Single audit report, June 30, 2003

state of georgia
SONNY PERDUE, GOVERNOR EIN 58-0973190
Single Audit Report June 30, 2003
Prepared by Georgia Department of Audits and Accounts RUSSELL W. HINTON, STATE AUDITOR

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

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

February 28, 2005
To the Citizens of the State of Georgia, The Honorable Sonny Perdue, Governor of Georgia
and Members of the General Assembly of Georgia
I am honored to present the Single Audit Report ofthe State ofGeorgia for the fiscal year ended June 30,2003. Organizational units comprising the State ofGeorgia reporting entity are listed in Appendix "A" ofthis 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-I33, Audits ofStates, Local Governments, andNon-Profit Organizations. Accordingly, the Single Audit Report ofthe State ofGeorgia discloses the results ofthe financial operations ofthe State of Georgia reporting entity, as well as its compliance with requirements applicable to Federal financial assistance programs administered by the State.
In submitting this report, I would like to express my appreciation to all those who made the completion ofthis audit possible. This report is the culmination ofextensive planning, coordination, cooperation, testing and evaluation by many people. I believe the results of this statewide audit provides the users ofthis report valuable information that will serve to better guide the course ofthe State's future.
Respectfully,
~~~~~~ State Auditor

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Table of Contents
June 30, 2003
SECTION A - BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION
Independent Auditor's Report Basic Financial Statements
Statement ofNet Assets Statement ofActivities Balance Sheet - Governmental Funds Reconciliation ofthe Balance Sheet - Governmental Funds to the Statements ofNet Assets Statement ofRevenues, Expenditures, and Changes in Fund Balances -
Governmental Funds Reconciliation ofthe Statement ofRevenues, Expenditures, and Changes in Fund Balances -
Governmental Funds to the Statement ofActivities Statement ofNet Assets - Proprietary Funds Statement ofRevenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds Statement ofCash Flows - Proprietary Funds Statement ofFiduciary Net Assets - Fiduciary Funds Statement ofChanges in Fiduciary Net Assets-Fiduciary Funds Combining Statement ofNet Assets - Component Units Combining Statement ofActivities - Component Units Notes to the Financial Statements ReqUired Supplementary Information Retirement Systems -Required Supplementary Schedules Budgetary Comparison Schedule - Budget Fund Notes to 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-I33
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-1 0 A -12 A -13
A-14
A-15 A-16 A-20 A-22 A-26 A-27 A-28 A-32 A-35
A-81 A-82 A-86
B-3
C-3
D-5 D-7 D-55

Table of Contents
June 30, 2003
AUDITEE'S SECTION
SECTION E - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Schedule ofExpenditures ofFederal Awards Schedule ofCluster Programs
SECTION F - AUDlTEE'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-49
F-5 F-29
AP-3

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

.._,,_

0 _ ' _ _-

SECTION A
BASIC FINANCIAL 9rATElvfEN'IS
.AND
REQUIRED SuPPLEMENTARY INFOR1v1ATION

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

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

INDEPENDENT AUDITOR'S REPORT
The Honorable Sonny Perdue Governor ofGeorgia
and Members ofthe General Assembly ofthe State ofGeorgia
We were engaged to audit the accompanying financial statements of the governmental activities and the major governmental fund - general fund, and we have audited the accompanying financial statements of the business-type activities, the aggregated discretely presented component units, the major governmental fund - Georgia State Financing and Investment Commission, each major proprietary fund - enterprise fund, and the aggregated remaining fund information of the State of Georgia as of and for the year ended June 30, 2003 which collectively comprise the State's basic financial statements as listed in the table of contents. These financial statements are the responsibility of management of the State of Georgia. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of certain organizations. These organizations reflect the following percentages of total assets and revenues or additions of the indicated opinion units:

()pinion Unit

Governmental Activities

Business-Type Activities

A

e Discretely Presented Component Units

Governmental Fund - General Fund

Governmental Fund - Georgia State Financing and

Investment Commission

Proprietary FundlEnterprise Fund -State Employees'

Health Benefit Plan

A

e Remaining Fund Information

Percent of Opinion Unit's Total Assets
21% 10% 77% 19%
100%

Percent of Opinion Unit's Total Revenues/Additions
19% 34% 87% 19%
100%

100% 90%

100% 41%

The financial statements of these organizations and component units were audited by other auditors whose reports have been furnished to us, and our opinions, insofar as it relates to the amounts included for those financial statements, is based solely upon the reports ofthe other auditors.

Except as discussed in the following paragraphs, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of the Employees' Retirement System of Georgia, Georgia General Assembly, Georgia Lottery Corporation, 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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions.
The State of Georgia's accounting system is decentralized in nature. The management of each organizational unit is responsible for maintaining accounting records pertinent to its operations and each retains complete responsibility and control over their operations, including revenue collections and disbursements. The State's principal accounting system, the Phoenix System, is utilized, in whole or in part, by 78 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 did not, as of the date of the issuance of this report, 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 infonnation presented in individual organization financial statements and to prepare adjusting journal entries necessary for the production of the basic fmancial statements. We are therefore not independent with regard to the preparation of accounting entries required to convert the consolidated budgetary financial statements to basic fmancial statements prepared in accordance with accounting principles generally accepted in the United States of America.
An independent audit of the Department of Community Health, which was conducted by other auditors, reported, " ... The Department of Community Health implemented the new MultiHealthNetwork (MHN) system on April], 2003. The new system administers the payment ofclaims, as well as provides customer service and health information for Medicaid and PeachCare recipients which are reflected in the governmental activities and the major governmental fund - general fund. Because the conversion to this new system was not appropriately controlled, errors in the processing ofclaims resulted. As a result, it was necessary to make advance payments to providers for the lag in payments due to the reprocessing of related claims. Ultimately, reconstruction and reconciliation of the payment records is needed to properly reflect payments made for health and welfare expenditures for the fzscal year 2003 and the resulting receivables, payables and federal revenues as of and for the year ended June 30, 2003. The
adjustments, if any, to the respective financial statements of the governmental activities and the major
governmental fund - general fund as ofand for the year ended June 30, 2003 have not been determined. Additionally, management was unable to provide written conclusive representation of all facts and circumstances as to its responsibility for the fair presentation of the financial statements of the governmental activities and the major governmental fund - general fund as of and for the year ended June 30, 2003. Such representations are required under generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General ofthe United States. As a result, we were unable to apply audit procedures suffiCient to determine the extent to which the financial statements ofthe governmental activities and the major governmental fund - general fund may have been affected by the above mentioned conditions as of and for the year ended June 30, 2003... " The financial statements of the governmental activities and the major governmental fund - general fund at the Department of Community Health are deemed to be material to the financial statements of the governmental activities and the major governmental fund - general fund for the State of Georgia as of and for the year ended June 30,2003.
A-4

Because of the matter discussed above, the scope of our work and the work of other auditors, was not sufficient to enable us to express, and we do not express, an opinion on the financial statements of the governmental activities and the major governmental fund - general fund as of and for the year ended June 30,2003.
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the fmancial position of the business-type activities, the aggregated discretely presented component units, the Georgia State Financing and Investment Commission, Georgia Technology Authority, State Employees' Health Benefit Plan, Higher Education Fund, Unemployment Compensation Fund, and the aggregated remaining fund infonnation of the State of Georgia as of June 30, 2003, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in confonnity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated January 7, 2005, on our consideration of the State of Georgia's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunctions with this report in considering the results of our audit.
The State of Georgia has not presented the management's discussion and analysis that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be part of, the basic financial statements.
The schedule of funding progress for the Employees' Retirement System of Georgia on page A-81, and the budgetary comparison schedule and accompanying notes on pages A-82 through A-86 are not required parts of the basic fmancial statements but are supplementary information required by the Governmental Accounting Standards Board. We did not audit the infonnation and express no opinion on it.
The accompanying Schedule of Expenditures 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 ofStates, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Our plan was to subject such information to the auditing procedures applied in the audit of the basic financial statements, however, due to the matters noted in the fourth paragraph, the scope of our work and the work of other auditors was not sufficient to enable us to express, and we do not express, an opinion as to if the Schedule of Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
Respectfully submitted,
~~.~ Russell W. Hinton, CPA, CGFM State Auditor
January 7, 2005
A-5

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BASIC FINANCIAL QrATE1v1ENI"E

Georgia
Statement of Net Assets June 30, 2003
Assets
Cash and Cash Equivalents Investments Accounts Receivable (Net of Allowances for
Uncollectibles) Interest and Dividends Notes and Loans Taxes Other Internal Balances Due From Primary Government Due From Component Units Intergovernmental Receivables Inventories Prepaid Items Other Assets Restricted Assets Cash and Cash Equivalents Investments Receivables Loans (Net) Interest and Dividends Other Advances to Component Units Deferred Charges Capital Assets (Net of Accumulated Depreciation) Total Assets
Liabilities Accounts Payable and Other Accruals Due to Primary Government Due to Component Units SalarieslWithholdings Payable Benefits Payable Accrued Interest Payable Contracts Payable Undistributed Local Government Sales Tax Funds Held for Others Deferred Revenue Customer Deposits Claims and Judgments Payable Liabilities Payable from Restricted Assets Unclaimed Bonds and Interest Other Liabilities Noncurrent Liabilities: Due within one year Due in more than one year
Total Liabilities

Primary Government

Governmental Activities

Business-Type Activities

Total

Component Units

$ 1,918,345,707 $ 1,798,486,172 $ 3,716,831,879 $

3,883,467,743

575,581,333

4,459,049,076

437,195,060 343,653,340

37,813,255
797,380,534 695,758,240
13,723,653
74,413,457 1,560,952,772
47,224,609 42,796,694 12,914,370

45,265,820
234,793,210 (13,723,653)
52,226 95,805,720 30,425,385 52,319,203

37,813,255 45,265,820 797,380,534 930,551,450
0 0 74,465,683 1,656,758,492 77,649,994 95,115,897 12,914,370

9,750,253 973,253,000
220,723 130,854,749
2,803,240
10,211,514 7,462,361 5,910,601 53,486,102

0

167,331,140

0

508,713,020

0

674,872,475

0

6,407,492

0

157,850

35,352,693

35,352,693

0

18,527,942

15,400,364,888

3,703,718,320

19,104,083,208

936,024,725

$ 24,520,508,615 $ 6,522,723,736 $ 31,043,232,351 $ 4,286,835,587

$ 1,322,867,477 $

77,381,342 $ 1,400,248,819 $

0

2,803,240

2,803,240

4,719,323

11,284,654

16,003,977

1,010,787,268

194,340,270

1,205,127,538

114,756,443

332,483

115,088,926

49,778,906

7,021,198

56,800,104

78,310,619

78,310,619

67,053,145

56,293,306

123,346,451

363,933,585

269,859,073

633,792,658

500,234

500,234

356,918,338

356,918,338

0

547,557

547,557

52,122,414

23,531,980

75,654,394

91,367,309 76,083,748 3,721,385
8,595,242 19,979,289
48,477,730
42,653,249 22,924,383

516,931,677

95,397,727

612,329,404

86,505,318

5,905,895,493

246,657,309

6,152,552,802

1,872,548,629

$ 9,847,925,719 $ 982,099,342 $ 10,830,025,061 $ 2,272,856,282

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

Georg,1a
Statement of Net Assets June 30, 2003
Net Assets Invested in Capital Assets, Net of Related Debt Restricted for: Bond CovenantslDebt Service Construction Disaster Assistance Distance Learning and Te1emedicine Guaranteed Revenue Debt Common Reserve Fund Hazardous Waste Trust Fund Loan and Grant Programs Lottery for Education Motor Fuel Tax Funds Permanent Trusts:
Nonexpendable Expendable Underground Storage Trust Fund Unemployment Compensation Benefits Other Purposes Unrestricted Total Net Assets

Primary Government

Governmental Activities

Business-Type Activities

Total

Component Units

$ 10,494,764,447 $ 3,517,357,655 $ 14,012,122,102 $ 705,022,046

3,720,292
47,424,046 24,200,352
251,429,560 860,394,150

20,087,276

3,720,292 20,087,276 47,424,046 24,200,352
251,429,560 860,394,150

25,116,456 3,198,178
27,873,450

71,000,381
33,938,231 2,885,711,437

105,116,799 182,154,423
1,005,557,412 314,612
710,036,217

105,116,799 182,154,423 71,000,381 1,005,557,412 34,252,843 3,595,747,654

8,039,953 1,244,729,222

$ 14,672,582,896 $ 5,540,624,394 $ 20,213,207,290 $ 2,013,979,305

The notes to the financial statements are an integral part of this statement. A-9

Statement of Activities For the fiscaL Year Ended June 30, 2003
FunctionslPrograms Primary Government
Governmental Activities: General Government Education Health and Welfare Transportation Public Safety Economic Development and Assistance Culture and Recreation Conservation Interest and Other Charges on Long-Term Debt Total Governmental Activities
Business-Type Activities: Georgia Technology Authority Higher Education Fund State Employees' Health Benefit Plan Unemployment Compensation Fund Total Business-Type Activities
Total primary government
Component Units Development Authority Environmental Facilities Authority Housing and Finance Authority Lottery Corporation Ports Authority Road and Tollway Authority Stone Mountain Memorial Association Student Finance Authority World Congress Center Authority Nonmajor Component Units
Total Component Units

Expenses

Sales and Charges for
Services

Program Revenues Operating Grants and
Contributions

Capital Grants and Contributions

$ 1,411,121,239 $ 7,942,981,306 10,299,189,336 1,096,837,030 1,779,431,612 729,877,988 199,872,826 57,885,080 342,747,642
$ 23,859,944,059 $

1,198,780,172 $ 1,326,185
780,018,085 14,313,741
382,390,432 81,738,521 125,583,326 2,926,895
2,587,077,357 $

230,046,472 $ 1,167,522,940 6,092,450,696
341,291,079 163,647,586 619,228,305 53,101,087
7,132,512
8,674,420,677 $

3,757,069 524,164
616,588,210 521,850
621,391,293

$ 207,164,956 $ 4,640,361,002 1,677,981,448 995,169,112
$ 7,520,676,518 $ $ 31,380,620,577 $

207,891,043 $ 1,210,451,623
128,546,240 1,546,888,906 $ 4,133,966,263 $

$ 1,308,997,531 1,656,633,369
259,073,836 3,224,704,736 $ 11,899,125,413 $

28,932
28,932 621,420,225

$

2,729,116 $

4,847,069 $

29,328,797

28,485,088

96,600,013

54,832,299

2,459,073,000

2,456,866,000

106,860,000

121,453,000

154,559,283

22,047,580

9,246,891

11,611,423

25,271,232

22,290,030

103,271,791

50,217,913

285,855,948

95,077,499

$ 3,272,796,071 $ 2,867,727,90 I $

$ 33,119,019 36,691,145
866,076 295,550 40,421,080 111,392,870 $

35,772,314 11,378,000
13,853,984 61,004,298

General Revenues: Taxes Grants and Contributions not restricted to specific programs Unrestricted Investment Income Unclaimed Property Other Payments from the State of Georgia
Special Item - Loss on Inventory Obsolescence Extraordinary Item - Property Tax on Land Purchase Transfers
Total General Revenues, Special Items, and Transfers
Change in Net Assets
Net Assets - Beginning - Restated Net Assts - Ending

The notes to the financial statements are an integral part of this statement. A-10

Governmental Activities

Net (Expense) Revenue and

Changes in Net Assets

Primary Government

Business-Type

Activities

Total

Component Units

$

21,462,474

(6,773,608,017)

(3,426,720,555)

(124,644,000)

(1,233,393,594)

(28,389,312)

(21,188,413)

(47,825,673)

(342,747,642)

$ (11,977,054,732)

$

21,462,474

(6,773,608,017)

(3,426,720,555)

(124,644,000)

(1,233,393,594)

(28,389,312)

(21,188,413)

(47,825,673)

(342,747,642)

$ (11,977,054,732)

$

755,019 $

755,019

(2,120,911,848) (2,120,911,848)

(21,348,079)

(21,348,079)

(607,549,036)

(607,549,036)

$ (2,749,053,944) $ (2,749,053,944)

$ (2,749,053,944) $ (14,726,108,676)

$ _____ $

2,117,953 68,047,624 (5,076,569) (2,207,000) 25,971,000 (132,511,703) 2,364,532 (2,115,126) (52,758,328) (136,503,385) (232,671,002)

$ 12,960,192,619 $ 336,793
260,409,399 43,718,971 8,819,960
(906,725)
(2,132,445,683) $ 11,140,125,334 $ $ (836,929,398) $
15,509,512,294 $ 14,672,582,896 $

$ 107,562,266
2,132,445,683 2,240,007,949 $

12,960,192,619 $ 336,793
367,971,665 43,718,971 8,819,960
(906,725) 13,380,133,283 $

(509,045,995) $ (1,345,975,393) $

6,049,670,389 21,559,182,683

5,540,624,394 $ 20,213,207,290 $

21,083,576
43,346,975
7,791,320 183,400,040
(25,616)
255,596,295 22,925,293 1,991,054,012 2,013,979,305

A-lI

Georgia.
BaLance Sheet GovernmentaL Funds
June 30, 2003
Assets Cash and Cash Equivalents Investments Receivables (Net of Allowances for Uncollectibles) Taxes Interest and Dividends Notes and Loans Other Due from Component Units Intergovernmental Receivables Inventories Prepaid Items Other Assets
Total Assets
Liabilities and Fund Balances Liabilities:
Accounts Payable and Other Accruals Due to Other Funds Due to Component Units Salaries/Withholdings Payable Benefits Payable Contracts Payable Undistributed Local Government Sales Tax Funds Held for Others Deferred Revenue Other Liabilities
Total Liabilities
Fund Balances: Reserved for Debt Service Reserved for Encumbrances Reserved for Guaranteed Revenue Debt Common Reserve Fund Reserved for Hazardous Waste Trust Fund Reserved for Inventories Reserved for Jobs and Growth Tax Relief Reconciliation Act of 2003 Reserved for Lottery for Education Reserved for Midyear Adjustment Reserved for Motor Fuel Tax Funds Reserved for Revenue Shortfall Reserved for Tobacco Settlement Funds Reserved for Underground Storage Trust Fund Reserved for Other Specific Purposes Unreserved, Designated Designated for Capital Outlay Designated for Liability Trust Fund Unreserved, Undesignated, Reported in General Fund Capital Projects Funds
Total Fund Balances
Total Liabilities and Fund Balances

General Fund

Georgia Stale Financing and
Investment Commission

Nonrnajor Funds

Total

$ 1,500,791,457 $

134,798,136 $

1,459,423,962

1,278,929,433

797,380,534 37,812,073 1,325,257
684,639,902 70,068,581
1,557,157,772 39,266,649 42,641,137 12,914,370

881,332

122,161,562 $ 1,757,751,155

1,651,454

2,740,004,849

237,159

797,380,534 37,812,073 1,325,257
684,877,061 70,949,913
1,557,157,772 39,266,649 42,641,137 12,914,370

$ 6,203,421,694 $ 1,414,608,901 $

124,050,1 75 $ 7,742,080,770

$ 1,299,591,083 $ 5,204,358 2,803,240 4,563,699
1,010,787,268 4,921,944
78,3 10,619 67,053,145 359,976,655
3,512,768
$ 2,836,724,779 $

19,682,157 $
44,829,722 1,725,750
66,237,629 $

$ 1,319,273,240 5,204,358 2,803,240 4,563,699
1,010,787,268 49,751,666 78,310,619 67,053,145 361,702,405 3,512,768
0 $ 2,902,962,408

$

$

$

689,357,100

47,424,046

24,200,352

45,014,208

139,191,036

479,734,194

136,248,467

860,841,831

260,600,570

200,144,644

71,000,381

390,804,603

12,582,417

1,348,371,272

9,553,066

$ 3,366,696,915 $ 1,348,371,272 $

115,081,862 $ 1,616,245

115,081,862 689,357,100 47,424,046 24,200,352
45,014,208 139,191,036 479,734,194 136,248,467 860,841,831 260,600,570 200,144,644 71,000,381 392,420,848

1,348,371,272 12,582,417

7,352,068

9,553,066 7,352,068

124,050,175 $ 4,839,118,362

$ 6,203,421,694 $ 1,414,608,901 $

124,050,175 $ 7,742,080,770

The notes to the financial statements are an integral part ofthis statement. A-12

Reconciliation of the BaLance Sheet - GovernmentaL Funds To the Statement of Net Assets June 30, 2003
Total Fund Balances - Governmental Funds
Amounts reported for governmental activities in the Statement of Net Assets are different because:
Capital Assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. These assets consist of: Land Buildings and Building Improvements Improvements Other Than Buildings Equipment Infrastructure Construction in Progress Works of Art Software Library Books Accumulated Depreciation
Certain long-term assets are not current available financial resources and, therefore, are not reported in the funds.
Certain liabilities are not accrued in governmental funds until they are due and payable, but must be recognized in the Statement of Net Assets
Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of a majority of the internal service funds are included in governmental activities in the Statement of Net Assets.
Certain long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. General Obligation Bonds General State Bonds Capital Leases Compensated Absences Long-Term Notes Contracts Payable Arbitrage Rebate

$

4,839,118,362

$

395,372,063

2,243,385,059

54,700,616

670,304,576

16,175,030,714

1,533,723,669

5,073,033

67,254,535

3,200,000

(5,985,251,583)

15,162,792,682

41,386,677

(163,913,646)

1,211,780,010

$

(6,083,975,000)

(15,505)

(5,410,134)

(244,979,263)

(2,570,440)

(40,786,966)

(40,843,881 )

(6,418,581,189)

Total Net Assets - Governmental Activities

$ ==1=4,=67=2=,5=8=2,=89=6=

The notes to the financial statements are an integral part of this statement A-13

Georgia.

Statement of Revenues, Expenditures, and Changes in Fund BaLances
GovernmentaL Funds
For the Fiscal Year Ended June 30, 2003

Revenues: Taxes Licenses and Permits Intergovernmental - Federal Sales and Services Fines and Forfeits Interest and Other Investment Income Rents and Royalties Contributions and Donations Penalties and Interest on Taxes Unclaimed Property Lottery Proceeds Other
Total Revenues
Expenditures: Current: General Government Education Health and Welfare Transportation Public Safety Economic Development and Assistance Culture and Recreation Conservation Capital Outlay Debt Service Principal Interest Accrued Interest on Bonds Retired in Advance Discount on Bonds Retired in Advance Other Debt Service Charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses): Proceeds from Issuance of General Obligation Bonds Proceeds from Disposition of General Capital Assets Proceeds from Capital Leases Transfers In Transfers Out
Net Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses
Fund Balances, July 1 (Restated) Decrease in Inventories

General Fund

Georgia State Financing and
Investment Commission

$ 12,960,192,619 $ 425,769,954
8,905,213,549 1,148,834,792
270,340,895 109,156,721 16,291,170 322,726,754
7,750,152 43,718,971 751,557,000 (2,604,916)
$ 24,958,947,661 $

$ 81,809,672
305,506 82,115,178 $

$ 997,050,076 $ 7,948,433,637 10,249,540,459 1,681,771,067 1,755,103,118 742,168,497 236,630,788 56,667,758

$ 824,857,628

$ 23,667,365,400 $

5,846,147 830,703,775 $

$ 1,291,582,261 $ (748,588,597) $

$

$

5,228,371

1,795,824

220,200,774

(2,642,722,259)

$ (2,415,497,290) $

552,513,811 $
5,634,329 (255,706,780) 302,441,360 $

$ (1,123,915,029) $
4,491,689,031 (1,077,087)

(446,147,237) $ 1,794,518,509

Nonrnajor Funds

Total

$
270,285 61,402

12,960,192,619 425,769,954
8,905,213,549 1,148,834,792
270,340,895 191,236,678
16,352,572 322,726,754
7,750,152 43,718,971 751,557,000 (2,299,410)

331,687 $ 25,041,394,526

11,100 $ 657
387,253

997,061,176 7,948,434,294 10,249,540,459 1,681,771,067 1,755,103,118
742,168,497 236,630,788
56,667,758 825,244,881

511,006,402 344,757,107
422,285 (12,101,415)

511,006,402 344,757,107
422,285 (12,101,415)
5,846,147

844,483,389 $ 25,342,552,564

(844,151,702) $ (301,158,038)

$ 730,896,853

552,513,811 5,228,371 1,795,824
956,731,956 (2,898,429,039)

730,896,853 $ (1,382,159,077)

(113,254,849) $ (1,683,317,115)

237,305,024

6,523,512,564 (1,077,087)

Fund Balances, June 30

$ 3,366,696,915 $ 1,348,371,272 $

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

124,050,175 $ 4,839,118,362

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds to the Statement of Activities For the fiscaL Year Ended June 30, 2003

Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses - Governmental Funds
Amounts reported for governmental activities in the Statement of Activities are different because:

Capital outlays are reported as expenditures in governmental funds. However, in the Statement of

Activities, the cost of those assets is allocated over their estimated useful lives as depreciation

expense. This is the amount by which capital outlays exceeded depreciation in the

current period.

Capital outlay (netoflosses), net of transfers to Business-Type Activities, Component Units

$

and outside organizations.

Depreciation expense

Collection oflong-term receivables is reported as revenue in governmental funds, but the collection reduces the receivable in the Statement of Net Assets.

Revenues that did not meet the criteria for recognition in the prior year governmental funds were reported in the current year. These revenues were reported in the prior year in the Statement of Activities.

Bond proceeds provide current financial resources to governmental funds; however, issuing debt increases long-term liabilities in the Statement of Net Assets.

Some capital additions were financed through capital leases. In governmental funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Assets, the lease obligation is reported as a liability.

Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment

reduces the long-term liabilities in the Statement of Net Assets Payments were made on the

following long-term liabilities:

General Obligation Bonds

$

Contracts

Notes

Capital Leases

Internal service funds are used by management to charge the costs of certain activities to individual funds The incorporation of the external activities of these funds, and the elimination ofprofitlloss generated by primary government customers results in net revenue (expense) for Governmental Activities.

Inventories accounted for using the purchases method are reported in the governmental funds. In the Statement of Net Assets, such amounts are reported as assets until the inventory is consumed.

Some items reported in the Statement of Activities do not require the use of current fmancial resources

and therefore are not reported as expenditures in the governmental funds. This adjustment

combines the net changes in the following balances:

Compensated Absences

$

Accrued Interest

Arbitrage Rebate

$

(1,683,317,115)

1,104,566,970 (255,253,080)

849,313,890 (3,370,553)

(9,608,114) (552,513,811)

(1,795,824)

510,945,000 13,883,246 61,402 2,297,137

527,186,785

47,051,087 (1,077,087)

(4,976,930) (1,376,242) (2,445,484)

(8,798,656)

Change in Net Assets - Governmental Activities

$====(8=3=6,=92=9=,3=98",,)

The notes to the financial statements are an integral part of this statement. A-I5

Georgia.
Statement of Net Assets Proprietary Funds June 30, 2003
Assets Current Assets: Cash and Cash Equivalents Investments Accounts Receivable (Net ofAllowances for
Uncollectibles) Due From Other Funds Due From Component Units Intergovernmental Receivables Inventories Prepaid Items Noncurrent Assets: Cash and Cash Equivalents Investments Notes Receivable Capital Assets:
Land Buildings and Building Improvements Improvements Other Than Buildings Machinery and Equipment Software Library Collections Works of Art and Collections Infrastructure Construction in Progress Accumulated Depreciation
Total Assets

Georgia Technology Authority

Business-Type Activities - Enterprise Funds

State

Higher

Employees'

Unemployment

Education

Health Benefit

Compensation

Fund

Plan

Fund

$

56,823,488 $ 410,393,283 $ 341,127,250 $ 986,287,995

11,043,026

162,360,121

58,975,674

4,655,516 5,588,048
52,226 108,050 2,156,381

182,255,915
93,874,370 28,265,464 52,319,203

29,984,124

17,714,002 1,823,300

3,548,334 121,383,078 45,265,820

221,819,434

67,190,148 39,328,938
(66,554,243)

142,354,526 3,773,447,041
209,015,223 1,078,535,150
527,099,745 15,241,224
121,372,403 73,563,651 (2,276,889,006)

$

120,391,578 $ 4,763,405,545 $

651,906,482 $ 1,005,825,297

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

Total

Governmental Activities Internal Service Funds

$ 1,794,632,016 $ 232,378,821

160,900,374 60,971,032

234,609,557 5,588,048 52,226
95,805,720 30,421,845 52,319,203

6,988,548 3,795,000
7,961,500 155,557

3,548,334 343,202,512
45,265,820

1,082,491,862

142,354,526 3,773,447,041
209,015,223 1,145,725,298
39,328,938 527,099,745
15,241,224 121,372,403 73,563,651 (2,343,443,249)

23,355,264 308,466,482
4,954,083 26,160,332
1,239,575
(126,590,010)

$ 6,541,528,902 $ 1,560,849,599 (continued)

A-17

G1org:ia
Statement of Net Assets Proprietary Funds (continued) June 30, 2003
Liabilities Current Liabilities: Accounts Payable and Other Accruals Due to Other Funds
Salaries/Withholdings Payable Benefits Payable Accrued Interest Payable Contracts Payable Funds Held for Others Deferred Revenue Customer Deposits Claims and Judgments Payable Compensated Absences Payable - Current Capital LeaseslInstailment Purchases Payable - Current Notes Payable - Current Other Current Liabilities Noncurrent Liabilities: Deferred Revenue Compensated Absences Payable Capital LeaseslInstallment Purchases Payable Notes Payable
Total Liabilities
Net Assets Invested in Capital Assets, Net of Related Debt Restricted for: Distance Learning and Telemedicine Permanent Trusts:
Nonexpendable Expendable Unemployment Compensation Benefits Other Purposes Unrestricted

Georgia Technology Authority

Business-Type Activities - Enterprise Funds

State

Higher

Employees'

Unemployment

Education

Health Benefit

Compensation

Fund

Plan

Fund

$

716,165 $

69,122,696 $

7,267,725 $

267,885

111,346

55,137

11,222,810

6,707

20,556,348

173,783,922

332,483

7,021,198

56,293,306

226,856,588

43,002,485

2,381,856 2,130,291

84,643,932 5,823,894 344,959
23,531,980

72,795

1,789,197 4,610,623

150,000 63,644,836 173,862,675 2,500,108

99,870

$

12,015,752 $ 745,686,676 $ 224,233,504 $

267,885

$

33,223,929 $ 3,484,120,206 $

-$

20,087,276

55,064,621

105,116,799 182,154,423
314,612 246,012,829

427,672,978

1,005,557,412

Total Net Assets

$ 108,375,826 $ 4,017,718,869 $

Adjustment to reflect the consolidation ofInternal Service Fund activities related to Enterprise Funds.

Net Assets of Business-Type Activities

427,672,978 $ 1,005,557,412

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

Total

Governmental Activities Internal Service Funds

$

77,374,471 $

3,601,107

111,346

90,576

11,284,654

155,624

194,340,270

332,483

7,021,198

27,240

56,293,306

269,859,073

2,231,180

0

500,234

0

356,918,338

87,098,583

2,751,776

7,954,185

13,170

344,959

23,531,980

150,000 65,533,903 178,473,298
2,500,108

1,479,886 1,149

$ 982,203,817 $ 367,770,280

$ 3,517,344,135 $
20,087,276
105,116,799 182,154,423 1,005,557,412
314,612 728,750,428

237,571,407
2,007,863 953,500,049

$ 5,559,325,085 $ 1,193,079,319

$

(18,700,691)

$ 5,540,624,394

A-19

Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2003

Operating Revenues: Grants and ContributionslPremiums Rents and Royalties Sales and Services Other
Total Operating Revenues
Operating Expenses: Personal Services Services and Supplies Benefits Claims and Judgments Depreciation
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses): Grants and Contributions Interest and Other Investment Income Interest Expense Other
Total Nonoperating Revenues (Expenses)
Income (Loss) Before Contributions, Transfers and Special Item
Capital Contributions
Special Item - Loss on Inventory Obsolescence
Transfers: Transfers In Transfers Out
Net Transfers
Change in Net Assets
Net Assets, July 1 (Restated)

Georgia Technology Authority

Business-Type Activities -

State

Higher

Employees'

Education Fund

Health Benefit Plan

$

$ 1,145,802,697 $ 1,656,633,369

2,209,563

207,891,043

1,076,087,446

129,439,584

$ 207,891,043 $ 2,353,539,290 $ 1,656,633,369

$

$--~:..::...:..:==-

$

-$

163,194,834 $

866,664

19,556,561

(405,300)

(8,339,459)

(405,896)

(49,226,067)

$---~~=5-5=,4-68- $

125,185,869 $

$-_....=..:..2:,.1..4.2:.,.5=7~:6....$ (2,102,008,361) $

$ ----:::..::2.8?,:9-3=2 - $ $------ $

208,967,503 $ $

10,815,458
10,815,458 (10,532,621 )

$

21,195,417 $ 1,975,159,405 $

(23,164,928)

(42,493,815)

(1,969,511) $ 1,932,665,590 $

0

$

201,997 $

39,624,732 $

(10,532,621 )

108,173,829

3,978,094,137

438,205,599

Net Assets, June 30

$

108,375,826 $ 4,017,718,869 $===4;,,27=,6=7,;,2,=97==:8=

Adjustment to reflect the consolidation of Internal Service Fund activities related to Enterprise Funds.

Change in Net Assets of Business-Type Activities The notes to the financial statements are an integral part of this statement.
A-20

Enterprise Funds
Unemployment Compensation
Fund

Total

Governmental Activities Internal Service Funds

$

387,574,329 $ 3,190,010,395 $

125,875,220

2,209,563

38,943,968

1,283,978,489

69,164,957

45,747

129,485,331

1,790,813

$ 387,620,076 $ 4,605,683,778 $ 235,774,958

$

$ 2,772,657,379 $

2,209,765,800

995,169,112

2,239,376,607

0

237,888,229

$ 995,169,112 $ 7,459,688,015 $

$ (607,549,036) $ (2,854,004,237) $

46,002,782 94,041,826 18,924,000 104,952,614 12,059,865
275,981,087
(40,206,129)

$

$

163,194,834 $

76,323,583

107,562,266

(8,744,759)

(49,631,963)

$

76,323,583 $

212,380,378 $

$ (531,225,453) $ (2,641,623,859) $

$

$ 208,996,435 $

$

$

0$

69,172,720 (1,792)
(2,211,778)
66,959,150
26,753,021
6,755,123
(906,725)

$

$ 1,996,354,822 $

36,424,238

(65,658,743)

(29,089,220)

$

0 $ 1,930,696,079 $

7,335,018

$ (531,225,453) $ (501,931,345) $

39,936,437

1,536,782,865

1,153,142,882

$ 1,005,557,412

$ 1,193,079,319

(7,114,650)

$ (509,045,995)

A-21

Statement of Cash FLows Proprietary Funds For the fiscaL Year Ended June 30, 2003
Cash Flows from Operating Activities: Cash Received from Customers Cash Received from Grants and Required ContributionslPremiums Cash Paid to Vendors Cash Paid to Employees Cash Paid for Benefits Cash Paid for Claims and Judgments Cash Paid for Scholarships, Fellowships and Loans Other Operating Items (Net)
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Noncapital Financing Activities: Transfers from Other Funds Transfers to Other Funds Other Noncapital Items (Net)
Net Cash Provided by (Used in) Noncapital Financing Activities
Cash Flows from Capital and Related Financing Activities: Capital Contributions Proceeds from Issuance of Capital Debt Proceeds from Sale of Capital Assets Acquisition and Construction of Capital Assets Principal Paid on Capital Debt Interest Paid on Capital Debt
Net Cash Used in Capital and Related Financing Activities
Cash Flows from Investing Activities: Purchase of Investments (Net) Interest and Dividends Received
Net Cash Provided by Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, July 1
Cash and Cash Equivalents, June 30
The notes to the financial statements are an integral part of this statement. A-22

Georgia Technology Authority

Business-
Higher Education
Fund

$ 218,647,404 $ 1,078,643,438 1,137,697,137
(140,447,840) (2,078,990,268) (54,164,414) (2,282,823,011)

(212,249,927) 339,328,549

$

24,035,150 $ (2,018,394,082)

$

21,195,417 $ 1,976,284,187

(23,164,928)

(42,493,815)

(2,900,000)

136,947,383

$

(4,869,511) $ 2,070,737,755

$

$

14,334,355

1,548,643

991,336

(7,989,283)

(219,609,617)

(3,090,727)

(7,288,269)

(466,570)

(8,320,124)

$ (11,546,580) $ (218,343,676)

$

9,927,187 $

46,050,534

866,664

17,957,498

$

10,793,851 $

64,008,032

$

18,412,910 $ (101,991,971)

38,410,578

515,933,588

$

56,823,488 $ 413,941,617

Type Activities - Enterprise Funds

State

Employees'

Unemployment

Health Benefit

Compensation

Plan

Fund

Total

Governmental Activities Internal Service Funds

$

-$

1,653,183,409

(437,021,496)

(3,443,928)

(1,232,896,542)

$ 383,933,866
(995,091,534)

1,297,290,842 $ 3,174,814,412 (2,656,459,604) (2,340,431,353) (2,227,988,076)
0 (212,249,927) 339,328,549

114,851,920 123,214,621 (95,038,644) (45,965,879) (18,924,000) (101,068,531)
8

$ (20,178,557) $ (611,157,668) $ (2,625,695,157) $ (22,930,505)

$

-$

(34,000,000)

$ (34,000,000) $

$

$

$

$

$

19,033,056 $

9,004,955

$

28,038,011 $

$ 1,997,479,604 $ (99,658,743) 134,047,383
$ 2,031,868,244 $

40,475,064 (33,140,046)
147,413
7,482,431

$

14,334,355 $

1,548,643

991,336

(227,598,900)

(10,378,996)

(8,786,694)

$ (229,890,256) $

2,998,054 60,618
(6,845,075)
(1,792) (3,788,195)

$ 76,323,583
76,323,583 $

75,010,777 $ 104,152,700
179,163,477 $

40,191,562 56,634,943
96,826,505

$ (26,140,546) $ (534,834,085) $ (644,553,692) $

367,267,796

1,521,122,080

2,442,734,042

77,590,236 83,310,138

$ 341,127,250 $ 986,287,995 $ 1,798,180,350 $ 160,900,374 (continued)
A-23

Statement of Cash FLows Proprietary Funds (continued) For the RscaL Year Ended June 30, 2003
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities:
Depreciation Expense Changes in Assets and Liabilities:
Decrease (Increase) in Accounts Receivable Decrease (Increase) in Due From Other Funds Increase in Due From Component Units Decrease (Increase) in Intergovernmental Receivables Decrease (Increase) iIi Inventories Decrease in Prepaid Items Decrease in Notes Receivable Increase (Decrease) in Accounts Payable and Other Accruals Decrease in Due to Other Funds Increase (Decrease) in SalarieslWithholdings Payable Increase (Decrease) in Benefits Payable Increase in Claims and Judgments Payable Increase (Decrease) in Contracts Payable Increase in Deferred Revenue Decrease in Customer Deposits Increase (Decrease) in Compensated Absences Payable Increase in Other Liabilities

Business-

Georgia Technology Authority

Higher Education
Fund

$

2,087,108 $ (2,227,194,230)

17,566,333 8,105
10,863,955 (7,649)
(108,050) (281,785) 518,798 (6,575,752)
(27,630)
(8,283)

220,321,896
(48,260,076)
(470,996) 6,576,203 1,803,216 (10,230,830) (607,546)
783,451 (8,721,611)
1,689,066 35,202,431
9,173,144 1,541,800

Net Cash Provided by (Used) in Operating Activities

$

24,035,150 $ (2,018,394,082)

Noncash Investing, Capital, and Financing Activities: Acquisition of Capital Assets through Capital Leases Donation of Capital Assets Net Increase (Decrease) in Fair Value of Investments Other

$

$ 103,482,433

101,876,230

(98,625)

600,020

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

Type Activities - Enterprise Funds

State

Employees'

Unemployment

Health Benefit Plan

Compensation Fund

Total

Governmental Activities Internal Service Funds

$ (21,348,079) $ (607,549,036) $ (2,854,004,237) $ (40,206,129)

(10,571,118)
(6,635,771) 3,212
11,310,953 7,121,158
(58,912)

(4,468,984) 782,774 77,578

237,888,229
(63,292,073) 10,863,955
(7,649) 674,724 (752,781) 7,095,001 1,803,216 (23,364,775) (607,546) 759,033 2,589,342
1,689,066
42,323,589
9,105,949
1,541,800

12,059,865
2,128,611 (852,660)
453,134 135,726
(1,100,954) (464,924) 135,314
3,884,083 (22,323)
1,280,085 (264,424)
(95,909)

$ (20,178,557) $ (611,157,668) $ (2,625,695,157) $ (22,930,505)

$

$

1,810,503

$ 103,482,433 $ 101,876,230 1,711,878 600,020

12,563,489

A-25

~1a
Statement of Fiduciary Net Assets
Fiduciary Funds June 30, 2003

Assets Cash and Cash Equivalents Receivables Interest and Dividends Due from Brokers for Securities Sold Other Investments, at Fair Value Certificates of Deposit Investment Accounts Pooled Investments Mutual Funds Repurchase Agreements U. S. Government Securities and
Corporate Obligations Stocks Real EstatelMortgages Capital Assets Land Buildings Software Machinery and Equipment Accumulated Depreciation
Total Assets

Pension Trust

Investment Trust

Private Purpose Trust

Agency

Total

$

26,133,222 $ 2,856,193,125 $

178,676,326 103,446,817 169,713,660

70,343,283 12,703,123,515
5,347,630 906,224,000

974,894,205

18,309,031,266 20,486,179,623
7,488,000

133,656 414,020 5,856,000 1,213,278 (725,739)

$ 52,972,598,557 $ 3,831,087,330 $

77,657,591 $ 32,243
10,394,888
150,643 (92,425) 88,142,940 $

192,035,849 $ 3,152,019,787

(686,451)

178,676,326 103,446,817 169,059,452

3,848,163 201,668,295

3,848,163 70,343,283 13,890,080,903 5,347,630 906,224,000

18,309,031,266 20,486,179,623
7,488,000

133,656 414,020 5,856,000 1,363,921 (818,164)

396,865,856 $ 57,288,694,683

Liabilities Accounts Payable and Other Accruals Due to Other Funds Due to Brokers for Securities Purchased SalarieslWithholdings Payable Funds Held for Others Deferred Revenue Compensated Absences Payable Capital Leases Payable
Total Liabilities
Net Assets Held in Trust for: Pension Benefits
Pool Participants Other Purposes
Total Net Assets

$

19,598,880 $

3,976,768

113,923,728

166,876

7,300 19,575 3,712

$

137,696,839 $

$

4,874 $

$

19,603,754

3,976,768

113,923,728

166,876

396,865,856

396,865,856

7,300

102,028

121,603

3,712

$

106,902 $

396,865,856 $

534,669,597

$ 52,834,901,718 $

$ 3,831,087,330

$ 52,834,901,718 $ 3,831,087,330 $

$ 88,036,038 88,036,038 $

$ 52,834,901,718 3,831,087,330 88,036,038
$ 56,754,025,086

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

A-26

Georg,1a
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds For the rlScal Year Ended June 30, 2003

Pension Trust

Investment Trust

Private Purpose Trust

Total

Additions:

Contributions/Assessments

Employer

$ 1,018,451,327 $

$

Plan Members

517,717,986

Other Contributions

Fines and Bond Forfeitures

17,726,870

Insurance Company Premium Taxes

16,817,708

Other Fees

2,413,293

Interest and Other Investment Income

Dividends and Interest

1,327,244,131

68,511,667

Net Appreciation (Depreciation) in Fair Value ofInvestments

951,960,178

1,074,297

Less: Investment Expense

(46,152,494)

(1,132,249)

Pool Participant Deposits

4,971,015,792

Other

Transfers from Other Funds

3,665,985

Miscellaneous

723,071

Total Additions

$ 3,810,568,055 $ 5,039,469,507 $

$ 158,447,092

1,018,451,327 676,165,078

17,726,870 16,817,708 2,413,293

544,426

1,396,300,224 953,034,475 (47,284,743)
4,971,015,792

3,665,985

383

723,454

158,991,901 $ 9,009,029,463

Deductions: General and Administrative Expenses Benefits Pool Participant Withdrawals Refunds
Total Deductions

$

26,043,644 $

$

2,156,455,933

5,790,163,430

56,217,574

$ 2,238,717,151 $ 5,790,163,430 $

2,101,346 $ 88,078,653

28,144,990 2,244,534,586 5,790,163,430
56,217,574

90,179,999 $ 8,119,060,580

Change in Net Assets Held in Trust for: Pension Benefits Pool Participants Other Purposes
Net Assets, July 1 (Restated)

$ 1,571,850,904 $

-$ (750,693,923)

51,263,050,814

4,581,781,253

$ 68,811,902

1,571,850,904 (750,693,923)
68,811,902

19,224,136

55,864,056,203

Net Assets, June 30

$ 52,834,901,718 $ 3,831,087,330 $

88,036,038 $ 56,754,025,086

The notes to the financial statements are an integral part of this statement. A-27

Georgia
Combining Statement of Net Assets Component Units June 30, 2003

Assets Current Assets:
Cash and Cash Equivalents Investments Receivables Accounts (Net) Taxes
Interest and Dividends Notes and Loans Due from Primary Government Intergovernmental Receivables Inventories Prepaid Items Other Current Assets Noncurrent Assets: Investments Receivables (Net) Notes and Loans Restricted Assets Cash and Cash Equivalents Investments Receivables
Loans (Net) Interest and Dividends Other Deferred Charges Capital Assets: Land Buildings and Building Improvements Improvements Other Than Buildings Machinery and Equipment Software Works of Art and Collections Infrastructure Construction in Progress Accumulated Depreciation Other Noncurrent Assets
Total Assets

Development Authority

Environmental Facilities Authority

Housing and Finance Authority

Lottery Corporation

Ports Authority

$

3,910,913 $

178,491,244 $

17,021,510 $

1,419

60,973,096

3,403,436

1,251,892 $

22,311,730 3,270,818

99,845,000

19,058,000

1,484,731

5,271,461
2,125,519 3,772,787

431,509 5,515,068

4,446,000

30,000
3,516,000 664,000

138,371,032

70,377,745

10,921,452

80,718,407

670,609,050

155,419,537

42,000

8,711,525

116,807,019 22,621,793

16,000 220,617,000

217,000 300,000

674,872,475 6,407,492

15,286,417

17,626

45,637

800,000 3,865,000 1,886,818 1,596,752

2,135,000
13,929,000 429,000

138,095,000 122,596,000 138,246,000 158,353,000

(1,959)

(21,725) 2,279,816

(4,215,489)

(14,357,000)

141,417,000 39,271,000 (269,310,000)
895,000

86,131,137 $ 1,070,629,442 $ 1,092,097,082 $

328,311 ,892 $

529,894,000

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

Road and Tollway Authority

Stone Mountain Memorial Association

Student Finance Authority

World Congress
Center Authority

Nonmajor Component
Units

Total

$

29,427,387 $

1,895,004

86,560

6,862,356 $ 1,324,634
30,944

8,193
23,547,174 250,733,139

11,884 37,560
11,502,027

3,241,525

10,415,915 5,082,077 2,484,921 4,460,671
200,675

1,135,841

(8,039,906) 44,285,184

$

368,964,360 $

8,047,085 72,769,183 21,924,038 27,192,514
121,823
573,505 (53,448,969)
267,013
97,215,597 $

3,298,225 $ 1,198,155
603,208 2,562,324
430,368 219,744 65,426,467
4,158,283 2,126,865
(3,792,317) 76.231,322 S

32,242,304 $ 149,085
2,122,576
487,090 671,339
45,721
18,032,422 14,441,088
157,850 37,282,886 209,402,736 35,797,675 16,203,649
(88,866,415) 278,170,006

142,377,499 $ 35,272,217

437,195,060 107,487,864

9,108,461 220,723 228
1,007,539 247,353
6,438,727 3,447,387
83,509

130,854,749 220,723
9,750,253 1,037,539 2,803,240 10,211,514 7,462,361 5,910,601 5,734,812

4,947,499

236,165,476

972,215,461

167,331,140 508,713,020

674,872,475 6,407,492 157,850 18,527,942

5,919,953 131,347,594
10,386,648 66,889,336
79,225 10,888,319 8,059,478 (77,555,223)
24,277

200,560,839 551,355,873 210,726,100 290,815,050
629,675 201,048 153,441,160 47,903,983 (519,609,003) 47,751,290

359,190,749 $

4,286,835,587 (continued)

A-29

Gnrg:ia.
Combining Statement of Net Assets Component Units (continued) June 30, 2003

Liabilities Current Liabilities:
Accounts Payable and Other Accruals Due to Primary Government SaiarieslWithholdings Payable Accrued Interest Payable Contracts Payable Deferred Revenue Compensated Absences Payable - Current Capital Leases!lnstallment Purchases Payable - Current Notes and Loans Payable - Current Revenue Bonds Payable - Current Grand Prizes Payable - Current Other Current Liabilities Current Liabilities Payable from Restricted Assets: Accrued Interest Payable Deferred Revenue Revenue Bonds Payable - Current Other Noncurrent Liabilities: Deferred Revenue Compensated Absences Payable Capital Leases!lnstallment Purchases Payable Notes and Loans Payable RevenuelMortgage Bonds Payable Grand Prizes Payable Advances from Primary Government Customer Deposits Other Noncurrent Liabilities
Iotal Liabilities
Net Assets Invested in Capital Assets, Net of Related Debt Restricted for: Bond CovenantslDebt Service Construction Loan and Grant Programs Other Purposes Unrestricted
Iotal Net Assets

Development Authority

Environmental Facilities Authority

Housing and Finance Authority

Lottery Corporation

Ports Authority

$

772,656 $

4,306,985 $

19,553,395 $

46,726,000 $

1,669,450

1,088

59,462,892

37,550

436,000

2,771,525

3,518,671

19,746,000

10,159,265

34,000

3,450,754

5,940,000

18,830,000 21,174,188

15,873,000

287,000 1,900,000

30,331,324

210,383 55,392,655

150,513,286 764,471,760

1,876,000 179,559,000

50,000 1,205,000
9,472,000 22,673,000

13,225,141 47,779,875 $

78,780,813 $

978,062,388 $

303,530,892 $

3,734,000 61,210,000

$

15,667 $

23,912 $

3,933,081 $

2,136,000 $

442,520,000

4,513,368

517,000

38,335,595

27,873,450 959,437,899

110,101,613

16,000 22,629,000

25,647,000

$

38,351,262 $

991,848,629 $

114,034,694 $

24,781,000 $

468,684,000

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

Road and Tollway Authority

Stone Mountain Memorial Association

Student Finance Authority

World Congress
Center Authority

Nonmajor Component
Units

Total

$

900,093 $

10,605,689

2,265,472

23,874,336
5,249,657 9,447,061 16,960,664
238,508

419,596,601

$

489,138,081 $

682,329 $ 2,499,397
39,574

2,190,677 $
11,802,098 204,311
13,500,000 1,600,000

1,957,982 2,776
111,083
17,925,312 119,382
5,112,359 5,645,000

1,410,309

172,655,000

3,221,300 $

29,297,086 $

7,432,913 257,382
212,629.498

12,607,742 S 3,474,356 3,174,302
233,289 8,591,055
646,393 1,809,908
36,234
150,195

91,367,309 76,083,748
3,721,385 8,595,242 19,979,289 48,477,730 1,004,086 1,809,908 17,273,988 50,544,336 15,873,000 22,924,383

10,362,016 9,447,061 22,605,664
238,508

2,016,041 869,193 244,948
35,352,693

150,563,286 6,717,733 869,193
40,048,272 1,434,789,016
179,559,000 35,352,693
7,432,913 17,216,523

69,206,349 $ 2,272,856,282

15,740,194 $ (135,913,915)

77,179,179 $ 16,815,118

2,492,831 $ 44,441,405

31,520,530 $
20,086,088 3,198,178
63,788 10,671,924

129,460,652 $
7,960,165 152,563,583

705,022,046
25,116,456 3,198,178
27,873,450 8,039,953
1,244,729,222

$

(120,173,721) $

93,994,297 $

46,934,236 $

65,540,508 $

289,984,400 $ 2,013,979,305

A-31

~1a
Combining Statement of Activities
Component Units
For the rlScaL Year Ended June 30, 2003

Expenses
Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions
Total Program Revenues
Net (Expenses) Revenue
General Revenues: Taxes Unrestricted Investment Income Payments from the State of Georgia Other
Total General Revenues
Extraordinary Item Property Taxon Land Purchase
Change in Net Assets
Net Assets, July I Correction of Prior Year Errors Capital Assets Accumulated Depreciation Noncurrent Liabilities Revenue
Net Assets, June 30

Development Authority

Environmental Facilities Authority

Housing and Finance Authority

$

2,729,116 $

29,328,797 $

96,600,013

Lottery Corporation
2,459,073,000 $

Ports Authority
106,860,000

$

4,847,069 $

28,485,088 $

54,832,299 $ 2,456,866,000 $

121,453,000

33,119,019

36,691,145

35,772,314

11,378,000

$

4,847,069 $

97,376,421

91,523,444 $ 2,456,866,000 $

132,831,000

$

2,117,953 $

68,047,624

(5,076,569)

(2,207,000) $

25,971,000

$

$

$

$

7,359

599,487

10,320,316

17,256,000

708,000

265,000

252,468

93,000

965,000

$

7,359

1,116,955 $

10,320,316 $

17,349,000 $

1,673,000

$

$

2,125,312

36,225,950

$ 69,164,579 $ 922,684,050

$ 5,243,747 $ 108,790,947

$ 15,142,000 $ 9,639,000

27,644,000 441,040,000

$

38,351,262 $

991,848,629 $

114,034,694 $

24,781,000 $

468,684,000

The notes to the financial statements are an integral part of this statement. A-32
_._ ..... -_._-----

Road and Tollway Authority

Stone Mountain Memorial Association

Student Finance Authority

World Congress
Center Authority

$

154,559,283 $

9,246,891 $

25,271,232 $

103,271,791

Nonmajor Component
Units

Total

285,855,948 $ 3,272,796,071

$

22,047,580

$

22,047,580 $

$

(132,511,703) S

11,611,423 $
11,611,423 $ 2,364,532 $

22,290,030 $ 866,076
23,156,106 $ (2,115,126) $

50,217,913 $ 295,550
50,513,463 $ (52,758,328)

95,077,499 $ 40,421,080 13,853,984

2,867,727,901 111,392,870 61,004.298

149,352,563 $ 3,040,125,069

(136,503,385) $

(232,671,002)

$

S

10,339,379

45,810

10,385,189 S

S 700,775
4,050
704,825 $

$ 76,824 973,811
1,050,635 $

17,678,297 $ 1,026,984
18,705,281 $

3,405,279 $ 2,311,851 182,161,229 6,430,992
194,309,351

21,083,576 43,346,975 183,400,040
7,791,320
255,621,911

$

(25,616) S

(122,152,130) $

1,978,409

$ 3,069,357 90,924,940

$ (1,064,491) 47,998,727

(34,053,047) $ 99,593,555

$
57,805,966 $
279,239,392
(12,775,567) 8,099,851
(42,125,388) (259,854)

(25,616)
22,925,293
2,038,114,970
(12,775,567) 8,099,851
(42,125,388) (259,854)

$

(120.173,721) S

93,994,297 $

46,934,236 $

65,540,508 $

289,984,400 $ 2,013,979,305

A-33

(This page intentionaLLy Left bLank)

Notes to the Financial Statements
Index
Note 1 Summary of Significant Accounting Policies Note 2 Accounting Changes Note 3 Deposits and Investments Note 4 Receivables Note 5 Capital Assets Note 6 Risk Management Note 7 Construction and Other Significant Commitments Note 8 Operating Leases Note 9 Capital Leases Note 10 Long-Term Liabilities Note 11 Interfund Balances Note 12 Nonmonetary Transactions Note 13 Contingencies Note 14 Subsequent Events Note 15 Retirement Systems Note 16 Postemployment Benefits Note 17 Deficit Fund BalancelNet Assets

Page A-36 A-47 A-49 A-57 A-58 A-61 A-62 A-62 A-65 A-66 A-68 A-70 A-71 A-71 A-72 A-73 A -73

A-35

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies
A. Basis of Presentation
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 financial reporting principles, which are set forth in the GASB's Codification of Governmental Accounting and Financial Reporting Standards (GASB Codification).
B. Financial Reporting Entity
In evaluating how to defme the government for fmancial reporting purposes, management has considered both the organizations that comprise the primary government and potential component units. The primary government consists ofall the organizations that compose the legal entity of the State of Georgia. All agencies, departments, authorities, commissions, courts, councils, boards, universities, colleges, retirement funds, associations and other funds that are not legally separate are, for fmancial reporting purposes, considered part of the primary government. In addition, included within the primary government are organizations which are legally separate but so intertwined with the primary government that they are, in substance, part of the primary government.
The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in Section 2100 of the GASB Codification. This Section defmes a component unit as a legally separate organization for which the primary government is financially accountable and other organizations for which the primary government is not accountable, but for which the nature and the significance ofthe 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 ofan organization's governing board and to impose will upon the organization or to have exist the potential for the organization to provide specific financial benefits or impose specific fmancial burdens on the primary government.

In addition, organizations that are fiscally dependent upon the primary government were considered as potential component units.
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:
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.
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 ofthe Board ofRegents. The Board consists offive State officials designated by statute and one member appointed by the Governor.
Georgia Technology Authority (Enterprise Fund) is an instrumentality of the State of Georgia and a public corporation. The authority is responsible for the procurement oftechnology resources, technology enterprise

A-36
__ - - - - -_._-_._-.. ..

Notes to the FinanciaL Statements
For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
management and technology portfolio management, as well as the centralized marketing, provision, sale and leasing, or execution of license agreements, for access on line or in volume, of certain public information maintained in electronic format to the public. State officials appoint the eleven members of the authority. Any funds in excess of those needed for the corporate purposes ofthe authority are required to be transferred to the General Fund.
Georgia Building Authority (Internal Service Fund) is a body corporate and politic. The purpose ofthis 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 o/Georgia (Pension Trust Fund) is a single-employer, public employee retirement system established to provide benefits for employees of the State. The system is governed by a seven member Board of Trustees, three of which are State officials designated by statute, and one who is appointed by the Governor. The system administers five blended defined benefit pension plans: the Employees' Retirement System Fund, the District Attorneys' Retirement Fund, the Georgia Judicial Retirement System, the Georgia Military Pension Fund, the Legislative Retirement System, and the Superior Court Judges Retirement Fund. The State provides a substantial amount of funding for these retirement systems in the form of employer contributions and administrative expenses.
Georgia Military College (Higher Education Fund) is a body corporate and politic. This institution is dedicated to providing a high-quality military education to the youth of the State. The Board consists of the mayor of the City of Milledgeville, and one trustee elected from each of the six municipal voting districts of the City of Milledgeville, as required by statute.

Discrete presentation entails reporting component unit fmancial data in columns separate from the fmancial data of the primary government. The discretely presented component units are as follows:
Georgia Education Authority (Schools) is a body corporate and politic. The authority is responsible for the construction of buildings and facilities intended for use as school buildings, classrooms, laboratories, libraries and instructional, administrative and recreational facilities for students, faculty, officers and employees of any institution under control of a county or city board of education or governing body of any independent district or system. The Board consists of six State officials designated by statute and one member appointed by the Governor.
Georgia Public Telecommunications Commission is a body corporate and politic. This commission is a public charitable organization created for the purpose ofproviding educational, instructional and public broadcasting services to citizens of Georgia. The budget ofthe commission must be approved by the State. The Board consists of nine members appointed by the Governor.
Georgia Regional Transportation Authority is a body corporate and politic. The purpose of the authority is to manage land transportation and air quality within certain areas of the State. The Governor appoints the fifteen members of the authority.
Georgia Agricultural Exposition Authority 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. The Authority has a separate management report, but separate audited financial statements are not required or issued for it.
Georgia Agrirama Development Authority 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 fifteen members of the Board, four are State officials designated by statute and the Governor appoints eight members. The Authority has a separate management report, but separate audited financial statements are not required or issued for it.

A-37

Notes to the Financial Statements
for the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
Georgia Development Authority 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 fanners 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 is a body corporate and politic. The authority provides assistance to local governments in constructing, extending, rehabilitating, repairing, replacing and renewing environmental facilities by providing fmancial and technical assistance. The Board consists of three State officials designated by statute and eight members appointed by the Governor.
Georgia Golf Hall of Fame Authority 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. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
Georgia Higher Education Assistance Corporation is a public authority, body corporate and politic. The corporation was created to improve the higher educational opportunities of eligible students by guaranteeing educational loan credit to students and to parents of students. The corporation is governed by the Board of Commissioners of the Georgia Student Finance Commission. The Board consists of thirteen members appointed by the Governor.
Georgia Highway Authority 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 three members of the Authority are State officials designated by statute. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
Georgia Housing and Finance Authority is a body corporate and politic. The authority is responsible for facilitating housing and housing finance, and fmancing 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 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 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 of seven members, all of which are appointed by the Governor. The State is legally entitled to residual resources of the corporation.
Georgia Music Hall ofFame Authority 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 the sixteen members of the Board. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
Georgia Ports Authority is a body corporate and politic. The purpose of the authority is to develop and improve the harbors or seaports of the State for the handling of waterborne commerce and to acquire, construct, equip, maintain, develop and improve said harbors, seaports and their facilities. The Board consists of twelve members, all of which are appointed by the Governor.
Georgia Rail Passenger Authority 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. The Authority has a separate management report, but separate audited financial statements are not required or issued for it.
Georgia Seed Development Commission 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 often 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. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.

A-38

Notes to the Financial Statements For the Year Ended June 30, 2003

Note 1. Summary of Significant Accounting Policies (continued)
Georgia Student Finance Authority 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 offunding is provided to the authority by the State. The Governor appoints the thirteen members of the Board.
Geo. L. Smith II Georgia World Congress Center Authority is a body corporate and politic and an instrumentality and public corporation of the State. The authority is responsible for acquiring, constructing, equipping, maintaining and operating the World Congress Center to promote trade shows, conventions and political, musical, educational, entertainment, recreational, athletic or other events. The Governor appoints the fifteen members of the Board.
Georgia Sports Hall ofFame Authority is a body corporate and politic. This authority was created to construct and maintain a facility to house the Georgia Sports Hall ofFame 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 ofbonds. The Authority has a separate management report, but separate audited financial statements are not required or issued for it.
Jekyll Island State Park Authority is a body corporate and politic and an instrumentality and public corporation of the State. The authority was created to operate and manage resort recreational facilities on Jekyll Island. The Board consists of one State official designated by statute and eight members appointed by the Governor. The Authority has a separate management report, but separate audited financial statements are not required or issued for it.
Lake Lanier Islands Development Authority 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 ofone State official designated by statute and eight members appointed by the Governor. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.

the State responsible for the construction and management of recreation, accommodation and tourist facilities and services. The Governor appoints the nine members of the Board. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
Oconee River Greenway Authority is a body corporate and politic and an instrumentality and public corporation of the State. The purpose of the authority is the acquisition of greenspace and its maintenance, protection, development or restoration. The Board includes four State officials designated by statute and the chairperson and two residents of the governing authority of each county which is in the geographic jurisdiction ofthe authority. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
OneGeorgia Authority is a body corporate and politic and an instrumentality and public corporation of the State. The purpose of the authority is to promote the health, welfare, safety and economic society ofthe rural citizens ofthf' State through the development and retention of employment opportunities in rural areas and the enhancement of the infrastructures that accomplish that goal. The six members of the Authority are State officials designated by statute. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
Regional Educational Service Agencies (RESA) comprise a statewide network of legally separate organizations established by the State Board of Education to provide shared services to local school systems. The Board of each RESA consists ofthe school superintendent ofeach member school system, the highest administrator of each member postsecondary institution, and a local public or regional library director appointed by a State official. The State must review and approve the annual budget ofeach RESA. Each RESA has a separate management report, but separate audited financial statements are not required or issued.
Sapelo Island Heritage Authority is a body corporate and politic. The purpose of the authority is the preservation of the cultural and historic values of Hog Hammock Community located on Greater Sapelo Island. The Board consists offour State officials designated by statute and one member appointed by the Governor. The State has assumed the obligation to provide financial support for real property acquisition. The Authority has a separate management report, but separate audited financial statements are not required or issued for it.

North Georgia Mountains Authority is a body corporate and politic and an instrumentality and public corporation of

Southwest Georgia Railroad Excursion Authority is a body corporate and politic and an instrumentality and public

A-39

Notes to the Financial Statements
For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
corporation of the State. The authority was created for the purposes of construction, fmancing, operation, and development of rail passenger excursion projects utilizing any state owned railway in southwest Georgia. The thirteen member Board is appointed by officials of counties and municipalities within the service area. The Georgia State Financing and Investment Commission must approve the issuance of bonds. The Authority has a separate management report, but separate audited fmancial statements are not required or issued for it.
State Road and Tollway Authority is a body corporate and politic and an instrumentality and public corporation ofthe State. The authority was created to construct, operate and manage a system ofroads, bridges and tunnels and facilities related thereto. The Board consists of three State officials designated by statute and two members appointed by State officials.
Stone Mountain Memorial Association 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 ofone State official designated by statute and eight members appointed by the Governor.
Superior Court Clerks' Cooperative Authority is a body corporate and politic and an instrumentality and public corporation ofthe State created to provide a cooperative for the development, acquisition and distribution of record management systems, information, services, supplies and materials for superior court clerks ofthe State. Ofthe seven members of the Board, the Governor appoints three. The nature of this organization is such that it would be misleading to exclude it from the reporting entity.
Fiduciary component units are required by GAAP to be reported as fiduciary funds ofthe primary government rather than as discrete component units. In accordance with GAAP, fiduciary funds and component units that are fiduciary in nature are excluded from the government-wide financial statements.
Georgia Class Nine Fire Department Pension Fund (Pension Trust Fund) is a multiple-employer, defined benefit pension plan established for the purpose of paying retirement and death benefits to volunteer firefighters ofthe State of Georgia. The Board of Trustees of the Georgia Firefighters' Pension Fund also serves as the Board of

Trustees of this pension fund. Benefit provisions and vesting requirements are established by State statute.
Georgia Firefighters' Pension Fund (Pension Trust Fund) is a multiple-employer, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the firemen of the State of Georgia. The Board of Trustees consists of two State officials designated by statute and three members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Judges ofthe Probate Courts Retirement Fund ofGeorgia (Pension Trust Fund) is a multiple-employer, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the judges ofthe Probate Courts ofthe State of Georgia. The Board consists of one State official designated by statute and six members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Peace Officers' Annuity and Benefit Fund of Georgia (Pension Trust Fund) is a multiple-employer, defmed benefit pension plan established for the purpose of paying retirement, death and disability benefits to the peace officers ofthe State ofGeorgia. The Board of Commissioners ofthe Annuity and Benefit Fund consists of two State officials designated by statute and four members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Public School Employees Retirement System (Pension Trust Fund) 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 (pension Trust Fund) is a multiple-employer, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the sheriffs of the State of Georgia. The Board consists of one State official designated by statute and five members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Superior Court Clerks' Retirement Fund of Georgia (Pension Trust Fund) is a multiple-employer, defined benefit pension plan established for the purpose of paying retirement, death and disability benefits to the Superior

A-40

Notes to the FinanciaL Statements For the Year Ended June 30, 2003

Note 1. Summary of Significant Accounting Policies (continued)
Court Clerks ofthe State of Georgia. The Board consists of one State official designated by statute and six members appointed by the Governor. Benefit provisions and vesting requirements are established by State statute.
Teachers Retirement System of Georgia (Pension Trust Fund) 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 ofwhich 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.
The State's significant discretely presented component units issue their own separate audited fmancial statements. These fmancial statements can be obtained from their respective administrative offices or from the Georgia Department of Audits and Accounts, 254 Washington Street, S.W., Atlanta, Georgia 30334.
C. Government-Wide and Fund Financial Statements
Government-Wide Financial Statements The Statement of Net Assets and Statement of Activities display information about the primary government and its component units. These statements include the fmancial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. Governmental activities, which normally are fmanced through taxes, intergovernmental revenues, and other non-exchange revenues are reported separately from business-type activities, which are fmanced in whole or in part by fees charged to external parties for goods or services. Likewise, the primary government is reported separately from its discretely presented component units.
The Statement ofNet Assets presents the reporting entity's non-fiduciary assets and liabilities, with the difference reported as net assets.
The Statement of Activities demonstrates the degree to which the direct expenses ofa given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function. Program revenues include (a) charges to customers or applicants who purchase, use, or directly benefit from goods, services or

privileges provided by a given function and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and' other items not meeting the defmition of program revenues are instead reported as general revenue.
