Management report, Department of Human Resources, an organizational unit of the state of Georgia, year ended June 30, 1999

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~ MANAGEMENT REPORT DEPARTMENT OF HUMAN RESOURCES ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA

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YEAR ENDED JUNE 30, 1999

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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

DEPARTMENT OF HUMAN RESOURCES
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 RECONCILIATION OF TRAVEL

3

D RECONCILIATION OF PER DIEM AND FEES

5

SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY 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
January 25,2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly of Georgia Members ofthe Board ofHuman Resources
and Honorable Audrey W. Home, Commissioner Department ofHuman Resources
Ladies and Gentlemen:
As part ofour audit of the statutory basis financial statements ofthe State of Georgia presented in the State of Georgia Report of the State Auditor, the general purpose financial statements of the State of Georgia presented in the State ofGeorgia 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, 1999, we have performed certain audit procedures at the Department ofHuman Resources. Accordingly, the financial statements and compliance activities ofthe Department ofHuman Resources 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 foregoing documents 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 Department of Human Resources as of and for the year ended June 30, 1999. 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 Department of Human Resources and members ofthe Board and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp

Ru sell W. Hinton State Auditor

SECTION I SELECTED FINANCIAL INFORMATION

DEPARTMENT OF HUMAN RESOURCES ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30. 1999

EXHIBIT "A"

FUND BALANCE - JUNE 30. 1999
SUMMARY OF FUND BALANCE Reserved State Funds Federal Financial Assistance Inventories Other Funds Year 2000 Project
Surplus
- 1-

$ 61,435,249.41
$ 11,176,708.00 17,767,996.40 7,250,904.00 2,040,190.79 11,201,498.41
$ 49,437,297.60
11,997,951.81
$ 61,435,249.41

DEPARTMENT OF HUMAN RESOURCES SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30. 1999

EXHIBIT "B"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 1,244,590,423.00 $ 1,244,316,645.00 $

1,100,701,935.00 1,129,288,906.16

347,515,344.00

266,818,159.22

$ 2,692,807,702.00 $ 2,640,423,710.38 $

-273,n8.00
28,586,971.16 -80,697,184.78
-52,383,991.62

2,933,064.00

26,738,913.61

23,805,849.61

$ 2,695,740,766.00 $ 2,667,162,623.99 $ -28,578,142.01

EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases EqUipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Other
Operating Expenses Community Services Case Services Children's Trust Fund Cash Benefits Special Purpose Contracts Service Benefits for Children Purchase of Service Contracts Grant-in-Aid to Counties Major Maintenance and Construction Utilities Postage Payments to DMA - Community Care Grants to County DFACS - Operations Medical Benefits Year 2000 Project Children's Trust Fund Grants
Excess of Funds Available over Expenditures

$ 541,415,124.00 $
179,605,733.00 7,074,716.00 490,268.00 2,576,578.00
70,012,221.00 15,070,579.00 20,136,203.00 105,025,272.00

517,586,549.13 $
168,442,218.51 5,823,367.21 445,987.06 1,940,027.26
63,550,105.94 13,256,042.15 19,414,000.22 100,699,881.67

59,323,879.00 345,514,455.00
40,369,432.00 3,992,945.00
216,760,556.00 11,112,457.00
288,926,338.00 160,313,599.00 169,837,661.00
4,399,828.00 11,605,723.00 4,632,649.00 22,413,965.00 360,435,947.00
6,576,928.00 46,459,052.00
1,658,658.00

58,366,883.67 339,251,275.84
38,683,202.97 3,992,945.00
205,931,605.92 7,874,113.14
288,653,852.72 154,674,956.44 163,543,967.34
2,886,994.88 9,950,862.04 3,996,008.40 22,252,351.47 355,162,845.85 5,346,319.49 34,549,916.80 1,006,515.55

