NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY MANAGEMENT REPORT - TABLE OF CONTENTS -

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHffiITS

A COMBINED SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
B SCHEDULE OF STATE REVENUE C SCHEDULE OF FEDERAL REVENUE D SCHEDULE OF OTHER REVENUE E SCHEDULE OF SALARIES AND TRAVEL

Page
1 2 3 4 5

SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS YUH, ,.n.Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS



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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
December 7, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the State Board of Education
and Director and Members of the North Georgia Regional Educational Service Agency Board of Control
Ladies and Gentlemen:
As part of our audit ofthe general purpose financial statements ofthe State ofGeorgia presented in the State ofGeorgia Comprehensive Annual Financial Report and the issuance ofaState ofGeorgia Single Audit Report pursuant to the Single Audit Act Amendments of 1996, as of and for the year ended June 30, 2000, we have performed certain audit procedures at the North Georgia Regional Educational Service Agency. Accordingly, the financial statements and compliance activities ofthe North Georgia Regional Educational Service Agency were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the financial statements contained in the State ofGeorgia Comprehensive Annual Financial Report and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996.
This Management Report contains information pertinent to the financial and compliance activities of the North Georgia Regional Educational Service Agency as of and for the year ended June 30, 2000. The particular information provided is enumerated in the Table of Contents.
This report is intended solely for the information and use of management of the North Georgia Regional Educational Service Agency and members of the Board and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb

~.
R sell W. Hinton State Auditor

SECTION I SELECTED FINANCIAL INFORMATION

NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2000

EXHIBIT "A"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services Enterprise Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1,1999
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 656,131.00 $
60,000.00 658,116,72

805,026.68 785,640.74

$ 1,374,247.72 $ 1,590,667.42

$

37,812.90 $

171,023.32

296,305,72

151,555.43

39,976.94

79,080.82

603,117.58

30,673.78 240,572.49 275,108.22 155,839.72
42,606.18 698,674.14

$ 1,378,872.71 $ 1.443.474.53

$

-4,624.99 $

147,192.89

341,360.72

341,032.70

-4,698.14

FUND BALANCE JUNE 30, 2000

$

332,037.59 $ =.",;;:4~88~,2~2;;;:,5;;;:,.5~9

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 105,763.00 $

105,763.00

2,376,883.98

2,277,935.77

$ 2,482,646.98 $ 2,383,698.77

$ 2,329,053.00 $ 2,235,501.75

153,342.00

147,485.04

550.00

1,010.00

$ 2.482,945.00 '$ 2,383,996.79

$

-298.02 $

-298.02

2,677.41

298.02

-2,379.39

$

0.00 $ ===~O~.O;;;,O

SUMMARY OF FUND BALANCE
Reserved Inventories Sick and Personal Leave
Unreserved Designated for Self-Insurance Program Undesignated

$

238,248.74

322.00

$

238,570.74

28,587.63 221 ,067.22

$ =...;;:4~88~,2~2~5.~59g.

$

~O~.O~O

$ ===~O=::.O~O

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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2000

EXHIBIT "B"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Vocational Education Other State Programs Georgia Learning Resources System Health Insurance Regional Educational Service Agencies Retirement
CONTRACTS Education, Georgia Department of Georgia Evaluation Program Georgia Teacher Conference CareerlTechnology Education Conferences Commission, Georgia Professional Standards Title II Middle Grades Mathematics and Science
OTHER Education, Georgia Department of Printing Services

GENERAL FUND

SPECIAL REVENUE
FUND

$

90,000.00 $

18,741.76 513,334.00
6,505.92

16,000.00 89,763.00

44,272.00 49,900.00 74,950.00
5,000.00

2,323.00

$

805,026.68 $ ==.,;,,10;;;,;;5~7,;,,;;6~3;,;0;;,;';;.0

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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2000

EXHIBIT "C"

