Management report, Judicial Branch, an organizational unit of the state of Georgia, year ended June 30, 2001

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MANAGEMENT REPORT

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JUDICIAL BRANCH

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AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA

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YEAR ENDED JUNE 30, 2001

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Russell W. Hinton

state Auditor

JUDICIAL BRANCH

MANAGEMENT REPORT



- TABLE OF CONTENTS -

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHffiITS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGET FUND

1

B SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES

CONWARED TO BUDGET

BUDGET FUND

2

C RECONCILIATION OF SALARIES AND TRAVEL

3

SECTION II 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

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DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W.. Suite 214 Atlanta. Georgia 30334-X400
December 19,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Justices of the Supreme Court of Georgia Judges of the Court of Appeals of Georgia Members of the Executive Committee of the Council of Superior Court Judges Members of the Prosecuting Attorneys' Council of Georgia Members of the Executive Committee of the Council of Juvenile Court Judges Trustees of the Institute of Continuing Judicial Education Members of the Georgia Magistrate Courts Training Council Members of the Board of the Judicial Council Members of the Judicial Qualifications Commission Members of the Executive Committee of the Georgia Indigent Defense Council Members of the Georgia Courts Automation Commission Members of the Office of Dispute Resolution Honorable Dana Russell, Commissioner Department of Administrative Services
and Honorable David L. Ratley, Director Administrative Office of the Courts
Ladies and Gentlemen:
As part ofour audit ofthe statutory basis financial statements ofthe State ofGeorgia presented in the State ofGeorgia Report ofthe State Auditor, the general purpose financial statements ofthe 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, 2001, we have performed certain audit procedures at the Judicial Branch. Accordingly, the financial statements and compliance activities of the Judicial Branch 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 Judicial Branch as ofand for the year ended June 30, 2001. The particular information provided is enumerated in the Table of Contents.

This report is intended solely for the information and use ofmanagement ofthe Judicial Branch and members ofthe various organizations comprising the Judicial Branch and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
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Rus ell W. Hinton State Auditor RWH:gp


SECTION I SELECTED FINANCIAL INFORMATION

JUDICIAL BRANCH ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30, 2001
FUND BALANCE - JULY 1, 2000 Reserved Surplus
ADDITIONS Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures Exhibit "B" Prior Year's Checks Voided
DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 2000 Adjustments to Prior Year's Accounts Receivable Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCE - JUNE 30, 2001
SUMMARY OF FUND BALANCE Reserved Federal Financial Assistance Food Stamp Prosecution Agreement Georgia Bar Foundation Grant
Surplus

EXHIBIT "A"

$ 4,153,782.48 722,254.93
$ 4,876,037.41
$ 349,521.G5
5,346,891.59 4,113.12
$ 5,700,526.36

$ 722,254.93 3,051.00
4,153,782.48 $ 4,879,088.41
$ 5,697,475.36

$

18,031.32

892,950.97

4,302,380.26

$ 5,213,362.55
484,112.81

$ 5,697,475.36

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JUDICIAL BRANCH SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30, 2001

EXHIBIT "B"

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

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 121,556,485.00 $ 121,556,485.00 $

5,850,373.25

4,405,894.35

5,455.744.21

8,629,433.08

$ 132,862,602.46 $ 134,591,812.43 $

0.00 -1,444,478.90 3,173,688.87
1,729,209.97

0.00

4,153,782.48

4,153,782.48

$ 132,862,602.46 $ 138,745,594.91 $ _--=5,:.;:8,..;:;;82::.:"9;:..:9:.:::;2~.4...;;..5

EXPENDITURES
Personal Services Other Operating Prosecuting Attorney's Council Judicial Administrative Districts Payment to Council of Superior Court Clerks Payment to Resource Center Computerized Information Network

$ 16,049,110.00 $
108,605,624.77 4,086,805.35 2,786,778.34 34,284.00 700,000.00 600,000.00

15,825,919.59 $ 109,635,997.08
3,704,833.45 2,897,673.05
34,281.67 700,000.00 599,998.48

223,190.41 -1,030,372.31
381,971.90 -110,894.71
2.33 0.00 1.52

$ 132,862,602.46 $ 133,398,703.32 $ _ _-..:::5.::.;36:.!.,1.:.:0:..::.0:;:.8.::..6

Excess of Funds Available over Expenditures

$ 5,346,891.59 $ =~5~,3~46~,8~9:..:.1;,;;,:.5;g,,9

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JUDICIAL BRANCH RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

Totals per Annual Supplement
Accruals June 30, 2000 June 30, 2001
Amounts Paid to Employees' Retirement System of Georgia for Salaries of Retired District Attorneys and Superior Court Judges for the Period July 1, 2000 through June 30, 2001
Unidentified Variance

SALARIES

TRAVEL

$ 73,106,553.75 $ 1,170,256.71

-2,400.00 212,424.88

22,734.87

2,159,528.75 747.61
$ 75,476,854.99 $ 1,192,991.58

SUMMARY OF SALARIES AND TRAVEL BY OBJECT
Personal Services Other Operating Prosecuting Attorney's Council Judicial Administrative Districts Computerized Information Network