23,828,574.87 11,163,514.49
1,251,348.79 44,280.94
636,550.74 6,462,115.06 1,814,536.85
722,202.78 4,325,390.33
956,995.33 6,263,179.16 1,686,229.03
0.00 10,828,950.08
3,238,343.86 272,485.28
5,638,642.56 6,293,693.66 1,512,833.12 1,654,860.96
636,640.60 161,613.53 5,273,101.15 1,230,608.51 11,909,135.20 652,142.45

$ 2,695,740,766.00 $ 2,587,282,796.67 $ 108,457,969.33

$ 79,879,827.32 $ 79,879,827.32 -2-

DEPARTMENT OF HUMAN RESOURCES RECONCILIATION OF TRAVEL YEAR ENDED JUNE 30,1999

. Total per Annual Supplement

Accruals June 30, 1998 June 30, 1999 Adjustment to Prior Year's Accounts Payables

Adjustments Andrews, Andrews, Bacon, Barkley, Bates, Benson, Bowman, Brantley, Britt, Brooks, Burris, Cabaseres, Callaway, Certain, Cyle, Dorrough, Douglas, Dunn, Dupree, Forehand, Fowler, Fricks, Goldberg, Harrell, Haselden, Haywood, Howell, Ivey, Jones, Jordan, Kingland, Kinney, Lancelot, Lane, Lazenby, Lord, Love, Lovett, McCauley, Meehan, Middlebrooks. Miller,

Carroll Catherine Rosalyn Chiquita Martha R. Carrol D. Lu RayD. MargaretG. Sandra A. Randal K. HanzC. MaryH. Sue Clark
Freda L.
Karen T. Mark A. Cynthia Michelle R. Blanche E. SusanA, Larry Joyce P.
Mlchael L.
JoeD. Christinea Elizabeth F. Elizabeth Rebb ZelmaM. Anita H. KatieW. B. Elizabeth Cynthia J. Jody Duane G. Elizabeth F. James Marvin Kimberly P. Cynthia A. Patrick Lynda Elaine

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EXHIBIT"C"
$ 6,424,511.74
-17,414.91 24,353.13
2,040.85
216.24 162.18 506.00
16.50 2.50 102.00 162.18 162.70 10.00 37.75 25.50 14.00 63.00 9.00 6.00 15.00 103.26 34.29 9.75 92.70 10.00 506.00 -104.10 92.70 105.70 105.70 168.77 15.00 7.59 92.70 9.00 322.56 30.00 216.24 580.25 13:00 80.77 30.00 192.78 28.50 47.00 34.50

DEPARTMENT OF HUMAN RESOURCES RECONCILIATION OF TRAVEL YEAR ENDED JUNE 30.1999

Adjustments Mitchell, Mitchell, Mitchko, Monroe-Spencer, Moore, Moore, Myers, Norris, Parham, Paul, Paulus, Pfirman, Phillips, Pruitt, Ross, Sawyer, Siman, Smith Strange, Sullivan, Surrency, Thornton, Wagner, Walker, Wasdin, Wheeler, Whitehead, Wilbon, Williams, Williams,

Sharon B. Tammy Patricia Ann Kyle
Nancy L.
Valerie Karen D. DianneW. Carol B. Cheryl Darlene Tara Vanessa Kathryn Dianne M. Cynthia MaryS. Helen J. Joseph M. Jr. Miriam S. Sherita Von MarcineA. Eleanor Karen A. Donna Laura Elizabeth B. Carolyn Allen Doris C. Brent John

EXHIBIT"C"

$

102.96

-510.00

36.00

10.00

61.00

162.18

162.70

108.50

3.00

92.70

4.75

-104.10

5.00

14.75

130.70

27.75

232.70

14.25

105.70

395.15

162.70

42.50

32.75

7.59

7.59

16.50

216.24

-177.80

7.59

7.59

$ 6,439,204.96

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DEPARTMENT OF HUMAN RESOURCES RECONCILIAliON OF PER DIEM AND FEES
-YEAR ENDED JUNE 30,1999

EXHIBIT "0"