AGENCY/FUNDING
GRANTS Education, U. S. Department of Through Georgia Department of Education Safe and Drug-Free Schools Individuals with Disabilities Education Act Part B - Special Education Special Projects Georgia Learning Resources System Part D - Special Education Personnel Development and Parent Training Georgia Learning Resources System Vocational Education - Basic Grants to States High School Program Basic Grant Tech-Prep Education
CONTRACTS Education, U. S. Department of Through Georgia Department of Education Technical Assistance Program Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Goals 2000 State and Local Education Systemic Improvement Grants

SPECIAL REVENUE
FUND

$

28,892.20

123,497.52
700.00
1,029,744.66 987,301.08

88,618.10 19,182.21
$ 2,277,935.77

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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30, 2000

EXHIBIT "D"

Compensation for Loss of Assets Indirect Cost
Special Revenue Fund Interest Earned Medicaid Reimbursements Sales and Services
Internal Service Printing Less: Cost of Goods Sold
Internal Service Repairs Less: Cost of Goods Sold
Vocational Education Curriculum Center Less: Cost of Goods Sold
Workshop Fees Other

GENERAL FUND

$

4,030.86

147,142.52 34,759.62 27,131.81

80,078.12 -64,774.81 284,148.23 -103,959.49 21,153.33 -13,725.87 302,381.86 67,274.56

$

785,640.74

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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2000

EXHIBIT "E"

NAME
ARP, BENNETT LELAND
BROOKS, LORI J
CANTRELL, WILLIAM L JR CLAMPITT, VANNA M COX, RALPH N ELLIS, ALICE M ENIS, DONALD F ENIS, GERTRUDE A FOSTER, LINDA W GANTT, SHIRLEY M JOHNSON, JOHNNY KINGSLEY, CURTIS W KIRKLAND, VIRGINIA C MULKEY, CINDY NELSON, KATRINA L NORTON, LELAND EUGENE TANKERSLEY, EVELYN P TANKERSLEY, WILLIAM WEAVER,CANDACELYNN WEAVER, CARA WEAVER, CAROL A WEAVER, JOSEPH BENNY WILLIAMS, ARTHUR M

TITLE CATEGORY
RESA Director Staff Development Enterprise Technician Support Serv Secretary/Clerk Enterprise Tech Coordinator IP Personnel-Finance & Business Director Of GLRS Support Serv Secretary/Clerk IS Personnel-Finance & Business Staff Development Enterprise Technician Youth Apprenticeship Director Plant Operations Support Serv Secretary/Clerk Business Serv Secretary/Clerk Deputy/Assoc/Assistant Supt Enterprise Technician Enterprise Technician School Improvement Specialist Secretary Support Serv Secretary/Clerk Enterprise Technician Enterprise Technician

SALARIES

TRAVEL

$

90,520.20

19,000.00 $

38,727.12

11,641.60

57,625.92

58,592.16

74,212.76

29,838.48

58,592.16

52,000.08

50,530.08

59,065.20

12,000.00

30,216.96

784.00

77,565.24

30,891.27

55,540.56

78,727.80

28,685.28

37,104.00

47,629.44

35,220.80

1,599.92
42.50
707.97 5,358.06
84.50 978.50 3,524.67
3,580.35
182.00
416.47
328.03 4,379.48
195.21
27.25 535.22

$ 1,034,711.11 $ ======2.;,,!1';;;.94~0~.1~3


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SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-8524-98-01 FS-8524-99-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-8524-99-01

North Georgia Regional Educational Service Agency does not maintain a General Fixed Assets Account Group within the formal accounting records. At this time, the Board of Control has determined that it is not cost effective to implement and maintain a General Fixed Assets Account Group.