Fund Financial Statements Separate fmancial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though fiduciary funds are excluded from the government-wide statements. Major individual governmental funds and major individual proprietary funds are reported as separate columns in the fund fmancial statements. All remaining governmental and proprietary funds are aggregated and reported as nonmajor funds.
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide fmancial statements and the proprietary and fiduciary fund fmancial statements are reported using the economic resources measurement focus and the accrual basis of accounting.
Under the accrual basis ofaccounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current fmancial resources measurement focus and 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 that are susceptible to accrual include income taxes, sales and use taxes, federal grants and shared revenues. Expenditures generally are recorded when the related fund liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due or when amounts have been accumulated in the debt service fund for payments to be made early in the subsequent fiscal year.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and

A-41

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Revenues and expenses not meeting this defmition are reported as nonoperating revenues and expenses.
As allowed by GASB Statement No. 20, the State's proprietary funds follow FASB Statements and Interpretations issued on or before November 30, 1989, Accounting Principles Board Opinions, and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements.
The State reports the following major governmental funds:
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.
The Georgia State Financing and Investment Commission accounts for the construction ofprojects for state agencies fmanced through the issuance of public debt, including educational facilities for county and independent school systems.
The State reports the following major enterprise funds:
The State Employees' Health Benefit Plan is a selfinsured 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.
The Georgia Technology Authority is primarily responsible for the procurement oftechnology resources, technology enterprise management and technology portfolio management, as well as the centralized marketing, provision, sale and leasing, or execution of license agreements, for access on line or in volume, of certain public information maintained in electronic format to the public.
The Unemployment Compensation Fund accounts for the collection ofemployers' unemployment insurance tax and the payment of unemployment insurance benefits.
The Higher Education Fund accounts for the operations of State colleges and universities and State technical colleges.

Additionally, the State reports the following fund types:
Governmental Fund Types: Debt Service Funds - Used to account for the payment of principal and interest on general long-term debt.
The primary government debt service fund is the General Obligation Debt Sinking Fund, which is administered by the Office of Treasury and Fiscal Services. The Debt Sinking Fund is responsible for the accumulation of resources for the payment of principal and interest on general obligation bonds.
Capital Projects Funds - Used to account for the acquisition or construction of capital facilities.
Permanent Funds - Used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that benefit the State or its citizenry.
Proprietary Fund Types: Internal Service Funds - Used to account for the fmancing of goods or services provided by one department or agency to other State departments or agencies, or to other governmental entities, on a costreimbursement basis. The predominant participant in internal service fund activity is the primary government.
Fiduciary Fund Types: Pension Trust Funds - Used to account for the Employees' Retirement System and its blended plans in the primary government and the eight individual retirement plans that meet the definition of a component unit of the State.
Investment Trust Funds - Used to account for external portions of government-sponsored investment pools.
Private Purpose Trust Funds - Used to report resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments.
Agency Funds - Used to report assets and liabilities for deposits and investments entrusted to the State as an agent for others.
Discretely Presented Component Units: The combining component unit financial statements are presented in order to provide information on each of the major component units included in the component units column ofthe government-wide statements. The component unit financial statements are reported using the economic

A-42

Notes to the Financial Statements For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
resources measurement focus and the accrual basis of accounting. The information is presented in order to be consistent with the government-wide statements, and is less detailed than the presentation in each component unit's separately issued fInancial statements. The component units follow all GASB pronouncements, and all FASB pronouncements issued on or before November 30, 1989, except those that conflict with a GASB pronouncement.
E. Budgets
The annual budget ofthe State of Georgia is prepared on the modifIed accrual basis utilizing encumbrance accounting with the following exceptions: federal and certain other revenues are accrued based on the unexecuted portion of long-term contracts; and intrafund transactions are disclosed as revenues 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 capital projects funds and certain debt service funds that are not subject to appropriation. The budget includes certain proprietary funds, the Higher Education Fund, and the administrative costs of operating certain public employee retirement systems. All unencumbered annual appropriations lapse at fiscal year end unless otherwise specified by constitutional or statutory provisions. Supplementary and amended appropriations may be enacted during the next legislative session by the same process used for original appropriations.
Encumbrances are used to indicate the intent to purchase goods or services. Liabilities and expenditures are recorded upon issuance of completed purchase orders. Goods or services need not have been received for liabilities and expenditures to be recorded.
F. Assets, Liabilities, and Net AssetslFund Balances
Cash and Cash Equivalents Cash and cash equivalents include currency on hand and demand deposits with banks and other financial 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 Higher Education Fund, which reports all time deposits as cash.

Investments Investments are defined as those fmancial instruments with terms in excess of three months from the date of purchase and certain other securities held for the production of revenue.
The investment policy 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 ofthe 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 funds "Georgia Fund I" and "Georgia Extended Asset Pool" are also available on a voluntary basis to organizations outside of the State reporting entity.
Authorized pool investments are limited to the followinoa in accordance with State statutes:
I) 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 that follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not

A-43

Georgia
Notes to the Financial Statements For the Year Ended June 3D, 2003

Note 1. Summary of Significant Accounting Policies (continued)
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 ofcapital, 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, corporate obligations and repurchase agreements.
The Secondary Liquidity Portfolio consists ofcertificates of deposit with average investment duration of.21 years.
The Georgia Extended Asset Pool is part of the Extended Term Portfolio. It is a variable net asset value investment pool that follows Standard and Poor's criteria for AAAf rated funds. The pool is not registered with the SEC as an investment company. The pool's primary objective is the prudent management of public funds on behalf of the State of Georgia and local governments seeking income higher than money market rates. Net Asset Value (NAV) is calculated daily to determine current share price. NAVis calculated by taking the closing fair value of securities owned plus other assets and subtracting liabilities. The remainder is then divided by the total number of shares outstanding to compute NAV per share (current share price). The pool distributes earnings (net ofmanagement fees) on a monthly basis and determines participant's shares sold and redeemed based on the current share price, which at June 30, 2003, was $2.03 per share. Investments consist generally of securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, bankers' acceptances and repurchase agreements. The average investment duration at June 30, 2003, was 0.70 years.
The Extended Term Portfolio includes two other funds: one consisting generally ofrepurchase agreements and certain U. S. Government Securities with an average investment duration at June 30, 2003, of 1.17 years; and a second fund consisting generally of repurchase agreements and certain U.S. Government Securities, which include mortgagebacked 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 3). Investments in this second fund are transacted by an external investment management firm under direction of an investment advisory agreement executed between the Office of Treasury and Fiscal Services and the investment management firm. The agreement directs the investment firm 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 average investment duration for this fund on June 30, 2003, was 1.49 years. The agreement also places limitations on individual security purchases and holdings. As of June 30, 2003, the State had $146,282,426 invested in U. S. agency mortgage-backed securities in this fund.
Other organizations of the State of Georgia reporting entity invest in a variety offmancial activities. These investments may include brokered certificates of deposit, commercial paper, convertible bonds, corporate bonds, notes and obligations, foreign bonds, investment agreements, mortgages, municipal bonds, mutual funds, real estate, real estate mortgages and notes, real estate investment trust limited partnerships, repurchase agreements, short-term investments, stocks, and U. S. Treasury bonds, notes, and bills. Investments of other organizations are stated at fair value at June 30, 2003.
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 ofthe funds and may take the form of certificates of deposit, letters of credit, money orders or cashiers' checks. At June 30, 2003, the Department held surety bonds in the amount of$38,116,026, and cash bonds in the amount of $14,197,624. These bonds are not recorded on the Combined Balance Sheet.
Securities are held pursuant to statutes that require licensed insurance companies to deposit securities with the Department ofInsurance prior to issuance of a certificate of authority to transact insurance by the Commissioner of Insurance. These securities remain in the name of the licensed insurance company as long as the company has a pending claim in the State 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, 2003, securities valued

A-44

- _.. ... _ _-_.. -'-_._-------------

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
at $202,318,247 were held by the Department of Insurance. These securities are not recorded on the Combined Balance Sheet.
Construction contracts awarded by the Department of Transportation 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 fmancial statements. At June 30, 2003, $777,232 in escrow deposits was administered by the Department of Transportation.
Receivables Receivables in the State's governmental funds pertain primarily to Federal revenues and revenues applicable to charges for services. Receivables in all other funds have arisen in the ordinary course of business. Receivables are recorded when either the asset or revenue recognition criteria (See Note I-D) have been met. Estimates of allowances for uncollectible receivables have not been made for the majority ofreceivables included within the fmancial statements.
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.
Advances Noncurrent portions oflong-term interfund loans receivable are reported as advances and are offset equally by a fund balance reserve account that indicates that they do not constitute expendable available financial resources and therefore are not available for appropriation.
Inventories Inventories of supplies and materials are determined by physical count and/or perpetual inventory records and are valued at cost, weighted average cost, moving average cost, or lower ofweighted average cost or market, using the firstin/first-out (FIFO) method, depending on the individual organization's preference. The costs of governmental fund inventories are recorded as expenditures when consumed rather than when purchased for larger agencies and agencies

with material inventories. Other agencies may use either the purchase or consumption method.
Under the purchase method, a portion ofthe fund balance is reserved for inventories to indicate that it is not available for appropriation. Organizations under the consumption method normally reserve a portion of fund balance equal to the average monthly inventories on hand for the fiscal year.
Prepaid Items Payments made to vendors and local government organizations for services that will benefit periods beyond June 30, 2003, are recorded as prepaid items.
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.
Capital Assets Capital assets of governmental funds are recorded as expenditures at the time of purchase and capitalized in the governmental activities column of the government-wide Statement of Net Assets. Capital assets of the State's proprietary funds and component units are capitalized in the fund in which they are utilized.
Capital assets are stated at historical cost or, in some instances, estimated historical cost. Donated capital assets are stated at fair market value at the time of donation. All land and non-depreciable land improvements are capitalized regardless ofcost. Buildings and Improvements Other Than Buildings are capitalized when the cost or value exceeds $100,000. Machinery and Equipment is capitalized when costs or value exceeds $5,000. The State's bridges and roadways included in the state highway system are capitalized regardless ofcost. All other infrastructure assets are capitalized when project costs exceed $1,000,000, except for infrastructure assets reported by the Higher Education Fund, which are capitalized when costs are greater than $100,000. The cost ofnormal maintenance and repairs that do not add to the value ofthe asset or materially extend assets lives is not capitalized.
The State holds certain assets such as works of art, historical documents, and artifacts that have not been capitalized or depreciated because the collections are protected and preserved for exhibition, education, or research and are considered to have inexhaustible useful lives.
Major outlays for construction of bridges and roadways in the state highway system are capitalized as projects are constructed. All other major construction projects are

A-45

Notes to the FinanciaL Statements For the Year Ended June 30, 2003

Note 1. Summary of Significant Accounting Policies (continued)

capitalized when projects are completed. Interest incurred during construction is not capitalized in governmental funds. Interest incurred during the construction ofproprietary fund assets is included in the capitalized value of the asset.

All depreciable capital assets are depreciated on the straightline basis over the following useful lives:

Infrastructure Buildings and Building Improvements Improvements Other Than Buildings Machinery and Equipment Software Library Collections

10-100 years 5-40 years 15-50 years 3-20 years 3-10 years 10 years

Due to the lack of complete and accurate inventory records applicable to State-owned land, and the lack of historical cost values for certain parcels of land, the amount reported as land does not represent a comprehensive valuation ofthe assets owned by the State of Georgia.

Certain capital assets acquired through capital leases in prior years have not been recorded on the fmancial statements at the net present value of the minimum lease payments as is required by GAAP.

Compensated Absences 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 offunds each fiscal year to cover the cost of annual leave of terminated employees. The State's obligation for accumulated unpaid annual leave is reported as a liability in the governmentwide and proprietary fund financial statements.

Employees earn ten hours of sick leave each month with a maximum accumulation ofninety days. Sick leave does not vest with the employee. Unused accwnulated 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.

Deferred Revenue In the government-wide statements, proprietary fund statements, and fiduciary fund statements, deferred revenue is recorded when cash or other assets are received prior to being earned. In the governmental fund statements, deferred revenue is recorded when revenue is either unearned or unavailable.
Mortgage Loans Under Repurchase Agreements AtJune 30, 2003, mortgage loans totaling $13,225,141 have been transferred and assigned to lenders under repurchase agreements by the Georgia Development Authority (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 oftime.
In addition, the Authority guarantees the principal and interest payment by the borrower to the lender within thirty (30) days ofthe due date. Any payment not received within thirty (30) days is considered advanced to the borrower and paid to the lender by the Authority. The Authority then charges the borrower interest on these advances for the period outstanding at a penalty rate agreed upon at the loan origination date.
Long-Term Obligations Long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities column or business-type activities column on the government-wide statement of net assets and on the proprietary fund statement ofnet assets in the fund fmancial statements. Bond discounts, premiums and issuance costs are deferred and amortized over the life ofthe bonds using a method that approximates the effective interest method or the straight-line method. Bonds payable are reported net of the unamortized bond premium or discount and, when applicable, the deferred amount on refunding. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

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Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 1. Summary of Significant Accounting Policies (continued)
Net Assets Net assets are reported as invested in capital assets, net of related debt, restricted or unrestricted. "Invested in capital assets, net of related debt" consists of capital assets, net of accumulated depreciation and reduced by outstanding balances for bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement of those assets.
Restricted net assets result when constraints placed on net asset use are either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation.
Unrestricted net assets consist ofnet assets that do not meet the defmition ofthe two preceding categories. Unrestricted net assets often are designated, indicating they are not available for general operations. Such designations have internally imposed constraints on resources, but can be removed or modified.
Fund Balances In the fund fmancial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally segregated by outside parties for use for a specific purpose. Designations of fund balance represent tentative plans for future use of fmancial resources. Unreserved, undesignated fund balance is the amount of fund balance remaining from operations of the current and prior years, net of amounts established as reserved and designated.
F. Interfund Activity and Balances
As a general rule, the effect of interfund activity has been eliminated from the government-wide fmancial statements with the exception of activities between governmental activities and business-type activities. In the fund fmancial statements, transfers represent flows of assets without

equivalent flows of assets in return or a requirement for repayment. In addition, transfers are recorded when a fund receiving revenue provides it to the fund which expends the resources. Transfers and balances between funds are made to accomplish various provisions oflaw.
Interfund payables and receivables have been eliminated from the statement of net assets except for amounts due between governmental and business-type activities. These amounts are reported as internal balances on the statement of net assets.
G. Fiscal Reporting Periods
The fiscal year end for the primary government and component units is June 30, except for the Stone Mountain Memorial Association, whose fiscal year end is December 31. On the government-wide Statement of Net Assets, amounts due to/from component units do not reconcile due to this difference in fiscal year ends.
Note 2. Accounting Changes
In fiscal year 2003, the cash balance ofthe Children's Trust Fund, reported in prior years as an agency fund, was transferred to the general fund. The beginning fund equity of the general fund/governmental activities has been increased by $9,503,122 to reflect the addition of this program.
In fiscal year 2003, various pension trust funds changed their basis of accounting from the cash basis of accounting, an other comprehensive basis of accounting, to the basis of accounting which complies with accounting principles generally accepted in the United States. The beginning net assets of the pension trust funds have been decreased by $2,294,675 for this change in accounting principle.
The following tables summarize the changes in fund equities as previously reported for the funds and activities at June 30, 2002, including correction of prior year errors as indicated.

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Ge:n-g1a
Notes to the Financial Statements For the Year Ended June 30, 2003
Note 2. Accounting Changes (continued)

GOVERNMENTAL FUNDS AND ACTIVITIES Major Funds:
General Fund Correction of Prior Year Errors Transfer of Equity from Agency Funds - Children's Trost Fund
Georgia State Financing and Investment Commission Nonmajor Funds:
Debt Service Fund Capital Projects Funds Permanent Fund Total Governmental Funds Capital Assets, net of depreciation Other Noncurrent Assets Long-Term Liabilities Other Liabilities Inclusion of Internal Service Funds in Governmental Activities
TOTAL GOVERNMENTAL FUNDS AND ACTIVITIES
PROPRIETARY FUNDS AND BUSINESS-TYPE ACTIVITIES Major Funds:
Georgia Technology Authority Correction of Prior Year Errors
Higher Education Fund Correction of Prior Year Errors
State Employees' Health Benefit Plan Unemployment Compensation Fund Nonmajor Funds: Internal Service Funds
Correction of Prior Year Errors
Intemal Service Funds Look-Back Adjustments Removal of Internal Service Funds Relating to Governmental Activities
TOTAL PROPRIETARY FUNDS AND BUSINESS-TYPE ACTIVITIES
FIDUCIARY FUNDS Pension Trust Funds
Change in Accounting Principle
Investment Trust Funds Private Purpose Trust Funds
TOTAL FIDUCIARY FUNDS
DISCRETELY PRESEl''TED COMPONENT UNITS Correction ofPrior Year Errors
TOTAL DISCRETELY PRESENTED COMPONENT UNITS

June 30, 2002 As Previously
Reported

Adjustments

June 30, 2002 (Restated)

$

4,504,152,981

$

1,794,518,509

228,453,750 8,837,774 13,500

$

6,535,976,514 $

14,272,732,321 12,239,956
(6,399,924,736) (146,648,593) 1,165,564,416

$

15,439,939,878 $

(21,967,072) 9,503,122 $
(12,463,950) $ 40,746,471 42,125,388
(835,493) 69,572,416 $

4,491,689,031 1,794,518,509
228,453,750 8,837,774 13,500
6,523,512,564 14,313,478,792
54,365,344 (6,399,924,736)
(146,648,593) 1,164,728,923
15,509,512,294

$

109,114,169

$

3,758,100,492

438,205,599 1,536,782,865
1,154,353,953

(1,165,564,416)

$

5,830,992,662 $

$

51,265,345,489

$

4,581,781,253 19,224,136

$

55,866,350,878 $

$

2,038,114,970

$

$

2,038,114,970 $

(940,340) $
219,993,645

108,173,829
3,978,094,137 438,205,599
1,536,782,865

(1,211,071)
835,493 218,677,727 $

1,153,142,882 (1,164,728,923) 6,049,670,389

(2,294,675) $
(2,294,675) $ $
(47.060,958) (47,060,958) $

51,263,050,814 4,581,781,253
19,224,136
55,864,056,203
2,038,114,970 (47,060,958)
1,991,054,012

A-48
.'.._--_._-------

Notes to the Financial Statements For the Year Ended June 30, 2003
Note 3. Deposits and Investments
A. Deposits
Funds belonging to the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in OCGA 50-17-59:
1) Bonds, bills, notes, certificates ofindebtedness, or other direct obligations ofthe United States or ofthe State of Georgia.
2) Bonds, bills, notes, certificates of indebtedness 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 indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association.

6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.

As authorized in OCGA 50-17-53, the State Depository Board has adopted policies that 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 $507,444,346, and the bank balances were $1,568,592,598. The amounts of these bank balances are classified into three categories of credit risk: (1) cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the State or by its agent in the State's name, (2) cash collateralized with securities held by the pledging 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, 2003:

Risk Category

Bank Balance

1

$

471,121,394

2

62,146,457

3

1,035,324,747

$

1,568,592,598

A-49

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 3. Deposits and Investments (continued)
Component Units
At year-end, the component units' deposits were classified as follows:

Risk Categories

2

3

Bank Balance

Funds Held by Primary
Government

Carrying Amount

Environmental Facilities Authority $ 11,075,197 $

$

$ 11,075,197 $ 373,883,656 $ 11,436,957

Georgia Housing and Finance Authority

7,301,623

117,782,579

125,084,202

10,789,052

125,084,198

OneGeorgia Authority

88,914

88,914

95,518,304

88,974

State Road and Tollway Authority

200,000

42,599,034

42,799,034

9,999,068

42,712,480

World Congress Center Authority

205,433

39,830,775

10,657,360

50,693,568

786,655

49,423,676

All Other Component Units

18,777,852

12,084,445

47,398,302

78,260,599

80,060,097

56,747,503

$ 37,649,019 $ 51,915,220 $ 218,437,275 $ 308,001,514 $ 571,036,832 $ 285,493,788

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

A-50
-..... ._---------

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

Notes to the Financial Statements For the Year Ended June 30, 2003

Note 3. Deposits and Investments (continued)
Primary Government

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

1 $

Risk Categories

2

3

Carrying Amount

110,821,945 $

$

10,293,970

5,456,000 56,917,369

152,915,051 41,001,345
653,375 3,981,586,188 27,509,324,961

282,963,225 404,079,140 $

77,686,996 140,060,365 $

32,144,223,617 63,829,704,537

8,284,927 21,026,295 17,692,702

985,466,968 $ ===6=4=:,8::6::2::,1=75:=,:::42:=9=

A-51

Notes to the FinanciaL Statements For the Year Ended June 30, 2003

Note 3. Deposits and Investments (continued)

Component Units
Proprietary Fund Types

Type of Investment

Risk Categories

1

2

3

Carrying Amount

Georgia Housing and Finance Authority
Lottery Corporation State Road and Tollway Authority
All Other Component Units

Corporate CMO

$

6,280,644 $

$

$

6,280,644

Mortgage-Backed Securities

60,001,161

60,001,161

U.S. Government Securities and Corporate Obligations

28,076,448

28,076,448

$ 94,358,253 $ ======,0,=$ ====,0,=$ ==9::::4,=35=8=,2=53=

U.S. Government Securities and

Corporate Obligations

$ 168,990,000 $ = = = = = $ 51,627,000 $ ==2=2=0=,6=17=,=00:::0=

Investment Accounts

$

$

294,573 $

$

294,573

Repurchase Agreements

222,332,463

222,332,463

U.S. Government Securities and Corporate Obligations

30,200,611

30,200,611

$ 222,332,463 $

30,495,184 $ =====,0,=$ ==2=5=2=,8=27=,6=4=7=

U.S. Government Securities and

Corporate Obligations

$

8,482,021 $

14,441,088 $ 4,009,840 $

26,932,949

Unclassified Other

4,031,000

$ ==3=0=,9=6::::3,=94=9=

A-52

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 3. Deposits and Investments (continued)
c. 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 ofthe 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 of collateral security.

Securities loaned totaled $23,955,347,020 at June 30, 2003, and the collateral value was equal to 104.3%. The loaned securities are classified as category 1 investments based on the custodial arrangements for the collateral securities. Loaned securities are included in the accompanying Statement ofNet Assets since the State maintains ownership. The related collateral securities are not recorded as assets on the Statement ofNet Assets, and a corresponding liability is not recorded, since the State does not pledge or trade the collateral securities.

A-53

Notes to the Financial Statements
For the Year Ended June 30, 2003
Note 3. Deposits and Investments (continued)

D. 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, 2003, and related categorization of investments are as follows:

Georgia Fund 1 Statement ofNet Assets
June 30. 2003

Georgia Fund 1 Statement of Changes in Net Assets For the Fiscal Year Ended June 30. 2003

Additions

Cash and Cash Equivalents Investments

$

4,701,799,132

1,099,439,827

Pool Participant Deposits Investment Income
Less: Investment Expense

$ 21,048,909,998 102,041,999 (1,696,091)

Net Assets

$ =====5,=80=1=,2=38=,9=59=

Total Additions Deductions

$ 21,149,255,906

Pool Participant Withdrawals

23,588,773,913

Distribution of Net Assets

Net Decrease

$

(2,439,518,007)

External Participant Account Balances

$

3,360,671,590

Internal Participant Account Balances

2,440,567,369

Net Assets July 1,2002

8,240,756,966

$ =::::::::5=,8=01=,2=3=8,=95:::9=

June 30, 2003

$ ====5=,80::1=,2::38=,9:=5=9

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, 2003, was $13,265,418. This amount is included in the categorization of deposits ofthe 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

Commercial Paper

$

Risk Categories 2

$

105,914,282 $

Carrying

3

Amount

$

105,914,282

Repurchase Agreements

1,835,720,624

1,835,720,624

U.S. Government Securities and Corporate Obligations

3,846,338,635

3,846,338,635

$ 5,682,059,259 $

105,914,282 $

0 $ 5,787,973,541

A-54

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 3. Deposits and Investments (continued)
D. Investment Pools
Georgia Extended Asset Pool Statement of Net Assets June 30. 2003

Cash and Cash Equivalents Investments

$

372,297,557

950,175,394

$ ===1,=32=2:,4=72=,::95:=1=

Distribution of Net Assets

External Participant Account Balances

$

Internal Participant Account Balances

470,415,740 852,057,211

$ ===1,=32:2::,4=7=2,=95::::1=

Georgia Extended Asset Pool Statement of Changes in Net Assets For the Fiscal Year Ended June 30. 2003

Additions Pool Participant Deposits Investment Income
Total Additions

$

492,684,496

50,355,902

$

543,040,398

Deductions

Pool Participant Withdrawals Net Increase

414,567,977

$

128,472,421

Net Assets July 1, 2002

1,194,000,530

June 30, 2003

$ ===1=,3=22=,4=7=2=,9=5:=1

The carrying amount of Georgia amount of Georgia Extended Asset Pool was $1,170,743. This amount is included in the categorization of deposits ofthe Primary Government. Investments of Georgia Extended Asset Pool are categorized below. These amounts are included in the categorization of investments of the Primary Government.

Type oflnvestment Repurchase Agreements

Risk Categories

1

2

$

950,175,394 $

$

U.S. Government Securities and Corporate Obligations

371,126,814

$ 1,321,302,208 $

o$

Carrying

3

Amount

$

950,175,394

371,126,814

o$

1,321,302,208

A-55

Notes to the FinanciaL Statements
For the Year Ended June 30, 2003
Note 3. Deposits and Investments (continued)

D. Investment Pools

Regents Investment Pool Statement ofNet Assets
June 30, 2003

Cash and Cash Equivalents Investments Interest Receivable
Net Assets

$

1,889,885

139,367,956

704,690

======= $

141,962,531

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

$

22,304,631

119,657,900

======== $

141,962,531

Regents Investment Pool Statement of Changes in Net Assets For the Fiscal Year Ended June 30, 2003

Additions

Investment Income

Interest

$

3,701,869

Fair Value Decreases

(755,696)

Less: Investment Expense Total Additions Deductions

(368,598)

$

2,577,575

--'---'---

Pool Participant Withdrawals

$

15,292,840

Capital Transactions

(28,413,299)

Total Deductions

(13,120,459)

Net Increase

$

15,698,034

Net Assets

July 1,2002 June 30, 2003

126,264,497 141,962,531

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 of June 30, 2003, was $2,594,575, This amount is included in the categorization of deposits ofthe Primary Government. Investments of Regents Investment Pool are categorized below, These amounts are included in the categorization of investments of the Primary Government.

Type ofInvestment Corporate Bonds Repurchase Agreements Stocks U.S. Government Securities and
Corporate Obligations

Risk Categories

1

2

3

Carrying Amount

$

$

15,074,924 $

$

15,074,924

5,456,000

5,456,000

56,917,369

56,917,369

61,919,663

61,919,663

$

$ 139,367,956 $ =====0,=$

139,367,956

A-56

Notes to the Financial Statements For the Year Ended June 30, 2003
Note 4. Receivables

Receivables at June 30, 2003, consisted of the following:

Gross Receivables

Allowance For
Uncollectibles

Allowance For Possible Loan Losses

Allowance For Service Repayments

Deferred Loan Fees

Net Total Receivables

Governmental Activities:

General Fund

$ 3,113,128,282 $

(34,812,743) $

$

$

- $ 3,078,315,539

Nonmajor Governmental

237,159

237,159

Total Governmental Funds

$ 3,113,365,441 $

(34,812,743) $

$

$

- $ 3,078,552,698

Internal Service Funds

7,171,663

(185,000)

6,986,663

Long-Term Lease Receivable

2,570,440

2,570,440

Receivables from Fiduciary Funds

3,795,000

3,795,000

Total Governmental Activities

$ 3,126,902,544 $

(34,997,743) $

$

$

3,091,904,801

Business-type Activities:

Georgia Technology Authority

$

4,763,566 $

$

$

4,763,566

Higher Education Fund

327,438,175

(6,042,070)

321,396,105

State Employees' Health Benefit Plan

34,141,680

(4,157,556)

29,984,124

Unemployment Compensation Fund

38,572,294

(19,034,992)

19,537,302

Internal Service Funds

1,885

1,885

Receivables from Fiduciary Funds

181.768

181,768

Total Business-type Activities

$

405,099,368 $

(29,234,618) $

$

$

-$

375,864,750

Component Units

$ 1.859,019,369 $

(10,141,086) $

(1,868,248) $

(41,085,349) $

(196,630) $ 1,805,728,056

A-57

Notes to the FinanciaL Statements For the Year Ended June 30, 2003

Note 5. Capital Assets

Primary Government

Capital asset activity for the year ended June 30, 2003, was as follows:

Retroactive

Restatement

Balance

of Prior

Balance

July 1,2002

Year Balances

Increases

Decreases

June 30, 2003

Governmental Activities:

Capital Assets Not Being Depreciated:

Land

$

335,224,453 $ 47,156,962 $

36,345,912 $

- $ 418,727,327

Works ofArt and Collections

6,239,808

19,000

53,800

6,312,608

Construction in Progress

1,650,184,189

1,005,756,522 (1,122,217,042)

1,533,723,669

Total capital assets, not being depreciated $ 1,991,648,450 $ 47,175,962 $ 1,042,156,234 $ (1,122,217,042) $ 1,958,763,604

Capital Assets Being Depreciated: Infrastructure Buildings Improvements Other Than Buildings Machinery and Equipment Software Library Collections
Total Capital Assets Being Depreciated

$ 16,342,241,597 $

5,898,663 $ 722,497,991 $

2,062,080,673

90,679,623

400,680,088

42,092,715

15,719,984

1,842,000

680,948,338

(1,529,177)

73,332,021

66,209,462

1,045,073

3,200,000

$ 19,196,772,785 $ 110,769,093 $ 1,199,397,173 $

(895,607,537) $ (1,588,843)
(56,872,538)
(954,068,918) $

16,175,030,714 2,551,851,541
59,654,699 695,878,644
67,254,535 3,200,000 19,552,870,133

Less Accumulated Depreciation For: Infrastructure Buildings Improvements Other Than Buildings Machinery and Equipment Software Library Collections
Total Accumulated Depreciation

$ (5,599,440,759) $

-$

(644,819,382)

(67,029,727)

(I 5,879,256)

(2,600,406)

(377,281,690)

(47,512,514)

(32,762,846)

(3,200,000)

$ (6,673,383,933) $ (117,142,647) $

(141,508,991) $ (68,315,818) (2,349,143) (48,645,498) (7,400,215)
(268,219,665) $

895,607,537 $ 86,427
51,783,432
947,477,396 $

(4,845,342,213) (780,078,500) (20,828,805) (421,656,270) (40,163,061) (3,200,000)
(6,111,268,849)

Total Capital Assets Being Depreciated, Net $ 12,523,388,852 $

(6,373,554) $

931,177,508 $

(6,591,522) $ 13,441,601,284

Governmental activities capital assets, net $ 14,515,037,302 $ 40,802,408 $ 1,973,333,742 $ (1,128,808,564) $ 15,400,364,888

A-58

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 5. Capital Assets (continued)

Primary Government

Business-type Activities:

Capital Assets Not Being Depreciated:

Land

$

Works of Art and Collections

Construction in Progress

Total capital assets, not being depreciated $

Capital Assets Being Depreciated:

Infrastructure

$

Buildings

Improvements Other Than Buildings

Machinery and Equipment

Software

Library Collections

Works of Art and Collections

Total Capital Assets Being Depreciated

$

Less Accumulated Depreciation For:

Infrastructure

$

Buildings

Improvements Other Than Buildings

Machinery and Equipment

Software

Library Collections

Works of Art and Collections

Total Accumulated Depreciation

$

Total Capital Assets Being Depreciated, Net $

Business-type activities capital assets, net $

Balance July 1,2002

Retroactive Restatement
of Prior Year Balances

Increases

Decreases

Balance June 30, 2003

138,383,333 $ 9,827,296
41,267,430 189,478,059 $

1,206,933 $ 1,206,933 $

3,013,868 $ 4,092,689 62,692,433 69,798,990 $

(249,608) $
(30,396,212) (30,645,820) $

142,354,526 13,919,985 73,563,651
229,838,162

111,137,823 $ 3,474,202,249
115,720,097 1,025,993,212
36,482,688 496,323,550
1,023,206 5,260,882,825 $

9,195,300 $ 111,332,704 56,007,791 (10,471,490)
277,661
166,341,966 $

7,933,789 $ 203,377,151
38,351,890 199,641,483
2,846,250 32,528,875
298,033 484,977,471 $

(6,894,509) $ (15,465,063)
(1,064,555) (68,851,643)
(2,030,341)
(94,306,111) $

121,372,403 3,773,447,041
209,015,223 1,146,311,562
39,328,938 527,099,745
1,321,239 5,817,896,151

(45,921,624) $ (1,102,189,650)
(70,980,416) (631,551,672) (17,616,682) (354,991,760)
(330,240) (2,223,582,044) $

5,451,714 $ 60,654,701 (7,452,307)
(891,861)
(21,480)
57,740,767 $

(3,412,972) $ (90,213,522)
(6,321,639) (106,856,944)
(7,581,162) (26,365,876)
(249,876) (241,001,991) $

2,239,510 $ 8,025,261
31,293 50,580,531
1,950,680
62,827,275 $

(41,643,372) (1,123,723,210)
(84,723,069) (688,719,946)
(25,197,844) (379,428,436)
(580,116) (2,344,015,993)

3,037,300,781 $ 224,082,733 $

243,975,480 $ (31,478,836) $

3,473,880,158

3,226,778,840 $ 225,289,666 $

313,774,470 $ (62,124,656) $

3,703,718,320

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

therefore, the table above does not represent a comprehensive valuation ofthe assets owned by the State of Georgia.

A-59

Notes to the Financial Statements For the Year Ended June 30, 2003

Note 5. Capital Assets (continued)

Primary Government
Current period depreciation expense was charged to functions of the primary government as follows:

General govemment Education Health and Welfare Transportation Public Safety Economic Development Culture and Recreation Conservation Capital Outlay

$

20,202,268

715,819

15,667,024

148,987,907

51,263,534

18,075,747

6,073,305

5,222,588

2,011,473

$

268,219,665

Component Units

Capital asset activity for the year ended June 30, 2003, was as follows:

Balance July 1,2002

Retroactive Restatement
of Prior Year Balances

Increases

Decreases

Balance June 30, 2003

Capital Assets Not Being Depreciated:

Land

$

Works of Art and Collections

Construction in Progress

Total capital assets, not being depreciated $

Capital Assets Being Depreciated:

Infrastructure

$

Buildings

Improvements Other Than Buildings

Machinery and Equipment

Software

Total Capital Assets Being Depreciated $

Less Accumulated Depreciation For:

Infrastructure

$

Buildings

Improvements Other Than Buildings

Machinery and Equipment

Software

Total Accumulated Depreciation

$

Total Capital Assets Being Depreciated, Net $

Component Units capital assets, net

$

178,604,647 $ 201,048
37,023,462 215,829,157 $
149,188,064 $ 532,697,356 191,501,222 277,165,265
188,000 1,150,739,907 $
(58,804,861) $ (150,829,437)
(69,889,668) (207,521,717)
(487,045,683) $
663,694,224 $
879,523,381 $

(6,288,423) $
4,453,130 (1,835,293) $
-$
(186,052) 1,886,818 (12,641,041)
(10,940,275) $
-$
(1,799,866) (8,314)
9,763,569
7,955,389 $
(2,984,886) $
(4,820,179) $

28,270,615 $
88,405,797 116,676,412 $
4,278,096 $ 20,232,941 17,344,060 31,136,279
441,675 73,433,051 $
(3,509,236) $ (13,323,257)
(7,273,700) (21,896,056)
(46,002,249) $
27,430,802 $
144,107,214 $

(26,000) $
(81,978,406) (82,004,406) $
(25,000) $ (1,388,372)
(6,000) (4,845,453)
(6,264,825) $
18,000 $ 1,216,000
3,000 4,246,540
5,483,540 $
(781,285) $
(82,785,691) $

200,560,839 201,048
47,903,983 248,665,870
153,441,160 551,355,873 210,726,100 290,815,050
629,675 1,206,967,858
(62,296,097) (164,736,560)
(77,168,682) (215,407,664)
(519,609,003)
687,358,855
936,024,725

A-60

_ --'-------"----------._- --, , _-------_

_--,---------

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 6. 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, 2003, and 2002, is shown below:

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

Fiscal Year Ended June 30, 2003

Fiscal Year Ended June 30, 2002

$

162,472,969 $

169,759,350

1,248,883,503

1,044,185,180

(1.237.572.550) (1,051,471,561 )

$

173,783,922 $

162,472,969

B. Board of Regents Employee Health Benefits Plan
The Board of Regents of the University System of Georgia maintains a program of health and dental benefits for its employees and retirees. This plan is funded j ointly through premiums paid by participants covered under the plan and employer contributions paid by the Board ofRegents and its organizational units, All units ofthe 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, 2003, and 2002, is shown below:

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

Fiscal Year Ended June 30, 2003

Fiscal Year Ended June 30, 2002

$

29,277,958 $

35,179,138

179,559,292

170,457,218

(188,280,902)

(176,358,398)

$

20,556,348 $

29,277,958

A-61

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 6. Risk Management (continued)
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 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.
A reconciliation of total claims liabilities for fiscal years ended June 30, 2003, and 2002, is shown below:

Unpaid Claims and Claim Adjusnnents July I
Incurred Claims and Claims Adjusnnent Expenses Provisions for Insured Events of the Current Year
Payments - Claims and Claim Adjusnnent Expenses Attributable to Insured Events of the Current Year and of Prior Years
Unpaid Claims and Claim Adjusnnents June 30

Fiscal Year Ended June 30. 2003

Fiscal Year Ended June 30. 2002

$

353.034.255 $

351.780.322

104,952,614

97.179,943

(101.068.531)

(95.926.010)

$

356.918.338 $

353.034.255

Note 7. Construction and Other Significant Commitments
Primary Government
The Georgia State Financing and Investment Commission has entered into agreements with various State departments and agencies for the expenditure of bond sale proceeds and cash supplements (provided by the department or agency involved) to acquire and construct capital projects. At June 30, 2003, the undisbursed balance remaining on these agreements approximates $1,265,337,259.
At June 30, 2003, the Department of Transportation had contractual commitments of $2,215,633,005 for construction ofvarious highway projects. Funding ofthese future expenditures is expected to be provided from federal grants, motor fuel tax funds and general obligation bond proceeds.
Note 8. 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 ofthe original term ofthe lease, the State has the option of renewing the lease on a year-to-year basis. Certain organizations within the State's reporting entity do not maintain adequate systems for recording lease commitments in accordance with GAAP.
Total lease payments for the State's governmental activities, business-type activities, and component units were $76,728,874, $30,708,400, and $4,383,037, respectively, for the year ended June 30, 2003. Future minimum commitments for operating leases as of June 30, 2003, are listed below. Amounts are included for renewable leases for which the option to renew for the subsequent fiscal year has been exercised.

A-62

Notes to the FinanciaL Statements
For the Year Ended June 30, 2003

Note 8. Operating Leases (continued)

Fiscal Year Ended June 30 2004 2005 2006 2007 2008
2009-2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2043 2044-2048 2049-2053 2054-2058 2059-2063
Less: Sublease Revenues
Total Minimum Commitments

Governmental Activities

Business-Type Activities

Component Units

$

75,901,699 $

21,988,792

17,786,558

16,457,667

15,105,335

29,460,385

147,570

37,570

41,940

41,940

41,940

41,940

41,940

41,940

41,940

33,552

$

177,212,708 $

22,540,059 $ 6,027,413 4,235,466 3,127,965 2,560,263 7,142,982 2,100
45,636,248 $

$

177,212,708 $

45,636,248 $

4,310,293 4,396,016 3,444,295 2,714,319 2,514,966 10,938,308
28,318,197 (2,463,000) 25,855,197

A-63

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 8. Operating Leases (continued)
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 controlIed by the State Properties Commission. These leases are accounted for as operating leases; revenues for services provided and for use offacilities are recorded when earned. Total revenues from rental of facilities for the State's

governmental activities and component units were $46,148,963, and $8,234,230, respectively for the year ended June 30, 2003. Minimum future revenues and rentals to be received under operating leases as of June 30, 2003, are as follows:

Fiscal Year Ended June 30
2004 2005 2006 2007 2008 2009-2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2043 2044-2048 2049-2053 2054-2058
Total Minimum Commitments

Governmental Activities

Component Units

$

13,384,618 $

13,549,531

13,817,280

13,439,058

13,065,423

59,272,107

15,336,947

2,460,454

2,646,685

2,832,916

2,467,395

1,844,437

1,867,275

1,938,163

1,107,438

$

159,029,727 $

10,586,300 9,702,851 8,764,291 8,280,535 8,115,957 2,129,750 23,587,750 11,689,750 1,047,750 1,047,750 1,047,750 1,047,010 1,045,650
209,130
88,302,224

A-64
...- _. .__ ....~._.. _ - - - - - - - - - - -

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 9. Capital Leases
The State acquires certain property and equipment through multi-year 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.

As noted in the Summary of Significant Accounting Policies (Note 1), capital lease transactions have not been consistently recorded in conformity with GAAP. Capital assets in prior years have not been recorded at the net present value of the minimum payments nor has the long-term liability applicable to capital leases been consistently recorded. 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, 2003, future commitments under capital leases were as follows:

Fiscal Year Ended June 30
2004 2005 2006 2007 2008 2009-2013 2014-2018 2019-2023 2024-2028 2029-2033

Governmental Activities

Business-Type Activities

Component Units

$

2,725,156 $

18,726,875 $

1,906,151

1,570,183

18,230,217

815,915

693,728

17,639,849

78,298

381,154

14,551,047

2,596

259,841

14,257,794

340,229

72,412,462

76,408,515

69,480,950

30,754,353

5,940,917

Total Capital Lease Payments

$

Less: Interest

Present Value of Capital Lease Payments $

5,970,291 $ (545,838) 5,424,453 $

338,402,979 $ (151,975,496) 186,427,483 $

2,802,960 (123,859) 2,679,101

A-65

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 10. Long-Term Liabilities
Primary Government
Changes in long-term liabilities for the fiscal year ended June 30, 2003 is shown in the table below:

Balance July 1,2002

Increases

Decreases

Balance June 30, 2003

Amounts Due Within One Year

Governmental activities: Compensated Absences Payable Capital Lease Obligations Contracts Payable Notes and Loans Payable General State Bond Debt General Obligation Bonds Payable Other

$ 244,329,904 $ 5,911,447
54,670,212 2,631,842 15,505
6,058,295,000 38,398,397

130,584,037 1,822,237 53,078
536,625,000 7,795,984

(125,703,016) $ (2,309,231 ) (13,936,324) (61,402)
(510,945,000) (5,350,500)

249,210,925 $ 5,424,453
40,786,966 2,570,440 15,505
6,083,975,000 40,843,881

49,860,589 2,429,172 13,288,710 64,825 15,505
440,060,000 11,212,876

$ 6,404.252.307 $ 676,880,336 $ (658,305,473) $ 6,422.827,170

516,931.677

Business-type activities: Compensated Absences Payable Capital Lease Obligations Notes and Loans Payable Other

$

143,526,537 $

109,592,147

93,262,622

103,614,238

2,345,608

656,620

150,000

(100,486,198) $ (10,449,377) (157,161)

152,632,486 $ 186,427,483
2,845,067 150.000

$ 239,284,767 $ 213,863,005 $ (1ll,092,736) $

342,055.036 $

87,098,583 7,954,185 344,959
95,397,727

The governmental funds in which the leases are recorded will liquidate the capital lease obligations for governmental activities, The compensated absences liabilities will be liquidated by the applicable funds that account for the salaries and wages of the related employees.
All General State Bonds of the State of Georgia are past due, but have not been presented for redemption. This obligation will be liquidated if and when the past due outstanding bonds and coupons are presented. Unredeemed General State Bonds at June 30, 2003, were $15,505 with accumulated interest of$11,475.
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:

General Government
General Government Refunding

Interest Rates
1.25% -7,70% $

5,675,725,000

4.75% - 6.30%

408,250,000

$ ==6=,0=8::3,::97=5:::,0::00=

A-66

_ _ _ _ _. _

0..





_

"

,._.

_

Notes to the Financial Statements
For the Year Ended June 30, 2003

Note 10. Long-Term Liabilities (continued)
Annual debt service requirements to maturity for general obligation bonds are as follows:

Year

Principal

2004

$

440,060,000 $

2005

475,265,000

2006

497,640,000

2007

499,415,000

2008

428,905,000

2009-2013

2,048,825,000

2014-2018

1,248,450,000

2019-2023

445,415,000

Interest 330,754,730 $ 305,404,706 278,166,455 250,349,441 222,293,185 732,397,725 262,684,255
37,966,786

Total 770,814,730 780,669,706 775,806,455 749,764,441 651,198,185 2,781,222,725 1,511,134,255 483,381,786

$

6,083,975,000 $

2,420,017,283 $

8,503,992,283

Component Units
Changes in long-term liabilities for the year ended June 30, 2003, was as follows:

Compensated Absences Payable $ Capital Lease Obligations Notes and Loans Payable Prizes Payable RevenuelMortgage Bonds Payable Otber

Retroacitive

Balance

Restatement

Balance

of Prior

Julv 1,2002

Year Balance

4,951.024 $

$

4,376,310

94,782,021

201,216,000

1,527,501,554

32,025,003

42,125.388

Increases 5,652,817 372,556
80,978,127 3,300,000
139,527,222 1.268,795

Balance

Amounts Due

Decreases

June 30, 2003 Within One Year

(2,882,022) $

7,721.819 $

1,004,086

(2,069,765)

2,679,101

1,809,908

(118,437,888)

57,322,260

17,273,988

(9,084,000)

195,432,000

15,873,000

(159,089,760)

1,507,939,016

73,150,000

(9,221,299)

66,197.887

6,195.758

$ 1.864.851.912 $

42,125.388 $ 231.099.517 $ (300,784.734) $ 1,837.292.083 $ 115,306,740

The Georgia Development Authority reported two longterm notes payable to banks with a combined outstanding balance at June 30, 2003 of $33,782,078. One note is secured by LIBOR mortgage loans financed through the note, is payable in semi-annual payments of$384,6l5 that includes interest at LIBOR plus one percent, and has an outstanding balance at June 30, 2003, of $6,538,462. The other note is secured by various fixed rate mortgage loans financed through the note, bears interest at a rate of 6.8% per annum, and has an outstanding balance at June 30, 2003, of$27,243,6l6.
Revenue/mortgage bonds outstanding at June 30, 2003, consisted of: mortgage bonds issued by the Georgia Housing and Finance Authority for financing the purchase of single family mortgage loans for eligible persons and families of low and moderate income within the State of Georgia; and revenue bonds issued by the State Road and

Tollway Authority for the fmancing ofcertain construction projects within the State's highway system. The significant revenue and mortgage bonds outstanding at June 30, 2003 consists of the following:

Interest Rates
Bonds Outstanding Unamortized
Premiwn Deferred Amount
for Refunding
Net

Georgia Housing and Finance Authority

1.100% - 11.25%

$

783,246,460 $

State Road and Tollway
Authority
2.50% - 5.375%
452,780,000

55,300

10,740,309

$

783,301,760 $

(3,088,709) 460,431,600

A-67

Notes to the Financial Statements
For the Year Ended June 30, 2003

Note 10. Long-Term Liabilities (continued)

Annual debt service requirements to maturity:

Georgia Housing and Finance Authority

Year

Principal

Interest

Total

2004

$

2005

2006

2007

2008

2009-2013

2014-2018

2019-2023

2024-2028

2029-2033

2034-2037 Future Accretion Capital Appreciation Bonds

18,830,000 $ 21,334,000 22,828,000 26,968,000 27,276,000 131,935,000 146,774,000 155,118,000 149,036,000 95,325,000
1,935,000
(14,113,000)

41,093,000 $ 40,070,000 39,080,000 37,939,000 36,667,000 164,493,000 129,176,000 90,980,000 49,047,000 11,807,000
50,000
14,113,000

59,923,000 $ 61,404,000 61,908,000 64,907,000 63,943,000 296,428,000 275,950,000 246,098,000 198,083,000 107,132,000
1,985,000

State Road and Tollway Authority

Principal

Interest

Total

40,835,000 $ 42,245,000 19,820,000 20,760,000 21,770,000 117,150,000 109,695,000 80,505,000

21,291,847 $ 19,868,852 18,698,514 17,766,963 16,723,086 66,383,667 38,290,840 8,283,419

62,126,847 62,113,852 38,518,514 38,526,963 38,493,086 183,533,667 147,985,840 88,788,419

$

783,246,000 $

654,515,000 $ 1,437,761,000 $

452,780,000 $

207,307,188 $

660,087,188

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

Note 11. Interfund Balances
Due TolFrom Other Funds at June 30, 2003, consist of the following:

Receivable Fund Georgia Technology Authority Georgia Technology Authority Georgia Technology Authority Georgia Technology Authority Internal Service Funds

Payable Fund General Fund Higher Education Fund Internal Service Fund Fiduciary Funds Fiduciary Funds

Due From

$

5,204,358 $

111,346

90,576

181,768

3,795,000

$

9,383,048 $

Due To 5,204,358 111,346 90,576 181,768 3,795,000 9,383,048

Interfund receivables and payables are recorded for billing for services provided between agencies and risk management liabilities. All interfund receivables and payables are considered short term in nature.
A-68

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 11. Interfund Balances (continued)
Interfund transfers at June 30, 2003, consist of the following:

Receiving Fund General Fund
General Fund General Fund General Fund Georgia State Financing and
Investment Commission Nonmajor Governmental Funds Nonmajor Governmental Funds
Nonmajor Governmental Funds Georgia Technology Authority Higher Education Fund Higher Education Fund Internal Service Funds Fiduciary Funds

Paying Fund
Georgia State Financing and Investment Commission
Georgia Technology Authority Higher Education Fund Internal Service Funds
General Fund General Fund Georgia State Financing and
Investment Commission Higher Education Fund Internal Service Funds General Fund Georgia Technology Authority General Fund General Fund

Transferred To

Transferred From

$

150,620,910 $

150,620,910

19,581,928

19,581,928

42,104,133

42,104,133

7,893,803

7,893,803

5,634,329 625,421,301

5,634,329 625,421,301

105,085,870 389,682
21,195,417 1,971,576,405
3,583,000 36,424,238
3,665,985

105,085,870 389,682
21,195,417 1,971,576,405
3,583,000 36,424,238
3,665,985

$

2,993,177,001 $ 2,993,177,001

Transfers are used to move revenues from the fund that statutes require to collect them to the fund that statutes require to expend them and to use unrestricted revenues collected in the General Fund to fmance various programs accounted for in other funds in accordance with budgetary authorizations.

A-69

Notes to the Financial Statements
For the Year Ended June 30, 2003
Note 12. 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, 2003

$

32,066,272 $

$

3,054,091 $

2,363,785 2,164,064

$

23,340,256 $

$

163,712 $

$

209,857 $

The value ofdonated commodities received and distributed is not reported as revenues and expenses on the combined statement of revenues, expenditures and changes in fund balances. Information is not available to determine the items used within the State and the items distributed to (or held for) other 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, 2003, is not reported on the combined balance sheet. The changes in Federal surplus personal property inventory during the fiscal year ended June 30, 2003, were as follows:

Balance July 1, 2002

$

4,304,563

Additions Property Received

7,507,184

$

11,811,747

Deductions Property Donated and Other Distributions

4,944,528

Balance June 30, 2003

$ ==::::::::6,=86::::7=,2=19=

A-70

Notes to the Financial Statements For the Year Ended June 30, 2003
Note 12. Nonmonetary Transactions (continued)
The Federal government provides food stamps to lowincome households. The amount offood stamps a household receives depends on the household's size and fmancial circumstances. The Georgia Department of Human Resources is responsible for determining eligibility for participation in the food stamp program within the State. During the year under review, the total value offood stamps distributed as approved by the Department was $738,255,272.
Note 13. Contingencies
A. Grants and Contracts
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 fmancial position.
B. Litigation
The State is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine governmental operations. The ultimate disposition of these proceedings is not presently determinable. However, the ultimate disposition of these proceedings would not have a material adverse effect on the fmancial condition of the State, with the following exceptions:
Primary Government A suit has been filed against the Georgia State Financing and Investment Commission involving a third-party action by the joint venture construction manager for the Georgia World Congress Center phase IV expansion project for indemnity from a number of subcontractors' claims based upon differing construction conditions. The subcontractors' claims are currently in mandatory arbitration, along with several other subcontractors, with multiple hearing being conducted each month. A decision by the arbitrators is expected in December 2004. The presently-asserted claim is for approximately $50,000,000. However, Georgia State

Financing and Investment Commission antICIpates the amount that is capable of being passed through to them as being substantially less, and an amount additionally capable of being defended as not being due to any cause or fault of Georgia State Financing and Investment Commission.
Currently, negotiations for fmal contract claims of approximately $19,000,000 have stalled. Georgia State Financing and Investment Commission anticipates that these claims will be amended into the lawsuit. In addition, Georgia State Financing and Investment Commission anticipates about three more subcontractors may file suit, all with claims expected to be less than $1,000,000 each. Georgia State Financing and Investment Commission will vigorously defend all of the claims based upon a number of factual and contractual defenses.
C. Guaranteed Loans
Component Units The Federal Government, through the Guaranteed Student Loan Programs of the U.S. Department of Education, fully reinsured loans guaranteed through September 30, 1993, until the 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 14. Subsequent Events
Primary Government
General Obligation Bonds Issued The State issued General Obligation Bonds in the amount of $172,575,000 on July 1,2003 (Series 2003A and 2003B); and in the amount of $485,230,000 on December 1,2003 (Series 2003C and 2003D).
Proceeds from these bonds will be used for the purpose of fmancing various capital outlay projects.

A-71

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 15. Retirement Systems
Georgia Defined Contribution Plan
Plan Description The Georgia Defmed Contribution Plan ("GDCP") is a single-employer, defmed 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. ERS issues a publicly available financial report that includes the fmancial statements and disclosures applicable to GDCP. The report may be obtained at the ERS offices.
Membership As ofJune 30, 2003, participation in GDCP was as follows:

Active plan members Terminated employees entitled to benefits
but not yet receiving benefits
Total
Employers

32,840 76,236 109,076
305

Summary of Significant Accounting Policies The financial statements of GDCP are prepared on the accrual basis of accounting. Contributions from the members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.
District Attorneys' Retirement Fund
Plan Description 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. ERS issues a publicly available fmancial report that includes the fmancial statements and disclosures applicable to DARF. The report may be obtained at the ERS offices.
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.
Summary of Significant Accounting Policies The financial statements of DARF are prepared on the accrual basis of accounting. Contributions from the employer and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.
Funding Policy 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 of Georgia
Plan Description Employees' Retirement System of Georgia ("ERS") is a single-employer, defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges ofa corporation. ERS issues a publicly available fmandal report that includes the applicable financial statements and required supplementary information. The report may be obtained at the ERS offices.

A-72

Notes to the Financial Statements
For the Year Ended June 3D, 2003

Note 15. 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.

.

Benefits The benefit structure ofERS 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 ofage sixtyfive (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 multiplied by the applicable benefit factor. 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.
Summary of Significant Accounting Policies The financial statements ofERS are prepared on the accrual basis of accounting. Contributions from the employer and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the

terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.
Funding Policy Member contributions under the old plan are four percent (4.0%) ofannual compensation up to $4,200 plus six percent (6.0%) ofannual 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.
Annual Pension Cost The required contribution for 2003 was determined as part ofthe June 30, 2002, actuarial valuation using the entry age actuarial cost method. The actuarial assumptions included (a) seven percent (7%) investment rate of return, (b) projected salary increases due to inflation ofthree and onehalf percent (3.5%) per year, and (c) projected salary increases due to seniority/merit raises offive and two-tenths percent (5.2%) to nine percent (9.0%) per year. The actuarial value of assets was determined using techniques that smooth the effects ofshort-term volatility in the market value of investments over a five-year period. ERS' actuarial funding excess is being amortized as a level percentage of projected payroll on an open basis. The employer contributions are projected to liquidate the actuarial accrued funding excess within forty (40) years based upon the actuarial valuation at June 30, 2002.
Three-Year Trend Information for ERS (in thousands):

Fiscal Year Ended
June 30 2000 2001 2002

Annual Pension Cost (APC) 302,332 315,505 233,229

Percentage ofAPC
Contributed 100% 100% 100%

Net Pension Obligation
0 0 0

A-73

Notes to the FinanciaL Statements For the Year Ended June 30, 2003

Note 15. Retirement Systems (continued)

at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.

Georgia Judicial Retirement System
Plan Description 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 Court 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 July 1, 1998. All assets of the Predecessor Retirement Systems were transferred to GJRS as ofJuly 1, 1998.
GJRS is a multiple-employer cost-sharing defmed 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. ERS issues a publicly available fmancial report that includes the financial statements and required supplementary information applicable to GJRS. The report may be obtained at the ERS offices.
Benefits The 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.

Funding Policy 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 areactuarially determined and approved and certified by the GJRS Board of Trustees.
Legislative Retirement System
Plan Description
Organization and Purpose Legislative Retirement System ("LRS") is a singleemployer, defmed benefit plan established by the Georgia General Assembly in 1979 for the purpose of providing retirement allowances for all members of the Georgia General Assembly. LRS is administered by the ERS Board ofTrustees. ERS issues a publicly available fmancial report that includes the applicable financial statements and required supplementary information. The report may be obtained at the ERS offices.
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 ofage sixty (60); however, the retirement benefit is reduced by five percent (5.0%) for each year the member is under age sixty-two (62).

Retirement benefits paid to members are computed as sixtysix 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.
Summary of Significant Accounting Policies The fmancial statements of GJRS are prepared on the accrual basis of accounting. Contributions from the employer and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported

Upon retirement, the member will receive a monthly service retirement allowance of $32 multiplied by the number of years ofcreditable service reduced by age reduction factors, if applicable. Death, disability, and spousal benefits are also available through the plan.
Summary of Significant Accounting Policies The financial statements ofLRS are prepared on the accrual basis of accounting. Contributions from the employer and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.

A-74

Notes to the FinanciaL Statements For the Year Ended June 30, 2003

Note 15. Retirement Systems (continued)

Funding Policy Member contributions are eight and one-halfpercent (8.5%) of annual salary. The State pays member contributions in excess offour and three-fourths percent (4.75%) of annual compensation. Employer contributions are actuarially determined and approved and certified by the Board.

Annual Pension Cost The required contribution for 2003 was determined as part ofthe June 30, 2002, actuarial valuation using the unit credit actuarial cost method. The actuarial assumptions included (a) seven percent (7%) investment rate of return, and (b) three percent (3%) annual post-retirement cost-of-living adjustment. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a five-year period. LRS' actuarial funding excess is being amortized using the level dollar method on an open basis.

Three-Year Trend Information for LRS (in thousands)

Year Ended June 30 2000 2001 2002

Pension Cost (APC)
23

ofAPC Contributed
417% N/A 7000%

Pension
Obligation
o o o

Georgia Military Pension Fund

service in excess of20 years. The maximum benefit is $100 per month.
Summary of Significant Accounting Policies The fmancial statements of SCJRF are prepared on the accrual basis of accounting. Contributions from the employer and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.
Funding Policy Employer contributions are actuarially determine and approved and certified by the ERS Board ofTrustees. There are no member contributions required.
Superior Court Judges Retirement Fund
Plan Description 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 ofGeorgia. 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. ERS issues a publicly available fmancial report that includes the financial statements and disclosures applicable to SCJRF. The report may be obtained at the ERS offices.

Plan Description The Georgia Military Pension Fund ("GMPF") is a defmed benefit pension plan established by the Georgia General Assembly in 2002 for the purpose of providing retirement allowances and other benefits for members of the Georgia National Guard ("National Guard"). The GMPF is administered by the Employees Retirement System Board of Trustees.

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.

Benefits A member becomes eligible for benefits upon attainment of age 60 with 20 or more years ofcreditable service (including at least 15 years of service as a member of the National Guard), having served at least 10 consecutive years as a member of the National Guard immediately prior to discharge, and having received an honorable discharge from the National Guard.
The retirement allowance is payable for life in the amount of $50 per month plus $5 per month for each year of creditable

Summary of Significant Accounting Policies The fmancial statements of SCJRF are prepared on the accrual basis of accounting. Contributions from the employer and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.

A-75

Notes to the FinanciaL Statements For the Year Ended June 30. 2003

Note 15. Retirement Systems (continued)
Funding Policy 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 offive percent (5.0%) ofthe member's annual salary. Additional employer contributions are not actuarially determined but are provided on an as-needed basis to fund current benefits.

report may be obtained at the TRS offices.
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 1, 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.

Regents Retirement Plan
Plan Description The Regents Retirement Plan, a single-employer defmed contribution plan, is an optional retirement plan established and administered by the Board of Regents ofthe University System of Georgia (Higher Education Fund), under which it may purchase annuity contracts for the purpose ofproviding 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.
Funding Policy 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 10.02% 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. In 2003, employer and employee contributions were (in thousands) $55,538 and $27,740, respectively.
Teachers' Retirement System of Georgia
Plan Description 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 of active and retired members and ex-officio State employees is ultimately responsible for the administration ofTRS. TRS issues a publicly available fmancial report that includes the applicable financial statements and required supplementary information. The

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%) ofthe average of the member's two (2) highest paid consecutive years of service multiplied by the number ofyears 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.
Summary of Significant Accounting Policies The fmancial statements ofTRS are prepared on the accrual basis of accounting. Contributions from the employers and members are recognized in the period in which the members provide services. Benefit and refund payments are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price.
Funding Policy TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Member contributions are five percent (5%) of annual salary, and employer contributions are 9.24%, as required by the annual actuarial valuation. The State's contributions to TRS for the years ending June 30, 2003 and 2002 were (in thousands) $104,131 and $119,391, respectively, and were equal to the required contributions for each year.

A-76

_ _-----

Notes to the FinanciaL Statements For the Year Ended June 30, 2003
Note 16. Postemployment Benefits
In addition to the pension benefits described in Note 15, the State ofGeorgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to Title 45, Chapter 18 of the OCGA. An individual eligible for these benefits must have been a full time employee at the time of retirement of either the State of Georgia or a county social service agency and must be receiving monthly retirement benefits from either the Employees' Retirement System of Georgia or a county employees' retirement system. The State Health Benefit Plan is a public entity risk pool funded by employee and employer contributions. Employees and retirees subject to the Plan contribute amounts determined by the State Personnel Board for various health insurance plans. The various agencies ofthe State 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 ofthe Plan include provisions for incurred but not reported claims.
As of June 30, 2003, there were 66,109 employees who had retired and were receiving postretirement health care benefits through the State Health Benefit Plan. For the fiscal year ended June 30, 2003, the State recognized expenditures of $237,893,820, which was net of retiree contributions of $105,991,874.
Pursuant to the general powers conferred by OCGA Section 20-3-31, the Board of Regents of the University System of Georgia (college and university funds) has established group health and life insurance programs for regular employees of the University System. It is the policy of the Board of Regents to permit employees of the University System eligible for retirement or that become permanently and totally disabled to continue as members ofthe 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 of service with the University System are eligible for these postemployment health and life insurance benefits. The University System pays the employer portion for group insurance for affected individuals. For the fiscal year ended June 30, 2003, the University System recognized expenditures of $40,905,021, which was net of participant contributions of$15,491,057.
Note 17. Deficit Fund BalancelNet Assets
The following organizations had deficit balances at June 30, 2003.
Primary Government
Internal Service Funds - Risk Management
Unemployment Compensation Fund - At June 30, 2003, the Fund had an unrestricted net assets deficit of$1,389,433.
Component Units
Lake Lanier Islands Development Authority - At June 30, 2003, the Fund had an unrestricted net assets deficit of $9,703,538.
Road and Tollway Authority - At June 30, 2003, the Authority had an unrestricted net assets deficit of $135,913,915.

A-77

(This page intentionaLLy Left bLank)

REQUIRED SuPPLEMENTARY INFORlv1ATION

(This page intentionaLLy Left bLank)

Required SuppLementary Information For the AscaL Year Ended June 30, 2003

Employees' Retirement System of Georgia

Schedule ofFunding Progress
(dollars in thousands)

Actuarial Valuation
Date

Actuarial Value of Plan Assets
(a)

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

6/30/00 6/30/01 6/30/02

10,999,901 11,750,624 12,124,414

10,573,408 11,557,255 11,994,850

Unfunded AAL/(Funding
Excess) (b-a)
(426,493) (193,369) (129,564)

Funded Ratio (alb)
104.0% 101.7% 101.1%

Annual Covered Payroll
(c)
2,304,289 2,397,169 2,408,306

Unfunded AAL/(Funding
Excess) as a Percentage of Covered Payroll
[(b-a)/c)
(18.5%) (8.1%) (5.4%)

A-81

Required SuppLementary Information Budgetary Comparison ScheduLe Budget Fund
For the fiscaL Year Ended June 30, 2003

Funds Available (inflows)
Revenues: State Appropriation Regular Lottery Proceeds Tobacco Settlement Funds Federal Revenues Other Revenues Retained
Total Revenues
Carry-Over from Prior Year: Transfer from Fund Balance

Budgeted Amounts

Original

Final

Actual Amounts

Variance Positive (Negative)

$ 15,307,983,094 $ 625,000,000 173,002,372
6,536,341,100 5,394,646,037
$ 28,036,972,603 $

15,315,646,346 $ 665,037,766 185,622,923
8,621,512,245 6,664,250,642
31,452,069,922 $

15,314,574,409 $ 665,037,766 185,622,923
8,168,484,960 5,823,551,140
30,157,271,198 $

(1,071,937)
o o
(453,027,285) (840,699,502)
(1,294,798,724)

85,026,075

3,734,447,795

1,504,690,915

(2,229,756,880)

Total Funds Available

$ 28,121,998,678 $

35,186,517,717 $

31,661,962,113 $ _ _(~3.:.::,5-=2~4,~55:...:5.z.;,6:...:0...;.;.4)

Expenditures (outflows)

Administrative Services, Department of

$

Agricultural Exposition Authority

Agriculture, Department of

Agrirama Development Authority

Audits and Accounts, Department of

Banking and Finance, Department of

Building Authority

Community Affairs, Department of

Community Health, Department of

Corrections, Department of

Defense, Department of

Education, Department of

Employees' Retirement System -

Administrative Expense Fund

Financing and Investment Commission, Georgia State

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

Motor Vehicle Safety, Department of

Natural Resources, Department of

Pardons and Paroles, State Board of

Personnel Board, State - Merit System of

Personnel Administration

Public Safety, Departrrient of

Public School Employees' Retirement System

Public Service Commission

Public Telecommunications Commission

Regents of the University System of Georgia, Board of

64,706,527 $ 6,678,170 54,080,627 1,853,242 31,225,276 11,192,120 44,840,097 155,242,671 6,746,062,223 981,769,781 36,696,620 6,913,430,590
7,478,230 0
43,583,399 36,367,560 602,752,918 53,021,783
0 2,785,546,425
96,057,825 17,229,392 99,142,475 141,110,410 297,900,801 356,904,865 37,174,846 104,541,676 185,582,542 50,181,567
14,390,292 112,830,819
15,258,226 9,452,805 37,798,773 4,007,982,895

64,437,689 $ 6,460,118 55,742,696 1,807,409 30,302,276 10,789,924
54,413,625 226,389,043 8,562,759,097 1,056,166,536
37,356,750 7,361,781,908
12,546,411 0
45,658,263 37,747,102 625,421,301 95,770,269
0 3,261,111,947
107,110,021 17,633,388 154,517,081 150,094,564 328,899,845 432,285,616 46,126,574 107,229,082 280,730,525 49,387,109
17,882,575 141,326,786
4,127,798 9,609,275 36,790,093 4,384,050,467

57,468,018 $ 6,510,618 55,653,071 1,390,740 29,935,959 10,413,140 48,383,694 218,799,890 8,159,966,449 975,425,571 36,606,487 7,242,641,964
10,579,956 0
45,405,692 30,322,919 625,421,301 75,632,187
0 3,120,662,736
106,954,092 16,838,779
137,022,298 149,999,123 313,247,068 417,827,863 45,632,540 106,257,383 273,177,341
49,027,202
13,525,302 128,971,619
4,127,798 9,521,765 31,251,644 3,755,974,401

6,969,671 (50,500) 89,625 416,669 366,317 376,784
6,029,931 7,589,153 402,792,648 80,740,965
750,263 119,139,944
1,966,455 0
252,571 7,424,183
0 20,138,082
0 140,449,211
155,929 794,609 17,494,783
95,441 15,652,777 14,457,753
494,034 971,699 7,553,184 359,907
4,357,273 12,355,167
0 87,510 5,538,449 628,076,066

A-82

Required SuppLementary Information Budgetary Comparison ScheduLe Budget Fund For the Fiscal Year Ended June 30, 2003

Budgeted Amounts

Original

Final

Actual Amounts

Variance Positive (Negative)

Revenue, Department of School Readiness, Office of Secretary of State Soil and Water Conservation Commission Student Finance Commission Teachers' Retirement System - Expense Fund Technical and Adult Education, Department of Technology Authority Transportation, Department of Veterans Service, Department of Workers' Compensation, State Board of

$

451,468,445 $

322,449,724

38,353,639

4,210,988

420,673,917

15,271,579

365,444,804

199,652,972

2,099,027,200

32,560,296

12,816,646

497,195,299 $ 338,852,496
40,927,451 4,686,416
432,897,638 25,925,324
493,801,527 230,196,791 5,260,034,053
33,383,330 14,154,229

485,330,597 $ 336,566,516 40,526,117
4,667,286 417,936,871
23,851,678 467,919,971 200,692,732 1,964,389,133 33,010,448
12,477,123

11,864,702 2,285,980
401,334 19,130
14,960,767 2,073,646 25,881,556 29,504,059 3,295,644,920
372,882 1,677,106

Excess of Funds Available over Expenditures

$ 28,121,998,678 $

35,186,517,717 $

30,297,945,082 $

4,888,572,635

$

1,364,017,031 $

1,364,017,031

A-83

Required Supplementary Information Budgetary Comparison Schedule Budget-To-GAAP Reconciliation For the fiscaL Year Ended June 30, 2003
SourceslInflows of Resources
Actual amounts (budgetary basis) "Total Funds Available" from the budgetary comparison schedule
Differences - budget to GAAP: Revenues of nonbudgeted funds included within the State's reporting entity, and shown in General Fund for fmancial reporting purposes. Revenues of budgeted funds included in the Budget Fund, but removed from the General Fund for fmancial reporting purposes. Budgeted Carry-Over Funds from Prior Year Fund Balances shown as Funds Available in Budget Fund, but removed for fmancial reporting purposes. Transfers from other funds are inflows of budgetary resources but are not revenues for fmancial reporting purposes. Receivables and revenues accrued based on encumbrances reported for supplies and equipment ordered but not received are reported in the year the order is placed for budgetary purposes, but in the year the supplies are received for GAAP reporting. Accrual of taxpayer assessed receivables and revenues. Proceeds from the sale of land and equipment are budgetary resources but are regarded as other fmancing sources under GAAP. State appropriation revenues are budgetary resources, but are netted with the State's treasury disbursements for GAAP purposes. Budget Fund reserves federal fmancial assistance, but these funds are not earned at year end, and are shown as deferred revenue for GAAP purposes. Intrafund revenues are budgetary revenues, but are not revenue for GAAP reporting purposes. Fund balance adjustments are not inflows of budgetary resources, but are current year revenues for GAAP reporting purposes. Change in revenue accrual for nonbudgetary medicaid claims. Change in revenue accrual for nonbudgetary food stamp program. Change in pooled investments to show at fair value. Other net accrued receivables and revenues.
Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds

General Fund
$ 31,661,962,113
14,904,913,156
(4,331,828,974) (1,504,690,915)
(121,712,211)
(160,117,455) 84,084,077 (4,659,671)
(16,165,235,098)
3,767,043 (381,563,199)
3,441,216 183,548,400 738,255,272
380,441 48,403,466
$ ===2=4=,=9=58=,=9=47=,=6=6=1=

A-84
- - - - - _...,._-------,-,_...

Required SuppLementary Information Budgetary Comparison ScheduLe Budget-To-GAAP Reconciliation For the fiscaL Year Ended June 30, 2003
Uses/Outflows of Resources
Actual amounts (budgetary basis) "Total Expenditures" from the budgetary comparison schedule
Differences - budget to GAAP: Expenditures of Nonbudgeted Funds included within the State's reporting entity, and shown in General Fund for fmancial reporting purposes. Expenses of Budgeted Funds included in the Budget Fund, but removed from the General Fund for fmancial reporting purposes. Transfers to other funds are outflows of budgetary resources but are not expenditures for GAAP reporting purposes. Encumbrances for supplies and equipment ordered but not received are reported in the year the order is placed for budgetary purposes, but in the year the supplies and equipment are received for GAAP reporting. Intrafund expenditures are budgetary expenditures, but are not expenditures for GAAP reporting purposes. Fund balance adjustments are not outflows of budgetary resources, but are current year expenditures for GAAP reporting purposes. Change in expenditure accrual for nonbudgetary medicaid claims. Change in expenditure accrual for nonbudgetary food stamp program Change in expenditure accrual for nonbudgetary teacher salaries. Capital lease acquisitions are not outflows of budgetary resources, but are recorded as current expenditures and other fmancing sources for GAAP reporting Other net accrued liabilities and expenditures.
Total Expenditures as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds

General Fund
$ 30,297,945,082
73,479,066
(6,352,914,802) (626,015,051)
(130,810,825) (376,822,751) (277,529,914) 209,600,000 738,255,272
11,178,937
1,795,824 99,204,562
$ ==2=3,=66::::7=,3=6=5,=40::::0=

A-85

Notes to Required SuppLementary Information For the fiscaL Year Ended June 30, 2003
Budgetary Process 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 fmancial 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 ofthe 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 ofGeorgia, 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 ofthe 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 object class level. Due to the complex nature ofthe 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 debt service fund and capital projects funds, which are not subject to appropriation. The budget does include certain proprietary funds, the higher education funds, and the administrative costs of operating various public employee retirement systems.
Budgetary Presentation The accompanying budgetary comparison schedule for the Budget Fund presents comparisons of the legally adopted budget with actual data prepared on the budgetary basis of accounting utilized by the State. The Budget Fund, a compilation ofthe budget units ofthe State, differs from the funds presented in the basic financial statements. The Budget-to-GAAP reconciliation immediately following the budgetary comparison schedule identifies the necessary adjustments to convert the Budget Fund into governmental funds, proprietary funds, and fiduciary funds, as required by generally accepted accounting principles (GAAP).

A-86

SECTION B
REIDRT ON CbMPLlANCE AND ON INTERNAL CbNTROL OVER FINANCIAL
REIDRTING BASED ON AN AUDIT OF
FINANCIAL srATEMENIS PERFORMED
IN ACXDRDANCE WITH (;bVERNMENT
AUDn 'lNQ STANDA.R.DI;

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

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

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

The Honorable Sonny Perdue Governor of Georgia
and Members of the General Assembly of the State of Georgia

We were engaged to audit the fmancial statements of the governmental actlVItIes and the major governmental fund - general fund, and we have audited the accompanying financial statements of the business-type activities, the aggregated discretely presented component units, the major governmental fund - Georgia State Financing and Investment Commission, each major proprietary fund - enterprise fund, and the aggregated remaining fund information of the State of Georgia as of and for the year ended June 30, 2003 which collectively comprise the State's basic financial statements as listed in the table of contents, and have issued our report thereon dated January 7, 2005.

We did not express an opinion on the financial statements of the governmental activities and the major governmental fund - general fund as of and for the year ended June 30, 2003 due to certain matters noted in the following paragraph. Except as discussed in the following paragraph of this report, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governmental Auditing Standards, issued by the Comptroller General of the United States. The financial statements of the Employees' Retirement System of Georgia, Georgia General Assembly, Georgia Lottery Corporation and Teachers' Retirement System of Georgia were not audited in accordance with Governmental Auditing Standards, and accordingly, this report does not extend to those organizations. We did not audit the financial statements of certain organizations and they reflect the following percentages of total assets and revenues or additions of the indicated opinion units:

Opinion Unit Governmental Activities Business-Type Activities Aggregate Discretely Presented Component Units Governmental Fund - General Fund Governmental Fund - Georgia State Financing and Investment Commission Proprietary FundlEnterprise Fund -State Employees' Health Benefit Plan Aggregate Remaining Fund Information

Percent of Opinion Unit's Total Assets
21% 10% 77% 19%
100%

Percent of Opinion Unit's Total Revenues!Additions
19% 34% 87% 19%
100%

100% 90%

100% 41%

The financial statements of these organizations and component units were audited by other auditors whose reports have been furnished to us, and our report, insofar as it relates to the amounts included for those financial statements, is based solely upon the reports of the other auditors.
An independent audit of the Department of Community Health, which was conducted by other auditors, reported, " ... The Department of Community Health implemented the new MultiHealthNetwork (MHN) system on Aprill, 2003. The new system administers the payment ofclaims, as well as provides customer service and health information for Medicaid and PeachCare recipients which are reflected in the governmental activities and the major governmental fund - general fund. Because the conversion to this new system was not appropriately controlled, errors in the processing of claims resulted. As a result, it was necessary to make advance payments to providers for the lag in payments due to the reprocessing of related claims. Ultimately, reconstruction and reconciliation of the payment records is needed to properly reflect payments made for health and welfare expenditures for the fiscal year 2003 and the resulting receivables, payables and federal revenues as of and for the year ended June 30, 2003. The adjustments, if any, to the respective financial statements of the governmental activities and the major governmental fund - general fund as ofandfor the year ended June 30, 2003 have not been determined. Additionally, management was unable to provide written conclusive representation of all facts and circumstances as to its responSibility for the fair presentation of the financial statements of the governmental activities and the major governmental fund - general fund as of and for the year ended June 30, 2003. Such representations are required under generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General ofthe United States. As a result, we were unable to apply audit procedures sufficient to determine the extent to which the financial statements ofthe governmental activities and the major governmental fund - general fund may have been affected Ly the above mentioned conditions as ofand for the year ended June 30, 2003..." The financial statements of the governmental activities and the major governmental fund - general fund at the Department of Community Health are deemed to be material to the financial statements of the governmental activities and the major governmental fund - general fund for the State of Georgia as of and for the year ended June 30,2003.
Compliance As part of obtaining reasonable assurance about whether the State of Georgia's financial statements are free of material misstatement, we and other auditors performed tests of its compliance with certain provisions of laws, 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 no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting In planning and performing our audit, we and other auditors considered the State of Georgia's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over fmancial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over fmancial 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 Findings section of the accompanying schedule of Findings and Questioned Costs.
B-4
----------_._-_.-. -

(1) Accounting Controls (Overall) Conversion from Electronic Data System ("EDS") Medicaid Management Information System ("MMIS") to Affiliated Computer Services ("ACS") MultiHealth Network (MHN) System FS-419-03-01 - Department of Community Health Deficiencies in Internal Control FS-466GHOS-03-01 - Department of Public Safety Inadequate Closing Procedures FS-521-03-0 1 - Albany State University FS-533-03-01 - Fort Valley State University Inadequacies in Control Over Subsidiary Ledgers FS-528-03-01 - Clayton College and State University Segregation of Duties FS-419-03-05 -Department of Community Health
(2) Cash and Cash Equivalents Uncollateralized Deposits FS-486-03-01 - Office of Treasury and Fiscal Services Various Inadequate Accounting Procedures FS-440-03-02 - Department of Labor FS-474-03-01 - Departn:i.ent of Revenue FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University FS-819-03-01 - West Georgia Technical College FS-823-03-01 - Atlanta Technical College FS-830-03-0 1 - DeKalb Technical College
(3) Inventories Various Inadequate Accounting Procedures FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University FS-830-03-01 - DeKalb Technical College
(4) RevenuelReceivableslReceipts Deficiencies in the Collection and Recording of Cash Tolls FS-927-03-01 - State Road and Tollway Authority Deficiencies in the Income Tax Division Subsidiary Records FS-474-03-02 - Department of Revenue Deficiencies in the Sales Tax Division Subsidiary Records FS-474-03-03 - Department of Revenue Inadequate Accounting Procedures FS-427-03-02 - Department of Human Resources FS-440-03-04 - Department of Labor FS-440-03-05 - Department ofLabor FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University Receivables - Other FS-419-03-03 - Department of Community Health
B-5

(5) ExpenditureslLiabilitieslDisbursements Accounts Payable, Accrued Liabilities and Contracts Payable FS-4 I9-03-04 - Department of Community Health Exceptions Related to Expenditure Sampling FS-466GHOS-03-06 - Department of Public Safety FS-466GHOS-03-07 - Department of Public Safety FS-466GHOS-03-08 - Department of Public Safety Inadequate Accounting Procedures FS-528-03-02 - Clayton College and State University FS-823-03-01 - Atlanta Technical College FS-980-03-01 - Georgia Technology Authority Upper Payment Limit Calculation FS-419-03-02 - Department of Community Health

(6) General Ledger Deficiencies in the Sales Tax Division Subsidiary Records FS-474-03-03 - Department of Revenue Ending Balances in Balance Sheet Clearing Accounts FS-440-03-06 - Department of Labor FS-486GOHS-03-02 - Department of Public Safety Undocumented Adjustments to Clearing Accounts FS-474-03-04 - Department of Revenue Inadequacies in Control Over Restricted Funds FS-521-03-03 - Albany State University FS-528-03-04 - Clayton College and State University Inadequacies in Control Over Subsidiary Ledgers FS-562-03-01 - Bainbridge College Various Inadequate Accounting Procedures FS-427-03-02 - Department of Human Resources FS-440-03-02 - Department of Labor FS-440-03-03 - Department of Labor FS-440-03-04 - Department of Labor FS-440-03-05 - Department of Labor FS-466GOHS-03-03 - Department of Public Safety FS-466GOHS-03-04 - Department of Public Safety FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University FS-548-03-05 - Savannah State University FS-593-03-01 - Skidaway Institute of Oceanography

(7) Capital Assets VariOllS Inadequacies in Operation of Property Management System Various Organizations

FS-402-03-01

FS-466-03-01

FS-533-03-05

FS-830-03-01

FS-414-03-02

FS-466GOHS-03-05 FS-548-03-07

FS-8764-03-01

FS-414-03-03

FS-503-03-01

FS-572-03-02

FS-91O-03-01

FS-440-03-07

FS-521-03-02

FS-575-03-01

FS-958-03-01

FS-462-03-01

FS-528-03-02

FS-829-03-0 1

B-6

A material weakness is a reportable 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 financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control 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) Conversion from Electronic Data System ("EDS") Medicaid Management Information System ("MMIS") to Affiliated Computer Services ("ACS") MultiHealth Network (MHN) System FS-419-03-01 - Department of Community Health Inadequate Closing Procedures FS-521-03-01 - Albany State University Inadequancies in Control Over Subsidiary Ledgers FS-528-03-01 - Clayton College and State University Segregation of Duties FS-419-03-05 - Department of Community Health
(2) Cash and Cash Equivalents Various Inadequate Accounting Procedures FS-440-03-02 - Department of Labor FS-474-03-01 - Department of Revenue FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University
(3) Inventories Inadequate Accounting Procedures FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University
(4) RevenuelReceivableslReceipts Deficiencies in the Income Tax Division Subsidiary Records FS-474-03-02 - Department of Revenue Deficiencies in the Sales Tax Division Subsidiary Records FS-474-03-03 - Department of Revenue Inadequate Accounting Procedures FS-440-03-05 - Department of Labor FS-521-03-02 - Albany State University FS-528-03-02 - Clayton College and State University Receivables - Other FS-419-03-03 - Department of Community Health
(5) ExpenditureslLiabilitieslDisbursements Accounts Payable, Accrued Liabilities and Contracts Payable FS-419-03-04 - Department of Community Health Inadequate Accounting Procedures FS-528-03-02 - Clayton College and State University FS-980-03-01 - Georgia Technology Authority
B-7

(5) Expenditures/LiabilitieslDisbursements (continued) Upper Payment Limit Calculation FS-4l9-03-02 - Department of Community Health

(6) General Ledger Deficiencies in the Sales Tax Division Subsidiary Records FS-474-03-03 - Department of Revenue Inadequacies in Control Over Restricted Funds FS-52l-03-03 - Albany State University FS-528-03-02 - Clayton College and State University Inadequate Accounting Procedures FS-440-03-02 - Department of Labor FS-440-03-03 - Department of Labor FS-440-03-05 - Department of Labor FS-52l-03-02 - Albany State University

(7) Capital Assets Various Inadequacies in Operation of Property Management System Various Organizations

FS-402-03-0l FS-4l4-03-03 FS-440-03-07

FS-462-03-0l FS-466-03-0l FS-52l-03-02

FS-528-03-02 FS-533-03-05 FS-548-03-07

FS-572-03-02 FS-575-03-0l FS-958-03-0l

We and other auditors have also noted certain matters that were reported to management of various organizations in separate letters during the course of our audit work.
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,
~~
Rus ell W. Hinton, CPA, CGFM State Auditor
January 7, 2005

B-8
_ --------_.. ....

_ __ - - ._- .. - - -- .... ....... ..

SECTION C
REIDRT ON OJMPLIANCE WITH: REQUIREMEN'"ffi .APPLICABLE TO EACH
MAJoR PR~AND ON INTERNAL O=>NTROL OVER OJMPLIANCE IN ..AanRDANCE
WITH OMB CIRCULAR k I 33

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

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 CIRCULARA-133

The Honorable Sonny Perdue 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 and Budget (OMB) Circular A-I33 Compliance Supplement
that are applicable to each of its major federal programs for the year ended June 30, 2003. 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 and grants applicable to each ofits major federal programs is the responsibility of the State of Georgia's management. Our responsibility is to express an opinion on the State ofGeorgia's compliance based on our audit. We did not audit the following major federal programs or percentages of federal programs:

CFDA NO. 14.231 14.238 14.239 14.241 66.458 66.468 81.041 81.042 84.069 93.767

PROGRAM NAME Emergency Shelter Grants Program Shelter Plus Care HOME Investment Partnerships Program Housing Opportunities for Persons with AIDS Capitalization Grants for State Revolving Ftmds Capitalization Grants for Drinking Water State Revolving Ftmd State Energy Program Weatherization Assistance for Low-Income Persons Leveraging Educational Assistance Partnership State Children's Insw-ance Program Medicaid Cluster Research and Development Cluster Student Financial Aid Cluster

% AUDITED BY OTHER AUDITORS
100% 100% 100010 100% 99% 94% 100% 1000/. 93% 100% 93% 85% 76%

MONETARY EXPENDITURES
$1,950,351 $1,578,192 $17,675,623 $1,986,848 $14,897,691 $14,742,426 $1,661,259 $2.884,078
$564.456 $185,978,773 3,958,998,985 $412,116,950 $552,251,201

NONMONETARY EXPENDITURES
$0 $0 $0 $0 $296,042,707 $32,809,380 $0 $0 $0 SO SO $160,023 $1,400,944,672

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 two paragraphs, we conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audits ofStates, Local Governments, and NonProfit 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 a major federal program occurred. An audit includes examining, on a test basis, evidence about the State ofGeorgia'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 ofthe State of Georgia's compliance with those requirements.
An independent single audit of the Department of Community Health, which was conducted by other auditors, reported, " ... The Department ofCommunity Health implemented the new MultiHealthNetwork (MHN) system on April], 2003. The new system administers the payment ofclaims, as well as provides customer serVice and health informationfor Medicaid and PeachCare recipients, which are reflected in the major programs. Because the conversion to this new system was not appropriately controlled, errors in the processing ofclaims resulted. As a result, it was necessary to make advance payments to providersfor the lag in payments due to the reprocessing ofrelated claims. Ultimately, reconstruction and reconciliation of the payment records is needed to properly reflect payments made for major program expenditures for the fiscal year 2003 and the resulting receivables, payables and federal
revenues as of and for the year ended June 30, 2003. The adjustments, if any, to the Schedule of
Expenditures of Federal Awards for the year ended June 30, 2003 have not been determined. Additionally, management was unable to provide written conclusive representation of all facts and circumstances as to its responsibility for compliance with the requirements of laws, regulations, contracts andgrants applicable to each ofits majorfederal programs whose expenditures are recorded and recognized in the financial statements of the governmental financial activities and the major governmentalfund - generalfundfor the year ended June 30, 2003. Such representations are required under generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General ofthe United States ... " These matters are further described in finding number FA-419-03-01 in the accompanying schedule ofFindings and Questioned Costs. Because ofthe matters discussed in this paragraph, the scope ofthe work ofother auditors was not sufficient to enable them to express an opinion on compliance with the requirements referred to above that are applicable to the Medicaid Cluster and the State Children's Insurance Program (93.767)
Other auditors were unable to obtain sufficient documentation supporting compliance for the Research and Development Cluster at the Georgia Institute ofTechnology with requirements governing reporting that are applicable to contract nos. A-6100, A-5521, and A-5617 ofthe U.S. Department ofDefense as these contracts and certain matters pertaining to them are classified by the U. S. Department ofDefense, and other auditors did not have security clearance to perfonn certain procedures with respect to these contracts; nor were other auditors able to satisfy themselves as to the Georgia Institute ofTechnology's compliance with the aforementioned requirement with respect to these contracts by other auditing procedures.
C-4

As described in finding number FA-427-03-03 in the accompanying schedule of Findings and Questioned Costs, the State of Georgia did not comply with requirements regarding Subrecipient Monitoring that are applicable to the Centers for Disease Control and Prevention - Investigations and Technical Assistance grant (CFDA 93.283). Compliance with such requirements is necessary, in our opinion, for the State of Georgia to comply with requirements applicable to this program.
As described in findingnumbersFA-427-03-04, FA-427-03-05 andFA-427-03-06 in the accompanying schedule of Findings and Questioned Costs, the State of Georgia did not comply with requirements regarding Eligibility, MatchinglLevel of Effort/Earmarking, and Subrecipient Monitoring that are applicable to the HIV Care Formula Grants (CFDA 93.917). Compliance with such requirements is necessary, in our opinion, for the State of Georgia to comply with requirements applicable to this program.
As described in finding number FA-466-03-01 in the accompanying schedule of Findings and Questioned Costs, the State of Georgia did not comply with requirements regarding Activities Allowed or Unallowed and Allowable Costs/Cost Principles that are applicable to the Highway Safety Cluster (HSC) programs. Compliance with such requirements is necessary, in our opinion, for the State of Georgia to comply with requirements applicable to this program.
As described in finding number FA-521-03-04 in the accompanying schedule of Findings and Questioned Costs, the State of Georgia did not comply with requirements regarding Reporting that are applicable to the Student Financial Aid Cluster (SFA) programs. Compliance with such requirements is necessary, in our opinion, for the State of Georgia to comply with requirements applicable to this program.
As described in finding numbers FA-548-03-03 and FA-521-03-04 in the accompanying schedule of Findings and Questioned Costs, the State of Georgia did not comply with requirements regarding Equipment and Real Property Management and Reporting that are applicable to Higher Education Institutional Aid (CFDA 84.031). 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 ofother auditors, except for the effects ofthe matters discussed in the six preceding paragraphs and except for the effects of such noncompliance, if any, as might have been determined had other auditors been able to examine sufficient evidence regarding the State's compliance with the requirements described in the seventh preceding paragraph, 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, 2003. 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-133 and which are described in the Federal Awards Findings and Questioned Costs section ofthe accompanying schedule ofFindings and Questioned Costs.
C-5

Allowable Costs/Cost Principles FA-548-03-01
Cash Management FA-486-03-01
Eligibility FA-414-03-03 FA-414-03-04 FA-414-03-05 FA-427-03-01 FA-521-03-01 FA-521-03-02 FA-530-03-01 FA-530-03-02 FA-530-03-03 FA-548-03-02

Equipment and Real Property Management FA-414-03-01
Matching, Level of Effort, Earmarking FA-414-03-02 FA-414-03-06
Procurement, Suspension and Debarment FA-466-03-02
Program Income FA-440-03-01

Reporting FA-503-03-02 FA-503-03-03 FA-503-03-04 FA-518-03-01 FA-518-03-02 FA-521-03-03 FA-533-03-01 FA-533-03-02 FA-918-03-01
Subrecipients Monitoring FA-414-03-07 FA-466-03-03
Special Tests and Provisions FA-548-03-02

Internal Control Over Compliance , The management of the 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 the internal control over compliance in accordance with OMB Circular A-133.
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 coming 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 oflaws, regulations, contracts and grants. The following reportable conditions are described in the Federal Awards Findings and Questioned Costs section of the accompanying schedule ofFindings and Questioned Costs.

C-6

Activities Allowed or Unallowed FA-466-03-01
Allowable Costs/Cost Principles FA-419-03-01 FA-419-03-02 FA-419-03-04 FA-427-03-02 FA-466-03-0 1 FA-548-03-0 1
Cash Management FA-486-03-01
Eligibility FA-414-03-03 FA-414-03-04 FA-414-03-05 FA-427-03-01 FA-427-03-06 FA-521-03-01

Eligibility (Continued) FA-521-03-02 FA-530-03-01 FA-530-03-02 FA-530-03-03 FA-548-03-02
Equipment and Real Property Management FA-414-03-01 FA-548-03-03
Matching, Level of Effort, Earmarking FA-414-03-02 FA-414-03-06 FA-427-03-05
Procurement and Suspension and Debarement FA-466-03-02

Program Income FA-440-03-01
Reporting FA-419-03-03 FA-419-03-05 FA-503-03-02 FA-503-03-04 FA-521-03-03 FA-521-03-04 FA-533-03-01 FA-533-03-02 FA-918-03-01
Subrecipients Monitoring FA-427-03-03 FA-427-03-04 FA-466-03-03
Special Tests and Provisions FA-548-03-02

A material weakness is a reportable 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 noncompliance with applicable requirements oflaws, regulations, contracts and grants caused by error or fraud 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-414-03-03, FA-419-03-01, FA-419-03-02, FA-419-03-03, FA-419-03-04, FA-419-03-05, FA-466-03-01, FA-521-03-04, FA-533-03-01 and FA-548-03-03 to be material weaknesses.
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 other than these specified parties.
Respectfully submitted,

January 7, 2005

R sell W. Hinton, 'CPA, CGFM State Auditor

C-7

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SECTIOND FINDINGS AND QuESTIONED ~

SuMMARy OF AUDITDR"S RESULTS

(This page intentionaLLy Left bLank)

Summary of Auditor's ResuLts
For the FIscal Year Ended June 30, 2003

Financial Statements

Type of auditor's report issued: Governmental Activities and Major Governmental Fund - General Fund

Disclaimer

Business-Type Activities, Aggregate Discretely Presented Component Units, Major Governmental Fund - Georgia State Financing and Investment Commission, Major Proprietary FundslEnterprise Funds: State Employees' Health Benefit Plan; Higher Education Fund; Georgia Technology Authority; Unemployment Compensation Fund and Aggregate Remaining Fund Information

Unqualified

Internal control over financial reporting:

Reportable Condition identified?

Yes

Reportable Conditions identified considered to be material weaknesses?

Yes

Noncompliance material to financial statements noted?

No

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: Medicaid Cluster and State Children's Insurance Program (CFDA 93.767)

Disclaimer

Research and Development Cluster

Scope Limitation

Highway Safety Cluster, Student Financial Aid Cluster, Higher Education Institutional Aid (CFDA 84.031), Centers for Disease Control and PreventionInvestigations and Technical Assistance (CFDA 93.283) and HIV Care Formula Grants (CFDA 93.917)

Qualified

All other major programs

Unqualified

Any audit fmdings disclosed that are required to be reported in accordance with

Circular A-133, Section .5lO(a)?

Yes

Identification of major programs:

CFDA Numbers 10.550
10.557 14.228 14.231 14.238 14.239 14.241 14.871 17.225

Name of Federal Program or Cluster Food Distribution Food Stamp Cluster Child Nutrition Cluster Special Supplemental Nutrition Program for Women, Infants, and Children Community Development Block Grants/State's Program Emergency Shelter Grants Program Shelter Plus Care HOME Investment Partnerships Program Housing Opportunities for People with AIDS Section 8 Housing Choice Vouchers Unemployment Insurance WIA Cluster Highway Safety Cluster

D-5

Georgia.
Summary of Auditor's ResuLts For the FIscaL Year Ended June 30, 2003

CFDA Numbers 39.011 66.458 66.468 81.041 81.042
84.031 84.048 84.069 84.126 84.352 84.367 93.283 93.558 93.563 93.667
93.767 93.917

Name of Federal Program or Cluster Election Reform Payments Capitalization Grants for State Revolving Funds Capitalization Grants for Drinking Water State Revolving Fund State Energy Program Weatherization Assistance for Low-Income Persons Student Financial Aid Cluster Higher Education - Institutional Aid Vocational Education - Basic Grants to States Leveraging Educational Assistance Partnership Rehabilitation Services - Vocational Rehabilitation Grants to States School Renovation Grant Improving Teacher Quality State Grants Center for Disease Control and Prevention - Investigations and Technical Assistance Temporary Assistance for Needy Families Child Support Enforcement Social Services Block Grant Medicaid Cluster State Children's Insurance Program HIV Care Formula Grants Disability Insurance/SSI Cluster Research and Development Cluster

Dollar threshold used to distinguish between Type A and Type B programs - $30,000,000.00

Auditee Qualified as low-risk auditee

No

D-6

FINANCIAL SITATE:MENT FINDINGS

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Andlngs and Questioned Costs For the FIscal Year Ended June 30, 2003

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

FINDING CONTROL NO.

ORGANIZATIONAL UNIT

PAGE NO.

ACCOUNTING CONTROLS (OVERALL)

FS-419-03-0 1

Community Health, Department of

FS-419-03-05

Community Health, Department of

FS-466GOHS-03-01

Public Safety, Department of

Governor's Office of Highway Safety

Colleges and Universities

FS-521-03-0l

Albany State University

FS-528-03-0l

Clayton College and State University

FS-533-03-0l

Fort Valley State University

BUDGET PREPARATION/EXECUTION

FS-472-03-0l

Regents of the University System of Georgia, Board of

FS-472-03-02

Regents of the University System of Georgia, Board of

CASH AND CASH EQUIVALENTS

FS-440-03-02

Labor, Department of.

FS-474-03-0l

Revenue, Department of

FS-486-03-0l

Treasury and Fiscal Services, Office of

Colleges and Universities

FS-521-03-02

Albany State University

FS-528-03-02

Clayton College and State University

Technical Colleges

FS-819-03-0l

West Georgia Technical College

FS-823-03-0l

Atlanta Technical College

FS-830-03-0l

DeKalb Technical College

INVENTORIES
FS-521-03-02 FS-528-03-02
FS-830-03-01

Colleges and Universities Albany State University Clayton College and State University
Technical Colleges DeKalb Technical College

REVENUES/RECEIVABLES/RECEIPTS

FS-419-03-03

Community Health, Department of...

FS-427-03-02

Human Resources, Department of

FS-440-03-04

Labor, Department of

FS-440-03-05

Labor, Department of

FS-474-03-02

Revenue, Department of

FS-474-03-03

Revenue, Department of

Colleges and Universities

FS-521-03-02

Albany State University

FS-528-03-02

Clayton College and State University

FS-927-03-0 1

Road and Tollway Authority, State

EXPENDITURES/LIABILITIES/DISBURSEMENTS

FS-419-03-02

Community Health, Department of

FS-419-03-04

Community Health, Department of

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findings and Questioned Costs For the Flscal Year Ended June 30. 2003

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

FINDING CONTROL NO.

ORGANIZATIONAL UNIT

PAGE NO.

FS-466GOHS-03-06
FS-466GOHS-03-07
FS-466GOHS-03-08
FS-467-03-01
FS-528-03-02
FS-823-03-01 FS-980-03-01
GENERAL LEDGER FS-427-03-02 FS-440-03-02 FS-440-03-03 FS-440-03-04 FS-440-03-05 FS-440-03-06 FS-466GOHS-03-02
FS-466GOHS-03-03
FS-466GOHS-03-04
FS-474-03-03 FS-474-03-04
FS-521-03-02 FS-52 1-03-03 FS-528-03-02 FS-528-03-04 FS-548-03-05 FS-562-03-01 FS-593-03-01
CAPITAL ASSETS FS-402-03-01 FS-414-03-02 FS-414-03-03 FS-440-03-07 FS-462-03-0 1 FS-466-03-0 1 FS-466GOHS-03-05
FS-503-03-01

Public Safety, Department of Governor's Office ofHighway Safety
Public Safety, Department of Governor's Office of Highway Safety
Public Safety, Department of Governor's Office of Highway Safety
Corrections, Department of Colleges and Universities
Clayton College and State University Technical Colleges
Atlanta Technical College Technology Authority, Georgia
Human Resources, Department of Labor, Department of. Labor, Department of Labor, Department of. Labor, Department of Labor, Department of Public Safety, Department of
Governor's Office of Highway Safety Public Safety, Department of
Governor's Office of Highway Safety Public Safety, Department of
Governor's Office of Highway Safety Revenue, Department of Revenue, Department of Colleges and Universities
Albany State University Albany State University Clayton College and State University Clayton College and State University Savannah State University Bainbridge College Skidaway Institute of Oceanography
Agriculture, Department of Education, Department of Education, Department of Labor, Department of Natural Resources, Department of Public Safety, Department of Public Safety, Department of
Governor's Office ofHighway Safety Colleges and Universities
Georgia Institute of Technology
D-I0

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Andlngs and Questioned Costs For the FIscaL Year Ended June 30, 2003

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

FINDING CONTROL NO.

ORGANIZATIONAL UNIT

PAGE NO.

FS-521-03-02 FS-528-03-02 FS-533-03-05 FS-548-03-07 FS-572-03-02 FS-575-03-01
FS-829-03-0 1 FS-830-03-0 1 FS-9I0-03-01 FS-958-03-01
FS-8764-03-01

Albany State University Clayton College and State University Fort Valley State University Savannah State University East Georgia College Gainesville College Technical Colleges Coosa Valley Technical College DeKalb Technical College Jekyll Island State Park Authority Golf Hall of Fame, Georgia Regional Educational Service Agencies Heart of Georgia Regional Educational Service Agency

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D-ll

G:org1a.========================
AndIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

DEPARTMENT OF AGRICULTURE

Finding Control Number: FS-402-o3-01 CAPITAL ASSETS Inadequate Accounting Records

Condition:

Our examination of the accounting records of the Department of Agriculture disclosed the following deficiencies in reporting capital assets:

(1) Over the years, the Department acquired certain tracts of land through donations. The Department's capital asset inventory records reports these assets at $1 or $10 rather than the estimated fair value at the acquisition date.

(2) Buildings owned by the Department are reported in the capital asset inventory listing at $34,889,647.68, net of accwnulated depreciation of $19,710,202.77. The Department failed to provide an audit trail leading to docwnentation supporting the reported amounts.

Criteria:

The State of Georgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Department's capital assets are properly maintained.

Effect:

The dollar value reported for Land appears to be understated. The amount of this misstatement cannot be determined. The amount reported for Buildings may contain misstatements; however the extent of these misstatements could not be determined.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Department's capital assets are properly accounted for and reported in accordance with the State ofGeorgia Capital Asset Guide.

DEPARTMENT OF EDUCATION

Finding Control Number: FS-414-o3-02 CAPITAL ASSETS Inadequacies in Operation of Property Management System

Condition:

Our examination included a review of the internal accounting controls used by the Department of Education in maintaining their capital asset inventory 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 Award Findings and Questioned Costs, finding control number FA-414-03-Q1.

Criteria:

The Accounting Procedures Manual for the State of Georgia (Manual), Section Three, Page 31-23 states in part: "Accurate subsidiary capital asset inventory records must be maintained. Balances and additions to the capital asset inventory records should be reconciled periodically (monthly) to the general ledger."

Cause:

Management's failure to follow capital asset accounting procedures as detailed in the Manual.

D-12

Georg1a========================
FIndings and Questioned Costs For the FIscal Year Enc:Iec:I June 30, 2003

FINANCIAL STATEMENT FINDINGS

Effect:

Failure to maintain accurate capital asset records may result in inaccurate internal management reports and resulting decisions concerning current and future capital asset needs, and possible misappropriation of assets.

Recommendation:

The Department should establish the necessary internal controls and implement procedures to ensure capital asset inventories are maintained in compliance with requirements of state law and the Manual.

Finding Control Number: FS-414-o3-03 CAPITAL ASSETS Inadequate Capital Asset Records

Condition:

Our examination of the accounting records of the Department of Education disclosed that land and buildings (net of accumulated depreciation) owned by the Department are reported in the capital asset inventory at $10,130,908.00 and $61,258,246.51, respectively. The Department failed to provide an audit trail leading to documentation supporting the reported amounts.

Criteria:

The State ofGeorgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Department's capital assets are properly maintained.

Effect:

The dollar value reported for land and buildings may contain misstatements; however, the extent of these misstatements could not be determined.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Department's capital assets are properly accounted for and reported in accordance with the State ofGeorgia Capital Asset Guide.

DEPARTMENT OF COMMUNITY HEALTH (*)

Finding Control Number: FS-419-03-01 ACCOUNTING CONTROLS (OVERALL) Conversion from Electronic Data System ("EDS") Medicaid Management Information System ("MMlS") to Affiliated Computer Services ("ACS") MultiHealth (MHN) System

Criteria:

The State of Georgia administers the Medicaid health benefit program for its citizens subject to

Federal laws and regulations. The State of Georgia has charged the Department of

Community Health the responsibility for this program and provides the Department of

Community Health with the authority to use Medicaid funds for Medicaid benefit payments (as

specified in the State of Georgia plan, Federal regulations, or an approved waiver), expenditures

for administration and training, expenditures for the State Survey and Certification Program,

and expenditures for State Medicaid Fraud Control Units. The State of Georgia plan may also

provide for case management services, managed care waivers, payment of certain health

insurance premiums for Medicare patients, payments to Disproportionate Share Hospitals, and

home and community based services, which may permit an individual from avoiding

institutionalization. The Department of Community Health is also provided with the

responsibility for the State Children's Healthcare Insurance Program ("SCRIP"), which uses

federal and state funds for assisting uninsured, low-income children.

(*) THIS ORGANIZATIONAL UNIT WAS AUDITED BY OTHER AUDITORS

D-13

Georg1a------------
Andlngs and Questioned Costs For the F1scaL Year Ended June 30.2003

FINANCIAL STATEMENT FINDINGS

Condition:

On April I, 2003 the Department of Community Health converted their MMIS of EDS to the MHN system of ACS. The MHN system is an automated infonnation system through which almost all Medicaid and SCHIP claims are processed. These claims are for payment to hospitals and other healthcare providers for the healthcare services to eligible emollees in the Medicaid and SCHIP programs. As a result of the conversion, providers were not being reimbursed in a timely manner; therefore, the Department of Community Health began to pay actual claims, supplemented by cash payments based on historical averages. During the conversion period the State also changed to nationwide standardized diagnosis codes but some of the providers had not made that change, resulting in discrepancies in claims paid. The conversion to the new MHN system also resulted in reimbursement to providers that did not correspond with the provider's billings. The conversion led to mass adjustments on millions of claims in an attempt to correct the claims processed in the early stages of implementation.

Context:

We were unable to determine the consequences of the matters associated with the Department of Community Health's system conversion due to the fact we did not complete our tests relative to these programs and operations.

Effect:

We were unable to apply audit procedures sufficient to determine the extent to which: The Department of Community Health complied with requirements of its major Federal programs; and, the financial statements of the govermnental activities and the major govermnental fund general fund may have been affected by this condition as of and for the year ended June 30, 2003.

Cause:

The failure to apply the necessary internal controls over this conversion resulted in the inability of the auditor to perfonn audit procedures in order to test the financial statements of the govermnental activities and its major govermnental fund - general fund of the Department of Community Health and its compliance with the federal program requirements. Internal controls that should have been considered necessary to ensure the proper accounting and reporting of the Department of Community Health's fmancial statements of the govermnental activities and the major govermnental fund - general fund and federal program compliance results include:

( I) providing adequate training!supervision; (2) establishing appropriate system security controls, system interfaces, and configuration
settings; (3) enforcing accountability and coordination/communication among key elements of the
system; (4) determining significant accruals and ensuring that all revenue/expenditures are properly
recorded; (5) determining that proper applications and controls are functioning as designed prior to
conversion; (6) approving the conversion's detail system by management prior to commencing the
development of the system; (7) testing the conversion data from the previous MMIS system to the MHN system to
determine if converted data met expectations; and, (8) testing of the system attributes prior to implementation to determine: (a) if the new system
works as designed; (b) what changes to policy and procedures are required; (c) adherence to the new HIPAA standards; and, (d) a proper estimate of registered providers that would be accessing the web portal.

Recommendation:

Management should develop procedures to ensure that the internal controls referred to above in the cause are implemented and appropriately monitored to provide proper accounting and reporting of the Department of Community Health's fmancial statements and federal programs.
D-14

Georg:ia-----------
FIndIngs and QuestIoned Costs For the FIscal Ye.. Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Finding Control Number: FS-419-03-02 EXPENDITURESILIABILITIESJDISBURSEMENTS Upper Payment Limit Calculation

Criteria:

Title 42 of the Code of Federal Regulations, sections 447.272 for inpatient services and 447.321 for outpatient services and nursing homes, states that the Department of Community Health is eligible to calculate Upper Payment Limit for providers that are State Government, Non-State Government and Privately owned and operated facilities. Upper Payment Limit refers to a reasonable estimate of the amount that would be paid for the services furnished by the group of facilities under Medicare payment principles.

Condition:

During the performance of our annual audit procedures, we obtained Upper Payment Limit ("UPL") calculations that were performed twice during fiscal year 2003, one in November 2002 and the other in June 2003. Through examination of the UPL calculation we noted that fourteen provider calculations for outpatient services had been performed incorrectly for both the November and June payments, which led to errors in UPL payments to the providers during fiscal year 2003. These errors led to overages in federal funds obtained.

Context:

The UPL calculations for outpatient services resulted in fourteen providers being overpaid. The Department of Community Health was able to determine the overages paid to the providers and plans to correct the error with future UPL calculations.

Effect:

The total dollar value of Upper Payment Limit calculations was overstate for the year in the amount of$1,603,902.

Cause:

The cause for this condition is substantially due to "human error". We noted incorrect usage of relevant tabular information as well as key stroke errors of the input information.

Recommendation:

Management should develop procedures to review Upper Payment Limit calculations to ensure that the calculations are being performed properly.

Finding Control Number: F8-419-03-03 REVENUESIRECEIVABLESIRECEIPTS Receivables - Other

Criteria:

The Department of Community Health's management is responsible for ensuring the accurate presentation of its financial statements and related information included in the Schedule of Expenditures of Federal Awards. Part of that responsibility is to ensure that:

reported receivables are authentic obligations owed to the Department, reported receivables include all amounts owed to the Department, and the reported allowance for doubtful accounts is adequate but not excessive.

Condition:

Upon the commencement of our audit fieldwork, the Department of Community Health provided a detail listing of receivables which included several significant amounts ultimately determined not to represent obligations owed to the Department of Community Health as of June 30, 2003. Additionally, the allowance for doubtful accounts as originally reported by the Department of Community Health was not adequate. The Department of Community Health determined adjustments were required to properly reflect receivables and the related allowance for doubtful accounts as of June 30, 2003.

D-15

Georg1a. ==================================
flndIngs and Questioned Costs For the F1scal Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

Context:

We were unable to determine the consequences of the matters associated with the Department of Community Health's receivables due to the fact we did not complete our tests relative to these accounts.

Effect:

The original detail listing of receivables totaled $556,754,527.93, which was net of an allowance for doubtful accounts of $19,357,297.90. The receivables, as determined and adjusted by the Department of Community Health, reflected a revised value of $534,654,934.88, net of an allowance for doubtful accounts of $38,970,298.67.

Cause:

The Department of Community Health did not have a system in place to support management's assertions that the receivables were complete, accurate, and properly valued.

Recommendation:

We recommend the Department of Community Health implement and maintain a system which will provide reasonable assurance that the receivables reported by the Department of Community Health represent authentic obligations owed to the Department of Community Health and the respective allowance for doubtful accounts is adequate and appropriate. The system should include internal controls which will reduce to a relatively low level the risk the Department of Community Health's receivables are materially misstated.

Finding Control Number: F8-419-o3-04 EXPENDITURESILIABILITIESIDISBURSEMENTS Accounts Payable, Accrued Liabilities and Contracts Payable

Criteria:

The Department of Community Health's management is responsible for ensuring expenditures are recorded when incurred and measurable, and its financial statements and the related information included in the Schedule of Expenditures of Federal Awards is accurate. This would include recognizing the expenditures and liabilities for costs associated with the receipt of goods or services.

Condition:

Upon the commencement of our audit fieldwork, the Department of Community Health provided detail listing of accounts payable, accrued liabilities and contracts payable which did not include several significant amounts ultimately determined to represent obligations owed by the Department of Community Health as of June 30, 2003. The Department of Community Health determined adjustments were required to properly reflect obligations payable as of June 30,2003.

Context:

See Effect as noted below:

Effect:

The original detail listing of accounts payable, accrued liabilities and contracts payable totaled $102,259,058.28. These accounts, as determined and adjusted by the Department of Community Health, reflected a revised amount of $167,191,007.32 as reflected in the basic financial statements.

Cause:

The Department of Community Health did not have a system in place to support management's assertions that the accounts payable, accrued liabilities and contracts payable were complete, accurate, and properly valued.

Recommendation:

We recommend the Department of Community Health implement and maintain a system which will provide reasonable assurance the accounts payable, accrued liabilities and contracts payable reported by the Department of Community Health represent a complete and accurate listing of obligations owed by the Department of Community Health. The system should include internal controls, which will reduce to a relatively low level the risk the Department of Community Health's obligations are materially misstated.

D-16

Georg1.B.========================
AndIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Finding Control Number: FS -419-03-05 ACCOUNTING CONTROLS (OVERALL) Segregation of Duties

Criteria:

The Department of Community Health's management is responsible for designing and maintaining internal controls, which provide proper segregation of duties. Such internal controls would limit anyone individual's access to both physical assets and the related accounting records.

Condition:

During our fieldwork, we noted a lack of segregation of duties. Certain individuals within the Department of Community Health have the ability to access and perform the following functions relating to general ledger and cash operations, which are considered incompatible:

perform all journal entry functions including posting and unposting, approve journal entries and transactions for recording in the general ledger, approve changes in authority of wire transfers, and are authorized check signors or have wire transfer authority.

Context:

See Condition as noted above:

Effect:

Transactions could be mishandled and not detected in a timely manner.

Cause:

The Department of Community Health's management did not have internal controls in place and functioning to provide for adequate segregation of duties.

Recommendation:

Duties should be separated as much as possible, and alternative controls should be used to compensate for any lack of separation of duties. Authorized check signors should not have access to incompatible functions within the Department of Community Health, such as performing and approving fmancial transactions.

DEPARTMENT OF HUMAN RESOURCES

Finding Control Number: F8-427-o3-02 REVENUESIRECENABLESIRECEIPTS GENERAL LEDGER Inadequate Accounting Procedures

Condition:

Our examination included a review of the internal accounting controls and accounting procedures utilized by the Department of Human Resources in recording their Federal Program activity. The following deficiencies were noted:

Federal grant awards were not recorded on the General Ledger in a timely manner. A review of 222 grant awards revealed that 23 grant awards were not recorded on the general ledger for at least 30 days after receipt of the grant. This review also revealed that 8 of these 23 grant awards were not recorded on the general ledger for at least 60 days after receipt of the award.

A review of the general ledger for the Federal Programs at the program level revealed that many of these programs had negative account receivable balances, negative account payable balances and negative fund balances. Subsequent to the end of the fiscal year, Department of Human Resources personnel did an analysis of the negative fund balances and provided an audit adjustment to correct these negative balances at the program level.

D-17

GeorgUl.======================
F1ncIIngs and Questioned Costs For the F1scal Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

Criteria:

Grants awards should be recorded on the General Ledger in a timely manner. Account balances within the program codes of the general ledger should be correctly stated.

Cause:

These deficiencies were a result of the Department's failure to record federal grant awards and to adequately monitor the program codes within the general ledger in a timely manner.

Effect:

Failure to adequately monitor the program codes within the general ledger could affect the proper recording of Federal program revenues (and expenditures) which could result in misstatements within the financial statements. In addition, this condition could result in the Department of Hwnan Resources not requesting reimbursement of Federal funds on a timely basis.

Recommendation:

The Department should establish policies and procedures to ensure the timely recording of grant awards. The Department should also establish procedures to ensure that all federal revenues earned are recorded and that account balances within the program codes are correctly stated.

DEPARTMENT OF LABOR

Finding Control Number: FS-440-03-02 CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Accounting Procedures

Condition:

Our examination of the accounting procedures of the Department of Labor noted that procedures were inadequate to ensure that all cash accounts are maintained on the Department's general ledger. Certain accounts of the Division of Rehabilitation Services, which were transferred from the Georgia Department of Human Resources effective July 1, 2001, were never recorded. There were seventeen of these accounts totaling $2,320,996.48.

Criteria:

The Accounting Procedures Manual for the State of Georgia, Section Three, page 3-1-3, states, in part, that "Cash must be accounted for in accordance with generally accepted accounting principles (GAAP)."

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that all of the Department's cash accounts are properly maintained on the general ledger. In addition, poor communication between the Department and the Georgia Department of Human Resources contnbuted to the failure to record certain of these accounts.

Effect:

The cash balance per the general ledger is misstated.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Department's cash accounts are properly accounted for and reported in accordance with the Accounting Procedures Manual for the State ofGeorgia.

D-18

~ia.------------
FIndtngs and Questioned Costs
For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Finding Control Number: FS-440-03-03 GENERAL LEDGER Inadequate Accounting Procedures

Condition:

The accounting procedures of the Department of Labor were insufficient to provide for adequate controls over the Department's general ledger. Our examination of the general ledger disclosed that the Department failed to provide for adequate fund and program accountability as follows:

(I) The "A" and "B" Budget Unit general ledgers, as presented for audit, were out of balance by equal and offsetting amounts.

(2) The Department failed to provide an analysis of fund balance adjustments, which included material journal entries to the program level ledgers to correct for prior year errors.

(3) After the close of the fiscal year, several program level ledgers were incorrect or out of balance requiring numerous post-closing adjusting journal entries to reflect the overall fmancial status of the Department and determine surplus.

Criteria:

In accordance with the Accounting Procedures Manual for the State of Georgia, Section Two, pages 2-5-1 and 2-6-4, the Department is required to maintain their general ledger in such a manner as to provide for individual fund accountability for each budget unit included in the annual Appropriations Act passed by the General Assembly of Georgia as well as to provide for separate program accountability within each budget unit.

Cause:

These deficiencies were caused by a lack of control and accountability over the general ledger.

Effect:

The conditions noted above resulted in a net adjustment in the amount of $20,470,679.47 to the agency's fund equity section of the report. In addition, extensive procedures were required to determine ending balances of various State and Federal programs as of June 30, 2003 as well as determine state surplus.

Recommendation:

The Department should ensure that the general ledger is maintained in accordance with the Accounting Procedures Manual for the State of Georgia and that the general ledger is reconciled with subsidiary ledgers as a routine matter with any variances noted and resolved in a timely manner.

Finding Control Number: FS-440-03-04 REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Accounting Procedures

Condition:

The Department of Labor acts as a lessor of property and parking lot space adjacent to the Department's main office building located in Atlanta, Georgia. The following deficiencies exist with regard to the Department's management controls over lease agreements:

(I) Written notice of renewal and assignment documents were missing.

(2) Based on terms of the lease agreements, incorrect amounts were billed and collected.

Criteria:

All required documents must be present and signed by appropriate parties to be legally enforceable. The Department is responsible to see that the correct amount of rent is collected in a timely manner, and that late payment penalty fees are added when rent payments are late.

D-19

Georgia========================
FIndIngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Department bills and collects rents due according to terms of the lease agreements.

Effect:

Incorrect rents were collected and late payment penalty fees were never billed.

Recommendation:

Management should develop policies and procedures to ensure that required signed documents are on file, and that rents due and payable are collected according to terms of the lease agreements.

Finding Control Number: FS-440-03-05 REVENUESffiECEIVABLESffiECEWTS GENERAL LEDGER Inadequate Accounting Procedures

Condition:

The accounting procedures of the Department of Labor were insufficient to provide for adequate internal controls over the recognition of revenue within the Department's general ledger.

The Department uses the FARS accounting system, which can be programmed to recognize revenue within the various programs (fund ledgers) based on expenditures recorded within a particular fund ledger. This feature is appropriate for recognizing revenue for reimbursement based funding sources such as Federal grants, but would not be appropriate in instances where funding does not depend entirely on the recording of expenditures. Our testing of the internal accounting controls and procedures utilized by the Department for the revenue recognition process disclosed that during fiscal year 2003, the Department utilized the above programming feature for revenue recognition for both reimbursement based funding sources and nonreimbursement based funding sources. In addition, adjustments were made directly to accounts receivable accounts without reconciling to the subsidiary records, which resulted in the general ledger not being supported by subsidiary records.

Criteria:

In accordance with the Accounting Procedures Manual for the State of Georgia, Section Three, pages 3-5-4 and 3-5-9, revenue for expenditure-driven grants should be recorded when qualifying expenditures have been incurred and, in general, other revenues should be recognized when measurable and available.

In addition, general ledger accounts receivable accounts should be reconciled to subsidiary records on a monthly basis.

Cause:

These deficiencies occurred because of management's failure to establish procedures to analyze and reconcile balances recorded in the general ledger with detailed supporting records.

Effect:

As a result of the revenue recognition deficiency, certain revenue accounts, as well as associated balance sheet accounts, were rnaterially misstated as of June 30, 2003. Adjusting journal entries to correct certain of these misstatements were provided by the Department. However, a misstatement in the amount of $715,254.45 remained after the adjustments. In addition, subsidiary accounts receivable records did not agree with the general ledger in the amount of $161,441.51 as a result of the Department's failure to update subsidiary records.

Recommendation:

The Department should establish procedures to ensure that revenue and accounts receivables are recorded as appropriate for the revenue source. In addition, the Department should ensure that accounts receivable are posted, balanced and reviewed on a monthly basis and that detailed records supporting the general ledger are complete, accurate and reliable.

D-20

G:org1a-----------
RndIngs and Questioned Costs For the AscaL Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Finding Control Number: FS-440-03-06 GENERAL LEDGER Ending Balance in Balance Sheet Clearing Account

Condition:

Our review of the general ledger balance sheet clearing accounts revealed that one clearing account contained a balance at June 30, 2003.

Criteria:

In accordance with the Accounting Procedures Manual for the State of Georgia, Section Three, page 3-4-1, clearing accounts have been provided in the State Chart of Accounts to facilitate the accumulation of transactions, which are subsequently distributed to appropriate accounts. At fiscal year end, no balances should remain in the clearing accounts.

Cause:

This deficiency was a result of management's failure to ensure that all clearing account balances were properly distributed to appropriate accounts on the general ledger.

Effect:

Balances remaining in these accounts at fiscal year end can misstate the financial statements of the Department and can lead to erroneous decisions by the Department's management.

Recommendation:

The Department should ensure that clearing account balances have been distributed to the appropriate accounts at the end of each accounting period and that no balances remain in the clearing accounts at fiscal year end in accordance with the Accounting Procedures Manual for the State ofGeorgia.

Finding Control Number: FS-440-03-07 CAPITAL ASSETS Inadequacies in Operations of Facilities Management System

Condition:

Our examination of the accounting records of the Department of Labor disclosed that the Department failed to maintain records necessary to report land and buildings separately and to depreciate the buildings. In addition, the Department of Labor has not recorded the land and buildings of the Division of Rehabilitation Services, which was transferred from the Department of Human Resources effective July 1, 2001, on the capital asset records.

Criteria:

The State of Georgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Department's capital assets are properly maintained. In addition, poor communication between the Department and the Georgia Department of Human Resources contributed to the failure to record certain of the unrecorded capital assets.

Effect:

Capital Assets reported by the Department appear to be understated. The amount of this misstatement cannot be determined.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Department's capital assets are properly accounted for and reported in accordance with the State ofGeorgia Capital Asset Guide.

D-21

~ia.================================
findings and Questioned Costs For the FIscaL Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

DEPARTMENT OF NATURAL RESOURCES

Finding Control Number: FS-462-o3-01 CAPITAL ASSETS Lack of Adequate Records for Land, Buildings and Related Accumulated Depreciation

Condition:

Our examination of the accounting records of the Department of Natural Resources disclosed the following deficiency:

Land owned by the Department is reported in the capital asset inventory at $335,952,960.31. Buildings and related accumulated depreciation owned by the Department are reported in the capital asset inventory at $52,449,873.68 and $33,569,340.00, respectively. The Department failed to provide an adequate audit trail leading to documentation supporting the reported amounts.

Criteria:

The State of Georgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Department's capital assets for land, buildings and related accumulated depreciation are properly maintained.

Effect:

The dollar value reported for land, buildings and related accumulated depreciation may contain misstatements; however, the extent of these misstatements could not be determined.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Department's capital assets for land, buildings and related accumulated depreciation are properly accounted for and reported in accordance with the State of Georgia Capital Asset Guide.

DEPARTMENT OF PUBLIC SAFETY

Finding Control Number: FS-466-03-01 CAPITAL ASSETS Inadequate Capital Asset Records

Condition:

Our examination of the accounting records of the Department of Public Safety disclosed the following deficiencies:

(1) Land owned by the Department is reported in the capital asset inventory at $6,910,133.91. Buildings owned by the Department of Public Safety are reported in the capital asset inventory at $67,228,991.54, net of accumulated depreciation of $12,193,876.75. The Department failed to provide an audit trail leading to documentation supporting the reported amounts.

(2) The vehicle portion of machinery and equipment owned by the Department are reported in the capital asset inventory at $24,141,758.47. The Department failed to provide an audit trail leading to the documentation accurately supporting the depreciation of the vehicle portion of machinery and equipment.

D-22

Georg1B.=================================
FIndIngs and Questioned Costs For the F1scal Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

Criteria:

The State of Georgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Department's capital assets are properly maintained.

Effect:

The dollar value reported for land, buildings and related depreciation, and depreciation for vehicles rnay contain misstatements; however, the extent of these misstatements could not be determined.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Department's capital assets and accumulated depreciation are properly accounted for and reported in accordance with the State of Georgia Capital Asset Guide.

DEPARTMENT OF PUBLIC SAFETY Governor's Office of Highway Safety

Finding Control Number: FS-466GOH8-03-01 ACCOUNTING CONTROLS (OVERALL) Deficiencies in Internal Control

Condition:

During the performance of our audit procedures, we observed deficiencies in the internal control system as follows:
-requests for proposals (RFP) requirements were not followed in the awarding of grants and contracts
-improper separation of duties in the reconciliation of bank accounts and purchase procedures
-written procedures for the following controls do not exist: -management override of internal controls -purchasing -personnel access to data, assets, and computer programs -transaction authorization -changes to computer programs -new vendor verification process was not performed -purchase orders and requisitions are not pre-numbered -purchase orders and requisitions are not always used when required -cancelled checks are not examined for proper payee, endorsement, or date -duplicate invoices received are not destroyed.

Criteria:

The State of Georgia Accounting Procedures Manual, Section V, Page 5-1-2 states in part: "Each state organization is responsible for adopting an internal control framework that is suitable for the type of service they provide Each state organization has a responsibility to assess their internal control system and use this information to design, implement, and monitor internal controls that are suitable for their organization."

Cause:

Management failure to comply with provisions of the State of Georgia Accounting Procedures Manual.

Effect:

Violation of state accounting procedures that might result in misappropriation of assets.

D-23

Georgia.=============================
FIndIngs and Questioned Costs
For the FlscaL Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Recommendation:

Engage the services of a professional for a complete study and evaluation of internal control. Implement recommendations and establish formal written policies and procedures to ensure adequate system maintenance.

Finding Control Number: FS-466GOHS-03-o2 GENERAL LEDGER Ending Balances in Balance Sheet Clearing Accounts

Condition:

Our examination revealed that, at two of the three years-end under review, the Office's general ledger balance sheet clearing accounts contained ending balances.

Criteria:

The State of Georgia Accounting Procedures Manual, Section II provides for clearing accounts in the State Chart of Accounts to facilitate the accumulation of transactions, which are subsequently distributed to appropriate accounts. At year-end, no balances should remain in the clearing accounts.

Cause:

Management failure to monitor the clearing accounts, and use them as prescribed in the State of Georgia Accounting Procedures Manual.

Effect:

Possible material misstatement of general ledger accounts leading to erroneous decisions by the Office's management and the State of Georgia executive decision makers.

Recommendation:

Ensure that clearing accounts have been distributed to appropriate accounts at the end of each accounting period, and that no balances remain in the clearing accounts at year-end.

Finding Control Number: FS-466GOH8-03-o3 GENERAL LEDGER Inadequate Accounting Procedures

Condition:

A review of the general ledger for the federal programs at the program level revealed that many had negative (credit) accounts receivable balances, and positive (debit) accounts payable and fund balance account balances at year-end.

Criteria:

Normal account balances are defined in accounting procedures as a debit for accounts receivable, and a credit for accounts payable and fund balance.

Cause:

These deficiencies were a result of the Office's failure to monitor federal program codes within the general ledger in a timely manner.

Effect:

Failure to monitor federal program codes within the general ledger in a timely manner could affect the proper recording of revenue and expenditures, resulting in financial statement misstatements.

Recommendation:

The Governor's Office of Highway Safety should review current policies and procedures regarding federal grant general ledgers to ensure adequate and accurate recording of transactions, and that account balances are properly stated.

Finding Control Number: FS-466GOH8-03-o4 GENERAL LEDGER Inadequate Accounting Procedures

Condition:

Accounting procedures of the Governor's Office of Highway Safety were insufficient to provide adequate internal controls over the general ledger accounts.

D-24

Georg1a------------
RncIJngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Criteria:

The State of Georgia Accounting Procedures Manual Section I, page 1-9-1 states in part: "State organizations included within the Appropriations Act must prepare financial statements in confonnity with the State's budgetary policy and procedures... " Accurate financial statements necessitate accurate general ledger account balances.

Cause:

On a monthly basis, the general ledger was not reviewed at the agency level to ensure accurate account balances. Audit adjustments were necessary to correctly reflect the status of the Office's fund balance at each year-end.

Effect:

Failure to maintain accurate general ledger account balances may result in inaccurate financial statements possibly leading to erroneous management decisions. Failure to produce accurate fmancial statements is a violation of the State ofGeorgia Accounting Procedures Manual.

Recommendation:

The Office should establish appropriate procedures to ensure that general ledger accounts are posted, balanced, reconciled if necessary, and reviewed on a monthly basis, and that detailed records supporting general ledger account balances are complete, accurate and reliable.

Finding Control Number: F8-466GOHS-03-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System

Condition:

Capital asset accounting procedures of the Office do not include monthly reconciliations of either beginning to ending inventory balances, or additions per inventory to purchases per general ledger.

Criteria:

The State of Georgia Accounting Procedures Manual, Section III, Page 3-1-23 states in part: "Accurate subsidiary capital asset inventory records must be maintained. Balances and additions to the capital assets inventory records should be reconciled periodically (monthly) to the general ledger. "

Cause:

Management failure to follow capital asset accounting procedures as detailed in the State of Georgia Accounting Procedures Manual.

Effect:

Failure to maintain accurate capital asset records may result in inaccurate internal management reports and resulting decisions concerning current and future fixed asset needs, and possible misappropriation of assets.

Recommendation:

The Office should establish the necessary internal controls, and implement procedures to ensure capital asset inventories are maintained in compliance with requirements of state law and the State ofGeorgia Accounting Procedures Manual.

Finding Control Number: F8-466GOHS-03-06 EXPENDITURESILIABILITIESIDISBURSEMENTS Exceptions Related to Expenditure Sampling

Condition:

Our review included an examination of documentation over the four-year period involving administrative expenditures. We tested a total of 791 voucher packages for compliance with the provisions of the State of Georgia Accounting Procedures Manual. Following are exceptions found in that test work:

D-25

Georg1B..=========================
findings and Questioned Costs For the Flscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

-Missing Original Documentation

111

-Travel did not Involve Employees

7

-Not Approved for Funding by an Authorizing Official 76

-Documentation not Cancelled

37

-Purpose of Travel not Documented

7

-No Evidence of Receipt of Goods or Service

52

-Missing Documentation

24

-Inadequate Documentation

335

Criteria:

The State of Georgia Accounting Procedures Manual, Section V, Page 5-4-2 states in part: "Documentation involves preserving evidence to substantiate a decision, event, transaction or system. All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations, and assist in analyzing operations."

Cause:

These exceptions were due to the failure of management to enforce documentation guidelines as established for state agencies.

Effect:

Possible misappropriation of assets, inaccurate decisions regarding current and future purchasing decisions, lack of required information for reporting both to state and federal agencies.

Reconunendation:

The Governor's Office of Highway Safety should establish controls to ensure compliance with documentation guidelines, and adequate audit trail information for every expenditure transaction.

Finding Control Number: FS-466GOH8-03-07 EXPENDITURESILIABILITIESIDISBURSEMENTS Exceptions Related to Expenditure Sampling

Condition:

Our review included an examination of documentation over the four-year period involving contract and sub-grant expenditures. We tested a total of 112 contracts and sub-grants for compliance with the provisions of the State of Georgia Accounting Procedures Manual. Following are exceptions found in that test work:

-Missing Claim for Reimbursement

64

-Missing Cost Category Detail

21

-No Supporting Documentation

23

-Payments not Authorized by an Appropriate Official 82

-Inadequate Documentation

106

-No On-Site Monitoring

81

Criteria:

The State of Georgia Accounting Procedures Manual, Section V, Page 5-4-2 states in part: "Documentation involves preserving evidence to substantiate a decision, event, transaction or system. All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations, and assist in analyzing operations."

Cause:

These exceptions were due to the failure of management to enforce documentation guidelines as established for state agencies.

Effect:

Possible misappropriation of assets, inaccurate decisions regarding current and future decisions involving contracts and sub-grants, lack of required information for reporting both to state and federal agencies.
D-26

Georg1a------------
findings and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Recommendation:

The Governor's Office of Highway Safety should establish controls to ensure compliance with documentation guidelines, and adequate audit trail information for every contract and sub-grant expenditure transaction.

Finding Control Number: FS-466GOHS-03-08 EXPENDITURESILIABILITIESIDISBURSEMENTS Exceptions Related to Expenditure Sampling

Condition:

Our review included an examination of documentation over the four-year period involving state purchasing card transactions. We tested a total of 37 monthly credit card statements for compliance with the above sources. Following are exceptions found in that test work:

-Purchases ofItems not Allowed

176

-Circumvented Single Transaction Dollar Limit

1

Criteria:

The State of Georgia Accounting Procedures Manual, Section V, Page 5-4-2 states in part: "Documentation involves preserving evidence to substantiate a decision, event, transaction or system All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations, and assist in analyzing operations." In addition, the Governor's Office of Highway Safety Purchasing Card Policies and Procedures Manual limits purchasing card transactions to that involving supplies, materials, and equipment. The manual also prohibits purchases involving services, travel, cash advances, fuel, and vehicle repair. Further, the Department of Administrative Services contract with the Bank of America to service state purchasing card transactions limits a single transaction to $5,000.00.

Cause:

These exceptions were due to the failure of management to enforce documentation guidelines as established for state agencies.

Effect:

Possible misappropriation of assets, inaccurate decisions regarding current and future purchasing card decisions, lack of required information for reporting both to state and federal agencies.

Recommendation:

The Governor's Office of Highway Safety should establish controls to ensure compliance with documentation guidelines, and adequate audit trail information for every purchasing card
expenditure transaction.

DEPARTMENT OF CORRECTIONS

Finding Control Number: FS-467-03-01 EXPENDITURESILIABILITIESIDISBURSEMENTS Questionable Travel Expenses

Condition:

Our examination of travel expenses revealed that an employee had submitted questionable documentation for reimbursement oflodging expenses.

Criteria:

Chapter 4 of the State of Georgia - Statewide Travel Regulations states, in part, that "Employees requesting reimbursement for lodging expenses are required to submit receipts with their expense statements."

Cause:

Motel receipts submitted by the employee for reimbursement were determined to be substitutes for the original receipts issued by the motel.

D-27

Georg1a.====================~
Rndings and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Effect:

This resulted in the Department paying travel expenses in excess of actual expenses incurred by the employee.

Recommendation:

The Department tenninated the employee. The Department should review their approval process to determine if additional training or changes to the approval process are needed to strengthen controls over travel expenses.

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA

Finding Control Number F8-472-03-01 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Resident Instruction, "A" Budget

Condition:

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 $3,882,909,912.00. A comparison of anticipated funds available and expenditures by object class indicates that the Office of Minority Business Enterprise object class was overspent by $141,394.70.

Criteria:

Section 62 of the Amended Appropriations Act of 2002-2003 provides that the State Auditor shall make a report to the Appropriations Committees of the Senate and House of Representatives of all instances where expenditures by object class exceed the authorized budgeted amount.

Cause:

This overexpenditure was a result of the failure of units of the University System to adhere to their authorized budget authority.

Effect:

Failure to monitor the expenditure of funds in comparison to the budgeted amounts resulted in a violation of Section 62 of the Amended Appropriations Act of 2002-2003.

Recommendation:

Units of the University System should closely monitor their internal control procedures over budget operations to prevent expenditure of funds in excess of budget approval.

Finding Control Number F8-472-03-02 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Regents Central Office and Other Organized Activities, "B" Budget

Condition:

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 $470,922,782.00. A comparison of anticipated funds available and expenditures by object class indicates that the following object classes were overspent by the amounts indicated below:

Agricultural Research

$2,805.45

Capital Outlay

$5,990,759.19

Criteria:

Section 62 of the Amended Appropriations Act of 2002-2003 provides that the State Auditor shall make a report to the Appropriations Committees of the Senate and House of Representatives of all instances where expenditures by object class exceed the authorized budgeted amount.

D-28

Gorg18..------------
Rnclings and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Cause:

These overexpenditures were a result of the failure of the Administrative Central Office and units of the University System to adhere to their authorized budget authority.

Effect:

Failure to monitor the expenditure of funds in comparison to the budgeted amounts resulted in a violation of Section 62 of the Amended Appropriations Act of2002-2003.

Recommendation:

The Administrative Central Office and units of the University System should closely monitor their internal control procedures over budget operations to prevent expenditure of funds in excess of budget approval.

