Audit report, state of Georgia, Department of Labor, year ended June 30, 1994

GA 8).800
.Rl
L3 \993-c:rq
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334

AUDIT REPORT STATE OF GEORGIA DEPARTMENT OF LABOR YEAR ENDED JUNE 30, 1994

DEPARTMENT OF LABOR - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

ALL FUND TYPES

5

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

6

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

8

E STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

STATE REVENUE COLLECTIONS FUND

9

F COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS

10

G NOTES TO THE FINANCIAL STATEMENTS

11

SUPPLEMENTARY INFORMATION

H COMBINING BALANCE SHEET

FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS

24

I COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS

25

J STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE -AGENCY FUND

26

SCHEDULES

1 SCHEDULE OF APPROVED BUDGET

27

2 CASH AND CASH EQUIVALENTS

28

3 SCHEDULE OF GOVERNOR'S EMERGENCY FUND

29

DEPARTMENT OF LABOR - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SUPPLEMENTARY INFORMATION

SCHEDULES

4 SCHEDULE OF FEDERAL REVENUES

30

5 SCHEDULE OF OTHER REVENUES RETAINED

31

6 SCHEDULE OF OTHER OPERATING EXPENSES

34

7 RECONCILIATION OF SALARIES

35

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174
TAX RATIO (404) 656-0494

~.epa:rtm.eut nf J\uhits
254 WASHINGTON STREET, S. W. ROOM 214
/\thmtn, ~eorgia 30334-8400
December 16, 1994

FINANCIAL AUDITS (404) 656-2180
PROGRAM AUDITS (404) 656-2006

Honorable Zell Miller, Governor Members of the General Assembly of Georgia
and Honorable David B. Poythress, Commissioner Department ofLabor
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through G) ofthe Department ofLabor as of and for the year ended June 30, 1994. These financial statements are the responsibility of the Department's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note I, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position (statutory basis) of the Department of Labor as of June 30, 1994, and the results ofits operations (statutory basis) for the year then ended, on the basis of accounting described in Note I.
As discussed in Note 7, financial statements included in this report are presented on the Statutory Basis of Accounting, whereas in prior years, such statements were presented in accordance with generally accepted accounting principles.
94ARL-IX

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibits H through J and Schedules I through 7) is presented for purposes of additional analysis and is not a required part of the financial statements of the Department of Labor. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:jy 94ARL-IX

FINANCIAL STATEMENTS - 1-

DEPARTMENT OF LABOR COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1994

ASSETS
Cash and Cash Equivalents (See Schedule)
Accounts Receivable Federal Financial Assistance Other
Prepaid Items
Inventories
Fixed Assets Land and Buildings Equipment
Amount to be Provided for Payment of Accrued Compensated Absences
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accrued Salaries Accounts Payable Deferred Revenue Federal Financial Assistance Payroll Withholdings Funds Held for Others Compensated Absences
Total Liabilities
Fund Equity Investment in General Fixed Assets Fund Balances Reserved Inventories (Federal Funds) State Revenue Collections Fund Unemployment Compensation Contributions and Benefits Unreserved Designated Surplus Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

GOVERNMENTAL FUND TYPES

STATE REVENUE

fil!Qil

COLLECTIONS

$1,115,161.23 $_ _ _..::,,1.:.26"-'.'-'-7~0
$ 8,845,377.73 190,888.16
$ 9,036,265.89 $ 26,121.48 $ 231,912.77

$10,409,461.37 $======1..,26=7=0

$ 322,230.04 7,063,675.71 2,485,735.62 195,070.76
$10,066,712.13

$ 231,912.77
$

126.70

110,836.47 $ 342,749.24 $_ _ _...1...2..6........7-.a.O $10,409,461.37 $====1==2;;.6...1...0.

The notes to the financial statements are an integral part of this statement. - 2-

EXHIBIT "A"

FIDUCIARY FUND TYPES

EXPENDABLE

TRUST

AGENCY

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTAL (Memorandum Only)

$1,217,309,464.13 $

$

299,267.95

6,352,986.87

$ 6,652,254.82

961. 93

$ 1,218,425,713.99

$

9,144,645.68

6,543,875.03

$ 15,688,520.71

$

26 121. 48

$

231 912.77

$ 42,963,484.30 30,191,998.81
$ 73,155,483.11

$ 42,963,484.30 30,191,998.81
$ 73,155,483.11

$ 6,442,962.53 $

6,442,962.53

$1!22319611718.95 $

961.93 $ 73,155,483.11 $ 6,4421962.53 $ 1,313,970,714.59

$

1,778.00

$

$

1 778.00 $

$1,223,807,956.95
151,984.00 $1,223,959,940.95
$1,223,9611718.95 $

961.93 961. 93

$
$ 6,442,962.53 $ 6,442,962.53 $

322,230.04 7,063,675.71
2,487,513.62 195,070.76 961.93
6,442,962.53
16,512,414.59

$ 73,155,483.11

$ 73,155,483.11

231,912.77 126.70
1,223,807,956.95

$ 73,155,483.11

110,836.47 151 984.00
$ 1,297,458,300.00

961. 93 $ 73,155,483.11 $ 6,442,962.53 $ 1,313,970,714.59

- 3-

--f_._
I ,,\
1vrv~

DEPARTMENT OF LABOR COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS)
ALL FUND TYPES YEAR ENDED JUNE 30. 1994

EXHIBIT "B"

FUND BALANCES - JULY 1

GOVERNMENTAL FUND TYPES

STATE

REVENUE

BUDGET

COLLECTIONS

FIDUCIARY FUND TYPE EXPENDABLE
TRUST

TOTAL (Memorandum Only)

Reserved Unreserved
Designated Surplus

$ 1,457,399.20 $ 35,537.85

0.00 $1,055,807,758.38 $ l,057,265,157.58 35,537.85

$1,492,937.05$

0.00 $1,055,807,758.38$ 1,057,300,695.43

Restatement of Fund Balances Change in Accounting Principles (Net) (See Note 7)

-1,224.825.22

4,097.63

-1.220.727.59

FUND BALANCES - JULY 1 (Restated)

$ 268,111.83 $

4,097.63 $1.055.807.758.38 $ 1.056.079,967.84

ADDITIONS

Adjustments to Prior Year's Accounts

Payable

$ 899,576.47

Cash Receipts for the Year

Exhibit "E"

