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MANAGEMENT REPORT NORTH GEORGIA TECHNICAL INSTITUTE 
CLARKESVILLE, GEORGIA AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA 
YEAR ENDED JUNE 30, 1997 
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 
254 WASHINGTON STREET 
ATLANTA, GEORGIA 30334-8400 
 
 NORTH GEORGIA TECHNICAL INSTITUTE MANAGEMENT REPORT - TABLE OF CONTENTS - 
 
LETTER OF TRANSMITTAL 
 
SECTION I 
 
SELECTED FINANCIAL INFORMATION 
 
EXHIBITS 
 
A ANALYSIS OF CHANGES IN FUND BALANCE 
 
BUDGET FUND 
 
2 
 
SCHEDULES OF FUNDS AVAILABLE AND EXPENDITURES 
 
COMPARED TO BUDGET 
 
BUDGET FUND 
 
B 
 
"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION 
 
3 
 
C 
 
"B" LOTTERY FOR EDUCATION 
 
4 
 
D RECONCILIATION OF SALARIES AND TRAVEL 
 
5 
 
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 
 
 CLAUDE L. VICKERS 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 
August 22, 1997 
 
Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors 
and Honorable Judy Hulsey, President North Georgia Technical Institute 
Ladies and Gentlemen: 
As part of our audit ofthe statutory basis financial statements of the State of Georgia presented in the Report ofthe 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 ofand for the year ended June 30, 1997, we have performed certain audit procedures at North Georgia Technical Institute. Accordingly, the financial statements and compliance activities ofNorth Georgia Technical Institute were examined to the extent considered necessary in order to express 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 North Georgia Technical Institute as of and for the year ended June 30, 1997. The particular information provided is enumerated in the Table of Contents. 
This report is intended solely for the use of management ofNorth Georgia Technical Institute. However, this report is a matter of public record and its distribution is not limited. 
Respectfully submitted, 
 
CLV:cm 
 
Claude L. Vickers State Auditor 
 
 SECTION I SELECTED FINANCIAL INFORMATION 
 
 THIS PAGE LEFT BLANK 
 
 NORTH GEORGIA TECHNICAL INSTITUTE ANALYSIS OF CHANGES IN FUND BALANCE 
BUDGET FUND YEAR ENDED JUNE 30,1997 
 
EXHIBIT "A" 
 
FUND BALANCE - JULY 1, 1996 
Reserved Surplus 
ADDITIONS 
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures 
Exhibit "B" Exhibit "C" 
DEDUCTIONS 
Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30.1996 
Adjustments to Prior Year's Accounts Receivable Refunds to Grantors 
Georgia Department of Technical and Adult Education - Administrative Central Office Federal Financial Assistance 
Georgia Department of Human Resources PEACH Project 
Reserved Fund Balance Carried Over from Prior Year as Funds Available 
 
nAil 
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION 
 
IIB" LOTIERYFOR EDUCATION 
 
TOTAL 
 
$ 
 
28,762.63 
 
472.29 $ 
 
$ 
 
29,234.92 $ 
 
$ 2.55 
2.55 $ 
 
28,762.63 474.84 
29,237.47 
 
$ 
 
3.713.61 
 
27.739.96 $ 
 
$ 
 
31,453.57 $ 
 
$ 
1.00 1.00 $ 
 
3,713.61 
27,739.96 1.00 
31,454.57 
 
$ 
 
472.29 $ 
 
1,453.16 
 
44.89 
 
34.38 
 
28.762.63 
 
$ 
 
30.767.35 $ 
 
2.55 $ 
 
474.84 1,453.16 
 
2.55 $ 
 
44.89 34.38 28,762.63 30.769.90 
 
FUND BALANCE - JUNE 30. 1997 
 
$ 
 
29,921.14 $ 
 
1.00 $ ===29:::l:,9:=2=2=.14= 
 
SUMMARY OF FUND BALANCE 
Reserved Live Work Projects Private Donations 
Surplus 
 
$ 
 
12,736.92 
 
15,000.00 
 
2.184.22 $ 
 
$ 
 
29,921.14 $ 
 
-2- 
 
$ 
....:.;1.~0.::..0 
 
12,736.92 15,000.00 
2.185.22 
 
1.00 $ ===2::!9.=92=2=.1==4 
 
 NORTH GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES 
COMPARED TO BUDGET BUDGET FUND 
"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION YEAR ENDED JUNE 30, 1997 
 