DEPARTMENT OF REVENUE

Finding Control Number: FS-474-03-01 CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures

Condition:

The Department of Revenue did not perform adequate bank reconciliation procedures on the Income Tax - Control Disbursement Account. General ledger reconciling items in the amount of $8,991,331.53 and bank reconciling items in the amount of $13,670,080.76 were not adequately identified. Also, reconciling items identified during the bank reconciliation process were not corrected in a timely manner.

Criteria:

Good internal control practices dictate that bank reconciliations are performed and adjustments are identified and corrected in a timely manner. Completed reconciliations should also be subjected to an independent supervisory review to ensure accuracy and completeness.

Cause:

These deficiencies were the result of the Department's failure to adequately manage and monitor the Income Tax - Control Disbursement Account.

Effect:

The cash balance per the general ledger for the Income Tax - Control Disbursement Account is misstated. Due to the age of some of the bank reconciling items, the bank may be unwilling to correct certain errors causing the general ledger balance to be further misstated.

Recommendation:

The Department of Revenue should implement additional policies and procedures to properly reconcile the Income Tax - Control Disbursement Account and follow up on all reconciling items with the bank or post documented adjustments to the general ledger.

Finding Control Number: FS-474-03-02 REVENUESIRECEIVABLESIRECEIPTS Deficiencies in the Income Tax Division Subsidiary Records

Condition:

The Income Tax Division of the Department of Revenue does not adequately track data received from companies and individuals concerning taxpayer wages, income tax withholdings or estimated payments of Georgia income tax.

Criteria:

The Accounting Procedures Manual for the State of Georgia, Section Five, page 5-6-4 provides that management should establish policies and procedures to enable management to monitor the reliability of reporting systems. Such policies and procedures should include periodic review of reports to ensure data are accurate, reliable, and measuring the appropriate things, as well as, integrating or reconciling information used to manage operations with data generated by the financial reporting system.

D-29

Gorgia.-------------
F1ncIIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Cause:

These deficiencies were the result of management's failure to design and implement needed procedures, programs or systems.

Effect:

The Income Tax Division cannot ensure, in all cases, that the withholding amount claimed by the taxpayer on the annual income tax return is accurate or that all known taxable income is reported as income.

Recommendation:

The Department of Revenue 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.

Finding Control Number: FS-474-03-03 REVENUESIRECEIVABLESIRECEIPTS GENERAL LEDGER Deficiencies in Sales Tax Division Subsidiary Records

Condition:

Subsidiary records and ledgers maintained by the Sales Tax Division are not reconciled to the general ledger maintained by Central Accounting. Accounting period cutoffs between the two sets of records are not consistent.

Criteria:

The general ledger maintained by Central Accounting should be reconciled to the records maintained by the Sales Tax Division on a monthly basis.

Cause:

These deficiencies were the result of management's failure to implement procedures whereby subsidiary records and ledgers are reconciled to the general ledger maintained by Central Accounting. Management also has failed to acknowledge that the records maintained by the Sales Tax Division constitute subsidiary records of the official general ledger. Management has failed to set consistent cutoffs for the Department to be adhered to by the division.

Effect:

Amounts recorded by the Sales Tax Division are not consistently reconciled to the general ledger resulting in potential misstatements of tax collection amounts and incorrect distributions to local governments.

Recommendation:

The Department of Revenue should implement procedures whereby subsidiary records and/or ledgers are reconciled monthly to the general ledger maintained by Central Accounting. Procedures should also be implemented to reconcile records maintained internally within the division to ensure that no computational or posting errors have occurred.

Finding Control Number: FS-474-03-04 GENERAL LEDGER Undocumented Adjustments to Clearing Accounts

Condition:

The Department of Revenue posted a significant journal entry at year end to zero out Clearing Account balances by program in the Revenue Collections Fund. The documentation provided was not adequate to support the journal entry. Sufficient review was not made to determine why the balance remained in the Clearing Accounts.

Criteria:

The Accounting Procedures Manual for the State of Georgia, Section Five, pages 5-4-2 and 3 state, in part, as follows:

"Documentation - involves preserving evidence to substantiate a decision, event, transaction, or system. All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations, and assist in analyzing operations... Documentation
D-30

~:iB.-----------
FlndIngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

of transactions should enable managers to trace each transaction from its inception through its completion. This means the entire life cycle of the transaction should be recorded, including initiation and authorization, processing, and final classification..."

Cause:

These deficiencies were the result of management's failure to monitor the general ledger by program and to implement adequate policies and procedures to ensure that sufficient documentation was maintained for all transactions.

Effect:

Posting errors could occur within the general ledger based on transactions with insufficient documentation and differences could occur between the Department of Revenue and amounts reported to the Office of Treasury and Fiscal Services by tax type.

Recommendation:

The Department of Revenue should implement additional policies and procedures to monitor the general ledger by program to ensure that all transactions are adequately documented.

OFFICE OF TREASURY AND FISCAL SERVICES

Finding Control Number: Fs-486-03-01 CASH AND CASH EQUIVALENTS Uncollateralized Deposits

Condition:

The Office of Treasury and Fiscal Services failed to have all of its Certificate of Deposit balances fully collateralized. Four of seventeen fmancial institutions holding Certificates of Deposit failed to maintain sufficient collateral.

Criteria:

The Official Code of Georgia Annotated Section 50-17-59 states in part, as follows:

"The director cannot have on deposit at anyone time in any of the depositories for a time longer than ten days a sum of money belonging to the state under a contract with the depository providing for the payment of interest by a depository which has not given a bond to the state in the amount as determined by the board... "

Cause:

The Office of Treasury and Fiscal Services failed to adequately monitor the collateralization of Certificate of Deposit balances.

Effect:

A loss could be incurred by the Office of Treasury and Fiscal Services for the uncollateralized deposits.

Recommendation:

The Office of Treasury and Fiscal Services should implement additional procedures to monitor the collateralization of Certificate of Deposit balances to ensure compliance at all times with State Laws governing deposits and investments. Written confirmation of collateral should be provided and checked against the collateral provided.

GEORGIA INSTITUTE OF TECHNOLOGY

Finding Control Number: F8-S03-o3-01 CAPITAL ASSETS Inadequate Capital Asset Records

Condition:

The accounting procedures of the Institute were insufficient to provide adequate controls over Capital Assets.

D-31

Georg1.a.=======================
FindIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Criteria:

The Institute should maintain its Capital Asset records in accordance with the Board of Regents Capital Asset Guide for the University System of Georgia. Property management records should be maintained such that additions and deletions are properly recorded, adequate documentation is available supporting deletions and transfers, and subsidiary Capital Asset module information supports balances reported in the Institute's general ledger and financial statements.

Information:

Audit sampling and other procedures were utilized to verify the validity and accuracy of the equipment inventory records as presented for audit. An equipment inventory sample of one hundred fifty (150) items was randomly selected from the subsidiary equipment inventory records. Thirty (30) equipment items reported by the Institute as having been deleted or disposed of during the fiscal year were also selected for testing. Additionally, the listing of small value deletions was tested to verify that items meeting the capitalization threshold, having a value of $5,000 or greater, were not deleted. The results of our testing disclosed the following:

(1) Two items from our equipment sample were found to be exceptions. One item could not be located. A second item was on the Institute's Capital Asset records but was an equipment item that belonged to the Institute's Research Foundation.

(2) Twenty two (22) items could not be located to the physical location indicated on the property management system.

(3) Adequate documentation could not be provided for two (2) items reported as being disposed ofby the institution.

(4) Three (3) items were deleted incorrectly as part of small value deletions. These items had values greater than $5,000 each.

Cause:

Institute management had failed to implement satisfactory controls to properly account for and track equipment inventory additions and deletions.

Effect:

Without satisfactory accounting controls and procedures in place, the Institute could place itself in a position where potential misappropriation of assets could occur.

Recommendations:

The Institute should establish procedures and controls to strengthen internal accounting controls over Capital Assets and to ensure that reconciliations are performed on a timely basis.

ALBANY STATE UNIVERSITY

Finding Control Number: FS-521-03-01 ACCOUNTING CONTROLS (OVERALL) Inadequate Closing Procedures

Condition:

The accounting procedures of the University were insufficient to provide adequate control over the final closing of the GeorgiaFIRST accounting system for the year ended June 30, 2003.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its financial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (O.C.G.A.).

D-32

Georg1B..-----------------
Rndlngs and Questioned Costs For the FIscal Year Endec:l June 30, 2003

FINANCIAL STATEMENT FINDINGS

Infonnation:

During fiscal year 2002, the Board of Regents of the University System of Georgia converted units of the University System from the College University Financial Accounting (CUFA) legacy system to the new GeorgiaFIRST System (Financial, Infonnation and Reporting Systems for Tomorrow). In February of 2002, Albany State University placed this accounting system into production.

The management of Albany State University is responsible for implementing procedures to establish and maintain adequate control over the operation, utilization, and integrity of their data processed with the GeorgiaFIRST System. We encountered problems with the financial data presented by the University. The University's failure to establish and adhere to a final closing for the year ended June 30, 2003, created a situation where data presented for audit was not complete.

Cause:

The University failed to implement satisfactory controls to establish and adhere to a final closing date.

Effect:

Without satisfactory accounting controls and procedures in place, the University placed itself in a position where potential misrepresentation of financial activities could occur. In addition, the lack of controls could impact the reporting of its fmancial position and results of operations.

Recommendation:

To reduce the risk of reporting incomplete infonnation, the University should work with the Board of Regents Central Office to develop procedures that will result in complete reporting of all fmancial data in a more efficient and timely manner.

Finding Control Number: FS-521-03-02 CASH AND CASH EQUIVALENTS INVENTORIES REVENUESJRECEIVABLESJRECEIPTS GENERAL LEDGER CAPITAL ASSETS Inadequate Accounting Procedures

Condition:

The accounting procedures of the University were insufficient to provide for adequate controls over (1) Cash and Cash Equivalents; (2) Revenues/ ReceivableslReceipts; (3) Inventories; and (4) Capital Assets.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its fmancial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (O.e.G.A.).

Information:

We noted the following weaknesses/deficiencies relating to various control categories:

(1) Cash and Cash Equivalents

(a) Bank reconciliations for the operating account were not properly completed for any month during the year under review. Review of the bank reconciliation for June 30, 2003 noted that amounts recorded on the bank reconciliation for outstanding checks and deposits did not agree to the outstanding listings.

D-33

Gex-gia.----------
AndIngs and QuestIoned Costs For the Ascal Year Ended June 30, 2003
FINANCIAL STATEMENT FINDINGS
The general ledger balance recorded on the bank reconciliation did not agree to the general ledger amount recorded on the GeorgiaFIRST accounting system
At June 30, 2003, an unidentified variance of $863,074.78 existed between the University's general operating bank account and the amount reported on the general ledger. Due to the condition of the accounting records and the lack of any properly completed bank reconciliations for the year, the auditors were unable to perform audit procedures necessary to properly identify the reconciling items for this account.
(b) Subsidiary records for petty cash accounts did not agree to general ledger balances. An unidentified variance of$822.36 existed at June 30, 2003.
(c) No subsidiary records were provided for two general ledger cash accounts totaling $48,812.63.
(2) Inventories
(a) Adequate procedures did not exist for the systematic and consistent mark-up of resale inventories.
(b) Tests of the perpetual inventory system revealed numerous errors between physical counts taken by the auditors and the inventory subsidiary records.
(3) Revenues/ReceivableslReceipts
A review of accounts receivable balances of $2,275,978.70 at June 30, 2003 revealed the following:
(a) Reconciliation of the student accounts receivable subsidiary ledger (BANNER) to the general ledger was not performed. An unidentified variance of $324,667.40 existed at June 30, 2003. In addition, an examination of the student accounts receivable subsidiary ledger (BANNER) at June 30, 2003, revealed that $584,802.83 in receivables were over one year old and were not supported by approved financial aid.
(b) No subsidiary records or inadequate subsidiary records were provided for numerous other accounts receivable accounts.
(4) General Ledger
Reconciliation of beginning balances revealed that the University posted fiscal year 2003 financial activity to the prior fiscal year 2002 accounting period. This occurred because the University failed to properly close the prior year general ledger activity.
(5) Capital Assets
(a) The University failed to record on the asset management module $2,922,365.85 of land, $112,760,285.79 of buildings, $4,317,641.00 of facilities and other improvements, and $12,621,336.00 of infrastructure along with any applicable depreciation. Management provided an audit adjustment to record these amounts along with a portion of the associated depreciation. However, due to the condition of the capital asset accounting records, no reconciliation was performed on the capital asset information provided.
D-34

C1x:n.gia.========================
FIndIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

(b) The University failed to record depreciation expense associated with $4,317,641.00 of facilities and other improvements and $1,112,790.00 of infrastructure. No audit adjustment was made to calculate and record these amounts.

(c) The University failed to establish residual values for facilities and other improvements and infrastructure, as required by the Capital Asset Guide for the University System of Georgia.

Cause:

University management failed to implement satisfactory controls to: (1) safeguard cash and cash equivalents; (2) ensure revenues, receivables, and receipts were properly documented and recorded in the accounting records; (3) ensure accuracy of resale inventories; and (4) properly record and maintain capital assets records.

Effect:

Without satisfactory accounting controls and procedures in place, the University could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The University should review the accounting procedures in place and design and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions.

Finding Control Number: FS-521-03-03 GENERAL LEDGER Inadequacies in Control over Restricted Funds

Condition:

The accounting procedures of the University were insufficient to provide adequate general ledger control over the restricted grants account activity.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its fmancial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (O.e.G.A.).

Information:

The following deficiencies were noted in the review of 160 restricted grant projects:

(1) A review of the restricted projects grants accounts receivable balance of $1,038,253.94 at June 30, 2003 revealed the following:

(a) Accounts receivable balances in 80 projects totaled $3,110,044.71. Adequate documentation was not provided to support the validity of these receivable balances.

(b) Accounts receivable balances in 59 projects totaled $-2,071,790.77. The University failed to properly analyze accounts and post an adjustment to reclassify accounts receivable to the proper account for reporting purposes.

(2) Reconciliations of net assets by project were not performed to ensure that revenues equaled expenditures. At June 30, 2003, 20 projects had net asset balances of $668,571.44 and 39 projects had deficit balances of $579,312.86, resulting in total Restricted Fund net assets of$89,258.58.

D-35

Ge:n-g1B.---------
F1ndIngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Due to the condition of the records, no audit procedures were perfonned to determine the validity of Restricted grants account balances.

Cause:

The University failed to implement satisfactory controls to ensure that activity for the Restricted Grant Funds is properly documented and recorded in the accounting records.

Effect:

Failure to implement satisfactory accounting controls and procedures could cause internal reports to management, grantor reimbursement requests and other restricted grant infonnation generated from the general ledger to be inaccurate and misleading. In addition, the University could place itself in a position where potential misrepresentation of financial activities could occur.

Recommendation:

The University should review the accounting procedures in place and design and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions.

CLAYTON COLLEGE AND STATE UNIVERSITY

Finding Control Number: FS-528-03-01 ACCOUNTING CONTROLS (OVERALL) Inadequacies in Control over Subsidiary Ledgers

Condition:

The accounting procedures of the University were insufficient to provide adequate control over the subsidiary ledgers comprising the GeorgiaFIRST accounting system.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its financial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with financial related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (OCGA).

Infonnation:

During fiscal year 2002, the Board of Regents of the University System of Georgia converted units of the University System from the College University Financial Accounting (CUFA) legacy system to the new GeorgiaFIRST System (Financial, Infonnation and Reporting Systems for Tomorrow). In March 2002, Clayton College and State University placed this accounting system into production.

The management of Clayton College and State University is responsible for implementing procedures to establish and maintain adequate control over the operation, utilization, and integrity of their data. We encountered problems with the financial data presented by the University. Our testing revealed that, at June 30, 2003, the University's general ledger module did not balance with the subsidiary modules. This condition was primarily due to errors in posting subsidiary records during the conversion from the old College University Financial Accounting (CUFA) legacy accounting system to the new GeorgiaFIRST accounting system and due to transactions being posted to the general ledger module rather than in the appropriate subsidiary ledger modules. The University did not provide a reconciliation of the general ledger balances to the subsidiary records which resulted in extensive work required by the auditors to identify reconciling items at June 30, 2003.

Our testing also revealed that certain accounts in the GeorgiaFIRST accounting system's general ledger for accounts receivable, accounts payable, prepaid items and cash which were supported'

__ D-36 ----------_...__.-._--.. _. _... ---

G.eorg:ia=================================
RndJngs and QuestIoned Costs For the Rscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

by information provided from the University's Banner Student Registration System, included numerous errors. These errors were the result of incorrect postings between the Banner Student Registration System module and the University's GeorgiaFIRST accounting system The University could not provide any reconciliation from the Banner Student Registration System module to the GeorgiaFIRST's general ledger for the accounts in question.

Cause:

The University failed to implement satisfactory controls to ensure that all transactions were posted to the appropriate subsidiary modules. Additionally reconciliations between the general ledger and the subsidiary records were not completed by the University.

Effect:

Without satisfactory accounting controls and procedures in place, the University placed itself in a position where potential misrepresentation of financial activities could occur. In addition, the lack of controls could impact the reporting of its fInancial position.

Recommendation:

To reduce the risk of reporting incomplete andlor inaccurate information, the University should implement procedures and controls to ensure that transactions are posted correctly in the appropriate subsidiary ledgers. At a minimum, procedures should be developed which require the reconciliation of subsidiary ledgers to the general ledger on a regular basis.

Finding Control Number: FS-528-03-02 CASH AND CASH EQUIVALENTS INVENTORIES REVENUESIRECEIVABLESIRECEIPTS EXPENDITIJRESILIABILITIESJDISBURSEMENTS GENERAL LEDGER CAPITAL ASSETS Inadequate Accounting Procedures

Condition:

Accounting procedures of the University were insufficient to provide adequate controls over (1) Cash and Cash Equivalents; (2) Inventories; (3) Revenues/Receivables/Receipts; (4) ExpenditureslLiabilitiesJDisbursements; (5) General Ledger and (6) Capital Assets.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its fInancial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with fInancial related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (OCGA).

Questioned Cost:

$616,774.43 (Invalid State Budget basis expenditures/encumbrances to be remitted as part of fIscal year 2004 surplus.)

Information:

The following weaknesses/defIciencies relating to various control categories:

(1) Cash and Cash Equivalents

(a) Reconciling items, such as unposted deposits, voided checks, charges and fees, noted by the University during the monthly bank reconciliation procedures for the operating account were not corrected in a timely manner.

(b) Reconciling items noted on the June 2003 bank reconciliation for the operating and payroll accounts were not adequately documented. The reconciliation contained deposits in transit for both credit charges and credit card deposits outstanding for a six month period. Additionally, two items, totaling $125,056.34, noted on the
D-37

Georg1B.-----------------
Findings and QuestIoned Costs For the FIscal Year Ended June 30, 2003
FINANCIAL STATEMENT FINDINGS
payroll account reconciliation were not reconciling items, but were unidentified variances between the general ledger and the bank balance.
(c) The monthly bank statements for the payroll account were not reconciled with the general ledger in a timely manner. In addition, there was an unidentified variance of $41,287.69 shown on the June 2003 bank reconciliation.
(d) University personnel failed to contact bank officials in a timely manner to resolve differences noted on the bank reconciliations concerning check amounts. These variances in check amounts are being shown as reconciling items for extended periods of time, in some cases exceeding twelve (12) months.
(e) Reconciliations of the petty cash counts to the general ledger were not performed. In addition, the University could not provide documentation verifying that items were being properly posted to the general ledger.
(2) Inventories
The bookstore resale inventory should be maintained on the general ledger at the cost of goods purchased for resale and not the retail value of items on hand at year end. Failure to record the resale inventory at cost resulted in overstatements of the inventory balance and cost of good sold for the current fiscal year. Based on testing performed, an audit adjustment of $86,712.21 was necessary to properly reflect the year end value of resale inventory at cost on the financial statements.
(3) RevenueslReceivableslReceipts
(a) The University did not have adequate procedures in place to ensure that all deposits were made and recorded on the general ledger in a timely manner. Of the thirty-five (35) receipts tested, seven (7) items were not deposited in the University's bank account in a timely manner and an additional twelve (12) items were not recorded on the general ledger in a timely manner.
(b) The University did not have procedures in place to properly age accounts receivable as required by the Board of Regent's policy manual. The aging analysis reports provided were incomplete and several accounts listed on the analysis did not agree with the general ledger.
(c) The University did not have procedures in place to ensure that adequate collection measures are being performed for accounts receivable greater than one year old as required by the Board of Regent's policies. Of the twenty (20) receivable items chosen for testing, the files for only four (4) items contained evidence documenting adequate collection procedures by University personnel.
(d) Access to the cash drawer in the Business Office was not limited and the key was left in the drawer's lock. In addition, the auditors observed the delivery of money bags from Auxiliary Enterprises' locations on campus during the absence of the head cashier. The money bags were left out on the head cashier's desk unsupervised and not placed in the vault upon receipt.
(4) ExpenditureslLiabilities/Disbursements
(a) The University did not have adequate control procedures in place over the accounts payable process. The University was unable to determine if voided checks had been
D-38

Georg1B.------------
F1nd1ngs and Questioned Costs For the Flscal Year Ended June 30, 2003
FINANCIAL STATEMENT FINDINGS
reissued; in addition, it appears that numerous invoices were recorded in the incorrect fiscal year; and the University, which is a tax exempt organization, paid sales tax on two vouchers tested.
(b) The University did not have procedures in place to ensure purchase orders were properly maintained and cancelled when corresponding invoices are paid as required by Board of Regent's policy. The University was unable to reconcile their documentation of open purchase orders with the listing of outstanding purchase orders per the subsidiary ledger. The University has provided the Department of Audits with a listing of the numerous invalid purchase orders greater than one year old. The University will be required to refund the balance of these invalid purchase orders, totaling $616,774.43, as part of its surplus remission in fiscal year 2004.
(c) The University did not have adequate procedures in place to ensure the proper revenue recognition of prior year deferred revenues. Our testing revealed that $35,457.15 of the amount recorded on the general ledger for deferred revenue was set up in the prior fiscal year and should have been recorded as revenue in the current fiscal year. The auditors made an audit adjustment to record these revenues.
(5) General Ledger
(a) The detail listing of salary payments made to employees, as submitted by the University to the Georgia Department of Audits, was not reconciled with the general ledger. The unidentified variance of $8,488.08 is reflected in the Reconciliation of Salaries and Travel.
(b) The University failed to properly record all prior year approved audit adjustments correctly which resulted in material audit adjustments in the current fiscal year.
(c) Journal entries were made to the general ledger without proper authorization, supporting documentation or explanation.
(6) Capital Assets
(a) The subsidiary ledger (Asset Management Module) for Capital Assets did not agree with the Capital Assets Ledger as reported. No reconciliation of these ledgers was prepared by the University as required. The variance was a direct result of the University reopening the general ledger (GeorgiaFIRST/PeopleSoft) after the final closing for fiscal year 2002.
(b) The University failed to follow the Board of Regent's instructions on the recording of Capital Assets received from Georgia State Financing and Investment Commission (GSFIC). GSFIC was to retain construction in progress on their books throughout the construction period and transfer the entire project to the University upon completion. However, Clayton College and State University recorded equipment asset additions of $110,055.00 and related depreciation of $4,532.15 for unfinished GSFIC projects, which resulted in an overstatement of $105,522.85 for Capital Assets net of depreciation.
(c) The University failed to properly retire assets during the year under review. At the end of fieldwork, there were pending transactions in the subsidiary ledger (Asset Management Module) for retirements that had not been completed for fiscal year 2003. Failure to complete the retirement process resulted in excess depreciation being calculated on assets no longer in service.
D-39

Georgia-----------
Findings and Questioned Costs For the FIscaL Year Enc:Ied June 30, 2003

FINANCIAL STATEMENT FINDINGS

Cause:

University management failed to implement adequate controls and procedures to: (1) safeguard cash and cash equivalents; (2) ensure accuracy of resale inventories; (3) ensure revenues, receivables and receipts were properly documented and recorded in the accounting records; (4) ensure expenditures, liabilities and disbursements were properly recorded in the accounting records and (5) properly record and maintain capital assets records.

Effect:

Without satisfactory accounting procedures and controls in place, the University placed itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting its financial position and results of operations.

Recommendation:

The University should review the accounting procedures in place and design and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions.

Finding Control Number: FS-528-03-04 GENERAL LEDGER Inadequacies in Control over Restricted Funds

Condition:

The accounting procedures of the University were insufficient to provide adequate general ledger control over the restricted grants account activity.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its fInancial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with fInance related legal and contractual provisions. Administrative requirements contained in the University of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (O.C.G.A.).

Information:

Our examination of the University's restricted grant accounts revealed that activity for accounts receivable and net assets was not properly maintained by project resulting in reconciliation problems for several restricted grants. This condition occurred because the University made numerous manual journal entries directly to the general ledger without including the appropriate project identifIcation numbers on the adjusting entries which caused individual restricted grant accounts to be out of balance. In addition, the University has failed to research and reclassify the beginning accounts receivables converted from the College University Financial Accounting (CUPA) legacy system to the appropriate grants.

Also, our examination revealed that numerous receipts during the fIscal year were posted to the wrong restricted grants. The University failed to properly distribute receipts between restricted grants which were received from the same grantors thus causing the accounts receivable between grant accounts to be inaccurate and misleading. Further complicating matters, the University failed to properly record revenues for several restricted grants earned during the fIscal year and recorded expenditures for two restricted grants for which there was no current year funds available.

Cause:

The University failed to implement satisfactory controls to ensure that activity for the Restricted Grant Funds is properly documented and recorded in the accounting records.

Effect:

Failure to implement satisfactory accounting controls and procedures could cause internal reports to management, grantor reimbursement requests and other restricted grant information generated from the general ledger to be inaccurate and misleading. In addition, the University could place itself in a position where potential misrepresentation of fInancial activities could occur.

D-40

Georgia.------------
FlncIIngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Recorrunendation:

The University should design and implement procedures relative to the Restricted Grants Funds to ensure all grant information is properly maintained.

FORT VALLEY STATE UNIVERSITY

Finding Control Number: FS-533-03-01 ACCOUNTING CONTROLS (OVERALL) Inadequate Closing Procedures

Condition:

The University did not comply with a fInal closing date for the GeorgiaFIRST Accounting System as set by the Board ofRegents.

Criteria:

Closing procedures are necessary to establish and maintain adequate control over the operation, utilization, and integrity of their data processed with the GeorgiaFIRST System.

Information:

The University did not close its accounting records until late November, well past the July 31, 2003, date set by the Board of Regents.

Cause:

The University failed to adhere to the fInal fIscal year end 2003 closing date established for the GeorgiaFIRST Accounting System.

Effect:

Without the adequate closing procedures, data presented for review was incomplete and required extensive review procedures to determine the validity of the information provided.

Recorrunendation:

The University should work with Board of Regents Central Office to develop procedures that will result in complete reporting of all fInancial data in a more efficient and timely manner.

Finding Control Number: FS-533-o3-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System and Equipment Inventory Records

Condition:

The University did not maintain adequate controls over their subsidiary ledger for Capital Assets.

Criteria:

The University should maintain their subsidiary ledger for Capital Assets in accordance with the Board of Regents' Capital Asset Guide for University System of Georgia.

Information:

We noted the following weaknesses/deficiencies relating to Capital Assets:

(1) The general ledger did not agree with the subsidiary ledger by $31,550.59. (2) The University did not record current year Library Collection additions in the amount of
$163,614.62. (3) Accumulated depreciation and the current year depreciation for Library Collections have
not been reflected in the Financial Statements. (4) There were numerous items on the inventory listing that were below capitalization
thresholds established by the Board ofRegents. (5) A test of seventy fIve items revealed the following:
(a) 13 items could not be located. (b) 13 items did not have inventory tags affixed. (c) 18 items were not in their proper location as shown on the inventory listing. (6) The University did not perform a complete physical inventory during the year in accordance with their policy.

D-41

Georg1a=================================
Flndings and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Cause:

These deficiencies were due to management's failure to implement controls adequate to ensure capital asset records and equipment inventories are properly maintained.

Effect:

Without proper accounting controls and procedures in place, the University could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The University should establish appropriate procedures and controls to ensure capital assets are properly maintained and reported correctly in the general ledger and that equipment items are easily identified and tracked through the Capital Asset system

SAVANNAB STATE UNIVERSITY

Finding Control Number: FS-548-o3-05 GENERAL LEDGER Deficiencies in Accounting Procedures

Condition:

The University failed to have adequate accounting policies and procedures in place to ensure that vendor credits are properly applied to bookstore inventories; old outstanding checks are properly voided; accounts payable are recorded in the proper accounting period; student loan receivable records are properly maintained; and uncollectible accounts receivable are identified and recorded in accordance with Board ofRegents policies.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its financial operation of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (O.C.G.A).

Information:

Our examination and testing for the year under review revealed the following deficiencies in accounting for financial transactions by Savannah State University.

(1) An adjustment of $78,008.02 was necessary to correctly record bookstore inventory. Vendor issued credits were not maintained within the formal accounting records. The credits and/or refund checks were reviewed, maintained and/or receipted by bookstore personnel.
(2) Checks outstanding for more than six months were not voided in a timely manner. (3) A review of encumbrance documentation for the Unexpended Plant Fund revealed that
three items totaling $51,829.00 were actually valid payables at June 30, 2003. (4) An examination of subsequent period accounts payable activity revealed that there were
$37,141.48 in valid payables that should have been recorded in fiscal year 2003. (5) A complete listing of Student Loan Receivables could not be obtained. (6) The University did not record the allowance for uncollectible accounts receivable in
accordance with Board of Regents Policy. An audit adjustment of $10,078.34 was made to correctly report the allowance.

Cause:

These conditions occurred because the University failed to have adequate accounting policies and procedures in place.

Effect:

Without satisfactory accounting controls and procedures in place, the University could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

D-42

~1a===============================
Andlngs and Questioned Costs For the Flscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Reconunendation:

The University should review current accounting policies and procedures, identify weaknesses, and implement procedures to ensure that vendor credits are maintained within the formal accounting records, checks outstanding for more than six months are voided, accounts payable are recorded in the proper period, a complete student listing of loans receivable is maintained, and the allowance for uncollectible accounts receivable is recorded in accordance with Board of Regents Policy.

Finding Control Number: FS-548-03-07 CAPITAL ASSETS Inadequate Capital Assets Records

Condition:

The University's procedures were insufficient to provide adequate control over the University's capital assets. The University failed to comply with capitalization and depreciation procedures as listed in the Capital Asset Guide for the University System of Georgia. The University failed to reconcile the property records to the Capital Asset Ledger.

Criteria:

Guidelines for accounting for capital assets are contained in the Capital Asset Guide for the University System of Georgia. Included in this guide are asset category defInitions, capitalization thresholds, depreciation methodologies, and examples of expenditures for each class of assets. Additionally, guidelines for leasehold improvements and construction in progress have been included.

Information:

The following weaknesses/deficiencies relating to Capital Assets were noted.

(1) During a test of equipment additions, it was noted that one equipment item purchased by the University met capitalization thresholds but was not capitalized.
(2) The University failed to capitalize amounts associated with construction in progress. An audit adjustment of $2, 167,169.20 was made to record construction in progress.
(3) The University restated prior period accumulated depreciation and adjusted current year depreciation expense to reflect residual values for Library Collections and Capitalized Collections. Per the Capital Asset Guide for the University System of Georgia, these asset categories do not have residual values. Therefore, audit adjustments of $404,902.48 and $140.99 respectively were made to correctly report asset values for Library Collections and Capitalized Collections.
(4) The University did not reconcile the property records to the Capital Asset Ledger. Extensive procedures were performed in an attempt to determine the variances. Variances were identified in accumulated depreciation, equipment, and capitalized collections. Net adjustments of $449,679.37 were made to obtain per audit fIgures for capital assets.
(5) The University was unable to provide a listing of equipment which included all of the following attributes: property description including serial number and decal number, source of funds used to purchase item, acquisition date and cost, reference to originating invoices and reference to physical location of the equipment item

Cause:

University's management failed to implement adequate policies and procedures to ensure that the University's capital assets were properly maintained.

Effect:

Without satisfactory accounting controls and procedures in place, capital purchases could be expensed and not recorded on the Asset Management module; depreciation expenses could be recorded on a basis not consistent with provisions of the Capital Asset Guide for the University System of Georgia; and capital assets could be misappropriated if a complete record of capital assets is not maintained.

D-43

Georg1B.---------
Findings and QuestIoned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Recommendation:

The University should establish appropriate procedures and controls to ensure that:

(1) Expenses which meet capitalization thresholds are added to the Asset Management module.
(2) Assets are depreciated in accordance with guidelines contained in the Capital Asset Guide for the University System of Georgia.
(3) Property records are reconciled to the Capital Asset Ledger. (4) Equipment records are properly maintained containing all the required attributes.

BAINBRIDGE COLLEGE

Finding Control Number: FS-562-03-01 GENERAL LEDGER Inadequacies in Control over Subsidiary Ledgers

Condition:

The accounting procedures of the College were insufficient to provide for adequate controls over the subsidiary ledgers.

Criteria:

NCGA Statement 1, paragraph I, which prescribes that an accounting system (I) present fairly and fully disclose its fmancial position including its financial operations of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (O.e.G.A).

Information:

The Banner Student Information System (BANNER) provides subsidiary ledger detail to support selected accounts receivable and accounts payable balances reported on the College's general ledger. Our testing revealed that the College could not reconcile the Banner subsidiary ledger to the general ledger for these accounts. As a result, numerous adjustments had to be provided by the College in an effort to provide an accurate reconciliation.

After posting the adjustments provided by the College, a variance of $26,592.50 still existed between the accounts receivable and accounts payable balances reflected on the College's general ledger and the Banner subsidiary ledger.

Cause:

Institution's management failed to implement satisfactory controls to ensure that the accounting information related to the Banner subsidiary records were properly documented and recorded in the accounting records.

Effect:

Without satisfactory accounting controls in place, the institution could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The Institution should establish appropriate procedures and controls to 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 ledger balances to include only earned revenues and/or valid obligations of the College.

D-44

GeorgiB.------------
Andings and Questioned Costs For the F1scal Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

EAST GEORGIA COLLEGE

Finding Control Number: FS-572-03-02 CAPITAL ASSETS Inadequate Capital Assets Records

Condition:

East Georgia College's accounting procedures for the Capital Asset Management System were insufficient to provide adequate control over the College's capital assets.

Criteria:

NCGA Statement 1, paragraph 1, which prescnbes that an accounting system (1) present fairly and fully disclose its financial position including its financial operations of its funds in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (OCGA).

Information:

We noted the following weaknesses/deficiencies relating to Capital Assets:

(1) The College's Asset Management module did not reconcile with estimated cost values established by an independent appraisal. There were assets in the amount of $38,978.00 for Equipment that were included on the independent appraisal report that were not included on the Asset Management module.

(2) The College's Asset Management module did not reconcile to the Capital Ledger. There were assets totaling $74,100.45 included in the Capital Ledger that were not added to the Asset Management module. Also, there were assets totaling $29,355.00 retired in the Asset Management module with no corresponding entry in the Capital Ledger. Review entries were made to reconcile the Asset Management Module to the Capital Ledger.

(3) The College failed to record assets purchased during the year under review totaling $28,547.22 in either the Capital Ledger or the Asset Management Module. A review entry was made to record the assets in the Capital Ledger.

(4) It is the policy of the Board of Regents of the University System of Georgia that Construction Work in Progress maintained by the Georgia State Financing and Investment Commission (GSFIC) should not be recorded in the College's Capital Ledger until the construction project is completed and transferred to the College. During fiscal year 2003, GSFIC started a construction project with an estimated project cost of $200,912.00. This project is scheduled to be completed in the subsequent period, however, the College recorded $120,269.00 in the current year Capital Ledger. A review entry was made to remove the Construction Work in Progress from the Capital Ledger.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the College's capital assets are properly maintained.

Effect:

Without satisfactory accounting controls and procedures in place, the College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The College should establish appropriate procedures to strengthen controls and ensure that assets are properly accounted for and safeguarded.

D-45

G:org1a.=========================
FIndIngs and Questioned Costs For the FIscaL Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

GAINESVILLE COLLEGE

Finding Control Number: FS-575-03-01 CAPITAL ASSETS Inadequate Capital Asset Records

Condition:

Gainesville College's accounting procedures for the Capital Asset Management System were insufficient to provide adequate control over the College's capital assets.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its financial operations of its funds and account groups in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the University System of Georgia, Board of Regents Business Manual and pertinent sections of the Official Code of Georgia Annotated (OCGA).

Information:

We noted the following weaknesses/deficiencies relating to Capital Assets:

(1) The College was unable to provide a Capital Asset Listing by Asset ill which detailed the acquisition cost, accumulated depreciation at July 1,2002, current year depreciation, year of acquisition and estimated useful life for individual assets.

(2) The College failed to reconcile accumulated depreciation on Library Collections with the Library Collections subsidiary schedule. A variance of$108,845.00 was identified.

(3) The College's Asset Management module for depreciation expense did not reconcile to the Capital Ledger resulting in a $35,372.19 unidentified variance in the equipment depreciation expense.

(4) The College did not reconcile the property records to the Capital Asset ledger. Extensive procedures were performed in an attempt to determine the variances. Variances were identified in accumulated depreciation, infrastructure and equipment. Net adjustments of 654,962.03 were made to capital asset balances reported.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the College's capital assets are properly maintained.

Effect:

Without satisfactory accounting controls and procedures in place, the Institution could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

The College should establish appropriate procedures to strengthen controls and ensure that assets are properly accounted for and safeguarded.

SKIDAWAY INSTITUTE OF OCEANOGRAPHY

Finding Control Number: FS-593-o3-01 GENERAL LEDGER Inadequate Closing Procedures

Condition:

The Institute's general ledger was not properly closed at fiscal year end June 30, 2002. As a result of this, the net asset balances reported on the fiscal year ended June 30, 2002 financial

D-46

Georg:i8..=========================
F1ndIngs and Questioned Costs For the FIscaL Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

statements presented for review did not agree with the balances carried forward in the GeorgiaFIRST accounting system as opening balances for fiscal year 2003.

Criteria:

GASB Codification Section 1100 which provides "a governmental accounting system must make it possible to (a) present fairly and with full disclosure the funds and activities of the governmental unit in conformity with generally accepted accounting principles". Section 300 of the Financial and Reporting Manual for Higher Education published by the National Association ofCollege and University Business Officers (NACUBO).

Information:

The ending net assets on the general ledger obtained for review for the year ended June 30, 2002, were $102,106.36. However, the Institute's 2003 general ledger opening balance for net assets reflected a deficit of$2,568.83.

Cause:

The Institute's management failed to ensure that appropriate year end closing procedures were in place to properly close general ledger activity and roll correct net asset account balances forward to the next fiscal year. The Institute was also unable to provide a reconciliation of the variance in the account balances.

Effect:

There was a net unidentified variance of$104,675.19 between the June 30, 2002, general ledger net asset balance and the opening net asset balance in the 2003 general ledger.

Recommendation:

The Institute should adhere to final year end closing procedures as required by the Board of Regents and implement procedures to ensure year end closing balances properly roll forward as opening balances for the following fiscal year.

WEST GEORGIA TECHNICAL COLLEGE

Finding Control Number: F8-S19-03-01 CASH AND CASH EQUNALENTS Inadequate Accounting Procedures

Condition:

Accounting procedures of the Technical College were insufficient to provide adequate controls over Cash and Cash Equivalents.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system present fairly and fully disclose its financial position including its financial operation of its funds in accordance with generally accepted accounting principles and the Department of Technical and Adult Education's Policy II.A.2.a. Accounting System, which states that, "The Central Office and the Technical Colleges shall process their accounting transactions in accordance with the State Auditor's rules and regulations and generally accepted accounting principles."

Information:

We noted the following weaknesses/deficiencies related to Cash and Cash Equivalents were noted:

(1) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.

(2) Reconciling items reflected on the bank reconciliation for the General Operating and Payroll accounts could not be properly documented.

(3) The Technical College failed to properly record receipts and disbursements to the general ledger. There were a number of instances noted where transactions were not posted to proper accounts.

D47

~1a==============================
FIndIngs and Questioned Costs For the Flscal Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

Cause:

This condition occurred due to management's failure to implement adequate controls and procedures to safeguard cash and cash equivalents.

Effect:

Without satisfactory accounting procedures and controls in effect, the Technical College could place itself in a position where it would not be able to fairly and fully disclose its financial position.

Recommendation:

The Technical College should implement procedures and controls in order to ensure that cash transactions are reviewed and posted on a monthly basis, that detailed records supporting the general ledger are complete, and that reconciling items are resolved in a timely manner.

ATLANTA TECHNICAL COLLEGE

Finding Control Number: FS-823-o3-01 CASH AND CASH EQUIVALENTS EXPENDlTURESILIABILITIESIDISBURSEMENTS Inadequate Accounting Procedures

Condition:

The accounting procedures of Atlanta Technical College were insufficient to provide adequate controls over (1) Cash and Cash Equivalents and (2) ExpenditureslLiabilitieslDisbursements.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its fInancial operation of its funds and account groups in accordance with generally accepted accounting principles and (2) demonstrate compliance with fInance related legal and contractual provisions. Administrative requirements contained in pertinent sections of the Official Code of Georgia Annotated (O.C.G.A.).

Information:

We noted the following weaknesses/defIciencies related to various control categories:

(1) Cash and Cash Equivalents

(a) Reconciling items, such as unposted deposits and checks, noted by the College during monthly bank reconciliation procedures for the operating, payroll, PELL, and H.O.P.E. accounts were not corrected in a timely manner.

(b) The College did not have procedures in place to ensure the bank was notifIed to stop payments on outstanding checks that were issued and subsequently voided.

(c) Reconciling items labeled "checks without numbers" were noted by the College during monthly bank reconciliation procedures for the PELL and SEOG account and were arbitrarily removed from the outstanding check list by Atlanta Technical College management without properly identifying the actual check numbers in question.

(d) During fIscal year 2003, several fraudulent checks cleared the HOPE checking account. Atlanta Technical College management discovered the fraudulent activity while performing the normal monthly bank reconciliation procedures.

Although Atlanta Technical College management discovered the fraudulent checks, Atlanta Technical College management did not report the fraudulent activity to any law enforcement authority. Therefore, a complete investigation has not been

D-48

Georg1.a.------------
FIndIngs and Questioned Costs For the FlscaL Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

perfonned to determine if the fraudulent activity occurred external or internal to Atlanta Technical College.

Atlanta Technical College management reported the fraudulent checks to the bank. The bank has agreed to reimburse the majority of the fraudulent checks. However, the bank has refused to reimburse one of the checks in the amount of $2,741.09 because the check was not disclosed to the bank within a timely manner as required by bank policy.

(2) ExpenditureslLiabilitieslDisbursements

The College did not have procedures in place to verify the receipt of goods before the accounts payable department processed the vendor payments.

Cause:

The management at Atlanta Technical College failed to implement satisfactory controls to:

(I) safeguard cash and cash equivalents;

(2) support the disbursement of funds.

Effect:

Without satisfactory accounting controls and procedures in place, the College could place itself in a position where the potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.

Recommendation:

Atlanta Technical College should establish appropriate procedures and controls to ensure that:

(1) Uncorrected items identified when reconciling bank statements to the general ledger are documented and posted in a timely manner, to ensure the bank is notified to stop payments on the outstanding checks that were issued and subsequently voided, to ensure that "checks without numbers" are accurately identified and removed from the outstanding check list, and to ensure that all fraudulent activity is properly reported and investigated in a timely manner.

(2) Documentation supporting the receipt of goods is reviewed by accounts payable prior to processing vendor payments.

COOSA VALLEY TECHNICAL COLLEGE

Finding Control Number: FS-829-03-01 CAPITAL ASSETS Failure to Maintain Complete Capital Assets

Condition:

Capital assets procedures pertaining to current year additions of capitalizable equipment and building renovations funded by the Georgia State Financing and Investment Commission (GSFIC) were not adequate.

Criteria:

The State of Georgia Accounting Procedures Manual Section Four - Other Procedural Topics GSFIC-Funded Construction Projects notes that "upon completion of the project, the appropriate assets should be recorded by the beneficiary organization in accordance with the guidance provided within the State of Georgia Accounting Procedures Manual Section Three Accounting Procedures under the topic Capital Assets. Cost of the assets recorded on the organization's accounting records should be obtained from GSFIC."

D-49

Georgia.==============================
FIndings and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

The Capital Asset Guide for the State of Georgia states that "a building improvement should be capitalized as a betterment and recorded as an addition of value to the existing building if the expenditure for the improvement meets or exceeds the capitalization threshold, or the expenditure increases the life or value of the building by 25% of the original life period or cost."

Information:

We found that acquired capitalizable equipment and building renovations funded through GSFIC were not added to the Capital Assets.

Cause:

The Technical College did not receive appropriate correspondence from Department of Technical and Adult Education to record the acquired capital equipment and building renovations funded through GSFIC.

Effect:

Capital Assets were understated in the amount of$2,376,180.80 prior to audit adjustment.

Recommendation:

The Technical College should ensure that appropriate procedures and controls are in place to:

(1) Properly record all acquired capitalizable equipment funded by GSFIC in accordance with the capitalization guidelines of the State ofGeorgia Accounting Procedures Manual.

(2) Properly add the costs of completed GSFIC projects to the College's Assets Management Module. The College should ascertain the progress of each project's completion so that once occupancy is transferred the asset is promptly added to the Assets Management Module.

DEKALB TECHNICAL COLLEGE

Finding Control Number: FS-830-03-01 CASH AND CASH EQUIVALENTS INVENTORIES CAPITAL ASSETS Deficiencies in Accounting Procedures

Condition:

The accounting procedures of the College were insufficient to provide adequate controls over (1) Cash and Cash Equivalents; (2) Inventories and (3) Capital Assets.

Criteria:

NCGA Statement 1, paragraph 1, which prescribes that an accounting system (1) present fairly and fully disclose its financial position including its financial operation of its funds and account groups in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Administrative requirements contained in the Accounting Procedures Manual for the State of Georgia and Pertinent sections of the Official Code of Georgia Annotated (O.C.G.A).

Information:

We noted the following weakness/deficiencies relatingJo various control categories:

(1) Cash and Cash Equivalents

Reconciling items noted by the College during the monthly bank reconciliation procedures for the operating, payroll, Federal funds, PELL and H.O.P.E. accounts were not corrected in a timely manner. Many of these reconciling items related to Fiscal Year 2001 and 2002 activity that had not been properly corrected by the College. In addition, supporting documentation was not available for several reconciling items noted on the Fiscal Year 2003 bank reconciliations.

0-50

Georg1a------------
findings and QuestIoned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

(2) Inventories

The College failed to properly account for changes in inventory on the general ledger and did not have adequate procedures in place to perfonn reconciliations of quarterly bookstore resale inventory counts to the general ledger.

(3) Capital Assets

Three equipment items totaling $42,153.00 were purchased during the year but were not properly capitalized in the Capital Asset Module. Also equipment items totaling $636,042.46 were deleted during the year but were added back to the equipment listing in error. In addition equipment items totaling $77,970.00 were identified as items with costs below the College's capitalization threshold and should be removed from the capital asset records.

Cause:

College management had failed to implement satisfactory controls to: (1) safeguard cash and cash equivalents; (2) ensure the general ledger accurately reflected resale inventory and cost of goods sold and (3) properly maintain and track equipment inventory additions and deletions.

Effect:

Without satisfactory accounting controls and procedures in place, the College could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operation.

Recommendations: The College should establish appropriate procedures and controls to ensure that:

(1) Uncorrected items identified when reconciling bank statements to the general ledger are documented and posted in a timely manner.

(2) Bookstore resale inventory counts are completed on a periodic basis and accurate inventory adjustments are accounted for on the general ledger.

(3) A comprehensive physical inventory is taken and all items are recorded in accordance with guidelines set forth in the State of Georgia Capital Asset Guide. Policies and procedures should also be established to ensure that reconciliations are perfonned for the Capital Assets Module and the related subsidiary records.

JEKYLL ISLAND STATE PARK AUTHORITY

Finding Control Number: F8-910-03-01 CAPITAL ASSETS Lack of Adequate Records

Condition:

Our examination of the accounting records of the Authority disclosed that buildings owned by the Authority are reported in the capital asset inventory records at $40,294,399.74, net of accumulated depreciation of $4,280,374.17. The Authority "failed to provide an audit trail leading to documentation supporting the reported amounts.

Criteria:

The State ofGeorgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Authority's capital assets are properly maintained.

D-51

Georgia.=================================
FlndJngs and Questioned Costs For the Ascal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

Effect:

The dollar value reported for buildings may contain misstatements; however, the extent of these misstatements could not be determined.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Authority's capital assets are properly accounted for and reported in accordance with the State ofGeorgia Capital Asset Guide.

STATE ROAD AND TOLLWAY AUTHORITY

Finding Control Number: FS-927-03-01
REVE~SntECErvABLESntECEIPTS
Deficiencies in the Collection and Recording of Cash Tolls (F. J. Torras Causeway)

Condition:

The following deficiencies were noted in the functioning of the Authority's equipment used to accumulate toll patron activity which documents revenue received at the F. J. Torras Causeway plaza:

(1) Electronic equipment could not produce reports to track individual lane activity, including the number of vehicles passing through the toll booth and the amounts deposited into the toll bins as vehicles pass through each toll lane.

(2) A formal reconciliation of amounts collected at the toll plaza and amounts deposited by the contracted security company was not performed for the final six months of the fiscal year.

(3) Laser scanners used to read yearly decals were not functioning properly.

(4) No formal violation processing procedures were in place to provide the appropriate data to identify toll violations.

Criteria:

The Accounting Procedures Manual for the State of Georgia, Section Five, pages 5-4-2 and 3 state, in part, as follows:

"Documentation - involves preserving evidence to substantiate a decision, event, transaction, or system All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations and assist in analyzing operations... Documentation of transactions should enable managers to trace each transaction from its inception through its completion. This means the entire life cycle of the transaction should be recorded, including initiation and authorization, processing, and final classification..."

Cause:

The malfunction of the Authority's equipment was the result of mechanical failure as well as management's failure to establish procedures to ensure timely deposits of cash receipts.

Effect:

Errors could occur in the recording of patron activity, including violations and tolls resulting in financial statement misstatements.

Recommendation:

The Authority should provide a system to accurately record patron activity, including violations, and toll revenue on the accounting records.

D-52

Georg:iB.-----------
Andlngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINANCIAL STATEMENT FINDINGS

GEORGIA GOLF HALL OF FAME

Finding Control Number: FS-958-03-01 CAPTIAL ASSETS Lack of Adequate Records

Condition:

Our examination of the accounting records of the Georgia Golf Hall of Fame disclosed the following deficiencies:

(1) Land, Gardens and Sculptures, Architects, and Phase II items owned by the Georgia Golf Hall of Fame are reported in the capital asset inventory at $12,784,922.01. The Georgia Golf Hall of Fame failed to provide an audit trail leading to documentation supporting the reported amounts.

(2) The Georgia Golf Hall of Fame failed to provide a schedule of changes in accumulated depreciation by capital asset category for all depreciable assets.

Criteria:

The State of Georgia Capital Asset Guide requires that capital assets be reported by category at historical cost or estimated historical cost when actual records are not available. Donated assets should be reported at fair value at the time of donation. Capital assets, except for land and other inexhaustible assets, should be depreciated over their estimated useful life.

Cause:

These deficiencies are a result of management's failure to implement adequate policies and procedures to ensure that the Georgia Golf Hall of Fame's capital assets are properly maintained.

Effect:

The dollar value reported for all capital assets may contain misstatements; however, the extent of these misstatements could not be determined. In addition, without accurate depreciation schedules, management may not be able to determine how long the assets are expected to meet service demands.

Recommendation:

Management should develop appropriate policies and procedures to ensure that all of the Georgia Golf Hall of Fame's capital assets are properly accounted for and reported in accordance with the State ofGeorgia Capital Asset Guide.

GEORGIA TECHNOLOGY AUTHORITY

Finding Control Number: F8-980-03-61 EXPENSESfLIABILITIESIDISBURSEMENTS Inadequate Accounting Procedures

Condition:

Documentation supporting a significant number of invoices received from a vendor of the Authority either could not be provided for audit or were insufficient to support the disbursement of funds. The vendor, as a contractor of the Authority, provided cable and wiring services and repairs at the facilities of customers of the Authority. Disbursements totaling $3,365,910.55 were not adequately documented and no documentation could be provided to support disbursements of $690,270.90.

Criteria:

The Accounting Procedures Manual for the State of Georgia, Section Five, pages 5-4-2 and 3 state, in part, as follows:

"Documentation - involves preserving evidence to substantiate a decision, event, transaction, or system All documentation should be complete, accurate, and reported promptly.

D-53

Georgia.----------
F1ncIIngs and Questioned Costs For the F1scal Year Ended June 30. 2003

FINANCIAL STATEMENT FINDINGS

Documentation should contribute to achieving the State organization's mISSIOn, help managers in controlling their operations, and assist in analyzing operations ... Documentation of transactions should enable managers to trace each transaction from its inception through its completion. This means the entire life cycle of the transaction should be recorded, including initiation and authorization, processing, and fmal classification..."

Cause:

Management of the Authority failed to maintain effective controls which accurately identify costs of services provided such that these costs can be passed on to the Authority's customers.

Effect:

Erroneous payments were made to the vendor and misstatements in the financial statements went undetected. The Authority could not perform the primary function associated with enterprise fund accounting, which is the determination of profitability or the cost to the general government, i.e., the State of Georgia.

Recommendation:

The Authority established adequate controls to prevent and detect the misstatements noted and ceased doing business with the vendor in question prior to the end of the year under review. An investigation by the Georgia Bureau of Investigation and the Attorney General's office is currently in progress for payments made to the vendor.

HEART OF GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY

Finding Control Number: FS-8764-03-o1 CAPITAL ASSETS Failure to Maintain Records for Capital Assets

Condition:

The Heart of Georgia Regional Educational Service Agency does not maintain a capital asset inventory.

Criteria:

The Accounting Procedures Manual jor the State oj Georgia (Manual), Section Three, Page 31-29 states in part: "Accurate subsidiary capital asset inventory records must be maintained. Balances and additions to the capital asset inventory records should be reconciled periodically (monthly) to the general ledger. Inventory records should include provisions for calculating and accumulating depreciation."

In addition the State oj Georgia Capital Asset Guide (Guide) states that as of July 1,2001, the State of Georgia is required to implement Governmental Accounting Standards Board Statement No. 34 and also provides the criteria for maintaining a capital asset inventory. The Heart of Georgia Regional Educational Service Agency has been determined to be a part of the State of Georgia reporting entity, and as such, is required to follow the above Manual and Guide.

Cause:

Management's failure to follow capital asset accounting procedures as detailed in the Manual and Guide.

Effect:

Failure to maintain capital asset records may result in inaccurate internal management reports and resulting decisions concerning current and future capital asset needs, and possible misappropriation of assets.

Recommendation:

The Heart of Georgia Regional Educational Service Agency should establish the necessary internal controls and implement procedures to ensure capital asset inventories are maintained in compliance with requirements of the Manual and Guide.

D-54

FEDERAL A"W"ARDS
FINDINGS AND QJEsrrONED Q:srs

(This page intentionally left blank)

FederaL Awards Findings and Questioned Costs Table of Contents
For the Ascal Year Ended June 30, 2003

ENTITY CODE

ORGANIZATIONAL UNIT

414

Education, Department of.

419

Community Health, Department of

427

Human Resources, Department of..

440

Labor, Department of

469

Public Safety, Department of

486

Treasury and Fiscal Services, Office of

Colleges and Universities

503

Georgia Institute of Technology

518

University of Georgia

521

Albany State University

530

Columbus State University

533

Fort Valley State University

548

Savannah State University

918

Higher Education Assistance Corporation, Georgia

PAGE NO.
D-58 D-63 D-65 D-69 D-70 D-71
D-72 D-74 D-75 D-79 D-81 D-82 D-84

D-57

Federal Awards RndIngs and Questioned Costs For the Rscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

DEPARTMENT OF EDUCATION

Finding Control Number: FA-414-03-01 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation ofProperty Management System

Condition:

Our examination included a review of the intemal accounting controls utilized by the Department of Education in maintaining their capital asset inventory. 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:

(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 three (3) additions that had been updated onto the equipment inventory records incorrectly by the amount of$27,115.00.

In addition, twenty-five (25) equipment items were selected from certain locations to test the accuracy of the Department's property management records. These items contained a value of $348,467.76 out of a population of $2,107,223.06 and were selected for the purpose of locating the equipment as recorded in the inventory records. The following deficiencies were noted:

(1) One (1) item totaling $5,000.00 could not be located.

(2) One (1) item was found in a location other than the location indicated in the equipment inventory records.

(3) One (1) item totaling $16,820.00 was surplused, but was not removed from the equipment inventory records.

(4) One (1) item was transferred, but was not updated on the equipment inventory records.

Criteria:

The Department is required to maintain equipment inventories in accordance with provisions of Title 34 CFR 80.32 Equipment (Office of the Secretary of Education).

Cause:

The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories.

Effect:

Failure to maintain accurate equipment inventory records causes internal reports to management to be misleading and can result in erroneous decisions by management concerning current and future equipment needs.

Recommendation: The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with federal regulations.

Major Federal Program/Award Affected:

u.S. Department of Education Title I - Grants to Local Educational Agencies - CFDA No. 84.010 Vocational Education - Basic Grants to States - CFDA No. 84.048

D-58

Federal Awards AndIngs and Questioned Costs For the AscaL Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Federal Agencies With Other Affected Programs:

U.S. Department of Agriculture U.S. Department of Education

Finding Control Number: FA-414-03-02 MATCHING, LEVEL OF EFFORT, EARMARKING Inadequate Accounting Records Title I - Grants to Local Educational Agencies (CFDA 84.010)

Condition:

Our examination included a review of the internal accounting controls utilized by the Department of Education in computing Title I allocations to local units of administration (LUA). The Department was unable to provide supporting documentation for the calculations of fiscal year 2003 allocations to the LUAs.

Criteria:

Under U.S. Department of Education policy Title I - Improving the Academic Achievement of the Disadvantaged, SUBPART 2 - ALLOCATIONS, SEC. 1122 ALLOCATIONS TO STATES, (c) HOLD-HARMLESS AMOUNTS, (1) AMOUNTS FOR SECTIONS 1124, 1124A, AND 1125: "For each fiscal year, the amount made available to each local educational agency under each of sections 1124, 1124A, and 1125 shall be-

(A) not less than 95 percent of the amount made available for the preceding fiscal year if the number of children counted for grants under section 1124 is not less than 30 percent of the total number of children aged 5 to 17 years, inclusive, in the local educational agency;

(B) not less than 90 percent of the amount made available for the preceding fiscal year if the percentage described in subparagraph (A) is between 15 percent and 30 percent; and

(C) not less than 85 percent of the amount made available for the preceding fiscal year if the percentage described in subparagraph (A) is below 15 percent."

Cause:

Formula spreadsheets supporting fiscal year 2003 allocations, created by the Department of Education, were missing from the agency's files. These files were allegedly destroyed by the Federal Financial Accountability Division under the previous Superintendent during the transition to the new Superintendent in January 2003.

Effect:

Fiscal year 2003 allocations could not be verified for compliance with federal regulations for each subpart of the grants on an individual LUA level.

Recommendation: The Department of Education should implement an internal control policy for safeguarding critical computer data.

Finding Control Number: FA-414-03-o3 ELIGIBILITY Inadequate Accounting Records Improving Teacher Quality State Grants (CFDA 84.367)

Condition:

Our examination included a review of the internal accounting controls utilized by the Department of Education in computing Title lIA allocations to local units of administration (LUA). The Department was unable to provide supporting documentation for the calculations of fiscal year 2003 allocations to the LUAs.

D-59

Federal Awards Flndlngs and QuestIoned Costs For the F1scal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Criteria:

Under U.S. Department of Education policy Title II - Preparing, Training, and Recruiting High Quality Teachers and Principals, Subpart 1 - Grants to States, SEC. 2113, STATE USE OF FUNDS, (a) IN GENERAL: "A State that receives a grant under section 2111 shall - (1) reserve 95 percent of the funds made available through the grant to make subgrants to local educational agencies as described in subpart 2;"

Subpart 2 - Subgrants to Local Educational Agencies, SEC. 2121, ALLOCATIONS TO LOCAL EDUCATIONAL AGENCIES, section (a), part (3) ALLOCATION OF ADDITIONAL FUNDS: "For any fiscal year for which the funds reserved by a State under section 2113(a)(1) exceed the total amount required to make allocations under paragraph (2), the State educational agency shall allocate to each of the eligible local educational agencies in the State the surn of -
(A) an amount that bears the same relationship to 20 percent of the excess amount as the number of individuals age 5 through 17 in the geographic area served by the agency, ... ; and

(B) an amount that bears the same relationship to 80 percent of the excess amount as the number of individuals age 5 through 17 from families with incomes below the poverty line in the geographic area served by the agency,..."

Cause:

Formula spreadsheets supporting fiscal year 2003 allocations, created by the Department of Education, were missing from the agency's files. These files were allegedly destroyed by the Federal Financial Accountability Division under the previous Superintendent during the transition to the new Superintendent in January 2003.

Effect:

Fiscal year 2003 allocations could not be verified for compliance with federal regulations for each subpart of the grants on an individual school system level.

Recommendation: The Department of Education should implement an internal control policy for safeguarding critical computer data.

Finding Control Number: FA-414-03-04 ELIGIBILITY Inadequate Accounting Records School Renovation Grants (CFDA 84.352)

Condition:
Criteria: Cause: Effect:

Our examination included a review of the internal accounting controls utilized by the Department of Education in maintaining the School Renovation grant. Our review revealed that the Department lacks supporting documentation for a ranking sheet used to determine which local units of administration (LUA) are considered high poverty.
The U.S. Department of Education's guidelines for School Renovation Grants state that: "States are required to provide total amounts for successful high-poverty and rural LUA applicants that are proportionate to the Title I shares of these types ofLUAs in aggregate."
Turnover in personnel responsible for eligibility determination resulted in the GDOE being unable to provide documentation that the eligibility criteria were met.
Auditor was unable to verify whether GDOE is in compliance with this requirement.

Recommendation: The GDOE should establish policies and procedures to ensure compliance with the U.S. Department of Education's guidelines for School Renovation.

D-60

Federal Awards Andlngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Finding Control Number: FA-414-03-0S ELIGIBILITY Inadequate Accounting Records School Renovation Grants (CFDA 84.352)

Condition:

Our examination revealed that several local units of administration (LUA) were obligated more funds than they requested in their applications. GDOE was unable to provide supporting documentation for these additional amounts. In addition, the GDOE was unable to provide an application for one of the LUAs.

Criteria:

The U.S. Department of Education's guidelines for School Renovation Grants state that: "States are required to distribute the funds on a competitive basis".

Cause:

Turnover in personnel responsible for eligibility determination resulted in the GDOE being unable to provide documentation that the eligibility criteria were met.

Effect: Recommendation:

LUAs receive funds under School Renovation Grants, IDEA, and Technology activities. For the IDEA and Technology portions of the grant, 13 LUAs who applied for funds were obligated more than they applied for. For the amounts that were over obligated, the LUAs applied for $740,800.78 of IDEA funds and were obligated $2,343,256.00 for IDEA activities (an over obligation of $1,602,455.22). For the Technology portion of over obligations, the LUAs applied for $0.00 and were obligated $78,000.00 (an over obligation of $78,000.00). In addition, GDOE was unable to provide an application for one of the LUAs. That LUA was obligated $97,448.00 for IDEA activities.
The GDOE should establish policies and procedures to ensure compliance with the u.s.
Department of Education's guidelines for School Renovation.

Finding Control Number: FA-414-03-06 MATCHING, LEVEL OF EFFORT, EARMARKING Inadequate Accounting Records Vocational Education - Basic Grants to States (CFDA 84.048)

Condition:

Our examination revealed that the GDOE was unable to provide adequate documentation regarding their maintenance of effort calculations.

Criteria:

U.S. Public Law 105-332, Title III - General Provisions, Part A - Federal Administrative Provisions, Section 311 Fiscal Requirements states that for maintenance of effort calculations, "fiscal effort" or "aggregate expenditures" must be used in the computation.

Cause:

The GDOE did not have policies and procedures in place in order to ensure that maintenance of effort calculations are documented as set forth by Federal law. There was no system in place for obtaining the correct state expenditures needed in order to calculate the maintenance of effort. The delegation of this responsibility was also overlooked by the GDOE.

Effect:

Auditors could not substantiate that the GDOE met the fiscal year 2003 maintenance of effort requirements.

Recommendation:

The GDOE should establish a system which will allow them to obtain information regarding actual expenditures involving the Local Units of Administration (LUAs), Department of Technical and Adult Education (DTAE), and the administration of the Vocational Education program. Policies and procedures should also be developed to ensure that maintenance of effort calculations are made in accordance with Federal law.

D-61

Federal Awards Andlngs and 0uestI0ned Costs For the Ascal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Finding Control Number: FA-414-03-07 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period

Condition:

As part of our examination, we reviewed tracking documents used by the GDOE to determine the status of subrecipient audit reports for the year ended June 30, 2002. Of the two-hundred-thirtyeight (238) subrecipients identified on the tracking documents, one-hundred-eighty-five (185) had not submitted their audits within the nine-month period as required by Office of Management and Budget (OMB) Circular A-133.

Criteria:

OMB Circular A-133 requires that subrecipient audit reports be submitted for review within nine months of the fiscal year end.

Cause:

This noncompliance is due to subrecipient audits not being performed in a timely manner.

Effect:

The condition identified above is in violation ofOMB Circular A-133.

Recommendation:

The GDOE should review and strengthen its in-house monitoring function in an effort to bridge the monitoring gap for those subrecipiients whose audit reports fail to meet the nine month deadline.

Major Federal Program/Award Affected: U.S. Department of Education
Food Distribution - CFDA No.1 0.550 Child Nutrition Cluster - CFDA No. 10.CNC Vocational Education - Basic Grants to States - CFDA No. 84.048 School Renovation Grants - CFDA No. 84.352 Improving Teacher Quality State Grants - CFDA No. 84.367

Federal Agencies With Other Affected 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-62

Federal Awards Andings and Questioned Costs For the Ascal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

DEPARTMENT OF COMMUNITY HEALTH (*)

Finding Control Number: FA-419-03-01

ACTIVITIES ALLOWED OR UNALLOWED

PERIOD OF AVAILABILITY OF FEDERAL FUNDS

ALLOWABLE COSTS/COST PRINCIPLES

PROCUREMENT AND SUSPENSION AND DEBARMENT

CASH MANAGEMENT

PROGRAM INCOME

ELIGIBILITY

REPORTING

MATCHING, LEVEL OF EFFORT, EARMARKING SPECIAL TESTS AND PROVISIONS

Conversion from Electronic Data System ("EDS") Medicaid Management Information System ("MMIS") to Affiliated

Computer Services ("ACS") MultiHealth (MHN) System

Federal Program Information:

CFDA Nos. 93.767, 93.777 and 93.778 State Children's Insurance Program ("SCHIP"), Medicaid Cluster (State Survey and Certification of Health Care Providers and Medical Assistance Program) US Department of Health and Human Services Grant Award Nos. 5-0305GA5021, 5-0305GA5001, 5-0305GA5028 and 5-0305GA5048 Fiscal Year 2003

Criteria:

See Financial Audit Finding FS-419-03-01

Condition:

See Financial Audit Finding FS-419-03-01

Questioned Cost: Amount not determinable

Context:

See Financial Audit Finding FS-419-03-01

Effect:

See Financial Audit Finding FS-419-03-01

Cause:

See Financial Audit Finding FS-419-03-01

Recommendation: See Financial Audit Finding FS-419-03-01

Finding Control Number: FA-419-03-o2 ALLOWABLE COSTS/COST PRINCIPLES Upper Payment Limit Calculation

Federal Program Information:

CFDA Nos. 93.777 and 93.778 Medicaid Cluster (State Survey and Certification of Health Care Providers and Medical Assistance Program) US Department of Health and Human Services Grant Award Nos. 5-0305GA5001, 5-0305GA5028 and 5-0305GA5048 Fiscal Year 2003

Criteria:

See Financial Audit Finding FS-419-03-02

Condition:

See Financial Audit Finding FS-419-03-02

Questioned Cost: $1,603,902

Context:

See Financial Audit Finding FS-419-03-02

(*) THIS ORGANIZATIONAL UNIT WAS AUDITED BY OTHER AUDITORS

D-63

Federal Awards AndIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Effect:

See Financial Audit Finding FS-4 I9-03-02

Cause:

See Financial Audit Finding FS-419-03-02

Recommendation: See Financial Audit Finding FS-419-03-02

Finding Control Number: FA-419-03-03 REPORTING Receivables - Other

Federal Program Information:

CFDA Nos. 93.767, 93.777 and 93.778 State Children's Insurance Program ("SCHIP"), Medicaid Cluster (State Survey and Certification of Health Care Providers and Medical Assistance Program) US Department of Health and Human Services Grant Award Nos. 5-030GA5021, 5-0305GA5001, 5-0305GA5028 and 5-0305GA5048 . Fiscal Year 2003

Criteria: Condition: Questioned Cost:

See Financial Audit Finding FS-419-03-03 See Financial Audit Finding FS-4 I9-03-03 None

Context:

See Financial Audit Finding FS-419-03-03

Effect:

See Financial Audit Finding FS-419-03-03

Cause:

See Financial Audit Finding FS-419-03-03

Recommendation: See Financial Audit Finding FS-419-03-03

Finding Control Number: FA-419-03-04 ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES REPORTING Accounts Payable, Accrued Liabilities and Contracts Payable

Federal Program Information:

CFDA Nos. 93.767, 93.777 and 93.778 State Children's Insurance Program ("SCHIP"), Medicaid Cluster (State Survey and Certification ofHealth Care Providers and Medical Assistance Program) US Department of Health and Human Services Grant Award Nos. 5-0305GA5021, 5-0305GASOOl, 5-0305GA5028 and 5-0305GA5048 Fiscal Year 2003

Criteria:

See Financial Audit Finding FS-419-03-04

Condition:

See Financial Audit Finding FS-419-03-04

Questioned Cost: None

Context:

See Financial Audit Finding FS-419-03-04

Effect:

See Financial Audit Finding FS-419-03-04

D-64

Federal Awards Anclings and Questioned Costs For the FIscal Year Ended June 30. 2003

FEDERAL AWARDS FINDINGS

Cause:

See Financial Audit Finding FS-4 I9-03-04

Recommendation: See Financial Audit Finding FS-419-03-04

Finding Control Number: FA-419-o3-05 ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES REPORTING Segregation of Duties

Federal Program Information:

CFDA Nos. 93.767,93.777 and 93.778 State Children's Insurance Program ("SCRIP"), Medicaid Cluster (State Survey and Certification of Health Care Providers and Medical Assistance Program) US Department of Health and Human Services Grant Award Nos. 5-0305GA5021, 5-0305GA5001, 5-0305GA5028 and 5-0305GA5048 Fiscal Year 2003

Criteria:

See Financial Audit Finding FS-419-03-05

Condition:

See Financial Audit Finding FS-419-03-05

Questioned Cost: Context:

None See Financial Audit Finding FS-419-03-05

Effect:

See Financial Audit Finding FS-419-03-05

Cause:

See Financial Audit Finding FS-419-03-05

Recommendation: See Financial Audit Finding FS-419-03-05

DEPARTMENT OF HUMAN RESOURCES

Finding Control Number: FA-427-03-o1 ELIGIBILITY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558)

Condition:

Our examination included a review of one thirty-five (135) 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 $244,543.09 out of a sample population of 84,534 cases totaling $118,945,513.55. Our examination revealed that two client fJ.les did not contain proper documentation for immunization which resulted in $735.00 of known questioned costs.

