(;A A. 900 ,'R \ .~ ,I F(,.(p ,( J.OC' I-;loo~ I , STATE OF GEORGIA , 7'DEPARTMENT OF AUDITS AND ACCOUNTS { ; -' , \ .. , \~ , ', " J ,C ',I , ,I \! . ~, I. FORT VALLEY STATE UNNERSITY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS II B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 12 C STATEMENT OF CASH FLOWS I3 D NOTES TO THE FINANCIAL STATEMENTS 14 SUPPLEMENTARY INFORMATION SCHEDULES SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET - (NON-GAAP BASIS) I RESIDENT INSTRUCTION 31 2 LOTTERY FOR EDUCATION 32 3 RECONCILIATION OF SALARIES AND TRAVEL 33 4 RECONCILIATION OF PER DIEM AND FEES 34 SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS FORT VALLEY STATE UNIVERSITY -TABLE OF CONTENTS- SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECflONI FINANCIAL R,,Ios Net Inve_ Props" Items Notes Recetv.bIea, Ne1 Aa:oonts Payel>le Salanes Payable Payroll W'lthhokhngl oeterreeIRevenue Other lJabllibes Compenaased AbSences see Indep&l ident Accountant's Comblned Report on Revtew of Basic FNllCillI Statements .nd Supplementlry tn1ormatIon The notes to the ftnancaalltltementa ere en Integ raJ pan of Ihll ltatement .,3 EXHIBITOC" S 5,3&01 740 14 10,304,155084 87,34128 -21 88274646 -24503,78380 -6,81045554 23591200 237 07i'5 1,697,400 22 4928788 1,515322 oe 286 018 40 834,94248 83,55537 1,011.58542 S 31 .790.9'94 58 S 22,383,01530 4575149 8450,31795 12 SOD 00 288880 S 26,849,4735ot S -2V3,3g1 .48 S 5.45825 -88,35732 S ..e2,889 07 S -3,2g7,811 59 S 8243.151732 -, .488,358 52 S 4,n5,25880 S '.4n .....721 S 2'a,&7i 83312 1750.36147 .1026,47910 1,87410 34 242 72 1 115715 .3,7855523'\ 112,3fI1 Q2 23 288 87 826,342 &0 33 1n 29 35.37099 S .31,790 9~ 58 FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002 EXHIBIT"D" NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Fort VaHey State Uruverslty serves the state, and national comrnurutIes byprovl(!Ing Its students With academic mstructlon that advances fundamental knowledge, and by dlssernmatlng knowledge to the people of Georgia and throughout the country REPORTING ENTITY Fort Valley State University IS one of thirty-four (34) State supported member mstItutlons ofhigher education m GeorgIa wluch compnse the Uruverslty System ofGeorgia, an orgaruzatIonal urut ofthe State of Georgia. The accompanying finanCial statements reflect the operations ofFort Valley Stale Uruverslty as a separate reportmg entity The Board of Regents has constItutIonal authonty to govern, control and manage the Umverslty System ofGeorgia. Tlus authonty mcludes but IS not lImited to the power to deSignate management, the abilIty to SIgnIficantly mfluence operations, the authonty to control InstitutiOns' budgets, the power to determme allotments of State funds to member Institutions and the authonty to prescnbe accountmg systems and adnumstrahve polICies for member IDSlItutIons. Fort Valley State UruversIty does not have authontyto retaIn unexpended State appropnatIons (surplus) for any given fiscal year. Accordmgly, Fort Valley State Umverslty IS considered an organIZational unit of the Board of Regents of the Umverslty System of Georgia reporhDg entIty for finanCial reporting purposes because of the slgmficance of ItS legal, operatIonal, and finanCial relationships With the Board of Regents as defined m Section 2100 of the Governmental AccountIng Standards Board (GASB) Codification ofGovemmental Accounting and Fmanclal Reporting Standards FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB ISSUed Statement No. 34, BasiC Fmanclal Statements and Management DISCUSSIOn and AnalysISfor State and Local Governments. Tlus was followed m November 1999 by GASB Statement No. 35, BasiC Fmanclal Statements and Management's DISCUSSion and AnalysIS for Pubilc Colleges and UniVerSities The State of GeorgIa IS reqUIred to Implement GASB Statement No. 34 as ofand for the year ended June 30, 2002 As an orgaruzatIonal urut ofthe State ofGeorgia, the Umverslty IS also required to adopt GASB Statements No. 34 and No 35 as amended by GASB Statements No 37 and No. 38. The finanCial statement presentatIOn reqUIred by GASB Statements No 34 and No. 35 as amended by GASB Statements No 37 and No 38 proVides a comprehenSive, entIty-Wide perspectIve of the UruVerslty'S assets, lIabilIties, net assets, revenues, expenses, changes m net assets, cash flows, and replaces the fund group perspective preVIOusly reqUIred The Umverslty has elected to not restate Its 2001 finanCial statements to conform With the new finanCial statement presentatIon, therefore comparative finanCial mformatlon Will not be presented for fiscal year 2002 Sigruficant accounting changes made m order to comply With the new requlTements mclude (I) adoptIon of depreciatIon on CapItal assets; and (2) recogmtlon of compensated absences GeneraHy Accepted AccountIng Prmclples (GAAP) requires that the - 14 - FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002 EXHffiIT"D" NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENT PRESENTATION reportmg ofsummer school revenues and expenses be between fiscal years rather than m one fiscal year. Due to the lack ofmatenallty, institutiOns ofthe Uruverslty System ofGeorgia Will continue to report summer revenues and expenses m the year In wlnch the predommate activity takes place At June 30,2001, encumbrances (contractual obligations for goods and ServIces not receiVed at fiscal year end) were recorded as expenditures by the University mstead ofreservations of fund balance as reqwred by generally accepted accounting pnnclples For fiscal year 2002, the Uruverslty changed Its method ofrecordmg encumbrances such that encumbrances at June 30,2002 were not recorded as expenses