EXHIBIT"B" 
 
EXPENDITURES Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants 
Excess of Funds Available over Expenditures 
 
$ 8,265,754.00 $ 7,771,410.65 $ 
 
-4..;;..94,..:.,34_3_.3_5 
 
$ 5,052,482.00 $ 5,018,397,10 $ 
 
2,624,104.00 
 
2,138,261.26 
 
589,168.00 
 
587,012.33 
 
34,084.90 485,842.74 
2,155.67 
 
$ 8,265,754.00 $ 7,743,670.69 $ _ _......;5..;;;;22~,.:..08:;..;;3......;,3_1 
 
$ 
 
27,739.96 $ =====2=7=,7::::3=9.::::9=6 
 
-3- 
 
 NORTH GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES 
COMPARED TO BUDGET BUDGET FUND 
"B" LOTIERY FOR EDUCATION YEAR ENDED JUNE 30, 1997 
 
EXHIBIT"C" 
 
FUNDS AVAILABLE REVENUES 
State Appropriations 
 
BUDGET 
 
ACTUAL 
 
VARIANCEFAVORABLE (UNFAVORABLE) 
 
$ 100,769,00 $ 100,769,00 $ 
 
...;.o...;..o~O 
 
EXPENDITURES Equipment-Technical Institutes 
 
$ 100,769.00 $ 100,768.00 $ 
 
1._0_0 
 
Excess of Funds Available over Expenditures 
 
$ 
 
1.00 $ ======1=.0=0 
 
-4- 
 
 NORTH GEORGIA TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND TRAVEL 
YEAR ENDED JUNE 30. 1997 
 
EXHIBIT"D" 
 
Totals per Annual Supplement 
Accruals June 30,1996 June 30, 1997 
 
SALARIES $ 4,159,514.22 $ 
 
TRAVEL 49,301.88 
 
-5,724.68 20,027.59 
 
$ 4,173,817.13 $=====4=9,=30=1::::::.8==8 
 
-5- 
 
 SECTIONll AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 NORTH GEORGIA TECHNICAL INSTITUTE AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
838-96-01 
 
Further Action Not Warranted 
 
 SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS 
 
 NORTH GEORGIA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 1997 
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
CASH AND CASH EQUIVALENTS Theft of Funds Amount: $7,241.13 Finding Control Number FS-838-97-01 
For the year under review and through July 31, 1997, it was discovered that a theft of funds had occurred at North Georgia Technical Institute. An employee with access to the checks and a signature stamp wrote and cashed checks from the general and payroll bank accounts totaling $6,946.13. These checks were not recorded on the general ledger. In addition, this same employee wrote personal checks to the Institute for cash totaling $295.00 which were later returned to the Institute as insufficient fund checks. Documentation relating to the unrecorded checks and returned deposits was removed from the bank statements by the employee. 
This condition occurred because management failed to provide for adequate internal control over the bank reconciliation process and the check writing function. Procedures should be implemented to ensure that internal controls relating to the bank reconciliation process and the check writing function are operating effectively. North Georgia Technical Institute should seek restitution from the individual involved for the total amount of$7,241.13 for deposit into the appropriate Institute bank accounts. 
The individual involved in the theft of funds is no longer employed by the Institute. 
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number FS-838-97-02 
For the year under review, our examination of internal controls disclosed that North Georgia Technical Institute's accounting procedures did not provide for adequate internal controls over the bank reconciliation process and the check writing function. The following deficiencies were found to exist: 
(1) Blank checks for the Institute's general, payroll and Pell Grant bank accounts were not safeguarded appropriately. 
(2) The duty of performing the bank reconciliations on the payroll and Pell Grant accounts was not adequately separated from the check writing function for these accounts. 
(3) There was no administrative review to determine that bank reconciliations were prepared accurately and that all reconciling items were identified and the appropriate adjustments made to the accounting records. 
These conditions occurred because management failed to evaluate its assignment of accounting duties and perform administrative reviews in relation to bank reconciliations and the check writing function. 
The Institute should implement the appropriate procedures and controls to ensure that internal controls related to the bank reconciliation process and check writing function are in place and operating effectively.