its investment accounts.
DEPARTMENT OF TRANSPORTATION
Finding Control Number: FS-484-99-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
Procedures have been put in place to direct personnel of each budget unit to complete the needed asset information, which includes tag/decal number, location, organizational unit and serial number.
The new procedures that were implemented in fIscal year 2000 are as follows:
Monthly reports of new assets requiring decal numbers and other additional information required is forwarded to appropriate offices/units and necessary follow up is provided.
In addition to regular asset inventory by the offices, spot and random inventories are conducted by internal audit teams.
GEORGIA INSTITUTE OF TECHNOLOGY
Finding Control Number: FS-503-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The Institute reviewed procedures for the equipment inventory process and implemented, revised procedures to strengthen the overall equipment inventory process. Special attention was focused on the review arid follow-up of items reported as missing and the deletion of equipment.
Operational changes included the departmental inventories being conducted throughout the fIscal year rather than in the fourth quarter of the fIscal year, the production of special senior management reports by unit for unaccounted equipment, and unit head certifIcation of unaccounted equipment prior to review and approval by the Associate Vice President for Financial Services for deletion and write-off.
The revised operating procedures resulted in a significant improvement in the accounting of equipment assets.
F-19

Audltee's Response Summary Schedule of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 3D, 2000
AUDITEE'S COMMENTS
ALBANY STATE UNIVERSITY
Finding Control Number: FA-521-98-01 ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $19,795.25
The University has responded to the correspondence from the u. S. Department of Education and has submitted funds to
resolve this issue. Confirmation from the Department is expected.
Finding Control Number: FA-521-98-02 SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $2,960.80
The University has responded to the correspondence from the U. S. Department of Education and has submitted funds to resolve this issue. Confirmation from the Department is expected.
Finding Control Number: FA-521-99-01 REPORTING Report Not Reconciled Student Financial Aid Cluster Program
The University has implemented adequate controls to ensure that reports are accurately completed and supported by the accounting records. Detailed reconciliations are prepared for any variances and are maintained as part of the supporting documentation. The University has not received any correspondence from the U. S. Department of Education since submission of the audit report containing the findings.
Finding Control Number: FA-521-99-03 SPECIAL TESTS AND PROVISIONS Deficiencies in Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $2,686.00
The University implemented procedures to ensure that refunds are correctly calculated and applied to appropriate accounts in a timely manner. Procedures were_ also developed to identify "unofficial withdrawals" to ensure that refunds are calculated accordingly. This is a continuous monitoring function. The University has not received any correspondence from the U. S. Department of Education since submission of the audit report containing the fmdings.
AUGUSTA STATE UNIVERSITY
Finding Control Number: FA-527-99-01 REPORTING Incorrect Student Payment Summary Report Student Financial Aid Cluster Program
Both the Business Office and the Financial Aid Office have compared the Department of Education's report with our records. The records have been reconciled and now the Financial Aid Office will make the necessary submission of awards for both increases and decreases. The Financial Aid Office will also investigate rejected awards.
F-20 -

Audltee's Response Summary ScheduLe of Prlor.Year Andlngs and Questioned Costs For the AscaL Year Ended June 30, 2000

AUDITEE'S COMMENTS

CLAYTON COLLEGE AND STATE UNIVERSITY

Finding Control Number: FS-528-99-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property M~nagement System

In fiscal year ended 6-30-2000, General Fixed Assets were not reconciled to the General Ledger, nor was a physical inventory count taken at year-end. In fiscal year ended 6-30-2001, a monthly reconciliation will be performed to reconcile the General Fixed Assets listings to the General Ledger. In addition, a count of equipment will be performed to verify equipment at year-end to both the General Fixed Assets listings and the General Ledger.

FORT VALLEY STATE UNIVERSITY

Finding Control Number: 533-96-14 TYPES OF SERVICES/ALLOWED OR UNALLOWED Disbursement in Excess of Cost of Attendance

The institution has mandated a policy that all payments to students, regardless of the source, must be approved by the

financial aid office before disbursement. This policy was already in effect, but apparently not adhered to sufficiently.

Therefore, the emphasis that the institution now places on the procedure should provide the appropriate enforcement of the

policy.

.

Finding Control Number: 533-96-15 ELIGIBILITY Funds Disbursed While Enrolled in Excess Remedial Hours

We concur with the audit finding, but are awaiting a response from U. S. Department of Education for resolution of the questioned cost.

Finding Control Number: 533-96-16 ELIGIBILITY Improper Determination of Enrollment Status

We concur with the audit finding, but are awaiting a response from U. S. Department of Education for resolution of the questioned cost.

Finding Control Number: 533-96-18 ELIGIBILITY Student Financial Aid in Excess of Maximum Time Frame

We submitted information to the federal governrnent concerning this student's specific situation. Documentation supporting this was available in the student's folder, but was not appropriately listed for the audit year. We have appealed this finding with the understanding that documentation will always be appropriately listed in the future.

F-21

Audltee's Response

Summary ScheduLe of-Prior Year Andlngs and Questioned Costs

For the Ascal Year Ended June 30, 2000

.

AUDITEE'S COMMENTS

Finding Control Number: 533-96-19 ELIGIBILITY Satisfactory Academic Progress Not Maintained

We do not concur with" this fmding. 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 catalogs 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:

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 suspension was warranted. Two students had been suspended from

financial aid at the end of Spring 95, had appealed their suspension and been approved for 95-96, and documentation was

available in the respective student's records attesting to action taken. Two students began the 1995-1996 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.

.

..

A result of all the aforestated information, we do not concur with audit findings in this area.

Finding Control Number: FA-533-98-02

ELIGIBILITY

_

Control Procedures Inadequate

We are awaiting a response from the U. S. Department of Education for resolution.

Finding Control Number: F A-533-98~03 ELIGIBILITY Failure to Disburse FSEOG Funds to All Pell Recipients

We are awaiting a response from the U. S. Department of Education for resolution.

Finding Control Number: FA-533-98-04 ELIGIBILITY Overpayment of Student Financial Aid

We are awaiting a response from the U. S. Department of Education for resolution of the questioned cost.

Finding Control Number: FA-533-98-05 PERIOD OF AVAILABILITY . Funds Awarded in Excess of Annual Limits

Our concurrence was with one error in Pell Grant payment, whereas the auditors cited two. We will reimburse the Pell Grant program upon direction from the U. S. Department of Education when final resolution is received.

Finding Control Number: F A-533-98-06 REPORTING Expenditures in Excess of Authorization

Awaiting final response from the U. S. Department of Education on the Pell Grant expenditures in question.

F-22

G1org1.8.
Audltee's Response Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the Fiscal Year Ended June 30, 2000
AUDITEE'S COMMENTS
Finding Control Number: FA-533-98-07 REPORTING Inadequate Documentation for Report
Documentation to support the FISAP report is maintained on file in the Financial Aid and Accounting Services Offices. II]formation used to prepare the report is generated through the University's Banner Student Information System and CUFA then summarized into appropriate data files.
Finding Control Number: FA-533-98-08 REPORTING Reports Not Reconciled
The Financial Aid and Accounting Service Offices have taken steps to ensure that all reports are reconciled on a timely basis. A new Financial Aid Director was appointed in October 1999. The University will engage a consultant to assist with documenting all reconciliation and reporting procedures.
Finding Control Number: FA-533-98-09 SPECIAL TESTS AND PROVISIONS Entrance and Exit Counseling not Conducted
The Financial Aid Office will adhere more strongly to its procedures on entrance and exit counseling.
Finding Control Number: FA~533-99-01 ELIGIBILITY Improper Disbursement of FSEOG Funds
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
Finding Control Number: FA-533-99-02 ELIGIBILITY Failure to Notify Student of Awards
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
Finding Control Number: FA-533-99-03 ELIGIBILITY Overpayment of Student Financial Aid
This finding has been reported to the U. S. Department of Education and we are awaiting their rmal determination.
Finding Control Number: FA-533-99-04 REPORTING Expenditures in Excess of Authorization
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
Finding Control Number: FA-533-99-05 REPORTING Inadequate Documentation for Report
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
F-23

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000
AUDITEE'S COMMENTS
Finding Control Number: FA-533-99-06 REPORTING Reports Not Reconciled
This finding has been reported to theu. S. Department of Education and we are awaiting their fmal determination.
Finding Control Number: FA-533-99-07 SPECIAL TESTS AND PROVISIONS Entrance and Exit Counseling Not Conducted
This finding has been reported to the U. S. Department of Education and we are awaiting their fmal determination.
Finding Control Number: FA-533-99-08 SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures
The financial aid office, personnel and payroll departments have now implemented procedures to ensure that time sheets are approved only after the last date indicated as worked on the time sheet. Procedures were also implemented to ensure that the supervisor actually signed student's time sheet and that each participant in the work-study program completes federal and state tax forms.
GEORGIA SOUTHERN UNIVERSITY
Finding Control Number: 539-96-01 REVENUES/RECEIVABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid
Georgia Southern University is following the Board of Regents Policy, Section 704, on collecting fees at student registration and ensuring that allowable exceptions to the Board of Regents' Policy have supporting documentation. Student fee deferments are only granted to students whose fees are guaranteed by an agreement with an outside agency and whose student fees will be paid from approved financial aid.
Procedures to collect outstanding accounts receivable balances have been implemented. Georgia Southern University will continue its collection efforts on the outstanding student accounts receivable balances. In addition, to assist in the collection of the accounts, Georgia Southern has placed a financial record hold on the academic records of students who have outstanding accounts receivable balances.
Finding Control Number: FS-539-98-02 GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
Following a management review of equipment inventory procedures the Institution has funded and is in the .process of hiring a Property Control Officer. This position will be responsible for identifying procedural weaknesses as well as correcting those already identified in a previous management review of equipment inventory. Planned enhancements to procedures include, but are not limited to, strengthening internal controls within the Property Control Office as well as controls within departments to whom equipment is assigned, improved training and communications to departments responsible for institutional equipment and increased use of technology in the equipment inventory process. The future implementation of the Peoplesoft Asset Management module will provideaddit"ional functionality for manag~ment of equipment inventory.
F-24

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
KENNESAW STATE UNIVERSITY
Finding Control Number: 543-96-01 REVENUES/RECEIVABLES/RECEIPTS Student Accounts Receivable not Supported by Financial Aid
The process for collecting Masters of Experienced Professional student fees has been restructured. These students' accounts are now processed in the Banner subsystem. The policies developed are designed to ensure that the University is in compliance with Regents policy. The number of outstanding Masters of Experienced Professional receivables has been greatly reduced.
SAVANNAH STATE UNIVERSITY
.Finding Control Number: FA-548-98-02 ALLOWABLE COSTS/COST PRINCIPLES Employee Compensation Deficiencies Higher Education - Institutional Aid (CFDA 84.031)
Title III and other Federal funded programs are required to submit time and effort reports on a monthly basis. Individuals res'ponsible for administering these accounts will:
1) Verify the accuracy of the report. 2) Make sure that the person preparing the report as well as hislher supervisor signs them. 3) Ensure that the percent of effort reflected in the report supports the actual work performed.
Finding Control Number: FA-548-98-04 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Higher Education - Institutional Aid (CFDA 84.031)
There was no report from the Department of Education. The finding is unresolved and questioned.
Finding Control Number: FA-548-98-05 PERIOD OF AVAILABILITY Unallowable Expenditures Higher Education - Institutional Aid (CFDA 84.031)
Procedures have been established to monitor grant accounts to ensure that funds are spent within the specified time period of the grant and to return any unspent funds to the grantor in a timely fashion. Departments will be required to obtain authorization from funding agencies and carry-over unspent amounts throughout the grant award budget period.
Finding Control Number: FA-548-98-07 REPORTING Final Performance Report Prepared with Budget Figures Higher Education - Institutional Aid (CFDA 84.031)
This was a deviation from past practices as a result of turnover in personnel. Future reporting will resume the historical practice of reflecting actual expenditures..
F-25

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the FiscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
Finding Control Number: FA-548-99-01 ALLOWABLE COSTS/COST PRINCIPLES Employee Compensation Deficiencies . Higher Education - Institutional Aid (CFDA 84.031) . Research and Development Cluster Programs
Personnel in the Department of Grants and Contracts has been made aware of OMB Circular 21 as it pertains to time and effort reports. Procedures are now in place to make sure that time and effort reports are submitted for all Federal programs on a monthly basis. The Office of Contracts and Grants will verify the accuracy of the report. The office will also ascertain that the percent reflected in its report supports its actual work performed.
Finding Control Number: FA-548-99-02 DAVIS-BACON ACT Payment of Prevailing Wage Rates not Monitored Higher Education - Institutional Aid (CFDA 84.031)
Employees responsible for administering the Federal programs have been made aware of the requirements of the DavisBacon Act. Future contractual obligations involving Federal funds will be monitored for compliance.
Finding Control Number: FA-548-99-03 ELIGIBILITY Overpayment of Student Financial Aid Weaknesses in Internal Control Structure Student Financial Aid Cluster Program
Final resolution is contingent upon a response from the United States Department of Education. The Institution has submitted requested information to the Department per its November 20,2000 letter.
Finding Control Number: FA-548-99-05 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Higher Education - Institutional Aid (CFDA 84.031) .
There was no report from the Department of Education. The finding is unresolved and questioned.
Finding Control Number: FA-548-99-07 REPORTING Expenditures in Excess of Authorization Federal Pell Grant Program (CFDA 84.063)
The Office of Contracts and Grants have been working closely with the Office of Financial Aid to ensure that the University's records ancj SPS Summary report reconcile. A remarkable improvement has been made this year.
Finding Control Number: FA-548-99-10 SPECIAL TEST AND PROVISIONS Failure to Disclose Federal Funding in Public Announcement Higher Education - Institutional Aid (CFDA 84.031)
The bid packets contained an announcement stating" ... this project is fully Federally funded" as opposed to "this project is 100% Federally funded in the amount of $... " Future notices have been revised to read" ... This project is 100% financed with Federal funds as part ofa $1,000,000 Title III Program."
F-26

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the Ascal Year Ended June 30, 2000
AUDITEE'S COMMENTS
SOUTHERN POLYTECHNIC STATE UNIVERSITY
Finding Control Number: FS-550-99-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
During Fiscal Year 2000 the University completed an approximate 80% equipment inventory. During this process documentation was found to support every item. Lost equipment was found and equipment that was listed but had been surplused was identified. One remaining department, the Information Technology department, did not complete the inventory prior to fiscal year end. During Fiscal Year 2001 resources will be focused completing the final department that remained. Procedures and processes have been reintroduced to strengthen the internal controls from the purchase of equipment to the delivery of equipment to the department. The Inventory Clerk now decals the equipment upon delivery from the vendor.
Finding Control Number: FA-550-99-01 REPORTING Inadequate Internal Controls and Compliance Deficiencies for FISAP Reporting Student Financial Aid Cluster Program
FISAP Reporting - This report represents expenditures of federal programs as of the financial statement date of June 30 each year. However, the actual expense at this time are not the fmal expenses for the program year as the fmancial aid office continues to adjust awards of students after the close of the reporting period. The Financial Aid Staff and Fiscal Affairs Staff will work together and reconcile financial data on all aid programs each month. Additional internal controls will be put in place to ensure that prompt research and follow-up occurs to resolve eligibility, award, disbursement and reporting issues related to each aid program.
Finding Control Number: FA-550-99-02 SPECIAL TESTS AND PROVISIONS Inadequate Internal Controls and Compliance Deficiencies for Promissory Notes and Exit Counseling Student Financial Aid Cluster Program
Promissory Notes - The Financial Aid Staff and Fiscal Affairs Staff will work jointly to ensure promissory notes are properly executed prior to award of aid and subsequent disbursement. Prompt research and follow-up will occur to resolve eligibility, award, disbursement and reporting issues related to loan programs. The UniversitY Fiscal Affairs staff has reviewed all Perkins loan notes from 7/1/98 to current. Of 164 accounts reviewed, 26 lacked some form of required documentation. Twenty-five (25) accounts have been resolved. The University is still pursuing resolution on the one remaining account.
Exit Counseling - The University is currently relying upon the web based exit iIiterview process. The University sends letters to students who petition to graduate notifying them of the exit interview requirement as well as identifying these students prior to the last term of emollment and focus resources on ensuring that all students have satisfied this requirement. Additional automated controls will be developed to ensure exit interview requirements are met for students who either withdraw or drop below half-time status.
F-27