$17,577,392.58

Excess of Funds Available over

Expenditures

Exhibit "C"

1,218,739.79

Excess of Revenues over Expenditures

Exhibit "F"

----- $

$ 168,152.182.57

899,576.47 17,577,392.58
1,218,739.79 168.152, 182. 57

$ 2,118,316.26 $17,577,392.58$ 168,152,182.57 $ 187,847.891.41

DEDUCTIONS

Unreserved Fund Balance (Surplus)

Returned to Office of Treasury and

Fiscal Services

Year Ended June 30, 1993

$ 35,537.85

Year Ended June 30, 1994

1,774,079.00

Adjustments to Prior Year's Accounts

Receivable

1,488.02

Cash Disbursements for the Year

Exhibit "E"

$17,581,363.51

Reserved Fund Balance Carried Over

from Prior Year as Funds Available 232,573.98

$

35,537.85

1,774,079.00

1,488.02

17,581,363.51

232,573.98

$ 2,043,678.85 $17,581,363.51

$_--"-1-9,-6=2_5___,0...4....2.._._3=6

FUND BALANCES - JUNE 30

(To Exhibit "A"

$ 342.749.24 $....,-=.....1.=2=6=.7=0 $1,223.959,940.95 $ 1,224.302.816.89

The notes to the financial statements are an integral part of this statement. - 5-

DEPARTMENT OF LABOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

FUNDS AVAILABLE REVENUES
STATE APPROPRIATION General Appropriation Governor's Emergency Fund (See Schedule) Total State Appropriation
FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED (S~e Schedule)
Total Revenues CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Federal Financial Assistance - Inventories

Total Funds Available

PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F. I .C.A. Retirement Health Insurance Personal Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Assessments by Merit System Employee Assistance

EXPENDITURES

REGULAR OPERATING EXPENSES
Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Direct Benefits - Medical Care and Public Assistance Grants to Counties, Cities and Civil Divisions Other Operating Expenses (See Schedule) Duplicating and Rapid Copy

TRAVEL
EQUIPMENT
Equipment Purchases Rental of Equipment

The notes to the financial statements are an integral part of this statement.
- 6-

EXHIBIT "C" Page 1
$16,082,059.00 25,000.00
$16,107,059.00 128,629,842.96 1,282,596.23
$146,019,498.19
232,573.98

$ 52,569,104.48
3,661,021.02 7,940,549.08 6,173,274.98
500,974.00 54,636.09
280,183.91 267,323.39 40,499.90
$ 71,487,566.85

$

28,377.91

1,439,254.07

1,787,517.86

1,190,242.15

48,609.07

39,987.06

1,048,201.39

19,655.17

610,908.01

232.66

$ 6,212,985.35

$ 1,231,913.74

$ 465,319.97 362,729.58
$ 828,049.55

DEPARTMENT OF LABOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

COMPUTER CHARGES
Other Costs Supplies and Materials Repairs and Maintenance Other Operating Expenses (See Schedule)
Software Equipment
Equipment Purchases Lease/Purchase of Equipment Rental of Equipment Per Diem, Fees and Contracts Per Diem and Fees Contracts Computer Billings, DOAS

EXPENDITURES

REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS
Per Diem and Fees Contracts

OTHER
PER DIEM, FEES AND CONTRACTS (JTPA) Per Diem, Fees and Conracts Contracts
Total Expenditures
Excess of Funds Available Over Expenditures

EXHIBIT "C" Page 2
$ 249,658.87 1,012,599.08 44,959.99 1,417,193.61 1,870,362.59 4,860.00 80,599.41 229,604.19 135,403.39 12,006.32
$ 5,057,247.45 $ 1,637,594.78 $ 1,281,286.05
$ 215,340.21 4,086,672.46
$ 4,302,012.67
$ 52,994,675.94 $145,033,332.38
1,218,739.79
$146.252.072.17

The notes to the financial statements are an integral part of this statement. - 7-

DEPARTMENT OF LABOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30, 1994

EXHIBIT "D"

FUNDS AVAILABLE
REVENUES
State Appropriation Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
EXPENDITURES
Personal Services Regular Operating Expenses Travel Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Capital Outlay Per Diem, Fees and Contracts (JTPA) Payments to State Treasury

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$16,107,059.00$ 16,107,059.00$

0.00

158,432,750.00 128,629,842.96 -29,802,907.04

1,969,158.00 1,282,596.23

-686,561.77

$176,508,967.00 $146,019,498.19 $-30,489,468.81

0.00

232,573.98

232,573.98

$176,508,967.00 $146,252,072.17 $-30,256,894.83
============== -------------- --------------

$ 73,459,548.00 $ 7i,487,566.85 $ 1,971,981.15

7,687,555.00 6,212,985.35 1,474,569.65

1,604,370.00 1,231,913.74

372,456.26

1,193,641.00

828,049.55

365,591.45

8,650,000.00 5,057,247.45 3,592,752.55

2,184,981.00 1,637,594.78

547,386.22

1,696,607.00 1,281,286.05

415,320.95

4,705,547.00 4,302,012.67

403,534.33

4,270,000.00

0.00 4,270,000.00

69,282,639.00 52,994,675.94 16,287,963.06

1,774,079.00

0.00 1,774,079.00

-------------- -------------- --------------

$176,508,967.00 $145,033,332.38$ 31,475,634.62
============== -------------- --------------

Excess of Funds Available over Expenditures

$ 1,218,739.79 $ 1,218,739.79
============== ==============

The notes to the financial statements are an integral part of this statement.
- 8-

DEPARTMENT OF LABOR STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30 1 1994

EXHIBIT "E"

CASH RECEIPTS STATE REVENUE COLLECTIONS
Unemployment Compensation Insurance Administrative Assessments on Employers' Contributions Interest Earned on Late Employers' Contributions Penalties on Late Employers' Contribution Reports
Safety Engineering Fees Total Cash Receipts
CASH AND CASH EQUIVALENTS - JULY 1, 1993
DISBURSEMENTS TRANSFERS
To Office of Treasury and Fiscal Services CASH AND CASH EQUIVALENTS - JUNE 30, 1994