This change IS In accordance With generally accepted accountmg pnnclples. No adjustments however, have been made on the financial statements to restate the fund balance at July I, 2001 for the June 30, 2001 encumbrances recorded as expendItures m fiscal year 2001 The net effect of the above accountIng treatment resulted in an understatement of expenses on the accompanying finanCial statements for pnor year encumbrances winch should have been reflected as expenses In the penod when goods and ServiCes were receIved. BASIS OF ACCOUNTING For finanCial reportIng purposes, the UnIVersity IS cofiSldered a special-purpose government engaged only In busmess-type actiVIties. Accordmgly, the University's finanCial statements have been presented usmg the econonuc resources measurement focus and the accrual basiS of accounting, except as noted in the preceding paragraphs. Under the accrual basiS, revenues are recogruzed when earned, and expenses are recorded when an obhgatIon has been incurred. All SIgnIficant IntrauruversIty transactions have been ehnunated. The UnIversity has the option to apply all Fmanclal Accounting Standards Board (FASB) pronouncements iSSUed after November 30, 1989, unless FASB COnfliCts With GASB. The UnIVersity has elected to not apply FASB pronouncements iSSUed after the applicable dIlte. RESTATEMENT OF NET ASSETS - BEGINNING OF YEAR As a result of the adoption of GASB Statement No. 34, the UnIVersity was also reqUired to make certaIn changes In accounting prinCiples, specifically (I) adoptlon ofdepreciation on capital assets, and (2) recordIng of compensated absences. GASB Statement No. 34 requires certam summer semester revenues be recogruzed between fiscal years rather than the fiscal year In wlnch the semester was predommantly conducted. The UruVer8lty System ofGeorgia has chosen to continue to record summer revenue m the year m winch the semester was predommantly conducted Net assets at July 1,2001 were reduced by $63,240,720 66 for the cumulatlve effect of these changes. CASH AND CASH EQUIVALENTSISHORT-TERM INVESTMENTS Cash and Cash Equivalents COnsiSt of petty cash, demand depoSits and time depoSits m authonzed fmanclal instltutlons, and cash management pools that have the general charactenstIcs of demand depOSit accounts. - 15 - FORT V ALLEY STATE UNIVERSITY NOTES TO mE FlNANCIAL STATEMENTS JUNE 30, 2002 EXHIBIT "D" NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS The Umverslty accounts for Its mvestments at farr value iD accordance With GASS Statement No 31, Accounting and Financial Reponlngjor Certain Investments andjor Extemal Investment Pools Changes iD unrealized gam (loss) on the carrymg value ofmvestments are reported as a component ofmvestment mcome m the statements of revenues, expenses, and changes m net assets ACCOUNTS RECEIVABLE Accounts receivable COnsiSts oftUItIon and fee charges to students and aUXIliary enterpnse ServIces proVided to students, faculty and staff, the rnaJonty of each resIerm:lJbon ToUl OpeTabng Emt:osg S 3.017.196 00 S 1.849.681 67 1,505,.197 05 33.45328 21052 84.764 26 1,23200 S 1.000.77905 822.003.22 10.41292 S 7,827.94359 16.752.831 14 7.048,.13552 210 52 508.899 55 409.62468 100,23262 S 5.054,362 71 1.619.99946 444.84233 167,28283 6,610.455 54 2,297.419,50 1.072.906 26 293,82963 102,36396 2,319,33950 S 135036147 8,331.31485 \ 75036\ 47 S 6 t99 51l 39 S J 728 196 Q4 S 51S672667 S 4 764 MQ s:; S I 759 36147 S " 177 971 68 - 27- SUPPLEMENTARY INFORMATION - 29- FORT VALLEY STATE UN!llERSIIY SCHEPULE OF REVENUES ANP EXpENDITURES COMpARED TO BUDGET - (NON-GAAP BASIS) RESIDENT INSmUCTION YEAR ENDED JUNE 30 2002 SCHEDULE "1" REVENUES State Appropnabons Other Revenues Retained BUDGET ACTUAL (1) VARIANCE FAVORABLE (UNFAVORABLE) $ 22,138,37900 $ 22,138,37900 $ 46,856,098 00 33,714,228 4B 000 -13,141,66952 $ 68,994,477 00 $ 55,852,6074B $ -13,141,86952 EXPENPITURES Personal Services Education, General and Departmental SeMCeS Sponsored Operabons Operabng Expenses Educabon, General and Departmental 8eMces Sponsored Operabons Capital Outiay Special FundIng Inlbabve $ 20,340,942 00 $ 20,470,16940 $ 9,876,530 00 7,542,251 12 4,176,24900 28,783,53200 2,298,337 00 3,518,88700 4,443,395 52 19,872,381 66 290,49214 3,377,88305 -129,22740 2,334,278 88 -267,146 52 8,911,150 34 2,007,844 86 141,00395 Excess of Revenues over Expendlbures $ 68,994,477 00 $ 55,996,572 89 $ _ _1:..::2::.::,99::::7:..:;,904=..:.1.:..1 $ -143,96541 $ _ _.;-.:;14;::;3:':196::;:;;:5.;:4~1 (1) Actual amounts were prepared on a prescnbed baSIS of accounbng that demonstrates compliance with budgetary staMes and regulations of the State of Georgia, which IS a comprehensrve basiS of accounbng other than generally accepted accounbng pnnClples See accompanymg notes and Independent Accountanfs CombIned Report on ReView of BaSIC FmanClal Statements and Supplementary Infannation - 31 - FORT VALLEY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET - (NON-GAAP BASIS) LOmRY FOR EDUCATION YEAR ENDER JUNE 30, 2002 SCHEDULE "2" REVENUES Slate AppropnallOns BUDGET ACTUAL(1) VARIANCE FAVORABLE (UNFAVORABLE) $ 247,88000 $ 247,88000 $ ----"O..