Audltee's Response
of Summary ScheduLe Prior Year Findings and Questioned Costs
For the Fiscal Year Ended June 30, 2000
AUDITEE'S COMMENTS
ATLANTA METROPOLITAN COLLEGE
Finding Control Number: 561-96-01 FUND EQUITIES Deficit Fund Balance
The College contacted the United States Department of Education in an effort to fund the fiscal year 1994 Pell Grant Program deficit by having the authorization amount for the fiscal year 1994 Pell Grant Program increased by $34,363.31. We explored the 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.
Finding Control Number: 561-96-02 FUND EQUITIES REPORTING Deficit Fund Balance
The College contacted the United States Department of Education in an effort to f\.!lld the fiscal year 1995 Pell Grant Program deficit by having the authorization amount for the fiscal year 1995 Pell Grantincreased by $64,595.20. In March 1998, the United States Department of Education notified the College that an authorization increase was appropriate for the fiscal year 1995 award year. The College has been given the opportunity to submit an official request for an authorization increase. The College has contracted with an accounting firm to provide assistance in preparation of the documentation required to support an authorization increase. The College has also contacted the Board of Regents regarding the funding of the deficit and will continue to explore all reasonable options available to the College to fund this deficit.
Finding Control Number: 561-96-04 REPORTING Incorrect Student Payment Summary Report
The College is currently waiting for an additional upward adjustment from the United States Department of Education in the amount of$41,529.14 to fully fund the fiscal year 1996 Pell Grant Expenditures.
Finding Control Number: 561-96-05 SPECIAL TESTS AND PROVISIONS Overpayments to Federal Financial Aid Recipients
The student receiving $282.00 has not responded to our request for repayment of the amount received in error. The College will continue to place on hold the academic record of this student until the obligation is satisfied.
FLOYD COLLEGE
Finding Control Number: FS-573-97-02 FUND EQUITIES Deficit Restricted Funds
Floyd College continues trying to collect the deficit balance of$15,285.55 owed by a private funding agency. The agency is under new management and to date, collection efforts have been unsuccessful.
F-28

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the Fiscal Year Ended June 30, 2000
AUDITEE'S COMMENTS
Finding Control Number: FS-573-97-04 GENERAL LEDGER Agency Fund Deficits
Deficiencies have been corrected in all Agency Funds with two exceptions. The Floyd College Choir account and the Tallatoona Head Start account have had deficit balances since fiscal year 1997. These accounts have not been active since that time and the accounts remain deficient.
GEORGIA MILITARY COLLEGE
Finding Control Number: FS-590-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Inadequacies in Operation of Property Management System
The College completed a 100% inventory and converted to a new inventory system during fiscal year 2000. The task of acquiring acquisition cost and acquisition date has been more time-consuming than originally expected. The College anticipates completion of the task by January, 2001.
The College has not yet identified the funds necessary to obtain outside, professional assistance to properly assess the historical' value of the older buildings owned by Georgia Military College. The College will attempt to fund this project in the fiscal year 2002 budget.
WEST GEORGIA TECHNICAL INSTITUTE
Finding Control Number: FS-819-99-03 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Property Management Procedures
West Georgia Technical Institute will perform a formal reconciliation of activity in the Asset Management System in FY2000. Accounting personnel will review inventory records to determine the proper valuation of equipment items. Adjustments will be made to correct the overstated valuation and supporting documentation will be kept on file. The Accounting Manager is responsible for inventory reconciliation.
AUGUSTA TECHNICAL INSTITUTE
Finding Control Number: FS-824-97-02 REVENUESIRECEIVABLESIRECEIPTS Inadequate Accountin& Control Procedures
Outstanding receivables from prior years continue to be pursued for collection. Collections are a continuing process. Receivables occur when the status of a financial aid student changes. The Institute has implemented checks and balances between financial aid and student registration in an effort to minimize receivables.
Finding Control Number: FA-824-98-01 ACTIVITIES ALLOWED AND UNALLOWED Improper Expenditures for Financial Aid Services Vocational Education - Basic Grants to States (CFDA 84.048) Questioned Costs: $48,930.95
Salaries for financial aid personnel were paid from non-Perkins funds for fiscal year 1999. However, in a communication with the U. S. Department of Education, it was stated that since financial aid personnel provide services to special
F-29

Auditee's Response
Summary Schedule c;>f Prior Year Andings and Questioned Costs
For the Ascal Year Ended June 30, 2000
AUDITEE'S COMMENTS
population students, salaries were a permissible expense. Also, with regard to the issue of supplanting funds, the Department of Education states that since the salaries have always been funded by Perkins, supplanting did not occur. Final resolution of this finding will not be made until such time as the Department of Education requests a response to the finding. This normally is a two to four year process. The Institute considers this finding resolved based on communication from the Department of Education.
Auditor's Note: The Department of Audits does not believe that this finding is resolved. This belief is based on our determination that the cited U. S. Department of Education communication which addressed conditions at another Technical Institute, is not applicable in this situation. We continue to believe that the expenditure of Perkins funds for personnel service costs specifically for the operation of the Student Financial Aid office is not an allowable activity that conforms with the Act and 34 CFR 403.111(c) and (d). We also believe these expenditures are not in compliance with "supplant versus supplement" requirements included in 34 CFR 403.196. We concur that the U. S. Department of Education will make final resolution of this fmding. However, resolution of the finding and related questioned costs should be based solely on circumstances surrounding the expenditure of the Perkins funds at Augusta Technical Institute.
CHATTAHOOCHEE TECHNICAL INSTITUTE
Finding Control Number: 827-95-03 REPORTING Incorrect Student Payment Summary Report
Final reconciliation of the adjustments to be made on the Student Payment Summary Report has been prepared and will be sent to the U. S. Department of Education by November 30,2000, following procedures in Dear Colleague letter P-97-2.
Finding Control Number: 827-96-03 REPORTING Incorrect Student Payment Summary Report
The fmal step of the adjustment process has not been implemented. A final reconciliation of the student accounts must be completed and then sent to the U. S. Department of Education following the guidelines of Dear Colleague letter P-97-2 by December 31, 2000.
Finding Control Number: FA-827-97-03 REPORTING Incorrect Student Payment Summary Report Amount: $3,612.00
The Institute must have the student awards certified by the state auditors before submission to the U. S. Department of Education for adjustment. Arrangements will be made to have the certification performed in order to submit the adjustments before June 30, 2001, following the provisions in Dear Colleague letter P-97-2.
DEKALB TECHNICAL INSTITUTE
Finding Control Number: FS-830-98-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Improper Recording of Capital Leases
Some of the prior year questioned lease-purchases have been added to the inventory. The remainder will be added as their status is verified with the vendor.
F-30

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the AscaL Year Ended June 30, 2000
AUDITEE'S COMMENTS
Finding.Control Number: FA-830-98-01 ACTIVITIES ALLOWED OR UNALLOWED Improper Expenditures for Financial Aid Services Questioned Costs: $31,480.04
Questioned costs have not yet been resolved. A revised use of Perkins funds for allowable activities is being used for the current year.
APPALACHIAN TECHNICAL INSTITUTE
Finding Control Number: FS-840-98-03 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Property Management Procedures
Last physical inventory was winter/spring of 1999. My intent was to do another inventory during fiscal year 2000 to verify update. Training and system schedules did not allow time for the additional physical inventory. There will be an inventory in the winter/spring of2001.
SAVANNAH TECHNICAL INSTITUTE
Finding Control Number: FA-841-98-01 ACTIVITIES ALLOWED AND UNALLOWED Improper Expenditures for Financial Aid Services Vocational Education - Basic Grants to States (CFDA 84.048)
Savannah Technical Institute set up a payable for $21,277.55 to the U.S. Department of Education for this audit finding so that we could pay this amount to the Federal Government. This decision was derived after contacting the Supervisor for Federal Audit Requirements, Georgia Department of Audits and our Georgia Department of Technical and Adult Education to give us this resolution. As of this date, Savannah Technical Institute has not received an invoice for these funds.
Finding Control Number: FA-841-98-02 ALLOWABLE COSTS/COSTS PRINCIPLES Improper Overtime Payments Vocational Education - Basic Grants to States (CFDA 84.048) Questioned Costs: $5,872.00
The Georgia Department of Technical and Adult Education (DTAE) issued us a letter stating that no further action was required by Savannah Technical Institute. The lett~r dated January 11, 2000 from the Assistant Commissioner of DTAE Administrative Services has been provided to our auditors.
AUDITORS RESPONSE
The Georgia Department of Technical and Adult Education (DTAE) appeared to exceed its authority concerning the resolution of this finding dealing with excessive compensation paid to an instructor using Vocational Education funds. According to the details of the finding, an instructor received $5,872.00 in unallowable overtime and holiday compensation. DTAE issued a letter dated January 11, 2000, resolving this finding without requiring the Institute to provide any documentation substantiating the validity of the additional compensation paid. DTAE also failed to contact United States Department of Education (USDOE), the grantor agency, regarding resolution of this questioned cost. DTAE should contact USDOE, the grantor agency, in regard to the resolution of this finding.
F-31

Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the Fiscal Year Ended June 30,2000
AUDITEE'S COMMENTS
NORTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8504-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Agency has decided not to pursue the recording of general fixed assets on the financial statements.
NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8524-99-01 GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
North Georgia Regional Educational Service Agency does not maintain a General Fixed Assets Account Group within the formal accounting records. At this time, the Board of Control has determined that it is not cost effective to implement and maintain a General Fixed Assets Account Group.
PIONEER REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8544-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
Due to changes in administration and changes in job descriptions this past year, and with limited staff we were unable to pursue the recording of fixed assets on our financial statements. It is however a major goal for our planning as we move into the FY 0 I fiscal year.
METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number:~ FS-8564-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The Georgia Department of Education has not implemented a General Fixed Asset Account Group within the accounting programs provided by them. We will continue to work with Georgia Department of Education to resolve this problem; however, Metropolitan Regional Educational Service Agency does not believe that it would be cost effective for us to implement such a system at this time:
NORTHEAST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8584-99-01 GENERAL FIXES ASSESTS/PROPERTY MANAGEMENT Failure to_Maintain General Fixed Assets Account Group
Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.
F-32

Audltee's Response Summary ScheduLe of Prior Year FIndings and Questioned Costs For the Ascal Year Ended June 30, 2000
AUDITEE'S COMMENTS
WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8604-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
It was the conclusion of the Board that at the present time we do not plan to address this issue, When the Department of Education provides sufficient guidance and funds to address this issue we will be glad to do so. Until then we will continue to look at how this can perhaps be accomplished and take action as we are able to do so.
OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8664-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
The management of a General Fixed Assets Account Group is not an accessible accounting procedure at the present time due to this function being inoperative in our accounting system that is provided by the Georgia Department of Education (GDOE). With future upgrades to our system this should be a feasible accounting function that would bring our accounting procedures into conforinity with General Accepted Accounting Principles. However, Oconee Regional Educational Service Agency does have an inventory procedure in place to be accountable for all equipment owned by the Agency which includes date required, acquisition cost, location and description. Date of implementation: Upon receipt of new GDOE accounting software.
CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8724-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
I concur with this finding. At the present time we do not intend to address this issue.
HEART OF GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8764-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
Due to the financial limitations and the inability of the current accounting system, the Heart of Georgia RESA is not able to establish accounting controls and procedures to provide for maintenance of the General Fixed Assets Account Group.
FIRST DISTRICT REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8804-99-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
At present, Georgia Department of Education has. not implemented a General Fixed Assets Account Group in our accounting system.
F-33

(This page intentionaLLy Left bLank)

OJRRECTIVE AcrrON RESFONSES TO
CuRRENT YEAR FrNDING" AND
Q..rEsrrONED Ch;Ts .

Georgia.

Corrective Action Responses to Current Year Findings and Questioned Costs TabLe of Contents For the AscaL Year Ended June 30, 2000

ENTITY CODE

ORGANIZATIONAL UNIT

401 414 419 427 428 462 466 467 472 474 476 478 484
503 518 521 528 530 533 539 548 550 561 571 590
819 823 826 830 840 918
8504 8524 8544 8564 8584 8604 8664 8724 8764 8804

Administrative Services, Department of

Education, Department of

Community Health, Department of.

Human Resources, Department of

Community Affairs, Department of



Natural Resources, Department of

Public Safety, Department of

Corrections, Department of.

Regents of the University System of Georgia, Board of..

Revenue, Department of

Student Finance Commission, Georgia

Secretary of State

:

Transportation, Department of

Colleges and Universities

Georgia Institute of Technology

University of Georgia

Albany State University

Clayton College and State University

Columbus State University

Fort Valley State University

Georgia Southern University

Savannah State University

Southern Polytechnic State University

Atlanta Metropolitan College

Georgia Perimeter College

Georgia Military College

Technical Institutes

West Georgia Technical Institute

Atlanta Technical Institute

Carroll Technical Institute

DeKalb Technical Institute

Appalachian Technical Institute

Higher Education Assistance Corporation, Georgia

Regional Educational Service Agencies

Northwest Georgia Regional Educational Service Agency

North Georgia Regional Educational Service Agency

Pioneer Regional Educational Service Agency

Metropolitan Regional Educational Service Agency

Northeast Regional Educational Service Agency

West Georgia Regional Educational Service Agency

Oconee Regional Educational Service Agency

Chattahoochee-Flint Regional Educational Service Agency

Heart of Georgia Regional Educational Service Agency

First District Regional Educational Service Agency

: :
;
: ,

PAGE NO.

F-38

F-41

:

F-46

F-48

F-50

F-52

F-52

F-52

F-53

F-53

F-56

:F-56

F-58

F-58 F-60 F-61 F-62 F-62 F-62 F-64 F-64 F-67 F-69 F-69 F-69

F-69 F-70 F-70 F-70 F-71 F-7l

F-71 F-71 F-73 F-73 F-74 F-74 F-74 F-74 F-75 F-75

F-37

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
DEPARTMENT OF ADMINISTRATIVE SERVICES
Finding Control Number: FS-401-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with the finding. A reconciliation statement is under review and action is being taken for correction. As previously noted in our prior response to this fmding, recommendations have resulted in the creation of the Division of Support Services/Asset Management, with responsibilities over General Fixed Asset inventory. Though considerable .improvements have been made, the Department recognizes the need for additional review of controls and new standards for the maintenance of the General Fixed Asset inventory. Since its creation and staffing, some of the measures that have taken place and that will be introduced in the near future are:
(1) Property coordinators have been identified and trained within each entity/location. (2) Full physical inventory conducted in the third and fourth quarters of fiscal year 2000. (3) Completed conversion of inventory information into the new Asset Management System. (4) Reconciliation of the Inventory listing to the financial records is completed through the 1st quarter and on
track for completion o(all quarters by year-end FY200L (5) Additions and deletions to inventory are being performed in a timely manner. (6) A custom query (run weekly) has been designed that accesses the financial records database and allows
identification of accountable assets at the initiation of the procurement process. (7) A draft of an updated Department policies and procedures manual is under review.
The above internal controls have been developed and implemented to help the Department ensure equipment inventory records are maintained in accordance with State laws and regulations. Though the Department recognizes that due to the magnitude and diversity of assets located across the State that this is an ongoing multi-year and step process.
Contact Person: Steve Fanczi, Director of Fiscal Services Telephone: (404) 656-5670; E-mail: sfanczi@doas.state.ga.us
Finding Control Number: FS-401-o0-02 ACCOUNTING CONTROLS (OVERALL) Inadequate General Controls
Reconciliations - Lack of Understanding of the System/Lack of Reports & Queries to perform procedures.
We concur with this finding. However, there are issues with the responsibility of the corrective actions. The responsibility of providing the Phoenix HRMS and Financial Systems to agencies resides with the Financial Systems Solutions (FSS) section. It is not the responsoibility ofFSS to control neither how an agency uses the system nor if they compl~te reconciliation and balancing procedures. The FSS section provides assistance and recommendations only for this area. The response to this finding describes several events, however for the FSS section, the finding should pertain to providing the necessary reports and/or queries to perform the reconciliation and balancing acth.:ities and assistance in understanding of the system: It was still each agency's responsibility to maintain therr books including proper reconciliation and balancing actionso
A consulting company, PwC, was brought in during FY2000 to assist agencies with backlogged
reconciliation and balancing issues. PwC, working with DOAS and Hunter, developed processes and new reports needed to help agencies reconcile accounts.
DOAS and PwC worked together to prioritize agency needso PWC coordinated site visit activities, which included teams of PwC, Hunter, and DOAS Staff. The
teams went to the agencies most in need and gave direct help. A series of leaining labs were also developed and delivered that gave agencies hands-on experience with their reconcilations.
As a result of the efforts detailed above, a variety of new audit and control reports were provided to the
agencies and put into service.
As needed, the FSS Financial Help Desk has assisted agencies with balancing issueso
F-38

