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

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DEPARTMENT OF REVENUE MANAGEMENT REPORT -TABLE OF CONTENTS-

LETTER OF TRANSM/TTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHIBITS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGET FUND

1

B SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

2

C SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

STATE REVENUE COLLECTIONS FUND

3

D SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

5

E ANALYSIS OF STATE REVENUE COLLECTIONS

7

SECTION II AUD/TEE'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 Waslnngton Street, SW, Suite 214

RussELL W. H1,To,
'iTATE AUDITOR (404)6S6-2174

Atlanta, Georgia 30334-8400

February 17, 2003
Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia
and Honorable T Jerry Jackson, Comm1ss1oner Department of Revenue
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 Comprehenswe 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 perfomied certain audit procedures at the Department of Revenue Accordingly, the financial statements and compliance act1v1t1es of the Department of Revenue were examined to the extent necessary in order to express an op1mon
as to the fair presentabon of the financial statements contained in the foregoing documents and
to issue reports on compliance and internal controls as required by the Single Audrt Act Amendments of 1996
This Management Report contains infom,abon perbnent to the financial and compliance act1v1bes of the Department of Revenue as of and for the year ended June 30, 2002 The parbcular 1nfom1abon provided 1s enumerated in the Table of Contents
This report 1s intended solely for the infomiabon and use of management of the State of Georgia and 1s not intended to be and should not be used by anyone other than these specified parties
Respectfully submrtted,

,:).hdo,~ W ~
~~IIW Hinton State Auditor

RWH cgc

SECTION I SELECTED FINANCIAL INFORMATION

DEPARTMENT OF REVENUE ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "A"

FUND BALANCE - JULY 1 2001 Reserved Surplus
ADDITIONS Adjustments to Pnor Yeafs Accounts Payable Excess of Funds Available over Expenditures Exh1brt "B"
DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal SeMces Year Ended June 30, 2001 Adjustments to Pnor Yeafs Accounts Receivable Decrease m lnventones Reserved Fund Balance Gamed Over from Pnor Year as Funds Available
FUND BALANCE JUNE 30. 2002

$

25,241 843 24

9 008 143 39

$ _ _,:a:34;:,,,,:a;24e.:9:..9, :::8:::6-"6"'-3

$

305,558 85

23.383,480 41

$ _ _.,,2030,.,.6,e:89:,,,0:,,3:::9:..,2=6

$

9,008,143 39

28,899 09 19,842 04

25 24184324

$ _ __,34=2:::98=7=2'-7-'-7~6

s _ _ _2_3_6_4_0._2_0.0.1._3 11

SUMMARY OF FUND BALANCE
Reserved Investment for Modem1zat1on Collectlon Cost - Unclaimed Property Collec:bon Cost - Income Tax
Surplus

$

17,785,550 85

2,213 518 00

2 490 969 00

$

22,490,037 85

115026028

$ _....:2;::3.:;64~0;;..:2:;::9;;;.8.,;;13;;.

- 1-

DEPARTMENT OF REVENUE SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30. 2002

EXHIBIT "B"

FUNDS AVAILABLE REVENUES
State AppropnabOn Federal Revenues Other Rewnues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from ReseNed Fund Balance

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 350,722,734 00 $ 350,722,734 00 $

373,131 00

789,073 39

35 565 130 00

8,924,303 96

$ 386 660,995 00 $ 360,436,111 35 $

0 00 415,942 39 -26,640,826 04
-26,224,883 65

000

25 24184324

25 241.843 24

$ 386,660,995 00 $ 385 677,954 59 $

-983 040 41

EXF'ENDITIJRES
Personal Servtces Regular Operabng Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunscabons Per Diem and Fees Contracts County Tax Offiaals/Rettrament and FICA Postage Investment for Modemozabon Homeowner Tax Relief Grants
Excess of Funds Ava:lable over Expend:turas