$12,531,029.07 1,085,146.03 1,901,833.56 $15,518,008.66 2,059,383.92 $17,577,392.58 4,097.63
$17,581,490.21
$17,581,363.51 126.70
$17,581,490.21

The notes to the financial statements are an integral part of this statement.
- 9-

DEPARTMENT OF LABOR COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS
YEAR ENDED JUNE 30. 1994

EXHIBIT "F"

REVENUES Contributions by Employers Refunds Federal Revenues Disaster Relief Assistance Benefits Emergency Unemployment Compensation Program Ex-Servicemen Benefits Federal Employees Benefits Trade Readjustment Assistance Project Interest Income Interest Earned on Employers' Escrow Deposits Interest Earned on Trust Fund Deposits Other Employers' Escrow Deposits (Net of Refunds) KEDS Settlement Rents, 903-A of Social Security Act, as Amended Total Revenues
EXPENDITURES Unemployment Benefits Regular Benefits To Claimants Refunds Reimbursable - County, School Systems and City Employees To Claimants Reimbursed Reimbursable - Hospitals, Institutes of Higher Education and State Government To Claimants Reimbursed Reimbursable - Non-Profit Organizations To Claimants Reimbursed To Ex-Servicemen Regular Benefits Refunds To Federal Employees Regular Benefits Refunds Combined Wage Claimant Plan to Other States Regular Benefits Disaster Relief Assistance To Claimants Emergency Unem~loyment Compensation Program Regular Benefits Refunds Trade Readjusment Assistance Project To Claimants Refunds Section 903-A of Social Security Act, as Amended Title IX Funds - Purchase of Building Escrow Unemployment Tax Payment Total Expenditures
Excess of Revenues over Expenditures FUND BALANCE JULY 1. 1993

TOTALS YE:JIR EROED
JORE 30. I!Hl<l'. JORE 30. I993

$ 361,601,499.88 $ 328,170,966.85

-4,582,925.22

-4,576,734.03

38,284.00 79,574,122.17 10,057,720.22 8,385,865.26
844,339.00

48,327.00 171,503,812.19
15,603,135.72 10,162,073.73
821,352.00

9,928.22 76,123,563.08

91,479.88 73,137,616.36

51,044.00 151,984.00 109 .119. 00

9,986.25 0.00
332,230.43

$ 532.364.543.61 $ 595.304.246.38

$ 262,431,638.62 $ 304,816,549.08

-3,686,791.02

-3 ,695,071. 52

4,246,403.84 -4,246,403.84

5,795,490.63 -5,795,490.63

2,946,020.82 -2,946,020.82

3,938,882.51 -3,938,882.51

2,641,121.01 -2,641,121.01

2,990,984.74 -2,990,984.74

10,095,064.09 -37,343.87

15,625,043.10 -21,907.38

8,458,550.82 -72,685.56

10,222,227.86 -60,154.13

6,549,966.15

9,013,976.83

38,284.00

48,327.00

79,787,272.77 172,350,772.19

-210,146.62

-846,960.00

847,460.00 -3,121.00

824,838.00 -3,486.00

0.00

1,214,519.82

14,212.66

0.00

$ 364.212.361.04 $ 509.488.674.85

$ 168,152,182.57 $ 85,815,571.53

1.055.807.758.38 969.992.186.85

FUND BALANCE JUNE 30. 1994

$1.223.959.940.95 $1.055.807.758.38

The notes to the financial statements are an integral part of this statement. - 10 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Department of Labor, an organizational unit of the State of Georgia, is part of the executive branch of the government ofthe State ofGeorgia. The Department is empowered to administer Federal labor programs and to enforce various State laws pertaining to labor. The Commissioner ofLabor is the chief executive officer of the Department of Labor and is responsible for supervision of the functions of the Department. The Commissioner is elected by the voters in a statewide election for a term of four years. In the event of a vacancy in the position of Commissioner during the period between election dates, the Governor appoints a Commissioner to serve until the next scheduled election.
The Department ofLabor does not have authority to determine the amount of funding it will receive from the State ofGeorgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Department also does not have authority to retain unexpended State appropriations (surplus) for any given
fiscal year. Accordingly, the Department ofLabor is included within the State of Georgia reporting entity for
financial reporting purposes because ofthe significance ofits legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The Department ofLabor uses funds and account groups to report on its financial position and the results of its operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPES
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1993-1994. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
STATE REVENUE COLLECTIONS FUND - The fund used to account for the collection of specific revenues ofthe State ofGeorgia as provided by statute or administrative action and the subsequent transfer of such funds to the Office of Treasury and Fiscal Services. This presentation differs from generally accepted accounting principles in that such activity should be included in the General Fund of the governmental organization.

- 11 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
FIDUCIARY FUND TYPES
EXPENDABLE TRUST FUND - The fund used to account for assets, revenues and expenditures utilized in accordance with the provisions of various trusts established by individual agreement, statute or administrative action. Expendable trust funds are used when both the principal and revenues earned on such principal may be expended for the purposes designated in the trust agreement.
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at historical cost. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds and expendable trust funds should be accounted for using the current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets.
GOVERNMENTAL FUND TYPES BUDGETFUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under
the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they
become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include primarily State appropriations, Federal grants and entitlements,and certain amounts earned under operating agreements with other parties. Further,
the modified accrual basis ofaccounting calls for expenditures, other than accrued interest of general long-term
debt, to be recorded when the related fund liability is incurred.
- 12 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based in part on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances ofthe Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
STATE REVENUE COLLECTIONS FUND The State Revenue Collections Fund is maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations of the State of Georgia. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred. The State Revenue Collections Fund, which should be included in the General Fund in accordance with generally accepted accounting principles, should be maintained on the modified accrual basis of accounting.
FIDUCIARY FUND TYPES EXPENDABLE TRUST FUNDS
Revenues and expenditures of Expendable Trust Funds are recorded in accordance with the modified accrual basis ofaccounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include primarily interest income and certain amounts earned under terms of the trust agreements. Expenditures are recorded when the related fund liability is incurred.