Audltee's Corrective Action PLans
For the AscaL Year Ended June 30, 2000
Firewalls and Security
We concur with this finding. The lack of appropriate firewalls and security has been corrected.
A pair of Nokia firewalls was installed during calendar year 2000 providing redundant failover firewall security service on a 7x24 hour basis.
The Phoenix firewall rule base has been actively managed since June 2000. Many rules have been added or updated to make the firewall more resistant to intrusion.
Network security engineers in the Enterprise Security Group actively manage traffic across the state network to the Phoenix systems during business hours. These same engineers remain on call evenings and weekends.
Automated tools are used in coordination with the frrewalls on a 7x24 basis. The tools monitor traffic, stop intrusions, and send alarms evenings and weekends.
A draft Firewall Management Plan was put into service in December of 2000 to provide technical coordination with respect to the frrewall rule base between the Enterprise Security Group, Phoenix DBA's, Unix Support, and Production Management teams. An updated version of the management guide is nearing completion.
Additional security enhancements are planned and underway. This includes replacement of Telnet access, used by developers and production management staff, with Secure Shell access. This will encrypt all operator commands and prompts sent between developers and the Sun platforms that host Phoenix.
Operator Security Classes
We concur with the finding. The separation of duties through assignment of operator security classes has been accomplished.
A total of 46 distinct operator classes have been established for financials across 7 FN modules. Special
permission is required for 6 special capabilities, such as "create requisitions" and "create purchase orders". Three roles and four approval levels can also be assigned for operator classes associated with the Purchasing module. Similar subdivision was also implemented for Accounts Payable and Accounts Receivable.
Asset Management - 6 Accounts Payable - 7 Accounts Receivable - 3 General Ledger - 7 Labor Distribution - 2 Purchasing - 7 State Purchasing - 6 DTAE Only - 1 DOT Only-4 All FN Modules - 1 Small and MinoritY Business - 1 Central Supply - 1
A total 0151 distinct operator classes have been established across 3 HR modules
Benefits - 17 Human Resources - 16 Payroll - 17 Special Access - 1
A group of about 25 special operator classes was created for FSS users who maintain Phoenix. These
allow FSS users special access needed without releasing these privileges to operator classes used by. general users.
Access is being actively managed, with freqilent updates to security tables and security documentation
throughout 2000 and 2001.
F-39

AudItee's Corrective ActIon PLans For the AscaL Year Ended June 30, 2000 ,
An automated tool, Braintree, was deployed in 2000 to help manage user accounts, to enforce password rotation, and to ensure expiration of unused or outdated accounts.
Response Time Performance Issues
We concur with this finding. Online response problems were relayed to the Governor's office in November of 1999, and the Governor authorized a study directed by the CIO. 77 recommendations were provided in a 23 December 1999 report.
The Governor's Office directed funding to a task force established to improve performance and to assist agencies in reconciling and closing their books. Work began in January 1999 on the 77 recommendations, consolidated to 59.
Significant improvements were put in place by March 2000, including several of the more significant original recommendations. Progress against the original list continues, as funding becomes available.
An online performance-sampling network of 26 Phoenix users in three agencies, DOR, DOE, and DHR was established in March of 2000. Samplings were taken in the March - June 1999 interval. Dozens of performance problems were identified and corrected. These most often required optimization of SQL or program code.
An upgrade of the operating version of Oracle provided access to additional performance improvements. A very significant restructuring of the Phoenix storage architecture was completed for FN user 20-21
May, and a significant performance increase was achieved. A complete replacement of the storage array disk drives for FN and HR systems was accomplished in
late calendar year 2000 and early 2001. This has provided a very significant improvement in performance and capacity. Precise SQL and Precise Insight tools began implementation during December 2000 and continuing into February of 2001. The tools support detailed SQL tuning ,and end to end performance monitoring. Performance data is being collected now into an automated performance warehouse. After several months of data are collected, additional improvements, such as deleting unused indexes, will be possible. Additional performance tuning has been established on a continuing basis since the beginning of FY 2001, with very significant improvements in online performance. Performance has improved despite a massive increase in the amount of data stored online. iii Additional perfonnance improvements can be expected from implementation of Quick 10, now underway. Partitioning will follow Quick 10 implementation. This should help limit the performance impact from tremendous growth in the amount of online data..
Recommendations Section of Finding:
The State should consider taking a statewide, coordinated, consistent approach toward securing and controlling computerized information system and related technology.
The DOAS security function is now a part of the new Georgia Technology Authority. It is their intent to take a statewide coordinated and consistent approach to all State security functions.
Consideration should also be given to requiring all entities that comprise the state's reporting entity to use the Phoenix system, centralize all business processes with the State of Georgia, and make the necessary changes to the system to provide for budget basis as well as GAAP basis financial statements.
DOAS and the FSS section do not have the authority to require any agency to use the Phoenix System or to centralize all business processes. This authority would belong to the State Controller if Georgia were to establish that position. In the past, a committee of state leaders has owned this authority.
The' FSS staff is currently working with the Department of Audits and PeopleSoft to implement GAAP basis functionality in Phoenix.
Contact Person: Sue Armstrong, Assistant Director, Information Technology Telephone: (404) 651-9153; E-mail: sarrnstro@doas.state.ga.us
F-40

Audltee's Corrective Action PLans For the Fiscal Year Ended June 30, 2000

DEPARTMENT OF EDUCATION

Finding Control Number: FS-4i4-00-04 CASH AND CASH EQUIVALENTS FUND EQUITIES Inadequate Accounting Procedures (Overall)

Prior to the completion of this audit, management discovered the failure of staff to perform all of the necessary accounting functions. At that time, management made the following changes: management over the accounting area was replaced with a CPA with governmental accounting experience hired from outside this agency; additional accounting staff was hired from outside the agency; and new procedures and processes have been implemented to correct the deficiencies. Necessary General Ledger reconciliations are now current. Further, OSR had made the necessary signature changes with all bank accounts one week prior to the Director's departure. Bank signature cards are dated August 8, 2000. Additional efforts were made with the Department of Administrative Services (DOAS) Phoenix staff to change the signature on automated system checks. OSR will alert DOAS management to address the delayed process for signature changes.

OSR will continue to address the areas of deficiency to assure that bank reconciliation remain current, that reconciling

items are investigated and cleared, and that subsidiary ledgers and systems are reconciled to the General Ledger accounts.

OSR will also take steps to assure that General Ledger balances are analyzed prior to fiscal year end and that appropriated

entries and corrections are accurately booked.

-

Contact Person: Leslie Lowe, Director of Administration Telephone: (404) 656-6333; Fax: (404) 657-4025; E-mail: Leslie.Lowe@mail.osr.state.ga.us

Finding Control Number: FS-414-00-06 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System -

See Finding Control Number FA-414-00-01.

Finding Control Number: FA-414-00-01 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

Department ofEducation 's Response: The following are the FY 2000 audit findings for equipment and real property management for this department:

(1) Equipment additions for the Department were not reconciled to the general ledger expenditure accounts.

(I) Reconciliation of equipment for this department is conducted by the following: All purchase orders (PO) are screened for proper accountability in PeopleSoft's Asset Management for all equipment purchases for the Department. All incorrect expense account numbers are emailed to the initiator of the PO for correction: the Agency Procurement Officer is carbon copied (cc:) on the email. A copy of the PO's lines and distribution are printed by Print Screen on the computer. If equipment is under $1,000.00 and is not accounted for on Asset Management, a green Property of decal is mailed to the property manager of the unit that initiated the PO. If the equipment is $1,000.00 or greater, or if under $1,000.00 but is deemed to be accounted for, the copies will be kept until the signed PO is received in this office for generating the DE Form 0513, Receipt of Equipment form. This equipment will have the DOE barcode decal affixed.
(2) The total additions and deletions listed on the General Ledger Reconciliation Detail/Summary Report from Asset Management for the Department did not agree with General Fixed Asset Account Group (GFAAG) trial balance by business unit.

(2) On many occasions, it has been discovered that Asset Management fails to include all inventories additions to the DOE Property System. This has been reported to the DOAS PeopleSoft Team.

FAI

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000

(3) Equipment inventory records for additions were updated incorrectly for the Department. Testing of current year additions revealed eight (8) additions were updated onto the equipment inventory records incorrectly by an amount of$38,450.98 (net).

(3) The auditor tested this area and no exceptions were noted, however, the audit finding indicate exceptions. The following is what the auditor and I tested and found to be in order:

No.1: PO 41400-065-0000020114: Receiving report's invoice signed by Ken Flickinger indicated a cost of$4,329.00 instead of the initial $4,436.00 amount on the PO.

No.2:

PO 41400-652-0000022246: This equipment was never received by the Agency Property Officer, therefore, never decaled nor entered into the DOE Property System. This equipment was received in the DOE Mailroom but was either misplaced or stolen at that point. This equipment had a cost of $3,045.00 that was. paid by Accounting Services since there was a signature for receiving this equipment by the DOE Mailroom.

No.3: PO 41400-652-0000021202: Line item no. 2-1 was emailed to the initiator that the expense account number would have to be changed to 616001, $1,234.00.

No.4: PO 41400-065-0000020115: Receiving report's invoice signed by Ken Flickinger indicated a cost of$I,592.00 instead of the initial $1,663.00 amount on the PO.

No.5: PO 41400-652-0000020600: All items had been entered, however, PeopleSoft's Asset Management only recorded six (6) of the seventeen (17) entered. The remaining eleven (11) were readded during the DOA Auditors visit this year at an adjustment of$16,995.00 to DOE Property System.

No.6: PO 41400-652-0000021432: Receiving report's invoice signed by Ken Flickinger indicated a cost of$9,588.00 instead of the initial $9,589.00 amount on the PO.

No.7: PO 41400-065-0000020357: Equipment received on 09/27/1999 and entered on the DOE Property System in the amount of$1,663.00: Error in PeopleSoft's Asset Management.

No.8: PO 41400-652-0000021916: Receiving report's invoice signed by Ken Flickinger indicated a cost of$2,058.00 instead of the initial $2,296.00 amount on the PO.

No.9: PO 41400-052-0000022387: Purchase Order Correction dated 04/26/2000 indicated a unit cost change of$I,922.00 instead of the initial $2,042.00 amount on the PO.

No. 10: PO 41400-053-0000022995: This PO was added to DOE Property System on 07/13/2000 with a total cost of$9,457.98: Error inPeopleSoft's Asset Management.

With the above noted, this reduces the $38,450.98 to $0.00, as what was found during the original test by the auditor.

(4) Equipment inventory items at the Department were deleted from the inventory system without adequate

supporting documentation or proper authorization. Testing of current year deletions revealed two (2)

items in the amount of $2, 165. 00 that had been deleted from the inventory records without supporting

documentation.

.

(4) The Auditor, tested this area and no exceptions were noted, however, the audit finding indicate exceptions. The following is what the auditor and I tested and found to be in order:

No.1: Decal 00-0009463, $1,050.00, was deleted by DOAS Transaction Number BR595-99. This record was returned from the Department of Archives and History, Records Center, anq shown to the auditor as supporting documentation to delete this item.

F-42

Audltee's Corrective Action PLans For the FiscaL Year Ended June 30, 2000

No.2:

Decal 00-0041257, $1,115.00, had been deleted because this was a duplicate entry into the DOE Property System as indicated by Decal 00-0041086, $1,115.00. This was, also, shown to the auditor by the supporting Property Add Form for the Reading Challenge Program, Eastside Elementary, location 024634, to delete this item.

With the above noted, this reduces the $2,165.00 to $0.00, as what was found during the original test by the auditor.

(5) Four (4) equipment items acquired through installment purchases at the Department 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 $1,678.92 (net). These same equipment items were identified in the prior year report as being recorded incorrectly and had not been corrected.

(5) This information was never brought to my attention for FY 2000. These installment purchases were entered into the DOE Property System prior to my arrival to this agency. In the past, I was reluctant to change the cost for the above but on March 2, 2001, the following decals were changed:

No.1: Decal 00-0021481, amount changed from $10,701.36 to $9,700.00.

No.2: Decal 00-0013149, amount changed from $9,819.72 to $9,700.00.

No.3: Decal 00-0020763, amount changed from $30,300.00 to $32,300.00.

No.4: Decal 00-0021451, amount changed from $24,775.00 to $25,575.00.

With the above changes, it reduces the $1,678.92 to $0.00.

In addition,four-hundred-seventy-five (475) equip.ment items were selectedfrom certain locations to test the accuracy of the Department's property management records. These items contained a value of $1,496,165.15 out of a population of $8.566,924.15 at the tested locations and were selected for the purpose of locating equipment as recorded in the inventory records. The general fued assets of the Department amounted to $46,530,787.73. The following deficiencies were noted:

(1) Twenty-two (22) items totaling $48,213.05 could not be located.

(2) Four (4) items were found in locations other than the location indicated in the equipment inventory records.

(3) One (1) item was found that was recorded as missing on the inventory records.

Also, during the physical inspection testing. six (6) items of equipment were located which were not included in the equipment inventory records.

(1) Failure by unit to properly account for their inventory whether the item was moved by an employee of the unit or Technology Services.

(2) Equipment not controlled properly will result in surprise findings of equipment.

(3) A unit who fails to properly inventory equipment or inventories completed quickly will result in equipment being indicated as "missing". This is a result of poor inventory inspection techniques by the unit.

The six (6) items of equipment found were for equipment under the $1,000 threshold for capturing on the DOE Property

System.

.

Contact Person: Grant Rowe, Accounting Services Director Telephone: (404) 656-2497; E-mail: growe@doe.kI2.ga.us

F-43

Audltee's Corrective Action Plans For the Ascal Year Ended June 30,2000
Office ofSchool Readiness' Response: We concur with these fmdings. The Office of School Readiness has various equipment items but no real property. Corrective steps had already been taken to address similar prior year audit findings. Accomplishments include a shift in the responsibility for recording fixed assets and an increase in staff. Progress was made to update PeopleSoft Asset Management records according to physical inventory results and sub-system documentation of computer equipment. Early into FY 2001 corrective steps continued to review and update the valuation amounts of fixed asset records as evidenced by purchasing documentation. OSR will continue this verification of valuation process. A reconciliation of purchases to date for FY 2001 to Asset Management records is complete through February 2001. Reconciling items are currently being addressed for items equal to or greater than $1,000. Additional staff will be dedicated to conduct a current year physical inventory prior to fiscal year end. Asset Management records will be updated to reflect missing or found items, correct locations, and correct asset reference data.
These steps are expected to bring OSR into compliance with Asset Managementprocedures and correct equipment records for proper valuation and financial reconciliation of fixed assets for FY 2001. OSR is now positioned to meet the guidelines established by the Georgia Department of Administrative Services (DOAS) for fixed asset management and OMB's Common Rule governing the Uniform Administrative Requirements for Grants Management. Federal auditors have accepted the improvements from implementing these internal controls as reported February 27,2001.
Contact Person: Margie Landers, Director of Finance and Human Resources Telephone: (404) 463-5031; Fax (404) 463-0976; E-mail: Margie.Landers@mai1.osr.state.ga.us
Finding Control Number: FA-414-00-02 SUBRECIPIENT MONITORING Failure to Establish Administration Agreement/Contracts Vocational Education - Basic Grants to States (CFDA 84.048)
Item I.
The procedures used by the Department of Education (DOE) and North Georgia RESA during FY 2000 were continuations of historically approved, audited, and accepted practices of previous years. Activities were monitored and supervised by DOE personnel in such a manner as to ensure compliance with the provisions of Perkins regulations regarding appropriate use of funds. Subsequent to FY 2000, the practices cited in the above referenced finding were discontinued between DOE and RESA. The RESA now has no fiscal agency responsibilities for DOE. If in the future such a relationship should be again established, formal agreements will be developed and implemented.
Item 2.
The activities of the two consultants were continuations of services that were contracted in FY 99. During FY 2000 the consultants provided services on an "as needed" basis as requested and approved by the Department of Education. Performance of services was documented by'invoices provided by the consultants and verified by DOE personnel before approval for payment was given by DOE.
The circumstances of the services provided for the Related Vocational Instructional program were similar to those of the consultants referenced above. Services were rendered for the benefit of special needs participants in DOE sponsored activities, and performance was evaluated on a continuous basis by a DOE program manager before approval for payments were granted.
Subsequent to FY 2000 the practice of issuing payments to contractors through the RESA was discontinued. Procedures have been implemented to assure that fully executed current contracts are in place that clearly define the terms of , agreements between DOE and contractors.
Contact Person: Grant Rowe, Accounting Services Director Telephone: (404) 656-2497; E-mail: growe@doe.kI2.ga.us
F-44

