Management report, Department of Public Safety, an organizational unit of the state of Georgia, year ended June 30, 2002

DEPARTMENT OF PUBLIC SAFETY MANAGEMENT REPORT -TABLE OF CONTENTS-

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHIBITS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGET FUND

1

SCHEDULES OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

B

"A" DEPARTMENT OF PUBLIC SAFETY

2

C

"B" UNITS ATTACHED FOR ADMINSTRATIVE

PURPOSES ONLY

3

D RECONCILIATION OF TRAVEL

4

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

DEPARTMENT OF AUDITS AND ACCOUNTS

254 Waslungton Street. S W. Suite 214

RtssEI I W.11,-,o,
<;T',Tl. AL"DllOR
(404)6~6-217

Atlanta, Georgia 30334-8400

December 11, 2002
Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Public Safety
and Honorable George A Ellis, Comm1ss1oner Department of Public Safety
Ladies and Gentlemen
As part of our audit of the statutory basis financial statements of the State of Georgia presented in the State of Georgia Report of the State Auditor, the basic 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, 2002, we have performed certain audit procedures at the Department of Public Safety Accordingly, the financial statements and compliance acbv1t1es of the Department of Public Safety were examined to the extent necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal controls as required by the Single Audit Act Amendments of 1996
This Management Report contains information pertinent to the financial and compliance act1v1t1es of the Department of Public Safety as of and for the year ended June 30, 2002 The particular information provided 1s enumerated m the Table of Contents
This report 1s intended solely for the information and use of management of the State of Georgia and members of the Board and 1s not intended to be and should not be used by anyone other than these specified parties
Respectfully submitted,

RWH ras

SECTION I SELECTED FINANCIAL INFORMATION

DEPARTMENT OF PUBLIC SAFETY ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30 2002

EXHIBIT"A"

-FUND B<>J..IW::E - JULY 1 2001 Surplus

"A"
CE'i>RThENT CE PLBUC SAFETY

"8''
LNTS ATTAO-IED FCR KMNISTRA~ Plff'CISESCN..Y

s

7,161,155 56 $

81311034

458,99755 $ 40989787

TOTAL
7,620,15311 1,223,00821

$

1974 265 oo s_ _....,ffiB=,,895=.=42,.,_ s_ ___,a,,,843""'"1""5""132ee.

AIXlllCNS

,'qustmerts lo Pnor Year's Q:r1tracls !rid />ax:u1ts ~ S
Emess a Furds Available"" ~
Bihib<t''B"
Exh!btt''C" lnaeaseu,tr,;entones
Pnor Years Oled<s 1/ooded

16767529 S
3464619 64
349,911 70 155000

888,CEl.94 $
-6!1! 18712 81,44922 21744

1 055,75823
3464,61964
431 36092 176744

c:El&)lOOS

l.heseNed Flni Sa1a-w::e (Surplus)

-

lo C1fice a Treaso,y and

FISCal 5eMcEs

i>anns- Year Ended June 30 2001
,'qustrrents 1o Pnor Years

-

Finl Sala-w::e Gamed 0...-fnxn

Pnor Year as Furds Available

$

3 983 756 63 $_ _....,36,ec1,.,562=..=4B,e. $_ ___;4"".345=3'-'19._1~1

s

81311034$

409,89787 S

122300821

591875 76

160,009 35

751,94511

523827500

132 60358

5.37087858

s

6.643.26110 s _ __.102.=570"-"-'ao"" s _ __,7""345""""83""1,_,oo""

FLt1D B<>J..iW::E - Jtx,E 30 2002
-SlMNB)'CE FlIDBYl:,CE 1"'""1tones Asse1 Fafetue A'c9'arn Ge:xga Pola, kaim/
&Jrplus

s

5 314 75143 s _ _ _527__.__887_1_0 s_--.:5:.:842=648=53~

s

2.272.792.'} $

2,524,762.45

s

4 797 554 71 $

517.2CE 72

s

5314 76143 $

407,84319 $
99030
40083349 S 11905361

2.68063545 2.524,762.45
99030
5 200,38820 63626033

527 88710 S

5.84264853

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DEPARTMENT OF PUBLIC SAFETY SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" DEPARTMENT OF PUBLIC SAFETY YEAR ENDED JUNE 30 2002

EXHIBIT "B"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 85100,13900 $ 85,100,13900 $

6 233,811 00

3,706,204 11

5 783 571 00

3,105,196 39

$ 97,11752100 $ 91,911,53950 $

000 -2,527,606 89 -2 678 374 61
-5,205 981 50

0 00

5 238 275 00

5 238.275 00

s_ _ S 97 117,521 00 $ 97,149,814 50

_;,32=-2ac9cc3_.c50.c.