s 61,058,868 00 $ 60,870,528 14 $

9,612,777 00

9,663,770 68

1,199,29100

1,020,799 65

59,166 00

21,521 50

954,495 00

196,518 76

16,313,473 00

16,606,354 87

7, 158,264 00

7,010,353 91

2,954,654 00

2 997142 68

944,549 00

940,993 82

2,423,468 00

2,017,633 27

4,272,795 00

4,272,795 00

2,936,975 00

2,992,298 36

21.m.22000

9,787,061 30

249,000,000 00 243,896,702 24

188 339 86 -50,993 68
178 491 35 37,644 50
757,976 24 -292.881 87 147,910 09 -42,488 68
3,555 18
405,834 73 0 00
-55,323 36 17,985,158 70
5 103 297 76

$ 386,660,995 00 $ 362,294 474 18 $ 24 366 520 82

$ 23 383 480 41 $ 23 383 480 41

-2-

DEPARTMENT OF REVENUE SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "C"

STATE REVENUE COLLECTIONS (Se, Exhrtiltl
Business L1C81'1Se TIIX Non Bua1ness ltcense Tax
Motor Vehide Registrations - Tags Motor Carner Regsstrations - Tags Motor VehlCle Title Registrabons

CASH RECEIPTS

Corporate J,jol Worth Tax Eatate Tax Financial lnstitutlons BusineSS 0caJpaUon Tax Income Tax
Corpcnbons Individuals

ProportyTu County Tax Digest Accounts lntllnglble Record1r1g

Plbkllbkbes ProponyTax .6.ese,srenta
Taxes Ba9ed on Sales Sales and UN Tax Regular
-MooJrFuel
Alcoholc Beverages
Liquor Wroe

Cigaraondc,gar-. Motor Fuel

F1nea and Forfeitures Peace Offlcerl and ProNcutors Training Fund UnclaanodPropof1Y

Stale Children' Trust FIWI

Eanmgs - -

Gowmmont

_ , _ , Optaon Saiea T a x ~ Coat

Locll OpbOn Sales Tax Collec:tion Colt

Marta Smel TD CoOec::tk:ln Coat

Real Emte Transfer Tu CoOecbon Cost

Salos Tax tor Educabonal PurJ>c,ses CollBcbon Coat
Speaal p,._ Sales TOX C<>locbon Coat

Other Fees

Total CUh Receapts

CASH AND CASH EQUIVALENTS JULY 1 2001

s

6 154 027 19

s

53 931 3,40 88

6,2?a 427 96

11 4TT 804 00

71 638 572 84

s 564 ga2 oos 31
e 71'4 1s1 1eo 63

29 346 195 00 123 033 M4 67
1315211185
7,279 173 189 94

s

56 373 183 43

1 870 401 53

5a 243 584 96

s

1 857 32

17Q 380 96

181 238 29

$ 4473,123,07410 200 197 979 16 $ 4 673,321 053.26

s 84 297,037 5-4
37 8~ Q31 71
20 1596 419 92

143 088 389 17

83 501 868 40 462 183 538 58

5 362 074,645 41

2,TT1 DEl2 74 29 959 705 04 3711042264
1,013 333 23

s

855,255 00

lil,498 033 26

2 915 617 78
335 ses 68

11,819 563 07

7 335 466 52

1!13 '62 282 00

96 3221083 31

s 13110,17 55710

17 99~1572 57

S 13 128.167 12e 157

-3-

DEPARTMENT OF REVENUE SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "C"

GOVEBNMSNTALCOSI

DISBURSEMENTS

Fees Retained at Collecting Source Property Tax County Tax Digest Aa:ounts tntang1t>N! Recording

$

2 -465 738 19

142 413 03 $

2608,15122

Taxes Based on Sales SmesandUaeTax Regular Motor Fuel

$ 48,967 042 73 547102278 $ 52 438 065 51

Motor Fuel

3 601 482 55

56 039 628 06 $

58,647 671il 28

DlabuBernenta of Motor VeNde Reglstral!On - Tags Collection, to Non-Game Wildlrfe ConservabOn and Wildbfe Habitat Acquosit>on Fund Collecbons to Unrted States Disabled Athletes FLM

s

380 160 00

16 57~ 00

376,735 00

OISburMment tor Income Tax Colledmn Com -
Relmblne Budget Fund

3 D'lil no ca

D<Sblnemont for Uncla,mod Property Expense Remburae Budget Fund
TOUII GoYemmental Cost