Audltee's Corrective Action PLans For the Ascal Year Ended June 30,2000
Finding Control Number: FA-414-00-03 SUBRECIPIENT MONITORING Approval for Improper Expenditure Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00
Item 1.
The utilization of the computer equipment reference in this citation is considered by DOE personnel to be directly related to the statewide administration of provisions of the Perkins act. Purchase of the equipment was necessary in order for services requested by DOE to be provided. These services included the operation and maintenance of a 24 hour/day, 7 day/week server on which internet web sites could be hosted. Sites from which all vocatismal curriculum materials would be available for doWnload on demand, on which vocational staff development opportunities would be published including the posting of course descriptions, dates of course offerings, and the capability of online registration for courses, on which Career/Technology Student Organization information would be published were required. The expenditure of funds from the referenced source for the purchase of this equipment is thought to be proper.
Item 2.
The transaction cited has been reviewed by DOE personnel and has been determined to be appropriate. Documentation originally submitted was general in nature. At DOE's request, the vendor supplied a breakdown of specific information as to services performed, supplies, dates, and associated costs. An evaluation of the information revealed that the value of the products provided by the contractor were consistent with the payment that was issued to the vendor.
Contact Person: Grant Rowe, Accounting Services Director Telephone: '(404) 656-2497; E-mail: growe@doe.kI2.ga.us
Finding Control Number: FA-414-00-04 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period
Department ofEducation 's Response: We concur with this finding. The Department of Education is responsible for tracking and reviewing the audits of local units of administration (LUAs). However, 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 LUA audits, the Department of Audits has the responsibility to audit all state agencies, commissions, etc. The LUAs are audited after the state agencies, commissions, etc. Because the LUAs are audited last and the large number of LUAs to be audited, the Department of Audits cannot complete the audits in the time period required by OMB Circular A-l33. The U.S. Department of Education is aware of the 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 fmdings in the LUA audits after being received from the Department of Audits.
Contact Person: Grant Rowe, Accounting Services Director Telephone: (404) 656-2497; E-mail: growe@doe.kI2.ga.us
Office ofSchool Readiness' Response: In response to this audit finding which details 82 audits received late, the total is down from 163 reported in the prior year finding. Of these 82 not received before the nine-month federal deadline, 70 represent County Boards of Education or School Systems which are audits performed by the Georgia Department of Audits (DOAA). The remaining number of late audits, 12, shows improvement from the 26 cited last year. It concerns OSR that this fmding will remain unresolved from this agencies level of controllability pending performance improvements to be made by DOAA. OSR has and will continue to take steps to meet our federal and state requirements.
Contact Person: Tanya Astin, Internal Auditor Telephone: (404) 656-6293; Fax: (404) 463-0976; E-mail: Tanya.Astin@mail.osr.state.ga.us
F-45

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
DEPARTMENT OF COMMUNITY HEALTH
Finding Control Number: FS-419-00-01 REVENUESIRECEIVABLESIRECEIPTS Federal Receivables Could Not be Verified The Georgia Department of Community Health agrees with this finding.
Corrective Action Plan 1. Finding: Federal receivables do not appear to have been reconciled in a timely manner. Response: Federal receivables are now reconciled montWy. 2. Finding: Based on managements' representation, excessive revenues/receivables were recorded to some Federal programs to facilitate the posting of cash deposits. These excess revenues/receivables were not properly reversed at year-end. Response: Each month, adjustments are now being made to ensure that revenue equals expense in each federal program. 3. Finding: Federal program collections under the Federal Government's Cash Management Improvement Act, 31 CFR Part 205, could not be traced to specific allocations of expenditures between State and Federal match. This policy caused the Department to inherit reconciling items from its predecessor agency (DMA) in the amount of $11,017,846.54 for the period of March 31, 1993, through September 30, 1994. Response: We have undertaken a project to reevaluate all State vs. Federal funding back to the time utilization of a controlled disbursement account started. In addition, we are initiating a request, through the Georgia Office of Treasury and Fiscal Services, that the State's agreement with the Federal Treasury be changed to allow funding based upon a clearance pattern rather than zero balance accounting (controlled disbursement). This change will allow for accurately funding each weekly check cycle with the correct amount of State and Federal funds. 4. Finding: At year-end, three draws totaling $12,005,286.05 that would have reduced Federal receivables, were funded from State funds. This was caused by overspending the Federal grant for the quarter. Response: A supplemental Federal grant was received soon after the quarter closed. 5. Finding: Electronic transfers of Federal cash for the month of June 2000 were not recorded as credits against the Federal receivables as of June 30, 2000, and were not adjusted prior to closing the Department's books. Response: We are now using the actual daily record of deposits at the bank as back up to our entries to record deposits on our general ledger. All cash deposits are recorded prior to closing each accounting period. We will at least quarterly, reconcile sources and uses of cash at the program level.
Contact Person: John Hankins, Director ofInternal Auditing and Program Evaluation Telephone: (404) 657-7880; E-mail: jhankins@dch.state.ga.us
F-46

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000 .
Finding Control Number: FS-419-00-02 CASH AND CASH EQUIVALENTS Cash Accounts are not Adjusted on a Timely Basis
The Georgia Department of Community Health agrees with this finding.
Corrective Action Plan
1. Finding: The Departmentprepares bank reconciliation's and proofs of cash on a monthly basis. However, the general ledger cash accounts are not adjusted on a timely basis for reconciling items. During performance of auditing procedures, several reconciling items were found, which if not recorded, would adversely effect the general purpose fmancial statements as of June 30, 2000.
Response: Reconciliations of cash are being completed on all cash accounts monthly. The general ledger cash accounts are adjusted monthly based upon the reconciling items identified through the reconciliation process.
2. The accounting staff has already completed training on GAAP basis of accounting, as recommended by the Auditors. Additional training on GAAP and utilization of PeopleSoft is being pursued.
Contact Person: John Hankins, Director ofinternal Auditing and Program Evaluation Telephone: (404) 657-7880; E-mail: jhankins@dch.state.ga.us
Finding Control Number: FA-419-00-01 ELIGIBILITY Deficiency in File Maintenance Medicaid Cluster Program
Medical Assistance Program (CFDA 93.778)
The Georgia Department of Community Health agrees with this finding.
Corrective Action Plan
The Georgia Department of Community Health will review case file maintenance procedures with the Division of Family and Children Services (DFACS) to improve the ready access to Medicaid participant files.
Contact Person: John Hankins, Director ofinternal Auditing and Program Evaluation Telephone: (404) 657-7880; E-mail: jhankins@dch.state.ga.us
Finding Control Number: FA-419-00-02 ALLOWABLE COSTS/COST PRINCIPLES Inadequate Recoupment Procedures Medicaid Cluster Program
Medical Assistance Program (CFDA 93.778)
The Georgia Department of Community Health agrees with this finding.
Corrective Action Plan
We have developed and implemented procedures to control the process of issuing, tracking and recovering emergency payments to providers.
Contact Person: John Hankins, Directo. of Internal Auditing and Program Evaluation Telephone: (404) 657-7880; E-mail: jhankins@dch.state.ga.us
F-47

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000

Finding Control Number: FA-419-00-03 SPECIAL TESTS AND PROVISIONS Inadequate Controls over EDS System Medicaid Cluster Program
Medical Assistance Program (CFDA 93.778)

The Georgia Department of Community Health agrees with this finding.

Corrective Action Plan

Ernst & Young submitted a report with an unqualified opinion of successful achievement of control objectives by EDS Clarkston for the period May I, 2000, through October 31, 2000. DCH has continued requiring that EDS Clarkston achieve the control objectives described in that report. DCH is also requiring EDS Clarkston to have an accounting firm perform another review of controls during 2001.

For additional assessment of certain aspects of its Medicaid Management Information system (MMIS) from an outside perspective, DCH contracted with an independent health care management firm. From August 2000 through October 2000, experienced systems professionals, including those with extensive experience managing MMIS programs and procurements at both the State and federal levels, analyzed DCH's MMIS processing. The firm's conclusion affIrmed that the Georgia MMIS was meeting industry standards. The health care management firm added that the firm's review results "do not demonstrate any material control weaknesses within the MMIS," and that "there is no indication at all to suggest that the Georgia MMIS functions inadequately in any ofthe subsystems reviewed."

Contact Person: John Hankins, Director ofIntemal Auditing and Program Evaluation Telephone: (404) 657-7880; E-mail: jhankins@dch.state.ga.us

DEPARTMENT OF HUMAN RESOURCES

Finding Control Number: FS-427-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System

See Finding Control Number FA-427-00-04.

Finding Control Number: FA-427-00-01 ELIGIBILITY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558) QuestionedCost: $12,573.00

DFCS state offIce instituted several initiatives to address compliance with policy in the TANF Program: They are:

TANF state offIce policy employees have been assigned to each field coordination area. Their role is to visit counties,

monitor program compliance, read records behind the supervisor for accuracy of case reading, and monitor the county's

ability to locate case records.

_I

.

Advanced record-tracking systems have been installed in several urban counties such as Dougherty, Muscogee, Bibb, and Clayton. They have also been installed in smaller counties such as Appling, Troup, Clarke, and Hall. It is our intent to expand the use of automated systems into each new DFCS facility approved for construction. As of this writing, two counties have tentative approval for new buildings in SFY 2002, Fulton and Chatham. Plans are to identify available funding at the end of each fiscal year for the next five years to install such filing systems in Gwinnett, Lowndes, Barrow, Paulding, and Sumter.

In addition, a team of program employees meets with regional front line supervisors quarterly to provide them with current policy updates and to emphasize the need for improving and maintaining case record accountability. Program employees

F-48

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
will meet with supervisors, caseworkers, and support staff to identify, develop, and design tools to address deficiencies in file maintenance. They will provide information and training at Field Staff meetings to increase awareness of deficiencies and introduce new methodology in efficient record keeping. Specific emphasis on improved case record accountability will be covered at biannual DFCS Management Conferences and at monthly Field Director meetings (Field Directors supervise County Directors). Additionally, this topic will be included in New Worker Training for Eligibility Workers and in County Director Orientation and Administrative Training. Case Record Management will be made a part of county director and eligibility supervisory performance evaluations.
Contact Person: Howard Willis, Section Director, Economic Support Telephone: (404) 657-3702
Finding Control Number: FA-427-o0-o2 ELIGIBILITY Deficiencies in File Maintenance Child Care Cluster
Child Care and Development Block Grant (CFDA 93.575) Child Care Mandatory and Matching Funds of the Child Care and Developme~t Fund (CFDA 93.596) Questioned Cost: $11,768.00
Program employees have been hired or are in the process of being hired. They will be assigned to and housed in specific regions throughout the state. Two additional Unit Chief positions will be filled. Adding program employees will facilitate more site visits resulting in additional technical assistance to the counties. It is expected that all employees will be hired and located in their assigned regions within eight months.
The employees will use the new MAXIMUS payment system to track payments to cases for review.
Training is being provided to supervisors on how to do second level case reviews. This is done as requested by county directors or when a program consultant identifies the need for such training. This also allows the supervisor to be in a better position to train new staff and strengthens the skills of supervisory staff. This is important due to the amount of turnover that has occurred among childcare staff. Statewide training of new workers and supervisors,has been scheduled for March 2001. Emphasis will be placed on technical proficiency, navigating the payment and reporting system, accurate data entry, fraud prevention, and instructing county staff in producing reports.
Contact Person: Bonnie Murray, Section Director, Child Care Telephone: (404) 657-3702
Finding Control Number: FA-427-00-03 ELIGIBILITY Deficiencies in File Maintenance Food Stamp Cluster (CFDA 10.551 and 10.561) Questioned Cost: $12,946.00
DFCS state office instituted several initiatives to address compliance with the Food Stamp Program. They are:
Food Stamp state office policy employees have been assigned to each field coordination area. Their role is to visit counties, monitor program compliance, read records behind the supervisor for accuracy of case reading, and monitor the county's ability to locate case records.
Advanced record-tracking systems have been installed in several urban counties such as Dougherty, Muscogee, Bibb, and Clayton. They have also been installed in smaller counties such as Appling, Troup, Clarke, and Hall. It is our intent to expand the use of automated systems into each new DFCS facility approved for construction. As of this writing, two counties have tentative approval for new buildings in SFY 2002, Fulton and Chatham. Plans are to identify available funding at the end of each fiscal year for the next five years to install such filing systems in Gwinnett, Lowndes, Barrow, Paulding, and Sumter.
F-49

Audltee's Corrective Action PLans For the FiscaL Year" Ended June 30, 2000
In addition, a team of program employees meets with regional front line supervisors quarterly to provide them with current policy updates and to emphasize the need for improving and maintaining case record accountability. Program employees will meet the supervisors, caseworkers, and support staff to identify, develop, and design tools to address deficiencies in file maintenance. They will provide information and training at Field Staff meetings to increase awareness of deficiencies and introduce new methodology in efficient record keeping. Specific emphasis on improved case record accountability will be covered at biannual DFCS Management Conferences and at monthly Field Director meetings (Field Directors supervise County Directors). Additionally, this topic will be included in New Worker Training for Eligibility Workers and in County Director Orientation and Administrative Training. Case Record Management will be made a part of county director and eligibility supervisory performance evaluations.
Each month, Food Stamp employees validated the coding of Able-Bodied Adult Without Dependents (ABAWD) Food Stamp case records. Case record accountability monitoring is an inherent characteristic of the process.
The Department of Human Resources (DHR) is committed to strengthening internal control and personal accountability in the area of equipment and property management. DHR intends to accomplish this by revising and updating department policies and internal control procedure to ensure that equipment inventories are properly maintained. Staff members are reviewing our current policies and procedures. This review will include compliance with OMB Common Rule and State laws and regulations.
We will conduct a system wide physical inventory and reconcile any discrepancies. The Property Management Unit will work more closely with division coordinators to ensure compliance with writing policies and procedures regarding equipment management requirements.
Contact Person: Howard Willis, Section Director, Economic Support Telephone: (404) 657-3702
Finding Control Number: FA-427-00-04 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The Department. of Human Resources (DHR) is committed to strengthening internal control and personal accountability in the area of equipment and property management. DHR intends to accomplish this by revising and updating department policies and internal control procedure to ensure that equipment inventories are properly maintained. Staff members 'are reviewing our current policies and procedures. This review will include compliance with OMB Common Rule and State laws and regulations.
We will conduct a system wide physical inventory and reconcile any discrepancies. The Property Management Unit will work more closely with division coordinators to ensure compliance with writing policies and procedures regarding" equipment management requirements.
Contact Person: Bill Harris, Director of Facilities and Support Telephone: (404) 656-4427
DEPARTMENT OF COMMUNITY AFFAIRS
Finding Control Number: FS-428-00-02 GENERAL FIXED ASSETSfPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
Finding 1. We do not concur with this finding.
Item No. J: Assets that were identified in the PeopleSoft Purchasing module as Purchase Orders were created beginning July 1999. During FY 2000 assets were checked off and identified in the PeopleSoft Purchasing module by the Agency Procurement Officer to automatically go to the PeopleSoft Asset Management module as the Purchase Order was created. The purchases listed in your finding totaling $310,583.03 is in error since it includes items identified with Voucher ID's
F:50

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000

amounting to $85,527.84 that are not identified with any Purchase Order numbers: The voucher ill's have descriptions such as "To Correct Cash Account", " To Correct Chart of Account" and "Capital Outlay Supply", all of which were necessary to reconcile with the PeopleSoft System. Accordingly, vouchers with these types of descriptions are clearly not General Fixed Assets and do not need to be added to the Equipment Inventory records. Most of the remaining Voucher ill's are vouchers connected to the Georgia Music Hall of Fame (GSHF) that were not transferred to the DCA central office for entry into the DCA PeopleSoft Purchasing module.

Corrective Action: The DCA Agency Procurement Officer, Margaret Stiggers, and her supervisor, Raymond Noel, Director of the Office of Administrative Operations, will identify which vouchers are indeed assets and enter them into the PeopleSoft Asset Management module. This task will be completed no later than March 31, 2001. The Administrative Operations Director has taken steps to ensure that future vouchers not entered into the DCA PeopleSoft Purchasing module are identified in a timely manner so that this problem will not occur again.

Item No.2: The $310,583.03 in purchases listed in the finding includes purchase orders that total $150,489.04 that were created in SPIN in FY 1999. The Phoenix team then converted these Spin Purchase Orders into new PeopleSoft Purchase Orders during the conversion from SPIN to PeopleSoft in July 1999. The PeopleSoft Conversion Purchase Order identified as 0000001275 was actually FY 1999 SPIN Purchase Order F-0428-001-003200. The PeopleSoft Conversion Purchase Order totals $2,240.00 but not one of the individual items on the original SPIN FY 1999 Purchase Order was over $1,000.00. The most expensive item was $488.34 and that was a package of 60 individual ZIP 100 MB storage disks so these items do not need to be entered into the DCA Equipment Inventory records.