- 13 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING FIDUCIARY FUND TYPES AGENCY FUNDS
The Agency Fund is custodial in nature in that assets are equally offset by liabilities to other funds, governmental units, or individuals. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.
BUDGET Appropriation allotment~ to the Department ofLabor are on the basis ofa budget submitted by the Department and approved by the Legislature and the Governor. The budget is compiled in the same manner as all State departments and expenditures are classified by budget unit object classes as provided in Act No. 608 of Georgia Laws 1993 (as approved April 28, 1993) and amended by Act No. 622 of Georgia Laws 1994 (as approved February 8, 1994), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1993-1994.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand, demand deposits with banks and other financial institutions, funds on deposit with the U. S. Treasury and cash management pools that have the general characteristics ofdemand deposit accounts in that the Department may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
INVENTORIES Consumable supplies inventories are valued at cost using the average weighted method and print shop inventories are valued at cost using the first-in, first-out (FIFO) method on the Combined Balance Sheet (Statutory Basis). The consumption method is used to account for the use of inventories. Under the consumption method, the costs ofinventories are recorded as expendtitures when consumed rather than when purchased.
DEFERRED REVENUE The Department of.Labor reports deferred revenue on the Combined Balance Sheet (Statutory Basis). Deferred revenues arise when a potential revenue does not meet the "available" criterion for recognition in the current period. Deferred revenues also arise when resources are received by the Department before it has a legal claim to them, as when grant monies are received prior to qualifying expenditures being incurred. In subsequent periods, when the revenue recognition criterion is met, or when the Department has a legal claim to the resources, the liability for deferred revenue is removed from the Combined Balance Sheet (Statutory Basis) and revenue is recognized.
RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:
- 14 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT"G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE INVENTORIES Reported inventories, under the consumption method, are offset by a portion ofFederal funds to provide working capital for managing a reasonable level of inventories.
STATE REVENUE COLLECTIONS FUND The balance ofrevenues collected but not transmitted to the Office of Treasury and Fiscal Services at fiscal year end. These funds are required by the Official Code of Georgia Annotated to be transferred to the Office of Treasury and Fiscal Services and are not available for use by the Department.
UNEMPLOYMENT COMPENSATION CONTRIBUTIONS AND BENEFITS The balance ofunemployment compensation contributions not yet expended at fiscal year end. This amount is restricted for expenditure in future years.
COMPENSATED ABSENCES Compensated absences represent obligations of the Department relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation of funds each year to the Department to cover the cost of annual leave paid to terminated employees.
The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group
for governmental funds.
MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Statements (Statutory Basis) are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results ofoperations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
COMPARATIVE DATA Due to the change in accounting principles as discussed in Note 7, comparative data for the prior year have not been presented in all of the accompanying financial statements as such data would mak:ecertain of these statements unduly complex and difficult to understand.

- 15 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State ofGeorgia.
(2) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State of Georgia.
(3) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates ofindebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation,
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State of Georgia the option of exempting demand deposits from the collateral requirements.
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. These bank balances are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.
Category 1 - Amounts covered by depository insurance or collateralized with securities (at market
value) held by the Department or by its agent in the Department's name.
Category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust department or agent in the Department's name.
- 16 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS Category 3 - Amounts collateralized with securities (at market value) held by the financial institution or by its trust department or agent, but not in the Department's name, and amounts uncollateralized.

Carrying Amount

Bank
Balance

Risk Categories

2

3

Cash Deposits

s 3,54 756.54 s 8 25180667 s 1084674 49 s====o...,oo= s 1161132 18

CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amounts shown below include amounts maintained with the United States Treasury and in an investment pool by the Office of Treasury and Fiscal Services.

T:xve of Investment
United States Treasury State Investment Pool

Carrying Amount

Market Value

$1,217,697,335.60 $1,217,697,335.60

371,801.85

371,801.85

$1,218,069.137 45 $1.218.069,137.45

NOTE 3: LESSOR OPERATING LEASES

The Department of Labor has purchased certain land and buildings for use as its principal offices. These assets, referred to as the Sussex Complex, are recorded in the General Fixed Assets Account Group. Certain portions ofthe Sussex Complex have been leased to other parties. Values of those portions leased have not been determined. Total revenue for such leases were $266,722.20 for the year ended June 30, 1994. Future minimum rentals to be received are as follows:

Fiscal Year Ending June 30

1995 1996 1997 1998 1999 2000 and Subsequent

$ 142,345.23 33,021.36 33,516.60 34,019.28 34,529.52
498,959.10

$ 776,391.09

- 17 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 4: OPERATING LEASES

The Department ofLabor has entered into certain agreements to lease real property and equipment which are classified as operating leases. These leases generally contain provisions that, at the expiration date of the original term of the lease, the Department of Labor has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as of June 30, 1994, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1995

$ 1.103,528.84

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1994, totaled $2,129,532.84.

NOTE 5: CHANGES IN GENERAL FIXED ASSETS

The following is a summary of changes of equipment in theGeneral Fixed Assets Account Group during the fiscal year:

Land and Buildings

Equipment

Balance July 1, 1993

$42,963,484.30 $27,278,798.95 $70,242,283.25

Additions Deductions

0.00 3,525,495.97 3,525,495.97

_ _____,;;o=o'-=-o

612,296.11

612,296.11

Balance June 30, 1994

$42,963,484.30 $30,191,998.81 $73,155,483.11

NOTE 6: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1994, follows:

- 18 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 6: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT

Compensated Capital Lease Absences Commitments

Total

Balance July 1, 1993

$ 5,739,019.55 $ 4,860.00 $ 5,743,879.55

Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits (*)
Deductions

246,082.67 457,860.31

4,860.00

246,082.67 457,860.31
4,860.00

Balance June 30, 1994

s 6,442 962.53 s.======'o~o=o s 6 442,962.53

(*) Includes related fringe benefits applicable to compensated absences at July 1, 1993.

NOTE 7: CHANGE IN ACCOUNTING PRINCIPLES

For the year under review, the financial statements of the Georgia Department of Labor are presented in conformity with a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations ofthe State ofGeorgia (Statutory Basis). In prior years, these financial statements were presented in accordance with generally accepted accounting principles.

To reflect this change, fund balance adjustments of $1,224,825.22 and $4,097.63 have been made to the Budget Fund and State Revenue Collections Fund, respectively, and are reflected on Exhibit "B" of these financial statements. In addition, the State Revenue Collections Fund, presented as a Fiduciary Fund Type Agency Fund in fiscal year 1993, is being presented as a Governmental Fund Type in the fiscal year 1994 financial statements.