Criteria:

Section 1360 - Immunization Requirements of the Economic Support Services Manual states that a preschool child under age seven who is not yet enrolled in public or private school must be immunized to be included in the assistance. A child who does not meet the immunization requirement and who is a member of the standard fJ.ling unit is penalized until the requirement is met or good cause is established.

Questioned Cost: $735.00

D-65

Federal Awards FIndings and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Cause:

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.

Effect:

Failure to properly maintain client files can result in direct material effects on the financial statements.

Recommendation:

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-427-03-02 ALLOWABLE COSTS/COST PRINCIPLES Inadequate Accounting Procedures Centers for Disease Control and Prevention - Investigations and Technical Assistance (CFDA 93.283)

Condition:

The results of our testing of internal controls over program expenditures revealed the following deficiencies:

(1) Two (2) of the 46 items tested were recorded to the wrong focus group.

(2) Four of the 46 items tested were not properly authorized.

Criteria:

Invoices received from all program Focus Areas should be properly documented, authorized and recorded.

Cause:

These deficiencies occurred as a result of the Department's failure to follow prescribed policies and procedures for authorizing and recording program expenditures.

Effect:

Failure to properly authorize and record program expenditures could result in erroneous payments to vendors, unallowable costs being charged to the program, and misstatements in the financial statements going undetected.

Recommendation: The Department of Human Resources should continually monitor their internal control procedures over program expenditures and responsible program officials should adhere to prescribed controls.

Finding Control Number: FA-427-Q3-03 SUBRECIPIENT MONITORING Inadequacies in Monitoring of Subrecipients Centers for Disease Control and Prevention - Investigations and Technical Assistance (CFDA 93.283)

Condition:

Our examination of monitoring of subrecipients for the Centers for Disease Control and Prevention - Investigations and Technical Assistance (93.283) grants disclosed that the Department of Human Resources did not document site visits to subrecipients. We were unable, therefore, to evaluate the effectiveness of such reviews.

Criteria:

Section 7502 of the Single Audit Act Amendments of 1996 provides that each pass-through entity shall monitor the subrecipient's use of Federal awards through site visits or other means to provide reasonable assurance that the subrecipient administers Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements.

Cause:

The Department of Human Resources failed to document site visits to subrecipients as a result of inadequate policies and procedures.

D-66

Federal Awards F1ncIIngs and Questioned Costs For the AscaL Year Ended June 30. 2003

FEDERAL AWARDS FINDINGS

Effect:

The failure to properly monitor subrecipients increases the risk that subrecipients will not use Federal awards for authorized purposes, comply with laws, regulations, and the provisions of contracts and grant agreements, and achieve performance goals.

Recommendation:

We recommend that the Department of Human Resources take immediate steps to document site visits of the subrecipients of this program. The site visit review should include attributes which will fully document the nature, extent, and conclusions reached during the visit. This review should focus on both fInancial and programmatic aspects ofbioterrorism preparedness.

To further enhance monitoring of subrecipients over this program, we also recommend that program staff request and review audit reports of its subrecipients rather than rely solely on the reviews conducted by the Department's internal audit section.

Finding Control Number: FA-427-03-04 SUBRECIPIENT MONITORING Inadequate Monitoring of Subrecipients HIV Care Formula Grants (CFDA 93.917)

Condition:

Our examination of monitoring of subrecipients for the HIV Care Formula Grants disclosed that procedures were not fully in place to effectively monitor their subrecipients during the year under review as follows:

(1) The HIV Care Formula Grants uses subrecipients to apply services to clients. The HIV Care Formula Grants provided funding to seventeen subrecipients during the year under review. Our examination disclosed that the Department of Human Resources only conducted nineteen site visits in fourteen of the seventeen districts receiving grant funds.
(2) The HIV program staff of the Department of Human Resources did not review subrecipient audit reports received during the year.
(3) We were unable to verify that monthly programmatic reports and quarterly expense report flled by subrecipients were reviewed and approved by HIV program staff.

Criteria:

Section 7502 of the Single Audit Act Amendments of 1996 provides that each pass-through entity shall monitor the subrecipient's use of Federal awards through site visits or other means to provide reasonable assurance that the subrecipient administers Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements.

Cause:

The Department of Human Resources indicated that defIciencies occurred in subrecipient monitoring due to staff shortages.

Effect:

The failure to properly monitor subrecipients increases the risk that subrecipients will not use Federal awards for authorized purposes, comply with laws, regulations, and the provisions of contracts and grant agreements, and achieve performance goals.

Recommendation: The Department of Human Resources has made significant progress since the previous year in conducting site visits. We recommend the Department take the following actions:

(1) The Department should continue its efforts to ensure that 100% of the site visits are conducted.
(2) The monitoring tool used for site visits be updated to include a sign-off box verifying the review.
(3) The monitoring tool used for site visits be modified to include a section verifying the examination of allowability of program costs.

D-67

Federal Awards FIndtngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Finding Control Number: FA-427-03-05 MATCHING, LEVEL OF EFFORT, EARMARKING Failure to Establish Quality Management Program HIV Care Formula Grants (CFDA 93.917)

Condition:

The Department of Human Resources did not fully implement a quality management program. This program is currently in the developmental stages.

Criteria:

The State of Georgia is required to establish a quality management program to determine whether the services provided under the grant are consistent with the most recent Public Health Service guidelines for the treatment of HIV disease and related opportunistic infection and, as applicable, to develop strategies for bringing these services into conformity with the guidelines.

Cause:

The Department of Human Resources indicated that a quality management program was not fully in effect during the year under review due to staff shortages.

Effect:

The failure to comply with this program requirement increases the likelihood that eligible individuals will not receive optimal treatment.

Recommendation:

The Department of Human Resources has made significant progress since the previous year in establishing the required quality management program. The Department should continue its implementation efforts in order to ensure that the services being provided are in conformity with program guidelines.

Finding Control Number: FA-427-03-06 ELIGIBILITY Deficiencies in Eligibility DatabaselFile Maintenance HIV Care Formula Grants (CFDA 93.917)

Condition:

Dual purpose testing of program eligibility (testing of internal controls and compliance requirements) conducted on AIDS Drug Assistance Program (ADAP) and the Health Insurance Continuation Program (HICP) revealed the following deficiencies:

ADAP Our testing included a review of sixty case files. Results of our testing is as follows:

(1) In 3 of the 60 files, the recipients' HIV positive status was questionable. (2) In 3 of the 60 files, the recipients' income level was questionable. (3) 2 of the 60 files indicated the recipient was receiving or had applied for Medicaid. (4) In 28 of the 60 files, Georgia residency was not properly supported. (5) In 24 of the 60 files, recipient CD4 counts were not properly documented. (6) In 5 of the 60 files, the recipient social security number was matched to a Medicaid
recipient social security number. (7) 7 of the 60 files did not contain a re-certification within 6 months ofthe testing date.
mcp
Our testing included a review of sixty case files. Results of our testing is as follows:

(1) 7 of the 60 files did not contain a re-certification within 12 months of the testing date. (2) In 1 ofthe 60 files, the recipients' income level was questionable. (3) In 25 of the 60 files, Georgia residency was not properly supported. (4) In 5 of the 60 files, the recipient social security number was matched to a Medicaid
recipient social security number.

D-68

Federal Awards AndIngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Criteria:

To be eligible to receive assistance in the form of therapeutics, an individual must have a medical diagnosis of HIV disease and be a low-income individual, as defined by the State (42 USC 300ff26 (b)).

Cause:

The various health district staff does not always follow documentation policies and requirements for HIV participant case files.

Effect:

Failure to properly maintain recipient files can result in direct material effects on the fmancial statements.

Recommendation:

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.

DEPARTMENT OF LABOR

Finding Control Number: FA-440-03-o1 PROGRAM INCOME Delayed Posting of Program Income Vocational Rehabilitation Program (CFDA 84.126)

Condition:

Our examination of the accounting records of the Department of Labor noted that procedures over the timely depositing and posting of program income were inadequate, and that multiple delays of one to four months had occurred.

Criteria:

Office of Management and Budget Circular A-B3, Compliance Supplement (March 2003), Part 3, Section J, suggested audit procedure 3 directs auditors to perform tests to verify that all program income was properly recorded in the accounting records.

Cause:

These deficiencies are a result of management's failure to implement adequate procedures to ensure that program income is deposited timely into the proper bank accounts and recorded on the general ledger.

Effect:

Program income is not available for use in the program until deposited and posted, thereby reducing the amount of funds available for use in the program. The Department is also losing the use of any interest that could be earned on this income if deposited timely.

Recommendation: Management should develop appropriate policies and procedures to ensure program income is deposited timely into the proper bank accounts and recorded on the general ledger.

Subsequent to June 30, 2003, the Department of Labor initiated procedures to receive program income through direct deposit into the appropriate bank accounts, thereby eliminating any delay in program income funds being deposited.

D-69

Federal Awards Andtngs and Questlonecl Costs For the Ascal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

DEPARTMENT OF PUBLIC SAFETY

Finding Control Number: FA-466-03-01 ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES Inadequate Documentation Highway Safety Cluster
State and Community Highway Safety (CFDA 20.600)

Condition:

Our review included an examination of documentation involving expenditures for the year under review. We tested 20 grant and contract files in the amount of $2,085,664.00 out of a population of $13,591,799.46 for compliance with federal guidelines. We found that expenditures totaling $209,730.21 were not adequately documented. Proper documentation is essential in the determination of allowable costs.

Criteria:

The National Highway Safety Administration's Highway Safety Grant Funding Policy for FieldAdministered Grants states; in part: "Allowable costs must be necessary, reasonable and allocable, and funds must be used in accordance with the appropriate statute and implementing grant regulations. "

Questioned Cost: $209,730.21

Cause:

Management did not follow Federal rules and regulations noted above regarding documentation of cash disbursements in order to determine whether costs were allowable.

Effect:

Inadequate documentation may result in misappropriation of assets, inaccurate decisions regarding current and future purchasing decisions, and a lack of required information for reporting both to state and federal agencies.

Reconnnendation:

The Governor's Office of Highway Safety (administratively attached to the Department of Public Safety) should establish controls to ensure compliance with documentation guidelines. All expenditures should be properly documented in order to provide an adequate audit trail.

Finding Control Number: FA-466-03-02 PROCUREMENT AND SUSPENSION AND DEBARMENT Inadequate Documentation Highway Safety Cluster
State and Community Highway Safety (CFDA 20.600)

Condition:

Our review included an examination of contracts in excess of $100,000.00 to ensure compliance with federal suspension and debarment certification requirements. Of the contracts let during the year under review, only two were in excess of $100,000.00. Neither contained the required certification.

Criteria:

The Office of Management and Budget Circular A-133 (Compliance Supplement) and Code of Federal Regulations (49CFRI8.35) requires the Governor's Office of Highway Safety (administratively attached to the Department of Public Safety) to ensure that contractors receiving individual awards for $100,000.00 or more and all subrecipients certify that the organization and its principals are not suspended or debarred.

Cause:

Management did not enforce documentation policies and procedures related to suspension and debarment certifications for contracts in excess of $100,000.00.

D-70

Federal Awards findings and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Effect:

The Governor's Office of Highway Safety could transact business with suspended or debarred parties in violation of federal regulations.

Recommendation: Management should develop procedures to ensure adequate documentation is in place before transacting business with contractors.

Finding Control Number: FA-466-03-03 SUBRECIPIENT MONITORING Inadequate Monitoring of Subrecipients Highway Safety Cluster State and Community Highway Safety (CFDA 20.600)

Condition:

The Governor's Office of Highway Safety (administratively attached to the Department of Public Safety) does not track audit reports of subrecipients required to be submitted, follow-up to see that the audit reports are received, or require corrective action plans for all federal [mdings reported.

Criteria:

The Office of Management and Budget Circular A-133 (Compliance Supplement) and Code of Federal Regulations (49CFR18.26) requires the Governor's Office of Highway Safety to establish a tracking system to assure timely submission of required reports such as financial statements, performance reports, audit reports, on-site monitoring .reviews of subrecipients, and timely resolution of audit findings.

Cause:

Management did not comply with certain of the subrecipient monitoring provisions cited above.

Effect:

Subrecipient audit reports were not tracked to enable follow-up of audit report [mdings and subsequent corrective action plans.

Recommendation:

Management should establish a tracking system to identify subrecipients required to submit audit reports, track those subrecipients to ensure audit reports are received in a timely manner, and then follow-up on applicable findings.

OFFICE OF TREASURY AND FISCAL SERVICES

Finding Control Number: FA-486-03-01 CASH MANAGEMENT Failure to Adhere to Terms of the Cash Management Improvement Act Agreement Cash Management Improvement Act (CMIA)

Condition:

The State of Georgia's CMIA agent, the Office of Treasury and Fiscal Services, did not verify the accuracy of interest calculations and clearance patterns claimed by state agencies and subsequently submitted to the United State Department of the Treasury.

Criteria:

Under 31 CFR 205.29(b), the State of Georgia's CMIA agent is responsible for certain oversight duties with regard to the CMlA program. The agent has the responsibility to " ....maintain records supporting interest calculations, clearance patterns, interest calculation costs, and other functions directly pertinent to the implementation and administration of this subpart A for audit purposes... "

Cause:

The Office of Treasury and Fiscal Services indicated they were unable to verify the accuracy of interest calculations and clearance patterns claimed by state agencies during the year under review due to staff shortages.

Effect:

An incorrect amount could be transmitted by the Office of Treasury and Fiscal Services to the United States Department of the Treasury.

D-71

Federal Awards Anclings and Questioned Costs For the fiscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Recommendation:

The Office of Treasury and Fiscal Services should implement policies and procedures to assure compliance with the Cash Management Improvement Act agreement between the State of Georgia and the United States Department of the Treasury

GEORGIA INSTITUTE OF TECHNOLOGY (*)

Finding Control Number: FA-503-03-02 REPORTING Reports Not Submitted in a Timely Manner Research and Development Cluster

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.

Criteria:

The reporting compliance requirement mandates 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.

Cause:

The cause of untimely filing, as stated to us by GTRC personnel, was the unavailability of data at the report due date necessary for the completion of the required reports.

Effect:

Since the reports listed at Exhibit I were ultimately filed, the effect of untimely filing is the possible delay of other projects which were related to GTRC grants and contracts.

Agency DOD DOD DOD DOD DOD

CFDA Number
12 12 12 12 12

NASA

43

Air Force 12.8 Air Force 12.8 Air Force 12.8

Air Force 12.8 Air Force 12.8 Air Force 12.8

Air Force NSF NSF NSF NSF NSF NSF
Energy Energy Energy

12.8 47.076 47.049 47.041 47.041 47.041 47.041
81 81 81

Contract Number XXXXXX-98-C-8094 XXXXXX-98-C-8094
XXXXXX-98~-8094
XXXXXX-98-C-8121 XXXXXX-98-C-8121
NCC3-982
F33615-98~-1341 F33615-98~-!341 F33615-98~-1341
F33615-98~-1341 F33615-98~-1341 F33615-98~-1341
F33615-98~-1341
3606A86 DMR-0205328 EEC-9723060 DMI-0113881 EEC-9402723
21066BM DE-FC36-00GI06oo DE-FC36-00G 10600 DE-FC36-OOGI06oo

GTRClGIT Reference Number
A5617 A5617 A5617 A5794 A5794
R3989
RI162 Rl162 R1162
Rl162 Rl162 Rl162
RI162 R4066 R3764 R0533 R3203 R8375 R3134 R2315 R2315 R2315

Report Type Final Report Monthly Cost Report Final Report Status Report Status Report Quarterly Progress
Report Funds & Man-Hour Expenditure Report Project Planning Chart
Status Report Funds & Man-Hour Expenditure Report Project Planning Chart
Billing Voucher Funds & Man-Hour Expenditure Report Annual Progress Report Annual Progress Report
Final Report Annual Report Annual Progress Report Annual Report Progress Report Progress Report Progress Report

Report Number D.O. 0009 D.O. 0010 D.O. 0013
A007 A007
nla
A003 A006 A002
A003 A006 A005
A003 nla nla nla nla nla nla nla nla nla

Date Due 10/30/2002 12/25/2002 113112003 7/15/2002 3/15/2003
12/15/2002
7/25/2002 7/25/2002 8/25/2002
8/25/2002 8/25/2002 10/25/2002
10/25/2002 6/1/2003 3/3112003 2/28/2003 5/3112003 8/15/2003 2/28/2003 7/3112002 10/31/2002 4/30/2003

Date Mailed 7/2412003 112112003 3/14/2003 811512002 4/11/2003
12/16/2002
7/29/2002 7/29/2002 9/612002
9/6/2002 9/9/2002 1118/2002
10/28/2002 6/27/2003 4n12003 6/17/2003 7/26/2003 1117/2003 41112003 1018/2002 1112112002 5/27/2003

(*) CERTAIN FEDERAL COMPLIANCE REQUIREMENTS FOR THE RESEARCH AND DEVELOPMENT CLUSTER OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS

D-72

Federal Awards AndIngs and Ouestioned Costs For the FIscaL Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

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

Finding Control Number: FA-503-03-03 REPORTING Required Reports Not Filed Research and Development Cluster

Condition:

A report required by grant and contractual agreements entered into by GTRC and various Federal Agencies was not filed.

Criteria:

The reporting compliance requirement mandates the submission of certain reports in accordance with the provisions of 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.

Cause:

The cause of not fJ.ling the report, as stated to us by GTRC personnel, was human error.

Effect:

The reports listed in this fmding were not filed. The effect of not meeting filing requirements is the possible delay of other projects which are related to GTRC grants and contracts.

Listing of agency names, contract numbers, and CFDA numbers associated with this finding are:

Agencv Commerce Commerce Commerce Commerce Commerce Commerce
Energy Air Force Air Force Air Force Air Force Air Force

CFDA Number
11 11 11 II 11 11 81 12.8 12.8 12.8 12.8 12.8

Contract Number
3506665 1906B80 1906B80 1906B80 1906B80 1906B80 D3E-FC02-O I ER25469 F33615-98-C-1341 F33615-98-C-1341 F33615-98-C-1341 F3361 5-98-C-I 341 F33615-98-C-1341

GTRClGIT Reference Number
R2560 R7488 R7488 R7488 R7488 R7488 R3281 RI162 RI162 R1162 R1162 RI162

Report Tvpe
Annual Progress Report Quarterly Progress Report Quarterly Progress Report Quarterly Progress Report Quarterly Progress Report
Final Technical Report Informal Progress Report
Project Planning Chart Project Planning Chart Project Planning Chart
Status Report Project Planning Chart

Report Number
nla n!a nla nla nla nla n!a A006 AOO6 A006 A002 A006

Date Due
4/30/2003 7/10/2002 10/10/2002 1/10/2003 4/10/2003 4/30/2003 5/14/2003 3/25/2003 4/25/2003 5/25/2003 2/25/2003 6/25/2003

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

Finding Control Number: FA-503-03-04 REPORTING Reports without Research Report Approval Sheet Forms or Required Signatures Research and Development Cluster

Condition:

The Research Report Approval Sheet ("RRAS") fonn was either not attached to the deliverable or the signature was omitted.

Criteria:

Pursuant to GTRC policy, the RRAS fonn should be used and signed to ensure the proper approval process.
D-73

Federal Awards Findings and Questioned Costs For the FIscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Cause: Effect:

Project Investigators forward the RRAS fonn when they submit the deliverable. For these reports, the Project Investigator did not submit the RRAS or did not sign them
If the RRAS is not included or signed, the correct approval process will not be documented. The form also provides necessary infonnation such as the deliverable identification number, award period, the date due and the date mailed.

The agency names, contract numbers, and CFDA numbers associated with this finding are:

~ NIHlDHHS
Air Force NASA NSF NSF NSF
Air Force

CFDA Number 93.395
12.8 43 47.075 47.041 47.075 12.8

Contract Number CA87525-03
F33615-98~-1341
NCC3-982 SBE-D123532 EEC-9402723 SBE-0123532
F33615-98~-1341

GTRC/GIT Reference Number
R3741 R1162 R3989 R3345 R8375 R3345 R1162

Report Type RRASForrn Status Report Quarterly Progress Report Interim Report RRAS Annual Progress Report Annual Report RRAS Status Report

Date Due 4/1/2003 8/25/2002 4/15/2003 7/24/2002 8/15/2002 6/30/2003 5/25/2003

Recommendation: The OSP personnel should ensure that the RRAS form is attached to the deliverable.

UNIVERSITY OF GEORGIA (*)

Finding Control Number: FA-518-03-01 REPORTING Financial Reports Not Properly Filed

Condition:

Two of the 20 expenditures selected for testing included fmancial reports that were not filed timely. The following table lists the financial reports filed improperly.

Account Number CFDANumber Date Due

Date Submitted

26-31-GE361-201 26-31-RE356-175

10.000 10.000

April 1, 2003 April 1, 2003

April 22, 2003 April 22, 2003

Criteria:

Section 52, Financial Reporting, of OMB Circular A-ll 0 establishes requirements for monitoring and reporting the financial performance.

Cause:

The cause of the fmding appears to be noncompliance with existing internal control features as opposed to the absence of such controls.

Effect:

The University failed to comply with the applicable fmancial reporting requirements, which could result in loss of federal funds.

Recommendation:

The University should continue its efforts to achieve full compliance with the existing internal controls for the monitoring of required reports. The University should consider developing a monthly report that lists all delinquent required reports. This list should be reviewed by University personnel in order to monitor the timeliness of required reporting.

(*) FEDERAL COMPLIANCE REQUIREMENTS OF THIS ORGANIZATIONAL UNIT WERE AUDITED BY OTHER AUDITORS
D-74

Federal Awards Andlngs and Questioned Costs For the Ascal Year Ended June 30. 2003

FEDERAL AWARDS FINDINGS

Finding Control Number: FA-518-03-02 REPORTING Tedmical Reports Not Properly Filed

Condition:

One of the 20 expenditures selected for testing included a technical report that was not filed timely. The following table lists the technical report filed improperly:

Account Number CFDANumber

Date Due

Date Submitted

10-31-RE336-699

93.000

June 30, 2003

August 13, 2003

Criteria:

Section 51, Monitoring and Reporting of Program Performance, of OMB Circular A-110 establishes requirements for the submission of technical reports when appropriate.

Cause:

The cause of this fmding appears to be noncompliance with existing internal control features as opposed to the absence of such controls.

Effect:

The University failed to comply with the applicable technical reporting requirements, which could result in loss of federal funds.

Recommendation:

The University should continue its efforts to achieve full compliance with the existing internal controls for the monitoring of required reports. The University should consider developing a monthly report that lists all delinquent required reports. This list should be reviewed by University personnel in order to monitor the timeliness of required reporting.

ALBANY STATE UNIVERSITY

Finding Control Number: FA-521-03-01 ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program

Condition:

The SFA Office improperly determined the fmancial need of eligible students.

Criteria:

Provisions included in 34 CFR 668 provides general provisions for administering Student Financial Aid (SFA) programs, 34 CFR 690 provides eligibility and other related program requirements that are specific to the Federal Pell Grant Program, and Section 737 of the Public Health Service Act provides eligibility and administrative program requirements that are specific to the Scholarships for Disadvantaged Students Program.

Questioned Cost: $2,700.00

Information:

A sample of sixty 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 $414,356.53 out of a population of $19,925,828.59. Our examination revealed that three students received funds in excess of their eligible need totaling $2,700.00 as shown below:

(1) One student was disbursed Federal Pell Grant Program funds in excess of allowable limits. Federal regulations (34 CFR 668.20) state that only thirty semester hours of remedial course work may be inCluded in a student's emollment status and cost of attendance determination. The University's published policy states that if courses must be taken beyond 30 hours of academic credit, students must enroll at their own expense. The student

D-75

Federal Awards Findings and Questioned Costs
For the FIscaL Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

in question exceeded the thirty hour limit Summer Semester 2001. This noncompliance resulted in an over-disbursement of$2,000.00.

(2) One student was not in compliance with the University's Repeat Policy Statement. The student in question was disbursed Federal Pell Grant Program funds based upon full-time emollrnent status; however, the student was only eligible for funding based upon threequarter-time emollment status. This situation was a result of the student attempting to repeat a class that she had already taken and earned a "C". The University's policy states that once a grade above "D" is earned in a class, grades earned in any subsequent repeat of the same course will not be counted. This noncompliance resulted in an over-disbursement of $500.00.

(3) One student was not in compliance with the Student Financial Aid Guidelines for the Scholarships for Disadvantaged Students (SDS) Program. Section 737(d)(I)(A) of the Public Health Service Act states that students must be emolled full-time in order to be eligible for SDS funds. The student in question received SDS funds while emolled halftime. This noncompliance resulted in an over-disbursement of$200.00.

Cause:

SFA office had not performed a risk assessment of its procedures to identify areas subject to nonconformity with eligibility requirements, and thus there were insufficient controls in place to assure that SFA funds were awarded in correct amounts to students based on their financial need.

Effect:

SFA office was not in compliance with Federal regulations concerning the awarding of SFA funds to students. For three students, a total of $2,700.00 was disbursed in excess of their eligibility.

A projection of these errors to the total sample population resulted in likely questioned costs in excess of $1 0,000.00.

Recommendation:

The University should perform a risk assessment of its procedures to assure that a proper eligibility determination of a student's fmancial aid is made in line with regulations. Where vulnerable, the University should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with financial need requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are properly implemented.

Finding Control Number: FA-521-03-02 ELIGIBILITY Incorrect Cost of Attendance Calculation Student Financial Aid Cluster Program

Condition:

The SFA office improperly determined the cost of attendance of eligible students and did not consider other resources in their financial need calculation.

Criteria:

Provisions included in 34 CFR 668 provides general provisions for administering Student Financial Aid (SFA) programs and 34 CFR 685 provides eligibility and other related program requirements that are specific to the William D. Ford Direct Student Loan Program.

Information:

A sample of sixty financial aid files was selected to determine if the cost of attendance was properly calculated for eligible students. Our examination revealed that eight students' cost of attendance was incorrectly calculated as shown below:

(1) Five students' cost of attendance was incorrectly calculated due to the wrong housing status being used by the SFA office. Four of the students used on-campus housing; however, the

D-76

Federal Awards Findings and QuestIoned Costs For the FIscal Year Ended June 30. 2003

FEDERAL AWARDS FINDINGS

SFA office calculated their cost of attendance based upon off-campus housing. One of the students used off-campus housing, but the SFA office calculated her cost of attendance based upon on-campus housing.

(2) Two students' cost of attendance was incorrectly calculated due to miscellaneous adjustments made by the SFA office. The SFA office could not explain why these miscellaneous adjustments were made.

(3) One student's cost of attendance was incorrectly calculated due to the wrong classification being used by the SFA office. The student should have been classified as in-state; however, the SFA office calculated his need based upon out-of-state.

In addition to the incorrect cost of attendance calculations noted above, our examination also revealed one situation in which a student received another financial resource that was not considered in his 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.

Cause:

SFA office had not performed a risk assessment of its procedures to identify areas subject to nonconformity with fmancial need requirements, and thus there were insufficient controls in place to assure that cost of attendance and fmancial need calculations were made correctly.

Effect:

SFA office was not in compliance with Federal regulations concerning the cost of attendance and financial need calculations of eligible students.

Recommendation:

The University should perform a risk assessment of its procedures to assure that a proper cost of attendance and financial need determination of each eligible student is made in line with Federal regulations. Where vulnerable, the University should develop and/or modify its policies and procedures to ensure that correct amounts will be calculated in conformity with cost of attendance budgets and Federal requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are adhered to.

Finding Control Number: FA-521-03-o3 REPORTING Reports Not Reconciled Student Financial Aid Cluster Program

Condition:

The Fiscal Operations and Application to Participate (FISAP) Report had amounts reported for various Student Financial Aid Cluster programs that did not reconcile to the accounting records and supporting documentation.

Criteria:

Provisions included in 34 CFR 674, 675,676 and 690 provide reporting requirements specific to the Federal Pell Grant Program, the Federal Supplemental Educational Opportunity Grant, the Federal Work-Study Program, and the Federal Perkins Loan Program.

Information:

The FISAP Report had amounts reported for the Federal Pell Grant Program, the Federal Supplemental Education Opportunity Grant and the Federal Work-Study Program that did not reconcile to the (Grants Administration and Payments System) GAPS Reports maintained by the University. The FISAP Report also had amounts reported for the Perkins Loan Program that did not reconcile to the accounting records. Federal regulations (34 CFR 674.19,675.19,676.19 and 690.18) require that the University ensure that reported information is accurate and reconciled as necessary.

D-77

Federal Awards Andlngs and Questioned Costs For the Fiscal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Cause:

The deficiencies were a result of management's failure to adequately reconcile reports submitted to the accounting records and supporting documentation.

Effect:

The SFA office incorrectly reported amounts to the U. S. Department of Education.

Recommendation:

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.

Finding Control Number: FA-521-o3-04 REPORTING Inadequate Accounting Records Student Financial Aid Cluster Program Higher Education - Institutional Aid (84.031)

Condition: Criteria:

The general ledger supporting financial reports for these programs could not be audited due to the condition of the accounting records. Provisions included in 34 CFR 608,674,675,676 and 690 provide reporting requirements specific to the Higher Education - Institutional Aid Program, Federal Pell Grant Program, the Federal Supplemental Educational Opportunity Grant, the Federal Work-Study Program, and the Federal Perkins Loan Program

Information:

The following reports were reviewed:

Higher Ed - Title III - Institutional Aid Programs - Part B - Strengthening Historically Black Colleges and University Programs Grants Administration and Payment System Payment Requests Final Performance Report for Award Number P031B70026 for Period October 1, 1997 to September 30,2002 Grant Performance Report for Award Number P031B020028 for Period October 1, 2002 to April 30, 2003

Student Financial Aid Cluster Program Grants Administration and Payment System Payment Requests Fiscal Operations Report and Application to Participate Report

Federal Pell Grant Program Summary Statement of Account Common Origination of Disbursement Report

Federal Direct Student Loan Program Year-to-Date Cash Summary Common Origination of Disbursement Report

Accounting records supporting amounts reported in the program reports listed could not be verified as accurate or a source of reliable information. The accounting records which maintain the financial activity for these programs were in a condition such that audit procedures could not be performed to ensure the accuracy of the financial information reported in the various program reports.

D-78

Federal Awards FIndIngs and Questioned Costs For the FIscal Year Ended June 30. 2003

FEDERAL AWARDS FINDINGS

Cause:

The deficiencies were a result of management's failure to implement and monitor internal controls to ensure that financial records were prepared, analyzed and maintained in a manner to provide an adequate audit trail.

Effect:

Sufficient compliance procedures could not be performed to verify accuracy of information reported in program reports.

Reconunendation:

The University should review internal controls in place and implement a monitoring process to ensure that controls are effective and working properly to produce fmancial records adequate for the audit process.

COLUMBUS STATE UNIVERSITY

Finding Control Number: FA-530-03-o1

ELIGIBILITY

.

Overpayment of Student Financial Aid

Student Financial Aid Cluster Program

Condition:

The SFA Office improperly determined the financial need of an eligible student.

Criteria:

Provisions included in 34 CFR 668 provide general provisions for administering Student Financial Aid (SFA) programs, 34 CFR 676 provides eligibility and other related program requirements that are specific to the Federal Supplemental Educational Opportunity Grant Program and 34 CFR 690 provides eligibility and other related program requirements that are specific to the Federal Pell Grant Program

Questioned Cost: Information:

$4,250.00
A sample of fifty fmancial 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 $229,772.00 out of a population of $22,008,353.01. Our examination revealed that one student received funds in excess of their eligible need totaling $4,250.00. The student was not in compliance with the University's published satisfactory academic progress policies. Federal regulations (34 CFR 668.16,668 32 and 668.34) state that a student must maintain satisfactory academic progress to be eligible to receive fmancial assistance under the Title IV programs. The University'S policy states that students must successfully complete 67% of the total hours attempted. The policy also states that financial aid recipients are expected to earn a minimum grade point average of 1.40 for 0-29 GPA hours. The student in question had completed 42% of the total hours attempted and had an overall grade point average of .96.

Cause:

SFA office had not performed a risk assessment of its procedures to identify areas subject to nonconformity with eligibility requirements, and thus there were insufficient controls in place to assure that SFA funds were awarded in correct amounts to students based on their financial need.

Effect:

SFA office was not in compliance with Federal regulations concerning the awarding of SFA funds to one student. The effect of this noncompliance was an over-disbursement of $4,000.00 of Federal Pell Grant Program funds and $250.00 of Federal Supplemental Educational Opportunity Grant Program funds, resulting in known questioned costs totaling $4,250.00. A projection of these errors to the total sample population resulted in likely questioned costs in excess of $10,000.00.

Reconunendation: The University should perform a risk assessment of its procedures to assure that a proper eligibility determination of a student's financial aid is made in line with regulations. Where

D-79

Federal Awards findings and Questioned Costs For the fiscal Year Ended June 30. 2003

FEDERAL AWARDS FINDINGS

vulnerable the University should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with fInancial need requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are adhered to.

Finding Control Number: FA-530-03-02 ELIGIBILITY Improper Financial Need Calculation Student Financial Aid Cluster Program

Condition:

The SFA office did not consider other resources in their fInancial need calculation.

Criteria:

Provisions included in 34 CFR 668 provides general provisions for administering Student Financial Aid (SFA) programs, 34 CFR 674 provides eligibility and other related program requirements that are specifIc to the Federal Perkins Loan Program and 34 CFR 685 provides eligibility and other related program requirements that are specifIc to the William D. Ford Direct Student Loan Program.

Questioned Cost: $1,544.00

Information:

A sample of fIfty fmancial aid fIles was selected to determine if the need calculation was properly calculated for eligible students. The items sampled contained fmancial aid disbursements of $229,772.00 out of a population of $22,008,353.01. Our examination revealed three situations in which students received other fInancial resources that were not considered in their fInancial need calculation. One of these situations resulted in an over-disbursement of $1,544.00 of William D. Ford Direct Student Loan Program Funds. Federal regulation (34 CFR 673.5) states that the institution must consider those resources it can reasonably anticipate at the time it awards funds.

Cause:

SFA office had not performed a risk assessment of its procedures to identify areas subject to nonconformity with fInancial need requirements, and thus there were insufficient controls in place to assure that fInancial need calculations were made correctly.

Effect:

SFA office was not in compliance with Federal regulations concerning the fmancial need calculations of eligible students. This resulted in known questioned costs of $1,544.00 for an over-disbursement of William D. Ford Direct Student Loan Program Funds. A projection of this error to the total sample population resulted in likely questioned costs in excess of $10,000.00.

Recommendation:

The University should perform a risk assessment of its procedures to assure that a proper fInancial need determination of each eligible student is made in line with Federal regulations. Where vulnerable the University should develop and/or modify its policies and procedures to ensure that correct amounts will be calculated in conformity with Federal requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are adhered to.

Finding Control Number: FA-530-03-o3 ELIGIBILITY Incorrect Cost of Attendance Calculation Student Financial Aid Cluster Program

Condition:

The SFA office improperly determined the cost of attendance of eligIble students.

Criteria:

Provisions included in 34 CFR 668 provides general provisions for administering Student Financial Aid (SFA) programs, 34 CFR 685 provides eligibility and other related program

D-80

Federal Awards FlndJngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

requirements that are specific to the William D. Ford Direct Student Loan Program and 34 CFR 690 provides eligibility and other related program requirements that are specific to the Federal Pell Grant Program

Information:

A sample of fifty financial aid files was selected to detennine if the cost of attendance was properly calculated for eligible students. Our examination revealed that two students' cost of attendance was incorrectly calculated as shown below:

(1) One student's cost of attendance was incorrectly calculated due to the fact that the student was enrolled less than half time for one semester of enrollment, and the SFA office calculated the cost of attendance using the full cost of attendance budget. Federal regulations state that for students who are enrolled less than half time, only the costs for tuition and fees and allowances for books and supplies, transportation, and dependent care expenses may be included as part of the cost of attendance.

(2) One student's cost of attendance was incorrectly calculated due to the wrong classification being used by the SFA office. The student should have been classified as a graduate student; however, the SFA office calculated his need based upon undergraduate status.

Cause:

The SFA office had not performed a risk assessment of its procedures to identify areas subject to nonconformity with financial need requirements, and thus there were insufficient controls in place to assure that cost of attendance calculations were made correctly.

Effect:

The SFA office was not in compliance with Federal regulations concerning the cost of attendance of eligible students.

Recommendation:

The University should perform a risk assessment of its procedures to assure that a proper cost of attendance determination of each eligible student is made in line with Federal regulations. Where vulnerable the University should develop and/or modify its policies and procedures to ensure that correct amounts will be calculated in conformity with cost of attendance budgets and Federal requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are adhered to.

FORT VALLEY STATE UNIVERSITY

Finding Control Number: FA-533-03-o1 REPORTING Expenditures in Excess of Authorization Federal Pell Grant Program (CFDA 84.063)

Condition:

The University exceeded the amount authorized in the Statement of Account.

Criteria:

Provisions contained in 34 CFR 690.83 indicates an Institution should provide to the U. S. Department of Education each student's Payment Data for each award year which is then used to detennine the institution's authorized award for the Federal Pell Grant Program

Information:

The Statement of Account report from the U. S. Department of Education authorized the University to expend $4,366,821.00. The University's accounting record reported $4,376,229.00 as fiscal year 2003 Pell Grant Program expenditures. As a result, the University expended $9,408.00 in excess ofthe authorized amount.

Cause:

The University does not have procedures implemented to ensure that the expenditures do not exceed the authorized amount.

D-81

Federal Awards Andlngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Effect:

The University will not be reimbursed the amount of overexpenditure unless they can provide the U. S. Department of Education appropriate documentation.

Recommendation:

The University should implement procedures to ensure that the amounts expended do not exceed the amount authorized. In order to be reimbursed for the excess Pell Grant program expenditures, the University, in conformity with Federal guidelines, must certify the validity of the payments to the U. S. Department of Education. The Federal agency can then provide appropriate adjustments of the fiscal year 2003 authorized amount in order to make the funds available to the University.

Finding Control Number: FA-533-03-o2 REPORTING Reports Not Reconciled 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)

Condition:

Amounts 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 properly reconciled.

Criteria:

Federal regulations (34 CFR 674.19,675.19,685.309,690.81 and 690.83) require the University to ensure reported information is accurate and reconciled as necessary.

Information:

The following reports were not properly reconciled:

(1) The Pell Year to Date Report, which reports Federal Pell Grant Program expenditures for the year, was not reconciled to the accounting records.
(2) The Fiscal Operations and Application to Participate (FISAP) report for fiscal year ending June 30, 2002, which was the most current report available during the review, had amounts reported for State Grant and Scholarships Made to Undergraduates, Tuition and Fees, the Pell Grant Program, the Federal Work-Study Program and the Perkins Loan Program that did not reconcile to the accounting records.
(3) The University did not reconcile monthly the Federal Direct Loan Program activity to the accounting records in accordance with Section 2 of The Blue Book.

Cause:

The deficiencies identified were a result of management's failure to adequately reconcile activity reported in Federal financial assistance program reports to the accounting records.

Effect:

Information submitted to the U. S. Department of Education is not accurate and not supported by the accounting records.

Recommendation: 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.

SAVANNAH STATE UNIVERSITY

Finding Control Number: FA-548-o3-o1 ALLOWABLE COSTS/COST PRINCIPLES Deficiencies in Internal Controls Higher Education - Institutional Aid (CFDA 84.031)

Condition:

The University paid vouchers without adequate supporting documentation.

D-82

Federal Awards Andlngs and Questioned Costs For the Ascal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Criteria:

Provisions set forth in OMB Circular A-21 Section C and J require expenditures to be supported by appropriate documentation.

Information:

During the year under review, a sample of forty-six Title III expenditures revealed the following:

(1) One voucher could not be located. (2) Five vouchers were paid from duplicated invoices rather than from the original invoices.

Cause:

These conditions were the result of management's failure to have adequate internal controls in place to ensure compliance with OMB Circular A-21.

Effect:

Without adequate documentation to support payments, the University could incorrectly pay invoices.

Recommendation:

The University should develop and implement policies and procedures to ensure that program expenditures are supported by adequate documentation. In addition, the University should develop a monitoring process to ensure that controls are being followed.

Finding Control Number: FA-548-03-02 ELIGIBILITY SPECIAL TESTS AND PROVISIONS Deficiencies in Student Financial Aid Refund Process Student Financial Aid Cluster Program

Condition:

The SFA office was not properly performing the refund process.

Criteria:

Provisions included in 34 CFR 668 provide general provisions for administering Student Financial Aid (SFA) programs. Provisions included in 34 CFR 685 and 34 CFR 690 provide eligibility and other related program requirements that are specific to William D. Ford Direct Student Loan Program and Federal Pell Grant PrograIll, respectively.

Questioned Cost:

Questioned Costs of $3,618.05 were identified for officially withdrawn students. The projection of questioned costs could not be readily determined for students who unofficially withdrew. However, the likely questioned costs are believed to exceed $10,000.00.

Information:

Twenty student financial aid refunds were selected to determine if refunds were calculated and returned in the correct amount to the proper funding agency and/or student. The items tested contained financial aid disbursements of $38,487.00 out of a population of $15,943,984.27. Our examination revealed the following deficiencies:

(1) Five student refunds were not calculated correctly. (2) Unearned Title IV funds were not applied by the University to the appropriate student
financial aid programs within 30 days as required by the Higher Education Amendments of 1998, Public Law 105-244 for two students. (3) University refunded incorrect amount of Title IV and/or HOPE funds for eight students resulting in a questioned cost of$1,518.96. (4) University returned funds without approval for three students. (5) Five students did not receive notification of HOPE refunds as required. (6) Four students received financial aid after withdrawing from classes causing overaward of financial aid resulting in a questioned cost of$1,905.59. (7) One student received an overaward ofPell resulting in a questioned cost of$193.50.

D-83

Federal Awards findings and QuestIoned Costs For the Ascal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

In addition, the University failed to calculate refunds for students that received all failing grades due to unofficially withdrawing from school.

Cause:

These deficiencies were the result of management's failure to properly process student fmancial aid awards and refunds in accordance with Federal regulations.

Effect:

SFA office awarded and/or refunded SFA funds to students incorrectly.

Recommendation:

The University should develop and implement procedures to ensure that student financial aid awards and refunds are properly calculated and that unearned funds are correctly returned to the appropriate accounts in a timely marmer in accordance with the Higher Education Amendments of 1998, Public Law 105-244. University officials should also ensure that students who received failing grades for unofficially withdrawing from school are properly included in the SFA refund process. The University should contact the U. S. Department of Education regarding resolution of this finding.

Finding Control Number: FA-548-03-03 EQUIPMENT AND REAL PROPERTY MANAGEMENT Failure to Maintain a Property Management System Higher Education - Institutional Aid (CFDA 84.031)

Condition:

The University failed to provide a complete Title III equipment report. Audit procedures relating to equipment could not be performed.

Criteria:

Provisions included in 34 CFR 74 and OMB Circular A-lIO, Subpart c.34 set forth Federal requirements for equipment.

Cause:

During the year under review, the University failed to have adequate internal controls in place to ensure compliance with Federal equipment requirements.

Effect:

Due to the lack of an appropriate inventory control system, the University is unable to adequately maintain and safeguard equipment inventory.

Recommendation:

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 every two years. The U. S. Department of Education should review this matter to determine that appropriate policies and procedures are established by the University to adequately maintain and report Title III equipment.

GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION (*)

Finding Control Number: FA-918-o3-o1 REPORTING Failure to provide a reconciliation of the September 30, 2002 ED Form 2000
to the National Student Loan Data System (NSLDS) extract

Condition:

For fiscal year end June 30, 2003, the Corporation was unable to provide a reconciliation of the September 30, 2002 ED Form 2000 to the National Student Loan Data System (NSLDS).

(*) THIS ORGANIZATIONAL UNIT WAS AUDITED BY OTHER AUDITORS D-84

Federal Awards AncIIngs and Questioned Costs For the F1scal Year Ended June 30, 2003

FEDERAL AWARDS FINDINGS

Criteria:

Guaranty agencies are required to submit loan level detail infonnation to the National Student Loan Data System (NSLDS) and are required to submit the ED Form 2000, Guaranty Agency Financial Report, on a monthly, monthly/quarterly, or annual basis. Relevant amounts on the NSLDS must reconcile with the NSLDS Extract submitted by the guaranty agency.

Recommendation: The Corporation should consider reconciling the ED Form 2000 to the NSLDS Extract on a quarterly and annual basis.

D-85

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SECTIONE ScI-rEDULE OF EXPENDITURES OF
FEDERAL AVV.ARI:S

ScHEDULE OF EXPENDITURES OF FEDERAL Avv~

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Georgia.
Schedule of Expenditures of Federal Awards For the FIscaL Year Ended June 30, 2003

International Development, U. S. Agency for
Other Federal Assistance Direct Through: Chemonics International, Inc. Through: International Science and Tech Institute Through: United Negro College Fund

CFDA NUMBER
02.XXX

PASS-11IROUGH ENITIY IDENTIFYING
NUMBER
AlZ97 CLG89 ALV89

AGENCY TOTAL
Office or National Drug Control Policy Other Federal Assistance Direct
AGENCY TOTAL
Agriculture, U. S. Department of Agricultural Research - Basic and Applied Research
Direct Through: University of Geo~Research Foundation
Plant and Animal Disease, Pest Contro~ and Animal Care Direct Through: Univemty of Georgia Research Foundation
W~dlife Services Through: University of Geo~Research Foundation
Forestry Incentives Program Direct
Conservation Reserve Program Direct
Market News Direct
FederalState Marketing Improvement Program Direct
Inspection Grading and Standardization Direct
MarltetProtectionandPromotion Direct
GnmlS for Agricultural Research. Special Research GnmlS
Direct Through: American Distmce Ed Consortiwn Through: University of Geo~Research Foundation
Cooperative ForeslJy Research Direct
PBymen1S 10 Agricultural Experiment Stations Under the Hatch Act
Direct

07.XXX

10.001
10.025
10.028 10.064 10.069 10.153 10.156 10.162 10.163 10.200
10.202 10.203

Various 01-8100-0743-CA 03740503343(CA)
BLD83 Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

2,871,173 (R) 1,924
10,972 203,919
3,087,988
3,087,988

27,480 27,480

7,889 (R) 1,477,416 (R) 1,485,305
715,511 (R) 6,457 (R)
721,968
16,302 (R)
30,000
129,400
30,959
6,457
2,883,325
285
710,960 (R) 4,499 (R)
4,318,346 (R) 5,033,805
762,326 (R)
4,199,718 (R)

E-5

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30. 2003

Agriculture, U. S. Department of
GranlS for Agricultural Research Competitive Research GranlS
Direct Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: University ofGeorgia Research Foundalion

CFDA NUMBER
10.206

PASS-11IROUGH ENTITY IDENTIFYING
NUMBER
Various

1890 Institution Capacity Buildin8 GranlS Direct
Higher Education Challenge GranlS Direct Through: Florida S_ University Through: Iowa Stare University Through: Texas Agricultunl! Experiment Station Through: University ofGeorgia Research Foundation

10.216 10.217

4162310 570078 200138411-12116

Higher Education Multicultural Scholars Program Direct
Funds for Rural America Research, Education, and Exlension Activities
Through: Purdue University
Agricultunl1 and Rural Economic Research Direct
Initiative for Future Agriculture and Food Systems Direct Through: University of Georgia Research Foundation Through: University of WISConSin

10.220 10.224 10.250 10.302

20213
Various 593A261

Integrated Prognuns Direct Through: ClelllSOO University Through: Nor1h Carolina S_ University Through: Pennsylvania Stare University Through: Texas A&:M University Through: University of Georgia Research Foundation Through: University ofFlorida

10.303

58375582072002700 200017310112000-1728-03
45014G-15 K006833-oISC000475-1-1
SC000453-1-10

Homeland Security. Agricultunl1 Direct
Rural Self-Help Housing Technical Assistance Direct
Crop Insurance Through: University of Georgia Research Foundation
Cooperative AgreemenlS with SlateS for Intrastale Meat and Poultry Inspection Direct
Cooperative Exlension Service Direcl Through: Comell University Through: Kansas Slal. University Through: Nor1h Carolina Stare University Through: Texas A&:M University Through: University of Arl<ansas Through: University of Georgia Research Foundation Through: University ofNebraska-UocoIn

10.304 10.420 10.450 10.475

2002-30001-12128 02IE083 10177

10.500

99-41560-0821 SOl 03203
2000-0352-042001-0072-04 2001-49200-GI238fTCE 622028
POOO4907 S03044
LMl6312116a14

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

270,753 (R) 169 (R)
11,384 (R) 2,217,211 (R) 2,499,517
2,881,721
46,242 (R) 10,896 36,503 (R)
1,838 (R) 81.208 (R) 176,687
45,702
2,528 (R)
74,293
61,402 (R) 1,334,684 (R)
17,812 (R) 1,413,898
827,701 (R) IS,521 (R) 76,916 (R) 33,831 6,661 (R) 33,861 (R) 4,986 (R)
1,002,477
146,995 (R)
5,029
45,749 (R)
3,358,000
12,422,739 (R) 3,182 (R)
41,022 (R) 7,220 (R) 18,468 (R) 15,722 (R) 9,834 (R) 9 (R)
12.518,196

E-6

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30, 2003

Agriculture, U. S. Department of
Food Distribution Direct
Food Stamps (FSC) Direct
School Breakfast Progrnm (CNq Direct
National School Lunch Progrnm (CNq Direct
Special Milk Progrnm for Children (CNq Direct
Special Supplemental Food Progrnm for Women, Infants. andauldren Direct Through: Ross Products, Inc.

CFDA NUMBER
10.550 10.55J 10.553 10.555 10.556 10.557

PASS-llIROUGH ENTITY IDENTIFYING
NUMBER

auld and Adult Care Food Progrnm Direct
Summer Food Service Progrnm for Children (CNq Direct
State Administrative Expenses for QuId Nutrition Direct
State Administrative M.tching Grants for Food Stamp Progrnm (FSC)
Direct
Emergency Food Assistmce Progrnm (Administrative Costs) (EFAq
Direct
Emergency Food Assistance Progrnm (Food Commodities) (EFAq
Direct
Nutrition Progrnm for the Elderly (Commodities) Direct
WIC Farmef" Marlcet Nutrition Progrnm (FMNP) Direct
Forestry R=ch Direct Through: UnivelSi1y ofGeorgia Research Foundation

10.558 10.559 10.560 10.561 10.568 10.569 10.570 10.572 10.652

Various

Cooperative Forestry Assistance Direct Through: UnivelSi1y of Georgia R=ch Foundation

10.664

Various

National Forest Dependent RoraI Communities Direct
Technical Assistance and Training Grants Direct
RoraI Development Grants Direct

10.670 10.761 10.769 10.901

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

5,348
71,738,023 314,186,560
16,646

S

31,820,835 (4)

738,255,272 (4)

133,885,789 (2) 59,381,313 193,267,102
2,615,324
88,590 (R)
4,419,479

50,772,327

138,691

2,392,209
23,052
532,185 807,8SS (R) 1,340,040
3,766,S84 (R) 123,843 (R)
3,890,427
11,S13
107,368
191,999
10,000

2,218,855

E-7

Gorg1a
ScheduLe of Expenditures of Federal Awards For the F1scaL Year Ended June 30, 2003

Agriculture, U. S. Department of
Soil and Water Conservation Direct Through: Univernty of Georgia Research Foundation

CFDA NUMBER
10.902

PASS-lHROUGH EN1TIY IDENTlFYING
NUMBER
68-6526-0-406

Agricultural Statistics Reports Direct
Scientific Cooperation Program Direct Through: Univ=i!y of Georgia Research Foundation

10.950 10.961

583148004115831482033

International Training - Foreign Participant Direct
Other Federal Assistance Direct Through: American Distance Ed Consortiwn Through: Georgia Tech Research Corporation Through: Southern U. S. Trade Association Through: Univernty of Florida Through: Univemty ofGeorgia Research Foundation

10.962 10.XXX

CLG87
5599-603 L71219 Various

AGENCY TOTAL
Commerce, U. S. Departmeat of
ITA Special Projects Through: Georgia Tech Research Corporation
Trade Adjustment Assistance Through: Georgia Tech Research Corporation
Interjurisdietional Fisheries Act of 1986 Direct
Sea Grant Support Direct Through: University of Georgia Research Foundation
Co~ Zone Management Administration Awards Direct
Co~ Zone Management Estuarine Research Reserves
Direct Through: University of Georgia Research Foundation
Fisheries Development and Utilization Research and Development Grants and Cooperative Agreements Program Through: University of Georgia Research Foundation
Undersea Research Through: University of Georgia Research Foundation
Cbmate and Atmospheric Research Through: Georgi. Tech Research Corporation Through: Univer>ity of Georgia Researd! Foundation

11.113 11.313 11.407 11.417

NA06RGOO291NA030AR4170032

11.419 11.420

NA070R0273INA170R1189

11.427 11.430 11.431

NAI7FF287 SEGM-200219ISEGM200213
NAI6GP2689INAI6GP2443

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

520,479 386 (R)
520,865
38,356
6,277 37,146 (R) 43,423
5,172 (R)
1,591,899 (R) 7,764 16 (R) 3 (R) 621 (R)
2,448,803 (R) 4,049,106
689,342,262

m,294,962

923,643 (R)
1,158,698 (R)
279,326
21,411 1.358,843 (R) 1,380.254
1,904,714
484,561 27,911 (R) 512,472
15,929 (R) 46,683 (R)
131,112 (R) 135,627 (R) 266,739

E-8
---- _ _.. --- --" _.. ._--

Schedule of Expenditures of Federal Awards For the FIscaL Year Ended June 30, 2003

Commerce, U. S. Department of
Office of Oceanic and Atmospheric Research (OAR) Joint and Cooperative Institutes Through: Univ=ity of Georgia Research FOlDldation
Cooperative FisItely Statistics Direct
Environmental Sciences. Appbcations, Data, and Education Through: University of Georgia Research FolDldation
Marine Research - Regional Programs Direct
Atlantic Coastal Fisheries Coopemive Management Act Direct
Center for Sponsored Coastal Ocean Program Coastal Ocean Program
Through: Univ=ity of Georgia Research FOlDldation
Measurement and Engineering Research and Standards Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: Univ=ity of Georgia Research FOlDldation

CFDA NUMBER
11.432
11.434 11.440 11.464 11.474 11.478
11.609

PASS-mROUGH ENITIY IDENTIFYING
NUMBER
667600 NAI6EC2373
NA960POOO3/NA96OPOOO5 70NANBIH0068

Other Federnl Assistance Direct Through: Clark Atlanta University Through: Georgia Tech Research Corporation Through: South Carobna Sea Grant Consortium Through: Univ=ity of Georgia Research FOlDldation Through: Univ=ity of Maryland Through: Univ=ity of New Hampslure

II.XXX

OSP-OO-12-30537-OO1
Various CA02-15
03-688

AGENCY TOTAL
Defense, U. S. Department or
Aquatic Plant Control Direct Through: Georgia Tech Appbed Research Corporation Through: Georgia Tech Research Corporation
Stale Memonmdum of Agroement Program for the Reimbursement ofTeclmical Services Direct
Collaborative Research and Development Direct
Basic and Appbed Scientific Research Direct Through: Ball Aerospace & Teclmical Corporation Through: Georgia Tech Appbed Research Corporation Through: Georgia Tech Research Corporation Through: Morehouse School ofMedicine Through: Univ=ity of Georgia Research FolDldation
Military CollS1nlCllOn Nanonal Guard Direct
National Guard Military Operations and Maintenaace (O&M) Projects
Direct

12.100
12.113 12.114 12.300
12.400 12.401

BlD81 Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

3,231 (R)
162,389
23,592 (R)
362.915 (R)
197,12\
112,860 (R)
198,051 (R) 48,084 (R) 19,001 (R) 265,136
297,887 (R) 8,427 (R)
3,984,868 (R) 304,770 (R) 188,551 (R) 245,609 (R) 7536 (R)
5,037,648
12,653,350
50,070 25,555,098 (R)
6,503,882 (R) 32.109,050
463,236
54,808 (R)
176,698 (R) 7,713 (R)
12.611,079 (R) 6,329,824 (R)
-21,631 (R) 109,658 (R) 19,213,341
305,861
23,541,548

E-9

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30. 2003

Defense, U. S. Department of
National Guard Civilian You1h Opportunities Direc1
Military Medical Research and Development Direct Through: Medical College ofGeorgia Research Institute Through: University of Georgia Research Foundation

CFDA NUMBER
12.404 12.420

PASS-TIlROUGH ENTITY IDENTIFYING
NUMBER

Basic Scientific Research Through: Georgia Tech Research Corporation Through: University of Georgia Research FOlDldation Through: University ofDlinois

12.431

DAADI9-o21.Q015 20221

International Education - U.S. Colleges and Universities Direc1 Through: University of Georgia Research FOlDldarion

12.550

S9OO255

Basic, Applied, and Advanced Research in Science and Engineering
Through: Georgia Tech Research Corporation Through: University of Georgia Research FOlDldation

12.630

NMA201-o112009

Air Force Defense Research Sciences Program Direc1 Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: University of Georgia Research FolDldation

12.800

Various

Ma1hemarical Sciences Grants Program Direc1 Through: Georgia Tech Research Corporation Through: University of Georgia Research FOlDldarion Through: University of Maryland

12.901

MDA904031OO86

Research and Technology Development Direc1 Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation

12.910

Other Federal Assislance Direc1 Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute Through: University of Georgia Research FOlDldarion .Through: University ofNor1h Carolina

12.XXX

Various DlJ88 3-12110.08

AGENCY TOTAL

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

5,585,310
15,676 (R) 1,460 73,909 (R)
88,125
410,367 (R) -1,089 (R) 11,202 (R)
420,480
52,800 26,968 (R) 79,768
817,126 (R) 111,028 (R)
928,154
28,908 (R) 37,931,364 (R)
7,684,798 (R) 255,289 (R)
45,900.359
15,982 (R) 17,194 (R) 14,674 (R)
1,050
48,900
175,923 (R) 210,174 (R) 2,677,135 (R) 3,063,232
2,242,524 (R) 19,769,428 (R) 6,003,643 (R)
399 189,255 (R) 69,596 (R) 272,186 (R) 28,547,031
160,349,203

E-IO

ScheduLe of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2003

Housing and Urban Development, U. S. Department of
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

CFDA NUMBER
14.169 14.171

PASS-llIROUGH ENTITY IDENTIFYING
NUMBER

Community Development Block GrantslEnti1lernent Grants (ESCq
Through: County of Clarke!Alhens
Community Development Block Grants/Small Cities Program (ESCq
Direct Through: City ofWamer Robins

14.218 14.219

Community Development Block GrantslState's Program Direct
Emergency Shelter Grants Program Direct
Supportive Housing Program Direct
Shelter Plus Care Direct
HOME Investment Par1nerships Program Direct
Housing Oppornmities for Persons wilh AIDS Direct
Fair Housing Assistance Program - State and Local Direct
Community Outreach Par1nership Center Program Direct Through: Georgia Tech Research ColJlOratlon

14.228 14.231 14.235 14.238 14.239 14.241 14.401 14.5J1

Community Development Work-Study Program Direct
Section 8 Housing OK>ice Vouchers Direct
Lead-Based Paint Haz3rd Control in Privalely-0wned Housing
Direct
01her Federal Assistance Direct Through: Atlanta Housing Aulhority Through: Georgia Tech Applied Research ColJlOration Through: Georgia Tech Research ColJlOration Through: University of Georgia Research Foundation

14.512 14.871 14.900 14.XXX

DlM09 S02000NCAA.Q2078

AGENCY TOTAL

MONETARY EXPENDITIJRES

NONMONETARY EXPENDITIJRES

159,463
172,664 8,083
290,478 471,225
(R)
1,780,999 14,215
1,795,214
47,689,167
1,950,351
18,069
1.578,192
17,675,623
1,986,848
328,628
68,152 48,726 (R) J16,878
38,185
102,323,287
-349,832
257,219 (R) 12,784 (R) 8,112 (R) 254 (R) 3J1 (R)
278,680
176,059,983

E-11

ScheduLe of Expenditures of Federal Awards For the Flscal Year Ended June 30. 2003

Interior, U. S. Department oftbe
Cultural Resource Management Direct
Sport Fish Restoration (FWC) Direct
Wildlife Restoration (FWC) Direct
Endangered Species Conservation Direct
Cooperative Endangered Species Conservation FlIlld Direct Through: Stale ofTennessee

CFDA NUMBER
15.224 15.605 15.611 15.612 15.615

PASS-TIlROUGH ENTITY IDENTIFYING
NUMBER
GU000278500

Wddlife Conservation and Apprecialion Direct Through: Univ=ity of Georgia Research FOlllldation

15.617

1448-40181-OD-G-044

North American Wetlands Conservation FlIlld Direct
Wildlife Conservation and Restoratioo Direct
i'lIrtneB for Fish and Wildlife Direct
Stale Wildlife Grants Direct
Assistance to Stale Water Resources Research Institutes Through: Georgia Tech Research Corporation Through: Univer,;ty of Georgia Research FOlllldation

15.623 15.625 15.631 15.634 15.805

B-02-04~

Earthquake Hazards Reduction Program Through: Georgia Tech Research Corporation
US. Geological Survey - Research and Da!a Acquisition Direct Through: Univer,;ty of Georgia Research FOlllldalion

15.807 15.808

VuiGUS

Nalional Cooperative Geologic Mapping Program Direct
Historic Pr=valion Fund Grants-In-Aid Direct Through: umver,;ty of Georgia Research Folllldation

15.810 15.904

CA-589<l-5-9020

Nalional Historic Landmark Direct
Outdoor Rectealion - Acquisition, Development and Planning Direct Through: Univer,;ty of Georgia Research FOlllldation

15.912 15.916

SRS 02-eA-11330139

Naliona1 Center for Pr=valion Technology and Training Direct Through: Univer,;ty of Virginia

15.923

MONITARY EXPENDITURES

NONMONITARY EXPENDITURES

16,100
5,m,214
5,696,880
190,098
2.019,940 13,824 (R)
2,033,764
15,m (R) 9,152 (R) 24,925
1.000,000
377,183
57.826
1,141,571
178,295 (R) -I (R)
178.294
18.064 (R)
138,629 (R) 585,120 (R) 723,749
69.366
743,481 (R) 28.307 (R) 771.788
10.105 (R)
1.685,802 16,353 (R)
1.702,155
20,345 (R) 7.062 (R) 27.407 (R)

E - 12

Georg1B.