EXPENDITURES
Personal Services Regular Operabng Expenses Travel Motor Vehlde Purchases Equipment Computer Charges Real Estate Rentals Telecommumcations Per Dtem and Fees Contracts State Patrol Posts Repairs and Maintenance ConVICIJon Reports

$ 71,984 595 00 $ 71,210,713 93 $

12 769 083 00

11,376 759 67

431,747 00

388 568 89

3,840,818 00

3 598,93194

2 169,962 00

2,052 013 47

1,411,94300

1199,416 70

461,509 00

460,506 28

2,147,396 00

1,634,33071

384 452 00

375,003 60

1,306 475 00

1,193,78148

204 541 00

195,168 19

5.000 00

000

TT3,881 07 1,392 323 33
4317811 241,88606 117,948 53 212,526 30
1,002 72 513,065 29
9,44840 112,693 52
9 372 81 5,000 00

$ 97117 521 00 $ 93 685194 86 $

3,432 326 14

Excess of Funds Available over Expenditures

S 3 464 619 64 $ -""""3..;464,..;;,6;.;1.9.aa64..,

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DEPARTMENT OF PUBLIC SAFETY SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" UNITS ATTACHED FOR ADMINISTRATIVE PURPOSES ONLY YEAR ENDED JUNE 30, 2002

EXHIBIT "C"

FUNDS AVAILABLE
REVENJES
State f>WropnatJCll Federal R<Nenues Other Revenues Retamed
CAARY-OVER FROM PRIOR YEAR Transfer from Reserved Fu,d Balance

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 15,751,730 00 $ 15 751730 00 $

21201,05900

13,389,669 26

3,288.412 00

3,252,229 35

$ 40 241,201 00 $ 32,393,62861 $

000 -7,811,389 74
-36 182 65
-7,847,572.39

0 00

132 603 58

13260358

S 40,241 201 00 $ 32,526,232 19 $ -7,714,968 81

EXPENDITIJRES
Personal Services Rego.Jar Opera!Jng Expenses Travel - Vehde Ptrchases Ecpment Computer Charges Real Estate Rentals TelecomrurucatJCllS Per Diem and Fees Cortracts Gaptal OJtlay 1-i~ Safety Graits Peace Officers Training Grants
'"" Excess of Fl.llds Ava,lable Expendrti.res

$ 12 501,004 00 $ 12,008 245.22 $

6,258,444 00

6,COl 91174

288,81600

175,92268

158,487 00

152,48059

240,83500

309,28986

351,032 00

310,29067

317,82000

303,06963

380,19100

32893948

635,781 00

812.949 34

2 279,532.00

1600,204 99

15000000

149,477 00

13,525,200 00

7,669,02251

315402900

313761560

412.758 78 251,532.26 112,893 32
6,00041 -68,424 86 40,741 33 14 750 37 51,251 52 -177, 168 34 589,327 01
52300 5 856,177 49
16 413 40

S 40 241 201 00 $ 33 134,419 31 $

7,106,781 69

$

-608 187 12 $ _ _ _-606__,1,.8_,7.1.2a.

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DEPARTMENT OF PUBLIC SAFETY RECONCILIATION OF TRAVEL YEAR ENDED JUNE 30. 2002
Totals per Annual Supplement Adjustment
Branson, Chff

EXHIBIT"D"
S 564,350 57 141 00
$ 564,491 57

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

DEPARTMENT OF PUBLIC SAFETY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-466-01-01 FS-466-01-02 FS-466-01-03 FS-466-01-04 FS-466-01-05

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies 1n Operation of Property Management System Fmdmg Control Number FS-466-01-05
The Property Management System maintains information correctly The 1nforrnat1on going into the system must be entered correctly however The Department placed considerable effort to ensure the assets identified in the Property Management System are earned at the correct amount and can be located appropnately

SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

DEPARTMENT OF PUBLIC SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequacies m Control Over Manual Journal Entries Finding Control Number FS-466-02-01
Our examination included a review of the internal accounting controls and procedures ut1hzed by the Department of Public Safety m recording adJustments to the various modules comprising the statewide Phoenix accounting system Our testing revealed that, at June 30, 2002, the Department's general ledger module did not balance with the accounts receivable (subs1d1ary) module This cond1t1on resulted because numerous manual Journal entries were posted to the general ledger module instead of recording the adJustment m the appropriate subsIdIary module As a result, numerous reconc1hng items existed at June 30, 2002 These reconciling items occurred because, m many cases, the Department used manual Journal vouchers, which are posted only to the general ledger, instead of adJustment vouchers, which are posted directly to the modules and automatically update the general ledger The Department was unable to provide necessary documentation to support all reconciling Items
The Department Is required to ensure subs1d1ary accounting records balance to the general ledger m accordance with the Accounting Procedures Manual for the State of Georgia as published by the State Auditor
Management's failure to ensure that subs1d1ary modules are In balance with the general ledger module causes internal reports to management, generated from the subs1d1ary modules, to be inaccurate and misleading This condition can lead to erroneous decIsIons by the Department's management as well as by the State of Georgia's executive dec1s1on makers
To ensure accurate and timely reporting of financial information from subsId1ary modules, the Department of Public Safety should use adJustment vouchers rather than manual Journal entries to the extent possible This procedure will allow the natural flow of the subs1d1ary modules into the general ledger module to correct adjustments to the accounting records that are determined to be necessary The Department should also develop internal accounting controls and procedures to ensure that adequate supporting documentation Is maintained for all adJustments and reconciling items
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DEPARTMENT OF PUBLIC SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number FS-466-02-02

Accounting procedures of the Department of Public Safety were insufficient to provide adequate internal controls over the fund balance accounts wrthin the general ledger The general ledger for the Department of Public Safety "A" Budget at June 30, 2002, had not been reviewed at the program level in order to determine the correct amount of reserves or surplus Audrt adjustments were necessary to reflect the status of fund balances for the Department Fund Balance accounts were adjusted as follows

Per Book

Per Audit

Reserves Surplus

$ 7,001,435 74 $(1,639,676 64)

$ 4,797,554 71 $ 517,206 72

This deficiency occurred because of management's failure to establish procedures to analyze and reconc~e fund balance accounts recorded on the general ledger with supporting records The failure to monitor these accounts within the general ledger could lead to inaccurate financial records
The Department should establish appropriate procedures to ensure that the general ledger Is posted, balanced and reviewed on a monthly basis and that detailed records supporting fund balance accounts m the general ledger are complete, accurate and reliable

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DEPARTMENT OF PUBLIC SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
BUDGET PREPARATION/EXECUTION Overexpend1ture of Budget Unit Ob1ect Classes Finding Control Number FS-466-02-03
The total approved budget for the Department of Public Safety - "B" Budget Unit provided for expendrtures totaling $ 40,241,201 00 A comparison of ant1c1pated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the Equipment common object class exceeded the authonzed expendrture level of 102% of the budgeted amount by $63,607 56 In addrt1on, the Per Diem and Fees object class exceeded the budgeted amount by$ 177,168 34
The overexpendrtures 1dent1fied above are m v1olat1on of Section 58 of the Amended Appropnat1ons Act of 2001-2002 Agency overexpend1tures can result m direct material effects on the financial statements
The Department of Public Safety should review its internal control procedures over budget operations, design procedures which would proh1b1t the expenditure of funds m excess of budget approval, and implement those procedures to strengthen the internal controls over the budget function
CAPITAL ASSETS/PROPERTY MANAGMENT Inadequacies m Operation of Property Management System Finding Control Number FS-466-02-04
One-hundred-seventy-three (173) equipment items were selected from certain locations to test the accuracy of the Department's property management records These items contained a value of $2,811,149 72 out of a population of $5,900,802 51 and were selected for the purpose of locating the equipment as recorded m the inventory records The following defic1enc1es were noted at the Georgia Public Safety Training Center, Forsyth, Georgia
(1) Ten (10) items totaling $73,900 86 could not be located
(2} Four (4} rtems did not have decal numbers attached However, items were located ut1l1zmg serial numbers or descriptions
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DEPARTMENT OF PUBLIC SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CAPITAL ASSETS/PROPERTY MANAGMENT Inadequacies in Operation of Property Management System Finding Control Number FS-466-02-04 Also. during the physical inspection testing, four (4) ,terns of equipment were located in our test locations, which were not included in the equipment inventory records for the particular location The Training Center ,s required to maintain equipment inventories in accordance with prov1s1ons of State laws and regulations The d1screpanc1es identified above were caused by the Training Center's failure to follow guidelines for maintaining equipment inventories Failure to maintain accurate equipment inventory records causes internal reports to management to be misleading and can result in erroneous dec1s1ons by management concerning current and future equipment needs The Training Center should establish the necessary internal controls to ensure that equipment inventories are maintained ,n accordance wrth State laws and regulations
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