NOTE 8: DEFERRED COMPENSATION PLAN

The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion of their salary until future years. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights ofthe State ofGeorgia subject only to the claims ofthe State's general creditors. Participant's rights

- 19 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 8: DEFERRED COMPENSATION PLAN
under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value ofthe deferred account ofeach participant. Financial information relative to the plan is presented in the financial report of the State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1994.
NOTE9: RETIRE:MENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF. GEORGIA The Department of Labor participates in the Employees' Retirement System of Georgia, a single-employer, defined benefit pension plan. The Employees' Retirement System of Georgia was established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The Retirement System is funded through a combination of employee and employer contributions. Employees are required to contribute a graduated percentage ofannual compensation. Employer contributions are for a specified percentage ofactive member payroll determined annually by an actuarial valuation. During the year ended June 30, 1994, the Department contributed $7,940,549.08 to the Employees' Retirement System ofGeorgia. Participation in the Retirement System is not segregated by employee groups of individual governmental units and the Department has no further liability under the retirement system other than future employer contributions as established for each fiscal year. Information relative to the plan description, funding status and historical trends is presented in the financial report ofthe Employees' Retirement System of Georgia for the year ended June 30, 1994.
GEORGIA DEFINED CONTRIBUTION PLAN The State ofGeorgia also provides retirement coverage for temporary, seasonal, and part-time employees who are not eligible for membership in the Employees' Retirement System of Georgia referred to above through a single-employer defined contribution plan. The Georgia Defined Contribution Plan was established by the General Assembly of Georgia and is a.dministered by the Board of Trustees of the Employees' Retirement System of Georgia. Covered employees are required to contribute 7.5% of their gross salary, with no matching contribution by the employer. A member who terminates employment may apply for a refund of contributions and interest. Benefits are based solely on the amount contributed by the employee plus investment earnings. Upon discretion ofthe Board ofTrustees, members who leave employment with less than $3,500.00 credited to their account may be required to make a lump-sum withdrawal. Members are eligible to retire at the age of65 with the option ofreceiving a periodic payment based on mortality tables and interest accumulation as adopted by the Board of Trustees of the Employees' Retirement System of Georgia. Information relative to the plan description and funding status is presented in the financial report of the Employees' Retirement System of Georgia for the year ended June 30, 1994.
NOTE 10: LEAVE POLICIES
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
- 20-

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30, 1994

EXHIBIT"G"

NOTE 10: LEAVE POLICIES
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences
Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 11: CONTINGENCIES
Litigation, claims and assessments filed against the Department ofLabor, if any, are generally considered to be actions against the State ofGeorgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self- insurance which provides coverage for such litigation, claims and assessments. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1994.
AU. S. Department ofLabor review ofthe Job Training Partnership Act program administered by the Georgia Department ofLabor resulted in a request for refund of disallowed costs amounting to $1,538,039.00. The review covered fiscal years 1984 through 1992 with the U. S. Department of Labor issuing a Final Determination letter dated November 12, 1993. The Georgia Department of Labor filed an administrative appeal for a hearing on the disallowed costs on December 7, 1993. As of the date of this report, a final
resolution ofthe appeal had not been made and we are unable to determine the extent of liability, if any, in this
matter.
In addition, on July 15, 1994, the Georgia Department ofLabor (GDOL) received a formal report of findings
and questioned costs based on a review performed by the U. S. Department of Labor on the Job Training Partnership Act (JTPA) program administered by the GDOL. This review was performed in GDOL's designated Service Delivery Area (SDA) 8 and was directed at the administrative agent contracted by GDOL to deliver JTPA services in SDA 8. Subsequent to the U. S. Department of Labor's on-site review, the
administrative agent ceased operations. This formal report is the first step of a process that could result in the
U. S. Department of Labor issuing a Final Determination Letter and requesting refund of disallowed costs. Approximately $3,800,000.00 in questioned costs were noted in the report. However, as ofthe date of this report we are unable to determine the extent ofliability, if any, in this matter.

- 21 -

DEPARTMENT OF LABOR NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 12: BONDING INFORMATION
The Commissioner and all employees of the Department of Labor are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1994. Under this agreement the Public Employee Dishonesty Coverage insures the Department to a maximum of$1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance ofDuty Coverage insures the Department to a maximum of $100,000.00 against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.
All employees ofthe Department ofLabor are also bonded under a Commercial Crime Policy written by the United States Fire Insurance Company, their Policy No. 626 011675 2, on which the premium was paid to October 1, 1994. Under this additional public employee dishonesty coverage, the policy insures the Department to a maximum of $4,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

- 22 -

SUPPLEMENTARY INFORMATION - 23 -

DEPARTMENT OF LABOR COMBINING BALANCE SHEET FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS
JUNE 30, 1994

EXHIBIT "H"

ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other

UNEMPLOYMENT COMPENSATION CONTRIBUTIONS AND BENEFITS FUND

KEDS CORPORATION SETTLEMENT FUND

TOTAL

$1,217,157,480.13 $

151,984.00$ 1,217,309,464.13

299,267.95 6,352,986.87

299,267.95 6,352,986.87

Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Deferred Revenue
Fund Equity Reserved For Unemployment Compensation Contributions and Benefits Unreserved Undesignated
Total Fund Equity

$1,223,809,734.95$

151,984.00$ 1,223,961,718.95

================= ================ =================

$

1,778.00

$

1,778.00

$ 1,223,807,956.95
$
$1,223,807,956.95$

$ l,223,807,956.95

151,984.00

151,984.00

151,984.00 $1,223,959,940.95

Total Liabilities and Fund Equity

$1,223,809,734.95$

151,984.00$ 1,223,961,718.95

================= ================ =================

See notes to the financial statements.

