(;rl\ 'f\~Do J~i IS3b '~~l-qg MANAGEMENT REPORT SUBSEQUENT INJURY TRUST FUND AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA YEAR ENDED JUNE 30, 1998 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 SUBSEQUENT INJURY TRUST FUND MANAGEMENT REPORT - TABLE OF CONTENTS - LETTER OF TRANSMITTAL SECTION I SELECTED FINANCIAL INFORMATION EXHIBITS A SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND 1 B STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS EXPENDABLE TRUST FUND 2 SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 December 2, 1998 Governor of the State of Georgia Members of the General Assembly of Georgia Members of the Board of Trustees of the Subsequent Injury Trust Fund and Honorable Anne D. Burnett, Administrator 'Ladies and Gentlemen: As part of our audit of the general purpose 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, 1998, we have performed certain audit procedures at the Subsequent Injury Trust Fund. Accordingly, the financial statements and compliance activities of the Subsequent Injury Trust Fund were examined to the extent considered necessary in order to express an opinion as to the fair presentation ofthe 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 Subsequent Injury Trust Fund as of and for the year ended June 30, 1998. The particular information provided is enumerated in the Table of Contents. This report is intended solely for the use of management ofthe Subsequent Injury Trust Fund. However, this R:2 report is a matter of public record and its distribution is not limited. ~~ieG SUbmitled:;fi' CLV:jb Claude L. Vickers State Auditor SECTION I SELECTED FINANCIAL INFORMATION SUBSEQUENT INJURY TRUST FUND SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND YEAR ENDED JUNE 30, 1998 EXHIBIT "A" FUNDS AVAILABLE REVENUES Other Revenues Retained BUDGET ACTUAL VARIANCE FAVORABLE (UNFAVORABLE) $ 1,727,771,00 $ 1,654,262,94 $ --'-73.:...:"5,,;.,,;o~8,;,,;;,,O_6 EXPENDITURES Personal Services Regular Operating Expenses Travel Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts $ 1,162,209,00 $ 73,861,00 6,500,00 4,389.00 249,015.00 87,675.00 11,500.00 132,622.00 1,099,839.74 $ 67,675.91 5,365.14 6,589.58 265,612.16 87,674.76 14,553.99 106,951.66 62,369.26 6,185.09 1,134.86 -2,200.58 -16,597.16 0.24 -3,053.99 25,670,34 $ 1,727,771.00 $ 1,654,262.94 $ 73....,:.,_50_8_.0_6 Excess of Funds Available over Expenditures $ 0.00 $=====0=:.0=,=0 - 1- SUBSEQUENT INJURY TRUST FUND STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS EXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1998 CASH RECEIPTS REVENUES Assessments to Insurers and Self-Insured Companies Income from Death Cases with No Dependents Interest Received Sale of Services Total Cash Receipts CASH AND CASH EQUIVALENTS - JULY 1,1997 DISBURSEMENTS EXPENSES Reimbursement of Benefits Transfer to Budget Fund Total Disbursements CASH AND CASH EQUIVALENTS - JUNE 30, 1998 EXHIBIT"B" $ 85,068,783.78 12,500,00 3,177,699.75 3,467.60 $ 88,262,451.13 10,310,707.47 $ 98,573,158.60 $ 63,048,970.57 1,654,262.94 $ 64,703,233.51 33,869,925.09 $ 98,573,158.60 -2- SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUBSEQUENT INJURY TRUST FUND AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 489-96-01 FS-489-97-01 No Further Action Warranted Unresolved - See Corrective Action/Responses CORRECTIVE ACTIONIRESPONSES ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number: FS-489-97-01 This agency employs a total of27, one of which is the Fiscal Officer's position who also serves as accountant for all of the Fund's assets and expenditures. To separate the duties of accounting functions into six separate functions would necessitate the acquisition of five additional accountants or accountant assistants. Under the current procedure, all of the accounting jobs can be performed by one (1) full time position. Therefore, the additional cost involved to separate the accounting functions for an agency as small as this would not be cost effective and cannot be justified. SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SUBSEQUENT INJURY TRUST FUND SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number: FS-489-98-01 For the year under review, internal accounting control procedures ofthe Subsequent Injury Trust Fund did not provide for an adequate separation of duties in the perfonnance ofcertain accounting functions and related procedures in the following control categories: (1) Cash and Cash Equivalents (4) Employee Compensation (2) Revenues/Receivables/Receipts (5) General Ledger (3) Expenditures/Liabilities/ Disbursements (6) General Fixed Assets/ Property Management This condition was a result of management's decision to limit the number of administrative staff made responsible for the supervisory review and perfonnance of accounting functions. Management should continue to review the accounting procedures in place. Even though the Subsequent Injury Trust Fund has limited administrative personnel, management could design and implement procedures which would enhance segregation of duties associated with the above categories.