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS


NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
INVENTORIES Inadequate Controls Over Resale Inventories Finding Control Number: FS-8524-00-01
For the year under review, the following deficiencies in internal control were noted regarding the Agency's perpetual inventory system for Vocational Education Curriculum Center (VECC) resale inventory:
1) The Agency failed to conduct an annual physical inventory count.
2) No controls were in place to ensure the safeguarding, recording and disbursement of inventory. Additionally, no individual was responsible for the posting of receipts and sales on the perpetual inventory accounting system.
As a result of these deficiencies in internal controls, we were unable to satisfy ourselves as to the accuracy ofthe resale inventory balance for the Vocational Education Curriculum Center (VECC) at June 30, 2000.
Management should implement procedures to ensure that resale inventory is adequately safeguarded, recorded and disbursed by designated personnel and that a complete physical count of the VECC inventory is conducted at least once per year. The current perpetual inventory should be reconciled to a physical count and appropriate corrections should be made to the Agency's general ledger control accounts and subsidiary records.
GENERAL LEDGER Failure to Implement a Deficit Reduction Plan Finding Control Number: FS-8524-00-02
The Printing Fund and Repair Fund at North Georgia RESA ended the year with deficit balances of $128,470.52 and $372,569.37, respectively. These deficits occurred primarily because expenditures have consistently exceeded revenues. Prior year recommendations to formulate a deficit reduction plan and review business practices were not followed as evidenced by a current year increase in deficit of$47,295.06 in the Printing Fund and $112,088.22 in the Repair Fund. The deficits in these funds, ifnot corrected, could eventually cause the North Georgia RESA as a whole to be in a deficit position.
Management should develop a deficit reduction plan and implement sound business practices to ensure that additional deficits do not occur for the Printing Fund and Repair Fund in subsequent periods.
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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-8524-00-03
The North Georgia Regional Educational Service Agency did not maintain a General Fixed Assets Account Group within the formal accounting records. This condition results in the financial statements ofthe Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofequipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED Failure to Establish Administration Agreement/Contracts Vocational Education - Basic Grants to States (CFDA 84.048) Finding Control Number: FA-8524-00-01
The RESA did not have established written agreements or contracts in place to assure that the Vocational Education - Basic Grants to States (Perkins III) program was properly administered. Our review revealed the following:
1. There was no formal agreement between the Georgia Department ofEducation (GDOE) and the North Georgia Regional Educational Service Agency (RESA) to define the responsibilities of the RESA as a fiscal agent ofthe Perkins III funds. For fiscal year 2000, GDOE provided the RESA with Perkins III funds, ofwhich $225,325.00 was earmarked for State Administration purposes and $481,904.00 was earmarked for Leadership program purposes.
Our review noted that GDOE provided the State Administration and Leadership funds to the RESA through an amendment to an approved application with the RESA to perform an apprenticeship program that was supported with non-Federal funds. The RESA primarily served as a fiscal agent for GDOE in managing the State Administration and Leadership program activities, which essentially involved the RESA establishing a fund account for each ofthese two program activities, requesting and receiving funds and making payments against the fund accounts based on GDOE approved invoices. As the RESA performed fiscal agent duties for the State Administration and Leadership programs, GDOE directed the program and carried out related responsibilities.
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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED Failure to Establish Administration Agreement/Contracts Vocational Education - Basic Grants to States (CFDA 84.048) Finding Control Number: FA-8524-00-01
According to OMB Circular A-133 and provisions ofP.L. 105-332, a written agreement should have been in place to describe the specific activities to be carried out by the RESA relative to vocational education programs funded with Perkins III funds. It was noted that neither the provisions of the GDOE approved apprenticeship agreement nor any separate written agreement between GDOE and the RESA provided for the specific duties and responsibilities of the RESA as a fiscal agent.
Management should establish a formal agreement with the Georgia Department ofEducation to ensure that the RESA's responsibilities as fiscal agent are clearly defined.