Corrective Action: The DCA Agency Procurement Officer, Margaret Stiggers, and her supervisor, Raymond Noel, Director of the Office of Administrative Operations will identify the vouchers that are indeed assets and enter them into the PeopleSoft Asset Management module by March 31, 2001. The problem should not occur again since this was unique to the conversion from SPIN to PeopleSoft.

Item No.3: The list of purchases totaling $310,583.03 in the finding also includes $74,564.67 in purchase order items that that are assets that did not end up in the PeopleSoft Asset Management module from Purchase Orders created in the PeopleSoft Purchasing module.

Corrective Action: The DCA Agency Procurement Officer, Margaret Stiggers, and her supervisor, Raymond Noel, Director of the Office of Administrative Operations, will identify which purchases that are indeed assets and enter them into the PeopleSoft Asset Management module by March 31, 2001. The Director of Administrative Operations has taken steps to ensure that future Purchase Orders that do not transfer assets to the PeopleSoft Asset Management module are identified in a timely manner and corrected so that this problem will not occur again.

Finding 2. We do not concur with this fmding. The Director of Administrative Operations evaluated each monthly State

of Georgia Property System report for DCA for the transaction dates June 13, 1998 through June 6, 1999 and identified all

transaction Reference Numbers that exceeded $1,000.00. All Reference numbers that represented assets over $1,000.00

were matched with the associated SPIN Purchase Order Number. The Agency Procurement Officer then entered all of

these assets for FY 1999 into the PeopleSoft Asset Management module between October 17,2000 and October 19,2000.

The Director of Administrative Operations gave a hard copy of these reports and the FY 1999 assets entered into

PeopleSoft to Department of Audits employee, Zack Rogers, on October 23,2000. The only FY 1999 assets that remain to

be resolved are those mentioned in the response to Finding I.

.

Corrective Action: The DCA Agency Procurement Officer, Margaret Stiggers, and her supervisor, Raymond Noel, Director of the Office of Administrative Operations, will identify which FY 1999 Conversion Purchase Orders identified in Finding 1 are indeed assets and enter them into the PeopleSoft Asset Management module by March 31, 2001. The Director of Administrative Operations has taken steps to ensure that the Equipment Inventories in the future are maintained in a timelier manner so that this problem will not occur again.

-Contact Person: Raymond Noel, Director of Administrative Operations Telephone: (404) 679-0623; FAX: (404) 679-3139, E-mail: rnoel@dca.state.ga.us

F-51

Audltee's Corrective Action PLans For the FiscaL Year Ended June 30, 2000
DEPARTMENT OF NATURAL RESOURCES
Finding Control Number: FS-462-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with this finding. Steps are being taken to ensure that all surplus items are removed from the equipment inventory records when the documentation is received and that all inventory items have the proper decal and are recorded in the property management system in accordance with the State Property System Manual. To further ensure the steps are being followed the duties are being removed from the person who has been responsible for inventory management over the past several years and are being reassigned to others. The department is in the process of conducting complete inventories at all office sites throughout the state and making appropriate entries into the asset management system from these inventories. This process (the complete inventories) was started in June 2000. We anticipate it will take 12 to 18 months to complete all inventories and get the property management system completely accurate and up to date.
Contact Person: Charles Tye, Office Services Director Telephone: (404) 656-7763; Fax (404) 656-2285, E-mail: charles_tye@dm.state.ga.us
DEPARTMENT OF PUBLIC SAFETY
Finding Control Number: FS-466-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
With the conversion to PeopleSoft, there were no clear instructions on how to reconcile the property management system to the financial reports. Our agency tried to maintain the information in the property system as accurately as possible but the balancing that had been performed in GIFS had not been maintained. After working with the Auditors during the audit to better understand what was expected from the property unit, we established procedures to handle the reconciliation in the future. We also worked with several other agencies to make sure we were using the correct reports to obtain our data. At this time, we have reconciled the all months from FY2000 and through the current month in FY2001. The Property Supervisor and the Director of Accounting feel the procedures are in place to eliminate this finding in the future.
Contact Person: Cathy Malone, Director of Accounting Telephone: (404) 624-7863; E-mail: cmalone@dps.state.ga.us
DEPARTMENT OF CORRECTIONS
Finding Control Number: FS-467-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
1) We concur with this fmding. However, a reconciliation process was being completed on a monthly basis according to the method that was taught in PeopleSoft training by DOAS. The department as a whole will be taking steps to implement an accurate reconciliation process.
2) We do not concur with this finding. Two of the four items mentioned here were appropriately omitted from the fixed asset inventory, because they were determined to be permanently attached real estate. The dollar amount of these two items totaled $278,000.00. The two items in question are a milk packaging and processing machine, in which both are piped and attached to the building. Both of the items are decaled but are not required to be on the fixed asset inventory.
3) We concur with this finding except for the following. There were four items noted as missing that are items the asset management section does not track. These four items are Cisco Switches, which are server components. There is no physical way to track these items. The items were given a decal # and put on the fixed asset inventory because of the value. These items have now been deleted from the GDC
F-52

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
inventory. The department is taking steps to provide information to address what items should be and should not be entered on the fixed asset inventory. We concur with the other (39) missing items. It should be noted that all of the (39) missing items are computer equipment related. The department is also taking steps to implement policy and guidelines concerning the property procedures used in the OIT section of the department.
Contact Person: Scott L. Kimball, GDC Property Control Manager. Telephone: (404) 463-6397
BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA
Finding Control Number: FS-472-QO-03 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Resident Instruction, "A" Budget
We concur with this finding. Procedures for preparing, approving and submitting budget amendments to the Office of Planning and Budget have been reviewed and revised in accordance with the audit recommendations'. The Budget Director has established procedures to ensure the identification of non-state capital outlay funds in budget amendments. This procedure went into effect October 1, 2000.
Contact Person: Debra Wike, Interim Director for Business and Financial Affairs Telephone: (404) 657-1472; Fax: (404) 656-4259; E-mail: dwike@mail.regents.peachnet.edu
Finding Control Number: FS-472-o0-04 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Regents Central Office and other Organized Activities, "B" Budget
We concur with the finding. Procedures for preparing, approving and submitting budget amendments to the Office of Planning and Budget have been reviewed and revised in accordance with the audit recommendations. The Budget Director has established procedures to ensure budget amendments are submitted to the Office of Planning in a timely manner. The new procedures went into effect October 1,2000.
Contact Person: Debra Wike, Interim Director for Business and Financial Affairs Telephone: (404) 657-1472; Fax: (404) 656-4259; E-mail: dwike@mail.regents.peachnet.edu
DEPARTMENT OF REVENUE
Finding Control Number: FS-474-00-01 CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures
We concur with this finding. The Department has recently hired a Controller. Additionally, accounting resources are being added to address the deficiencies under findings number FS-474-00-01 and FS-474-00-02. The additional resources along with a general reorganization of the accounting functions are planned to accommodate the implementation of a new dual~entry accounting system effective July 1,2001.
The new revenue system has been designed to function through the current statewide PeopleSoft Financial System. The reorganization along with the Revenue Collection and Disbursement System will address the inadequacies noted in your findings. The following is a listing of the planned and completed corrective actions for the six deficiencies cited in finding FS-474-00-01 :
In response to deficiency 1: Individuals were promoted and their job responsibilities were reassigned to provide adequate separation of duties.
F-53

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000
In response to deficiency 2: Two new Financial Analysts positions were created and two individuals
were offered these positions. Their main focus will be the reconciliation of all cash and general ledger accounts.
In response to deficiency 3: An Accounting Manager position will be created to manage all staff
accoUntants and financial analysts. Bank along with all other reconciliations will be reviewed and approved by the Manager and/or the Director.
In response to deficiency 4: Bank accounts are currently reconciled monthly. The Director is currently
reviewing and approving them when completed. (See response above)
In response to deficiency 5: All reconciling items were reviewed and researched and correcting entries
posted.
In response to deficiency 6: Accounting policies Will be reviewed and changes will be made, if
necessary, as the new system and individuals are in place.
Contact Person: Jeremie S. Peterkin, Controller Telephone: (404) 463-6960; Fax: (404) 651-6490, E-mail: JPeterkin@gw.rev.state.ga.us
Finding Control Number: FS-474-o0-02 REVENUES/RECEIVABLES/RECEIPTS Deficiencies in !he State Revenue Collections Fund (Overall)
We concur with this fmding. The new PeopleSoft Revenue Accounting System is in the testing stage and scheduled to be implemented in July 2001.
In response to deficiency I: All revenues and disbursements will be posted through the new system beginning July 1, 2001. The new system provides dual-entry accounting for all receipts and disbursements.
In response to deficiency 2: The new system functionality will include separate accounts to identify each type of revenue reported to OTFS.
In response to deficiency 3: Policies and procedures are scheduled for implementation with the new. revenue system.
In response to deficiency 4: The Department recognizes and agrees that generally accepted accounting principles are not followed in this instance, however, more research is need in this area to adopt a feasible, and agreeable resolution to the problem.

Contact Person: Jeremie S. Peterkin, Controller Telephone: (404) 463-6960; Fax: (404) 651-6490, E-mail: JPeterkin@gw.rev.state.ga.us
. Finding Control Number: FS-474-o0-03 REVENUES/RECEIVABLES/RECEIPTS Deficiencies in the Income Tax Division Subsidiary Records
FS-474-00-03 (])
We concur with this finding. However, the feasibility, practicality and financial responsibility of capturing withholding information for approximately 3 million (+) individual tax returns each year is questionable.
Capturing information from even 3 million W2s would be an awesome task. This number does not take into consideration the multiple W2s for married couples and withholding form more than one employer. Without mandated standardization of W2s, capturing the necessary information through optical character recognition would be nearly impossible. In many cases, it is difficult to read the original W2s. Therefore capturing a readable image of the form is even more difficult. To capture information of this magnitude by data entry is inconceivable.
The Department has several income match programs with the Internal Revenue Service that are related to compliance issues. The Department is also awaiting further development of partnership between the Social Security Administration, Internal Revenue Service and States. The basic concept of this program will be that the Social Security Administration will
F-54

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
capture the data and provide to states for a fee. This type of program would be more financial responsible to capture the data than at the State level.
No matter how the information is captured, the State will have to'make a financial commitment to provide the necessary funding for a project of this scope.
FS-474-00-03 (2)
We concur with this audit finding. However, we feel this finding was based on reviews of old systems and associated procedures that have been retired. The following are brief overviews of the system controls and procedures currently in place.
A. Amended returns filed by individual taxpayers are data entered into the mail/cash system and downloaded into the Individual audit tax system. A batch of amended returns is pulled into the inbox by a tax examiner. The return information in the amended system is compared to the hard copy amended returns. Any adjustments made to the return or the acceptance of the amended return as filed is documented by time-date stamp and user identification. In addition, changes made to the amended return as filed by the taxpayer are captured and shown within the system as a Per Taxpayer record and Per Department record. Amounts paid with amended returns are downloaded from the Deposit History File (DHF) and cannot be changed by tax examiners in the taxing divisions. Based on established system parameters, a percentage of returns are randomly routed to supervisors for quality review. Furthermore, during the initial training period, all returns worked by new examiners are systematically routed for quality review.
Since the Individual audit tax system was only recently implemented fully, requirements for reports are still being established. Supervisor review tax examiner in-boxes, document and/or batch searches to identify backlogs, old and outstanding amended returns. These are monitored and addressed to tax examiners.
The system controls in place for computer notices and all protests submitted by taxpayers are identical to the aforementioned controls for amended returns.
B. Withholding documents filed by taxpayers are flagged by established system parameters, systematically placed on hold and routed to the in-boxes of tax examiners. Tax examiners compare the information keyed by data entry to the hard-copy document and make adjustments directly on-line to tax periods, account numbers, wages, document type, etc. Withholding tax examiners cannot make changes to money amounts shown as paid with the documents. These amounts download from the Deposit History File (DHF) in the mail/cash system and cannot be changed in the DHF by any taxing division employee. The tax examiner then posts the document and where applicable, the information interfaces to the centralized taxpayer accounting system (CTA).
The Withholding transaction maintenance history shows a record of the original document, what was changed, when changed and the user identification. A monthly report is generated of all documents in each tax examiners' in-boxes. The Withholding supervisor reviews the report and any backlogs, old and/or outstanding documents not completed are addressed to the tax examiners.
C. Both the Individual audit tax system and the Withholding tax system provide chronological audit trail documentation of all adjustments to returns and documents.
Contact Person: Jeremie S. Peterkin, Controller Telephone: (404) 463-6960; Fax: (404) 651-6490, E-mail: Jpeterkin@gw.rev.state.ga.us
. F-55

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
GEORGIA STUDENT FINANCE COMMISSION
Finding Control Number: FS-476-00-02 CASH AND CASH EQUIVALENTS Drawdown of Lottery Funds in Excess of Current Operating Needs
We concur with this finding. Effective April I, 2000, revised cash management procedures were implemented to minimize the period of time from the receipt of funds from the State Treasury to the disbursement of funds to participating universities, colleges and schools. These procedures were coordinated with the Office of Treasury and Fiscal Services to further contribute to the efficient and effective utilization of the State's cash resources.
Contact Person: Sanjay Sharma, Director of Accounting Services Telephone: (770) 724-9095: Fax: (770) 724-9120; E-mail: sanjay@mail.gsfc.state.ga.us
SECRETARY OF STATE
Finding Number: FS-478-00-01 REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Accounting Procedures (Overall) ,
Early in the fiscal year under review, the Office of Secretary of State recognized problems related to our accounting operation that were heightened by the implementation of PeopleSoft financial system. Concerns included the capacity of existing staff to work with a system that clearly required more formal accounting knowledge, as well as the sufficiency of existing staff to manage the new workload imposed by the system.
The Office of the Secretary of State, acting on it's own initiative, has been aggressive in addressing these concerns on all fronts:
Over the course of six months, it was necessary to terminate two of the then staff of four in the Accounting Unit, plus the director of the Administrative Division;
We retained an outside accounting firm which spent several months working with our staff, assisting with the implementation of PeopleSoft, examining our accounting procedures and staffing level in the Accounting Unit;
During the period under review, two positions were added to the Accounting Unit, providing a current staff of 6 in the Unit; and
The minimum requirements were raised over the period, such that where the original staff of 4 included only 1 individual with an accounting degree, four of the existing staff of six have accounting degrees.
While written policies and procedures existed for the previous financial system, staffing levels and lack of familiarity with the new accounting system resulted in the problems listed in this finding. The Office of Secretary of State, with the guidance of the accounting firm, has re-written the operational procedures to reflect the implementation of PeopleSoft Financial.
In a further effort to ensure that staff skill levels and operational procedures remain current, the accounting unit routinely attends training in the PeopleSoft accounting system and is making strides in cross-training staff to create redundancies for all functions.
With these changes, State Appropriations Allotment requests are now properly recorded in "A" Budget unit and "B" Budget unit as required; General ledgers for the Budget funds, State Revenue Collections Funds and Trust and Agency Funds have been corrected to move activity to the appropriate fund; and Policies have been developed to ensure that future activity is properly recorded.
F-56