=OO=.. EXPENDITURES EqUipment, Technology and ConstruclJon Trust Fund Special Funding InltJalJves $ 108,848 00 $ 48,098 63 $ 139,032 00 138,658 25 60,74937 37375 $ 247,880 00 $ 186,756 88 $ _ _---:6~1"_1,:,:2:::;3...:.1=.2 Excess of Revenues over Expendrtures $ 61,123 12 $ 6..1.,.1;,;;2.3..1..2.. (1) Actual amounts were prepared on a prescrlbad baSIS of accounting that demonstrates compliance wtth budgatary statutes and regulations of the State of Georgia, which IS a comprehensIVe basis of accounting other than generelly accepted eccountlng pnnaples See accompanYIng notes and Independent Accountant's Combined Report on R8VIBW of BaSIC FinanCIal Statements end Supplementary Information - 32- FORT VALLEY STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30 2002 SCHEDULE "3" Totals per Annual Supplement Accruals June 30, 2002 Compensated Absences June 30, 2002 June 30, 2001 Adjustments Shared Services on JOintly Staffed Personnel Darton Collage Krtamura, Nattsu Georg,a Instrtute of Technology Wilson, Deborah Unrden1Jfied Vanance SALARIES $ 24,493,136 61 $ TRAVEL 509,872 30 112,361 92 1,625,252 23 -1,658,109 63 7,433 60 70000 -972 75 $ 24,580,n4 73 $_....:508=~,8::;99::.5~5~ See accompanYln9 notes and Independent Accountanfs Combined Report on R8Vlew of BaSIC F,nancaal Statements and Supplementary InfonnalJon - 33- FORT VALLEY STATE UNIVERSITY RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30 2002 SCHEDULE "4" Totals per Annual Supplement Unodentlfied Venance FEE AMOUNT EXPENSE AMOUNT $ 487,77075 $ 20,52033 S 68440 TOTAL 508,29t OS 68440 s 488,45515 S 20,520 33 S~...;;;508=19_75_4,;,;8_ See accompeny'ng notes end Independent Accountant's Combined Report on ReVIew of BaSIC F,nanCIal Statements and Supplementary InformatIOn - 34 SECTIONn AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS FORT VALLEY STATE UNIVERSITY AUDITE'E'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-533-98-03 FS-533-99-02 FS-533-00-0I FS-533-00-02 FS-533-00-03 FS-533-00-04 FS-533-0I-OI FS-533-01-02 FS-533-o1-03 FS-533-01-04 FS-533-o1-05 FS-533-o1-06 FS-533-01-07 FS-533-01-08 FS-533-01-09 FS-533-01-10 Unresolved - See Corrective Actlon/Responses Unresolved - See Corrective Actlon/Responses Further Action Not Warranted PartIally Resolved - See Corrective Actlon/Responses Unresolved - See Corrective Actlon/Responses Further ActIOn Not Warranted PartIally Resolved - See Corrective Actlon/Responses Unresolved - See Corrective Actlon/Responses Unresolved - See Corrective Actlon/Responses Unresolved - See Corrective ActionIResponses Unresolved - See Corrective Actlon/Responses Unresolved - See Corrective Actlon/Responses Unresolved - See Corrective Actlon/Responses Unresolved - See Corrective ActlOn/Responses Unresolved - See Corrective ActlOnlResponses Further Action Not Warranted CORRECTIVE ACflONIRESPONSES EXPENDITURESILIABll.JTIESfDISBURSEMENTS H.O.P.E Disbursements Made to Inehgible Students QuestIOned Costs: $743.00 Finding Control Number: FS-533-98-03 The institution dId not concur WIth findIng, and the mfonnatJon was submitted to GeorgIa Student Finance CommissIOn to detcnnme ehgibihty The institution has not received a response from the agency The finding IS five years old and should be closed With no further action necessary EXPENDITIJRESILIABll.JTIESfDISBURSEMENTS H O.P.E Disbursements Made to Inehglble Students Questioned Costs: $5,265.00 Finding Control Number' FS-533-99-02 The InstItution has subrmtted the finding to the Georgia Student Finance ComrmsslOn and has not received their final determination The finding IS four years old and should be closed WIth no further action necessary. -I - FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES REVENUESIRECEIVABLESIRECEIPTS Student Accounts ReceIvable Not Supported by FmancIaI Aid Fmdmg Control Number' FS-533-0Q-02 EffectIve Summer Semester 2002, the InstItutIon put m place the Board ofRegents' Pohcy that no student fees Will be deferred unless the student has approved documentation of financIal aId at the tIme of regIstratIOn EXPENDITURESILIABll.ITIESIDISBURSEMENTS H O.P.E. DIsbursements Made to InelIgIble Students Questioned Cost: $1,422 00 Fmdmg Control Number: FS-533-00-03 Procedures have been implemented whIch mclude the hInng of a H O.P.E. coordmator to ensure that all H O.P.E. recIpIents are checked at each 30th hour benchmark to determme contInued academIc eligIblhty AddItionally, students who are m Jeopardy of losmg H O.P.E. Scholarships (less than 3.0 GPA) are sent warmng letters when approachmg a checkpomt. The one student, who was dIsbursed $150 viewed as $75 in excess of the allowable amount, dropped a class and the drop/delete was used by the RegIstrar's Office and did not capture the number ofcredIt hours the student was enrolled for when the InItIal disbursement was made Tne Fmanclal AId Director has met WIth the RegIstrar and others regardmg the negatIve Impact of the use of the drop/delete code. INVENTORIES REVENUESIRECElVABLESIRECEIPTS Inadequate Resale Inventory Procedures Fmdmg Control Number: FS-533-01-01 The DIrector of Auxlhary ServICes compIled an ItemIzed lIsting of the resale mventory held by the Umverslty on June 30, 200 I, and reconCiled the mventory lIstIng to the general ledger A copy of the mventory IIstmg IS aVllllable for reVIew The Umverslty has outsourced the bookstore operatIon to Follett Higher EducatIon Group In May 2002, the Umverslty received a final payment from Follett for the mventory they purchased and that wholesalers purchased. The remaInIng textbook Inventory of $93,896 05 appears to have no value. Steps will be taken to establIsh If the remaInIng textbook mventory should be wntten off Also steps Will be taken to determme Ifthe other mIscellaneous Items mventory of $13.854.60, winch Follett would not purchase has any value. The mventory WIll be properly secured untIl It IS lIqUidated -2- FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS CORRECTIVE ACflONIRESPONSES REVENUESIRECEIVABLESIRECEIPTS invalId Accounts Receivable Fmdmg Control Number. FS-533-01-02 Part ofthe student accountsTecelvable resulted m a turung difference between the Banner System and CUPA records at year-end close. Part of the credit balances were created because of the method