Schedule of Expenditures of Federal Awards For the F1scal Year Ended June 30, 2003

Interior, U. S. Department of the
Other Federal Assistance Direct Through: Georgia Te<h Research Corporation Through: National Park Service Through: University of Georgia Research Foundation

CFDA NUMBER
15.XXX

PASS-TIlROUGH ENTITY IDENTIFYING
NUMBER
DLP08 Various

AGENCY TOTAL
Justice, U. S. Department of
Stale Domestic Preparedness Equipment Support Program Direct
State and Local Domestic Preparedness Technical Assistance Di=
Offender Rentry Program Direct
Law Enforcement Assistance FBI Advanced Police Training Direct
Juvenile Accountability Incentive Block Grants Direct
Juvenile Justice and Delinquency Prevention Allocation to States Direct
Juvenile Justice and Delinquency PreventionSpecial Emphasis
Through: Florida Atlantic Uriiversity
Nationallnstitule for Juvenile Justice and Delinquency Prevention
Through Florida Atlantic Uriiversity Through: Uriiversity of Georgia Research Foundation
Missing Children', Assistance Direct
Tide V - Delinquency Prevention Program Direct
Pan E - State Challenge Activities Direct
State Justice Statistics Program for Statistical Analysis Centers
Direct
National Criminal Hislory Improvement Program (NCHJP) Direct
National Institute of Justice Research, Evaluation, and Developmem Project Grants
Direct Through: National Opinion Research Center
Crime Laborator Improvement Combined Offender DNA Index System Backlog Reduction
Direct
Crime Victim As:sistlInce Direct

16.007 16.010 16.202 16.300 16.523 16.540 16.541 16.542
16.543 16.548 16.549 16.550 16.554 16.560
16.564 16.575

2000JRVX-OQ05 DU86

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

394,097 (R) 94,074 (R) 24,588
n9,852 (R)
1,292,611
21,105,100

2,697,942 12.060 5,245 53,143 (R)
3,665,161
1,192,921
2,067
53,245 19,899 (R) 73.144
1,358 632,206 -115,860
20,683 2.212,784
219,471 208,736 (R) 428,207
384,690 10,703,711

E-13

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30, 2003

Justice, U. S. Department of
Crime Victim Compensation Direct
Byrne Fonnula Grant Program Direct
Edward Byrne Memorial Stale and Local Law Enforcement Assistance Discretionary Gr"ants Program
Direct Through: City of Adanta

CFDA NUMBER
16.576 16.579 16.580

PASS-lHROUGH ENTI1Y IDENTIFYING
NUMBER

Violent Offender Incarceration and Truth in Sentencing Incentive Grants
Direct
Violence Against Women Fonnula Gr"ants Direct Through: VIOlence Intervention Program

16.586 16.588

DLNII

Rural Domestic Violence and Child Victimization Enforcement Grant Program
Direct
Local Law Enforcement Block Gr"ants Program Direct
Residential Substonce Abuse Treaunent for S_ Prisoners Direct
Corrections - Training and Staff Development Through: Federal Correctional Institution
S_ Criminal Alien Assistance Program Direct
Community Prosection and Project Safe Neighborhood Direct
Closed-Circuit Televising of Child Victims of Abuse Direct
Public Safety Par1nership and Community Policing Gr"ants Direct
Enforcing Underage Drinking Laws Program Direct
Drug-Free Communitites Support Program Grants Direct
Other Federal Assistance Direct Through: Community Researcb Associates. Incorporaled Through: Georgia Tecb Researcb Corporation

16.589
16.592 16.593 16.601 16.606 16.609 16.611 16.710 16.727 16.729
16.XXX

97-LF-CX-Kool

AGENCY TOTAL
Labor, U. S. Departmeat of Labor Force StalISllCS Direct Compensation and Worbng Conditions Direct

17.002 17.005

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

1,230,060 14,579.742
120,924 3,718
124,642
22,549,541 2,735,748 22,796 (R) 2,758,544
179,028 1,142,683 1,546,541
92,622 3,514,668
16,137 8,081 166,387 49,761 1,006,232
3,918,063 (R) 130,627 30,641 (R)
4,079,331 75,013.462

1,945.884 162,857

E - 14

Schedule of Expenditures of Federal Awards
For the FIscal Year Endec:l June 30, 2003

Labor, U. S. Department of
Certification of Foreign Workers for Temporary Agricultural Employment Direct Through: RiclunondlBurke Job Training Authority

CFDA NUMBER
17.202

Labor Certification for Alien Workers Direct
Employment Service (ESC) Direct Through: City of Macon Through: Middle Georgia Consortium, Incorporated

17.203 17.207

Unemployment1nsur.lnce Direct
Senior Community Service Employment Program Direct
Trade Adjustment Assistance - Workers Direct
Employment Services and Job Training Pilots Demonstrations and Research
Direct
Welfare.to-Work Grants to States and Localities Direct Through: East Central Georgia Consortium Through: Job Training Unlimited, Incorporated Through: Nonheast Georgia Regional Development Center

17.225 17.235 17.245 17.249
17.253

Workforce Investment Act Through: Fulton County
One-Stop Career Center Initiative
Direct Through: Job Training UnIintited, Incorporated

17.255 17.257

W1A Adult Program (WlA) Direct Through: Atlanta Workforce Development Agency Through: Atlanta Regional Commission Through: City of Columbus Consolidated Government Through: Coosa Valley Regional Development Center
Through: Job Training Unlimited, Incorporated Through: Middle Flint Regional Development Center Through: Middle Georgia Consortium, Incorporated Through: Nonh Georgia RegionaJ Development Center Through: RiclunondlBurke Job Training Authority Through: Sou1h Georgia RegionaJ Development Center Through: Sou1hwest Georgia RegionaJ Development Center

17.258

W1A You1h Activities (WlA) Direct Through: Job Training Unlimited, Incorporated

17.259

W1A DisIoca1ed Workers (WlA) Direct

17.260

P~TIlROUGH
ENITTY IDENTIFYING NUMBER

MONETARY EXPENDITURIS

NONMONETARY EXPENDITURES

a..K14 114233-00 01-C257-CAJ

2,231 202,073 204,304
415.075
20,293,744 35,421 108,596
20,437,761
1,036,659,693 (I)
2,035,682
3,532,811

319,103
-3,666,838 56,994 672,504 321,262
-2,616,078
8.521

S

380,259

56,302

436,561

34,709,266 54,973 446,294 194,804 450,746 232,991 141,849 219,667 58,481 27,481 1,340 133,288 626.841
37,298.021

28,539,152 802,517
29,341,669

26,648,655

E - 15

ScheduLe of Expenditures of Federal Awards For the FIscaL Year Ended June 30, 2003

Labor, U. S. Department of
Employment and Training Administra1ion Pilots. Demonstrations and Research Projects Direct Through: Northeast Georgia Regional Development Center Through: OgIelhotpe County Board of Education

CFDA NUMBER
17.261

Employment and Training Administra1ion Evaluations Direct
YoUlh Opponunity Grants Direct
Consultation Agreements Direct
Employment Programs for People with Disabilities Direct
Local Veterans' Employment Represenlalive Program (ESC) Direct
Other Federal Assistance .Direct Through: Atlanta Workforce Development Agency
Through: Cornell Univer>ity Through: Georgia Tech Research Corporation Through: SlaIeWide n.C of Georgia

17.262 17.263 17.504 17.720 17.804 17.XXX

AGENCY TOTAL
State, U. S. Department of Special Domestic Assignments Direct
Educational Exchange - Graduate Students Direct
College and Univer>ity Aflilialions Program Direct
Cooperative Grants Direct
Edueationall'ar1nerWps Program Direct
Other Federal Assistance Direct
AGENCY TOTAL
Transportation, U. S. Departmeat or
Boating Safety Fmancial Assistance Direct
Aviation Education Direct
Airpon Improvement Program Direct

19.202 19.400 19.406 19.420 19.424 19.XXX
20.005 20.100 20.106

PASS-TIlROUGH
EN111Y IDENTIFYING NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

BLV97 BLF62 CLF92

767.258 475 (R)
28,465 796.198
514,548
2,421,601
49,984
47,964
1.196,818
8,611 14,516 28.631 2,429 175,762 (R) 1,368,659 (R) 34,024 (R) 1,632,632
1.163,490,264

$

138,250

$

13,509

78,442 (R)

92,460

13,546 (R)

237,179 (R) 573.386

$

808,175

40.241 (R)

4,326,407

E - 16

Schedule of Expenditures of Federal Awards For the F1scaL Year Ended June 30, 2003

Transportation, U. S. Department of
Highway Planning and Construction (HPCq Direct
Highway Training and Education Direct
Motor Carner Safety Direct
National Motor Camer Safety Direct
Local Rail Freight Assistance Direct
High Speed Ground Transportation Next Generation High Speed Rail Program Direct
Federal Transit - Capitlilnvestment Grams (ITq Direct
Federal Transit - Metropolitan Planning Gran", Direct
Federal Transit - Fonnula Gran", (ITq Direct
Fonnula Grams for Other Than Urbanized Areas Direct
Federal Transit Technical Assistance Through: Atlanta R<gional Commission
Capitli Assislanc:e Program for Elderly Persons and Persons Wtth Disabilities
Direct
Job Access ~ Commute Direct
SllIle and Community Highway Safety (HSC) Direct
Pipeline Safety Direct
Univ=ity Transportation Center.; Program Through: University ofTennessee
Other Federal Assistance Direct Through: Atlanta R<gional Commission Through: Georgia Tedt Applied Reseatdt ColJlOl1ltion Through: Georgia Tedt Reseatdt ColJlOl1ltion Through: Sou1h Carolina State University Through: Univ=ity of Georgia Research Foundation Through: Univ=ity ofTennessee

CFDA NUMBER
20.205 20.215 20.217 20.218 20.308 20.312
20.500 20.505 20.507 20.509 20.512 20.513
20.516 20.600 20.700 20.701 20.xxx

AGENCY TOTAL Treasury, U. S. Department oftbe
AGENCY TOTAL

21.XXX

PASS-TIlROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

OJ82

812,585,716 (I) 19,232
159,993 6,338.991
5,492

145,820 2,448,780 1,310,905 14,168,113 (I) 5,424,375
80,858

1,780,410

52.925

20,974,659 (R)

259.242

18,076 (R)

3,402,689 11,594
562,943 1,593,806
34,496 163
30,366

(I)(R)
(R) (R)
(R) (R)

5,635,731

876,584,141

13,658

$

~1~3,~65~8

E -17

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30, 2003

Postal Service, U. S. Other Federal Assistance Direct
AGENCY TOTAL
Appalacbian Regional Commission Appalacllian Regional Development Direct Appalacllian Area Development Direct Appalacllian Stale Research, Teclmical Assistance. and Demonstration Projects Direct
AGENCY TOTAL
PenODDel Managemeat, U. S. Office of Intergo"""""ental Personnel Act (!PA) Mobility Program Direct
AGENCY TOTAL
Equal Employment Opportunity Commission
Employment Discriminalion Title vn of the
Civil RighlS Act of 1964 Direct
AGENCY TOTAL
General Sen-ices Administration Donation of Federal Surplus Personal Property Direct Election Reform PaymenlS Direct Other Federal Assistance Direct Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation

CFDA NUMBER
22.XXX
23.001 23.002 23.011
27.011
30.001
39,003 39.011 39.XXX

PASS-llIROUGH EN1TIY IDENTIFYING
NUMBER

AGENCY TOTAL
NatioDal Aeronautics and Space Administration Aerospace Education Services Program Direct Through: Goddard Space Flight Center
Teclmology Transfer Through: Space Telescope Science Inslitute

43.001 43.002

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10,700 10,700

176.523 1,219.182
118,477 1,514.182

1.325.258 (3) 1,325,258

44.074 44.074

88.213 88.213
4.740,448 21.384
2,686.885 (R) 1.045.729 (R)
3,753.998 8,494.446
171.942 (R) 297 (R)
172,239
13.301 (R)

7.507.184 7,507,184

E - 18

Schedule of Expenditures of Federal Awards
For the fiscaL Year Ended June 30, 2003

National Aeronautics and Space Administration
OlberFederalAssistance Direct Through: Dartmouth College Through: Geolgia Tech Applied Research Corporation Through: Geolgia Tech Research Corporation Through: Jet Propulsion Laboratories Through: Lewis Research Center Through: SmiIhsonian Astrophysical Through: Space Telescope Science Institute

CFDA NUMBER
43,XXX

Through: United Negro College Fund Through: Univ=ities Space Research Associalion Through: University of Georgia Research Foundation Through: Unive";ty ofKentuclcy Through: University ofTennessee

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
5-36276
BLF57
CLF99 BLF45 ALV57 ALV60 CLV74 BLF26 BLF25 BLF28 DLIOO CLF75 DLKll
E-I6-U5-G11INGf5-40116 Various

AGENCY TOTAL
National Foundation on the Arts and the Humanities
Promotion of Ibe Arts - Grams to Organizations and Individuals
Direct
Promotion of lite Arts - Pannership Agreements Direct
Promotion of lite Arts - Leadership Initialives Through: Georgia Council for the Arts
Promotion ofllte Humanities - FederallSl3le Pannership Direct Through: Georgia Humanities Council
Through: University of Georgia Research Foundalion
Promotion of lite Humanities - Ola1Ienge Grams Direct
Promotion of lite Humanities Division ofPreservation and Access Through: University ofGeolgia Research Foundation
Promotion of lite Humanities - Fellowships and Stipends Through: University of Georgia Research Foundalion
Promotion of lite Humanities Education Development and Demonstration
Direct Through: University of California
Promotion of Ibe Humanities - Seminars and Institutes Direct

45,024 45,025 45,026 45,129
45,130 45,149 45,160 45,162

GHC2()()().{)6OG BLC32, DLN32, DLN33
GHC200Q.134G 200Q.I23G
FA3714202IFA37247-02

45,163

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

&41,321 (R)
51,864 (R) 1,782,379 (R) 10,&41,288 (R)
28,459 (R) 26,610 (R) 28,802 (R) 69,462 (R)
196 (R) 4,152 (R) 97,993 (R) 35,574 (R) 7,600 (R)
480 (R) 2,313 (R) 19,835 (R) 23,334 (R)
125,699
15,934 (R) 731,951 (R)
3,979 13,971
14,753,196
14,938,736

30,622 (R)
504,629
5,000
50,232
4,069 (R)
3,803 6,000
1,739 (R) 7,000 (R)
72,&43
278 (R)
12,966 (R)
60,267 (R)
2,854 (R)
20,505 23,359
77,334

E-19

Schedule of Expenditures of Federal Awards For the F1scaL Year Ended June 30, 2003

National Foundation on the Arts and tbe Humanities
Promotion of the Humanities - Extending the Reach Grants to Presidentially - Designated Minority Institutions Direct
State Libnuy Program Direct
Other Federal Assistance Direct
TIrrou~: ~r~aCo~lfurtheAm
TIrrou~: ~r~a Tech Research Corporation TIrrou~: Institute ofMuseumtLibnuy Services

CFDA NUMBER
45.167
45.310 45.XXX

PASS-lHROUGH EN1TJY IDENTIFYING
NUMBER
41-03-39 FY03 Ur90 172-991ND-OOO17-00

AGENCY TOTAL
National Science Foundation
En~eering Grants Direct TIrrou~: Georgia Tech Applied Research Corporation TIrro~: Georgia Tech Research Corporation TIrrou~: University of Georgia Research Foundation TIrro~: Univmity of MassaclIusetIS
Mathematical and Physical Sciences Direct TIrrou~: ~rgia Tech Research Corporation TIrrou~: Jet Propulsion Laboratories TIrrou~: University of Georgia Research Foundation
Geosciences Direct TIrro~: Geor~ Tech Applied Research Corporation TIrrou~: Georgia Tech Research Corporation TIrrou~: Univmity of Georgia Research Foundation TIrrou~: Univmity of New Mexico
Computer and Information Science and En~eering Direct TIrro~: Georgia Tech Research Corporation TIrrou~: University of California TIrrou~: University of Georgia Research Foundation TIrro~: University of Virginia
Biological Sciences Direct TIrrou~: CoUego of Chad....,n TIrrou~: Georgia Tech Research Corporation TIrrou~: Medical CoUego of Georgia Research Institute TIrrou~: Texas A&M Research Foundation TIrrou~: Univmity of Georgia Research Foundation

47.041 47.049 47.050 47.070 47.074

Various
BLF15 Various
Various Cl.H62
Various BLA76
02-068 AL789 Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

3.309
4,716.301
19,999 36.989
99,511 (R) 49,314 (R) 52,687 (R)
258,500
5.765.408
140,922 (R) 17,876 (R) 14,016,163 (R) 260,023 (R)
19,965
14,454,949
541,192 (R) 5,589,809 (R)
46,591 (R) 2,079,716 (R)
8,257.308
413,780 (R) 32,971 (R) 2,613,133 (R) 1,502,783 (R) 16,693 (R)
4.579,360
641,025 (R) 9.867,532 (R)
7,033 (R) 605,110 (R) 58,501 (R)
11,179,201
687,760 (R) 5,390 (R)
1,862,73g (R) 44,586 (R) 4,345 (R)
8,317,719 (R)
10,922,538

E-20

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

....... -._

_------------

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

.' ..

Georgia.
Schedule of Expenditures of Federal Awards For the Flscal Year Ended June 30, 2003

National Science Foundation
Social. Behavioral, and Economic Sciences Direct Through: CiviJianR&D Through: Emory University
Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation Through: University of Virginia

CFDA NUMBER
47.075

PASS-TIIROUGH ENTITY IDENTIFYING
NUMBER
DLN34 ALW99 DLN39 Various CLG91

Education and Human Resources Direct Through: Clark Atlanta University Through: Georgia Tech Research Corporation Through: University of Georgia R.esearth Foundation Through: University of Pennsylvania

47.076

ALX24
Various CLH41

Polar Programs Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

47.078

Various

Other Federal Assistance Direct Through: Florida Agriculrural and Mechanical Universtty Through: Georgia Tech Research Corporation Through: Savannah State University Through Southeastern Universities Research Association, Inc. Through Swarthmore Colle8e Through: University ofGeoTgla Research Fountlanon Through: University of South Carolina

47.XXX

C-9549
111201-1 EPSCORE REC-9618223
Various AU95

AGENCY TOTAL
Securities and EJ:cbaage Commission Other Federal Assistance Direct AGENCY TOTAL
Small Business AdmioistratioD Small Business Development Center Direct Other Federal Assistance Direct Through: Georgia Tech Research Corporation
AGENCY TOTAL
Snaitbooian Institute Other Federal Assistance Through: University of GeoTgl' Research Foundation AGENCY TOTAL

58.XXX 59.037 59.XXX
6O.XXX

T993PCoo133ooo

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

244,972 (R) 6,284 (R)
1,699,663 (R) 299,659 (R)
1,087,272 (R) 394,068 (R) 37,598 (R)
3,769,516
2,110,471 (R)
37,572 (R) 3,194,244 (R)
1,115,122 (R)
146,630 (R)
6,604,039
347,714 (R) 19,600 (R)
367,314
5,395,833 (R) 38,030
1,859,678 (R) 136,333 (R) 60,636 (R)
40 (R)
2,902,627 (R)
1.800 (R)
10,394,977
70,529,202
159,139 (R)
159,139

3,072,089 (R) 105,690 (R) 8.126 (R) 113,816
3,185,905
-1,000 (R)
-1,000

E - 21

Georg1B.
Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30, 2003

Tennessee Valley Authority
Other Federal Assistance Direct Through: Georgia Tech Research Corporation

CFDA NUMBER
62.XXX

PASS-lHROUGH ENTITY IDENTIFYING
NUMBER

AGENCY TOTAL
Veterans Affain, U. S. Department of
Veterans State Domici1i:uy Care Direct
Veterans State Nursin8 Home eare Direct
Veterans Educalional Assistance Direct
PostVietnam Era Veterans' Educalional Assistance Direct
Other Federal Assistance Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

64.014 64.015 64.111 64.120 64.XXX

508D35013

AGENCY TOTAL
EuviroDmeatal ProtectioD Agency
Stuelndoor Radon Grants Direct
Surveys, Studies, Demonstralions and Special Purpose Grants Section 1442 oflile Safe Drinking Water Act
Direct
State Pubhc Wau:r S}>t<fO Supervision Direct
State Underground Wau:r Source Protection Direct
Construction Management Assistance Direct
Wau:r QuaIi1y Management Planning Direct
Cllpilalizalion Grants for State Revolving Funds Direct
Nonpomt Source Implernentalion Grants Direct
Wedands Grants Direct
Wau:r QuaIi1y Cooperative Agreem..... Direct
Cllpitalizalion Grants for Drinking W_ State R.evolviDg Fund Direct

66.032 66.424
66.432 66.433 66.438 66.454 66.45g 66.400 66.461 66.463 66.468

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

5,309 11,058 (R) 16,367
16,367

1,095,136
9,830,843
394,701
16
565,367 (R) 7,229 (R) 15,182 (R)
587,778
11,908.474

185,700
9,000 (R) 31,765 49,216 196,971 2.496,418 14,897,691
1,192 (R) 100,210 39,461
14,742,426

296,042,707 (3) 32,809,380 (3)

E-22

Schedule of Expenditures of Federal Awards
For the FIscal Year Ended June 30, 2003

Environmental Protection Agency
Hardship Grants Program for Rural Communities Direct
Beach Monitoring and Notification Program Development Grants
Direct
Water Protection Coordination Grants to States Direct
Environmental Protection - Consolidated Research Direct Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

CFDA NUMBER
66.470 66.472
66.474 66.500

PASS-lHROUGH EN'ITIY IDENTIFYING
NUMBER
Various

Science 10 Achieve Results (STAR) Program Through: Univ=ity ofGeorgia Research Foundation
Perfonnance Partnership Grant Direct
Surveys, Studies, Investigations and Special Purpose Grants Direct Through: Aubwn University Through: Florida Fish & Wl!dIife Conservation Commission Through: Georgia Tech Research Corporation

66.509 66.605 66.606

RD-g308000I-O 02ENT533799-UG

Training and FeUowships for lbe Environmental Protection Agency
Direct Through: Georgia Tech Research Corporation Through: University of Georgia Research Foundation

66.607

T83086201

One SlOp Reporting Direct
Consolidated Pesticide Enforcement Cooperative Agreements Direct
TSCA Tille IV Stale Lead Grants - Certification ofLeadBased Paint Professionals
Direct
PoUution Prevention Grants Program Direct Through: Georgia Tech Research Corporation

66.608 66.700 66707
66.708

Pesticide Environmental Stew.u"dship - Regional Grants Direct
Ila=dous Waste Management Stale Program Suppon Direct
Superfund S_ Site Specific CooPerative Agm:ments Direct
Leaking Underground SlOrage Tank Trust Fund Program Direct
Solid Waste MmJagement Assistance Direct
CEPP Technical Assistance Grants Program Direct

66.714 66.801 66.802 66.805 66.808 66.810

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

307,163
121,970
92,003
23,715
146,775 (R) 876,153 (R) 554,555 (R)
1,601,198
19,969 (R)
18,664,093
961,303 (R) 5,518 (R) 85,636 (R)
106,441 (R)
1,158,898
20,820 (R) 14,317 (R) 20,370 (R)
55,507
77,940
710,157
623,432
85,167
-6,090 (R)
79,077
18,446 (R)
216,065
1,262,673
1,664,565
82,129
18,330

E- 23

Schedule of Expenditures of Federal Awards For the F1scal Year Ended June 30, 2003

Environmental Protection Agency
Environmental Educalion and Training Program Direct
Environmental Education Grants Direct
Other Federal Assistance Direct Through: Georgia Tech Applied Research Corporlllion Through: Georgia Tech Research Corporlllion Through: Environrnen13l Protection Division, Georgia Through: University ofGeorgia Research Foundation

CFDA
NUMBER
66.950 66.951 66.XXX

AGENCY TOTAL
Energy, U. S. Department of
s.... Energy Program
Direct
Weatherizarion Assistance for LowIncome Persons Direct
Office ofScionce Fmancial Assistance Program Direct Through: Georgia Tech Research Corporlllion Through: University of Georgia Research Foundation
Conservation Research and Development Through: Georgia Tech Applied Research Corporlllion Through: Georgia Tech Research Corporlllion Through: University of Georgia Research Foundation
Renewable Energy Research and Development Through: University ofGeorgia Research Foundation
Nuclear Energy. Reactor Systems, DeveIopmen~ and Technology
Direct
Office of Scionce and Technology for Environmental Management
Direct Through: University of Georgia Research Foundation
Naliona1 Industrial Competitiveness through Energy. EnWonment, and Economics
Direct
University Nuclear Science and Reactor Support Through: Georgia Tech Research Corporlllion
Science and Engineering Training 10 Support Diversity-Relaled Programs Direct
Energy Efficiency and Renewable Energy Jnformalion DisseminaIion, Outreach. training and Technical
~Assistance Direct
Through University of Georgia Research Foundalion

81.041 81.042 81.049
81.086
81.087 81.095 81.104
81.105 81.114 81.116 81.117

PASS-TIlROUGH ENITJY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Various Various

45.017 (R)
21.643 (R)
107.635 (R) 374,516 (R) 207.032 (R)
87,712 (R)
950,991 (R)
1,727,886
61,318,211

328,852,087

$ Various DE-FC36-0 I GO I0619 Various
1209-202L().A $

1,661,259
2,884,078
212,992 (R) 1,525,669 (R) 1,445,110 (R)
3.183,771
12,991 (R) 331,034 (R) 147,071 (R)
491.096
41,972 (R)
24,764
673,324
292.797 (R)
966.121
22
90,305 (R)
60,112 (R)

3,099 436
3,535

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

E-24

Schedule of Expenditures of Federal Awards For the Flscal Year Ended June 30. 2003

Energy, U. S. Department of
State Energy Program Special Projects Direct
Other Federal Assistance Direct Through: Argonne National LaboralOry Through: Energy Resources. Georgia Office of Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation Through: Univer>ity of New Orleans
Through: Wackenhut Services,lncorporated

CFDA NUMBER
81.119 81.XXX

AGENCY TOTAL
United States Information Agency
Other Fmancial AssiS1ance Direct
AGENCY TOTAL
Federal Emergency Management Agency
Hazardous Materials AssiS1ance Program Direct
Community Assistance Program - State Support Services Element (CAP-SSSE)
Direct
flood Mitigation AssiS1ance Direct
Fire Suppression AssiS1ance Direct
Public Assistance Grants Direct
Disaster Housin8 Program Direct
Hazard Mitigation Grant Direct
Emergmcy Management Perfonnance Grants Direct
Other Federal AssiS1ance Through: Georgia Tech Research Corporation
AGENCY TOTAL
EducatioD, U. S. Department of
Adult Education - State Granl Program Direct
Federal Supplemernal Educational Opportunity Grants (SFA) Direct
rille I Grants to Local Educational Agencies Direct

82.XXX
83.012 83.105 83.536 83.542 83.544 83.545 83.548 83.552 83.XXX
84.002 84.007 84.010

PASS-TIlROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITIJRES

NONMONETARY EXPENDITURES

$ OF-00605 50120 ENERGY AG
Various CLC85 CLC87 91609/916 I 01DRS-OI-186

80,646
1,780,053 (R) 34,954 (R) -13 (R)
375,505 (R) 4,828,440 (R)
64,596 (R) 13,000,367 (R)
7,996 (R) 12,198 -4,332 (R)
20,099,764
29,587,445

56,357 (R) 56,357

7,500

305,865

35,793

828,615

35,323,792

-36,985

6,893,162

3,092.101

$

229,765

$

46,679,608

$

5,488,447

$

8,383,604

$

309,675,559

E-25

Georgia.
Schedule of Expenditures of Federal Awards
For the F1scaL Year Ended June 30, 2003

Education, U. S. Departm.ent of
Migrant Education - Basic State Grant Program Direct Through: Southern Pine Migrant Edueational Agency

CFDA NUMBER
84.011

Ti~e 1 Program for Neglected and Delinquent Children Direct
Undergnduate International Studies and Foteign Language Progr.uns
Direct
Intemalional Research and Studies Direct
Intemalional: Ovetseas Group Projects Abroad Direct
Special Education Grmtts to States (SEq Direct
Higher Education - Institutional Aid Direct
Federal Family Educalion Loans (SFA) Direct
Federal Work-Study Program (SFA) Direct
Federal Perkins Loan Program Federal Capital Contributions (SFA)
Direct
TIUO - Student Suppon Services ('IRIO) Direct
TIUO Talent Search (IlUO) Direct
TIUO Upward Bound (IlUO) Direct
Voeational Edueation Basic Grants to States Direct
Federal Pell Grant Program (SFA) Direct
TIUO Educalional Oppottunity CenletS (IlUO) Direct
Leveragin8 Educational Assislance !'artDer.ibip Direct
Fund for the Improvement ofPostseo:mdary Educalion Direct Through: Associll2ion of American Colleges and Universities Through: New England Conservatory Through: Portland State Umversity Through: San Diego State Umversity Through' University of Arlcansas Through: University of Florida

84.013 84.016
84.017 84.021 84.027 84.031 84.032 84.033 84.038
84.042 84.044 84.047 84.048 84.063 84.066 84.069 84.116

Educational Research and Development Direct
Minority Science and Engineerin8lmprovement Direct

84.117 84.120

PASS-1HROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

a..F96 <U:84 DLP26 SA021174 UFlFAS020328491

8,291,635 70,542

$

8,362,ln

$

3,043,328

115,732 (R)

173,410 (R)

291,507 (R)

$

192,664,912 (R)

8,794,490 (R)

46,621,537

$

9,475,039 (R)

1,419,657

2,234,667 (R)

$

1,702,968 (R)

2,981,544 (R)

32,399.212

$

204,203,601

1,297,310 (R)

564,456

1,192,278 (R) 4,492
38,681 13,140 (R) 29,564
3,365 (R) 5,323 (R)

$

1.286,843

4,829 206,224

1,360,911,810 (3) 37,146.380 (3)

. E-26

ScheduLe of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2003
CFDA NUMBER

PASS-lHROUGH EN1T1Y IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

E-27

ScheduLe of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2003

EducatioD, U. S. DepartmeDt of
Evea Slart - State Educalional Agencies Di=t
Ftmd for Ihelmprovemeat of Education Direct Through: GSURF- UniVOlSity of New Orleans

CFDA NUMBER
114.213 114.215

PASS-lHROUGH EN1TIY IDEN11FYJNG
NUMBER
BLC08

TRIO - MeNair PosI-Bacca1aJJreale Achievement (TRIO) Di=t
Ceaters for Intemational Busiaess Education Through: Georp Tech Research Corporation
Assistive Technology Direct
Income Contingent !.<>an Program Di=t
Rehabilitation Services Demonstration and TraiDing SpeciaI Demonstration Programs
Direct
Tech-Prep Education Di=t
Rehabilitation TraiDing - Continuing Education Di=t
Rehabilitation TraiDing - S_ Vocational Rehabilitalion Unit In-Service TraiDing
Di=t
Federal Di=t Student Loans (SFA) Di=t
Goals 2000 - State and Local Education Systemic Improvement Grants
Di=t
Eisenhower Professional Development S_ Grants Di=t Through: Georgia Tech Research Corporation

114.217 114.220 114.224 114.226 114.235
114.243 114.264 114.265
114.268 114.276
114.281

Owter Schools Di=t Through: OgIe1horpe County Board ofEducation

114.282

Twenty-Fust Century Community Learning Centers Di=t
Innovalive Education Program StnIlegies Direct
Nationallnslitute on Student Achievanen~ Curriculum. and Assessment Through: NewYorlt University Through: University of Georgia Research Foundalion

114.287 114.298 114.305

CLG66 R30ST990330

Technology Litmlcy OWIenge Ftmd Graats Di=t
Eisenhower Regional MalbemaDcs and ScieDce EducatioD Consor1ia
Through: UniVOlSity of North Carolina

114.318 114.319

MONETARY EXPENDITURES

NONMONETARY EXPENDrnJRES

6.876,937 483.488 2,050 485.538 497,381 228,417 (R) 653,232 -899 (3)
1.578 (R) 3,322.959
876,255
140,102 282.360.927
-74.991 1,702.228 (R)
21,995 (R) 1.724,223 5,236,161
23,086 5,259,247 4,993,305 10,621,550
13,013 (R) 182.108 (R) 195.121 17,966,600
458

94.953 (3)

E-28
_ - - - - - ._.- ......

Schedule of Expenditures of Federal Awards
For the F1scaL Year Ended June 30, 2003

Education, U. S. Department of
Special Education - State Program Improvement Gnmts for Children with Disabilities
Direct
Special Education - Research and Innovation to Improve Services and Results for Children with Disabilities
Direct Through: UniveT>ity of Georgia Research Foundation

CFDA NUMBER
84.323
84.324

PASS-TIlROUGH ENTITY IDENTIFYING
NUMBER
H324NOIOO29-o2

Special Education Per.;onnel Preparation to Improve Services and Results for Children with Disabilities
Direct
Special Education Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities
Direct
Special Education Technology and Media Services for Individuals with Disabilities
Direct
Advanced Placement Incentive Program Direct
Grants to Stales for Incarc:eroted Youtll Offend... Direct
Comprehensive School Refunn Demonstration Direct
Gaining Early Awareness and Readiness for Undergraduate Programs
Direct
Child Care Access Means Parents in School Direct
Teacher Qua1ity Enhancement Grants Direct
Reading Excellence Direct
Learning Anytime Anyv.itere PannetShips Through: UnivetSity of GeorgJa Research Foundation
Class Size Reduction Direct
Preparing Tomorrow's TeachetS to Use Technology Direct Through: Georgia Tech Research Corponltion

84.325 84.326
84.327 84.330 84.331 84.332 84.334 84.335 84.336 84.338 84.339 84.340 84.342

10209-0147

lRIO Disseminarion Through: UnivetSity of South Rorida
Occupational and Employment Infonnation State Grants Direct
Tide I Accountability Gnmts Direct
Early Childhood Educator Professional Development Through: University of Georgia Research Foundation
Tnmsition to TeadDng Direct

84.344 84.346 84.348 84.349 84.350

S349A010167

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

1,070,986
260,023 (R) 79,465 (R) 339,488
386,650 (R)
239,031
351,331 (R) 418,601 703,838 6,997,661
514,840 175,588 3,295,576 (R) 25,641,238 44,720 (R) -561.032 1,633,264 (R) 664,393 (R) 2,297,657 12,279 162,159
-5,106 545,841 (R) 252,689 (R)

E-29

Schedule of Expenditures of Federal Awards For the F1scaL Year Ended June 30. 2003

Education, U. S. Department of
School RenoVlllion Grant Direct
Rural Education Achievment Program Direct
English Language Acquisition Grants Direct
Improving Teacher Quality Slate Grants Direct
Grants for Slate Assessments and Related Activities Direct
National Assessment of Educational Progress Direct
0Iher Federal Assistance Direct Through: Georgia Tech Research Corporation Through: Great Cities University Foundation Through: Gwinn... County Schools Through: MPR Associates Through: National Writing Project Corporation

CFDA NUMBER
84.352 84.358 84.365 84.367 84.369 84.902
84.XXX

Through: Univetsity of Georrja Research Foundation Through: University ofTennessce

AGENCY TOTAL
CODSumer Product Safety Commission, U. S. 0Iher Federal Assistance Direct
AGENCY TOTAL
NatioDal Archives aad Records Administration Nationaillistorical Publications and Records Grants Direct
AGENCY TOTAL
National Council on Disability 0Iher Federal Assistance Through: Georgia Tech Applied Research Corporation
AGENCY TOTAL
Bealtb aad Humaa Services, U. S. Departmeot of Public Health and Social Services Emergency Fund Direct State and Terrilorial and Technical Assisloace Capacity Development Minority HIVIAIDS DemonslratioD Program Direct

87.XXX 89.003 92.XXX 93.003 93.006

PASS-TIlROUGH
EN1TIY IDENTIJiYING NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

DLP04 Cl.F75
AL796 84-928N94-GA03
03GA07 F002736 8666-02-ll3

$

30.734.356

$

7.106.934

$

8.004.760

$

71.789.607

$

s.o03.779

$

110.745

$

493.332 (R)

4.190.077 (R)

4.320

5.915

-54 (R)

56.705 (R)

30,742

39,237

418 (R)

72,988 (R)

40,000

$

4.933.680

$

1,464.608.995

1.398.153.143

$

1,200

$

1.200

$

4.081

$

4,081

$

147 (R)

$

147

289,577

$

130.177

E-30

Schedule of Expenditures of Federal Awards For the F1scal Year Ended June 30, 2003
CFDA NUMBER

PASS-llIROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

E - 31

Schedule of Expenditures of Federal Awards For the fiscal Year Ended June 30, 2003

Health and Human Service., U. S. Department of
Acquired Immunodeficiency Syndrome (AIDS) Activity Through: Emory University
Oral Diseases and Disorders Research Through: Georgia Tech Research Corporation Through: Medical College ofGeorgia Research Institute Through University of Georgia Research Foundalion

CFDA NUMBER
93.118 93.121

PASS-lHROUGH ENTrrV IDENTIFYING
NUMBER
BLA84
Various

Nurse AnesIhetist 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
Centers for Research and Demonstration for Health Ptomotion and Disease Prevention
Through: Morehouse School of Medicine
Injury Prevention and Control Research and State and Community Based Programs
Direct Through: Association ofTeachers of Preventive Medicine Through: University ofGeorgia Research Corporation

93.124 93.127 93.130 93.135 93.136

AlD25
DLN06 Various

AIDS Education and Training Centers Direct
Projects for Assistance in Transition from Homelessness (pAlH)
Direct
Coordinated HIV Services and Access 10 Research fur Children, Youth Women, and Farnibes
Direct
lntemaliona1 Cooperative Biodiversity Groups Program Through: University ofGeorgia Research Foundalion
Hwnan Genome Research Direct Through: University of Georgia Research Foundalion

93.145 93.150 93.153 93.168 93.172

TWOlOO9
3ROIHG02191~2S1

Research R.elared 10 Deafness and Communication Disorders Direct Through: Georgia Tech Research Corporation Through: Medical College ofGeorgia Research Institute Through: University ofGeorgia Research Foundalion

93.173

DC0483~IA1

Nwsing Workforce Diversity Direct
Allied Health Projects Direct
Childhood Lead Poisoning Prevention Projects - State and Local Childhood Lead Poisoning Preveotion and Surveillance of Blood Lead Levels in Cbildren
Direct

93.178 93.191 93.197

MONETARY EXPENDITURES

NONMONETARY EXPENDmJRES

6.623 (R)
97,952 (R) 280,288 (R) 616,860 (R)
995,100
33.904
168.620
248,428
152,089 (R)
1,315,743
165,847 (R) 1,097,323 (R)
2,578,913
86.584
713,944
725,845
18,814 (R) 44,664 (R) 242,618 (R)
287,282
362,400 (R) 135,351 (R) 261,424 (R) 114,311 (R)
873,486
524,322
323.134
263.009

E-32

Georgia.
Schedule of Expenditures of Federal Awards For the Ascal Year Ended June 30, 2003

Health and Human Services, U. S. Department of
HUITIlllI Heal1h Studies - Applied Research 3l'ld Development Direct TIuough: Univ=ity of Georgia Research Foundation

CFDA NUMBER
93.206

Rural Telemedicine Grants Direct
Research and Training in Alternative Medicine TIuough: Georgia Tech Research Corporation TIuough: Medical College of Georgia Research Institute

93.211 93.213

Hansen's Disease National Ambulatol)' Care Program Direct
Family Planning - Services Direct
Community Health Centers (CHCC) Direct
National Research Service Awards - Health Services Research Training
TIuough: Morehouse School of Medicine Through: South Carolina Department of Social Service

93.215 93.217 93.224 93.225

Research on Healthcare Costs, Quality and Outcomes Direct TIuough: Georgia Tech Research Corporation TIuough: Medical College of Georgia Research Institute TIuough: \Jniver.;ity of Alabama at Birmingham TIuough: University of Georgia Research Foundation

93.226

Consobdated Knowledge Development and Appbeation (KD&A) Program
Direct TIuough Morehouse School of Medicine

93.230

Abstinence Education Direct
Cooperative Agreements for State T~ Outcomes and Performance Pilot Studies Enhancement Direct
Policy Research and Evaluation Gr3l'lts TIuough: University of WISCOIISin
State Capacity Building Direct
State Rural Hospital Fle>ability Program Direct
Mental Heal1h Research Gr3l'lts Direct TIuough: Dartmouth CoUege TIuough: Emory University TIuough: Georgia Tech Research CorporatIOn TIuough: Medical CoUege of Georgia Research Institute 11uough: University of Georgia Research FouDdation

93.235 93.238
93.239 93.240 93.241 93.242

PASS-THROUGH EN1TIY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

U50/CCU420515-O 1

47,110 (R)
190,212 237,322
96,338
194,050 (R) 214,304 (R)
408,354
954
6,999,174
1,562,332

BLD99 CLG74
AW20 HSI0815
CLJ09
DLPI8 CLG68 Various

45,943 (R) 23,298 (R)
69,241
417,165 (R) 33,722 (R) 29,416 (R) -5,S49 (R)
9,756 (R)
4S4,210

152,002
160,118 (R)
312,120
1,026,088

177.575

9,136 (R)

94,212

326,970

S

1,456,615 (R)

70,792 (R)

105,082 (R)

219,523 (R)

927,159 (R)

2,495,704 (R)

S

5,274,875

E- 33

Schedule of Expenditures of Federal Awards For the F1scal Year Ended June 30, 2003

CFDA NUMBER

PASS-TIlROUGH EN1TIY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

Healtb aDd HumaD Services, U. S. DepartmeDt of
Health Centers Grau.. for Migraol and Seasonal Fannworlters (CReC)
Direct
Advanced EdueatiOD Nursing Graul Program Direct
UnivetSll1 Newborn Heariog Screening Direct
Community Access Program TIuougb: Fulton County
State Planning Graul - Health Care Access for the Unisured Direct
Rural Access to Emergency Devices Gnnt Direct
Occupational Safety and Health Research Grau.. TIuougb: Georgia Tech Applied Researeb Corporation TIuougb: Macon State Conege TIuougb: Tcombs Departmenl ofPub~cHealth TIuougb: University of Georgia Research Foundation TIuougb: University ofKentucky
Immunization Grants Direct
Alcohol Nalional Researeb Service Awards for Research Training
TIuougb: University of Georgia Research Foundation
Alcohol Research Programs TIuougb: Georgia Tech Researeb Corporation TIuougb: University of Georgia Research Foundation
Drug Abuse Scientist o..dopment Awards. Researeb Scientist DeveIopmenl Awards. and Research Scientist Awards
Direct
Drug Abuse Nalional Researeb Service Awards for Research Training TIuougb: Georgia Tech Research Corporation TIuougb: Medical Conege of Georgia Research Institute
Drug Abuse Researeb Programs Direct TIuougb: Emory University
TIuougb: Georgia Tech Researeb Corporation TIuougb: Medical Conege of Georgia Research Institute TIuougb: University of Georgia Researeb Foundation
Menlal HeaItb Research c:ar-lScientist DeveIopmenl Awards Direct TIuougb: University of Georgia Researeb Foundation

93.246
93.247 93.251 93.252 93.256 93.259 93.262

OH03737A

93.268 93.272 93.273

5T32AA07473-145T32AA07473-15 Various

93.277

93.278

93.279 93.28\

0Hl3 CLH56 Various
SKOIMHOI85203

72,004
203,264
118,749
81,417
862,178
61,900
1,115 (R)
902 5,173
159,262 (R)
6,311 172,763
6.660,646 (R)
171,995 (R)
1,971 (R) 688,223 (R)
690,194
106,551
12,948 (R)
24,391 37,339
836,974 (R) 125,028 (R) 93,081 (R) 589,25\ (R) 2\7,834 (R) 2.781,914 (R)
4,644,082
118.243
55,086 (R)
173,329

23,340,256 (4)

E-34

G:org1a.
ScheduLe of Expenditures of Federal Awards For the F1scaL Year Ended June 30, 2003

Health BDd Human Services, U. S. Department of
Mental Health National Research Service Awards for Research Training
Direct Through: Georgia Tech Research Corporation

CJil>A NUMBER
93.282

Centers for Disease Control and Prevention -Investigations and Technical Assistance
Direct Through: Association of Teachers of Preventive Medicine Through: University of Georgia Research Foundation

93.283

Biomedical Imaging Research Through: Health Research, Inc.
Nurse Practitioner and Nurse-Midwifery Education Programs Direct
Small Rural HospilaIlmprovements' Grant Direct
Comparative Medicine Direct Through'. Medical CoUege of Georgia Research Institute Through' University ofGeorgia Research Foundation
Clinical Research Direct Through: University of Georgia Research Foundation

93.286 93.298 93.301 93.306
93.333

Health Professions Student Loans. Including PrimaIy Care LoansILoans for Disadvantaged Students (SFA)
Direct
Advanced Education Nurse Traineeslups Direct
Basic Nurse Education and Practice Grants Direct
Nwsing Research Direct
Nwsing Student Loans (SFA) Direct
Biomedical Technology Through Georgia Tech Research Corporation Through' Nationallnslitutes of Health Through: University of Georgia Research Foundation
Minonty Biomedical Research Support Direct Through New Mexico Stale Univmity
Research Infrastructure Through: University of Georgia Research Foundatin

93.342 93.358 93.359 93.361 93.364 93.371
93.375
93.389

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURFS

CLH52 Various
5R24RROll733

58,561 21,620 (R) 80.181
20,251,779 65,561 (R) 315,418
20,632,758
2.720 (R)
263,797
424.138
764,898 (R) 213,656 177,672 (R) 1,156,226 49,295 31,441 (R) 80,736

Various
$ Q.K04
ISIORROI798901

-560,202
650,874 (R)
303,516
173,055 (R)
77,503 (3)
133,821 (R) 10,853 (R) 937,605 (R) 1.082,279
366,699 (R) 17,167 (R)
383.866
280.400 (R)

1,806,820 (3) 1,079,662 (3)

E-35

Schedule of Expenditures of Federal Awards For the fiscal Year Ended June 30. 2003

Health and Human Services, U. S. Department of
Cancer Cause and Prevention Research Direct Through: Medical College of Georgia Research Institute Through: Univ=ity ofGeorgia Research Foundation
Cancer Detection and Diagnosis Research Through: University of Georgia Research Foundation

CFDA NUMBER
93.393
93.394

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
Various
Various

Cancer TreBlment Research Direct Through: Georgia Tech Research Corporation Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundation

93.395

Various

Cancer Biology Research Direct Through: Medical College of Georgia Research Institute Through: Thomas Jefferson Univ=ity Through: Univer.;ity of Georgia Research Foundation

93.396

CLH48 5 RO1 CA 64462-ll6

Cancer Research Manpo~ Through: Univ=ity of Georgia Research Foundation
Cancer Control Through: Medical College of Georgia Research Institute
Abandoned Infants Direct
Promoting Safe and Stable Families Direct Through: County of Clarke!Athens

93.398 93.399 93.551 93.556

CA68072B 200202900500

Temporary Assistance for Needy Families Direct Through: Goodwill Industries of1he Coastal Empire

93.558

Family Support ~ to S..... - Assistance ~ Direct Through: Univer.;ity of Georgia Research Foundation

93.560

427-93-91231

OliId Support Enforcemen. Direct
Refugee and EolJ1lllt Assistance - Stale Adminislored Programs Direct
Low-Income Home Energy Assistance Direct
Community Services Block Gran. Direct
Conununi1y Services Block Gran. - Discretionary Awords Direct Through: National CoI1egiate Alhletic Assoc:iaIion

93.563 93.566
93.56& 93.569 93.570

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

173.082 (R) -29.924 443.052 (R) 586.210 135,479 84,498 (R) 219,977
36.084 1,126,942 (R)
276,949 (R) 655.628 (R) 2,095.603
81,659 (R) 204,153 (R) 179,760 (R) 522,716 (R) 988,288
15,275 (R)
66,792 (R)
89,980
10.621,350 (R) 26,306 (R)
10,647.656
338,887,045 12,575
338.899.620
-864,408 -3.567 (R)
-867,975
74.382,892
4,166.274
8.624,098
18,495,668
63,091 190,484 253,575

E- 36

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

Schedule of Expenditures of Federal Awards For the F1scal Year Ended June 30, 2003

Health and Human Sen'ices, U. S. Department of
Community Services Block Grant Discretionary Awards Community Food and Nutrition
Direct
Child Care and Development Block Grant (Ccq
Direct Through: Georgia Child Care Council
Through: Kids Advocacy Coalition Through: United Way ofMetro Atlanta

CFDA NUMBER
93.571
93.575

PASS-TIlROUGH ENITIY IDENTIFYING
NUMBER
Various CU35

Refugee and EnlI1lllt Assistance DiscretiolWy Grants Direct
Refugee and EnlI1lllt Assistance Targeted Assislance Direct Through: Univmity of Georgia Research Foundation

93.576 93.584

01-497

State Court Improvement Program Direct
CommunityBased Family Resource and Support Grants Direct
Family VIOlence Prevention and Services/Grants for Banered Women's Shelter Discretionary Grants
Through: Association ofteachers of Preventive Medicine Through: Violence Intervention Program

93.586 93.590 93.592

cum
DLN28

Child Care Mandall:>l)' and Matching Funds of lhe Child Care and Development Fund (Ccq
Direct
Grants '" States for Access and VISitation Programs Direct
Head Stir! Direct Through: NIII1h District Opportunity, Incorporated Through Sumter Head Stir!

93.596 93.597 93.600

Adoption IncentM: Payments Direct
Developmental Disabilities Basi<: Support and Advocacy Grants
Direct
Developmental Disabilities Projects of National SignifiClllce Direct
Developmental Disabilities UniveJSity Affiliated Programs Direct
Children', Justice Grants to States Direct
Child Welfare Services State Grants Direct

93.603 93.630
93.631 93.632 93.643 93.645

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

103,035
118,429,982 88,869 64,679 4,878
499,687 (R)
119,088,095
937,763
2,057,528
295 (R)
2,057,823
275,124
703,872
15,446 (R) 35,345 (R)
50.791
70.808,868
184,593
2.600,435 5,020 8,044
2.613,499
798,211
2.031,816 (R)
195,020 (R)
369,855 (R)
439,978
8,841,735

E- 37

Schedule of Expenditures of Federal Awards For the Rscal Year Ended June 30, 2003

Health and Buman Services, U. S. Department or
Social Services Research and Demonstration Direct Through: University of Georgia Research Foundation

CFDA NUMBER
93.647

PASS-TIlROUGH ENTITY IDEN11FVING
NUMBER
9OYEOO34/02

Child Welfare Services Training Gnmts Direct
Adoption Opportunities Direct
Foster Care - TidelV-E Direct
Adoption Assistance Direct
Social Services Block Gr3nt Direct
Child Abuse and Neglect State Gnmts Direct Through: University of Georgia Research Foundation

93.648 93.652 93.658 93.659 93.667 93.669

000121

Family VIOlence Prevention and Services'Grants for Battered Women's SheltelS - Grants to Stales and Indian Tribes
Direct
Independent Living Direct
State Children's Insurance Program Direct
Medicaid Infrastructure Grants To Suppon the Competitive Employrnent o{People wi1h Disabilities
Direct
Medicare - Hospital Insurance Direct
Medicare - Supplementary Medical Insurance Direct
State Medicaid Fraud Control Units (Mq Direct
State Survey and Certification ofHeal'" Care Provider> and Suppliers (Mq
Direct
Medical A.ssislance Program (Mq Direct
Heallh Care Fmancing Researdt, Demonsuations and Evaluations
Direct
Cell Biology and Biophysics Research Direct Through: Georgia Tech Research ColpOraboD Through: University of Georgia Research Foundation
Ileal'" careers Opportunity Program Direct Through: Morris Brown CoUege

93.671 93.674 93.767 93.768 93.m 93.774 93.775 93.m 93.m 93.779 93.821
93.822

Various

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

171,570 (R) 159,848 (R)
331,418
137,087 (R)
-255 33,890,489 34,614,782 70,009,828
402,605
-71 (R)
402,534
2,152,299 3,833,778 185,978,m
12,072 3,927,475 11,914,813 3,242,628
2,560,620 3,953,195,737
1,135,870
1,215,035 (R) 904,817 (R)
11,676,160 (R)
13,796.012
142,258 (R)
43,267 185,525

E-38

Schedule of Expenditures of Federal Awards For the F1scal Year Ended June 30, 2003

Healtb aad Human Senrices, U. S. Departmeat of
BasidCore Area Health Education Cent= Direct
Heart and Vascular Diseases Research Through: Georgia Tech Applied Research Corporalion Through: Georgia Tech Research Corporalion Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion

CFDA NUMBER
93.824 93.837

PASS-lHROUGH ENTITY IDENTIFYING
NUMBER
Various

Lung Diseases Research Direct Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion

93.838

5ROIHL026148Z4

Blood Diseases and Resources Research Direct Through: Georgia Tech Research Corporalion Through: Medical College of Georgia Research !nsli1ute Through: University of Georgia Research Foundalion

93.839

Arthritis, Musculoskeletal and Skin Diseases Research Through: Georgia Tech Research Corporalion Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion

93.846

SF32AR08643-03

Diabetes. Endocrinology and Merabolism Research Direct Through: Georgia Tech Research Corporalion Through: University of Georgia Research Foundalion

93.847

Various

DigestM Diseases and NUlrilion Research Direct Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion

93.848

Various

Kidney Diseases, Urology and Hemalology Research Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion

93.849

3 ROI DK 0323032051

Extramund Research Programs in the Neurosciences and Neurological Disord=
Direct Through: Clark Atlanta University
Through: Georgia Tech Research Corporalion Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion Through: University of Louisville Research

93.853

ALXS6 AL735
Various Various

Allergy, lnununology and Transplanration Research Through: Georgia Tech Research Corporalion Through: Medical College of Georgia Research Institute Through: University of Georgia Research Foundalion

93.855

IROIAl055OOlOi

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

475,985
8,399 (R) 1,267,103 (R) 8,736,894 (R)
211,092 (R)
10,223,488
276,800 (R) 136,512 (R) 230,075 (R)
643,387
68,660 (R) 220,608 (R) 2,320,061 (R) 78,907 (R)
2,688,236
161,843 (R) 69,539 (R) 44,399 (R)
275,781
170,644
368,319 (R) 557,992 (R)
1,096,955
237,559 (R) 889,876 (R) 402,571 (R)
1,530,006
1,724,454 (R) 345,324 (R)
2,069,778
1,036,227 (R) 3,259 (R)
111,696 (R) 561,346 (R) 2,527,253 (R) 29,774 (R) 41,197 (R)
4,310.752
791,937 (R) 1,162,023 (R)
19,464 (R)
1,973,424

E-39

Schedule of Expenditures of Federal Awards For the fiscal Year Ended June 30, 2003

Healtb aad Hamaa Services, U. S. Departmeat of
Microbiology and Infectious Diseases Research Direct Through: Emory University Through: Medical College of Georgia Research Institute Through: Nalionallnstitute ofHeal1b Through: University ofNonh Carolina Through: University of Georgia Research Foundation

CFDA NUMBER
93.g56

Pharmacology. ~ology, and Biorelated Chemistry Research
Direct Through: Georgia Tech Research Corporation Through: University of Georgia R=ch Foundation

93.859

Genetics and Developmental Biology Research and Researcb Training
Through: Georgia Tech Researcb Corporation Through: Medical College of Georgia R=ch Institute Through: Nalionallnstitute ofHealIh Through: University of Georgia Researcb Foundation

93.862

Population Researcb Direct Through: Medical College of Georgia Researcb Institute Through: University of Georgia Research Foundation

93.864

(eater for R=ch for Malhers and Children Direct Through: Georgia Tech Researcb Corporation Through: Medical College of Georgia Researcb Institute Through: University of Georgia R=ch Foundation Through: Yale University

93.865

Aging Researcb Direct Through Georgia Tech R=ch Corporation Through: University of Georgia Researcb Foundation Through: University of Wisconsin
VISion Research Direct Through: Medical College of Georgia Research Institute
Minority Access 10 R=ch Careers Direct Through: University of Georgia R=ch Foundation
Grants for Residency Training in General Internal Medicine and/or General Pediatrics
Direct
Physician Assistant Training in Primary Care Direct
Resource and Mani>o- Development in Ihe Envuonmenlal Heahb Sciences
Direct

93.866
93.867 93.8g0 93.884 93.886 93.g94

PASS-11IROUGH EN1TIY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

ALX49 F32GM65009
BLF40 Various
Various
Various
Various
Various DLN02 C1.H43
Various DLN25
Various

586,006 (R) 97,818 (R) 615,853 (R)
906 (R) 160,738 (R) 4,669,418 (R)
6,130,739

580,128 (R) 536,781 (R) 1,935,703 (R)
3,052,612

289,741 (R) 294,694 (R) 41,965 (R) 1,890.431 (R)
2,516,831

110 (R) 479,732 (R) 49,244 (R)
528,866

3,102,826 (R) 173,576 (R)
1,914,169 (R) 1,969,639 (R)
167,729 (R) 34,320 (R)
7,362,259

438,326 (R) 982,798 (R) 1,526,774 (R) 20,241 (R)
2,968,139

343,947 (R) 1,947,636 (R)

S

2,291,583

12,103 (R) 30,012 (R)
42,115

225,978 4,887

40,383 (R)

E-40

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30, 2003

Health and Human Senri~es, U. S. Department of
Grants for Faculty Development in Family Medicine Direct
Predoctoral Training in Primary Care (Family Medicine, General Intemal Medicine/General Pediatrics)
Direct
Rural Health Medical Education Demonstration Projects Direct
Rural Health Outreach and Rural Netv.<>rk Development Program
Direct
Grants to States for Operation of Offices of Rural Health Direct
HIV Care Formula Grants Direct
Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease
Direct
Cooperative Agreements for Stale-Based Comprehensive Breast and Cervical Cancer Early Detection Programs
Direct
Scholar.rups for Health Professions Students from Disadvantaged Backgrounds (SFA)
Direct
Healthy Start Initiarive Direct
Center for Medical Rehabilitation Research Direct Through: Univ=ity of Georgia Research Foundation

CFDA NUMBER
93.895 93.896 93.906 93.912 93.913 93.917 93.918 93.919 93.925 93.926 93.929

PASS-THROUGH ENTITY IDENTIFYING
NUMBER
Various

Fogarty Intemalional Research CoUaboration Award Direct Through: Georgia Tech Research CotpOration Through: University of Georgia Research Foundation

93.934

TWOO106

Cooperative Agreements to Support Comprehensive School Health Programs to Prevent the Spread ofHIV and OtIler Important Health Problems Direct
HIV Prevention Activities Health Department Based Direct
HIV Demonstration, Research, Pub~c and Professional Education Projects
Direct Through: Univmity ofDlinois at OUcago

93.938
93.940 93.941

DLN14 ALX57

Epidemiologic Research Studies of Acquired Immunodeficiency Syndrome (AIDS) and Human Immunodeficiency VIlUS (HIV) Infection
m Selected Population Groups Through: University of Georgia Research Foundation
Human Immunodeficiency VIlUS (HIV)IAcquircd Immunodeficiency VIlUS Syndrome (AIDS) Surveillance Direct

93.943 93.944

U64/CCUC41mO

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

185,670
174,350 67,653
125,855 87,842 33,565,871
809,487
963,785
269,535 (R) 96,960 95,961 (R)
347,279 (R) 443,240
6,790 (R) 27,790 (R)
595 (R) 35,175
67,786 7,162,086
919.292 58,463 (R) 90,266 (R)
1,068,021

814,460 (R) 503,285

E - 41

Schedule of Expenditures of Federal Awards For the FIscaL Year Ended June 30, 2003

Healtb and Human Services, U. S. Department of
Assistance Program for Chronic Disease Prevention and Control
Direct
Improving EMS/Trawna eare in Rural Areas Direct
Block Grants for Community Mental Heal1h Services Direct
Block Grants for Prevention and Treatment of Substance Abuse
Direct Through: University ofGeorgia Research Foundation

CFDA NUMBER
93.945
93.952 93.958 93.959

Special Minority Initiatives Direct Through: University of Georgia Research Foundation

93.960

Health Administration Traineeships and Special Projects Program
Direct
Preventive Health Services Sexually Transmitted Diseases Control Grants Direct
Academic Administrative Units in Primary Care Direct
Cooperative Agreements for SllItO-Based Diabetes Control Programs and Evaluation of Surveillance Systems
Direct
Senior International Fellowships Direct Through: Medical College of Georgia Research Institute

93.962 93.977 93.984 93.988 93.989

Preventive Heal1h and Health Services Block Grant Direct
MatemaI and OWd Health Services Block Grant to 1I1e Statt:s
Direct

93.991 93.994

PASS-THROUGH ENTITY IDENTIFYING
NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

4279312047 1 R24 GM6632 1

1,376,887 8,257
14,817,987

47,013,874 5,059
47,018,933

172,353 36,198 (R)

S

208,551

S

13,537

S

4,149,685

105,760

S

293,599

S

23,185 (R)

-1,526

21,659

5,149,337

17,791,096

163,712

E-42
_ --_ _--_. ---_.... _ ... --

Schedule of Expenditures of Federal Awards For the FIscal Year Ended June 30, 2003

Health and Human Services, U. S. Department of
Other Federal Assistance Direct Through: American Council on Education Through: Association of Teachers of Preventive Medicine Through: Center for Disease Control Through: City of Albany Through: Emory University Through: Georgia Tech Applied Research Corporation Through: Georgia Tech Research Corporation Through: Metro Adanta Council on Alcohol Through: National Collegiate Athletic Association Through' ORC Macro International. Inc. Through: Science Applications International Group Through: United Negro College Fund Through: lhUversity ofConnecticut Through: UnIVersity of Georgia Research Foundation
Through: U. s.. Ukraine Foundation
Through: Virginia Tech Through: World Learning. Incorporated

CFDA NUMBER
93XXX

PASS-THROUGH ENTI1Y IDENTIFYING
NUMBER
DLM20 99IPA06048/02IPA04661
AL790 ALW09 DLM31
Various CR-19295-425215

AGENCY TOTAL
Corporation for National and Community Service
Retired and Senior Volunteer Program Direct
State Commissions Direct
Learn and Serve America School and Community Based Programs
Direct Learn and Serve America Higher Education
Direct Through: Georgia Tech Research Corporation
AmeriCorps Direct
Planning and Program Development Grants Direct
Training and Tethnical Assistance Direct
Foster Grandparent Program (FGCC) Direct
Senior Companion Program (FGCC) Direct
AGENCY TOTAL
Social Security Administration Social Security - Disability Insurance (DIISSI) Direct Social Sec.urity - Benefits P1annmg. Assistance and Outreach Program Direct AGENCY TOTAL

94002 94003 94.004 94.005
94.006 94.007 94.009 94.011 94.016
96.001 96.008
E -43

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

1.185.638 (R) 31.664 (R) 47,333 (R) 19,533 (R) 5.295 3,638 (R) 111.571 (R)
3.156.696 (R) 5.704 (R)
83.092 28.901 (R) 3.151 (R)
7,395 8,731 (R) 6,716,465 (R) 14.967 (R) 6.306 19.386 (R)
11,455,466
5.280,468.448

160.023 (3) (R)
160.023 26,760,330

178,983 (R) 291.775
514.447 4.173
24.129 (R) 28.302 1.150.696
188.988 (R) 150.650 489.256 (R) 383.992 (R) 3,377.089
51,473.077
309.107 51.782.184

Schedule of Expenditures of FederaL Awards For the FIscal Year Ended June 30, 2003

Homeland Security, U. S. Department of
Port Security Grants for Critical NaIiona1 Seaports Direct
Other Financial Assistance Direct

CFDA NUMBER
97.056 97.XXX

PASS-TIfROUGH ENTITY IDENTIFVING
NUMBER

AGENCY TOTAL

MONETARY EXPENDITURES
1,178,077 53,765
1,231,842

GRAND TOTAL EXPENDITURES OF n:DERAL AWARDS

10,234,069,730

NONMONETARY EXPENDITURES
2,534,892,964

E-44

Notes to the ScheduLe of Expenditures of FederaL Awards For the FIscal Year Ended June 30, 2003

PURPOSE OF THE SCHEDULE

Office ofManagement and Budget (OMB) Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, requires a Schedule ofExpenditures ofFederal Awards reflecting total expenditures for each Federal financial 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, 2003. 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-133,

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-133 established a risk-based

approach for defining Major Federal financial assistance programs. This approach resulted in 30 of 38 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, 2003, a Type A program is defined as any Federal program which exceeded $30,000,000 in

expenditures/disbursements/issuances.

Basis ofAccounting - The Schedule ofExpenditures ofFederal Awards is prepared using the basis ofaccounting as described in Note I of the Notes to the Financial Statements of the Basic 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 ofFederal expenditures/expenses. Therefore, net Federal expenditures/expenses is reported in the schedule.

OTHER

The following Notes provide additional pertinent information regarding Federalfinancial assistance.

(I) 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$301,098,710 and State expenditures of$735,560,983.

(2) During the fiscal year ended June 30, 2003, the Georgia Department of Human Resources received $59,381,313 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. I 6(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 92,731 additional persons per month during fiscal year 2003.

E-45

Notes to the Schedule of Expenditures of Federal Awards For the fiscal Year Ended June 30, 2003

(3) Federally funded loan programs incurred the following current fiscal year monetary and nonmonetary expenditures:

CFDA NUMBER

GRANT PROGRAM

MONETARY

NEW FEDERAL CAPITAL

FEDERAL REIMBURSEMENT

ADMINISTRATIVE COSTS

NONMONETARY

LOANS OUTSTANDING
AT 06130/02

LOANS MADE DURING YEAR

23.011 66.458 66.468 84.032 84.038 84.226 93.342
93.364 93 XXX 93.XXX

Appalachian Srate Research, Technical Assistance, and Demonslration Projects (0)

Capitalization Grants for Srate Revolving FW1<1s (0)

Capitalization Grants for Drinking Water Srate Revolving Funds (0)

$

Federal Family Education Loans (0)

Federal Perkins Loan Program - Federal Capital Contributions (0)

$

Income Contingent Loan Program

Health Professions Student Loans, Including Primary Care LoanslLoans for Disadvantaged Students

Nursing Student Loans

Pharmacy Loans (0)

Veterinary Medicine Loans (0)

0$ 23,349,107 $ 16,683,800 $
0$ 163,985 $
0$ -560,202 $
n,460 $
~5,789 $ -83,432 $

0$ 0$ 0$ 39,864,111 $ 908,024 $ 0$ 0$ 0$ 0$ 0$

32,541 $ 1,669,917 $
443,876 $ 0$
351,958 $ -899 $ 0$ 43 $ -315 $ -\7 $

1,325,258 $ 296,042,707 $
32,809,380 $ 1,360,911,810 $
37,146,080 $ 94,953 $
1,806,820 $ 1,079,662 $
54,638 $ 105,385 $

0 53,240,706 14,997,062 236,062,523 6,675,057
0 78,513 128,840
0 0

(*) 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 two organizational units of the State, represent the U. S. Department of Agriculture assigned value ofthe 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 financial circumstances. The Georgia Department of Human Resources is responsible for determining eligibility for participation in the Food Stamp Program. For the year under review, the total value of food stamp benefits distributed as approved by the Department was $738,255,272.
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-46
_ - - . ------- ...

Notes to the Schedule of Expenditures of Federal Awards For the FIscaL Year Ended June 30. 2003

(5) Cluster programs are detailed on the Schedule ofCluster Programs and identified as follows on the Schedule ofExpenditures ofFederal Awards:

(AC) (CCC) (CNC) (CHCC) (DI/SSI) (EFAC) (ESC) (ESCC) (FTC) (FWC) (FSC) (FGCC) (HPCC) (HSC) (MC) (R) (SEC) (SFA) (TRIO) (WIA)

Aging Child Care Child Nutrition Consolidated Health Centers Disability Insurance/SSI Emergency Food Assistance Employment SeIVices CDBG - Entitlement and (HUD-Administered) Small Cities Federal Transit Fish ana Wildlife Food Stamp Foster Grandparent/Senior Companion Highway Planning and Construction Highway Safety Medicaid Research and Development Special Education Student Financial Aid TRIO WIA

(6) Circular A-133 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 82% oftotal Federal expenditures for the State ofGeorgia. Provided below is the amount of maj or programs awards provided to subrecipients:

CFDA NUMBER
10.550
14.239 66.458 66.468 81.041 81.042 84.048 84.367

GRANT PROGRAM
Food Distribution Child Nutrition Cluster HOME Investment Partnerships Program Capitalization Grants for State Revo1vinK Funds Capitalization Grants for Drinkinll: Water State RevolvinK Ftmd State EneTl1:Y Prol';tan1
Weatherization Assistance for Low-Income Persons Vocational Education - Basic Grants to States
Irnprovinll: Teacher Quality State Gl3Dts Research and Development Cluster
Total

AMOUNT PROVIDED TO SUBRECIPIENTS

$

31,810,662

308,652,902 1,223,650
13,737,241 14,298,550
1,263,375 2,681,334 15,382,643 70,636,168 40,607,920

$

500,294,450

E-47

(This page intentionaLLy Left bLank)

ScHEDULE OF CLUSTER PR~s

(This page intentionaLLy Left bLank)
- - - - _ __ _- -_.._-- ._._-----.-

G:org1B.