2. The RESA made payments to two contractors totaling $82,222.50 for contracted services during fiscal year 2000. The RESA also paid the two contractors $4,013.94 for reimbursement of travel expenses. It was noted that there was no written contractual agreements executed with the two contractors detailing the services to be performed, the amount of compensation to be paid or the period the services were to be performed. The RESA made monthly payments to the contractors based on GDOE approved contractor invoices. It was also noted that for the July 1, 1998 through June 30, 1999 period there was an executed contract between the RESA and each contractor on behalf of GnOE and payments made to each of the contractors in FY 2000 appeared to be based on rates of the July 1, 1998 through June 30, 1999 written agreements.
Procedures should be implemented to assure that fully executed current contracts are in place that clearly define the work/services to be performed, the amount and terms ofcompensation and other related provisions which would ensure that funds are paid for appropriate purposes.
ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00 Finding Control Number: FA-8524-00-02
The following direct costs charged to Vocational Education - Basic Grants to States (Perkins III) funds, either did not conform to OMB Circular A-87 requirements, or lacked sufficient documentation to support charges to the program:
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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED .rUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00 Finding Control Number: FA-8524-00-02
1. During the year under review, the RESA purchased administrative computer equipment totaling $8,978.00 with Perkins III Administration funds. Even though this expenditure was approved by GDOE, the expenditure does not appear to be a proper charge to the program in accordance with cost allowability criteria defined in OMB Circular A-87.
Provisions ofOMB Circular A-87 require that a cost charged directly to a Federal award be directly related to the program. The RESA's primary purpose for acquiring the computer equipment was to up-grade its computer hardware to facilitate accounting software required by the Georgia Department ofEducation (GDOE). Such a cost was not totally and directly related to Perkins III activities and accordingly, should be allocated to Federal awards as an indirect cost. The RESA has an approved indirect cost plan that it uses to recover indirect costs associated with the administration of Federal awards.
This deficiency occurred because management did not conform to cost principles contained in OMB Circular A-87. The RESA should implement procedures to ensure that expenditures funded with Perkins III program funds meet the criteria ofOMB Circular A-87.
The Georgia Department ofEducation should review this matter and take appropriate action to resolve and, as applicable, refund the Perkins III funds expended for this unallowable cost.
2. During fiscal year 2000, the RESA made payment of$9,200.00 to a vendor for preparation of instructional materials, delivery of administrative/vocational handbooks and audio/video material. The invoice was dated June 15,2000. RESA and GDOE officials were unable to provide sufficient documentation that the materials were delivered by the vendor as indicated on the invoice. Without proper documentation that services were rendered by the vendor, the payment to the vendor and charges to Perkins III funds are unallowable.
It should be noted that the vendor is an immediate family member ofthe RESA's bookkeeper who handles the Perkins III accounting records and payments made from those accounts. It was also disclosed that the address and the telephone number on the vendor's invoice was that of an accounting business which is operated by the RESA's bookkeeper and that same immediate family member. Provisions included in GDOE's policy manual, Financial Management For Georgia Local Units ofAdministration, indicate that officials must avoid
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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ALLOWABLE COSTS/COST PRINCIPLES Improper Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $18,178.00 Finding Control Number: FA-8524-00-02
all situations in which their public actions may be affected by or come into conflict with their personal interests. Officials should also be wise to avoid situations that, even though legally permissible, place them into a conflict of interest situation.
Given the circumstances surrounding this transaction, RESA and GDOE officials should review this matter and take action to determine if the transaction was appropriate or if an irregularity has occurred. Refund of $9,200.00 to the GDOE may be required.
ALLOWABLE COSTS/COST PRINCIPLES Improper Indirect Cost Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $38,608.00 Finding Control Number: FA-8524-00-03
An examination ofthe Vocational Education - Basic Grants to States program (Perkins III) at North
Georgia Regional Educational Service Agency (RESA) revealed excessive and unallowable costs being charged to the Federal program through an indirect cost rate.