Totals per Annual Supplement

Adjustments Fuller, Kelly, Quick,

Judith H. James Chris

TYPE PAYMENT
Fee Fee Fee

FEE AMOUNT

EXPENSE AMOUNT

TOTAL

$ 21,595,966,01 $ 1,160,387,71 $ 22,756,353.72

169.40 56.00
7,59

169.40 56.00
7,59

$ 21,596,199.00 $ 1,160,387.71 $ 22,756,586.71

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SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

DEPARTMENT OF HUMAN RESOURCES
AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-427-97-01 FS-427-98-01 FS-427-98-02

Further Action Not Warranted Partially Resolved - See Corrective ActionJResponses Unresolved - See Corrective ActionJResponses

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUNALENTS Inadequate Accounting Procedures Finding Control Number: FS-427-98-01

Our corrective action plan included several components. As discussed in'the plan, we did immediately institute the initialing of the bank reconciliations by the supervisory personnel to indicate review. Secondly, we did make substantial progress in clearing book errors which had been carried for a significant period of time. However, the payroll account at June 30, 1999, is still showing some long standing book errors and we will intensify our efforts to get these resolved. Lastly, we have increased management oversight ofthe bank reconciliations. On a monthly basis, the Director of Financial Services reviews the bank reconciliations and checks the status of reconciling items with the section managers.

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation ofProperty Management System Finding Control Number: FS-427-98-02

See our corrective action/response to finding number FA-427-98-03 in the Prior Year Federal Award Findings and Questioned Costs.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-427-97-01 FA-427-97-02 FA-427-97-03 FA-427-97-04 FA-427-98-01 FA-427-98-02 FA-427-98-03

Further Action Not Warranted Further Action Not Warranted - See Corrective ActionJResponses Further Action Not Warranted - See Corrective ActionlResponses Further Action Not Warranted - See Corrective ActionlResponses Partially Resolved - See Corrective ActionJResponses Partially Resolved - See Corrective ActionJResponses Unresolved - See Corrective ActionlResponses

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DEPARTMENT OF HUMAN RESOURCES
AUDITEE'SRESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
ELIGffiILITY Improper Benefit Payments Temporary Assistance to Needy Families (CFDA 93.558) Family Support Payments to States (CFDA 93.560) Questioned Cost: $4,143.00 Finding Control Number: FA-427-97-02
The Federal agency never requested this payment, so no payment was made. Discussions were held between the DHR Funds Management reporting staff and the U. S. Department of Health and Human Services (HHS). HHS was to bill the Department if repayment was to be required. No billing was received from HHS.
ELIGffiILITY Improper Benefit Payments Foster Care Title IV-E (CFDA 93.658) Questioned Cost: $620.00 Finding Control Number: FA-427-97-03
The Federal agency requested this payment. DHRpaid the Federal share ($381.43) of the finding to the U. S. Department ofHealth and Human Services.
ELIGffiILITY Improper Benefit Payments Child Care and Development Block Grant (CFDA 93.575) Questioned Cost: $659.00 Finding Control Number: FA-427-97-04
The Federal agency never requested this payment, so no payment was made. Discussions were held between the DHR Funds Management reporting staff and the U. S. Department of Health and Human Services (HHS). HHS was to bill the Department if repayment was to be required. No billing was received from HHS.
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DEPARTMENT OF HUMAN RESOURCES
AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
ELIGffiILITY Improper Benefit Payments .Temporary Assistance to Needy Families (CFDA 93.558) Questioned Cost: $1,688.00 Finding Control Number: FA-427-98-01
The completion ofthe on-line system has led to the ability to access information from the computer screen which has led to the reduction ofthe use ofcase files. The initiative in the large counties has been very successful. In the counties where implemented, all cases have been located for Quality Control and the counties report that the problem previously experienced has been resolved.
ELIGffiILITY Improper Benefit Payments Child Care and Development Block Grant (CFDA 93.575) Child Care Mandatory and Matching Funds of the Child Care and Development Fund
(CFDA 93.596) Questioned Cost: $2,345.00 Finding Control Number: FA-427-98-02
The state has increased the child care consultant staffby three. All state level child care staff are assigned to monitor county child care operations as specified in field areas. Staff review case records, vendor files and assist c~unties as needed to improve the child care program. During the past year, all supervisors were trained in child care, all workers attended conferences where child care workshops were held and quarterly supervisors meetings were held. The state continues to work to improve the program.
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation ofProperty Management System Finding Control Number: FA-427-98-03
We did implement th<?=c~y,,~action plan, however, this did not resolve this finding. DHR hired an experienced propertY'manager and completed an inventory of fixed assets as was indicated in our corrective action plan in response to FY 98 findings.
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SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