Schedule of auster Programs For the FIscal Year Ended June 30, 2003
Aging Cluster (AC)
Special Programs for the Aging - Title III, Part B Grants for Supportive Services and Senior Centers Special Programs for the Aging - Title III, Part C Nutrition Services
Child Care Cluster (CCC)
Child Care and Development Block Grant Child Care Mandatory and Matching Funds ofthe 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
Consolidated Health Centers Cluster (CHeC)
Community Health Centers Health Centers Grants for Migrant and Seasonal Fannworkers
Disability InsuranceiSSI Cluster (DIISSI)
Social Se~ - Disability Insurance
Emergency Food Assistance Cluster (EFAC)
Emergency Food Assistance Program (Administrative Costs)
Emergency Food Assistance Program (Food Commodities)
Employment Services Cluster (ESC)
Employment Service Local Veterans' Employment Representative Program
CDBG - Entitlement and (HUD-Administered) Small Cities Cluster (ESCC)
Community Development Block Grants!EntitJ.ement Grants Community Development Block GrantslSmaIl Cities Program

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.044 $
93.045
$

7,758,217 13,830,778 21,588,995

93.575 $ 93.596
$

119,088,095 70,808,868 189,896,963

10.553 $ 10.555 10.556 10.559
$

71,738,023 314,186,560
16,646 88,590
386,029,819

93.224 $ 93.246
$

1,562,332 72,004
1,634,336

96.001 $

51,473,077

10.568 $
10.569
$

138,691 $
138,691 $

2,218,855 2,218,855

17.207 $ 17.804
$

20,437,761 1,196,818
21,634,579

14.218 $ 14.219
$

5 1,795,214 1,795,219

E -51

Schedule of Ouster Programs For the FIscaL Year Ended June 30. 2003
Federal Transit Cluster (FTC)
Federal Transit Capital Investment Grants Federal Transit - Fomrola Grants
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 Conununity Highway Safety
Medicaid Cluster (MC)
State Medicaid Fraud Control Units State Survey and Certification ofHealth Care Providers
and Suppliers Medical Assistance. Program
Research and Development Cluster (R)
Other Federal Assistance Agricultural Research - Basic. and Applied Research Plant and Animal Disease, Pest Control. and Animal Care Wildlife Services Grants for Agricu1tural Research. Special Research Grants Cooperative Forestry Research Payments to Agricu1tural Experiment Stations Under. the Hatch Act Grants for Agricultural Research - Competitive. Research Grants Higher. Education Challenge Grants Funds for Rural America Research. Education. and
Extension Activities

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

20.500 $ 20.507
$

2,448,780 14,168,113
16,616,893

15.605 $ 15.611
$

5,773,214 5,696,880
11,470,094

10.551 10.561
$
$

$ 50,772,327 50,772,327 $

738,255,272 738,255,272

94.011 $ 94.016
$

489,256 383,992
873,248

20.205 $

812,585,716

20.600 $

20,974,659

93.775 $ 93.777
93.778
$

3,242,628
2,560,620 3,953,195,737
3,958,998,985

02.xxx $ 10.001 10.025 10.028 10.200 10.202 10.203
10.206
10.217 10.224

227,439 1,485,305
130,644 16,302
5,033,805 762,326
4,199,718
2,291,078 165,792
2,528

E-52

Schedule of Ouster Programs For the FIscal Year Ended June 30, 2003
Research and Development Cluster (R)
Initiative for Future Agriculture and Food Systems Integrated Programs Homeland Security - Agricu1tura1 Crop Insurance Cooperative. Extension Service Summer Food Service Program for Children (CNC) Forestry Research Cooperative. Forestry Assistance Soil and Water. Conservation Scientific. Cooperation Program International Training - Foreign Participant Other. Federal Assistance ITA Special Projects Trade Adjustment Assistance Sea Grant Support Coastal Zone Management Estuarine. Research Reserves Fisheries Development and Utilization Research and
Development Grants. and Cooperative Agreements Program Undersea Research Climate. and Atmospheric. Research Office of Oceanic. and Atmospheric Research (OAR) Joint .and Cooperative. Institutes Environmental Sciences, Applications, Data, and Education Marine. Research - Regional Programs Center for Sponsored Coastal Ocean Program - Coastal
Ocean Program Measurement and Engineering Research and Standards Other Federal Assistance Aquatic Plant Control Collaborative Research and Development Basic and Applied Scientific Research Military Medical Research and Development Basic Scientific Research International Education - U.S. Colleges and Universities 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 Community Development Block Grants!Eutit1ement
Grants (ESCC) Community Outreach Partnership Center Program Other Federal Assistance Cooperative. Endangered Species Conservation Fund Wildlife Conservation and Appreciation Assistance to State Water. Resources Research Institutes Earthquake Hazards Reduction Program U.S. Geological Survey - Research and Data Acquisition Historic Preservation Fund Grants-In-Aid National Historic Landmarlc Outdoor Recreation - Acquisition, Development and Planning

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

10.302 10.303 10.304 10.450 10.500 10.559 10.652 10.664 10.902 10.961 10.962 10.XXX 11.113 11.313 11.417 11.420 11.427
11.430 11.431 11.432
11.440 11.464 11.478
11.609 11.xxx 12.100 12.114 12.300 12.420 12.431 12.550 12.630
12.800 12.901 12.910 12.xxx 14.218
14.511 14.xxx 15.615 15.617 15.805 15.807 15.808 15.904 15.912 15.916

1,354,749 968,645 146,995 45,749
9,833,998 38,381
807,855 347,280
386 37,146
5,172 3,050,406
923,643 1,158,698 1,358,843
27,911
15,929 46,683 266,738
3,231 23,592 362,915
112,860 265,136 5,037,647 32,058,980
54,808 19,213,341
89,585 420,481
26,968
928,154 45,900,358
47,850 3,063,232 26,530,546
5 48,726 194,707 13,824 24,733 178,294 18,064 594,414 89,789 10,105
16,353

E-53

Schedule of Cluster Programs For the fiscal Year Ended June 30, 2003
Research and Development Cluster (R)
National Center for Preservation Technology and Training Other Federal Assistance Law Enforcement Assistance - FBI Advanced Police Training National Imtitute for Juvenile Justice. and Delinquency Prevention
National Institute. ofJustice Research,. Evaluation, and Development Project Grants Violence Against Women Formula Grants
Other. Federal Assistance Employment and Training Administration Pilots,. Demonstrations and Research Projects Other Federal Assistance College. and University Affiliations Program Educational Partnerships. Program Other. Federal Assistance Aviation Education State and Community. Highway Safety (HSC) University Transportation Centers Program Other Federal Assistance Other Federal Assistance Aerospace. Education Services Program Teclmology Transfer Other Federal Assistance Promotion ofthe Arts - Grants to Organizations and
Individuals Promotion ofthe. Humanities - Federal/State. Partnership Promotion ofthe Humanities - Challenge Grants Promotion ofthe Humanities. - Division of Preservation
and Access Promotion ofthe Humanities - Fellowships and Stipends Promotion ofthe Humanities - Education Development
and Demonstration Other Federal Assistance Engineering Grants Mathematical and Physical Sciences Geosciences Computer and Infonnation Science. and Engineering Biological Sciences Social, Behavioral, and Economic. Sciences Education and Human Resources Polar Programs Other Federal Assistance Other Federal Assistance Small Business Development Center Other Federal Assistance Other. Federal Assistance Other Federal Assistance Other Federal Assistance Surveys, Studies, Demonstrations and Special Purpose Grants - Section 1442 ofthe Safe. Drinking Water Act Nonpoint Source Implementation Grants Environmental Protection Consolidated Research

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

15.923 15.XXX 16.300
16.542
16.560
16.588 16.XXX 17.261
17.XXX 19.406 19.424 19.xxx 20.100 20.600 20.701 20.xxx 39.xxx 43.001 43.002 43.xxx 45.024
45.129 45.130 45.149
45.160 45.162
45.xxx 47.041 47.049 47.050 47.070 47.074 47.075 47.076 47.078 47.xxx 58.xxx 59.037 59.xxx 60.XXX 62.xxx 64.xxx 66.424
66.460 66.500

27,406 1,152,089
53,143
19,899
208,736 22,796
309,365
475 1,578,445
78,442 13,546 237,179 40,241
5,927 18,076 2,238,441 3,732,613 169,413 13,301 14,480,655
30,622 10,739
278
12,966 60,267
2,854 201,511 14,434,984 8,194,352 4,351,098 11,172,320 10,917,208 3,769,516 4,982,317 367,314 6,812,595 159,139 2,868,567 113,816
-1,000 11,058 586,331
9,000 1,192 1,577,483

E..., 54

Schedule of Cluster Programs For the F1scal Year Ended June 30, 2003
Research and Development Cluster (R)
Science to Achieve Results (STAR) Program Surveys, Studies, Investigations and Special Purpose Grants Training and Fellowships. for the Environmental
Protection Agency Pollution Prevention Grants Program Pesticide Environmental Stewardship - Regional Grants Environmental Education and Training Program Enviromnental Education Grants Other Federal Assistance State Energy Program Conservation Research and Development Renewable Energy Research and Development Office of Science and Technology. for Environmental
Management University Nuclear Science and Reactor Support Science and Engineering Training to Support
Diversity-Related Programs Other Federal Assistance Other Federal Assistance Undergraduate International Studies and Foreign
Language Programs International Research and Studies International: .Overseas - Group Projects Abroad Special Education - Grants to States (SEC) Higher. Education Institutional Aid Federal Work-Study Program (SFA) TRIO - Student Support Services (TRiO) TRIO - Talent Search (TRiO) TRiO- Upward Bound (TRiO) TRIO - Educational Opportunity Centers (TRIO) Fund for the Improvement ofPostsecondary Education Rehabilitation Long-Term Training National Institute on Disability and Rehabilitation Research Graduate. Assistance in Areas ofNational Need Centers for International Business Education Rehabilitation Services Demonstration and Training -
Special Demonstration Programs Eisenhower. Professional Development State Grants National Institute on Student Achievement, Curriculum,
and Assessment 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 Special Education - Technology and Media Services for Individuals. with Disabilities Teacher Quality Enhancement Grants Learning Anytime. Anywhere Partnerships Preparing Tomorrows Teachers to Use Technology Early Childhood Educator Professional Development Transition to. Teaching Other Federal Assistance Other Federal Assistance

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

66.509 66.606 66.607
66.708 66.714 66.950 66.951 66.XXX 81.049 81.086 81.087 81.104
81.114 81.116
81.XXX 82.XXX 84.016
84.017 84.021 84.027 84.031 84.033 84.042 84.044 84.047 84.066 84.116 84.129 84.133 84.200 84.220 84.235
84.281 84.305
84.324
84.325
84.327
84.336 84.339 84.342 84.349 84.350 84.XXX 92.XXX

19,969 206,321
55,507 -6,090 18,446 45,017 21,643 1,727,886 3,102,489 491,097 41,972
292,797 90,305
60,112 19,489,995
56,357
50,269 74,648 107,012 230,543 2,624,712 762,582 263,831 711,241 1,196,122 479,586 138,706 131,681 1,539,647 385,720 228,417
1,578 1,888,742
195,120
339,488
386,650
351,331 1,466,877
44,720 981,292 545,841
5,052 4,541,832
147

E -55

ScheduLe of Ouster Programs For the F1scal Year Ended June 30. 2003
Research and Development Cluster (R)
Nation Family Caregiver Support Program Health Disparities Grants. in Minority Health Food and Drug Administration - Research Comprehensive Community Mental Health Services for .Children with Serious. Emotional Disturbances (SED) Maternal and Child Health Federal Consolidated Programs Biological Response to. Environmental Health Hazards Biometry and Risk. Estimation - Health Risks from .Environmental Exposures Acquired Immunodeficiency Syndrome (AIDS) Activity Oral Diseases and Disorders Research Centers. for Research and Demonstration for Health
Promotion and Disease. Prevention Injury Prevention and Control Research and State. and
Community Based Programs International Cooperative. Biodiversity Groups Program Human Genome Research Research Related to Dea.fuess and Communication Disorders Human Health Studies. - Applied Research and Development Research and Training in Alternative. Medicine National Research Service Awards - Health Services
Research Training Research on Healthcare Costs, Quality and Outcomes Consolidated Knowledge Development and Application
(KD&A) Program Policy Research and Evaluation Grants Mental Health Research Grants Occupational Safety and Health Research Grants lnununization 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 Biomedical Imaging Research Comparative Medicine Clinical Research Advanced Education Nurse. Traineeships Nursing Research Biomedical Technology Minority Biomedical Research Support Research Infrastrncture Cancer. Cause and Prevention Research Cancer Detection and Diagnosis. Research Cancer Treatment Research Cancer Biology Research

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.052 93.100 93.103 93.104
93.110 93.113 93.115
93.118 93.121 93.135
93.136
93.168 93.172 93.173 93.206 93.213 93.225
93.226 93.230
93.239 93.242 93.262 93.268 93.272
93.273 93.278
93.279 93.281
93.282
93.283 93.286 93.306 93.333 93.358 93.361 93.371 93.375 93.389 93.393 93.394 93.395 93.396

161,121 2,566
351,035
60,427 15,905 335,360
77,150 6,623
995,099
152,089
1,263,170 18,814
274,586 873,486
47,110 408,353
69,241 98,845
160,118 9,136
5,274,876 160,377 97,309
171,995 690,194
12,948 4,644,082
55,086
21,620
65,561 2,720
942,570 31,441 15,953 173,055
1,082,279 383,866 280,400 616,134 84,498
2,059,519 988,288

E-56

Schedule of Ouster Programs For the Fiscal Year Ended June 30, 2003
Research and Development Cluster (R)
Cancer. Research Manpower Cancer. Control Promoting Safe and Stable Families Family Support Payments to States - Assistance Payments Child Care and Development Block Grant (CCC) Refugee and Entrant Assistance - Targeted Assistance Family Violence Prevention and Services/Grants for Battered
Women's Shelter - Discretionary Grants Developmental Disabilities Basic. Support and Advocacy
Grants Developmental Disabilities Projects ofNational Significance Developmental Disabilities University Affiliated Programs Social Services Research and Demonstration Child Welfare Services Training Grants Child Abuse and Neglect State Grants Cell Biology and Biophysics Research Health Careers Opportunity Program 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 Extramural Research Programs in the Neurosciences and
Neurological Disorders Allergy, Immunology and Transplantation Research Microbiology. and Infectious Diseases Research Pharmacology, Physiology, and Biorelated Chemistry.
Research Genetics and Developmental Biology Research and
Research Training 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 (SFA) Center. for Medical Rehabi1itation Research Fogarty International Research Collaboration Award HIV Demonstration, Research, Public and Professional
Education Projects Epidemiologic Research Studies ofAcquired
Immunodeficiency Syndrome (AIDS) and Human Immunodeficiency Vll1lS (HIV) Infection in Selected Population Groups
Special Minority. Initiatives Senior International Fellowships Other Federal Assistance Retired and Senior Volunteer. Program

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

93.398 93.399 93.556 93.560 93.575 93.584
93.592
93.630 93.631 93.632 93.647 93.648 93.669 93.821 93.822 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
93.941

15,275 66,792 100,949 -3,567 499,687
295
50,790
23,673 124,606 365,855 331,418 137,087
-71 13,796,013
-524 10,223,488
643,387 2,688,235
275,781 926,311 1,530,006 2,069,778
4,301,512 1,973,424 6,098,274
3,052,612
2,516,831 528,866
7,362,259 2,640,395 2,291,583
42,115
40,383
111,495 443,240
35,175
148,729

93.943 93.960 93.989 93.xxx 94.002

814,460 36,198 23,185 10,970,696 178,983

160,023

E-57

Georgia.
Schedule of CLuster Programs For the fiscal Year Ended June 30, 2003
Research and Development Cluster (R)
Learn and Serve America - Higher Education Planning and Program Development Grants Foster Grandparent Program (FGCC) Senior Companion Program (FGCC)
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 Student Loans Health Professions Student Loans, Including Primary Care
LoanslLoans for Disadvantaged Students Nursing Student Loans 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 TRIO - McNair Post-Baccalaureate Achievement
WIA Cluster (WIA)
WIA Adult Program WIA Youth Activities WIA Dislocated Workers

CFDA NUMBER

MONETARY EXPENDITURES

NONMONETARY EXPENDITURES

94.005 94.007 94.011 94.016
$

24,129 175,220 478,299 215,851
412,116,950 $

160,023

84.027 $ 84.173
$

192,664,912 10,016,614
202,681,526

84.007 $ 84.032 84.033 84.038
84.063 84.268 93.342
93.364 93.925
$

8,383,604 46,621,537 $
9,475,039
1,419,657 204,203,60 I 282,360,927
-560,202 77,503
269,535
552,251,201 $

1,360,911,810 37,146,380
1,806,820 1,079,662
1,400,944,672

84.042 $ 84.044 84.047 84.066 84.217
$

2,234,667 1,702,968 2,981,544 1,297,310
497,381
8,713,870

17.258 17.259 17.260
$

37,298,021 29,341,669 26,648,655
93,288,345

E-58

SECTION F
AUDlTEE'S RESPONSES

SuMMARy ScHEDULE OF PRIOR YEAR
FINDINGS AND QuESTIONED Q:srs

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Summary ScheduLe of Prior Year Andlngs and Questioned Costs
For the FIscal Year Ended June 30, 2003

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

COMMENTS

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

Department ofAdministrative Services

FS-401-01-01 Further Action Not Warranted

FS-403-02-01 Further Action Not Warranted

See Comments F-10

Department ofEducation

FS-414-01-01 Further Action Not Warranted

FS-414-01-02 Further Action Not Warranted

FS-414-02-02 Unresolved

See Comments F-1O

FS-414-02-03 Previously Reported Corrective Action Implemented

FS-414-02-04 Unresolved

See Comments F-I0

FS-414-02-05 Unresolved

See Comments F-ll

Department ofHuman Resources

FS-427-02-02 Partially Resolved

See Comments F-14

FS-427-02-03 Previously Reported Corrective Action Implemented

FS-427-02-04 Previously Reported Corrective Action Implemented

Department ofLabor

FS-440-01-02 Further Action Not Warranted

FS-440-01-03 Further Action Not Warranted

FS-440-02-01 Previously Reported Corrective Action Implemented

FS-440-02-02 Previously Reported Corrective Action Implemented

FS-440-02-03 Previously Reported Corrective Action Implemented

FS-440-02-04 Partially Resolved

See Comments F-16

FS-440-02-05 Partially Resolved

See Comments F-17

FS-440-02-06 Partially Resolved

See Comments F-17

FS-440-02-07 Previously Reported Corrective Action Implemented

FS-440-02-08 Partially Resolved

See Comments F-17

FS-440-02-09 Previously Reported Corrective Action Implemented

Department ofNatural Resources

FS-462-01-01 Previously Reported Corrective Action Implemented

Department ofPublic Safety

FS-466-0 1-05 Previously Reported Corrective Action Implemented

FS-466-02-01 Previously Reported Corrective Action Implemented

FS-466-02-04 Previously Reported Corrective Action Implemented

Department ofCorrections

FS-467-01-01 Previously Reported Corrective Action Implemented

FS-467-02-01 Previously Reported Corrective Action Implemented

Board ofRegents ofthe University System ofGeorgia

FS-472-02-02 Previously Reported Corrective Action Implemented

FS-472-02-03 Previously Reported Corrective Action Implemented

FS-472-02-04 Previously Reported Corrective Action Implemented

FS-472-02-05 Previously Reported Corrective Action Implemented

FS-472-02-06 Previously Reported Corrective Action Implemented

Department ofRevenue

FS-474-01-Q2 Further Action Not Warranted

FS-474-01-03 Further Action Not Warranted

FS-474-02-01 Previously Reported Corrective Action Implemented

FS-474-02-02 Unresolved

See Comments F-18

F-5

Summary Schedule of Prior Year Andlngs and Questioned Costs
For the fiscal Year Ended June 30, 2003

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

Georgia Student Finance Commission

FS-476-01-07 Partially Resolved

Georgia Institute ojTechnology

FS-503-02-01 Partially Resolved

Medical College ojGeorgia

FS-512-02-06 Previously Reported Corrective Action Implemented

Albany State University

FS-521-02-02 Partially Resolved

FS-521-02-06 Unresolved

Armstrong Atlantic State University

FS-524-02-04 Further Action Not Warranted

Clayton College and State University

FS-528-01-01 Further Action Not Warranted

FS-528-02-03 Partially Resolved

Columbus State University

FS-530-02-01 Partially Resolved

Fort Valley State University

FS-533-01-05 Further Action Not Warranted

FS-533-02-06 Previously Reported Corrective Action Implemented

FS-533-02-12 Unresolved

Georgia Southern University

539-96-01

Further Action Not Warranted

Savannah State University

FS-548-01-01 Previously Reported Corrective Action Implemented

FS-548-02-0 1 Previously Reported Corrective Action Implemented

FS-548-02-08 Previously Reported Corrective Action Implemented

State University oj West Georgia

FS-554-02-04 Previously Reported Corrective Action Implemented

Atlanta Metropolitan College

561-96-0 I

Previously Reported Corrective Action Implemented

561-96-02

Previously Reported Corrective Action Implemented

East Georgia College

FS-572-02-02 Unresolved

Floyd College

FS-573-97-02 Previously Reported Corrective Action Implemented

FS-573-02-04 Previously Reported Corrective Action Implemented

Atlanta Technical College

FS-823-02-0I Partially Resolved

Augusta Technical College

FS-824-97-02 Previously Reported Corrective Action Implemented

DeKalb Technical College

FS-830-01-01 Further Action Not Warranted

FS-830-02-0 I Partially Resolved

*Georgia Higher Education Assistance Corporation

FS-918-02-01 Previously Reported Corrective Action Implemented

COMMENTS See Comments F-18 See Comments F-18 See Comments F-19 See Comments F-19 See Comments F-20 See Comments F-20 See Comments F-21
See Comments F-23 See Comments F-23 See Comments F-24 See Comments F-25

F-6

Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the FIscal Year Ended June 30, 2003

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

State Road and Tollway Authority FS-927-02-01 Previously Reported Corrective Action Implemented FS-927-02-02 Unresolved FS-927-02-03 Previously Reported Corrective Action Implemented FS-927-02-04 Previously Reported Corrective Action Implemented Georgia Public Telecommunications Commission FS-977-01-01 Unresolved Georgia Technology Authority FS-980-02-01 Previously Reported Corrective Action Implemented FS-980-02-02 Partially Resolved Metropolitan Regional Educational Service Agency FS-8564-01-01 Further Action Not Warranted FS-8564-02-01 Further Action Not Warranted West Georgia Regional Educational Service Agency FS-8604-01-01 Previously Reported Corrective Action Implemented FS-8604-02-01 Previously Reported Corrective Action Implemented Oconee Regional Educational Service Agency FS-8664-01-01 Further Action Not Warranted FS-8664-02-01 Further Action Not Warranted Chattahoochee-Flint Regional Educational Service Agency FS-8724-01-01 Further Action Not Warranted FS-8724-02-01 Further Action Not Warranted Heart o/Georgia Regional Educational Service Agency FS-8764-01-01 Further Action Not Warranted FS-8764-02-01 Unresolved

COMMENTS See Comments F-25 See Comments F-26 See Comments F-26
See Comments F-27

F-7

Summary Schedule of PrIor Year Andlngs and Questioned Costs For the fiscal Year Ended June 30, 2003

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Department ofEducation FA-414-01-01 Further Action Not Warranted FA-414-01-02 Further Action Not Warranted FA-414-01-03 Further Action Not Warranted FA-414-02-0 I Unresolved FA-414-02-02 Unresolved FA-414-02-03 Unresolved FA-414-02-04 Unresolved FA-414-02-05 Partially Resolved FA-414-02-06 Unresolved
* Department ofCommunity Health
FA-419-02-0 I Previously Reported Corrective Action Implemented Department ofHuman Resources FA-427-02-01 Partially Resolved FA-427-02-02 Partially Resolved FA-427-02-03 Partially Resolved FA-427-02-04 Partially Resolved FA-427-02-05 Partially Resolved FA-427-02-06 Further Action Not Warranted FA-427-02-07 Previously Reported Corrective Action Implemented Department ofLabor FA-440-02-01 Previously Reported Corrective Action Implemented Office ofSchool Readiness FA-469-01-01 Further Action Not Warranted FA-469-02-01 Partially Resolved Office of Treasury and Fiscal Services FA-486-02-01 Unresolved
* Georgia Institute ofTechnology
FA-503-02-01 Previously Reported Corrective Action Implemented FA-503-02-02 Previously Reported Corrective Action Implemented Georgia State University FA-509-02-0 I Previously Reported Corrective Action Implemented
* University ofGeorgia
FA-5 I 8-02-01 Previously Reported Corrective Action Implemented Albany State University FA-52 1-00-03 Previously Reported Corrective Action Implemented FA-521-01-01 Further Action Not Warranted FA-52 1-02-0 I Previously Reported Corrective Action Implemented FA-521-02-02 Previously Reported Corrective Action Implemented Fort Valley State University FA-533-01-01 Previously Reported Corrective Action Implemented FA-533-0 1-05 Unresolved FA-533-01-Q6 Further Action Not Warranted FA-533-02-01 Unresolved FA-533-02-02 Unresolved FA-533-02-03 Unresolved

F-8

COMMENTS
See Comments F-12 See Comments F-12 See Comments F-13 See Comments F-13 See Comments F-13 See Comments F-13 See Comments F-13 See Comments F-14 See Comments F-14 See Comments F-15 See Comments F-15 See Comments F-16
See Comments F-17 See Comments F-18
See Comments F-21 See Comments F-21 See Comments F-21 See Comments F-21

Summary Schedule of Prior Year Andlngs and Questioned Costs
For the fiscal Year Ended June 30. 2003

FINDING CONTROL NUMBER

AUDITEE RESPONSE/STATUS

Savannah State University

FA-548-01-02 Previously Reported Corrective Action Implemented

FA-548-01-04 Further Action Not Warranted

FA-548-01-05 Further Action Not Warranted

FA-548-01-06 Previously Reported Corrective Action Implemented

FA-548-01-07 Partially Resolved

FA-548-02-0 I Unresolved

FA-548-02-02 Partially Resolved

FA-548-02-03 Unresolved

FA-548-02-04 Further Action Not Warranted

FA-548-02-05 Unresolved

Southern Polytechnic State University

FA-550-00-04 Partially Resolved

Atlanta Metropolitan College

561-96-01

Previously Reported Corrective Action Implemented

561-96-02

Previously Reported Corrective Action Implemented

561-96-04

Previously Reported Corrective Action Implemented

Chattahoochee Technical College

827-95-03

Previously Reported Corrective Action Implemented

827-96-03

Previously Reported Corrective Action Implemented

FA-827-97-03 Previously Reported Corrective Action Implemented

Savannah Technical College

FA-841-98-02 Partially Resolved
* Georgia Higher Education Assistance Corporation

FA-918-02-01 Previously Reported Corrective Action Implemented

North Georgia Regional Educational Service Agency

FA-8524-00-03 Further Action Not Warranted

FA-8524-01-01 Further Action Not Warranted

COMMENTS
See Comments F-22 See Comments F-22 See Comments F-22 See Comments F-22 See Comments F-22 See Comments F-23
See Comments F-25 See Comments F-25

*Audit Follow-up was performed by Other Auditors.
F-9

Audltee's Response Summary Schedule of Prior Year Andlngs and Questioned Costs For the fiscaL Year Ended June 30. 2003
AUDITEE'S COMMENTS
DEPARTMENT OF ADMINISTRATIVE SERVICES
Finding Control Number: FS-403-02-01 CAPITAL ASSETS Inadequacies in Operation of Property Management System
As of the close of fiscal year 2003, agency 403 has completed thorough physical inventories of all property, has transferred from the 401 database all equipment which belongs to DOAS, has researched all items which remained in the 40 I database, and has essentially closed the 401 "in service" equipment list, as nothing remains there. As DOAS moved into fiscal year 2003 and assumed full responsibility for fixed asset and property management, DOAS has taken agencywide measures to assure proper accounting for equipment. The IT Manager has assigned inventory responsibility to staff members who track all desktop equipment under $1,000, as well as assuring that all higher cost items are tagged and reported appropriately. The Procurement staff provides copies of all equipment purchases before the inventory even arrives on site. All divisions of DOAS (including attached agencies) maintain a contact person who is responsible for verifying inventory in their areas and appropriately reporting any changes.
DEPARTMENT OF EDUCATION
Finding Control Number: FS-414-02-02 EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Contracting Practices
See our corrective action/responses to finding number FA-414-02-03 in the Prior Year Federal Awards Findings and Questioned Costs.
Finding Control Number: FS-414-02-04 EXPENDITURESILIABILITIESIDISBURSEMENTS Inadequacies in Information System Operations, Changes to Applications, Security and Audit Trail Maintenance
GAORS 1. a) Configuration and Change Management
Presently there is an application and process available that documents and controls requests for system changes to the GAORS system as well as all other applications at Department of Education (DOE). This application is the liS Request for Services. It is an automated system that creates and tracks all requests from their creation through their final disposition. These requests are initiated by the user community for all their requested modifications and enhancements to the applications. The liS Manager, Program Managers, and DBAs can initiate requests for all other system changes. The first step in this process is the creation of the IS request. This first must be approved by the IS Manager. After approval, the Program Manager for the specified system assigns the requests to the appropriate developer. The developers assigned to the request review and analyze the specifications described in the IS request by the initiator. They then make the described modifications and enhancements needed to satisfy the request. Modifications and enhancements are made first in the development environment and unit tested by the developer to ensure compliance with the request and that the changes lead to no inadvertent negative behavior in the existing application. After unit testing is complete, the Program Manager forwards the request to the DBA for code migration to the test system. Once the code is in test system, and after DBA and developer signoff on the changes, selected requests then are sent to the QA staff for system testing. Once the QA staff has tested the application and given its approval to the modifications, a notification is sent to the initiator of the request for user testing of the changes. The developer is not involved in the user-testing process, unless the user requests additional resource support for the testing. Once the initiator is satisfied with the changes, the request will be sent to the Program Manager for production authorization. After approval by the Program Manager and IS Manager, the request is sent to the DBA for compilation and migration of the changes to production. Notifications are then sent to all involved parties documenting the production move.
F-lO

Auditee's Response
Summary ScheduLe of Prior Year Andings and Questioned Costs
For the fiscaL Year Ended June 30, 2003
AUDITEE'S COMMENTS
The IS Request for Services process is being enhanced to include the use of an IS Request number in the remarks section of changed code. This will improve traceability of requests to actual code changes. The new development process for the QBE system is using the Rational Unified Process (RUP), which provides a new source code library system that will be used in conjunction with its change management tool. This will provide a more robust configuration management process. All new application development and all application redevelopment will use this new process.
b) Quality Assurance and Testing
The user community tests all modifications to the GAORS application. No changes are put into production unless the user places a formal request for that change through the liS Request for Services application. In addition, this migration will not occur until the developer has performed unit testing and requested the changes be moved to the test system. Finally, the user is responsible for testing the changes made at their request and for authorizing the code for production use.
At this time, users are not required to develop any formal testing documents, such as testing scripts and documented data. DQE, with the addition of QA and testing personnel, is addressing the issue of formalizing the test process. This QA testing process was first used in the Student Record Data Collections System. DOE is in the process of rolling out a comprehensive QA function that will be responsible for creating and documenting test cases, testing the enhancements and modifications to the applications, and collecting the results.
These results will be used by Project Managers to determine the effectiveness of the Development process.
c) Permissions
The appropriate changes have been instituted to ensure that only the developer and administrator responsible for the application can access the application source code. The IT LAN administrator controls this process.
2. Database Controls
Information has been provided the auditor by the DBA and no further feedback has been received.
Auditing
The GAORS application currently performs auditing on three forms, the Grants Master, Completion Report and the Dl47 report. This audit function tracks the user id, timestamp, and modifications made to these forms. This audit capability will be expanded to cover the entire application and is being analyzed to determine the impact and effort required to implement these modifications. Once the scope of this effort is determined, a report will be given to senior management for review and approval.
Finding Control Number: F8-414-02-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System
See our corrective action/responses to fmding number FA-4l4-02-0l in the Prior Year Federal Awards Findings and Questioned Costs.
F-ll

Audltee's Response
Summary Schedule of Prior Year Andings and Questioned Costs For the FiscaL Year Ended June 30, 2003
AUDITEE'S COMMENTS
Finding Control Number: FA-414-02-01 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
The Georgia Department of Education (DOE) is currently in the process of installing the following rules, policies and procedures to rectify the previous issues and fmdings for the Operation of the Property Management System.
1. DOE hired a new Property and Supply Supervisor on August 1,2003. After research into the PeopleSoft Database for DOE, it has been detennined that currently DOE has around 16,800 total assets on the database. By using Acquisition Date of before 1996 and Asset Description referring to Information Technology equipment, DOE currently has around 11,500 assets that need to be retired. The manual process of retiring these assets began on January 7, 2004.
2. DOE has purchased equipment for Public School Systems in the past, buying the equipment out of DOE funds and sending the assets to the schools. This poses severe property management issues as well as reconciling problems for DOE. The new procedures will include the process of writing a grant to the Public School System by DOE with specific requirements to purchase the assets for the various programs.
3. DOE has not had a Physical Inventory completed by the Property Manager in a few years. It will be in DOE policy that a full physical inventory will be completed every fiscal year to ensure accuracy. Upon the first physical inventory, all assets will receive a new color-coded barcode decal. The color blue will indicate an asset below $5,000.00 and the color red will indicate above $4,999.99. Physical Inventory for DOE began December 29,2003.
4. An issue at DOE that has become a problem has been the location codes issued to assets. The location codes currently are very generic and not specific. A new location code system is being installed as well as location code decals with a barcode. These location code decals will be assigned to each cubicle, room and office. This will help to speed up the inventory process as well as the accuracy. Location code changes began December 30,2003.
5. An issue at DOE has been responsibility and accountability; therefore, each employee will become the custodian of the assets assigned to hirn/her. In cases where it is used by many employees, it will be assigned to the department or organization, and organizational custodians will be assigned. Custodian changes began December 30,2003.
6. Previously, DOE was not using the Asset Interface in PeopleSoft. By not using this, it makes reconciliation a very tedious and time consuming process and there is not a clear audit trail. Also, it does not allow DOE to use the current processes and queries that have been designed for reconciliation of asset purchases. DOE is now using the Asset Interface in PeopleSoft.
7. Previously, DOE did not reconcile asset management properly or in some cases at all. Currently, asset reconciliation will be done on a monthly basis.
Finding Control Number: FA-414-o2-02 ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditures
The Title VI innovative funds guidelines were met by the five contracts identified in the audit. The Department feels the funds were spent in support of local school system programs and activities, which meets Title VI regulations. The Department asked U.S. Department of Education personnel to review the contracts to verify that they are within guidelines and regulations. Copies of the contracts were sent to a Title V (formerly Title VI) program coordinator with the U.S. Department of Education. The coordinator has agreed to review the contracts for compliance with Title VI regulations and guidelines.
F-12
__ .._--------_.._._---_. - -. ._--_.._._------

AudJtee's Response Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the fiscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
Finding Control Number: FA-414-02-03 ALLOWABLE COSTS/COST PRINCIPLES Improper Contracting Practices
The Department of Education (DOE) is in the process of re-examining its current procedures, and will make any necessary changes. In addition, DOE will be re-training its staff who handle contract matters.
Finding Control Number: FA-414-02-04 ALLOWABLE COSTS/COST PRINCIPLES Improper Contracting Practices
This matter has been turned over to the U.S. Department of Education for their review. In addition, the Georgia Attorney General's office is looking at this matter. The Department of Education (DOE) will follow whatever guidance is issued from these two agencies. DOE will examine its policies and train staff accordingly.
Finding Control Number: FA-414-02-05 SUBRECIPIENT MONITORING Inappropriate Issuance of Management Decision
This audit finding is partially resolved. The Georgia Department of Education refunded to the United States Department of Education (USDOE) $102,129.32 for the resolution of the fmding related to Okefenokee Technical College.
We have contacted the USDOE for a resolution of the fmding related to Augusta, Dekalb, and Savannah Technical Institutes.
Finding Control Number: FA-414-02-06 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period
The Department of Education (DOE) is responsible for tracking and reviewing the audits of local units of administration (LUA). 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-133. The U.S. Department of Education is aware of the problem, and realizes there is not currently a viable solution to the fmding. The LUA audits are normally completed within a 15 to 18 month time period. DOE has a six-month resolution period to resolve fmdings in the LUA audits after being received from the Department of Audits.
DEPARTMENT OF COMMUNITY HEALTH
Finding Control Number: FA-419-02-01 ALLOWABLE COSTS/COST PRINCIPLES Pharmacy Benefit Claim
The Department of Community Health has developed and implemented procedures to ensure that Express Scripts, Inc. is processing claims properly.
F-13

Auditee's Response Summary Schedule of Prior Year Andings and Questioned Costs For the FIscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
DEPARTMENT OF HUMAN RESOURCES
Finding Control Number: FS-427-02-02 GENERAL LEDGER Inadequate Accounting Procedures
Staff was instructed on recording grant awards on April 16, 2003. Staff immediately started following this procedure. This instruction significantly reduced the deficits at June 30, 2003.
A letter was developed to send with grant award applications to help route the grants appropriately.
Also, the Commissioner's Office staff has been made aware of the importance of the appropriate routing of grant awards. The staff now insures that the Office of Financial Services receives a copy of the grant award as well as the Office of Planning and Budget Services.
In addition, Office of Financial Services staff was instructed to be more diligent to insure that any apparent grant award missing is tracked down promptly.
Finding Control Number: FA-427-02-01 ELIGIBILITY Deficiencies in File Maintenance Temporary Assistance for Needy Families (CFDA 93.558) Questioned Cost: $4,610.00
The areas cited in the FY 2002 audit findings for the TANF and Food Stamp programs were addressed by the sharing of results of this audit with county supervisors at their fourth quarter area supervisors' meeting that is conducted by program consultants.
County Eligibility Supervisors were reminded of the importance of ensuring that TANF and Food Stamp eligibility requirements are adhered to as they do case record reviews via memo dated August 18, 2003.
County Eligibility Supervisors provided in house ESS Policy Manual refresher training on all required documentation and information required for complete and accurate case records.
Subsequent to the fiscal year under review, the U.S. Department of Health and Human Services (HHS) was paid back for the questioned costs cited in the finding.
Finding Control Number: FA-427-02-02 ELIGIBILITY Deficiencies in File Maintenance Food Stamp Cluster
Food Stamps (CFDA 10.551) State Administrative Matching Grants for Food Stamp Program (CFDA 10.561) Questioned Cost: $3,405.00
The areas cited in the FY 2002 audit findings for the TANF and Food Stamp programs were addressed by the sharing of results of this audit with county supervisors at their fourth quarter area supervisors' meeting that is conducted by program consultants.
County Eligibility Supervisors were reminded of the importance of ensuring that TANF and Food Stamp eligibility requirements are adhered to as they do case record reviews via memo dated August 18, 2003.
F-14

Auditee's Response
Summary Schedule of Prior Year Findings and Questioned Costs For the FIscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
County Eligibility Supervisors provided in house ESS Policy Manual refresher training on all required documentation and infonnation required for complete and accurate case records.
The U.S. Department of Agriculture (USDA) has not yet requested payment, so no payment was made. USDA was to bill the Department if repayment was to be required. No billing was received from USDA.
Finding Control Number: FA-427-02-03 SUBREC.IPIENT MONITORING Inadequate Monitoring of Subrecipients HN Care Formula Grants (CFDA 93.917)
To address the deficiencies of staff shortage and inadequate monitoring of subrecipients, as cited in the Federal Awards Findings for the fiscal year ending June 30, 2002, the HIV section established a District Liaison Team, consisting of seven members. A District Liaison, with the responsibility to ensure adequate monitoring of subrecipients, is assigned to each district that receives a Title II Grant award. The Liaison staff will conduct a minimum of one administrative site visit per quarter in their assigned districts. District Liaisons coordinate site visit scheduling and activities for medical/nursing care, other audits and quality assurance efforts. This will ensure effective comprehensive monitoring of all subrecipients during the year. Effective comprehensive monitoring tools are in place to ensure client eligibility, case management emollment, poverty level adherence, and compliance with other requirements. For example, the Grant-InAid Monitoring tool is used to ensure adequate documentation in case records, including the following:
HIV + status Income at or below 300% of current Federal Poverty Level Initial Screening at intake Six-month recertification on going Assessment of appropriate fee Routine screening for other healthcare providers Referral to Medicaid for emollment as appropriate Screening for other healthcare providers Clients' private insurance, including coverage details
This monitoring tool also ensures clients are screened for assets at intake, and that a fee scale policy has been established and implemented. This monitoring tool also ensures a Client Grievance Policy is in place, with a documented process, including a signed Client Rights and Responsibilities form. This monitoring tool is also used to ensure each medical client is emolled in case management; it ensures case notes are appropriately documented, charts and lab work are secured, electronic records are password protected, and signed confidentiality agreements are on file for all staff working with Ryan White clients. This monitoring tool (used during site visits), site visit and suggestions for correcting noted deficiencies. When the District Liaison has completed hislher site visit, he/she shall prepare a final written report with the review findings and recommendations, to be submitted to the District Liaison Team Leader for review, signature and placement in the subrecipient's permanent file folder. The reviewer then provides the written report to the subrecipient for follow-up_
Finding Control Number: FA-427-02-04 MATCHING, LEVEL OF EFFORT, EARMARKING Failure to Establish Quality Management Program HIV Care Formula Grants (CFDA 93.917)
The first draft of the "Medical Guidelines for the Care of HIV-Infected Adults and Adolescents" was reviewed and returned with comments by the HN Medical Advisory Cormnittee, District HN Coordinators, and relevant programmatic personnel. The second draft of the Medical Guidelines is currently awaiting review and [mal approval from the HIV Medical Advisory Group. The public health nurse protocols for HIV/AIDS were revised and released. The "Clinical Management of HIV-Infected Adult: A Manual for Midlevel Clinicians" was revised and completed in
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Auditee's Response Summary ScheduLe of Prior Year Andings and Questioned Costs For the Ascal Year Ended June 30, 2003
AUDITEE'S COMMENTS
collaboration with the Southeast Training and Education Center and Grady Infectious Disease Program. Monitoring tools were developed and implemented to access clinic accessibility, confidentiality and security, clinic scheduling, accessibility of other services, emergency procedures, reference material (including DHHS Treatment Guidelines), outcome measures, and medical chart review. A tool to measure and monitor response to highly active antiretroviral therapy was developed and implemented.
Finding Control Number: FA-427-02-0S ELIGIBILITY Deficiencies in Eligibility DatabaselFile Maintenance HIV Care Formula Grants (CFDA 93.917)
The Ryan White CAREWare database has been fully implemented as the HIV Section's Care data system. This database provides accurate and complete information on all ADAP and HICP clients enrolled in the programs.
Actions taken to ensure all required documentation is obtained from the enrollment sites has been in various forms. To date, the Section has reviewed all of the ADAP and HICP client files, approximately 6,500 in total, and removed inactive client records to a separate file. Each active record was then reviewed for incomplete information and/or the absence of recertification document. Enrollment sites were contacted asking for their support in assisting us in updating the files, by obtaining and submitting the missing information.
A new application packet has been developed. This packet clearly outlines all of the documentation that is required for a client to be considered for program enrollment. The packet was piloted in five (5) enrollment sites. It is currently under review for approval to utilize statewide.
The Ryan White CAREWare database includes a field for recertification due dates. This information is used to generate a quarterly report reflecting when recertification documents are to be submitted to the State Office. Each enrollment site is then responsible for the submission of these documents or for informing the State office if the client is to be discontinued from the program.
In October, 2003, the HIV Section acquired access to the Medicaid database via the Georgia Health Partnership Portal. A cross-check is completed on all new applications received to ensure the client is not currently receiving Medicaid servIces.
DEPARTMENT OF LABOR
Finding Control Number: Fs-440-02-04 GENERAL LEDGER Inadequate Accounting Procedures (Overall)
The general ledger was properly separated between "A" budget unit and "B" budget unit. The corrective action implemented allows for a separate accounting of the State Appropriation allotment by budget category and adequate accountability within each budget units in accordance with the Accounting Procedures Manualfor the State of Georgia published by the State Auditor.
Weare still reviewing the end of the year closing procedures in order to assure that GIL balance are in line with program/funds ledgers before the year end close takes place. By May 2004, we are expecting new procedures to be implemented to ensure that the GIL reflects an accurate picture of the Department's fmancial position.
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Audltee's Response Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the F1scal Year Ended June 30, 2003
AUDITEE'S COMMENTS
Finding Control Number: FS-440-o2-05 REVENUESIRECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Accounting Procedures
As of April 2003, the general ledger balances have been corrected and accurately depicts the financial activity of the month. We have been in contact with Facilities Management and other Department officials to renegotiate a new contract with the Tenants. We are expecting the completion of this correction no later than May 2004.
Finding Control Number: FS-440-02-06 REVENUEIRECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Accounting Procedures
Department accounting procedures and controls were revamped to ensure that the general ledger is accurately maintained and monitored on a monthly basis. Procedures and controls are in place to assure that federal revenues are recognized based on expenditures, and the associated balance sheet accounts are properly stated. Additionally, the recognition of revenue has been updated to properly record revenue for the State Appropriations (drawdowns).
Weare still reviewing the end of the year closing procedures in order to assure that GIL and AIR balances are in line with program/funds ledgers before the year end close takes place. By May 2004, we are expecting new procedures to be implemented to ensure that the GIL reflects an accurate picture of the Department's fmancial position.
Finding Number: FS-440-02-08 GENERAL LEDGER Ending Balances in Balance Sheet Clearing Accounts
Balance Sheet Clearing Accounts have been reviewed and corrected. Controls have been revised to ensure that account balances are distributed to the appropriate accounts at the end of each accounting period. Weare still reviewing the end of the year closing procedures in order to assure that Balance Sheet Clearing Account balances are zero before the year-end close takes place.
By May 2004, we are expecting new procedures to be implemented to ensure that the Clearing Accounts are analyzed and have zero balances to accurately depict the Department's financial position at the end of the fiscal year.
OFFICE OF SCHOOL READINESS
Finding Control Number: FA-469-o2-o1 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period
Along with the traditional letters to grant sub-recipients OSR implemented a plan to include audit compliance reminders in customer newsletters, to send additional postcard mailings as a compliance reminder, and to emphasize the requirements for audit compliance at training sessions. However, many of the sub-recipients are local units of administration (LVA), a term used to identify boards of education. Because LVAs receive the majority of their funding from the state, the Georgia Department of Audits and Accounts is required by state law to audit the LVAs. Effective January 2002, the Department of Audits and Accounts reorganized in an effort to address this matter and has adopted a plan to meet OMB Circular A-133 deadlines for fiscal year 2004 LVA audits.
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Audttee's Response Summary ScheduLe of Prior Year Andings and Questioned Costs For the Rscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
DEPARTMENT OF REVENUE
Finding Control Number: FS-474-02-02 REVENUEIRECEIVABLESIRECEIPTS GENERAL LEDGER Deficiencies in the Income Tax Division Subsidiary Records
Under present budget restrictions of the Department, we are unable to provide the necessary funding for a project of this magnitude. There are 3.6+ million individual returns filed annually. This number does not take into consideration multiple W-2's for married couples and withholding from more than one employer. To capture this data, manually and electronically, the Department would have to redirect various projects that are essential to the Department's current strategic direction. To fulfill the action, the Department would need to start an initiative that would require additional funding to develop and implement such a system. There are initiatives in the development stage for states to partner with the Federal Government that may be a viable cost efficient alternative.
GEORGIA STUDENT FINANCE COMMISSION
Finding Control Number: FS-476-01-07 GENERAL LEDGER Failure to Reconcile General Ledger to Grant and Scholarship Subsystems
The student subsystems maintained by the Scholarship & Grant Division have been reconciled to the general ledger. These reconciliations have not been as effective 'as desirable. The Commission has researched the feasibility of an electronic invoicing system, as recommended in the report for the year ended June 30, 2001, and is currently developing such a system. This system will incorporate these reconciliation procedures, or may eliminate the need for some of these reconciliations. As stated in the response to the report, the earliest period for which such a system may be implemented is FY 2004.
OFFICE OF TREASURY AND FISCAL SERVICES
Finding Control Number: FA-486-02-01 CASH MANAGEMENT Failure to Adhere to Terms of the Cash Management Improvement Act Agreement Cash Management Improvement Act (CMIA)
The Office of Treasury and Fiscal Services is in the process of procuring an outside vendor to verify the accuracy of interest calculations and clearance patterns claimed by state agencies. Due to staff and resource limitations, this is not a function we have the ability to handle internally.
GEORGIA INSTITUTE OF TECHNOLOGY
Finding Control Number: F8-S03-02-01 CAPITAL ASSETS Inadequacies in Operation of Property Management System
During April 2002, the new Capital Asset Management System was implemented as planned. This new system and the related operating procedures have strengthened the controls over the identification and recording of equipment additions and dispositions, and the documentation of changes to the equipment inventory. This change has strengthened internal accounting controls over the equipment inventory process; however, improvement has not been uniform on the campus. Test samples conducted by the Institute's Capital Assets Accounting Department indicated that additional staff training was needed in some departments to insure that the new system is used effectively. This on-going training program has been initiated, and management will continue to monitor progress in this area to complete this corrective action plan.
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Auditee's Response Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the Ascal Year Ended June 30, 2003
AUDITEE'S COMMENTS
ALBANY STATE UNIVERSITY
Finding Control Number: F8-S21-02-02 CASH AND CASH BQUIVALENTS INVENTORIES REVENUESIRECEIVABLESIRECEIPTS EXPENDlTURESILIABILITIESIDISBURSEMENTS Inadequate Accounting Procedures Cash and Cash Equivalents/General Ledger Effectively immediately, closer monitoring of the bank reconciliation process will take place and procedures will be reviewed and revised as necessary to ensure accounts are accurately reconciled to the general ledger in a timely manner, with proper documentation of any adjustments. Inventories The University will continue to review and revise already established procedures to provide for the systematic and consistent mark-up of resale inventory and ensure the timely inputting of resale inventory information into the point-ofsale system. The University's new computerized point-of-sale system is being enhanced such that management can ensure adequate monitoring of inventory costs throughout the year. Revenues/Receivables/Receipts The balance noted is an accumulation of a balance from previous fiscal years. The University will continue the practice of assigning certain accounts for collection by outside firms. Additionally, the University will continue to reserve funds for those accounts determined to be uncollectible. ExpenditureslLiabilitieslDisbursements Corrective action was implemented in this area. Finding Control Number: F8-S21-02-06 CAPITAL ASSETS Inadequate Capital Asset records Effectively immediately, the University will implement procedures to strengthen the internal controls over the University's capital assets. The Asset Management Module will accurately reflect all university assets along with any applicable depreciation. Additionally, procedures will ensure that capital assets will be added and removed from the equipment inventory records in a timely manner.
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Auditee's Response Summary Schedule of Prior Year Andlngs and Questioned Costs For the Flscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
CLAYTON COLLEGE AND STATE UNIVERSITY
Finding Control Number: FS-528-02-03 CASH AND CASH EQUIVALENTS GENERAL LEDGER CAPITAL ASSETS Deficiencies in Accounting Procedures
Cash and Cash Equivalents
During fiscal year 2003, the University reconciled its operating account in a timely manner, identified and recorded outstanding reconciling items and required adjustments, and implemented procedures utilizing web based bank reporting to facilitate timely identification and recording of receipts.
During fiscal year 2004, the University employed a full time professional whose duties include reconciliation of the operating account.
During fiscal year 2004, the University will cooperate with its banks and credit card processor to more quickly identify electronic transactions and bank and merchant fees to ensure that these charges are recorded in a timely manner.
General Ledger
During fiscal year 2003, the University implemented procedures to reconcile detail listings of payments made to employees and completed reconciliation of travel and per diem payments.
Additional procedures adopted during fiscal year 2004 will ensure that salaries are reconciled during fiscal year 2004.
To ensure that data received by the Department of Audits is complete and accurate, the university will request access to the continuous audit portal during fiscal year 2004.
Capital Assets
During fiscal year 2003, the University completed a comprehensive physical inventory of equipment - its first in more than five years, to re-establish and validate asset book values.
University staff, during fiscal year 2003 and fiscal year 2004, continues to attempt a reconciliation of asset activity from June 30, 2001 forward, and to recover and reconstruct supporting documentation required to prove disposition of assets. Should reconciliation prove impossible, the University will use valuation established through physical inventory.
During fiscal year 2003, the university properly recorded Library collection values and activity for the current and prior years.
The University, during the fiscal year 2003, made corrections to post one month of depreciation activity, and will seek technical support to calculate and correct the missing twelfth month during fiscal year 2004.
COLUMBUS STATE UNIVERSITY
Finding Control Number: F8-530-02-01 CAPITAL ASSETS Inadequate Capital Asset Records
The University has completed a comprehensive physical inventory and is in the process of updating inventory in the asset management module. The University will make adjustments to prior year depreciation within the asset management module. Controls have been implemented to improve the procedures relative to asset management. All corrections,

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Auditee's Response Summary ScheduLe of Prior Year Andlngs and Questioned Costs For the AscaL Year Ended June 30, 2003
AUDITEE'S COMMENTS
additions and/or deletions will be made to the asset module in fiscal year 2004, as a result of the completion of the physical inventory.
FORT VALLEY STATE UNIVERSITY
Finding Control Number: FS-S33-02-12 CAPITAL ASSETS Inadequacies in Operation of Property Management System and Equipment Inventory Records
Capital assets are now being managed by the Director of Auxiliary Services and proper records are being maintained to track all assets. Also, the University has established and hired a Records Retention Officer who is refurbishing our Ohio Hall building and reviewing Fort Valley State University records retention policies and guidelines.
Finding Control Number: FA-S33-01-0S REPORTING Expenditures in Excess of Authorization
The Pell Grant Program expenditures are being reconciled to identify the student awards that must be increased to justify the expenditure of $9,976.75 over the total Pell Grant for Fiscal Year 2001.
The University has responded to the U. S. Department of Education on the audit finding (see letter to the U. S. Department of Education, dated September 25, 2002) and will take action based on final determination of the finding.
Finding Control Number: FA-S33-02-01 ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Questioned Cost: $24,489.00
Information has been submitted to U. S. Department of Education and we will take action based on fmal determination of the fmding.
Finding Control Number: FA-S33-02-02 REPORTING Expenditures in Excess of Authorization Student Financial Aid Cluster
Information has been submitted to U. S. Department of Education and we will take action based on final determination of the finding.
Finding Control Number: FA-S33-o2-o3 REPORTING Reports Not Reconciled Student Financial Aid Cluster
Information has been submitted to U. S. Department of Education and we will take action based on final determination of the finding.
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Auditee's Response Summary Schedule of Prior Year Andings and Questioned Costs For the Ascal Year Ended June 30, 2003
AUDITEE'S COMMENTS
SAVANNAH STATE UNIVERSITY
Finding Control Number: FA-548-01-o7 PERIOD OF AVAILABILITY Deficit Fund Balances Student Financial Aid Cluster Program
The University is continuing the reconciliation process to identify those students that reimbursement can be requested for. The reconciliation is anticipated to be completed by June 30, 2004. Upon the completion of the reconciliation, the University will request from the Department of Education that it be allowed to certify the validity of these payments and submit reimbursement for these expenditures. In the future the University will implement procedures to ensure that funds are available to cover valid expenditures.
Finding Control Number: FA-548-02-0l ACTIVITIES ALLOWED OR UNALLOWED Improper Activity Higher Education - Institutional Aid (CFDA 84.031) Questioned Cost: $7,185.07
The University is waiting on audit resolution from the U. S. Department of Education.
Finding Control Number: FA-548-02-02 ALLOWABLE COSTS/COST PRINCIPLES Deficiencies in Internal Controls Higher Education - Institutional Aid (CFDA 84.031)
The University has established a procedure to ensure the faxed invoices have not been previously paid. The procedure includes stamping the invoice with the following wording, "This is to certify that this invoice was not paid previously, that the Original Invoice has been lost, misplaced, or retained by the Vendor and that a Duplicate invoice was issued". The verification is dated and signed by the respective Accounts Payable staff person.
Finding Control Number: FA-548-02-03 ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditures Higher Education - Institutional Aid (CFDA 84.031) Questioned Cost: $1,112.00
The University is waiting on audit resolution from the U. S. Department of Education.
Finding Control Number: FA-548-o2 -05 EQUIPMENT AND REAL PROPERTY MANAGEMENT Failure to Maintain a Property Management System Higher Education - Institutional Aid (CFDA 84.031)
The University has updated its equipment records to ensure compliance as stated in OMB Circular A-110, Subpart c.34. The Office of Central Receiving and Records Management has revised the University's procedures for property and equipment management. The Title III Inventory List for years prior to conversion to PeopleSoft is being maintained on a spreadsheet. The Title III Inventory List for years after PeopleSoft conversion is being maintained in PeopleSoft. Although the University has the Inventory List, it was inadvertently not presented to the State Auditors. Upon this discovery the State Auditors would not accept the Inventory List.
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Auditee's Response Summary Schedule of Prior Year Andings and Questioned Costs For the Ascal Year Ended June 30, 2003

AUDITEE'S COMMENTS

SOUTHERN POLYTECHNIC STATE UNIVERSITY

Finding Control Number: FA-550-00-04 SPECIAL TESTS AND PROVISIONS Failure to Reconcile Program Reports William D. Ford Federal Direct Loan Program (CFDA 84.286)

The University has reconciled the open program years for the William D. Ford Federal Direct Loan Program as follows:

1997-1998 1998-1999 1999-2000 2000-2001

Closed by the LOC (Loan Origination Center) $26,189.44, remaining loans to be booked by the LOC $110,329.75, remaining loans to be booked by the LOC $23,323.00, remaining loans to be booked by the LOC

All borrower's additions, adjustments and/or corrections have been identified and reported to the Loan Origination Center (LOC) since February 2002; therefore there is no further action to be taken by the University at this time.

In June 2002, the Department of Education suspended electronic transfer of data for prior years; thus requiring the LOC to manually process each borrower's records. This manual process is both labor intensive and time consuming. Once all transactions have been recorded by the LOC, the University will then receive pennission from the Department of Education to request reimbursement in the amount of$159,842.19 as noted above.

EAST GEORGIA COLLEGE

Finding Control Number: FS-572-02-02 CAPITAL ASSETS Inadequate Capital Assets Records

The capital ledger is reconciled. However, there were journal entries not posted as well as assets not posted in the Asset Management module. By February 28, 2004, the following actions will be completed in order to correct our capital assets records:

1) All journal entries made by the auditors will be posted to the books 2) All retirements, additions and deletions will be processed and completed.

ATLANTA TECHNICAL COLLEGE

Finding Control Number: FS-823-02-01 CASH AND CASH EQUNALENTS REVENUESJRECEIVABLESJRECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS INVENTORIES CAPITAL ASSETS Inadequate Accounting Procedures

1) Cash and Cash Equivalents

a) Monthly preparation of bank reconciliation ensures reconciling items are being cleared in a timely manner for all accounts.

b) We have changed our banking procedures to ensure timely notification.

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Audttee's Response
Summary Schedule of Prior Year Andlngs and Questioned Costs
For the FIscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
c) Procedures have been implemented to limit control over access to the activation key as well as the signature plate.
2) Revenues/Receivables/Receipts
a) Procedures are now in place to ensure we have adequate documentation of all receivables and that write offs are explained.
b) The processes used in the Financial Aid Office has been changed to facilitate the reconciliation process. A quarterly reconciliation procedure has been implemented for BannerfPeopleSoft. Daily receipts from the Banner system can be verified as entered on the daily PeopleSoft Accounting Entry Information Report and the Cash Receipts Journal Report.
c) As noted in 2b above, daily revenue is recorded in Banner and posted in PeopleSoft. Daily receipts are recorded by date and entered in the appropriate accounting period.
d) Procedures used for handling mail have been expanded to incorporate a detail log of checks received.
3) Expenditures/LiabilitieslDisbursements
Procedures are in place to verify the three way match (purchase order, invoice, receiving report) prior to issuance of all checks.
4) Inventories
A quarterly inventory reconciliation for resale items has been implemented. A budget line item has been incorporated to record the cost of sales.
5) Capital Assets
Effective procedures are in place for ensuring new equipment items are tagged and recorded appropriately on inventory. An annual physical inventory system has been implemented and progress is being made toward improving the accuracy of equipment inventory.
DEKALB TECHNICAL COLLEGE
Finding Control Number: FS-830-02-01 CASH AND CASH EQUIVALENTS INVENTORIES GENERAL LEDGER CAPITAL ASSETS Deficiencies in Accounting Procedures
Each of the four bank reconciliation's has been transitioned to select individuals. Each bank statement should be reconciled by the end of the month following the statement date; this goal should be met beginning with the December bank reconciliation. Bookstore buy-back money has established procedures for acquisition and disbursement, and is being entered into PeopleSoft in a timely manner.
A bookstore inventory is now being taken on a quarterly basis, and valued using the FIFO (first-in, first-out) method of inventory valuation; and appropriate entries made into PeopleSoft in a timely manner.
No entries are being made into the fund balance, unless they involve interest earned or prior-year collectibles.
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Audltee's Response Summary ScheduLe of Prior Year Findings and Questioned Costs For the FIscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
An external inventory has been taken during fiscal year 2003; the reconciliation process has not yet been completed. The local inventory and PeopleSoft Asset Management records should be in agreement by January 1, 2004, due to a monthly reconciliation process.
SAVANNAH TECHNICAL COLLEGE
Finding Control Number: FA-841-98-02 ALLOWABLE COSTS/COST 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 College. The letter dated January 11,2000, from the Assistant Commissioner ofDTAE Administrative Services has been provided to our auditors. As requested by our auditors, DTAE sent a letter dated March 17, 2000, to the U. S. Department of Education (USDOE) concerning fmal resolution of this finding. No response has been received from USDOE. Our DTAE office notified USDOE again in March 2002, regarding this unresolved finding. As of yet, no resolution has been made.
GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION
Finding Control Number: FS-918-02-01 GENERAL LEDGER Inadequate Accounting Procedures
The instances noted accured in fiscal year 2001 and were corrected in fiscal year 2002. Procedures are in place to prevent these issues from recurring.
Finding Control Number: FA-918-o2-01 REPORTING Inadequate Data Submitted to ED
The instances noted accured in fiscal year 2001 and were corrected in fiscal year 2002. Procedures are in place to prevent these issues from recurring.
STATE ROAD AND TOLLWAY AUTHORITY
Finding Control Number: FS-927-02-02 REVENUES/RECEIVABLESIRECEIPTS Deficiencies in the Collection and Recording of Cash Tolls (F. J. Torras Causeway)
This issue is unresolved. The Torras Causeway was scheduled to close on or before December 2003. The collection of tolls ceased on September 24, 2003. Studies were done to fmd alternatives to address the toll collection deficiencies. However, with the tolls at the Causeway scheduled to be removed it did not warrant the cost to implement any additional toll collection or enforcement systems.
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Auditee's Response Summary Schedule of PrIor Year Andlngs and Questioned Costs For the fiscal Year Ended June 30, 2003
AUDITEE'S COMMENTS
GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION
Finding Control Number: FS-977-01-01 REVENUES/RECEIVABLES/RECEIPTS Control over Third Party Tower Rental
Georgia Public Broadcasting concurs with this finding. During the Georgia Technology Authority's (GTA) tenure of authority over the broadcast towers, Georgia Public Broadcasting (GPB) was restricted from pursuing a resolution to Control over Third Party Tower Rental. On July 12, 2002, GTA released GPB from the State of Georgia's Converged Communications Outsourcing Project, the comprehensive statewide telecommunications RFP. As a result of this, GPB was left without funding to implement the federally mandated FCC requirements for conversion to a digital broadcast signal.
In FY 2003 the General Assembly approved $32.1 million in five-year General Obligation Bonds for the digital conversion of all nine GPB television transmitters. However, the use of general obligation bonds for the digital conversion has created circumstances that continue to hinder GPB from resolving the "Third Party Tower Rental" fmding until other related issues are resolved.
The first issue is that, according to the Attorney General's office, GPB, as an authority created after 1967, cannot have the bonds sold on its behalf. Therefore, the custody of each piece of property will need to be transferred to the Board of Regents. This process is under way and should be completed in FY 2004. GPB does not want to initiate any contract changes with existing tenants until this transfer is completed and management details have been confirmed through a contract with the Board of Regents.
The second issue, which most directly affects the tower rental contracts, is whether the bonds will be sold as taxable or non-taxable bonds. If it is determined that the bonds will be sold as non-taxable general obligation bonds, then the commercial (or non-state) tenants will have to vacate the towers. This scenario resolves the finding by having all nonstate tenants vacate the towers immediately. However, this determination has yet to be made and the bonds have not been sold as of this date.
In light of the current budget crisis and until all issues related to the transfer of property and the sale of the bonds are resolved, GPB cannot afford to give up the revenues being generated from the tower rentals. The current management of GPB has not added any new tenants since joining GPB in 1999; however, contracts and agreements already in place at that time have been honored and kept in place.
GPB is working diligently through all of the above issues before attempting to modify or enter into new agreements with the tenants that currently reside on the towers. It is management's belief that these issues can be and will be resolved in FY 2004.
GEORGIA TECHNOLOGY AUTHORITY
Finding Control Number: FS-980-o2-02 CAPITAL ASSETSIPROPRETY MANAGEMENT Inadequacies in Operation of Asset Management Module
Georgia Technology Authority partially implemented the corrective action previously reported on this finding. Financial Systems requested a critical hire for an accountant with GAAP experience and AM knowledge but was denied due to a reduction in force at the time of the request. The remaining clean up of the out of balance conditions remain. A contract is now in place with a third party vendor to begin January 20, 2004 on site with 3 staff members (2 functional and 1 technical) to complete the clean up effort. The vendor is familiar with the situation and he was the consultant on site for a few months in early 2003 working on this effort. The vendor has been contracted for 5 to 6 months to clean up the AM out of balance data and to assist with training going forward with the staff and the agency staffusing the AM module.
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Audltee's Response
Summary Schedule of Prior Year Andlngs and Questioned Costs
For the fiscal Year Ended June 30. 2003
AUDITEE'S COMMENTS HEART OF GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: FS-8764-02-01 CAPITAL ASSETS Failure to Maintain Records for Capital Assets According to GASB 34 rules and regulations, organizations purchasing an item valued at $5,000.00 or more will be required to meet the Capital Asset requirement June 30, 2004. Therefore, the Heart of Georgia RESA will work toward meeting this rule by June 30, 2004 if the organization purchases/owns an item meeting the $5,000.00 minimum value requirements.
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OJRRECTIVE AcrrON RESFDNSES TO
CuRRENT YEAR FINDINGS AND
Q.rEsrrONED ~

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Corrective Action Responses to Current Year Andings and Questioned Costs
TabLe of Contents
For the FIscaL Year Ended June 30. 2003

ENTITY CODE

ORGANIZATIONAL UNIT

402 414 419 427 440 462 466
467 472 474 486
503 518 521 528 530 533 548 562 572 575 593
819 823 829 830 910 918 927 925 980
8764

Agriculture, DepartInent of Education, DepartInent of Community Health, DepartInent of Human Resources, DepartInent of Labor, DepartInent of Natural Resources, DepartInent of ; Public Safety, DepartInent of
Governor's Office ofHighway Safety Corrections, DepartInent of Regents of the University System of Georgia, Board of Revenue, DepartInent of. Treasury and Fiscal Services, Office 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 Savannah State University Bainbridge College East Georgia College Gainesville College Skidaway Institute of Oceanography Technical Colleges West Georgia Technical College Atlanta Technical College Coosa Valley Technical College DeKalb Technical College Jekyll Island State Park Authority Higher Education Assistance Corporation, Georgia Road and Tollway Authority, State Golf Hall of Fame, Georgia Technology Authority, Georgia Regional Educational Service Agencies Heart of Georgia Regional Educational Service Agency

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Auditee's Corrective Action Plans For the fiscal Year Ended June 30, 2003
DEPARTMENT OF AGRICULTURE
Finding Control Number: FS-40Z-03-01 CAPITAL ASSETS Inadequate Accounting Records
We concur with this fmding. Historical cost records are unavailable. The Department will request assistance from the State Properties Commission to secure certified appraisals for both land and buildings in order to authenticate the stated values for buildings and establish fair market value for donated property,
Contact Person: Anthony J. Amoroso, Fiscal Officer and Treasurer Phone: (404) 656-9~19; Fax: (404) 656-3683; E-mail: tamoroso@agr.state.ga.us
DEPARTMENT OF EDUCATION
Finding Control Number: FS-414-03-OZ CAPITAL ASSETS Inadequacies in Operation of Property Management System
See response to fmding control number FA-414-03-01.
Contact Person: David Childers, Purchasing Manager Phone: (404) 656-2195; Fax: (404) 657-8821; E-mail: dchilders@doe.kI2.ga.us
Finding Control Number: FS-414-03-03 CAPITAL ASSETS Inadequate Capital Asset Records
We concur with this finding. The DOE in conjunction with the Georgia Technology Authority discovered that the date used to calculate depreciation on the various buildings is the in-service date and not the acquisition date. All in-service dates were external as the date they were put into the Asset Management system and not the historical in-service date. This caused the account balance for buildings cost of depreciation to be misstated. The DOE is in the process of correcting the in-service date for all buildings and any adjusting journal entries necessary will be made to the general ledger to correctly state the account balance for buildings (net of depreciation).
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.kI2.ga.us
Finding Control Number: FA-414-03-01 EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System
We concur with this fmding. The DOE has implemented procedures to ensure that equipment additions are reconciled to the general ledger expenditure accounts. The DOE is currently in the process of conducting a physical inventory at all locations with should correct the deficiency of items on the equipment records being surplused or transferred and not being removed or updated. Also, procedures are now being placed in operation to assign the proper location codes and the proper custodians to each item of equipment. This should correct the problem of locating equipment.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.kI2.ga.us
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Audttee's Corrective Action Plans For the fiscal. Year Ended June 30, 2003
Finding Control Number: FA-414-03-02 MATCHING, LEVEL OF EFFORT, EARMARKING Inadequate Accounting Records Title I - Grants to Local Educational Agencies (CFDA 84.010)
We concur with this fmding. Procedures are being implemented to ensure that documentation of the calculations are retained and safeguarded for the Title I allocation to the LUA's.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.k12.ga.us
Finding Control Number: FA-414-03-03 ELIGIBILITY Inadequate Accounting Records Improving Teacher Quality State Grants (CFDA 84.367)
We concur with this finding. Procedures are being implemented to ensure that documentation of the calculations are retained and safeguarded for the Improving Teacher Quality State Grant allocations to the LUA's.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.kI2.ga.us
Finding Control Number: FA-414-03-04 ELIGIBILITY Inadequate Accounting Records School Renovation Grants (CFDA 84.352)
We concur with this finding. The DOE is in the process of re-examining its current policy and procedures. The DOE will make the necessary changes to the internal control to ensure documentation for eligibility determination is properly maintained.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.k12.ga.us
Finding Control Number: FA-414-03-OS ELIGIBILITY Inadequate Accounting Records School Renovation Grants (CFDA 84.352)
We concur with this finding. The DOE is in the process of re-examining its current policy and procedures. DOE will make the necessary changes to strengthen internal control to ensure that proper documentation is maintained that supports amounts obligated on the accounting records.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.kI2.ga.us
Finding Control Number: FA-414-03-06 MATCHING, LEVEL OF EFFORT, EARMARKING Inadequate Accounting Records Vocational Education - Basic Grants to States (CFDA 84.048)
We concur with this finding. The DOE is in the process of developing policies and procedures in conjunction with the Department of Technical and Adult Education and Local Units of Administration to ensure that calculations for
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Audltee's CorTeCtive Action Plans For the FIscal Year Ended June 30, 2003

maintenance of effort consider actual expenditure for the total statewide Vocational Education-Basic Grant to States program. Procedures should be placed into operation early in Fiscal Year 2005 to correct the deficiency.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.k12.ga.us
Finding Control Number: FA-414-03-07 SUBRECIPIENT MONITORING Subrecipient Audit Reports Not Received Within the Required Time Period
We concur with this finding. The DOE is responsible for tracking and reviewing the audits of local units of administration (LUA), a term used to identify boards of education. Because LUAs receive a majority of their funding from the state, the Georgia Department of Audits and Accounts is required by state law to audit the LUAs. Due to the large number of LUAs requiring audits, the Department of Audits and Accounts has been unable to complete the audits in the time period required by OMB Circular A-133. The U. S. Department of Education is aware of this problem, and realizes that the Department of Audits and Accounts is working towards a viable resolution to the finding in the near future. Effective January 2002, the Department of Audits and Accounts reorganized in an effort to address this matter and has adopted a plan to meet OMB Circular A-133 deadlines for fiscal year 2004 audits.
Contact Person: Randy Trowell, Director of Accounting Services Phone: (404) 656-2497; Fax: (404) 657-5512; E-mail: rtrowell@doe.k12.ga.us

DEPARTMENT OF COMMUNITY HEALTH

Finding Control Number: FS-419-03-01 ACCOUNTING CONTROLS (OVERALL) Conversion from Electronic Data System ("EDS") Medicaid Management Information System ("MMIS") to Affiliated Computer Services ("ACS") MultiHealth (MHN) System
See Finding Control Number FA-4l9-03-0l.
Finding Control Number: FS-419-03-02 EXPENDITURESILIABILITIESIDISBURSEMENTS Upper Payment Limit Calculation
See Finding Control Number FA-419-03-02.
Finding Control Number: FS-419-03-03 REVENUESIRECENABLESIRECEIPTS Receivables - Other
See Finding Control Number FA-4l9-03-03.
Finding Control Number: FS-419-03-04 EXPENDITURESILIABILITIESIDISBURSEMENTS Accounts Payable, Accrued Liabilities and Contracts Payable
See Finding Control Number FA-419-03-04.
Finding Control Number: FS -419-03-05 ACCOUNTING CONTROLS (OVERALL) Segregation of Duties
See Finding Control Number FA-4l9-03-05.

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Finding Control Number: FA-419-03-01

ACTIVITIES ALLOWED OR UNALLOWED

PERIOD OF AVAILABILITY OF FEDERAL FUNDS

ALLOWABLE COSTS/COST PRINCIPLES

PROCUREMENT AND SUSPENSION AND DEBARMENT

CASH MANAGEMENT

PROGRAM INCOME

ELIGIBILITY

REPORTING

MATCHING, LEVEL OF EFFORT, EARMARKING SPECIAL TESTS AND PROVISIONS

Conversion from Electronic Data System ("EDS") Medicaid Management Information System ("MMIS") to Affiliated

Computer Services ("ACS") MultiHealth (MHN) System

We concur with this finding. For system corrections and improvements occurring after the April 2003 conversion, the department subsequently conducted the following control reviews to identify changes necessary to provide proper accounting and reporting for financial statements and federal programs:

Decision to arrange for SAS 70 reports on "Controls Placed in Operation and Tests of Operating Effectiveness" conducted during the applicable reporting period and reflective of 15 consecutive months of operation April 2004 through June 2005;
Independent Accountants' Report on "Applying Agreed-Upon Procedures" to obtain objective information about controls over Claims Reprocessing;
Independent Accountants' Report on "Payment Integrity Project" to obtain objective evidence indicating whether significant errors are occurring and identifying the types of such errors; and
Participation in the U.S. Department of Health & Human Services' "Payment Error Rate Measurement" Pilot program to obtain additional objective evidence of the prevalence of payment errors and source causes.

To appropriately monitor financial reporting controls, the department will utilize an independent estimate of claims processing overpayments and underpayments to ensure that fiscal year 2004 and fiscal year 2005 financial reports are fairly stated based on the Department's responsibilities for paying health care benefit claims.

We will also implement and monitor such controls related to any future system conversions.

Contact Person: John Hankins, Director, Internal Audit & Program Evaluation Telephone: (404) 657-7880; Fax: (404) 657-4199; E-mail: jhankins@dch.state.ga.us

Finding Control Number: FA-419-o3-02 ALLOWABLE COSTS/COST PRINCIPLES Upper Payment Limit Calculation

We concur with this finding. The department has implemented additional internal procedures for testing and verifying that Upper Payment Limit calculations are accurate. These internal controls will complement existing external controls. Before UPL calculations are fmalized, preliminary calculations as well as other DCH data are sent to hospitals to allow for detailed reviews. The Center for Medicare and Medicaid Services (CMS) also reviews UPL calculations to validate the state's claim for related federal fund reimbursement.

Contact Person: John Hankins, Director, Internal Audit & Program Evaluation Telephone: (404) 657-7880; Fax: (404) 657-4199; E-mail: jhankins@dch.state.ga.us

Finding Control Number: FA-419-03-o3 REPORTING Receivables - Other

We concur with this finding. During fiscal year 2003, the new Medicaid and PeachCare for Kids claims payment system was initially unable to perform accurate claims processing in a timely manner. As a result, the Department made providerspecific, interim payments. For every interim payment made, an account receivable was established. As a result, there was a 1219% increase in Other Accounts Receivable from June 30, 2002 to June 30, 2003.

