Management report, Georgia Agrirama Development Authority, a component unit of the state of Georgia,year ended June 30, 2004

STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor
MANAGEMENT REPORT GEORGIAAGRIRAMA DEVELOPMENT AUTHORITY AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 2004

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY MANAGEMENT REPORT -TABLE OF CONTENTS-

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHIBITS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGET FUND

1

B SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

2

C SCHEDULE OF OTHER REVENUES

3

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

DEPARTMENT OF AUDITS AND ACCOUNTS

254 Washington Street, S.W., Suite 214

w. RUSSELL

HINTON

STATE AUDITOR (404) 656-2174

Atlanta, Georgia 30334-8400

January 10, 2005
Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Georgia Agrirama Development Authority
and Honorable Michael A. Froehlich, Acting Executive Director
Ladies and Gentlemen:
As part of our audit of the statutory basis financial statements of the State of Georgia presented in the State of Georgia Report of the State Auditor, the basic financial statements of the State of Georgia presented in the State of Georgia Comprehensive Annual Financial Report, and the issuance of a Statewide Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2004, we have performed certain audit procedures at the Georgia Agrirama Development Authority. Accordingly, the financial statements and compliance activities of the Georgia Agrirama Development Authority were examined to the extent necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal controls as required by the Single Audit Act Amendments of 1996.
This Management Report contains information pertinent to the financial and compliance activities of the Georgia Agrirama Development Authority as of and for the year ended June 30, 2004. 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 State of Georgia 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,
~~-~
Russell W. Hinton State Auditor

RWH:pr

SECTION I SELECTED FINANCIAL INFORMATION

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY ANALYSIS OF CHANGES IN FUND BALANCE BUDGET FUND YEAR ENDED JUNE 30, 2004

EXHIBIT"A"

FUND BALANCE - JULY 1, 2003 Reserved Unreserved
ADDITIONS Excess of Funds Available over Expenditures Exhibit"B" Unidentified Variance
DEDUCTIONS Fund Balance Carried Over from Prior Year as Funds Available Reserved Unreserved
FUND BALANCE - JUNE 30, 2004 SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance Inventories Restricted Funds SPLOST Projects
Unreserved Undesignated
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$

306,794.82

129,225.23

$

436,020.05

$

516,909.30

666.51

$

517,575.81

$

306,794.82

129,225.23

$

436,020.05

$

517,575.81

$

6,431.51

48,055.13

39,886.38

8,373.37

$

102,746.39

414,829.42

$

517,575.81

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30, 2004

EXHIBIT"B"

FUNDS AVAILABLE
REVENUES
Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR
Transfer from Fund Balance Reserved Unreserved

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 1,192,687.00 $ 1,296,574.50 $

103,887.50

0.00 0.00

306,794.82 129,225.23

306,794.82 129,225.23

EXPENDITURES
Personal Services Regular Operating Expenses Travel Equipment Computer Charges Telecommunications Per Diem and Fees Contracts Capital Outlay Goods for Resale

$ 1,192,687.00 $ 1,732,594.55 $ - - - - -5-39-,9'0-7.-55-

$ 798,574.00 $ 798,573.95 $

230,586.00

253,584.10

1,997.00

1,997.32

40,622.00

40,621.40

3,022.00

3,022.20

14,992.00

14,992.28

5,558.00

5,557.58

28,577.00

28,577.20

21,350.00

21,350.14

47,409.00

47,409.08

0.05 -22,998.10
-0.32 0.60 -0.20 -0.28 0.42 -0.20 -0.14 -0.08

$ 1,192,687.00 $ 1,215,685.25 $ - - ~(22-,99-8.2-5)

Excess of Funds Available over Expenditures

$

516,909.30 $ =====51=6,=90=9=.30=

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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF OTHER REVENUES YEAR ENDED JUNE 30, 2004

EXHIBIT"C"

Contracts Georgia Department of Natural Resources
Gifts and Grants Restricted Funds
Sales Concession Stand Sales Country Store Sales Drug Store Sales Gate Receipts General Sales On-Site Manufactured Product Sales Vending Revenues Memberships
Other Interest Earned Rents Miscellaneous Vendor's Compensation of Sales Tax Collections Rebates ATM Insurance Proceeds

$ 903,942.00
55,304.98
26,579.52 72,796.67 23,664.27 184,190.63
2,098.00 8,717.44 4,417.41 5,028.24
3,225.87 3,420.00
522.03 486.75 222.69 1,958.00

$ 1,296,574.50

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SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CAPITAL ASSETS Inadequate Capital Asset Records Finding Control Number: FS-940-04-01

Condition:

Our examination of the accounting records of the Georgia Agrirama Development Authority disclosed the following deficiencies in reporting capital assets:

(1) Over the years, the Authority acquired certain tracts of land and buildings through donations. The Authority's capital asset inventory records reports these assets at an estimated value without adequate documentation of how they arrived at the estimates.

(2) Buildings owned by the Authority are reported in the capital asset inventory listing at $1,677,842.09, net of accumulated depreciation of $1,165,357.54. The Authority failed to provide an 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 Authority's capital assets are properly maintained.

Effect:

The amounts reported on the general ledger 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 Authority's capital assets are properly accounted for and reported in accordance with the State of Georgia Capital Asset Guide.

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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number: FS-940-04-02

Condition:

Examination of accounts receivable and accounts payable balances recorded in the general ledger revealed that Authority personnel did not routinely reconcile the balance sheet accounts to the relevant subsidiary ledgers and did not periodically determine the validity of outstanding balances.

Criteria:

In accordance with the Accounting Procedures Manual for the State of Georgia, the Authority 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. The general ledger should be reconciled with subsidiary ledgers as a routine matter with any variances noted and resolved in a timely manner.

Cause:

Management failed to establish and implement adequate controls over the Authority's general ledger.

Effect:

Accounts receivable and accounts payable balances reflected in the general ledger were not supported by detail on relevant subsidiary ledgers.

Recommendation:

Management should establish and implement appropriate controls over the Authority's general ledger to ensure that balances reported in the general ledger are routinely reconciled with relevant subsidiary ledgers with any variances noted and resolved in a timely manner.

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