Auditee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
Further, periodic reconciliation of the recorded State appropriations allotments to the information provided by the Office of Treasury and Fiscal Services, has ensured that the appropriation allotment revenue and accounts receivable are being properly recorded. And finally, procedures have been written to provide guidance in monthly balancing of the general ledger to subsidiary records.
Contact Person: Tommie H. Pike, Accounting Manager Telephone: (404) 656-2890; Fax: (404) 657-5840; E-mail: tpike@sos.state.ga.us
Finding Control Number: FS-478-00-02 REVENUE/RECEIVABLES/RECEIPTS Deficiencies in Accounting for State Revenue Collections
(I) Early in the fiscal year under review, the Office of Secretary of State recognized problems related to our accounting operations that were heightened by the implementation of the PeopleSoft fmancial system. Concerns included the capacity of existing staff to work with a system that clearly required more formal accounting knowledge, as well as the sufficiency of existing staff to manage the new workload imposed by the system.
The Office of the Secretary of State has been aggressive in addressing these concerns on all fronts: Over the course of six months, it was necessary to terminate two of the then staff of four in the Accounting Unit, plus the director of the Administrative Division; We retained an outside accounting firm which spent several months working with our staff, assisting with the implementation of PeopleSoft, examining our accounting procedures and staffing level in the Accounting Unit; During the period under review, two positions were added to the Accounting Unit, providing a current staff of 6 in the Unit; and The minimum requirements were raised over the period, such that where the original staff of 4 included only 1 individual with an accounting degree, now four of the existing staff of six have accounting degrees.
While written policies and procedures existed for the previous financial system, staffing levels and lack of familiarity with the new accounting system resulted in the problems listed in this finding. The Office of Secretary of State, with the guidance of the accounting firm, has re-written the operational procedures to reflect the implementation of PeopleSoft Financial.
In a further effort to ensure that staff skill levels and operational procedures remain current, the accounting unit routinely attends training in the PeopleSoft accounting system and is making strides in cross-training staff to create redundancies for all functions.
With these changes, Policies and procedures have been formulated to ensure that adequate records are maintained for our collecting units and that collected balances are remitted to the Office of Treasury and Fiscal Services in a timely manner; and Periodic reconciliation with the information provided by the Office of Treasury and Fiscal Services ensures that our records agree with their records.
(2) The GeorgiaNet Authority (subsequently made a division of the Georgia Technology Authority (GTA is the state entity authorized to collect and remit to the OTFS revenue collections that are paid for license, registrations and other services over the Internet. While OCGA 45-12-92 requires that state agency revenue collections be remitted by the 15th of each month for the immediately preceding month's collections, funds were not transferred in that manner by GeorgiaNet.
As a relatively new approach to handling governmental transactions, guidance and procedures for electronic payment processing were not formally available, especially for relationships between state authorities and other state agencies. In fact, no advising agency had indicated to our agency that monthly remittance procedures required by law would be different for an authority. As a result, upon receipt of quarterly statements from GeorgiaNet, our understanding from the authority was that funds were being remitted on our behalf as required by law.
F-57

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000
After June 30, 2000, phone calls to the Department of Audits, the Office of Treasury and Fiscal Services, and Georgia Technology Authority revealed that funds were deposited, but were not identified as being to the credit of the Office of Secretary of State.
Subsequent to the period under review, the Office of Secretary of State is taking the initiative to work with the new administration of GTA to devise appropriate procedures for remittance and reporting of electronic payments received on our behalf and sent to OTFS. Additionally, we are seeking guidance from the Department of Audits and OTFS as to the level of total funds collected that are required by law to be remitted monthly by an authority, particularly as it relates to licensing fees collected by the Professional Licensing Boards Division.
.In light of the uncertain fiscal relationship and apparent absence of formalized guidance between state authorities and state agencies, as well as our inability to mandate policy on a separate state entity, we submit that the Office o( Secretary of State should not have a finding for this matter.
Contact Person: Tommie H. Pike, Accounting Manager Telephone: (404) 656-2890; Fax: (404) 657-5840; E-mail: tpike@sos.state.ga.us
DEPARTMENT OF TRANSPORTATION
Finding Control Number: FS-484-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in operation of Property Management System
We concur with this fmding, with reservations. The Asset Management module of PeopleSoft was flawed as delivered and could not produce reliable data extracts for reconciliation. However, with the diligence of department personnel, necessary corrections were implemented to insure a more accurate level of asset control. The department has implemented a program of reviewing EDP equipment requests to insure that assets are properly identified at the time. of purchase. All assets. interfaced from the purchasing module to the asset management module are reviewed for content, as necessary. Each budget unit is required to "tag" all interfaced assets within two weeks of being released from pending asset status.
Procedures are in place to direct personnel of each budget unit to complete the needed additional asset information. The
minimum asset information that is required is the tag/decal number, location, organizational unit, and serial number.
Policy has been revised to terminate the authority to purchase assets for any budget units that have failed to comply with these new procedures.
Contact person: Earl Mahfuz, Director of Administration Telephone: (404) 656-5239; Fax: (404) 657-0174; e-mail: earl.mahfuz@dot.state.ga.us
GEORGIA INSTITUTE OF TECHNOLOGY
Finding Control Number: FS-503-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with this fmding. The Institute has appointed a new manager to oversee the day to day operations of the property management function. Emphasis has been placed on the review of and strengthening of internal office controls to insure full compliance with existing procedures and to insure adequate documentation is maintained.
Contact Person: Tom O. Pearson, Director, Procurement Services Telephone: (404) 894-5000; Fax (404) 894-8552; E-Mail: tom.pearson@business.gatech.edu
F-58

Audltee's Corrective Action PLans For the AscaL Year Ended June 30,2000

Finding Control Number: FA-503-00-02 ALLOWABLE COSTS/COST PRINCIPLES - RESEARCH AND DEVELOPMENT CLUSTER Overhead Expense Pools: Understated Fringe Benefit Accrual Variance

GIT/GTRC/GTARC concurs with the finding and recommendation identified above concerning the need to remove fringe

benefits expense allocable to other units of the Institute before calculating the GTRI fringe benefit rate. Procedures have

been implemented to identify and adjust all fringe benefits expenses allocable to other units on a monthly basis. This

monthly procedure will assure that all fringe benefits expenses have been properly accounted for before calculation of the

GTRI fringe benefit rate.

.

Contact Person: Charles T. Duffy, Director, Office of Grants & Contracts Accounting Telephone: (404) 894-1026; Fax: (404) 894-5519; E-Mail: chuck.duffy@business.gatech.edu

Finding Control Number: FA-503-00-03 ALLOWABLE COSTS/COST PRINCIPLES - RESEARCH AND DEVELOPMENT CLUSTER DCAA 00-2G&A Expense Pool: Understated Fringe Benefit Accrual Variance

GIT/GTRC/GTARC concurs with the finding and recommendation identified above concerning the need to remove fringe benefits expense allocable to other units of the Institute before calculating the GTRI fringe benefit rate. Procedures have been implemented to identify and' adjust all fringe benefits expenses allocable to other units on a monthly basis. This montWy procedure will assure that all fringe benefits expenses have been properly accounted for before calculation of the GTRI fringe benefit rate. In addition, this action will assure that the expenses are properly recognized in the General & Administration rate calculation.

Contact Person: Charles T. Duffy, Director, Office of Grants & Contracts Accounting Telephone: (404) 894-1026; Fax (404) 894-5519; E-Mail: chuck.duffy@business.gatech.edu

Finding Control Number: FA-503-o0-04 ALLOWABLE COSTS/COST PRINCIPLES - RESEARCH AND DEVELOPMENT CLUSTER DCAA 00-3 G&A Allocation Base: Understated Fringe Benefit Accrual Variance and Unallowable Costs Excluded from G&A Allocation

GIT/GTRC/GTARC concurs with the finding and recommendation identified above concerning the need to confirm that all

unallowable costs properly ineludable in any indirect cost rate base is indeed in that base. New procedures have been

developed and added to the GTRI indirect rate study Work Plan to add all unallowable laboratory overhead costs to the

G&A rate base. In addition, a footnote will be added to the rate study to specifically identify the amount of unallowable

expenses included in the G&A rate base.

.

Contact Person: Charles T. Duffy, Director, Office of Grants & Contracts Accounting Telephone: (404) 894-1026; Fax (404) 894-5519; E-Mail: chuck.duffy@business.gatech.edu

Finding Control Number: FA-503-00-05 REPORTING -RESEARCH AND DEVELOPMENT CLUSTER GT 00-1 Reports Not Submitted in a Timely Manner

We concur with this finding and recommendation. Prior to June 30, 2001, a review will be performed to consider the possible need to improve the following efforts currently being made to ensure that all required contractual deliverables are submitted to the contracting agencies in a timely fashion:

1. The Office of Sponsored Programs (OSP) reviews all RFPs and solicitations to identify all contractual

deliverable requirements, which are reviewed with the proposed Project DirectorlPrincipal Investigator

(PDIPI) prior to proposal submission. If needed, this review is completed again, prior to acceptance of

the agreement. .

.

2. As soon as a new sponsored project is received, OSP reviews the agreement and prepares (for the

PDIPI) a listing, including the dates that items are due, of all contractually required deliverables. This

F-59

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000
deliverable schedule is presented to the PD/PI for review, and they are asked to sign-off on a copy of the schedule to indicate concurrence. This record is then retained in the permanent contract file. 3. OSP prepares and distributes for all campus units a monthly report of deliverables due the following month to contracting agencies under all sponsored research projects. 4. OSP expanded efforts to provide a list of all project deliverable information to each PD/PI and all levels of management within a unit via a web-based query tool. 5. OSP also prepares and distributes to all campus units a quarterly report of overdue deliverables for all sponsored research projects. This is a list of all required deliverable items not known by OSP to be satisfied or submitted to the sponsoring agency. The report is copied to members of upper administration, including Qeans, School Chairs and Lab/Center Directors. 6. OSP initiates special follow-up action by way of memos directly to PD/PI's for any deliverable items(s) that are approximately 60 or more days overdue, with special attention given to oldest items. 7. Campus newsletter articles have been issued to emphasize the importance of timely deliverable submission or the need to seek timely relief (extension of due date) from sponsors for required deliverables.
Contact Person: G. Duane Hutchison, Director, Office of Sponsored Programs Telephone: (404) 894-4819; Fax: (404) 894-7002; E-Mail: duane.hutchison@osp.gatech.edu
Finding Control Number: FA-503-00-06 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS REPORTING -RESEARCH AND DEVELOPMENT CLUSTER GT 00-2 Failure to Submit Report Required by Special Contract Provisions
We concur with this fmding and recommendation. Action will be initiated to develop and implement improved monitoring procedures to improve the accuracy and timeliness of reports required by special contract provisions. Action will be completed no later than June 30, 2001 to improve these procedures.
Contact Person: G. Duane Hutchison, Director, Office of Sponsored Programs Telephone: (404) 894-4819; Fax: (404) 894-7002; E-Mail: duane.hutchison@osp.gatech.edu
UNIVERSITY OF GEORGIA
Finding Control Number: FA-518-00-01 REPORTING Research and Development Cluster Technical Reports Not Properly Filed for subrecipient awards from the University of Georgia Research Foundation, Inc.
. The University continues to contact faculty members whose reports are delinquent and remind them of proper procedures. The University is developing a computerized follow-up system.
Contact Person: Tracy Walters, Director of Contracts and Grants Department Telephone: (706) 542-6889; E-mail: twaltOl@arches.uga.edu
Finding Control Number: FA-518-00-02 REPORTING Research and Development Cluster Financial Reports Not Properly Filed for Federal Awards Direct to the University
University staff members responsible for preparing fmancial reports have been reminded to carefully review the financial reporting requirements of each project.
Contact Person: Tracy Walters, Director of Contracts and Grants Department Telephone: (706) 542-6889; E-mail: twaltOl@arches.uga.edu
F-60

Audltee's Corrective Action PLans For. the AscaL Year Ended June 30, 2000

ALBANY STATE UNIVERSITY

Finding Control Number: FA-521-00-01

REPORTING

'

Report Not Reconciled

Student Financial Aid Cluster Program

We concur with this rmding. The University implemented procedures to ensure that refunds are correctly calculated and applied to appropriate accounts in a timely manner. Procedures were also developed to identify "unofficial withdrawals" to ensure that refunds are calculated accordingly. This is a continuous monitoring function. The University has also implemented a process to target and identify financial aid recipients that do not complete at least 60% of the term and received all "F" grades for the term. Every effort will be made to determine the last date of attendance as certified by an instructor of record or an academically related activity: The University will contact the U. S. Department of Education regarding resolution of this finding.

Contact Persons: Dorothy Martin, Director of Financial Operations Telephone: (912) 430-4610; E-mail: dmartin@asurarns.edu

Kathleen Caldwell, Director of Financial Aid Telephone: (912) 430-4650; E-mail: kcaldwel@asurarns.edu

Finding Control Number: FA-521-00-02 SPECIAL TESTS AND PROVISIONS Deficiencies in Disbursement Notification Process Student Financial Aid Cluster Program

We concur with this finding. The University has implemented adequate controls to ensure that reports are accurately completed and supported by the accounting records. Detailed reconciliations are prepared for any variances and are maintained as part of the supporting documentation.

Contact Person: Dorothy Martin, Director of Financial Operations Telephone: (912) 430-4610; E-mail: dmartin@asurarns.edu

Finding Control Number: FA-521-00-03 SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $1,188.75

We concur with this finding. The University is implementing procedures to inform loan recipients of their rights and responsibilities regarding the loan. The procedure will address all aspects of the disbursement notification process affecting Federal Direct Student Loan recipients in accordance with Federal Regulation 34 CFR 668.165 (A). The University will also incorporate pertinent information on the student's bill/fee statement provided to them each semester.

Contact Persons: Dorothy Martin, Director of Financial Operations Telephone: (912) 430-4610; E-mail: drnartin@asurarns.edu

Kathleen Caldwell, Director of Financial Aid Telephone: (912) 430-4650; E-mail: kcaldwel@asurarns.edu

F-61

Audltee.s Corrective ActIon PLans For the AscaL Year Ended June 30, 2000
CLAYTON COLLEGE AND STATE UNIVERSITY
Finding Control Number: FS-528-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with this finding.
A monthly reconciliation has been performed to reconcile General Fixed Assets listing to the General Ledger. In addition a physical inventory count has been performed again to verify equipment on the ledger as of December 2000 and will be performed again to verify equipment at year-end to both the General Fixed Assets listing and the General Ledger.
Contact Person: Carla Dent ~elephone: (770) 961-3602; E-mail: carladent@mai1.clayton.edu
COLUMBUS STATE UNIVERSITY
Finding Control Number: FA-530-o0-01 SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $2,158.00
We concur with this finding. The following procedures will be implemented effective with Summer Term 2001.
Each instructor will be given a class roll the day after the drop/add period. Each instructor will be told to notify the Registrar of any discrepancies between the class rolls and the students in attendance. Discrepancies will include students on the class roll and not attending, and students not on the class roll and attending. The Registrar will contact all students not attending classes listed on their registration forms and inform them how to rectify their enrollment discrepancies. At the end of the term, each instructor will be required to report unofficial withdrawals to the Registrar for any student who has never attended class and for each student who has stopped attending class. The last date of attendance will be required for students who stopped attending class. Students who never attended any classes and students who stopped attending classes before the end of the refund period will be processed through the Federal RetUrn to Title IV policy, where applicable.
Contact Person: Ms. Sandra Hand, Assistant to the Vice President for Business & Finance Telephone: (706) 568-2003; E-mail: Hand_Sandra@colstate.edu
FORT VALLEY STATE UNIVERSITY
Finding Control Number: FA-533-00-o1 ELIGffiILITY Improper Disbursement ofFSEOG Funds Student Financial Aid Cluster Program Questioned Cost: $47,199.00
The University is awaiting resolution of this finding from the U.S. Department of Education regarding its interpretation of
regulations regarding awarding FSEOG funds to non Pell-eligible students. Until this issue is resolved, FSEOG will only
be awarded to Pell-eligible students.
Contact Person: Beatricia M. King, Director of Student Financial Aid Telephone: (478) 825-6609; Fax: (478) 825-6976; E-mail: kingb@mai1.fvsu.edu
F-62

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000

Finding Control Number: FA-533~OO-02 ELIGIBILITY .Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18

There were instances where students who did not make satisfactory academic progress appealed fmancial aid suspensions and financial aid was reinstated. Adjustments were made in students' cost of attendance budgets which led to increased eligibility and revised award notifications. In the case of the student who is an employee of the University whose file contained conflicting information, the amount of aid awarded could only be based on information available to personnel in the Office of Financial Aid who had no knowledge of information in the individual's personnel file and consequently could not make the comparison made by the auditors. The University is in the process of investigating this situation and will take the necessary steps to ensure that this matter is resolved.

However, the University has implemented changes designed to strengthen the internal controls related to student financial

aid.

'

~ The policies and procedures manual related to the awarding process has been revised. ~ Staff members have participated in mandatory in house staff training sessions and training sponsored by
state and federal agencies. ~ Satisfactory Academic Progress Policies have been revised. ~ Students who have exceeded maximum time frames well beyond the mandated maximum hours denied
additional aid at the undergraduate level.

Contact Person: Beatricia M. King, Director of Student Financial Aid Telephone: (478) 825-6609; Fax: (478) 825-6976; E-mail: kingb@mail.fvsu.edu

Finding Control Number: FA-533-00-03 ELIGIBILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $50,741.74

Corrective action addressing this finding has been fully implemented and includes initial and revised award notifications. In a number of the cases identified, the award letters were in-house but not filed in the individual files as they should have been.

Contact Person: Beatricia M. King, Director of Student Financial Aid Telephone: (478) 825-6609; Fax: (478) 825-6976; E-mail: kingb@mail.fvsu.edu

Finding Control Number: FA-533-00-04 REPORTING Reports Not Reconciled Student Financial Aid Cluster Program

We concur with this finding. The reconciliation amounts reported for all Federal Financial Assistance Programs have been corrected. The federal fiscal activity calendar allows for corrections to be made.