used to record pre-paid fees The Intemal Auditor has been assigned the lead responsibility for reconciling pnor year accounts receivable dunng Fiscal Year 2003 Reconcilmg the student accounts receivable set up m the Banner System to the PeopleSoft System is a close out reqwrement for Fiscal Year 2002; therefore, the accounts receivable total reflected m the Banner system should be the same m the PeopleSoft System. REVENUESIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by FinanCial AId Fmdmg Control Number. FS-533-01-03 EffectJve Summer Semester 2002, the Umverslty put mto place the Board of Regents' policy that no student fees wIll be deferred unless the student has approved documentation of finanCial aid at the tJme of regls!ratJon In addltJon, If finanCial aid IS recalled on a student, the student wIll be given the opportumty to pay Ins or her fees from other sources However, If the fees are not paid by other sources therr registratIOn Will be cancelled Also, the Umverslty put in operatJon, effective Summer Semester 2002, a policy and procedure for canceling student registrations for non-payment of fees Dates were established for the cancellation process to be performed Should a student's registration be cancelled for non-payment offees the student would have to pre-pay the fees before bemg allowed to re-reglster for classes. RegistratJon holds are placed on students' accounts for outstandmg balances and where appropnate accounts are turned over to a third party for collection -3- FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS CORRECTIVE ACflONIRESPONSES EXPENDITURESILIABlllTIESIDISBURSEMENTS ExcessIve Fee Waivers Fmdmg Control Number FS-S33-Q1-Q4 The Umverslty put mto operation, effective Summer Semester 2002, the pohcy to grant out-of-state fee Waivers to students based on the Imnts set forth In the Board of Regents' Pohcy Manual, Section 704.0302. The policy will allow Waivers of up to two percent of the eqwvalent full-l1me enrollment for the prevIOus Fall Semester. INVESTMENT IN PLANT (EQUIPMENT) Inadequate Equipment Inventory Records Finding Control Number: FS-S33-QI-QS The Office ofAuxihary Services has worked WIth Amencan AppTaJsaIs AsSOCIates In the process of completing the current physIcal mventory of eqwpment for the conversIOn to PeopleSoft Fmanclal. The campUS Inventory staff has completed another physIcal eqwpment mventory, makmg adjustments to the mventory and addmg missing decals Followmg are control measures Implemented by the Umverslty to ensure accountablhty and the use of proper procedures m transfernng or dispoSing of Inventory Items' Perform random monthly mspections of inventory Reqwre mstJtutlonal forms to be completed and approved pnor to Inventory transfers or msposals Designate an indIVIdual In each department to maJntam the Inventory In Ins or her area Ensure all surplus eqwpment IS properly stored until It is msposed FUND EQUITIES DefiCIt to Be Funded from Subsequent Year's Operations Flndmg Control Number' FS-S33-01-06 The Umverslty WIll Impose budget measures to ensure that Intercollegiate AthletICS does not expend more than the aVailable funds In future fiscal years. The available funds would be pnor year reserve funds and current year revenue. In addItion, the Umverslty WIll attempt to Talse addItional funds from outsIde sources to fund some of the deficit -4- FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS CORRECTIVE ACfIONfRESPONSES FUND EQUITIES DonnantlDeficlt Restncted Funds FmdIng Control Number: FS-533-01-07 UruVerslty personnel have InItiated contact With the granting agencies to resolve donnant accounts. At the present tIme, three ofthe twelve accounts have been resolved; three have been billed, and the UruVerslty IS aWllltlng instructions from the rem=g agencies. UniVersity grants and contracts accounts will be billed based on contractual gwdelmes estabhshed m funding proposals, and new project directors wIll be selected to complete the projects when ongmal directors termmate from the University. When UruVerslty grants and contracts are completed and funds remll1n on hand, the funding agencies wIll be contacted for instructions on handhng the balances. Should funds be due the Uruverslty, steps will be taken to collect the balance due. GENERAL LEDGER FinanCial Statements Not Supported by SubSidiary Records Findmg Control Number. FS-533-01-08 The PerkIns Loan FlUId current records are reconciled With the UruVerslty'S bIlhng agency's statement. However, records for past penods of tIme reflect a difference between the UniVersity and the bIlhng agency, wluch Will need to be adjusted on the UruVerslty books dunng Fiscal Year 2003 GENERAL LEDGER Reports Not Reconciled to Accounting Records Fmdmg Control Number: FS-533-0I-09 The University has set up procedures for reconcllmg all financialllld programs, for Fiscal Year 2002, Wlthm the three systems. Banner Fmanclal Aid, Banner Student Accounts and the Accounting System Representatives from all three areas are workIng together on the reconcihng process. After the University's reconcilement process IS completed, the Office of Financial Aid Will make any necessary adjustments WIth the fundmg agencies The reconcl1mg process for Fiscal Year 2001 will take place dunng Fiscal Year 2003 -5- FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 533-96-14 533-96-15 533-96-16 533-96-18 533-96-19 FA-533-98-02 FA-533-98-03 FA-533-98-04 FA-533-98-05 FA-533-98-06 FA-533-98-07 FA-533-98-08 FA-533-98-09 FA-533-99-01 FA-533-99-02 FA-533-99-03 FA-533-99-04 FA-533-99-05 FA-533-99-06 FA-533-99-07 FA-533-99-08 FA-533-00-01 FA-533-00-02 FA-533-0o-03 FA-533-00-04 FA-533-00-05 FA-533-0I-01 FA-533-01-02 