$ 11,711,471.85 59,792,863.38 $
2,247,363.57 1,725,156.19

1,062,868.96 34,843.22 92,095.73 3,183.67

$ 75,476,854.99 $ 1,192,991.58

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

JUDICIAL BRANCH . AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-430-00-01

Partially Resolved - See Corrective Action/Responses

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CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number: FS-430-00-01

At the present time, the Administrative Office ofthe Courts reconciles all bank statements on a monthly basis. Reconciling items identified are adjusted on the accounting records and/or corrected by the bank. However, some items identified require additional research and will be adjusted accordingly.



SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS


JUDICIAL BRANCH SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Administrative Office of the Courts Finding Control Number: FS-430-01-01
Our examination of the accounting records of the Judicial Branch - Administrative Office of the Courts disclosed deficiencies in the management of cash assets as follows:
(1) The June 30, 2001, bank reconciliations were not prepared timely for the two bank accounts maintained: Wachovia - General Operating Account and Wachovia - Payroll Account.
(2) Reconciling items identified during the bank reconciliation process were not corrected in a timely manner. As ofJune 30, 2001, reconciling items of$368,045.57 on the General Operating Account and $272,691.96 on the Payroll Account dating from August 1998 had not been corrected.
(3) Reconciling items were inadequately documented and/or identified in the two bank reconciliations.
These deficiencies were a result of the Administrative Office of the Courts' failure to adequately manage cash assets of the Agency.
The Administrative Office of the Courts should establish procedures to ensure that monthly bank statements are reconciled with the accounting records on a timely basis.
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Prosecuting Attorneys' Council Finding Control Number: FS-430-01-02
Our examination ofthe accounting records ofthe Judicial Branch - Prosecuting Attorneys' Council disclosed deficiencies in the management of cash assets as follows:
(1) The June 30, 2001, bank reconciliation for the Bank of America - General Operating Account was not prepared in a timely manner.
(2) Reconciling items identified during the bank reconciliation process were not corrected in a timely manner. As of June 30, 2001, reconciling items of$17,561.68 on the General Operating Account dating from Fiscal Year 2000 had not been corrected.
(3) Reconciling items were inadequately documented and/or identified.
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JUDICIAL BRANCH SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Prosecuting Attorneys' Council Finding Control Number: FS-430-01-02
These deficiencies were a result of a failure by the Prosecuting Attorneys' Council to adequately manage cash assets of the Agency.
The Prosecuting Attorneys' Council should establish procedures to ensure that monthly bank statements are reconciled with the accounting records on a timely basis.
REVENUESIRECENABLESIRECEIPTS GENERAL LEDGER Deficiencies in the Budget Fund Administrative Office of the Courts Finding Control Number: FS-430-01-03
Our examination of the accounting records of the Judicial Branch - Administrative Office of the Courts disclosed the following deficiencies in maintaining revenues/receipts on a program basis:
(1) The General Ledger does not adequately identify/separate activity on a program/project basis.
(2) RevenuelReceipts are not recorded in a timely manner to a program/project.
These deficiencies were a result of the Administrative Office of the Courts' failure to adequately record revenues/receipts on a program basis.
The Administrative Office of the Courts should establish procedures to ensure that all revenues/receipts are recorded correctly on a timely basis by program/project.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacy in Operation of Property Management System Superior Courts - Department of Administrative Services Finding Control Number: FS-430-01-04
Our review of the General Fixed AssetsIProperty Management System of the Judicial Branch Superior Courts/Department ofAdministrative Services disclosed the Superior Courts/Department of Administrative Services did not maintain an equipment inventory at June 30, 2001.
The Department is required to maintain an inventory in accordance with provisions ofState laws and regulations.
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JUDICIAL BRANCH SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
,
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacy in Operation of Property Management System Superior Courts - Department of Administrative Services Finding Control Number: FS-430-01-04 The condition was caused by the Department's failure to follow guidelines for maintaining equipment inventory. The Superior Courts/Department of Administrative Services should establish procedures to ensure that equipment inventory records are maintained in accordance with State laws and regulations. EMPLOYEE COMPENSATION Overpayment ofEmployee Prosecuting Attorneys' Council Finding Control Number: FS-430-01-05 Our examination ofthe accounting records ofthe Judicial Branch - Prosecuting Attorneys' Council disclosed a deficiency in the management of employee compensation. A review of compensation paid noted compensatory leave accrued in the amount of$31,963.47 was paid to an employee. This payment is not allowed by Prosecuting Attorneys' Council policies. This deficiency was a result ofa failure by the Prosecuting Attorneys' Council to adequately manage employee compensation policies ofthe Agency. The Prosecuting Attorneys' Council should seek reimbursement of the $31,963.47 and establish procedures to ensure employees are paid in accordance with Council policies.
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