- 24 -

DEPARTMENT OF LABOR COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 1994

EXHIBIT "I"

UNEMPLOYMENT

COMPENSATION

KEDS CORPORATION

CONTRIBUTIONS

SETTLEMENT

AND BENEFITS FUND

FUND

TOTAL

REVENUES

Contributions by Employers Refunds

$ 361,601,499.B8 -4,582,925.22

$ 361,601,499.88 -4,582,925.22

Federal Revenues Disaster Relief Assistance Benefits Emergency Unemployment Compensation Program Ex-Servicemen Benefits Federal Employees Benefits Trade Readjustment Assistance Project

38,284.00 79,574,122.17 10,057,720.22 8,385,865.26
844,339.00

38,284.00 79,574,122.17 10,057,720.22 8,385,865.26
844,339.00

Interest Income Interest Earned on Employers' Escrow Deposits Interest Earned on Trust Fund Deposits

9,928.22 76,123,563.08

9,928.22 76,123,563.08

Other Employers' Escrow Deposits (Net of Refunds) KEDS Settlement Rents, 903-A of Social Security Act, as Amend

51,044.00 $
109,119.00

151,984.00

51,044.00 151,984.00 1091119. 00

Total Revenues

$ 532.212,559.61 $

151,984.00$ 532,364,543.61

EXPENDITURES

Unemployment Benefits Regular Benefits To Claimants Refunds

$ 262,431,638.62 $ -3,686,791.02

0.00 $ 262,431,638.62 -3, 686,791. 02

Reimbursable - County, School Systems and City Employees To Claimants Reimbursed

4,246,403.84 -4,246,403.84

4,246,403.84 -4,246,403.84

Reimbursable - Hospitals, Institutes of Higher Education and State Government To Claimants Reimbursed

2,946,020.82 -2,946,020.82

2,946,020.82 -2,946,020.82

Reimbursable - Non-Profit Organizations To Claimants Reimbursed

2,641,121.01 -2,641,121.01

2,641,121.01 -2,641,121.01

To Ex-Servicemen Regular Benefits Refunds

10,095,064.09 -37,343.87

10,095,064.09 -37,343.87

To Federal Employees Regular Benefits Refunds

8,458,550.82 -72,685.56

8,458,550.82 -72,685.56

Combined Wage Claimant Plan to Other States Regular Benefits

6,549,966.15

6,549,966.15

Disaster Relief Assistance To Claimants

38,284.00

38,284.00

Emergency Unemployment Compensation Program Regular Benefits Refunds

79,787,272.77 -210,146.62

79,787,272.77 -210,146.62

Trade Readjustment Assistance Project To Claimants Refunds

847,460.00 -3, 121. 00

847,460.00 -3,121.00

Escrow Unemployment Tax Payment

14,212.66

14,212.66

Total Expenditures

$ 364.212,361.04 $_ _ _ __;0e.,:,~0~0 $ 364.212,361.04

Excess of Revenues over Expenditures

$ 168,000,198.57 $

151,984.00$ 168,152,182.57

FUND BALANCE JULY 1, 1993

1,055,807.758.38 _ _ _ _ _o::..:c..:o""'o 1,055.807,758.38

FUND BALANCE JUNE 30. 1994

$ 1.223,807,956.95 $

151,984.00 $ 1.223.959.940.95

See notes to the financial statements.

- 25 -

DEPARTMENT OF LABOR STATEMENT OF CHANGES IN ASSETS ANO LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30 1 1994

EXHIBIT "J"

FUND Seminar/Conference Fund

ASSETS/ LIABILITIES JULY 1, 1993

ADDITIONS

DELETIONS

ASSETS/ LIABILITIES JUNE 30, 1994

$

0.00 $ 12,430.00$ 11,468.07 $

961.93

============= ============= ============= =============

See notes to the financial statements.

- 26 -

DEPARTMENT OF LABOR SCHEDULE OF APPROVED BUDGET
YEAR ENDED JUNE 30, 1994

SCHEDULE "l"

FUNDS AVAILABLE
---------------
REVENUES
--------
State Appropriation Federal Revenues Other Revenues Retained
EXPENDITURES
Personal Services Regular Operating Expenses Travel Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Capital Outlay Per Diem, Fees and Contracts (JTPA) Payments to State Treasury

ORIGINAL

GOVERNOR'S

BUDGET

APPROPRIATION EMERGENCY FUND ADJUSTMENTS
------------- -------------- -----------

TOTAL

$ 16,082,059.00 $

25,000.00

$ 16,107,059.00

144,319,740.00

$14,113,010.00 158,432,750.00

1,969,158.00

1,969,158.00

-------------- -------------- ------------- --------------

$162,370,957.00 $

25,000.00 $14,113,010.00 $176,508,967.00

============== ============== ============= ==============

$ 65,485,271.00 5,121,799.00 $ 1,060,000.00 470,064.00 8,650,000.00 2,184,981.00 1,133,232.00 2,938,892.00 4,270,000.00
69,282,639.00 1,774,079.00

$7,974,277.00$ 73,459,548.00 25,000.00 2,540,756.00 7,687,555.00
544,370.00 1,604,370.00 723,577.00 1,193,641.00
8,650,000.00 2,184,981.00 563,375.00 1,696,607.00 1,766,655.00 4,705,547.00 4,270,000.00 69,282,639.00 1,774,079.00

$162,370,957.00 $ 25,000.00 $14,113,010.00 $176,508,967.00
============== ============== -===--====-== ==============

See notes to the financial statements.

- 27 -

DEPARTMENT OF LABOR CASH AND CASH EQUIVALENTS
JUNE 30, 1994

SCHEDULE "2"

NONINTEREST BEARING ACCOUNTS
Bank South, N.A., Atlanta, Georgia First Southern Bank, Lithonia, Georgia First Union National Bank of Georgia, Atlanta, Georgia NationsBank of Georgia, N.A., Atlanta, Georgia Trust Company Bank, Atlanta, Georgia Wachovia Bank of Georgia, N.A., Atlanta, Georgia
INTEREST BEARING ACCOUNTS
Carver State Bank, Savannah, Georgia First State Bank and Trust Company, Valdosta, Georgia Funds on Deposit with Office of Treasury and Fiscal Services
State Investment Pool Funds on Deposit with United States Treasury
OTHER
Cash on Hand

$

772,459.37

100,000.00

10,809.71

-574,705.86

11,216.23

-416,377.77 $

-96,598.32

$

202,001.54

249,353.32

371,801.85 1,217,697,335.60

1,218,520,492.31

$1,218,423,893.99

1,820.00

$1,218,425,713.99

See notes to the financial statements.