In accordance with OMB Circular A-87, costs can be charged to the Perkins ill funds as long as they are necessary and reasonable. For the RESA, indirect costs are claimed against Federal grants through a GDOE approved indirect cost rate. Such a rate is applied to those Federal funds where the RESA carries out program and administrative responsibilities ofthe grant. For FY 2000, GDOE approved an 8.06% indirect cost rate for the RESA.
Our review noted the RESA performed as a fiscal agent for administering State Administration and Leadership programs activities supported with Perkins ill funds while the Georgia Department of Education (GDOE) carried out the program related responsibilities for these activities. As fiscal agent for these two program activities, the RESA was allowed to claim indirect costs at a negotiated 6.9% indirect cost rate through a GDOE approved budget. The RESA also served as fiscal agent for the Georgia Vocational Staff Development Consortium. The Consortium was also funded with Perkins ill funds designated for Secondary School Programs. As a fiscal agent for this program activity, the RESA was allowed to claim indirect costs at a negotiated 7.45% indirect cost rate through a GDOE approved budget. The RESA claimed a total of $69,081.78 against these three program activities in fiscal year 2000. The GDOE approved rate of 8.06% would have been permitted if the RESA carried out all the program services and administrative functions for these
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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ALLOWABLE COSTS/COST PRINCIPLES Improper Indirect Cost Expenditures Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $38,608.00 Finding Control Number: FA-8524-00-03
three program activities instead ofmerely acting as a fiscal agent. Neither the RESA nor GDOE was able to provide documentation justifying that the two negotiated indirect cost rates would result in necessary and reasonable costs incurred by the RESA. Indirect costs charged by the RESA to the State Administration, Leadership and Consortium funds should have been based on a lower indirect cost rate commensurate with the costs incurred by the RESA in performing its duties as a fiscal agent.
Additionally, Section 124 of P.L. 105-332 specifically prohibits the use of Leadership funds for administrative purposes and accordingly the $30,768.00 ofindirect cost charged by the RESA to the Leadership funds are unallowable. Furthermore, the RESA charged $23,840.00 ofindirect costs to Perkins ill Secondary School Program funds for serving as fiscal agent for the Consortium. Section 135(d) ofP.L. 105-332 states that no more than 5% ofPerkins ill Secondary School Program funds may be used by an entity for administrative costs. Since the RESA claimed indirect costs based on the 7.45% indirect cost rate, which exceeded the maximum of5%, the RESA overcharged $7,840.00 to these funds.
The RESA and GDOE should evaluate, determine and document an appropriate indirect cost rate for fiscal agent responsibilities performed by the RESA. Such a rate should result in a reasonable amount that would be charged to State Administration and Secondary School program activities supported with Perkins ill funds. With regard to Leadership funds, the United States Department of Education should be consulted to determine ifindirect costs or another acceptable means can be used to charge Leadership Program funds for costs associated with a fiscal agent. The Georgia Department of Education should review this matter and take appropriate steps to resolve the unallowable and/or excessive indirect costs charged to Perkins ill program funds.
CASH MANAGEMENT Excessive Cash Balances Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $12,719.20 Finding Control Number: FA-8524-00-04
A review ofcash management procedures and internal controls for the Vocational Education - Basic Grants to States program (CFDA 84.048) disclosed that cash draws utilizing DE Form 147, "Quarterly Report of Expenditures and Estimated Requirement for Grant Funds", were made in
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NORTH GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Vocational Education - Basic Grants to States (CFDA 84.048) Amount: $12,719.20 Finding Control Number: FA-8524-00-04 advance of immediate cash needs, resulting in the accumulation of excessive ending monthly cash balance for all twelve months during the year under review. In accordance with A-I 02 Common Rule paragraph 21 (h)2(l), interest earned on advances by local government grantees is required to be submitted promptly to the Federal grantor agency. Up to $100.00 per year may be kept for administrative expenses. The Vocational Education - Basic Grants to States program earned interest amounting to $12,819.20 of which $12,719.20 should have been remitted to the Georgia Department ofEducation. The interest earned on these program funds was recorded in the RESA's General Fund. Management should become familiar with the Federal regulations for the Vocational Education program in order to develop adequate control procedures to ensure that the cash drawdowns ofthe Vocational Education Program are made based on immediate cash needs. The excessive interest earnings totaling $12,719.20 should be refunded to the Georgia Department of Education.
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