DEPARTMENT OF HUMAN RESOURCES
SCHEDULE OF FINDINGS AN]) QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation ofProperty Management System Finding Control Number: FS-427-99-01
Our examination included a review ofthe internal accounting controls utilized by the Department ofHuman Resources in maintaining their State Property System and also included testing the system for compliance with State laws and regulations. A number of conditions relating to inappropriate accounting practices were found to exist and have been identified in detail within the Federal Awards Findings and Questioned Costs, finding number FA-427-99-04.
The Department is required to maintain equipment inventories in accordance with provisions of the ~ Property Management System Manual as published by the Department of Administrative Services. The discrepancies identified were caused by the Department's failure to follow guidelines for maintaining equipment inventories.
The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with the State PrQPerty Management System Manual.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
EUGffilllTY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558) Questioned Cost: $11,525.00 Finding Control Number: FA-427-99':01
Our examination included a review oftwo-hundred-twenty-six (226) benefit transactions from the Temporary Assistance to Needy Families Program (TANF) at certain countyDepartment ofFamily and Children Services (DFACS) offices to determine ifbenefit payments were made within program guidelines. The following deficiencies were noted in the files presented for review:
1. Four (4) files did not include required social security numbers.
2. Seven (7) files did not document that applicant identification had been verified by DFACS staff.
3. Ten (10) files did not contain document interview of applicant.
4. Six (6) files did not have a signed Application for Assistance in their file.
5. Eighteen (18) files did not contain Form 297A, Rights and Responsibilities, prior to benefit payments being made to recipients.
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DEPARIMENT OF HUMAN RESOURCES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGmn..ITY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558) Questioned Cost: $11,525.00 Finding Control Number: FA-427-99-01
6. Eleven (11) files did not contain an Eligibility Determination Document prior to benefit payments being made to recipients.
7. Twenty-five (25) files did not contain an Expense Statement prior to benefit payments being made to recipients.
8. One (1) file did not contain evidence ofverification of alien status.
9. Two (2) files did not contain documentation whether applicant had received TANF in another state. 10. Four (4) files did not contain a maximum time/benefit calculation for applicants who had received
benefits in another state.
11. Ten (10) files did not contain Form 138 Cooperation with Child Support Enforcement.
12. Eight (8) files contained evidence offailure to cooperate with Child Support Enforcement, however no action was taken to reduce benefits as required.
13. Fourteen (14) files did not contain required immunization documentation for preschool age children.
14. Nine (9) files did not contain documentation ofprenatal care for applicants who were pregnant at time of application.
15. Twenty-one (21) files did not contain a Personal Responsibility Plan.
16. Twenty-four (24) files did not contain a Personal Work Plan.
17. Seven (7) files did not contain Income and Eligibility Verification System documentation.
18. Two.(2) files did not contain evidence ofrequired reviews.
The total known questioned costs for the above errors is $2,995.00. In addition, three (3) files coUld not be located for our review. The total amounts paid to these recipients for the year under review was $8,530.00.
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DEPARTMENT OF HUMAN RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
FEDERAL AWARD FINDINGS AND QIJESTIONED COSTS
ELIGIBILITY Deficiencies in File Maintenance Temporary Assistance to Needy Families (CFDA 93.558) Questioned Cost: $11,525.00 Finding Control Number: FA-427-99-01
These errors were caused by DFACS management's failure to ensure that infonD.ation required by the Department of Human Resources "Economic Support Services Manual" were included and maintained in client files at the county Department of Family and Children Services offices.
Failure to properly maintain client files can result in direct material effects on the financial statements. The Department of Human Resources should ensure that procedures are in place to provide for proper maintenance of client files and that all required data for eligibility detennination is included in the file.