3 H53872152

s

65 228,057 13

TRANSFERS
To Office of Treasury and Fiscal SeMces Leu Reh.Inell through Office of Truaury end F1SC81 SeMces
Total OIStlinementa

s 14,69'1,570, 181 30
-1 623 505 5-43 &4 13.0715 0641637 86
s 13 141.2"2,694 79

CASH AND CASH EOUrvALENTS -:NNE 30 2002

-13 125 565 12

-4-

DEPARTMENT OF REVENUE SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS YEAR ENDED JUNE 30. 2002

EXHIBIT "D"

Elllill
Central Processng Umt Special Accoun: Homestesd Opbal SaleS Tax
Colledlons For Dl:str1bubon to Local Govemrnents Local Options~ Tax Coliectlons For Olstrtbutlon to Local Gowmments MARTA Sales Tax
Motor Fuel Cash Bond Escrow Aa:ourl Rallroad Car Tax Real Estate Transfer Tax Setoff Debt Collectlons Acco1.111
Various Gowmmental Unrts Sales Tax for EducaUmal Purposes
Collect\On> For Oisb1bubon to Local Governments Special Pulpose Sales Tax Collect\On> For Dlsb1bubon to Local Governments Tenneuee Valley Authority Account Undalmed Property Aa:ourl

ASSETS/ LIABILITIES JULY 1.2001
s 1 120,580 18 S

ADDITIONS 140 645 79

DELETIONS

ASSETS/ LIABILITIES JUNE 30, 2002
s 1 261 325 97

0 00

84 554 908 30 S 84 554,908 30 (1)

0 00

83 728,198 41

83,728 198 41

0 00 000

0 00 000 000 34,453 50 445,277 28 18 369 404 54

940,216 451 06 930,675 501 35 289,310,092 33
6 014,646 09 48,384,192 95

940 216 451 06 (2) 930 582,947 22 289,310,092 33 (3)
34 453 50
46,387,205 02 (4)

0 00 92 554 13
000 000 6,459 923 37 18 346 392 47

0 00

18,736,416 42

18 736 416 42

0 00

000 880

1,171,899,73666 1,171 899 738 66 (5) 1 160,253,469 34 1,160 253,469 34

000 8 80

0 00 416 88 1,142,063.25 2,333,002 98

727,501 712.03 720,271 813 05
4,903,607 51 1010611943

727 501 712 03 (6) 720 272 229 93
18,045 670 76 4,696 248 37

000 0 00 -12,000 000 00 7 742 874 04

s $

23151307 41 S

6 194 677.5'1212

1

1

e,1001219 171 35

s 21,003,078 78

(1 l HOMESTEAD PPIION SALES TAX PfSBURSEMENJS
To Office of Treasl.l'Y and Fiscal Servk:es For Dstribution to Local Gowmmenta
To State-= Colections Fund

$ 83,699,653 30 655 255 00

(2) LOCAL OPTION Al ES TAX PlBUREMENT
To Office of Treasury end Fiscal SeMCeS For Dmtributlon to Local Gowmments
To State Rewnua ConeCbOnO Fund

$ 84,554,908 30
S 930,718,417 BO
9,498,033 26

-5-

DEPARTMENT OF REVENUE SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS YEAR ENDED JUNE 30. 2002

EXHIBIT "D"

(3) MARTA SALES TAX DISBURSEMENTS
To Office of Treaslry and Fiscal Services For DlstnbuOon to MARTA
To State Rewnue ColledtcnS Fund

$ 286 394,474 55 291561778

(4) REAL ESTATE TRANSFER TAX DISBURSEMENTS
To Col.l'ltJea am Munlapahbes
To State Rewnue Colections Fund