FA-533-01-03 FA-533-01-04 FA-533-01-05 FA-533-01-06 Further Action Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Action Not Warranted Further Achon Not Warranted Further Action Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Action Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Action Not Warranted Further Achon Not Warranted Further Achon Not Warranted Further Action Not Warranted Further Action Not Warranted Further Achon Not Warranted Further Achon Not Warranted Unresolved- See Corrective ActlOnlResponses PreVIously Reported Correchve Action Implemented PreVIously Reported Corrective ActIOn Implemented PrevIOusly Reported Corrective Achon Implemented Unresolved- See Corrective ActlonIResponses Unresolved- See Corrective ActlonlResponses - 6- FORT V ALLEY STAIE UNIVERSITY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS CORRECTIVE ACfIONIRESPONSES CASH MANAGEMENT Excessive Cash Balances Fmdmg Control Number: FA-S33-01-01 When takIng mto account all Federal Programs that owe funds to the UruVerslty a defiCit balance of Federal funds should eXIst. REPORTING ExpendItures m Excess of AuthonzatIon Fmdmg Control Number- FA-S33-OI-05 The Pell Grant Program expenditures are bemg reconciled to IdentIfY the student awards that must be mcreased to JustIfY the expenditure of$9,976.75 over the total Pell Grant for Fiscal Year 2001. The Uruverslty has responded to the U. S Department of EducatIon on the audit findmg (see letter to the U. S. Department of EducatIon, dated September 25,2002) and Will take actIon based on final determinatIon ofthe findIng REPORTING Reports Not Reconciled Fmdmg Control Number- FA-533-01-06 The Uruverslty has set up procedures for reconcIlmg all financlal3.1d programs, for Fiscal Year 2002, withm the three systems: Banner FinanCial, Banner Student Accounts and the Accountmg System. RepresentatIves from all three areas are worklng together on the reconcilIng process The reconcllmg process for Fiscal Year 2001 will take place dunng Fiscal Year 2003 The Umverslty has responded to the U. S. Department of EducatIon on the audit findmg (see letter to the U. S Department ofEducatIon, dated September 25, 2002) and WIll take actIon based on final detenmnatIon of the findIng -7- SECI10Nill CURRENT YEAR FINDINGS AND QUESTIONED COSTS FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS ACCOUNTING CONTROLS (OVERALL) Inadequate ClOSing Procedures FmdIng Control Number: FS-533-02-01 Dunng Fiscal Year 2002, the Board ofRegents ofthe Urnverslty System ofGeorgia converted Units ofthe UniVersity System from the College University Fmancial Accountmg (CUFA) legacy system to the new GeorgIaFIRSTSystem (Financial, Informalion and ReportIng Systems for Tomorrow) In Apnl of2002, Fort Valley State Umverslty placed this accountmg system Into produclion. The management of Fort Valley State Umversity IS responsible for Implemenling procedures to establish and mamtam adequate control over the operation, ulilizaliOn, and mtegnty 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 c10smg for the year ended June 30, 2002, created a sltualion where data presented for revIew was Incomplete. ExterlSlve reView procedures were necessary to determme the valllhty ofthe informatIon proVided. To reduce the nsk ofreportIng Incomplete informatIon, the UniVersity should work With the Board of Regents Central Office to develop procedures that Will result m complete reportIng of all finanCial data In a more effiCient and timely manner. CASH AND CASH EQUIVALENTS Failure to Reconcile Cash FIndmg Control Number. FS-533-02-02 An examination of the operatmg account's bank reconCIliation revealed that the cash balances recorded m the general ledger were not reconciled With the Umverslty's bank statements A vanancc of$19,342 63 was noted between the Umverslty's bank reconCIliation and the Umverslty's finanCial statements for cash. Further revIew revealed that the UniVersity'S cash balance had not been reconCiled smce the UmversItyconverted from the College Umverslty Fmancial Accounting (CUFA) system to the GeorgIaFIRST System (FInanCial, information and ReportIng Systems for Tomorrow) on Apnl 1,2002. These defiCienCies are a result of management's faIlure to have adequate poliCies and procedures to ensure that cash IS reconciled on a monthly basiS The University should establish appropnate procedures to strengthen mternal accountmg controls and erlSure the cash balances on the bank statements are reconciled to the general ledger. -I- FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS INVENTORIES REVENUESIRECEIVABLESIRECEIPTS Inadequate Resale inventory Procedures FIndIng Control Number FS-533-02-03 For the year under reVIew, the procedures for resale Inventones utIlIzed by Fort Valley State Umverslty were found to be Inadequate. Dunng FIscal Year 200 I, the Umverslty transferred the bookstore operations to a pnvate vendor WIth an agreement for the vendor to purchase certaIn stock on hand. DurIng the year under reVIew, the Umverslty sold part of the remaImng bookstore Inventory to vanous vendors; however, tins actiVIty was Incorrectly posted to the Umverslty's accountIng records. At June 30, 2002, the Umverslty reported resale inventory on the finanCIal statements of$215,222.89 It was detenmned that the actual amount ofresale Inventory on hand at year-end was $107,750.65 winch results In the resale Inventory reported on the accountIng records beIng overstated by $107,472.24. TIns defiCIency IS a result of management's faIlure to have adequate polICIes and procedures to ensure all sales are recorded on the accounting records The Umverslty should develop and Implement procedures to ensure sales are reported