ELIGIBILITY Deficiencies in File Maintenance Child Care Cluster
Child Care and Development Block Grant (CFDA 93.575) Child Care Mandatory and Matching Funds ofthe Child Care and Development Fund (CFDA 93.596) Questioned Cost: $8,470.00 Finding Control Number: FA-427-99-02
Our examination included a review oftwo-hundred-thirty-three (233) benefit transactions from the Child Care Program at certain county Department of Family and Children Services (OFACS) offices to detennine if benefit payments were made within program guidelines. The following deficiencies were noted in the files presented for review:
1. One (1) file was coded to UAS Code 535 (Transitional Child Care Benefits) on FonD. 77, Child Care Certificate, but was coded to UAS Code 544 (Child Care Block Grant) on the payment voucher.
2. One (1) file did not include required social security numbers on FonD. 77 which resulted in known questioned costs of$360.00.
3. One (1) file did not include a FonD. 77 signed by the caseworker which resulted in known questioned costs of $210.00.
4. One (1) file indicated that the case was closed, however benefits were paid in the amount of $1,213.00.
5. One (1) benefit of $730.00 revealed that the fee to be paid by client was incorrectly assessed.
6. One (1) file did not document client fee assessment.
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DEPARTMENT OF HUMAN RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGIBILITY Deficiencies in File Maintenance Child Care Cluster
Child Care and Development Block Grant (CFDA 93.575) Child Care Mandatory and Matching Funds ofthe Child Care and Development Fund (CFDA 93.596) Questioned Cost: $8,470.00 Finding Control Number: FA-427-99-02
7. Two (2) files did not contain Form 62, Disposition and Parent Information Child Care Services.
8. Two (2) files did not contain Form 60, Application for Child Care Services. Income verification could not be determined for these files which resulted in known questioned costs of $408,00.
9. One (1) file did not have evid~ce of employment verification or school attendance which resulted in known questioned costs of $765.00.
10. Six (6) files coul,! not be located for our review which resulted in known questioned costs of $4,784.00.
11. One (1) file did not contain a Form 77, Child Care Certificate, which resulted in knoWn questioned costs of $264.00.
The total questioned costs associated with certain ofthese case files could not be readily determined due to the method of recording child care payments. However, the likely questioned costs are believed to exceed $10,000.00.
These errors were caused "by DFACS management's failure to ensure that information required by the Department ofHuman Resources "Childcare and Parent Services Manual" were included and maintained in client files at the county Department ofFamily and Children Services offices. Failure to properly maintain client files can result in direct material effects on the financial statements. The Department of Human Resources should ensure that procedures are in place to provide for proper maintenance of client files and that all required data for eligibility determination is included in the file.
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DEPARTMENT OF HUMAN RESOURCES SCHEDULE OF FINDINGS AND QIJESTIONED COSTS
YEAR ENDED JUNE 30. 1999
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGIBILITY Deficiencies in File Maintenance Food Stamps (CFDA 10.551) State Administrative Matching Grants for Food Stamp Program (CFDA 10.561) Questioned Cost: $12,803.00 Finding Control Number: FA-427-99-03
Our examination included a review of seventy-one (71) benefit transactions from the Food Stamp Program at certain county Department of Family and Children Services (OFACS) offices to determine if benefit payments were made within program guidelines. The following deficiencies were noted in the files presented for review:
1. One (1) file did not include required social security numbers.
2. Six (6) files did not document that applicant identification had been verified by DFACS staff.
3. Four (4) files did not contain documentation of applicant interview.
4. Two (2) benefit payments totaling $452.00 were paid to recipients who did not have a signed Application for Assistance in their file.
5. Twelve (12) files did not contain Form 297A, Rights and Responsibilities, prior to benefit payments being made to recipients.