The following procedures have been implemented to ensure that all programs are reconciled at the end of the fiscal year, the Student Financial Aid Director will ensure that the total disbursements per Financial Aid's records are in agreement with the general ledger prior to the submission of the FISAP report. Any discrepancies or errors noted after the initial transmission will be corrected in the FISAP edit report prior to December 15th as allowed by the U.S. Department of Education. A copy of the documentation that supports that reconciliation will be on file and available for review in either the office of the Director of Student Financial Aid or the Vice President for Business and Finance.

F-63

AUdltee's Corrective Action PLans For the Fiscal Year Ended June 30, 2000
The University is workirig with the U.S. Department of Education to complete the reconciliation process for the Direct Loan program. Copies of the 732 and GS5660 are on file at the University in the offices of Student Financial Aid and Business Finance. U.S. Department of Education's representatives have advised that they have accepted the reconcilia!ion for years 2 and 3. The reconciliation for year 4 has been completed and final settlement will be made prior to the end of February 2001.
Our interpretation of Section 2 of the Blue Book is that a formal reconciliation is not required on a monthly basis. Procedures are now in place to ensure that the Direct Loan (LOC, Student Financial Aid and Accounting records) and Pell grant reconciliations are completed in a timely manner and documented.
Contact Person: Stanley E. Williams, Director of Accounting Services Telephone: (478) 825-6300; Fax: (478) 825-6977; E-mail: williamO@mail.fvsu.edu
Contact Person: Beatricia M. King, Director of Student Financial Aid Telephone: (478) 825-6609; Fax: (478) 825-6976; E-mail: kingb@mail.fvsu.edu
Finding Control Number: FA-533-00-05 SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures Student Financial Aid Cluster Program
We concur with this finding. The University will continue its efforts to strengthen controls in the area of Federal WorkStudy. Both the Office of Financial Aid and the Payroll Office have on file "Authorized Supervisor Signature Forms." The filing system in the Office of Financial Aid is being changed and will include individual files for each federal workstudy employee by program year.
Contact Person: Beatricia M. King, Director of Student Financial Aid Telephone: (478) 825-6609; Fax: (478) 825-6976; E-mail: kingb@mail.fvsu.edu
GEORGIA SOUTHERN UNIVERSITY
Finding Control Number: FS-539-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with this finding. Management has completed a review of equipment inventory procedures and has found that internal controls are weak primarily due to inadequate system for managing fixed assets, insufficient staffmg, and lack of adherence to inventory procedures. Plans are currently in place to remedy each of these inadequacies. Implementation. of the PeopleSoft Asset Management system in October, 200 I will provide' a much improved system for management of fixed assets and a Property Control Officer has been hired to oversee and manage Property Control operations. Additionally, we are in the process of planning a campus wide inventory count and approval of revised institutional procedures for campus wide management of fixed assets. The current time frame for completion of these new procedures is June 2001.
SAVANNAH STATE UNIVERSITY
Finding Control Number: FA-548-00-01 ALLOWABLE COSTS/COST PRINCIPLES Time and Effort Report Deficiencies Higher Education - Institutional Aid (CFDA 84.031)
We concur with this finding. We have made significant progress in this area over the last few years. For the year under review, 43 Time and Effort Reports were requested and all were submitted for audit. We have now put appropriate procedures in place to ensure that Time & Effort Reports are submitted for all federally funded programs on a monthly basis. The Office of Budgets, Contracts and Grants will verify the accuracy of each report.
F-64

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000

Contact ,Person: Mestewat Alemayehu Telephone: (912) 353-3821; E-mail: mestewat@savstate.edu

Finding Control Number: FA-548-00-02 DAVIS-BACON ACT Payments of Prevailing Wage Rates Not Monitored Higher Education - Institutional Aid (CFDA 84.031)

We concur with this finding. Employees responsible for administering federal funds are made aware of the requirements of the Davis-Bacon Act. Contractual obligations involving federal funds will be monitored for compliance of the provisions pertaining to wages paid to laborers.

Contact Person: Mestewat Alemayehu Telephone: (912) 353-3821; E-mail: mestewat@savstate.edu

Finding 'Control Number: FA-548-00-03 ELIGIBILITY Overpayment of Student Financial Aid Weaknesses in Internal Control Structure Student Financial Aid Cluster Program Questioned Cost: $8,105.39

University's Response: (1) The university concurs with finding as it relates to management's failure to review awards before disbursements were made. However, the university does not concur on the amount of $4,107.00 in excess of the students' need.

Student #1: When the Office of Financial Aid received the NROTC's Delivery Order on October 4, 1999 awarding the student $3,890.00 for Spring Semester 2000, the remaining Stafford loan amount of $1,698.00 should have been canceled. Because it was not canceled, this resulted in an award/disbursement of $1,698.00 in excess of student's need as oppose to $4,107.00.

University's Response:

The university concurs with finding as it relates to management's failure to review awards before disbursements were made. However, the university is in non-concurrence with the amount of$I,279.00 disbursements and award in excess of need.

Student #2: An INAS calculation was used to determine the student's Pen eligibility, pending dependency override adjustment to the SAR. When the university did not receive the corrected ISIR to support the INAS calculation, the Pen award was removed from the student's account. Subsequently, the student repaid the $1,775.00 Pen award, which in terms eradicated the disbursement in excess of need and institution liability. The institution further submits that even with the application of the Pen award, an adjustment to the Stafford Loan would not have been necessary. As the attached Student Account Detail Form shows, the NROTC room ($960.00) and book ($313.35) scholarships were applied to the student's account on January 31, 2000 which was after disbursement of the Stafford Loan ($1,334.00) on December 30, 1999.

These oversights appear to be training issues and will be addressed more aggressively through continued training on making appropriate manual adjustments to remaining Title IV aid when additional aid becomes available to a student. In addition, the institution will improve in the areas of tracking corrections and resolving SAR discrepancies.

Audit Finding: (2)

One student received a refund in excess of the correct amount by $1,155.39. This error resulted from management's failure to review refund calculations prior to disbursement of funds.

F-65

Audltee's Corrective Action PLans .For the Ascal Year Ended June 30, 2000

University's Response:

Student #3: Student Accounts to respond. Response not received by management.

Audit Finding:

One student was disbursed $1,564.00 of Federal Work-Study Program funds in excess ofthe approved grant award. This error was caused by management's failure to monitor the student's disbursement.

University's Response:

The university concurs with this finding.

Student #4: Even though the student's earning from the Federal Work-Study Program did not exceed his need, the university failed to issue another Certification of Federal Work Study form to support earnings beyond the initial award. The university will address this issue by making sure to issue FWS Certification to reflect the awarding of additional FWS funds.

Contact Person: Jerrie Huewitt Telephone: (912) 356-3198

Finding Control Number: FA-548-00-04 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Higher Education - Institutional Aid (CFDA 84.031) Questioned Cost: $10,030.12

We concur with this finding. The University plans to expand the utility of our Data Base to include and facilitate all required forms of reporting and documentation for equipment and real property management.

Contact Person: Thelma Harris Telephone: (912) 356-2414; E-mail: harrist@savstate.edu

Finding Control Number: FA-548-00-05 PERIOD OF AVAILABILITY Deficit Fund Balance Student Financial Aid Cluster Program

We concur with this fmding .. The Office of Budget, Contracts & Grants is working diligently to reconcile the carryover deficit balance ofPELL grant from FY 97-98 and 98-99 and also the deficit balance of the Direct Lending Programs for the .FY 98. One employee is assigned to work on a full time basis for Pell and Direct Leading reconciliation.

Contact Person: Mestewat Alemayehu Telephone: (912) 353-3821; E-mail: mestewat@savstate.edu

Finding Control Number: FA-548-00-06 SPECIAL TESTS AND PROVISIONS Deficiencies in Student Financial Aid Refu~d Process Student Financial Aid Cluster Program Questioned Cost: $2,770.17

We concur with this fmding. The University will implement procedures to ensure that all appropriate personnel are informed of both the program and amount of funds to be returned. In addition, the Office of Student Accounts and Cashiering will monitor the lists to ensure that the adjustments are made on the students' accounts.

Contact Person: Janis Allen - Comptroller Telephone: (912) 353-3044; E-mail: allen@savstate.edu

F-66

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
Finding Control Number: FA-548-00-07 SPECIAL TESTS AND PROVISIONS Failure to Disclose Federal Funding in Public Announcement Higher Education - Institutional Aid (CFDA 84.031)
We concur with this finding. Management will comply with the conditions illustrated in Attachment S of the Federal Grant Award and Public Law 105 -78, Sec. 508.
Contact Person: Mestewat Alemayehu Telephone:' (912) 353-3821; E-mail: mestewat@savstate.edu
SOUTHERN POLYTECHNIC STATE UNIVERSITY
Finding Control Number: FS-550-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Reconcile Equipment Inventory Records to Accounting Records
We concur with this finding. During the year under review, the University began a University-wide physical inventory that remained twenty (20%) percent incomplete at year-end. The University will finalize the complete physical inventory during fiscal year 2001 and rectify all remaining discrepancies by reconciling the inventory records to the University's financial statements.
A Property Control Manager position has been established to provide the necessary expertise in this functional area and ensure a successful outcome. This position will be responsible for the oversight and administration that will strengthen internal controls/processes and ensure sound custodial care and ongoing reconciliation of the university's capital assets with financial statements.
Contact Person: Anton Kashiri, Senior Director ofFacjlities Management Telephone: (770) 528-7256; Fax: (770) 528-7260; E-mail: akashiri@spsu.edu
Finding Controt"Number: FA-550-00-01 . MATCHING, LEVEL OF EFFORT AND/OR EARMARKING REQUIREMENTS Failure to Provide Institution Capital Contribution Student Financial Aid Cluster Program
Federal Perkins Loan Program (CFDA84.038)
We concur with this finding. The University has identified private funds to comply with the Institutional Capital Contribution match requirement for the year under review and has transferred the appropriate amount to the Perkins Loan program account. The University will monitor Perkins Loan financial statements each month to ensure the institutional capital contribution meets program requirements.
Contact Person: Diann Moffett, Controller Telephone: (770) 528-3706; Fax (770) 528-3706; E-mail: drnoffett@spsu.edu
Finding Control Number: FA-550-00-02 REPORTING Failure to Reconcile Program Reports Student Financial Aid Cluster Program
No.1 We concur with this finding. University records at year-end differed from U.S. Dept. of Education year-to-date data by an amount of $9,738.00. $7,006.00 of this amount has been identified and corrected. The remaining $2,732.00 was identified as award changes for 42 studtnt accounts which had not been transmitted to the U.S. Dept. of Education. The University's Office of Financial Aid is currently addressing all remaining discrepancies.
F-67

-"
Audltee's Corrective Action Plans For the Fiscal Year Ended June 30, 2000
No.2 We concur with this fmding. The University has identified private funds to comply with the Institutional Capital Contribution match requirement for the year under review and has transferred the appropriate amount to the Perkins Loan program account. The University will monitor Perkins Loan financial statements each month to ensure the institutional capital contribution meets program requirements.
Contact Persons: No. I Emerelle McNair, Director of Financial Aid
Telephone: (770) 528-7290; Fax (770) 528-7301; E-mail: emcnair@spsu.edu
Helen Spivak" Acting Director of Financial Aid Telephone: (770) 528-7225; Fax: (770) 528-7483; E-mail: hspivak@spsu.edu
No.2 Diann L. Moffett, Controller Telephone: (770) 528-3706; Fax: (770) 528-7301; dmoffett@spsu.edu
Finding Control Number: FA-550-00-03 SPECIAL TESTS AND PROVISIONS Exit Counseling Not Conducted Student Financial Aid Cluster Program
We concur with this fmdmg. The University has developed internal controls to identify all students whose emollment status has dropped below half time. Letters are sent to affected students on a weekly basis that informs them of their loan requirements and directs them to the Universities web site. The web site is designed so students are able to complete the required exit interview, print off and sign the verification form for return to the student account coordinator. The Student Accounts coordinator then forwards the form to the Financial Aid Office to be filed in the student's financial aid file. All student records are "held" until the student has satisfied this requirement. Subsequent telephone attempts are then made to officially notify the student of the exit interview requirement.
Contact Persons: Po Chang, Student Accounts Coordinator Telephone: (770) 528-3285; Fax (770) 528-7301; E-mail: pchang2@spsu.edu
Emerelle McNair, Director of Financial Aid Telephone: (770) 528-7290; Fax (770) 528-7301; E-mail: emcnair@spsu.edu
Helen Spivak, Acting Director of Financial Aid Telephone: (770) 528-7225; Fax: (770) 528-7483; E-mail: hspivak@spsu.edu
Finding Control Number: FA-550-00-04 . SPECIAL TESTS AND PROVISIONS Failure to Reconcile Program Reports William D. Ford Federal Direct Loan Program (CFDA 84.268)
We concur with this finding. The University has committed additional resources to the Office of Financial Aid to include consultant services for the purpose of reconciling the year under review, as well as identifying and implementing appropriate reporting and reconciliation procedures. Internal controls will be established to ensure reconciliation and required reporting are completed on a timely basis and are supported by institutional accounting records.
Contact Persons: Emerelle McNair, Director of Financial Aid Telephone: (770) 528-7290; Fax: (770) 528-7301; E-mail: emcnair@spsu.edu
Helen Spivak, Acting Director of Financial Aid Telephone: (770) 528-7225; Fax: (770) 528-7483; E-mail: hspivak@spsu.edu
F-68

Audltee's Corrective Action PLans For the FiscaL Year Ended June 30, 2000
Po Chang, Student Accounts Coordinator Telephone: (770) 528-3285; Fax: (770) 528-7301; E-mail: pchang2@spsu.edu
ATLANTA METROPOLITAN COLLEGE
Finding Control Number: FS-561-00-03 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Reconcile Subsidiary Equipment Records to Accounting Records
Atlanta Metropolitan College is in the proces~ of reconciling our equipment listing to the accounting records. Subsequent reviews by the State audit will find this account has been reconciled.
GEORGIA PERIMETER COLLEGE
Finding Control Number: FA-571-00-01 REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Federal Pell Grant Program (CFDA 84.063)
We concur with this finding. The District Director Financial Aid and Veterans Affairs, the Director of Accounting Services, and the Director of Student Accounts are working together to ensure that all reports submitted to the U.S. Department of Education are accurately completed and supported by the College's accounting records. Detailed reconciliations are being prepared and any variances are maintained as part of the supporting documentation.
Contact Person: Eddie Beauchamp, Internal Auditor Telephone: (404) 244-2455; E-mail: ebeaucha@gpc.peachnet.edu
GEORGIA MILITARY COLLEGE
Finding Control Number: FS-590-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with this finding. The inventory of fixed assets has been completed and the missing data has been included and invalid data corrected. Monthly review of procurement records insures that new equipment is being added to the inventory. Measures are also taken to insure that all deletions from the inventory are being recorded. Inventories are conducted semiannually to insure that subsidiary ledger inventories match quantities "on hand". Discrepancies are research and reconciled.
Contact Person: Bruce Thomas . Telephone: (478) 445-0749; Fax: (478) 445-2688; E-mail: bthomas@gmc.cc.ga.us
WEST GEORGIA TECHNICAL INSTITUTE
Finding Control Number: FS-819-00-02 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Property Management Procedures
We concur with this finding. West Georgia Technical Institute will perform a formal reconciliation of activity in the Asset Management System in FY2001. Accounting personnel will review inventory records to determine the proper valuation of equipment items. Adjustments will be made to correct the overstated valuation and supporting documentation will be kept on file. The Accounting Manager will complete the inventory reconciliation before end ofFY 2001.
F-69

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000

Contact Person: Tony Jones, Accounting Manager Telephone: (706) 845-4323; Fax: (706) 812-5613; E-mail: ~ones@westga.tec.ga.us

ATLANTA TECHNICAL INSTITUTE

Finding Control Number: FS-823-00-01 CASH AND CASH EQUIVALENTS GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Deficiencies in Accounting Procedures

Cash and Cash Equivalents

We concur with this finding. The staff of Atlanta Technical College~s finance department will complete formal bank

reconciliations for all accounts, inclusive of an outstanding checklist and other reconciling items. To ensure better controls

over this process, a new Vice President of Administrative Services and Business Manager has recently been hired.

Significant progress in this area should be evident by the end of FY 2001.

.

General Fixed Assets

We concur with this fmding. Atlanta Technical College will perform a formal reconciliation of activity in the Asset Management System in FY2001. Accounting personnel will review inventory records to determine the proper valuation of equipment items.