$ 289,310.092 33
$ 46 051,339 34 335,865 68

(5) S&.i;S W EQB a;lUCAT!Q~ ~UBeQSfS IJl~UBS!;~~S
To Office of Treas1.r1 and Fiscal Services For Dt!tnbubon to Local GOlmmants
To State Rewnue CoUectlons Food

$ 4613871205 02
$ 1180 080,175 59 11,819,563 07

(6) SPEC}Al. PURPOSE SALES TAX OISBURSEMENJS
To Office ofTreaSl.W)' and Fiscal Services For OIStnbubOn to Local Governments
To S1818 Rewnuo Colectlons Fund

$ 1171 899.738 86
$ 720,166,245 51 7 335 486 52
$ n1so1112 03

-6-

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

BUSINESS LICENSE TAX
Beer Deeters Wholesalers' LieeMes Retaers Llcenaes Speoal Pemirts License and Brand Reg1strat1on
Liquor Dealers Wholesalers' Ltcenaes Retailers Licenses License and Brand RegistratJon
Wine Dealers Wholesal era Licenses Rete1lers' Llcenaes License and Brand Reg1strabon License Penalba
Cigar and Cigarette Oealer1 WholeS8.lers' Licenses Manufacturers' Represen.tatfve LJcense
COin Operated Am uaement Machines Licenses and Pmmtta
Net to State Beer Dealers LJquorDv.eB Wine Dealers Cigar nd Cigarette Dealera Com Operated Amusement Machnes
Cash Balance June 30, 2002

s

9 500 00

781 878 75

32 800 00
s 49,473 34

873 652 09

s

34 000 00

496 828 51

25 376 66

556 205 17

s

25 500 00

857 168 43

9,150 00

7 307 45

699 125 88

s

126 193 05

2 280 00

128 473 05

3 896 571 00

s

6 15-102719

s

673,852 09

556 205 17

69181843

138 006 00

3 896 571 00

-2 225 50

s

615"'02719

-7-

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30, 2002

EXHIBIT "E

NON BUSINESS LICENSE TAX
Tag Reg1strat1on and Transfers GRATIS Counties NonGRATIS Counties Trade port
Und1stnbuted C ol lecbofl!; - Other

Less Refunds Through Office of Treasury and F1scat Services

Motor Carner Reg1strabons Tags

lntemebonal Regr.5tral.Jon Plan

Coliecoons from Georgia Motor Camera

For Georgia

$

For Other States

ColledlOl"ls from Other States

MtSCellaneous Co llectlOOS

Less Refunds Throvg h Office of Treasury and Flacal SeMCeS

Motor Vehrc:le ntle Reg1stralt01"19

GRA.TIS Count.Jes

$

NonGRATIS Counbes

Trtle Penalties

45 021 839 75 4 343 370 50 293231354 S
$
5 069 977 06 1 253 522 02 $
$
10,517 946 00 738 427 00 S

52 297 523 79 1 946 445 87
54 243 969 66 312 628 78 S
6 323 499 08 769 821 52 92 954 16
7 166 274 76 956 846 80
11256373 00 221 431 00

53 931 340 88
6 229 427 96 11477 80400

$

71 638 572 84

Disbursements o1' Motor Vehicle Reg1strabon - Tags

Collections lo Non-G&me W1ldllfe ConaervatlCWl and Wildlife

Habrtate Acqu1s111on Fund

s

Collecbons lo United Stales DtSablecl A thletl:ta Fund

Net to State

Cash Balance

Juty 1 2001

s

June 30 2002

360 160 00 16 575 00 S
18840075 61 215 36

376 735 00 71 012 221 73
24961611

S

71 638 572 84

-8-

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

CORPORATE NET WQRTH TAX
Oomestrc end Fore,gn Corporations Current Debnquent and Penatbes
Net to State
ESTATE TAX Ong1nal Retunu and AcldrtJ ona
Less Rofund5 Through Office o1 Treaaury and FtSCal Servtces
Net to State
FINANCIAL INSTITUTIONS BUSINESS OCCUPATION JAX
Onginal Returns and Addrtl ons
Net to Slate

s _ _~29aa34=s.:a'":::5.::00::. s _ _~29""34:;.s::.:.1:::.s.::oo::.