- 28 -

DEPARTMENT OF LABOR SCHEDULE OF GOVERNOR'S EMERGENCY FUND
YEAR ENDED JUNE 30, 1994
Georgia Commission on Women - Operating Expenses for a Program to Honor the First Ladies of Georgia

SCHEDULE "3" $ 25,000.00

See notes to the financial statements.

- 29 -

DEPARTMENT OF LABOR SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30. 1994

PROGRAM
BUDGET FUND
Labor, U. S. Department of Labor Froce Statistics Direct Compensation and Working Conditions Data Direct Employment Service Direct Unemployment Insurance Direct Trade Adjustment Assistance - Workers Direct Employment and Training Assistance Dislocated Workers Direct Employment and Training Research and Development Projects Direct Employment Services and Job Training Pilot and Demonstration Programs Direct Job Training Partnership Act Direct Women's Special Employment Assistance Direct Disabled Veterans Outreach Program Direct Veterans Employment Program Direct Local Veterans Employment Representative Program Direct
Other Federal Assistance Veterans Employment and Training Troops to Teachers Direct National Commission for Employment Policy Subgrant National Occupational Information and Coordinating Committee Subgrant Women's Bureau - Georgia Commission on Women Subgrant

CFDA NUMBER
17. 002 17.005 17.207 17.225 17.245 17.246 17.248 17.249 17.250 17.700 17.801 17.802 17.804
N/A N/A N/A N/A

Total Budget Fund
EXPENDABLE TRUST FUND
Labor, U. S. Department of Unemployment Insurance Direct

17.225

See notes to the financial statements.

- 30 -

SCHEDULE "4"
AMOUNT
$ 1,583, 111. 00 109,121.76
19,193,186.17 41,741,292.44
769,465.37 9,985,465.64
6,450.38 768,409.65 49,887,535.16 16,450.00 2,050,592.30 216,598.00 1,404,846.11
729,376.98 3,890.34
162,561.91 1,489.75
$128,629,842.96
$ 98,900,330.65

DEPARTMENT OF LABOR SCHEDULE OF OTHER REVENUES RETAINED
YEAR ENDED JUNE 30, 1994


SCHEDULE "5" Page 1

Contracts Human Resources, Georgia Department of Division of Family and Children Services Wage and Unemployment Information Inquires Office of Child Support Recovery Child Support Intercept
Jobs for America's Graduates Jobs for Georgia Graduates Career Association Project
Office of the Governor Office of Planning and Budget School to Work Program
Service Provider Contracts Service Delivery Areas 1. North Georgi a North Georgia Regional Development Center Administration Management Information Serivces Participant Follow-up Services Personal Computer and Telecommunications
2. Georgia Mountains Georgia Mountains Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
3. Cobb - Douglas Counties 16. East Atlanta Regional
Atlanta Regional Commission Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
4. Northeast Georgia Northeast Georgia Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
5. West Central Georgia Griffin Regional Educational Service Agency Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
6. Lower Chattahoochee Columbus Consolidated Government Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
7. Middle Georgia Middle Georgia Consortium, Incorporated Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications

$
$ 1,200.00 9,568.65 4,368.00 4,295.66 $
-------------
$ 1,200.00 9,803.05 4,389.00 4,018.93
-------------
$ 1,200.00 24,228.73 15,477.00 5,003.74
-------------
$ 1,200.00 12,059.46 2,709.00 4,331.06
-------------
$ 1,200.00 18,236.16 3,656.00 4,853.43
-------------
$ 1,200.00 12,999.30 4,935.00 5,918.38
-------------
$ 1,200.00 13,222.85 4,641.00 5,118.48
-------------

192,145.15 156,775.24 $
19,432.31 19,410.98 45,909.47 20,299.52 27,945.59 25,052.68 24,182.33

348,920.39 3,014.24 631. 21

See notes to the financial statements.

- 31 -

DEPARTMENT OF LABOR SCHEDULE OF OTHER REVENUES RETAINED
YEAR ENDED JUNE 30, 1994

SCHEDULE "5" Page 2

Contracts Service Provider Contracts Service Delivery Areas 8. Oconee Overview, Incorporated Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
8. Heart of Georgia Heart of Georgia Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
9. Central Savannah River Area Employment and Training Consortium, Incorporated Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
10. Altamaha - Georgia Southern Altamaha - Georgia Southern Regional Development Center Administration Management Information services Participant Follow-up Services Personal Computer and Telecommunications
11. Savannah/Chatham County City of Savannah, Georgia Labor Resources Department Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
12. Southwest Georgia Southwest Georgia Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
13. South Georgi a South Georgia Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
14. City of Atlanta Private Industry Council of Atlanta, Incorporated Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
15. DeKalb County DeKalb County Private Industry Council Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications

$

1,200.00

4,391.37

2,730.00

4,040.67 $

-------------

$

1,200.00

5,162.60

2,270.00

3,175.56

-------------

$

1,200.00

18,959.40

5,765.00

6,520.70

$

1,200.00

8,235.09

3,465.00

5,411.03

$

1,200.00

9,475.05

3,003.00

1,093.69

-------------

$

1,200.00

20,213.32

10,282.00

6,198.02

-------------

$

1,200.00

8,639.63

3,739.50

3,907.17

-------------

$ 1,200.00
40,914.68 10,626.00 11,108.49

$ 1,200.00 15,967.36 6,048.00 10,651.83

12,362.04 11,808.16 32,445.10 18,311.12 14,771.74 37,893.34 17,486.30 63,849.17 33,867.19

See notes to the financial statements.

- 32 -

DEPARTMENT OF LABOR SCHEDULE OF OTHR REVENUES RETAINED
YEAR ENDED JUNE 30. 1994

SCHEDULE "5" Page 3

Contracts Service Provider Contracts Service Delivery Areas 17. Coosa Valley Coosa Valley Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
18. Southeast Georgia Southeast Georgia Regional Development Center Administration Management Information Services Participant Follow~up Services Personal Computer and Telecommunications
19. Middle Flint Middle Flint Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
20. Costa l Costal Georgia Regional Development Center Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
21. Fulton County Fulton County Office of Community Services and Job Training Administration Management Information Services Participant Follow-up Services Personal Computer and Telecommunications
State Agency Education, Georgia Department of Administration Management Information Services Personal Computer and Telecommunications
Human Resources, Georgia Department of Office of Aging Administration Management Information Services Personal Computer and Telecommunications
Donations Georgia Commission on Women
Information Searches
Insurance Recoveries
Rents, Parking, and Vending Machine Sales

$

1,200.00

23,107.12

8,852.00

8,755.50 $

$

1,200.00

6,983.49

3,150.00

4,523.97
-------------

$

1,200.00

6,472.20

2,520.00

3,227.95

-------------

$ 1,200.00 6,570.44
2,247.00
4,060.40
-------------

$

1,200.00

5,717.99

1,995.00

5,051.87

$ 1,200.00 12,975.33 4,967.02

$ 1,200.00 5,207.44 2,055.65

41,914.62
15,857.46
13,420.15
14,077.84
13,964.86
19,142.35
8,463.09 $ 551,867.41 5,512.51
13,204.53 641.00
358,804.94

$1,282,596.23

See notes to the financial statements.