Contact Person: Marion Davis-Barnett, Vice President of Administrative Services Telephone: (404) 756-3711; Fax: (404) 756-0932; E-mail: mbamett@admin1.atlanta.tec.ga.us

CARROLL TECHNICAL INSTITUTE
Finding Control Number: FS-826-00-01 CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures
We concur with this finding. The operating, Hope, and payroll accounts at West Central Georgia Technical College (formerly known as Carroll Technical Institute) have been reconciled, and there were no required adjustments. to any accounting records. Steps have been taken to assure that all bank accounts are reconciled in a timely manner so that this problem will not occur again.
Contact Person: Jim.Eason, Vice President for Administrative Services Telephone: (770) 836-4701; Fax: (770) 836-6814; E-mail: jeason@westcentra1.org

DEKALB TECHNICAL INSTITUTE

Finding Control Number: FS-830-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in the Operation of Property Management System
We concur with this fmding. Assets purchased during Fiscal Year 2000 are currently being added to the equipment inventory records; and will be complete prior to the end of Fiscal Year 2001. Assets acquired through capital lease agreements have been added to the equipment inventory records. A physical inventory of equipment is planned before the end of Fiscal Year 2001. Procedures have been put in place to ensure that all equipment is placed on inventory records prior to being placed in service.
Contact Person: John Buell, CIO/Comptroller. Telephone: (404) 297-9522, ext. 2123; Fax: (404) 298-3614; E-mail: john@admin2.dekalbtech.org

F-70

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000
APPALACHIAN TECHNICAL INSTITUTE
Finding Control Number: FS-840-00-01 CASH AND CASH EQUIVALENTS Deficiencies in Accounting Procedures
We concur with this finding. Appalachian Technical College recognizes problems with its accounting records and controls. The college administration has provided additional support to the effort with the addition ofa Director of Financial Aid and Accounting. In addition, DTAE is supporting the effort with additional training and assistance in reviewing the books. Appalachian Technical College continues to work to correct these deficiencies.
Contact Person: Jim Looney, Vice President of Administrative Services Telephone: (706) 253-4504; Fax: (706) 253-4510; E-mail: jlooney@apptec.org
GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION
Finding Control Number: FA-918-00-01 REPORTING Report Data Submitted to ED was Unverifiable with the Loan's Holder of Record
GHEAC has made great strides in resolving lender reporting differences and will continue to work with lenders to resolve reporting problems. .The one loan that was unverifiable was formerly held by EduServe who exited the business in 1997. Since GHEAC has not been able to find a new holder for this loan, it will be classified as 'abandoned' when the new NSLDS codes are implemented in July 2001. GHEAC has no information from ED as to how 'abandoned' loans will be treated on the Form 1130 replacement, Form 2000.
NORTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8504-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
We concur with this finding. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Agency has decided not to pursue the recording of General Fixed Assets on the financial statements.
Contact Person: Gail B. Cobb, Financial Officer Telephone: (706) 295-6189, Fax: (706) 295-6098; E-mail: gcobb@doe.kI2.ga.us
NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8524-00-03 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
We concur with this finding. North Georgia RESA does not maintain a general fixed assets group within the formal accounting records. At this time the Board of Control has determined that it is not cost effective to implement and maintain a General Fixed Asset Accounts Group.
Contact Person: Ben L. Arp, Executive Director Telephone: (706) 276-1111; Fax: (706) 276-1114; E-mail: barp @ Ellijay.com
F-71

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000

Finding Control Number: FA-8524-00-01

ACTIVITIES ALLOWED OR UNALLOWED

Failure to Establish Administration Agreement/Contracts Vocational Education - Basic Grants to States (CFDA 84.048)

,

We do not concur with this finding. The procedures used by North Georgia RESA and the Department of Education, were historically approved, audited and accepted. North Georgia RESA provided to the Department of Education as required a Local Plan/Application for Vocational-Technical Education, which includes a Statement of Assurances and a Debarment Certification. The Department of Education requested that North Georgia RESA initiate DE0448 grant budgets. The Department of Education amended these grant budgets to North Georgia RESA's Local Plan/Application for VocationalTechnical Education. These grant budgets were signed off on by the RESA official, the Vocational-Technical Education official, and the Department of Education grants accounting official.

In reference to the two consultants paid without contract, they performed on an as needed basis for Vocational-Technical Education. In FY 1999, these two consultants were contracted by RESA on behalf of Vocational-Technical Education, to be paid from specific ,set aside grant monies. In FY2000, these two consultants performed at the will of VocationalTechnical Education. The consultant provided an invoice requesting payment stating the number of days worked and rate for payment. The invoice was verified by Vocational-Technical education, and payment was made to the consultant. The grant funds established at RESA, from which these two consultants were paid were set aside for state planned activities.

Contact Person: Ben 1. Arp, Executive Director Telephone: (706) 276-1111; Fax (706) 276-1114; E-mail: baql@ellijay.com

Finding Control Number: FA-8524-00-02 ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditure's Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00

In reference to point one, we do not concur with this finding. Funds were allotted to RESA by the DOE to assist with the provision of technical assistance, in the area of planning and professional development. Georgia's State Plan authorized by Section 112 of the Carl Perkins Law authorizes the expenditure of State Administration funds to provide technical assistance to Local LEAs.

In reference to point two, we do not concur with this finding. An evaluation of the referenced vendor payment has been made. At the request of the DOE, the vendor provided professional services and supplies to the DOE. The DOE was satisfied with the performance of this vendor and issued authorization to RESA to make payment. It is to be noted that the bookkeeper's responsibility in relation to payment of vendor's is to assign accounting codes to the invoice once DOE has approved the invoice. The family member of the bookkeeper, at the initiation and approval of the DOE has provided professional services to the DOE for a number of years. The bookkeeper does not enter into a conflict of personal interests by recording DOE approved invoices into the financial accounting system.

Contact Person: Ben 1. Arp, Executive Director Telephone: (706) 276-1111; Fax (706) 276-1114; E-mail: barp@ellijay.com

Finding Control Number: FA-8524-00-03 ALLOWABLE COSTS/COST PRINCIPLES Improper Indirect Cost Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $38,608.00

We do not concur with this finding. North Georgia RESA provided enumerable services to Vocational-Technical Education in the areas of-State Administration, Leadership, and the Georgia Vocational Staff Development Consortium. The agreed upon and approved rate for providing these services to Vocational-Technical Education was 6.9% of the total grant for State Administration and Leadership, and 7.45% for the Georgia Vocational Staff Development Consortium. The

F-72

Audltee's Corrective Action PLans For the Ascal Year Ended June 30, 2000
agreed upon rates are documented by signed DE0448 grant budgets. These grant budgets were approved by the RESA official, the Vocational-Technical Education official, and the Grants Accounting official.
Contact Person: Ben L. Arp, Executive Director Telephone: (706) 276-1111; Fax: (706) 276-1114; E-mail: barp@ellijay.com
Finding Control Number: FA-8524-00-04 CASH MANAGEMENT Excessive Cash Balances Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $12,719.20
We do not concur with this fmding. North Georgia RESA serving as a fiscal agent for Vocational-Technical Education funds must requisition these funds based on projected expenditures and project ending dates. The DOE only allows for requisition of funds on a monthly basis. The system does not allow for adjustments to requisitions. The cash balance as of the last day of the month does not give a true picture of funds available at North Georgia RESA.
Contact Person: Ben L. Arp, Executive Director Telephone: (706) 276-1111; Fax: (706) 276-1114; E-mail: barp@ellijay.com
PIONEER REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8544-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
Prior to June 30, 2000, we were anticipating changing computer systems and transferring GENESIS records to the new PC environment. We have now converted to the new system and are in the process of establishing a General Fixed Asset Module. We will have our GFA information recorded on our books prior to June 30, 2001.
Contact Person: Staci Newsome, Office Manager Telephone: (706) 865-2141, ext. 230; E-mail: snewsome@sun.pioneer.resa.kI2.ga.us
METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8564-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group
We concur with this finding.
Weare reviewing a software package on a trial basis to make sure that it will provide all of the necessary information needed to comply with Audit requirements. The software is FAS Solutions by Best Software, Inc. After careful review, we will make a determination to use this software or check into another. It is our desire to comply with the General Fixed Assets requirements of the Georgia Department of Audits.
Contact Person:, Charlene Williams, Accountant Telephone: (404) 352-2697; E-mail: charlene@mresa.org
F-73

Audltee's Corrective Action PLans For the AscaL Year Ended June 30, 2000

NORTHEAST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY

Finding Control Number: FS-8584-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group

Due to current staffing limitations and budgetary considerations prohibiting hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.

Contact Person: Debra Wallace, Director of Business and Finance Telephone: (706) 742-8928; E-mail: dwallace@negaresa.org

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY

Finding Control Number: FS-8604-00-o1 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group

West Georgia RESA concurs with this finding. However, our Board of Control has decided not to account for General Fixed Assets at this time.

Contact Person: Frank Stewart, Director Telephone: (770) 583-2528, ext. 633; E-mail: Fstewart@garesa.org

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY

Finding Control Number: FS-8664-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group

We concur with this finding. The following information shows our corrective action plan for all audit findings and improper or questioned costs:

The management of a General Fixed Assets Account Group is not an accessible accounting procedure at the present time

due to thisfunction being inoperative in our accounting system that is provided and maintained by the GDOE. With future

upgrades to our system this should be a feasible accounting function that would bring our accounting procedures into

conformity with Generally Accepted Accounting Principles. However, Oconee RESA does have an inventory procedure in

place to be accountable for all equipment owned by the Agency which includes date acquired, acquisition cost, location,

and description.

.

Date of Implementation: Upon receipt of new GDOE accounting software.

Contact Person: Frieda Brinson, Accounting Supervisor Telephone: (478) 552-5178; ext. 227; Fax: (478) 552-0446; E-mail: fbrinson@doe.k12.ga.us

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY

Finding Control Number: FS-8724-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group

We will begin work during the summer to inventory equipment we have on hand. This attempt may not be finalized prior

to FY 2001 audit.

.

F-74

Audltee's Corrective Action PLans For the AscaL Year Ended June 30; 2000
Contact Person: Meredith Walker, Executive Director Telephone: (912) 937-5341
HEART OF GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8764-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. Contact Person: June D. Bradfield, Executive Director Telephone: (912) 374-2240, Ext. 111; E-mail: june@lightwood.com
FIRST DISTRICT REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8804-00-01 GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group We concur with this finding. At present, Georgia Department of Education has not implemented a General Fixed Assets Account Group in our accounting system: We will work with the Department in resolving this finding. Contact Person: Donna Mangrum, Financial Officer Telephone: (912) 842-5000; Fax: (912) 842-5161; E-mail: dmangrum@mail.first-district.resa.k12.ga.us
F-75

APPENDIX C4A'"
ORGANIZATIONAL UNITS

Listing of OrganizationaL Units Comprising the State of Georgia Reporting Entity For the AscaL Year Ended June 30, 2000
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 Building Authority, Georgia
Regular (*) Hospital (*) Markets (*) Penal (*) Community Affairs, Department of Community Health, 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 (*) Georgia Tobacco Community Development Board GeorgiaNet Authority Golf Hall of Fame Authority, Georgia Golf Hall ofFame Board, Georgia Governor, Office of the Higher Education Assistance Corporation, Georgia (*) Highway Authority, Georgia Housing and Finance Authority, Georgia (*) Human Resources, Department of Industry, Trade and Tourism, Department of Insurance, Department of International and Maritime Trade Center Authority (*) Investigation, Georgia Bureau of Jekyll Island State Park Authority Judicial Branch Juvenile Justice, Department of Labor, Department of Lake Lanier Islands Development Authority Law, Department of Lottery Corporation, Georgia (*) Music Hall of Fame Authority, Georgia Natural Resources, Department of

CONTROL NUMBERS
401 926 402 940 404 483 406
900 903 904 905 428 419 921 467
411
914 414
906 907 928 409 420 496
445
978 941 999 958 422'
I
918 924 923 427 429 408 974 471 910 430 461 440 913 442 973 929 462

(*) Audits of these organizational units performed in whole or in part by other auditors.
AP-3

Listing of Organizational Units Comprising
the State of Georgia Reporting Entity
For the Ascal Year Ended June 30, 2000
ORGANIZATIONAL UNIT
North Georgia Mountains Authority Pardons and Paroles, State Board of Pension Funds
Employees' Retirement System of Georgia (*) Regular Defmed Contribution Plan District Attorneys Retirement Fund Judicial Retirement System Legislative Retirement System Public School Employees' Retirement System State Employees' Assurance Department Superior Court Judges Retirement Fund
Firefighters' 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 (*) 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 Atlantic State University Augusta State University Clayton College and State University Columbus State University Fort Valley State University Georgia College and State University Georgia Southwestern State University Kennesaw State University North Georgia College and State University Savannah State University Southern Polytechnic State University State University of West Georgia

CONTROL NUMBERS
912 465
416
N/A
946
N/A N/A
468
N/A
945 950 949 947 951 948 482 460 916 466 470
977
960
472
.503 509 512 518
539 551
521 524 527 528 530 533 536 542 543 545 548 550 554

(*) Audits of these organizational units performed in whole orin part by other auditors.
AP-4

Listing of Organizational Units Comprising the State of Georgia Reporting Entity For the AscaL Year Ended June 30, 2000
ORGANIZATIONAL UNIT
Colleges and Universities (continued) Associate Degree Colleges Abraham Baldwin Agricultural College Atlanta Metropolitan College Bainbridge College Coastal Georgia Community College Dalton State College Darton College East Georgia College Floyd College Gainesville College Georgia Perimeter College Gordon College Macon State College Middle Georgia College South Georgia College Waycross College Other Georgia Military College
Skidaway Institut~ of Oceanography
Regional Educational Service Agencies Central Savannah River Area Regional Educational Service Agency Chattahoochee-Flint Regional Educational Service Agency Coastal Plains Regional Educational Service Agency First District Regional Educational Service Agency Griffin Regional Educational Service Agency Heart of Georgia Regional Educational Service Agency Metropolitan Regional Educational Service Agency . Middle Georgia Regional Educational Service Agency North Georgia Regional Educational Service Agency Northeast Georgia Regional Educational Service Agency Northwest Georgia Regional Educational Service Agency Oconee Regional Educational Service Agency Okefenokee Regional Educational Service Agency Pioneer Regional Educational Service Agency Southwest Georgia Regional Educational Service Agency West Georgia Regional Educational Service Agency
Regional Transportation Authority, Georgia Removal of Hazardous Materials, Agency for Revenue, Department of Sapelo Island Heritage Authority Secretary of State Seed Development Commission, Georgia Soil and Water Conservation Commission, State Sports Hall of Fame Authority Stone Mountain Memorial Association (*) Student Finance Authority, Georgia (*) Student Finance Commission, Georgia Subsequent Injury Trust Fund Board of Trustees

CONTROL NUMBERS
557 561 562 563 569 570
572
573 575 571 576
581
584 587 589
590 593
8684
8724
8864 8804 8624 8764 8564 8644 8524 8584 8504 8664 8884 8544 8844 8604 976 497 474 942 478 919 480 944
911 917
476 489

(*) Audits of these organizational units performed in whole or in part by other auditors.
AP-5

Listing of Organizational Units Comprising the State of Georgia Reporting Entity For the Ascal Year Ended June 30, 2000
ORGANIZATIONAL UNIT
Superior Court Clerks' Cooperative Authority, Georgia (*) Technical and Adult Education, Department of State Technical Institutes
Albany Technical Institute Altamaha Technical Institute Appalachian Technical Institute Athens Area Technical Institute Atlanta Technical Institute Augusta Technical Institute Carroll Technical Institute Chattahoochee Technical Institute Columbus Technical Institute Coosa Valley Technical Institute DeKalb Technical Institute East Central Technical Institute Flint River Technical Institute Griffin Technical Institute Heart of Georgia Technical Institute Lanier Technical Institute Macon Technical Institute Middle Georgia Technical Institute Moultrie Area Technical Institute North Georgia Technical Institute North Metro Technical Institute Northwestern Technical Institute Ogeechee Technical Institute Okefenokee Technical Institute Sandersville Technical Institute Savannah Technical Institute South Georgia Technical Institute Southeastern Technical Institute Swainsboro Technical Institute Thomas Technical Institute Valdosta 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
955 415
820 821 840 822 823 824 826 827 828 829 830 825 847 831 833 834 835 836 837 838 839 849 844 818 817 841 842 843 845 846 848 819
927
484 486 488 490 922

(*) Audits of these organizational units performed in whole or in part by other auditors.
AP - 6