appropnately. EXPENDITURESILIABILITIESIDISBURSEMENTS ExcesSIve Fee WaIvers FIndIng Control Number' FS-533-Q2-04 For the year under reView, fee waivers by Fort Valley State Umverslty for out-of-state students exceeded hmlts estabhshed by the Board of Regents' PolIcy Manual. Gwdelmes as set forth In Section 704.0302 state that an mstItution may WaIve out-of-state tuItion for up to two percent of the mstltutlon's full-time enrollment for supenor out-of-state students In selected programs and/or international students, as selected by the President. The number of fee WaIvers for these students granted by the Umverslty that exceeded the allowable lImIt for each semester IS as follows: Semester Allowable Fee Waiver Amounts Actual Fee WaIver Amounts Fee WaIvers mExcess of LImIt Fall Semester 42 Spnng Semester 41 105 63 159 118 TIns condItion occurred because management dIsregarded the pohcles of the Board of Regents The Umverslty should Implement procedures to ensure that student fee WaIvers for out-of-state tuition of students do not exceed hmlts establIshed by the Board ofRegents' PolIcy Manual. -2- FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL LEDGER inadequacies In Control Over SUbSlliJary Ledgers FmdIng Control Number: FS-S33-DZ-OS Our examInallon Included a review of the procedures ullhzed by Fort Valley State Umverslty In recording transacllons to the vanous modules comprising the GeorgIaFIRSTaccounting system Our tesllng revealed that, at June 30, 2002, the University's general ledger module did not balance With the subslliJary modules nus condlUon was pnmanly due to errors In postmg subSIdIary records dunng the conversIOn from the old College Umverslty Fmancial AccountIng (CUFA) legacy accounllng system to the new GeorgIaFIRST accounllng system and due to transactIons beIng posted to the general ledger module rather than the appropnate subsllhary modules. The Umverslty did not proVide a reconclhation of the general ledger balances to the subSIdIary records wluch resulted In extensive work by the auditors to Identlfyreconcihng items atJune 30, 2002 Management's fallure to ensure that SUbSidIary records are reconciled WIth the general ledger causes Internal reports to management, generated from the subSidiary modules, to be Inaccurate and misleading This condlUon can lead to erroneous deciSIOns by the UniVersity'S management and result In maccurate reporting of finanCial mformation To ensure accurate and timely reporting of finanCial mformauon from subSIdiary records, the Umverslty should post transactions correctly to the subSIdiary ledgers rather than as JOurnal entnes In the general ledger. The Umverslty should develop Internal accounting controls and procedures to ensure that reconclhatIons of subSidiary ledgers and the general ledger are performed on a regular basiS. GENERAL LEDGER Failure to Comply with Board of Regents' ReqUIrements Finding Control Number: FS-S33-02-D6 Dunng Fiscal Year 2002, the Board ofRegents ofthe Umvel"S1ty System ofGeorgia converted units of the Umversity System from the College Umversity FinanCial Accountmg (CUFA) legacy system to the new GeoTgIaFIRST System. The conversIOn process prescnbed by the Board of Regents Included thirty-twO journal entnes that were reqUired to be made by Umversltypersonnel, depending upon theIr apphcabihty, to the Umverslty's Actuals, GAAP and Capitals Ledgers The Umverslty attempted to make only one of the journal entnes as reqUIred by the Board of Regents Management's fallure to follow Board of Regents' requirements results In matenal misstatements WithIn the University's finanCial statements. nus condmon causes maccurate reporting of finanCial information and could lead to erroneous deciSIOns to be made by those revlewmg the Umverslty's finanCial statements To ensure accurate reporting of finanCial informatIon, the Umverslty should follow Board of Regents' guldelmes as reqUired -3- FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL LEDGER Banner System Not ReconcIled to Fmanclal Accountmg System Fmdmg Control Number: FS-533-02-07 For the year under reView, the Umverslty failed to reconcIle the Banner System to the general ledger and could not proVide adequate supportmg documentation for balance sheet cleanng accounts at June 30, 2002. These cleanng accounts consIsted of an unapplIed cash balance of$314,418.34, a cash m bank balance of$221 ,849.67, an applIed pay balance of$131 ,219.56, an unapplIed finanCIal aid balance of $112,863.67, a purchase card balance of $49,876.41, a returned check balance of $11,675.00 and a contract cleanng balance of$1,535.43. These account balances resulted pnmanly from mterfaces between the Umverslty's Banner Student Registration System and the Umverslty's accounting system Management was unable to produce subsllhary records from the Banner Student Registration System to support the balances recorded on the accounting system's general ledger. The Umver8lty should mvestigate the balances m the Balance Sheet clearmg accounts, determine the cause and make appropriate adjustments to the accountmg records to ensure that assets and lIabilIties are accurately represented on the accounting records. Procedures should be Implemented to ensure that detailed subSldJary records are generated from the Banner Student Registration System that support the balances on the general ledger. GENERAL LEDGER DefiCIt to Be Funded from Subsequent Year's Operations Findmg Control Number: FS-533-02-08 On June 30, 2002, the Umversity's Intercollegiate Athletics, a sub fimd ofawnlIary enterprises, had a deficit of$283,164.50. Tlus defiCIt IS a result of the Umverslty's lack ofsufliclent funds to meet oblIgations on