s

128 795 397 70

5 761 893 03 $ _.....:,12~3"'0:::,33=504=67:.

s

123 033 504 67

s _ _,:;13a.1:;:.52._11'"'1.::B5;:. s _ _,:;13;:.1:.::5::.2~11'-1":::.5

-9-

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

INCOME TAX
Corpc)l'Bll005 Ongmal Returns Add11.Jonal Tax Interest and Penalties Estimate of Taxes
Less Refini!. Through Office of Treasury and F111cal Services lncl1v1duals
Ongmal Returns Additional Tax, Interest and Penetbe& Estimate of Taxes f ldUCllllry Wrthhok:lmg1
Less Refunds Through Office of Treasury and Fiscal SeMcea

s

72 516 373 08

684 069 147 04

s

756,Sl!S 520 12

191 603 510 81 S

564 982 009 31

s

877,393,688 21

1 321,724 524 12

15 771 596 80

5,91113!2,342 19

s 8,128 272 151 32

1412080 990 69

6 714.191.16

$ 7 279 173 169 94

Dllburaement for Collecbon Costs Reimburse Budget Food
Net to State Cash Balance
July 1 2001 June 30, 2002

$

304977003

7,307 199 851 62

s

--4 7-1096522

-26 335 486 49

-31 076 451 71

S 7 279 173 169 94

- 10 -

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT 'E"

PROPERTY TAX

County Tax Digest Accounts

Velucle

s

Property

Mobile Home

Timber

Not on Digest

Penalttes and Int eres1

Leas Refunda Through Office of Treasury and Flscal Services

lntang:itwe Recording Gro,.s Collections

5 355 792 46 47 86 887 55
323 246 19 135 97 39
555,571 22 2 270 508 03 $

56 487 502 64 11431941 $

56 373 183 43 1 870 401 53

S _ _.5.8=24;:;3:..5:.84;a;..:;96aa.

Commksslons Paid oo A.bOve County Digest Accounts ColleetOr
lntanglbla Recording
Net to State County Tax l),gOII Acc0unta Intangible Rocortlong

s

2 465 738 19

14241303

$

2 eoe 1s1 22

s

53,907 445 24

1 121 eaa 50

55 835 433 74

s

58,243 584 96

- 11 -

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

PUBLIC UTILITIES
Property Tax Ad Valorem Tax Electnc Light and Power Companies
Assessments 2002 CollectJons
Net to State

s

1,857 32

179 380 96

s _ _ _.;1,.B1'-'"23:;aBa;2;;;.B

s _ _ _.;1,_B1'-2a;3;,;;Ba;2;;;,B

TAXES BASED ON SALES
Sales end Use Tax Monthly Collectlons by General Al;c;:ounbng Office Reguler Motor Fuel
Leu Refunds Through Off"tce of Treasury and F!SCal SeMc:ea Regular Motor Fuel

S 4 500,055,750 05 200871955 30 S 4700,727,70535

s

26,Q32 675 95

473 976 14

27 -106 652 09

S 4 673 321 053 26

Commulona Paid on Abow
Regular Motor Fuel
Net to State RegWlr Mo<or Fuel
Cash Balance July 1 2001 J-..-.e 30, 2002

s

46,987,042 73

5471 02278 S

52 438,065 51

s 4 418 406,974 23
194 726 956 38

4613,133930 81

s

-6 363 325 31

14 112 382 45

7 749 057 14

s 4 67313211053 26

- 12 -

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

TAXES BASER ON SALES
Alcoholic: Beveniges Bee, Mall Beverage Tax

$

64 297 037 54

Net to Stale Cash Balance
July 1 2001 June 30 2002

$

83 822 185 78

s

231 307 50

243 544 26

474 851 76

Liquor
Stamp Sales Less Refunds Through Office of Treasury and Fmcal SeMces

$

84 297 037 54

$

37 913 509 17

1857746 S

37 894 931 71

Net to State Cash Balance
June 30 2002

$

37,809 272 16

85 859 55

$

3789493171

w...
Wu,e Tax

$

20 896.419 92

Notto Stale Cash Balance
June 30, 2002

$

20 896 080 31

33961

s

20 896 -419 92

Cigara and Cigarettes
Stamp Sales Less Refunds Through Office of Treasury BfN:t Fiscal Se,w:es