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Auditee's Corrective Action Plans For the fiscal Year Ended June 30, 2003

The department lacked a sufficient number of qualified staff in Benefits Recovery to monitor the significant increase in Other Accounts Receivable that resulted from interim payments made to providers in lieu of claims payments. The department has replaced the director of the unit responsible for monitoring receivables and has hired additional Benefits Recovery staff. As a result, the department now has a better ability to research and monitor Accounts Receivables on an ongoing basis to ensure the receivables reported by the MHN represent valid obligations owed to the Department and to accomplish the collection of these accounts. The department also revised its methodology for estimating the allowance for doubtful accounts to consider interim payments made to providers between April 2003 and April 2004.
Contact Person: John Hankins, Director, Internal Audit & Program Evaluation Telephone: (404) 657-7880; Fax: (404) 657-4199; E-mail: jhankins@dch.state.ga.us
Finding Control Number: FA-419-03-04 ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES REPORTING Accounts Payable, Accrued Liabilities and Contracts Payable
We concur with this finding. The Department implemented policies and procedures to help staff identify valid fmancial obligations and to provide guidance on the proper recording of the related liability. These procedures will be used to ensure financial obligations at fiscal year end are recorded within the proper accounting period.
Contact Person: John Hankins, Director, Internal Audit & Program Evaluation Telephone: (404) 657-7880; Fax: (404) 657-4199; E-mail: jhankins@dch.state.ga.us
Finding Control Number: FA-419-03-05 ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES REPORTING Segregation of Duties
We concur with this finding. The department, assisted by internal auditors, is reviewing the department's internal controls as they relate to Financial Services. This review will include an evaluation of the duties of all Financial Services staff to gain an understanding of where weaknesses may exist. Upon completion of the review, duties will be re-assigned to limit each individual's access to both physical assets and the related accounting records. The review and re-assignment will be completed as soon as possible but no later than June 30, 2005.
Contact Person: John Hankins, Director, Internal Audit & Program Evaluation Telephone: (404) 657-7880; Fax: (404) 657-4199; E-mail: jhankins@dch.state.ga.us

DEPARTMENT OF HUMAN RESOURCES

Finding Control Number: FS-427-03-02 REVENUESIRECEIVABLESIRECEIPTS GENERAL LEDGER Inadequate Accounting Procedures
We concur with this fmding. The grants that were posted late were due to staff not processing them timely. We have reiterated to staff the importance of the posting of the grant awards and instructed them that all grant awards are to be booked within five days of receipt of that grant award. We also have informed them that if they have any problems at the time it is received, to notify their supervisor immediately so that it can still be booked timely.
In addition, we have sent a reminder notice to the Divisions to instruct them that if a grant is sent to them directly, they need to insure they submit a copy to OFS. If any are discovered in the Divisions by OFS that have not been submitted, the Director of OFS will be notified and in return, the Division Director will be notified that they must insure that OFS

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Audltee's Corrective Action Plans
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receives a copy of the grant. This should be rare since we are trying on the front end of the grant process to tell the funding agency to send the grant award to the Commissioner's office.
For the debit balances in federal programs, we are reviewing these more often. We are reviewing them at least quarterly to insure that we get any errors corrected. We have instructed staff that they are to resolve any debit balances upon notification or when they discover them in their balancing of the program codes.
In addition, at year end, with the rerates that are processed, we will insure that OPBS is aware of these needing to be completed in a timely manner to give us time to properly recognize revenue as a result of these rerates.
Contact Person: John Sartain, Office of Financial Services Phone: (404) 656-7999
Finding Control Number: FA-427-03-01 ELIGIBILITY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558)
We concur with this finding. The FY 2003 audit findings for the TANF program will be addressed initially by sharing these findings with the County Directors and supervisors of the counties with the problem cases. A meeting will be scheduled by the TANF consultants to review these [mdings no later than May 15,2004.
In addition the TANF Unit will develop a Required FormsNerification checklist that will be completed by staff at initial application, annual reviews, creation of duplicate cases, and review of cases transferred into the county. Supervisors will also use this form when completing Accuracy Reviews. Consultants will monitor the completion of these forms when they complete second level reviews during their county field visits.
Lastly consultants will discuss case record management during their next scheduled quarterly supervisors meeting.
Contact Person: Robert Bell, Division of Farnily and Children Services Phone: (404) 657-3702
Finding Control Number: FA-427-03-02 ALLOWABLE COSTS/COST PRINCIPLES Inadequate Accounting Procedures Centers for Disease Control and Prevention - Investigations and Technical Assistance (CFDA 93.283)
We concur with this finding. DHR will continue to monitor grant expenditures and has re-rated these items to the proper focus area. In the future, on a quarterly basis, the program will review expenditures of over $2,500 in critical line items, including contracts, equipment, per diem, and personnel and take appropriate corrective action.
DHR will continue to monitor the proper authorization of expenditures. These funds, as with many other grants, are budgeted in different organizational units of the department. The authorization of expenditures against these budgets is under the authority and control of individuals in these units who have the designated responsibility for their budgets. Public Health will work closely with the OIT to assure that all appropriate expenses are correctly authorized.
Contact Person: David Martin, Division of Public Health Phone: (404) 657-2709
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Audltee's Corrective Action Plans For the FIscal Year Ended June 30, 2003

Finding Control Number: FA-427-03-03 SUBRECIPIENT MONITORING Inadequacies in Monitoring of Subrecipients Centers for Disease Control and Prevention - Investigations and Technical Assistance (CFDA 93.283)
We concur with this finding. A comprehensive monitoring program is being implemented. This will include a technical assistance tracking log, field site visit reports that document concerns and findings with a corrective action plan, and annual in-depth comprehensive site review which will include a review of audit reports. The site visit report will address program and audit fmdings.
Contact Person: David Martin, Division of Public Health Phone: (404) 657-2709
Finding Control Number: FA-427-03-04 SUBRECIPIENT MONITORING Inadequate Monitoring of Subrecipients HIV Care Formula Grants (CFDA 93.917)
We concur with this fmding. During the current fiscal year, four (4) additional program consultants/district liaisons were hired to ensure the HIV Section fulfills the requirements of the grant as it relates to monitoring of subrecipients. Written procedures are being instituted to ensure effective programmatic and fiscal monitoring of subrecipients as required by the grantor. The monitoring tool used for site visits is being updated to include a section verifying the examination of allowability of program costs and a sign-offbox verifying review.
Contact Person: David Martin, Division of Public Health Phone: (404) 657-2709
Finding Control Number: FA-427-o3-oS MATCHING, LEVEL OF EFFORT, EARMARKING Failure to Establish Quality Management Program HIV Care Formula Grants (CFDA 93.917)
We concur with this finding. The HIV Section has made significant progress in developing and implementing its quality management program. During the upcoming fiscal year 2004-2005, we will continue to implement the program guidelines and standards submitted to the grantor for review and approval.
Contact Person: David Martin, Division of Public Health Phone: (404) 657-2709
Finding Control Number: FA-427-03-o6 ELIGffiILITY Deficiencies in Eligibility DatabaselFile Maintenance HIV Care Formula Grants (CFDA 93.917)
We concur with this fmding. Subsequent to the completion of the audit, the HIV program obtained access to the Medicaid database system in October of 2003. Access to the Medicaid database system will assist the HIV program with the emollment process thereby allowing all potential applicants to be cross-checked for verification of eligibility determination.
The HIV program is currently developing an internal monitoring process for the ADAP and HICP program to alleviate the previous findings and ensure a continuous quality improvement process for proper maintenance of client files and required data for eligibility determination.

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Auditee's Corrective Action Plans
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Contact Person: David Martin, Division of Public Health Phone: (404) 657-2709
DEPARTMENT OF LABOR
Finding Control Number: F8-440-03-02 CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Accounting Procedures
We concur with the fmding. Department procedures have been revised to provide adequate internal controls to ensure that all cash accounts are maintained on the general ledger in accordance with the Accounting Procedures Manual for the State of Georgia, Section Three, page 3-11 through 3-1-3.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williams@dol.state.ga.us
Finding Control Number: F8-440-03-03 GENERAL LEDGER Inadequate Accounting Procedures
We concur with the finding. Department procedures have been revised to ensure that general ledger is accurately maintained, reconciliations are performed on a timely manner, and variances between general ledger and subsidiary ledgers are resolved in accordance with the Accounting Procedure Manual for the State ofGeorgia published by the State Auditor.
Additionally, Department will ensure that each budget is separately and accurately maintained on the general ledger. Internal control will be revised and up-date to ensure periodic analysis of funds balances at the program and budget unit level.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williams@dol.state.ga.us
Finding control Number: F8-440-03-04 REVENUESIRECEIVABLESIRECEIPTS GENERAL LEDGER Inadequate Accounting Procedures
As of September 2003, the general ledger balances have been corrected and accurately represent the fmancial activity of the month.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williarns@dol.state.ga.us
Finding Control Number: F8-440-03-05 REVENUEIRECEIVABLESIRECEIPTS GENERAL LEDGER Inadequate Accounting Procedures
We concur with the finding. Department procedures have been revised to ensure that the Department's revenue recognition processes recognized revenues for non-reimbursable based funding as soon as they are susceptible to accrual and all eligibility criteria have been met (measurable and available) in accordance with the Accounting Procedure Manualfor the State ofGeorgia.
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Audttees Corrective Action Plans
For the fiscal Year Ended June 30. 2003
Additionally, Department procedures have been revised to ensure that the general ledger is accurately maintained, reconciliations are performed on a timely manner, and variances between general ledger and subsidiary ledgers are resolved.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williams@dol.state.ga.us
Finding Control Number: FS-440-o3-06 GENERAL LEDGER Ending Balance in Balance Sheet Clearing Account
We concur with the fmding. Department will ensure that the Balance Sheet Clearing Accounts balances are accurately distributed to the appropriate account on a monthly basis.
In addition, the Department internal controls procedure manual will be revised to ensure that no balances remain in the clearing accounts at the fiscal year end in accordance to the Accounting Procedures Manual for the State ofGeorgia.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williams@dol.state.ga.us
Finding Number: FS-440-03-07 CAPITAL ASSETS Inadequacies in Operations of Facility Management System
We concur with the finding. Department will ensure that the capital assets are reported by category and depreciated over their estimated useful life in accordance with the State of Georgia Capital Asset Guide. The Department internal controls procedure manual have been revised to ensure that the Department's capital assets are properly accounted for and reported.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williams@dol.state.ga.us
Finding Control Number: FA-440-03-01 PROGRAM INCOME Delayed Posting of Program Income Vocational Rehabilitation Program (CFDA 84.126)
We concur with the fmding. Department procedures were reviewed to ensure that program income is deposited on a timely basis and general ledger accurately maintained. Furthermore, in order to avoid delayed posting of program income, the Department established procedures to receive program income through direct deposit into the appropriated account.
Contact Person: John T. Williams, Director of Accounting Telephone: (404) 656-3188; Fax: (404) 651-6843; E-mail: johnt.Williams@dol.state.ga.us
DEPARTMENT OF NATURAL RESOURCES
Finding Control Number: FS-462-03-01 CAPITAL ASSETS Lack of Adequate Records for Land, Buildings and Related Accumulated Depreciation
We concur with this finding. The database used for land is being revised to ensure that adequate audit trails are included A complete inventory of all buildings and related information is underway and should be complete by the end ofFY 2004. A building database is also being created to house this information and will contain adequate audit trails. We anticipate it will take 18 to 24 months to ensure the information in these databases is completely refined.
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Auditee's Corrective Action Plans For the FIscal Year Ended June 30, 2003
Contact Person: Michele Bonner, Financial Services Director Phone: (404) 656-3527; Fax: (404) 463-6688; E-mail: michele_bonner@dnr.state.ga.us
DEPARTMENT OF PUBLIC SAFETY
Finding Control Number: FS-466-o3-01 CAPITAL ASSETS Inadequate Capital Asset Records
We concur with this fmding. The department acknowledges that complete documentation was not available to provide an appropriate audit trail on the land and buildings. The department was relying on tax assessment values for property and was unable to obtain an assessment from each county that property was occupied in. While most assessments have been received, some are still outstanding. We will continue to correspond with the county tax assessor's office to obtain the fair value of the land and buildings where documentation is currently missing during this year. If we are unable to obtain this information in a timely basis, we will work with the Department of Audits to develop an alternative method of valuation that may be acceptable.
The Department recognizes that maintaining appropriate documentation for depreciation on vehicles is a requirement that must be corrected. Machinery and equipment records are being maintained in PeopleSoft and are meeting the documentation requirements for recording depreciation. Immediate steps have been taken to develop an excel spreadsheet which will meet the depreciation/accumulated depreciation guidelines. A draft spreadsheet generated from the Fleet anywhere system has been sent to the Department of Audits and has been given tentative approval. The department will add this process to the year end procedures.
Contact Person: Captain Johnny Davis, Director of Administrative Services Phone: (404)624-7080; Fax: (404)624-7585; E-mail: jdavis@gsp.net
DEPARTMENT OF PUBLIC SAFETY Governor's Office of Highway Safety
Finding Control Number: FS-466GOH8-03-01 ACCOUNTING CONTROLS (OVERALL) Deficiencies in Internal Control
We concur with this finding. GOHS will engage the services of a professional for a complete study and evaluation of internal controls. GOHS will implement the recommendations and establish formal written policies and procedures to ensure adequate system maintenance. December 31,2003 is the projected completion date for this task.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
Finding Control Number: FS-466GOH8-03-o2 GENERAL LEDGER Ending Balances in Balance Sheet Clearing Accounts
We concur with this finding. However, at year end 06/30/03, no balances remained in the clearing accounts. GOHS finance staff will monitor clearing account activity and make sure the clearing accounts are distributed to appropriate accounts at the end of each accounting period. This process will begin with the September 2003 accounting period.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
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Auditee's CorTec:tlve Action Plans For the AscaL Year Ended June 30, 2003
Finding Control Number: F5-466GOHS-03-03 GENERAL LEDGER Inadequate Accounting Procedures
We concur with this finding. However, at year end 06/30/03, the General Ledger reflected normal balances for accounts receivable (debit), accounts payable (credit) and fund balance (credit). Effective immediately, GOHS finance staff will monitor federal program codes within the General Ledger to ensure adequate and accurate recording of transactions, and that account balances are properly stated.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
Finding Control Number: FS-466GOHS-03-04 GENERAL LEDGER Inadequate Accounting Procedures
We concur with this fmding. In cooperation with the Department of Public Safety, by 09/30/03, GOHS will establish appropriate procedures to ensure that general ledger accounts are posted, balanced, reconciled if necessary, and reviewed on a monthly basis. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@go):1s.state.ga.us
Finding Control Number: FS-466GOH5-03-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System
We concur with this finding. By 11130/03, GOHS will establish the necessary internal controls, and implement procedures to ensure capital asset inventories are maintained in compliance with requirements of State law and the State of Georgia Accounting Procedures Manual. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and rnake recommendations on our overall internal controls.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
Finding Control Number: FS-466GOH5-03-06 EXPENDITURESILIABILITIESIDISBURSEMENTS Exceptions Related to Expenditure Sampling
We concur with this fmding. Effective immediately, GOHS will begin establishing the necessary controls to ensure compliance with documentation guidelines and adequate audit trail information for every expenditure transaction. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls.
Contact Persons: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
and Spencer Moore, Director of Program and Planning Phone: (404) 656~6997; Fax: (404) 651-9107; E-mail: smoore@gohs.state.ga

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Auditee's Corrective Action Plans For the Ascal Year Ended June 30, 2003
Finding Control Number: FS-466GOHS-03-07 EXPENDITURESILIABILITIESIDISBURSEMENTS Exceptions Related to Expenditure Sampling
We concur with this fmding. Effective immediately, GOHS will begin establishing the necessary controls to ensure compliance with documentation guidelines, and adequate audit trail information for every contract and sub-grant expenditure transaction. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls.
Contact Persons: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
and Spencer Moore, Director of Program and Planning Phone: (404) 656-6997; Fax: (404) 651-9107; E-mail: smoore@gohs.state.ga
Finding Control Number: FS-466GOH8-03-08 EXPENDITURESILIABILITIESIDISBURSEMENTS Exceptions Related to Expenditure Sampling
We concur with this finding. By 09/30/03, GOHS will establish the necessary controls to ensure compliance with documentation guidelines, and adequate audit trail information for every purchasing card expenditure transaction. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
Finding Control: FA-466-03-01 ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES Inadequate Documentation
We concur with this finding. GOHS has engaged the services of a professional for a complete study and evaluation of internal controls. GOHS will implement the recommendations and establish formal written policies and procedures to ensure adequate system maintenance.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
Finding Control: FA-466-03-02 PROCUREMENT AND SUSPENSION AND DEBARMENT Inadequate Documentation
We concur with this finding. GOHS currently includes the suspension and debarment certification in all of its contracts (and grants). This certification is even included in contracts below $100,000.00.
Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us
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Audltee's Corrective Action PLans For the FIscal Year Ended June 30, 2003

Finding Control: FA-466-03-03 SUBRECIPIENT MONITORING Inadequate Monitoring of Sub-recipients

We concur with this finding. GOHS will establish a tracking system to identify sub-recipients required to submit audit

reports, track those sub-recipients to ensure audit reports are received in a timely manner, and then follow-up on applicable

fmdings.

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Contact Person: Clifton W. Jenkins, Director of Administrative Services Phone: (404) 657-4197; Fax: (404) 651-9107; E-mail: cjenkins@gohs.state.ga.us

DEPARTMENT OF CORRECTIONS

Finding Control Number: FS-467-03-01 EXPENDITURESILIABILITIESIDISBURSEMENTS Questionable Travel Expenses

We concur with this fmding. The Department has reviewed and modified its approval process and strengthened controls over travel expenses.

Contact Person: Travis Kennedy, Director of Financial Services Phone: (404) 656-4619; Fax: (404) 657-7936; E-mail: kennetOO@dcor.state.ga.us

BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA

Finding Control Number: FS-472-03-01 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Resident Instruction, "A" Budget

We concur with this finding.

The University of Georgia overexpended the Minority Business Enterprise fund by $143.00. The institution overexpended this fund group by the amount of prior year liability adjustments posted to the fund group's surplus account as allowed by the GA Dept of Audits & Accounts in FY 03. The University of Georgia has been instructed to discontinue the practice of using surplus funds to fund overexpenditures. The institution has reestablished the controls that were in place before FY 02 to prevent an overexpenditure of its budgetary fund groups for FY 04 and forward.

Contact Person: Chad Cleveland, Director of Accounting Services Phone: (706) 542-1197; Fax: (706) 542-6887; E-mail: cclevela@Uga.edu

Georgia State University overexpended the Minority Business Enterprise fund by $141,251.70. The Minority Business Enterprise operation was discontinued in FY 04 and no additional revenues or expenditures will occur.

Contact Person: Roberta Byrum, Assistant VP for Finance and Comptroller Phone: (404) 651-5302; Fax: (404) 651-1927; E-mail: FINRKB@langate.gsu.edu

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Audltee's Con-ectlve Action Plans For the F1scal Year Ended June 30, 2003
Finding Control Number: FS-472-03-02 BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Class Regents Central Office and Other Organized Activities, "B" Budget
We concur with this finding.
The University of Georgia overexpended the Agricultural Research fund by $2,805.45. The institution overspent this fund group by the amount of prior year liability adjustments posted to the fund group's surplus account as allowed by the GA Dept of Audits & Accounts in FY 03. The University of Georgia has been instructed to discontinue the practice of using surplus funds to fund overexpenditures. The institution has reestablished the controls that were in place before FY 02 to prevent an overexpenditure of its budgetary fund groups for FY 04 and forward.
Contact Person: Chad Cleveland, Director of Accounting Services Phone: (706) 542-1197; Fax: (706) 542-6887; E-mail: cclevela@Uga.edu
The University System Office overexpended the Capital Outlay fund in FY 03. In the future, all prior year monies held in reserve investment accounts will be re-budgeted as revenue in the current period with the expenditure budgeted in the same manner. In addition, discussions will be held with the State Auditors related to any real property acquisitions as they begin their audit to ensure that the appropriate budget information is shared concerning which budget incurred the capital expenditure.
Contact Person: Debbie Lasher, Executive Director for Business & Financial Affairs Phone: (404) 657-1472; Fax: (404) 657-5977; E-mail: debbie.lasher@usg.edu
DEPARTMENT OF REVENUE
Finding Control Number: FS-474-03-01 CASH AND CASH EQUNALENTS Inadequate Accounting Procedures
We concur with this fmding. The Department has put into place additional policies and procedures to assure adequate identification of reconciling items and their timely correction. Prior year reconciling items have been identified and corrections posted. Regular void check files are set to the bank as each requisition is processed.
Contact Person: Jeremie Peterkin, Controller Phone: (404) 417-2213
Finding Control Number: FS-474-03-02 REVENUESIRECEIVABLESIRECEIPTS Deficiencies in the Income Tax Division Subsidiary Records
We concur with this finding. Under present budget initiatives and restrictions of the department, we are unable to provide the necessary funding for a project of this magnitude. There are 3.7+ million individual returns filed annually. This number does not take into consideration multiple w-2's for married couples and withholding from more than one employer. To capture and warehouse this data, manually and electronically, the Department would have to redirect various projects that are essential to the Department's current strategic direction. To fulfill this action, the Department would need to develop an initiative that would require additional funding to implement such a system. It should also be noted that the Department presently has a compliance partnership with the IRS to match relevant data against Georgia individual income tax returns and taxpayers. Since 2002, this initiative has generated 143,000 assessments with a proposed assessment value of $33.8 million. The Department has collected $14.1 million during the initial billing of these proposed assessments. There are other initiatives in the development stage for states to partner with the Federal Government that may be a viable cost efficient alternative to this proposal. The Department continues to monitor the progress of these programs.
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Auditee's Corrective Action Plans
For the FIscal Year Ended June 30, 2003
Contact Person: Bobby Goolsby, Income Tax Director Phone: (404) 417-2309
Finding Control Number: FS-474-03-03 REVENUESIRECEIVABLESIRECEIPTS GENERAL LEDGER Deficiencies in Sales Tax Division Subsidiary Records
We concur with this finding. The Department's subsidiary ledger systems are independent and do not interfaced with the PeopleSoft Accounting System. We have developed policies and procedures to ensure our main sub-ledger (Mail Cash) ties in with the general ledger. Additionally, the Sales Tax Division subsidiary ledgers are now being reconciled to the PeopleSoft general ledger. Procedures have been implemented to formally reconcile the monthly Sales Tax distribution subsidiary totals to the general ledger.
Contact Person: Phil Embry, Sales Tax Director Phone: (404)417-6626
Finding Control Number: F8-474-03-04 GENERAL LEDGER Undocumented Adjustments to Clearing Accounts
We concur with this fmding. The Department bas put into place additional policies and procedures to assure adequate documentation is attached to all adjusting entries. Clearing accounts are now being reconciled by program, researched, documented, and reviewed by management.
Contact Person: Jerernie Peterkin, Controller Phone: (404)417-2213
OFFICE OF TREASURY AND FISCAL SERVICES
Finding Control Number: F8-486-03-01 CASH AND CASH EQUIVALENTS Uncollateralized deposits
We concur with this finding. The Office of Treasury and Fiscal Services currently uses an outside vendor to monitor Certificate of Deposit collateral. We will review current procedures and implement new procedures as necessary.
Contact Person: Steve Caffarelli, Assistant Director Phone: (404) 656-2168; Fax: (404) 656-9048; E-mail: scaffar@otfs.state.ga.us
Finding Control Number: FA-486-03-01 CASH MANAGEMENT Failure to Adhere to Terms of the Cash Management Improvement Act Agreement Cash Management Improvement Act (CMIA)
We concur with this finding. The Office of Treasury and Fiscal Services is in the process of procuring an outside vendor to verify the accuracy of interest calculations and clearance patterns claimed by state agencies. Due to staff and resource limitations, this is not a function we have the ability to handle internally.
Contact Person: Steve Caffarelli, Assistant Director Phone: (404) 656-2168; Fax: (404) 656-9048; E-mail: scaffar@otfs.state.ga.us

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Audltee's Corrective Action Plans For the F1scal Year Ended June 30, 2003
GEORGIA INSTITUTE OF TECHNOLOGY
Finding Control Number: FS-503-03-0l CAPITAL ASSETS Inadequate Capital Asset Records
We concur with this fIDding. Corrective actions have been taken and other steps will be initiated to address the weaknesses identified. The new capital asset management system, which allows property coordinators to input all routine asset management changes and surplus requests, has been found to be more than adequate if properly maintained. However, as indicated by this finding, not all campus property coordinators have demonstrated the ability to effectively account for equipment changes.
To address the identified weaknesses, the following steps will be performed on or before December 31,2004: 1. Additional targeted training will be provided to property coordinators with demonstrated weaknesses. If required, personnel actions or organizational changes may be necessary in certain units if training is not effective. 2. We will meet with Deans and other senior management to apprise them of the need for significant improvement in the management of equipment and equipment records in the campus units. 3. Special status reports will be prepared and distributed presenting the results of the equipment inventory to keep unit managers informed of progress and problems. 4. Random sampling procedures will be utilized to test the accuracy of equipment inventory reports, with appropriate follow-up procedures where weaknesses are identified.
We believe that the performance of these steps along with continued diligence by management will correct the weaknesses noted in the audit.
Contact Person: Henry Spinks, Controller Phone: (404) 894-6272; Fax: (404) 894-9135; E-mail: henry.spinks@business.gatech.edu
Finding Control Number: FA-503-o3-02 REPORTING Reports Not Submitted in a Timely Manner Research and Development Cluster
We concur with this fIDding and recommendation. Prior to June 30, 2004, 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 (PD/PI) 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 PD/PI) a listing, including the dates that items are due, of all contractually required deliverables that are the responsibility of the PD/PI. This 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 expanded its capability 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.
4. OSP prepares and distributes to all campus units a periodic 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 Deans, School Chairs and Lab/Center Directors.
5. OSP initiates special follow-up action by way of memos directly to PD/Pl's for any deliverable items(s) that are approximately 60 or more days overdue, with special attention given to the oldest items.
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Audttee's Corrective Action Plans
For the FIscal Year Ended June 30. 2003
6. 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 Phone: (404) 894-4819; Fax: (404) 894-7002; E-mail: duane.hutchison@osp.gatech.edu
Finding Control Number: FA-503-03-03 REPORTING Required Reports Not Filed Research and Development Cluster
We concur with this fmding and recommendation. Prior to June 30, 2004, 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 (aSP) 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, asp reviews the agreement and prepares (for the PDIPI) a listing, including the dates that items are due, of all contractually required deliverables that are the responsibility of the PDIPI. This deliverable schedule is presented to the PDIPI 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. asp expanded its capability to provide a list of all project deliverable information to each PDIPI and all levels of management within a unit via a web-based query tool.
4. asp prepares and distributes to all campus units a periodic report of overdue deliverables for all sponsored research projects. This is a list of all required deliverable items not known by asp to be satisfied or submitted to the sponsoring agency. The report is copied to members of upper administration, including Deans, School Chairs and Lab/Center Directors.
5. asp initiates special follow-up action by way of memos directly to PDIPI's for any deliverable items(s) that are approximately 60 or more days overdue, with special attention given to the oldest items.
6. 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 Phone: (404) 894-4819; Fax: (404) 894-7002; E-mail: duane.hutchison@osp.gatech.edu
Finding Control Number: FA-503-03-04 REPORTING Reports without Research Report Approval Sheet Forms or Required Signatures Research and Development Cluster
We concur with this fmding and recommendation. Prior to June 30, 2004, a review will be performed to consider what the Office of Sponsored Programs (aSP) can do to improve the efforts currently being undertaken to ensure that all Research Report Approval Sheets ("RRAS") are submitted with required deliverables. Current Georgia Tech policy permits submission of the RRAS electronically (without signatures) with a copy of any interim deliverable E-mailed to a sponsor.
Contact Person: G. Duane Hutchison, Director, Office of Sponsored Programs Phone: (404) 894-4819; Fax: (404) 894-7002; E-mail: duane.hutchison@osp.gatech.edu

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Audftee.s Corrective Action Plans For the F1scal. Year Ended June 30, 2003
UNIVERSITY OF GEORGIA
Finding Control Number: FA-518-03-01 REPORTING Financial Reports Not Properly Filed
University staff members responsible for preparing fmancial reports have been reminded to carefully review the fmancial reporting requirements of each project. Computerized lists are generated on a monthly basis to assist staff in assuring the timely filing of Financial Reports.
Contact Person: Tracy Walters, Director of Contracts and Grants Department Phone: (706) 542-6889; E-mail: twaltOl@arches.uga.edu
Finding Control Number: FA-518-03-02 REPORTING Technical Reports Not Properly Filed
The University continues to contact faculty members whose reports are delinquent and remind them of proper procedures. The University has in the past six months developed a computerized follow-up system to assist in monitoring and tracking technical reporting requirements.
Contact Person: Tracy Walters, Director of Contracts and Grants Department Phone: (706) 542-6889; E-mail: twaltOl@arches.uga.edu
ALBANY STATE UNIVERSITY
Finding Control Number: FS-521-03-01 ACCOUNTING CONTROLS (OVERALL) Inadequate Closing Procedures
We concur with this fmding. The University has established a Fiscal Year-end close committee to internally monitor the University's compliance with Fiscal Year-end deadline dates. This committee will also provide oversight over the operation, utilization and integrity of the University's data processed within the GeorgiaFIRST system to ensure that data is accurate, complete and ready for the June 30, 2004 State Audit review.
Contact Person: Stanley Williams, Vice President for Fiscal Affairs Phone: (229) 430-4608; Fax: (229) 430-2763; E-mail: stanley.williams@asurarns.edu
Finding Control Number: FS-521-03-02 CASH AND CASH EQUNALENTS INVENTORIES REVENUES/RECEIVABLESfRECEIPTS GENERAL LEDGER CAPITAL ASSETS Inadequate Accounting Procedures
Cash and Cash Equivalents Revenues/Receivables/Receipts
We concur with this fmding. The University engaged Mauldin & Jenkins Certified Public Accountants, LLC to assist the University with 1) reconciling and correcting the University's bank accounts; and 2) reviewing student accounts receivable balances in an effort to identify and reconcile the variances that existed between Banner and Peoplesoft at the conclusion of the 2003 State audit. Accordingly, all necessary adjustments will be made to the accounting records for Fiscal Year 2003 and 2004.
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Audltee's Corrective Action Plans For the Ascal Year Ended June 30, 2003
Contact Person: Diann Moffett, Associate Vice President for Fiscal Affairs Phone: (229) 430-4608; Fax: (229) 430-2763; E-mail: diann.moffett@asurams.edu
Inventories
We concur with this froding. The University will revise already established procedures to provide for the systematic and consistent mark-up of resale inventory and to ensure the timely inputting of resale inventory information into the point-ofsale system. During June 2004, the University conducted extensive year-end physical inventories of inventory for resale to ensure that assets reported on the accounting records exist and that the University subsidiary ledgers are accurate and complete.
Contact Person: Lori Washington-Burnett, Auxiliary Services Specialist Phone: (229) 430-4609; Fax: (229) 430-2763; E-mail: lori.burnett@asurams.edu
General Ledger
We concur with this froding. The University has established a Fiscal Year-end close committee to internally monitor the University's compliance with Fiscal Year-end deadline dates. This committee will also provide oversight over the operation, utilization and integrity of the University's data processed within the GeorgiaFIRST system to ensure that data is accurate, complete and ready for the June 30, 2004 State Audit review.
Contact Person: Diann Moffett, Associate Vice President for Fiscal Affairs Phone: (229) 430-4608; Fax: (229) 430-2763; E-mail: diann.moffett@asurarns.edu
Capital Assets
We concur with this finding. During June 2004, the University conducted extensive year-end physical inventories of capital assets to ensure that assets reported on the accounting records exist and that the University subsidiary ledgers are accurate, complete and reconcilable to the accounting records. The procedures will ensure that all assets maintained on subsidiary capital asset reports will be located at its assigned location with the appropriate decals affixed. Additionally, capital assets will be added to and removed from the equipment inventory records in a timely manner. Furthermore, the University has implemented procedures to strengthen the internal controls over the University's asset management module. The Asset Management Module will accurately reflect all University assets along with any applicable depreciation.
Contact Person: Liz Dotson, Director of Administrative Services Phone: (229) 430-4607; Fax: (229) 430-3085; E-mail: lizzie.dotson@asurarns.edu
Finding Control Number: F8-S21-03-03 GENERAL LEDGER Inadequacies in Control over Restricted Funds
We concur with this finding. The University engaged Mauldin & Jenkins Certified Public Accountants, LLC to assist the University with reviewing the validity of restricted accounts balances that were revealed at the conclusion of the 2003 State audit. Accordingly, all necessary adjustments will be made to the accounting records for Fiscal Year 2003 and 2004 to properly reflect restricted fund activity.
Contact Person: Janice H. Jones, Director of Budgets and Contracts Phone: (229) 430-6438; Fax: (229) 430-2763; E-mail: janice.haywood@asurams.edu
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Auditee's Corrective Action Plans For the FIscaL Year Ended June 30, 2003
Finding Control Number: FA-521-03-01 ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program
We concur with this finding. The University has implemented procedures to ensure that exception reports are generated to ascertain if a student's eligibility, fmancial need calculation or cost of attendance budget has changed during the middle or at the end of each academic term. Students will be awarded, packaged and disbursed funds in accordance with financial need requirements and adjustments will be timely made, if necessary, if a student's eligibility changes during the academic term.
Contact Person: Kathleen Caldwell, Director of Financial Aid Phone: (229) 430-4650; Fax: (229) 430-3936; E-mail: kathleen.caldwel@asurams.edu
Finding Control Number: FA-521-o3-o2 ELIGIBILITY Incorrect Cost of Attendance Calculation Student Financial Aid Cluster Program
We concur with this finding. The University has implemented procedures to ensure that exception reports are generated to ascertain if a student's eligibility, fmancial need calculation or cost of attendance budget has changed during the middle or at the end of each academic term. Students will be awarded, packaged and disbursed funds in accordance with fmancial need requirements and adjustments will be timely made, if necessary, if a student's eligibility changes during the academic term.
Contact Person: Kathleen Caldwell, Director of Financial Aid Phone: (229) 430-4650; Fax: (229) 430-3936; E-mail: kathleen.caldwel@asurams.edu
Finding Control Number: FA-521-03-03 REPORTING Reports Not Reconciled Student Financial Aid Cluster Program
We concur with this fmding. During Fiscal Year 2004 University officials realigned the Fiscal Affairs division. Additionally, a Director of Financial Operations and an Associate Vice President for Fiscal Affairs position were reestablished within the Fiscal Affairs division. These two additional Fiscal Affairs middle managers will enhance the division's efficiency and accountability. Specifically, they will work with the University's Financial Aid and Financial Operations offices to ensure that any reports submitted to the U.S. Department of Education are accurately completed and supported by the accounting records. Finally, fmancial records will be prepared, analyzed and maintained in a manner to provide for an audit trail.
Contact Person: Diann Moffett, Associate Vice President for Fiscal Affairs Phone: (229) 430-4608; Fax: (229) 430-2763; E-mail: diann.moffett@asurarns.edu
Finding Control Number: FA-521-o3-o4 REPORTING Inadequate Accounting Records Student Financial Aid Cluster Program Higher Education - Institutional Aid (84.031)
We concur with this finding. During Fiscal Year 2004 University officials realigned the Fiscal Affairs division. Additionally, a Director of Financial Operations and an Associate Vice President for Fiscal Affairs position were reestablished within the Fiscal Affairs division. These two additional Fiscal Affairs middle managers will enhance the division's efficiency and accountability. Specifically, they will work with the University's Financial Aid and Financial
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Auditee.s CorTective Action Plans For the F1scaL Year Ended June 30, 2003

Operations offices to ensure that any reports submitted to the U.S. Department of Education are accurately completed and supported by the accounting records. Finally, financial records will be prepared, analyzed and maintained in a manner to provide for an audit trail.
Contact Person: Diann Moffett, Associate Vice President for Fiscal Affairs Phone: (229) 430-4608; Fax: (229) 430-2763; E-mail: diann.moffett@asurarns.edu
CLAYTON COLLEGE AND STATE UNIVERSITY
Finding Control Number: F8-S28 -03-01 ACCOUNTING CONTROLS (OVERALL) Inadequacies in Control Over Subsidiary Ledgers
We concur with the fmding. The University will review all subsidiary ledger mapping to ensure that the interface to the general ledger is posting correctly. Once the mapping has been reviewed and corrected, the difference in the general ledger and the subsidiary ledgers will be determined. At this time, the University will provide documentation of uncollectible student receivables and a request to write off or reserve this balance to the State Audit Department. Once approved, a correcting journal entry will be prepared to bring the general ledger in agreement with the subsidiary ledgers.
Contact Person: Bruce Spratt, Executive Director ofBudget and Finance Phone: (770) 961-3487; E-mail: brucespratt@mai1.c1ayton.edu
Finding Control Number: F8-S28-03-02 CASH AND CASH EQUIVALENTS INVENTORIES REVENUESIRECENABLESIRECEIPTS
EJCPENDrrtntESfL~ILITIESnDISBURSEMENTS
GENERAL LEDGER CAPITAL ASSETS Inadequate Accounting Procedures
We concur with the fmding with one exception. The University does not agree with the request that $616,774.43 be returned as part of its surplus remission for fiscal year 2004. The $616,774.43 is derived from encumbrances that were identified as not valid. These questioned encumbrances have multiple funding sources including a significant amount of locally collected funds that are accounted for separately.
Cash and Cash Equivalents: The University will prepare cash proofs to ensure that the current period bank activity is properly reconciled and corrected. Unidentified differences from periods previous to the initial month chosen for cash proof will be evaluated and corrected. Any bank. errors found in the cash proofs will be formally sent to Wachovia Bank in a timely manner to ensure that the University will be properly reimbursed for those errors.
Inventories: The Bookstore inventory will be correctly valued at the cost of goods purchased at the close of fiscal year 2004.
RevenueslReceivableslReceipts: During fiscal year 2004, the University has been identifying and recording all receipts directly posted to the bank accounts within the month that they are receipted by the bank.. In addition, the Bursar's Office has communicated with the other campus receipting units the need to post all receipts daily (if possible). Reconciliation of all balance sheet accounts will be performed by October 1st, 2004. The reconciliations will include the amounts receivable by individual and the dates associated with the

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Auditee.s Corrective Action Plans
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establishment of the receivable. Using that documentation, all receivable accounts can be aged as required. The University will be correcting the General Ledger at year end to bring the balances supported by the Banner System detail in agreement with that detail. Any revenue derived from this entry will require the establishment of either a doubtful accounts reserve or the offsetting write off of the AR established. The University will request approval of these entries from the State Auditor.
Expenditures/Liabilities/Disbursements: Every encumbrance on the ledgers of the University will be reviewed to ensure that the obligation is valid. In addition, for those encumbrances that are over $5,000, the University will be reviewing vendor payments to ensure that the encumbrance is not a duplication caused by a non-encumbered payment made for the same invoice using an express voucher. All prior budget year encumbrances have been validated and tickets have been sent to OlIT to have the invalid encumbrances deleted (where the University is unable to close). To aid in the Accounts Payable reconciliation at year end, the University will attempt to pay all accrued invoices on or shortly after June 30, 2004.
General Ledger: New continuous audit reconciliation tools are now being provided to the USG. The University has reconciled the salary and travel information year to date and does not see any issues associated with the submission and reconciliation of the final report submitted to the Department of Audits at year end. All prior year audit entries identified by the state auditors have been posted to the general ledger. A review of all journal entries posted in FY 04 is in progress. Any entries that do not have adequate documentation will be reversed if the preparer does not provide the necessary documentation by the end of June. No Journal Entries will be accepted unless the documentation supports the requested adjustment.
Capital Assets: Reconciliation of the Asset Management Module has been started. Queries are being run that identify all of the capital asset transactions in the actuals and capital ledgers. Adjustments will be posted by the close of fiscal year 2004 to correct any errors identified on the reconciliation. Procedures associated with the recognition of capital assets acquired from GSFIC funding are in place.
Contact Person: Bruce Spratt, Executive Director of Budget and Finance Phone: (770) 961-3487; E-mail: brucespratt@mail.clayton.edu
Finding Control Number: FS-528-o3-04 GENERAL LEDGER Inadequacies in Control over Restricted Funds
We concur with the finding.
The University is reconciling all balance sheet accounts and will have the task completed by October 1, 2004. If reconciliation is not completed before the FY close, the auditors will be given the correct reconciliation along with the adjustments necessary to correct the University's ledgers.
Early in FY 04 the University hired an experienced Grants and Contracts Accountant to correct the restricted fund errors noted in the FY 03 audit. The accountant has also implemented new reconciliation procedures to ensure the restricted fund activity is posting correctly.
The H.O.P.E. Scholarship Program will be correctly reported in the agency funds in the FY 04 AFR.
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Auditee.s Corrective Action Plans For the fiscal Year Ended June 30, 2003
Contact Person: Bruce Spratt, Executive Director of Budget and Finance Phone: (770) 961-3487; E-mail: brucespratt@mail.clayton.edu
COLUMBUS STATE UNIVERSITY
Finding Control Number: FA-530-o3-01 ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program
We concur with this froding. Students who are placed on academic probation are monitored for continued progress. If a student fails to restore their academic standing, financial assistance is withdrawn in accordance with Federal regulations.
Contact Person: Janis Bowles, Director ofFinancial Aid Phone: (706) 568-2035; E-mail: bowlesjanis@colstate.edu
Finding Control Number: FA-530-03-o2 ELIGIBILITY Improper Financial Need Calculation Student Financial Aid Cluster Program
We concur with this froding. The report which identified students receiving exemptions has been modified to include all resources including tuition remission.
Contact Person: Janis Bowles, Director of Financial Aid Phone: (706) 568-2035; E-mail: bowlesjanis@colstate.edu
Finding Control Number: FA-530-03-03 ELIGIBILITY Incorrect Cost of Attendance Calculation Student Financial Aid Cluster Program
We concur with this finding. A report of less than half-time students is analyzed at the beginning of the semester. Further, a fonn has been developed to assure that proper budget components are placed in the student files.
Contact Person: Janis Bowles, Director of Financial Aid Phone: (706) 568-2035; E-mail: bowlesjanis@colstate.edu
FORT VALLEY STATE UNIVERSITY
Finding Control Number: FS-533-o3-01 ACCOUNTING CONTROLS (OVERALL) Inadequate Closing Procedures
We concur with this froding. However; we have closing procedures in place, but our ability to close the records timely was due primarily to trouble caused by a glitch in the PeopleSoft process. Our request for assistance from OIIT on July 15, 2003 to clear a $736,378 ticket that was important to our fmancial position was not resolved until October, 2003. Barring an unforeseen impediment, this finding should not happen again.
Contact Person: J. Edward Robinson, Comptroller Phone: (478) 825-6300; Fax: (478) 825-6977; E-mail: robinsone@fvsu.edu

F-54

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Audttee's Corrective Action Plans
For the F1scal Year Ended June 30, 2003
Finding Control Number: FS-533-03-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System and Equipment Inventory Records
We concur with this finding with the exception of item #5 (a). Prior to the auditors exit conference, we located all but two of the missing items, which are a pulse generator and a photograph flash unit at the Veterinary Science Building. The Veterinary Science Building is under renovation so the missing items were probably packed in a box. Two of the other items reported not found, (university vehicles/school buses) were off campus during the physical count. The General ledger now agrees with the subsidiary ledger, Library Collections are added and accumulated depreciations are reflected on the Financial Statements.
Contact Person: J. Edward Robinson, Comptroller Phone: (478) 825-6300; Fax: (478) 825-6977; E-mail: robinsone@fvsu.edu 2nd Contact: Randall Bigham, Director of Auxiliary and Logistic Services Phone: (478) 825-6532; Fax: (478) 825-6089; E-mail: bighaml@fvsu.edu
Finding Control Number: FA-533-o3-01 REPORTING Expenditures in Excess of Authorization Federal Pell Grant Program (CFDA 84.063)
We concur with this finding; however, Federal Pell Grant eligibility is determined from the information provided to us by the student's FAFSA application. As this information is revised by FVSU, other institutions with access to the student's data or by the student's family, a new electronic record is released to us. Consequently, the se changes may have a negative impact on Pell eligibility. An original award is automatically reduced based on verified revisions as required by 34 CFR 690.80(a).
The $9,408 excess in this fmding is due to unresolved multiple reporting records (MMR) received from the Federal Common-line Originations and Disbursement (COD) office by the University. Institutions that are unable to resolve duplicate reporting issues on transfer students for Pell now have their allocations revised to reflect a -0- authorization for the reporting period in COD. The Financial Aid office is working with the institutions concerned to resolve this matter, albeit, the award period is now a part of a closed accounting period.
Contact Person: Russelle Keese, Director of Financial Aid Phone: (478) 825-6605; Fax: (478) 825-6976; E-mail: keeser@fvsu.edu
Finding Control Number: FA-533-03-o2 REPORTING Reports Not Reconciled 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)
We concur with this finding and the University is working to prevent reoccurrence in the future. Our reconciliation committee that meets weekly has developed a process that reconciles all Federal programs to the accounting records.
Contact Person: J. Edward Robinson, Comptroller Phone: (478) 825-6300; Fax: (478) 825-6977; E-mail: robinsone@fvsu.edu 2nd Contact Person: Russelle Keese, Director of Financial Aid Phone: (478) 825-6605; Fax: (478) 825-6976; E-mail: keeser@fvsu.edu
F-55

Auditee's Corrective Action Pl.a'1s For the FIscaL Year Ended June 30, 2003
SAVANNAH STATE UNIVERSITY
Finding Control Number: FS-548-03-05 GENERAL LEDGER Deficiencies in Accounting Procedures
1) The University failed to have adequate accounting policies and procedures in place to ensure that vendor credits are properly applied to bookstore inventories.
We concur with this fmding. The University outsourced the bookstore, effective July 7, 2003.
2) Checks outstanding for more than six months were not voided in a timely manner.
We concur with this finding. The University has developed and implemented policies and procedures to more effectively monitor the process of voiding checks when they become stale dated. The individual performing the monthly bank reconciliation will give a list of the stale dated checks to the Accounts Payable Unit and the Payroll Unit for appropriate action.
3) The University failed to have adequate accounting policies and procedures in place to ensure that accounts payable are recorded in the proper accounting period.
4) Valid payables that should have been recorded in fiscal year 2003.
We concur with this fmding. The University has developed and implemented policies and procedures to ensure that all payables are classified and recorded in the proper period. All invoices or purchase orders dated on or before June 30 of the current year, but received in the succeeding year will be examined to ensure they are expensed and accrued as payables in the current year.
5) A complete listing of Student Loan Receivables could not be obtained.
We partially concur with this finding. The University has a subsidiary ledger for Student Loan Receivables but due to the emergency absence of the Bursar, the subsidiary ledger prior to PeopleSoft conversion was not presented to the auditors.
Appropriate staffhas been made aware of how to obtain this subsidiary ledger.
6) The University did not record the allowance for uncollectible accounts receivable in accordance with Board of Regents Policy.
We concur with this finding. Going forward, the University will follow the guidelines established by the Board of Regents for recording the allowance for uncollectible accounts.
Contact Person: Elaine Campbell, Comptroller Phone: (912) 303-1776; Fax: (912) 353-3188, E-mail: campbele@savstate.edu Implementation Date: June 2004

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Audltee's Corrective Action Plans For the FIscaL Year Ended June 30, 2003
Finding Control Number: FS-548-03-07 CAPITAL ASSETS Inadequate Capital Assets Records
1) The University failed to capitalize one equipment item that met the capitalization threshold.
We concur with this finding. The asset referenced in this finding will be manually added to the asset management module prior to year-end 2004. The University has developed and implemented procedures and controls to ensure that all items that meet the capitalization threshold guidelines are capitalized.
2) The University failed to capitalize amounts associated with construction in progress.
We concur with this fIDding. The University has developed and implemented procedures and controls to ensure that assets are accounted for appropriately by year-end.
3) The University restated prior period accumulated depreciation and adjusted current year depreciation expense to reflect residual values for Library Collections and Capitalized Collections.
We concur with this finding. The University has developed and implemented procedures and controls to ensure that assets are appropriately accounted for.
4) The University did not reconcile the property records to the Capital Asset Ledger.
We do not concur with this fmding. The University provided the auditors with information as to why there was a variance between the property records and the capitals ledger. The University reconciled the general ledger to the capital listing and reconciled the capital listing to the capitals ledger. Due to a systemic error, the capital ledger reports did not report the correct beginning balances for the three accounts in question. The University submitted a ticket to anT in July 2003 for correction of this problem. To date, this ticket has not been resolved. anT and Board of Regents staffs are working together for resolution of this ticket.
5) The University was unable to provide a listing of equipment, which included the required attributes.
We concur with this fIDding. The attributes required by the PeopleSoft system are not readily available. At conversion all of the sourcing information was summarized and converted to PeopleSoft. The detailed information was not converted from the legacy system into the current financial system. The required attnbutes will require the University to manually gather this information from a variety of sources and manually enter the data in PeopleSoft. This is a very extensive task, which will require over six months to complete.
Contact Person: Elaine Campbell, Comptroller Phone: (912) 303-1776; Fax: (912) 353-3188, E-mail: campbele@savstate.edu Implementation Date: December 2004
Finding Control Number: FA-548-03-0l ALLOWABLE COSTS/COST PRINCIPLES Deficiencies in Internal Controls Higher Education - Institutional Aid (CFDA 84.031)
1) One voucher could not be located.
We concur with this fIDding. Inadvertently, this voucher was not put back after use by staff. The University has located the invoice. Going forward the University will review current procedures, identify weaknesses, and implement policies and procedures to ensure that all vouchers are accounted for and can be located upon request.
2) Five vouchers were paid from duplicated invoices rather than the original invoices.
F-57

Auditee's Corrective Action Plans
For the FIscal Year Ended June 30, 2003
We concur with this fmding. The University has a policy and procedure, which is located in the Accounts Payable manual, which allows payment of faxed invoices. Accounts payable staff must conduct a search to ensure that the faxed invoice has not been paid. This verification is affixed to the invoice with a stamp. In those instances stated in this finding, the accounts payable staff inadvertently forgot to stamp the invoices stating that the verification process had been done.
Going forward, the University will review current procedures and revise them appropriately to ensure that all faxed invoices are not duplicate invoices and the vouchers have been appropriately documented.
Contact Person: Elaine Campbell, Comptroller Phone: (912) 303-1776; Fax: (912) 353-3188, E-mail: campbele@savstate.edu Implementation Date: June 2004 .
Finding Control Number: FA-548-03-02 ELIGIBILITY SPECIAL TESTS AND PROVISIONS Deficiencies in Student Financial Aid Refund Process Student Financial Aid Cluster Program
The University failed to properly process student financial aid awards and refunds in accordance with Federal regulation.
We concur with this finding. The University will review current procedures, identify weaknesses, and implement procedures and controls to ensure that student financial aid awards and refunds are properly calculated and that unearned funds are correctly returned to the appropriate accounts in a timely manner in accordance with the Higher Education Amendments of 1998, Public Law 105-244.
The University will also develop and implement procedures to ensure that students who receive failing grades for unofficially withdrawing from school are properly included in the Student Financial Aid refund process.
In addition, the University will contact the U.S. Department of Education regarding resolution of this finding.
Contact Person: Elaine Campbell, Comptroller Phone: (912) 303-1776; Fax: (912) 353-3188, E-mail: campbele@savstate.edu Implementation Date: October 2004
Finding Control Number: FA-548-03-03 EQUIPMENT AND REAL PROPERTY MANAGEMENT Failure to Maintain a Property Management System Higher Education - Institutional Aid (CFDA 84.031)
The University failed to provide a complete Title ill equipment report.
We do not concur with this finding. The university has this list. This list can be found at the end of the Equipment Listing.
Contact Person: Elaine Campbell, Comptroller Phone: (912) 303-1776; Fax: (912) 353-3188, E-mail: campbele@savstate.edu
F-58

Audltee's Con-ectlve Action Plans For the FIscal Year Ended June 30, 2003
BAINBRIDGE COLLEGE
Finding Control Number: FS-562-63-01 GENERAL LEDGER Inadequacies in Control over Subsidiary Ledgers
We concur with this finding. The accounts were reconciled by end of audit. The new Controller has taken steps to assure that all accounts are reconciled in a timely manner so that this problem will not occur again.
Contact Person: Natalie Higley, Controller Phone: (229) 248-2522; Fax: (229) 248.2954; E-mail: NHigley@Bainbridge.edu
EAST GEORGIA COLLEGE
Finding Control Number: FS-572-63-02 CAPITAL ASSETS Inadequate Capital Assets Records
We concur with this finding. This finding occurred because the College's accounting procedures for the Capital Asset Management System were insufficient to provide adequate control over the College's capital assets.
Expected Date of Resolution: This finding has not been fully resolved. Estimated cost values by the independent appraiser, the Asset Management module, and the Capital ledger are currently being reconciled. alIT tickets have been submitted and current resolutions are being processed. The College is recording all capital assets in both the Asset Management module and the Capital ledger on a timely basis in FY2004. We are hopeful that this ticket will be resolved by June 30, 2004, if alIT has completed their work on our outstanding tickets and associated DBl's.
Contact Person: Becky Foskey, Business Mfairs Manager Phone: (478) 289-2006 Fax: (478) 289-2104, E-mail: bfoskey@ega.edu
GAINESVILLE COLLEGE
Finding Control Number: FS-575 -63-01 CAPITAL ASSETS Inadequate Capital Asset Records
We concur with this finding. A query is being developed that will allow aIisting of Capital Assets by Asset ill, acquisition cost, accumulated depreciation at beginning of each fiscal year, current depreciation, year of acquisition and estimated useful life of individual assets. The results of this query will be provided to the auditors at each yearly audit. Accumulated depreciation on library collections was reconciled and the appropriate journal entries were made to correct the variance. The depreciation expense on equipment was reconciled to the Capital Asset Footnote of the Annual Financial Report. Property records were reconciled to the Capital Asset ledger and appropriate journal entries were made to correct the variance.
Contact Person: Debbra Pilgrim, Accounting Director Phone: (770) 718-3731; Fax: (770) 718-3859, E-mail: dpilgrim@gc.peachnet.edu
F-59

Audttee's Corrective Action Plans For the Ascal Year Ended June 30, 2003
SKIDAWAY INSTITUTE OF OCEANOGRAPHY
Finding Control Number: F8-S93-03-01 GENERAL LEDGER Inadequate Closing Procedures
We concur with this fmding. Policies and procedures have been implemented to assure the timely and accurate closing of the general ledger. All Statement of Net Asset accounts are reconciled on a monthly basis. All PeopleSoft related issues have been resolved and additional system training has been obtained.
Contact Person: Marc Mascolo, Assistant Director Phone: (912) 598-2483; Fax: (912) 598-2310; E-mail: mascolo@skio.peachnet.edu
WEST GEORGIA TECHNICAL COLLEGE
Finding Control Number: F8-819-03-01 CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures
We concur with this finding. West Georgia Technical College will implement appropriate procedures and controls to ensure that all bank statements that are reconciled to the general ledger on a timely basis and that all reconciling items are identified and corrected in a timely manner. The Accounting Manager will manage this process. Adjustments necessary for reconciliations will be adequately identified and detailed. Written procedures on performing bank reconciliations are being implemented and have been added to the procedures manual for administrative services. All bank statements are now current. The Vice President of Administrative Services will approve all bank reconciliations.
Contact Person: Dianne Parrish, Accounting Manager Phone: (706) 837-4250; Fax: (706) 812-5613; E-mail: dparrish@westgatech.org
ATLANTA TECHNICAL COLLEGE
Finding Control Number: F8-823-o3-01 CASH AND CASH EQUIVALENTS EXPENDITURESILIABILITIESIDISBURSEMENTS Inadequate Accounting Procedures
We concur with this finding:
1) Cash and Cash Equivalents
a) Monthly preparation of bank reconciliation ensures reconciling items are resolved in a timely manner on all accounts.
b) Our banking procedures now include an online stop payment process to ensure timely notification.
c) The bank will ensure that all canceled checks are included in the bank statement even if encoding does not present the check number on the statement.
d) Bank procedures now include an online "positive pay" transmission to the bank each time disbursements are made, giving the check number, name of payee and the amount.
2) Expenditures/LiabilitieslDisbursements
Procedures are in place to verify that goods have been received before vendor payment is processed.
F-60

Audltee's Corrective Action Plans For the FIscal Year Ended June 30, 2003
Contact Person: Teresa A. Brown, Vice President of Administrative Services Phone: (404) 225-4700; Fax: (404) 225-4711, E-mail: tbrown@atlantatech.edu
COOSA VALLEY TECHNICAL COLLEGE
Finding Control Number: FS-829-03-01 CAPITAL ASSETS Failure to Maintain Complete Capital Assets
We concur with this fmding. The technical college is working in conjunction with the Department of Teclmical and Adult Education to secure accurate and relevant documents in a timely manner so as to record assets funded by Georgia State Financing and Investment Commission promptly and accurately.
Contact Person: Brad Jones, Accountant Phone: (706) 295-6542; Fax: (706) 295-6948; E-mail: bjones@coosavalleytech.edu
DEKALB TECHNICAL COLLEGE
Finding Control Number: FS-830-03-01 CASH AND CASH EQUIVALENTS INVENTORIES CAPITAL ASSETS Deficiencies in Accounting Procedures
We concur with this fmding. DeKalb Technical College has initiated new automated procedures to assist in completing the bank reconciliations by the end of the month following the statement date; timely entry of reconciling items will be posted to the General Ledger.
A bookstore inventory is being taken on a quarterly basis and appropriate entries made in the General Ledger.
Inventory reconciliation of the Capital Asset module in PeopleSoft with the General Ledger, along with local inventory records, is being done on a monthly basis. A physical inventory by an external agency will be done prior to June 30, 2004.
Contact Person: Mike Richardson, Vice President of Administrative Services Phone: (404) 297-9522; Fax: (404) 297-3027; E-mail: richardm@dekalbtech.edu
JEKYLL ISLAND STATE PARK AUTHORITY
Finding Control Number: FS-910-03-01 CAPITAL ASSETS Lack of Adequate Records
We concur with this fmding. The Jekyll Island Authority endeavored to meet the requirements ofGASB 34 in recording reasonable estimates of the original costs and improvements to the buildings. The Authority recorded the 2 newer buildings at construction cost supported by invoices. The 7 buildings built between 15 and 50 years ago were recorded based on estimates. The remaining 17 historic buildings with values greater than $100,000 were built between 75 and 117 years ago. The basis for these buildings is primarily the estimated cost of the renovations during the last 20 years. These renovations were expensed and audited as they occurred. In order to calculate a reasonable estimate of cost for each owned building and recapture their renovation costs, calculations were made based on a combination of a building survey prepared September 20, 1999 by staff; estimates from Jekyll Island's Museum Director to determine cost of improvements made to historic buildings; and a reverse consumer price index model to calculate the original cost based on acquired information. The Authority is currently working to obtain independent verification of the estimates used to base the value of Jekyll Island Authority's buildings. Adjustments to the book value will be made if deemed necessary.
F-61

Auditee's Corrective Action Plans
For the FlscaL Year Ended June 30, 2003
Contact Person: Laura J. Bonds, Deputy Director, Chief Financial Officer Phone: (912) 635-4166; Fax: (912) 635-4004; E-mail: Ibonds@jekyllisland.com
GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION
Finding Control Number: FA-918-03-01 REPORTING Failure to provide a reconciliation of the September 30,2002 ED Form 2000
to the National Student Loan Data System (NSLDS) extract
The Corporation has attempted to reconcile NSLDS and Form 2000 data, but is not able to reasonably do so. In addition to timing differences for NSLDS extract dates and Form 2000 dates, there are data definition inconsistencies that exist for these two reporting mechanisms. The U.S. Department of Education (ED) has convened an NSLDSlForrns 2000 Data Definition work group that will meet again in February 2004 to begin serious work on this issue. The Corporation plans to have a representative at this meeting so that it can position itself to exceed the Reasonability Goals set by ED for this requirement just as the Corporation has for all other NSLDS Goals set by ED.
The Corporation will make progress on this finding as the issues that create barriers for success of reconciliation are resolved and changes as necessary are implemented by our systems provider.
Contact Person: Jim Hollifield, Internal Auditor Phone: (770) 724-9012; Fax: (770) 724-9004; E-mail: jirnh@gsfc.org
STATE ROAD AND TOLLWAY AUTHORITY
Finding Control Number: FS-927-03-01 Revenues/Receivables/Receipts Deficiencies in the Collection and Reporting of Cash Tolls (F.J. Torras Causeway)
We concur with this fmding. The Authority conducted a study to evaluate a number of alternatives including the installation of collection systems similar to those at the GA 400 Extension or the removal of the toll altogether. The F.J. Torras Causeway was decommissioned and toll collection was ceased on September 24, 2003. No further corrective action is warranted.
Contact Person: Guy Johnson, Accounting Director Telephone: (404) 893-6132; Fax: (404) 893-6144; E-mail: gjohnson@georgiatolls.com
GEORGIA GOLF HALL OF FAME
Finding Control Number: FS-958-03-01 CAPTlAL ASSETS Lack of Adequate Records
We concur with this finding. Depreciation by capital asset for all depreciable assets has been set up. The Administration has set a plan of action to maintain all depreciable items.
Also an audit trail accounting for the Land, Garden and Sculptures of the Golf Hall of Fame has documentation to support the numbers reported.
Contact Person: Janet Garmany, Administration Phone: (706) 724-4443; Fax: (706) 724-4428; E-mail: jgarmany@gghf.org
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Audltee's ColTective Action Plans For the F1scal. Year Ended June 30, 2003
GEORGIA TECHNOLOGY AUTHORITY
Finding Control Number: FS-980-03-01 EXPENSESILIABILITIESIDISBURSEMENTS Inadequate Accounting Procedures
GTA concurs with this fmding. As stated by the Audit Department in its reconrrnendation pertaining to this finding, GTA established adequate controls to prevent and detect the misstatements noted and ceased doing business with the vendor in question prior to the end of the year under review. The Authority implemented procedures so that documentation for any wire and cable vendor invoice is maintained and reviewed by both the Teleconrrnunications and Financial divisions in a consistent manner. Examples of supporting documentation reviewed and kept include vendor timesheets, vendor quotes, vendor scope of work descriptions and vendor invoices as well as GTA originated requests for work, approvals to proceed, change order documentation, completion acceptance and customer billing.
GTA corrected the weakness of allowing the wire and cable vendor to bill block hours. Block time is no longer allowed to be ordered or billed under the current contract. All service requests ar~ for defined projects with clear, concise statements of work to be performed for specific customers.
GTA implemented multiple signature requirements across the Teleconrrnunications and Financial divisions that will insure that the processes are consistently followed for customer orders, internal and external cost proposals, application of administrative overhead and assessment of service order fees to insure that only authorized work is performed appropriately by vendors and accurately invoiced to the state. The level of detail provided in customer proposals is normally done at a summary level. However, if the customer requests additional detail it is provided. This detail may include specific materials and their quantities, labor hours specified by skill level and administrative overhead costs.
The process begins with a written request for work submitted by a customer agency. The request must be reviewed and countersigned by managers in two sections indicating acknowledgement of a formal request. This counter signature requirement follows each documentation stage of the project. For example, countersignatures are required for
Site visit requests Validation of vendor quote and scope of work Memorandums to proceed Project completion and acceptance of work performed Invoice validation and approval for payment Intemal review of project file for closure
Prior to payment of the vendor invoice in Accounts Payable, the GTA Billing Office reviews certain project documentation before submitting its release of payment approval. No invoices are paid until these steps have been acknowledged in writing.
Bulk materials do not exist as a valid line item in the contract and are not allowed to be ordered or invoiced as such. All material components used must be individually listed and costed on the vendor invoice. Only two situations exist where the vendor will provide materials under the existing contract.
Repair - Cable plant repair is typically outside aerial or underground facilities or riser transport between floors. Breeches of these facilities usually cause widespread outages that must be addressed on an emergency basis. They can involve backhoes, expensive splice closures and conduit repair. These are not services that are in the best interest of the state to provide in-house.
Specific large projects with well defined and documented scope to include a timeline and logistics that preclude a separate materials provisioning approach due to a significant increased risk to the project. Use of this "turnkey" provision must be approved by the CNO or her Executive Analyst.
Procedures were implemented to cross reference vendor invoices to projects in the billing system so that this information can be compared. A request has been submitted to the Financial System Services group to add functionality to the PRISM billing system to add query capability on the GTA job #. The profitability of any particular project is maintained on a project by project basis within the Telecommunications Division. All direct costs are accumulated on each and every
F-63

Audltee's Corrective Action Plans
For the FIscal Year Ended June 30, 2003
project and passed to customer agencies with specific product and service detail, cost and appropriate mark up. This includes direct labor for technicians and materials. Materials may be purchased specifically for a project or pulled from shelf stock. In either case, an itemized materials list is kept in the project file. All other overhead is captured in the administrative fee for each project.
GTA's formal naming convention has been in place since the inception of the state providing cabling services in the 90s, but was not followed in the time period audited by certain individuals in the Atlanta Region. The multiple signature process across divisions that has been implemented will not allow for the naming convention to be distorted. GTA's Accounts Payable has implemented the use of the GTA Project Job number by entering it in Phoenix as a cross reference to the project in GTA's billing system.
Procedures for cable and/or wiring projects were documented on March 4, 1999 and since that time, additional flow charting of these procedures as well as implementing narrative written procedures has taken place. Most recently this process was re-examined for accuracy and to require additional validation points in January, 2003. Training was provided for all affected GTA staff in February, 2003. The most current changes to this procedure have been fully flow charted and are currently in use in both the Teleconununications and Financial Divisions of GTA.
Contact Person: Asa Barnard, Director of Intemal Financial Services Phone: (404) 657-6019; Fax: (404) 651-9498; E-mail: asa@gta.ga.gov
HEART OF GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
Finding Control Number: F8-8764-03-01 CAPITAL ASSETS Failure to Maintain Records for Capital Assets
The Heart of Georgia RESA has contacted the Glick Consulting Group and were told that according to GASB rules and guidelines, organizations purchasing and item valued at $5000 or more will be required to record assets in the agency's accounting records on June 30, 2004. During FY 03 the Heart of Georgia RESA did not meet the above requirements. The Heart of Georgia RESA will be adding the Capital Assets Inventory to the financial records as required by the above guidelines.
Contact Person: June D. Bradfield, Eds. S., Executive Director Phone: (478) 374-2240; Fax: (478) 374-1524

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F-64

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APPENDIX "A"
ORGANIZATIONAL UNITS

Listing of Organizational Units Comprising the State of Georgia Reporting Entity For the fiscal Year Ended June 30, 2003
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 (*) Environmental Training and Education Authority, Georgia Financing and Investment Commission, Georgia State (*) Forestry Commission, State Games Commission, Georgia State General Assembly, Georgia (*) GolfHall ofFame Authority, Georgia GolfHall ofFame, Georgia Governor, Office ofthe 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, Georgia (*) 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 (*) Motor Vehicle Safety, Department of Music Hall of Fame Authority, Georgia Natural Resources, Department of North Georgia Mountains Authority

CONTROL NUMBERS
403 926 402 940 404 483 406
900 903 904 905 428 419 921 467 411 914 414
906 907 928 985 409 420 496 444 975 958 422 918 924 923 427 429 408 974 471 910 430 461 440 913 442 973 475 929 462 912

(*) 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, 2003
ORGANIZATIONAL UNIT
Oconee River Greenway Authority OneGeorgia Authority Pardons and Paroles, State Board of Pension Funds
Class Nine Fire Department Pension Fund, Georgia Employees' Retirement System of Georgia (*)
Regular Defined Contnbution Plan, Georgia District Attorneys Retirement Fund of Georgia Judicial Retirement System, Georgia Legislative Retirement System, Georgia Military Pension Fund, Georgia Public School Employees Retirement System State Employees' Assurance Department Superior Court Judges Retirement Fund of Georgia Firefighters' Pension Fund, Georgia Judges of the Probate Courts Retirement Fund of Georgia Peace Officers' Annuity and Benefit Fund 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 (*) Power Alley Development Authority (*) Public Safety, Department of Public Service Commission Public Telecommunications Commission, Georgia Rail Passenger Authority, Georgia 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

CONTROL NUMBERS
988 981 465
983
416 N/A 946 N/A N/A N/A 468 N/A 945 950 949 947 951 948 482 460 916 987 466 470
977
960 472
503 509
512
518
539 551
521 524 527 528 530 533 536 542 543 545 548

(*) Audits of these organizational units performed in whole or in part by other auditors.

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AP-4

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Listing of Organizational Units Comprising the State of Georgia Reporting Entity For the Fiscal Year Ended June 30, 2003
ORGANIZATIONAL UNIT
Colleges and Universities (continued) Southern Polytechnic State University State University of West Georgia
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 Institute 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 Griffm 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 Road and Tollway Authority, State Sapelo Island Heritage Authority School Readiness, Office of Secretary of State Seed Development Commission, Georgia Soil and Water Conservation Commission, State Southwest Georgia Railroad Excursion Authority Sports Hall of Fame Authority, Georgia

CONTROL NUMBERS
550 554
557 561 562 563 569 570 572 573 575 571 576 581 584 587 589
968 593
8684 8724 8864 8804 8624 8764 8564 8644 8524 8584 8504 8664 8884 8544 8844 8604 976 497 474 927 942 469 478 919 480 984 944

(*) 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 fiscal Year Ended June 30, 2003
ORGANIZATIONAL UNIT
Stone Mountain Memorial Association (*) Student Finance Authority, Georgia (*) Student Finance Commission, Georgia Subsequent Injury Trust Fund Superior Court Clerks' Cooperative Authority, Georgia (*) Technical and Adult Education, Department of
State Technical Colleges Albany Technical College Altamaha Technical College Appalachian Technical College Athens Technical College Atlanta Technical College Augusta Technical College Central Georgia Technical College Chattahoochee Technical College Columbus Technical College Coosa Valley Technical College DeKalb Technical College East Central Technical College Flint River Technical College Georgia Aviation Technical College Griffm Technical College Heart of Georgia Technical College Lanier Technical College Middle Georgia Technical College Moultrie Technical College North Georgia Technical College North Metro Technical College Northwestern Technical College Ogeechee Technical College Okefenokee Technical College Sandersville Technical College Savannah Technical College South Georgia Technical College Southeastern Technical College Southwest Georgia Technical College Swainsboro Technical College Valdosta Technical College West Central Technical College West Georgia Technical College
Technology Authority, Georgia Tobacco Community Development Board, Georgia Transportation, Department of Treasury and Fiscal Services, Office of Veterans Service, Department of Workers' Compensation, State Board of Wodd Congress Center Authority, Geo. L. Smith II, Georgia

CONTROL NUMBERS
911 917 476 489 955 415
820 821 840 822 823 824 835 827 828 829 830 825 847 816 831 833 834 836 837 838 839 849
844
818
817
841 842 843 846 845 848 826 819 980 978 484 486
488
490 922

(*) Audits of these organizational units performed in whole or in part by other auditors.
AP-6