- 33 -

DEPARTMENT OF LABOR SCHEDULE OF OTHER OPERATING EXPENSES
YEAR ENDED JUNE 30, 1994
REGULAR OPERATING EXPENSES
Appraisal Costs Bank Charges Conference Expense Court Costs Freight, Express and Storage G.E.D. Testing Fees Linen and Laundry Service Moving Expense Registration Fees Staff Training Subscriptions and Dues
COMPUTER CHARGES
Staff Training

SCHEDULE "6"

$

6,868.32

187,094.20

46,807.89

69,312.12

19,418.58

4,228.31

3,886.67

7,170.12

88,495.54

87,896.82

89,729.44

$ 610,908.01

$ 44,959.99

See notes to the financial statements.

- 34 -

DEPARTMENT OF LABOR RECONCILIATION OF SALARIES
YEAR ENDED JUNE 30 1 1994

Total per Annual Supplement

Accruals June 30, 1994 June 30, 1993

Adjustments Askew, Booker, Bradley, Brown, Burkahalter, Carlisle, Ferrell, Garel, Gonzalez, Harrison, Ives, Jones, Jordan, Moss, Springett, Turner, White,

Deborah Jan Rasely Atimari Charles Edward Albert, Jr. Lorie, S. Zina M. Mary J. Vernon E. Tony James A. Judy L. Rosalie Mary Ruth G. Patricia A. Clifford A. Fleming Betty R.

Total per Report

SCHEDULE "7"
$ 52,573,004.56
322,230.04 -325,547.B4
-3.77 -5.00 -5.00 -5.00 -74.60 -115.22 -5.00 -50.00 -23.31 -5.00 -10.61 -5.00 -5.00 -50.00 -102.99 -111. 7B -5.00
$ 52,569,104.4B

See notes to the financial statements.

- 35 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

DEPARTMENT OF LABOR SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the audit report for the year ended June 30, 1993, is summarized below:

Audit Control Number

Status ofFinding

440-93-01 440-93-02

See Audit Control Number 440-94-01 Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

MONITORING SUBRECIPIENTS Inadequate Monitoring of Status of Subrecipient Audits Federal Financial Assistance Employment and Training Assistance - Dislocated Workers (CFDA 17.246) Job Training Partnership Act (CFDA 17.250) Major Programs Audit Control Number 440-94-01

Our study and evaluation of the Department's significant internal control structure policies and procedures applicable to the Employment and Training Assistance - Dislocated Workers and the Job Training Partnership Act included a review ofthe Department ofLabor's system for monitoring subrecipients as required by 0MB Circular A-128, which states, in part, as follows:

"9. Subrecipients. State and local governments that receive Federal financial assistance and provide $25,000 or more of it in a fiscal year to a subrecipient shall:

b. determine whether the subrecipient spent Federal assistance funds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subrecipient made in accordance with this Circular, 0MB Circular A-110, or through other means (e.g., program reviews) if the subrecipient has not yet had such an audit;... "

The Circular further states that subrecipients subject to the foregoing requirements should submit audit reports
no later than one year after the end ofthe audit period. In addition, the Circular requires that corrective action
be taken within six months after receipt of subrecipient audit reports which disclosed instances of noncompliance with Federal laws and regulations.

The audit report for the year ended June 30, 1993, reported that certain deficiencies existed in this area. A review of subrecipient audit tracking documents utilized by the Job Training Division of the Department of Labor during the year under review indicated that deficiencies continued to exist. The results of the current year's audit tests revealed the following:

DEPARTMENT OF LABOR SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
MONITORING SUBRECIPIENTS Inadequate Monitoring of Status of Subrecipient Audits Federal Financial Assistance Employment and Training Assistance - Dislocated Workers (CFDA 17.246) Job Training Partnership Act (CFDA 17.250) Major Programs Audit Control Number 440-94-01
(1) Oftwenty-two (22) audits identified as due during the year under review, three (3) had not been submitted within the allotted time period.
(2) Of seventeen (17) audits disclosing instances of noncompliance which were to be resolved, corrective action had not been taken within the allotted time period for six (6) audits.
The Department is not in compliance with the subrecipient monitoring requirements ofOMB Circular A-128 and, as a result, cannot be assured that the subrecipients have adequate internal controls and are complying with applicable laws and regulations pertaining to Federal financial assistance. The Department should take action to ensure that subrecipient audit reports and corrective action plans are submitted within the required time limits.
CURRENT YEAR
CASH MANAGEMENT Failure to Amend the Cash Management Improvement Act Agreement Federal Financial Assistance Unemployment Insurance (CFDA 17.225) Job Training Partnership Act (CFDA 17.250) Major Programs Audit Control Number 440-94-02
In the year under review, the Georgia Department of Labor utilized funding techniques which had not been formally approved by the U. S. Department of Treasury in accordance with the Cash Management Improvement Act Agreement between the State of Georgia and the U. S. Department of Treasury. The Georgia Department ofLabor submitted proposed amendments to the Agreement to the State's designee, the Office ofTreasury and Fiscal Services. However, the Department failed to verify subsequent approval of such amendments prior to implementation. In addition, all proposed amendments to the Agreement should have been submitted by the State's designee, the Office of Treasury and Fiscal Services, to the U. S. Department of Treasury as required by 31 CFR 205.9(d).
The Georgia Department of Labor should strengthen internal control procedures to ensure compliance with all aspects of the 31 CFR 205 - Rules and Procedures for Funds Transfers.