a current basIS. The Board of Regents' PolIcy Manual Section 702.02 states that awnlIary enterpnses "WIll be placed on a self-supporting basiS and the State WIll not make an appropnation to finance Its operations". The Umvemty should take appropnate action to fund tins defiCIt. GENERAL LEDGER Dormant/Deficlt Agency Funds FmdJng Control Number: FS-533-02-09 At June 30, 2002, Agency Funds had ten fimds which were m a deficit and no documentation was provided that funds had been requested or were aVailable Also, three of these ten funds had no actIVity occur durmg the year under reView -4- FORT V ALLEY, STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL LEDGER DormantlDeficlt Agency Funds Finding Control Number: FS-533-02-09 These defiCienCies are a result ofmanagement's faIlure to estabhsh controls to ensure that funds are aVaIlable and that reunbursement requests are made In a timely manner. The Umverslty should estabhsh appropnate procedures to strengthen Internal accountIng controls In morutonng these accounts and determme If all aVaIlable funding was requested or If any other source of funding can be used to fund the defiCIts GENERAL LEDGER Fmanclal Statements Not Supported by Subsidtary Records Finding Control Number. FS-533-Q2-10 An exarrunatIon of the subSidiary records of the loans made to students from the Perktns Loan Program revealed that the amounts recorded in the general ledger were not reconcIled WIth the UruVerslty'S bllltng agency's statements. At June 30, 2002, a vartance of $81,620 44 was noted between the UniversIty'S finanCIal statements and theIr bllltng agency for notes receIvable. Durmg the reVIew, extensIve procedures were performed that located $25,282.28 of errors made on the general ledger, whtch were corrected by the audttor. The remammg $56,338.16 continues to be umdentIfied. These defiCIenCIes are a result of management's faIlure to have adequate POltCles and procedures to ensure the subSidiary records reconCIled to the general ledger The UniVersIty should estabhsh appropnate procedures to strengthen tnternal accounting controls and ensure the subSIdIary records are reconcIled to the general ledger GENERAL LEDGER Reports Not Reconciled to Accounting Records Finding Control Number: FS-533-02-11 The UniversIty'S H.O.P.E Scholarshtp Program reconclhatIon reports for FIscal Year 2002, whtch were proVlded to the Georgia Student Fmance CommIssion, dId not reconCIle WIth the accounting records as indIcated below: Report Item Per H.OP.E ReconcIlIation Per Accounting Records Unreconclled DIfference Cash DIsbursed to School $1,355,955.00 $1,344,96100 $10,99400 Amount Awarded to Students $1,404,763.00 $1,384,91600 $19,847.00 -5- FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL LEDGER Reports Not Reconciled to Accounting Records Finding Control Number: FS-533-Q2-ll The unreconclled differences IdentIfied above occurred because management failed to reconcile accountIng records to the H O.P E Scholarship Program reconclhatIon reports at year-end Procedures should be estabhshed to ensure that all H.O.P.E Scholarship Program reconcillal1on reports are reconciled to the Uruverslty's formal accounting records. CAPITAL ASSETSIPROPERTY MANAGEMENT inadequacies In OperatIon of Property Management System and Eqwpment Inventory Records Finding Control Number: FS-533-02-12 Our exammatIon Included a review of the procedures utilized by Fort Valley State UruVerslty In malntalrung their property management system and SUbSllhary equipment Inventory records. T1us review also Included testing the system for comphance WIth State laws and regulatIons and testIng of one hundred equipment Items The follOWIng comhtIons relating to Inappropnate accounting practiCes and procedures were found to eXist I) The subSidiary equipment Inventory records, as presented for reVIew, did not reconcile to the general ledger Extensive work was performed by the auditors to reconcile SUbSllhary records to the general ledger and IdentIfy reconciling items. 2) EqUIpment purchased by the Uruverslty from July through March 2002, In the CUFA system, was not posted to the Capital Assets detalled records. In addition, total amounts posted to the Capital Assets ledger from the CUFA system Included Items below the capltahzatlOn threshold of $5,000.00. 3) The Umverslty did not complete calculatIons necessary to properly record hbrary collectlons In accordance WIth gwdehnes ISSUed by the Board of Regents As a result, accumulated depreCiatIon and current depreclatlon expense have not been reflected for hbrary collecl1ons 4) Tlurty-elght of the Items selected for testing could not be located. 5) Twenty of the Items located were not In them proper local1on as shown on the Inventory hstlng. -6- FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS CAPITAL ASSETSIPROPERTY MANAGEMENT InadequacIes m OperatIon of Property Management System and EquIpment Inventory Records Fmdmg Control Number FS-533-02-12 The matters above mdlcate matenal defiCienCies relatIve to the Umverslty's management of therr capital assets records and equIpment mventory These defiCiencies were due to management's faIlure to Implement controls adequate to ensure capital assets were properly reported m the general ledger. reconciled to detaIled capital assets records and eqUIpment mventones are properly mamtamed. The Umverslty should establIsh appropnate procedures to strengthen mternal accountIng controls to ensure capital assets are properly recorded m the gencralledger and that assets are safeguarded agaInSt loss from unauthonzed use or dispoSItIon. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS ELIGmILITY Overpayment of Student Fmancial AId Student Fmanclal AId Cluster Program QuestIoned Costs: $24,489.00 Fmdmg Control Number FA-533-Q2-QI A sample of fifty-eight finanCial aId files was selected to deterrmne If finanCial aId was properly calculated and disbursed to eligible students. The items sampled contamed financial aId disbursements of$543,705.87 out ofa populatIon of$ I4,323,008.67. Our exanunatIon revealed that seven students received fimds in excess of theIr eligIble need totalmg $24,489.00 as shown below: I) Three students were not m comphance WIth the University'S publIshed satisfactory Acadenuc progress pohcles. Federal regulatIons (34 CFR 668.32 and 668 34) state that a student must maIntaIn satIsfactory academiC progress to be ehglble to receIve financial assistance under the Title IV programs. The UmvCfSIty's policy states that the maximum tIme frame a graduate student IS allowed to successfully complete Ius course of study IS 72 semester hours. The three students m questIon had not successfully completed therr course of study WIthm the requIred tune frame. Tlus noncomphance resulted m questioned costs of$19,220 00. 2) Two students exceeded the aggregate hrmt of$23,ooO 00 m Dlrect Loans for a dependent undergraduate. Federal regulatIons (34 CFR 685.203) state that the aggregate hmlt ofall Direct SubSidized and Unsubslwzed Loans for dependent undergraduate students IS $23,000.00. Tlus noncomphance resulted m questIoned costs of$3,473 00 -7- FORT VALLEY STATE QNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FEDERAL AWARD FINDINGS AND OUESTIONED COSTS ELIGffiILITY Overpayment of Student Fmanclal Aid Student Fmanclal AId Cluster Program Questioned Costs. $24,489 00 Fmdmg Control Number. FA-533-02-01 3) Two students received DIreCt SUbSidized Loans m excess of their financial need. Federal regulalions (34 CFR 685.200) state that Direct Subsidized Loan borrowers must demonstrate finanCial need m order to meet borrower eligibility reqwrements This noncompliance resulted m queslioned costs of $1,796.00. The weaknesses Idenlified m the Federal Student Fmanclal Aid Cluster Program were a result of management's failure to perform a nsk assessment ofthe critIcal areas ofthe program and llDplement appropnate controls m the Fmancial Aid Office. The UruVerslty should develop and Implement poliCies and procedures to ensure adequate controls over the eligibility process. AdditIonally, the UruVerslty should develop and llDplement a morutonng process to ensure that controls are bemg followed The University should contact the Uruted States Department ofEducation regardmg the resolulion of these queSlioned costs Federal Programs/Awards Affected Student Fmanclal Aid Cluster Program U.S. Department of Educalion Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268) REPORTING Expenditures m Excess of Authonzalion Student Fmanclal Aid Cluster Program Fmdmg Control Number FA-533-02-02 The Statement of Account report from the U. S. Department of Education mdIcated that the Uruverslty was authonzcd to expend $4,357,017.51 m Federal Pell Grant Program funds m state Fiscal Year 2002 The UruVerslty'S accounling records, however, reflected $4,433,125 00 for Fiscal Year 2002 Pell Grant expenditures As a result, the Uruverslty expended $76,107.49 m excess ofthe authonzed amount. In order to be reimbursed for the excess Pell Grant program expenditures, the Uruverslty, m conformity With Federal Statutes, must certIfy the validity of these payments to the U S Department ofEducatIon. The Federal agency can then proVide appropnate adjustments ofthe FIScal Year 2002 authonzed amount m order to make the funds available to the UnIversity. -8- FORT V ALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2002 FEDERAL AWARD FINDINGS AND OUESTIONED COSTS REPORTING ExpendItures In Excess of Authorization Student FInanCial AId Cluster Program FIndIng Control Number FA-533-02-02 Federal Programs/Awards Affected Student FInanCIal AId Cluster Program U. S Department of Education Federal Pell Grant Program (CFDA 84.063) REPORTING Reports Not ReconcIled Student FInancial AId Cluster Program FIndmg Control Number: FA-533-Q2-03 For the year under reVIew, amounts reported on several ofthe reqUIred reports for Federal FInanCIal Assistance programs subnutted by the Uruverslty to the U. S. Department of Education were not reconcIled as follows 1) The Pell Year to Date Report and the Statement of Account, wluch reports Federal Pell Grant Program expendItures for the year, was not reconciled to the accountmg records. 2) The FIscal Operations and Apphcatlon to PartIcIpate (FlSAP) report had amounts reported for State Grants and Scholarslups 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 accountmg records. 3) The UmversIty dId not reconcIle monthly the Federal DIrect Loan Program to the accounting records In accordance WIth Section 2 of The Blue Book. Federal regulations (34 CFR 674.19, 675.19, 685.309, 690 81 and 690.83) reqUire the UruVerslty ensure that reported informatIon IS accurate and reconcIled as necessary The defiCIenCies IdentIfied were a result of management's failure to adequately reconcIle reports submItted to the accounnng records. The Uruverslty 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 vanances and maIntained as part of the supporting documentation. -9- FORTVALLEYSTATEUNNARSITY SCHEDULE OF FINDINGS ANDOUESTIONED COSTS YEAR ENDED JUNE 30. 2002 FEDERAL AWARD FINDINGS AND OUESTIONED COSTS REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Finding Control Number. FA-533-02-03 Federal Programs/Awards Affected' Student Fmanclal AId Cluster Program U S. Department ofEducatJon 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) - 10-