6. Eight (8) files did not contain an Eligibility Determination Document prior to benefit payments being made to recipients.
7. Fifteen (15) files did not contain an Expense Statement prior to benefit payments being made to recipients.
8. Four (4) earned income files did not show evidence of supervisory review.
9. One (1) benefit was paid for $95.00 above the maXimum allowed for the household size indicated in the case file.
In addition to the above, four (4) files could not be located for our review. The total amounts paid to these recipients for the year under review was $12,256.00.
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 ofFamily and Children Services offices.
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DEPARIMENT OF HUMAN RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGIBILITY Deficiencies in File Maintenance Food Stamps (CFDA 10.551) State Administrative Matching Grants for Food Stamp Program (CFDA 10.561) Questioned Cost: $12,803.00 Finding Control Number: FA-427-99-03
Failure to properly maintain client files can result in direct material effects on the financial statements. The Department of Human Resources should ensure that procedures are in place to provide for proper maintenance of client files and that all required data for eligibility determination is included in the file.
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation ofProperty Management System Finding Control Number: FA-427-99-04
Our examination included a review ofthe internal accounting controls utilized by the Department ofHuman Resources in maintaining their property management system and also included testing the system for compliance with Federal laws and regulations. This examination included a sample of350 items at certain locations for testing the accuracy ofthe Department's general fixed asset records. The sample items contained a value of$I,902,923.47 out ofa population of$30,160,356.72 at the tested locations and were selected for the purpose of locating the equipment. Total general fixed assets of the Department amounted to $164,570,087.59. The following deficiencies were noted:
1. One hundred and four (l04) items totaling $316,507.32 could not be physically located.
2. Fifty-one (51) items totaling $140,233.90 were surplused, but were not removed from the equipment inventory records.
3. Eleven (11) items located utilizing serial numbers did not have decal numbers attached.
4. Eight (8) items were located with the wrong decal attached.
5. Three (3) items totaling $4,671.71 were documented as missing or stolen, but were not included in the missing or stolen category on the equipment inventory records.
The Department is required to maintain equipment inventories in accordance with provisions of paragraph 32 of OMB's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and "Local Governments (Common Rule) and the State Property System Manual. The discrepancies identified above were caused by the Department's failure to follow guidelines for maintaining equipment inventories.
The Department should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of OMB's Common Rule and the State Property System Manual.
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DEPARIMENT OF HUMAN RESOURCES SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequacies in Operation ofProperty Management System Finding Control Number: FA-427-99-04 Major Federal Programs/Awards Affected:
u. S. Department ofAgriculture
Food Stamps - CFDA 10.551/561 U. S. Department ofHealth and Human Services
Temporary Assistance for Needy Families - CFDA 93.558 Child Care and Development Block Grant - CFDA 93.575 Child Care Mandatory and Matching Funds ofthe Child Care and Development Fund - CFDA 93.596 SUBRECIPIENT MONITORING Subrecepient Audit Reports Not Reviewed Within Required Time Period Community Mental Health Services Block Grant (CFDA 93.958) Substance Abuse Block Grant (CFDA 93.959) Finding Control Number: FA-427-99-05 Our examination included a review ofthe status ofsubrecipient audit reports received by the Department of Human Resources Office ofAudits for the period under review. Thirteen (13) subrecipients were selected to detennine ifreports had been received and that desk reviews had been performed in a timely manner. All had submitted a fiscal 1998 report, however, no desk reviews had been performed on any of the subrecipient reports as ofthe date of our review. Management should implement procedures to ensure that subrecipient reports are reviewed in a timely manner and that deficiencies are resolved within six months after receipt ofthe subrecipient's report.
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