$

83 555 463 44

53,78704 S

83 501 686 .co

Net to State Cash Balance
July 1 2001 J- 30, 2002

s

86 587 765 54

s

-6 e,s 780 es

3 730 681 71

-3 0&B 099 14

$

83 501 666 40

- 13 -

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

TAXES BASED ON SALES

Motor Fuel

Colleebons

AV18hcm Dealers

s

Gasoline Oealen

Special Fuel Dealers

Diesel Operaton Bonded

L P Gas Operators - Bonded

Undlstnbuted by Fuel Type

Penalties and Interest

Compressed Natural Gas

Comm1U1ona Allowed

Motor Carner MIieage Tax Collec:bons
Penatues end lntereat

Less

Refl.a'ids Through Office of Treasury and Fiscal Servtees AgnaJtturo lntemabonal Fuel Tax Agreement Motor Carner
Retail DealerS

49,988 29 364 069 147 26
2,194 59 123077 26,420
348 067 17 -281 894 68 885 369 23 458 476 92 S
s

488 628 632 98 3 601 -462 55 $
,o 1e1 364 31 159 86810
$
a 1315269
39 087 101 63 133 59
5 286 68

492 230,095 53 10341 23241
502 571,327 94
40 407 791 36

CommlAIOllS Paid on Above (Retained at Colleetmg Source)

Net to Slate

Cash Balance

July 1, 2001

S

June 30, 200 2

s _--'46=2"'-,s"'3"s"'36""'ss:a..

s
.... 82 491 34 542 230 42

3 601,462 55 458 -'82 334 85
79 739 OB

s _....::::~2.\16::;3:.5::;36:::.;58:::,

- 14 -

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

FINES AND FORFEITURES Beer - Mall Beverage L,quor Wine Cigar, and C,garettes

BOND FORFEITURES

s

570400$

57 485 00

PENALTIES 13247940 S 70 622 10 122 970 79
2 382 701 45

TOTAL 138 183 40 128 107 10 122 970 79
2 382 701 45

s

63 189 00 $

2 708 773 74 $

2 771 962 74

Net to State Cash Betance
Ji.ne 30 2002

s

2,771,904 74

58 00

s

2 771 982 74

e~CE QEEICEBS .!iNQ eBQSEC!JIQBS IB.elNIN~ B.!NI:!
Fees from Court Fnea and Bond Fortemns
Net to State Caah Balance
JW'le 30, 2002

$

29 959 705 04

s

29 718 762 69

240 942 35

s

29 959 705 04

UNCLAIMED PROPERTY
~ from Salo of Abandoned Property Otabursement for UndBJmed Property Expense -
R1111mburl8 Budget Fl.rid Net to State
SIA]]; Cl::tlLQR!it!S !BUSI EU~Q
Fees from Mamage L.tcenses and Divorce Cases
Net to State

s

3711042264

s

3153ens2

33 956 5'9 82

s

37110422 84

s

1 013 333 23

s

1.013 333 23

- 15 -

DEPARTMENT OF REVENUE ANALYSIS OF STATE REVENUE COLLECTIONS
YEAR ENDED JUNE 30. 2002

EXHIBIT "E"

EARNINGS - GENERAL GOVERNMENT
Homestead Opuon Sales Tax CoUechon Cosl Local ()poon Sales Tax Collection Cost MARTA Sales Tax Colli,ctlon Cost Real Estate Transfer Tax Collecbon Cost Sales Tax for Educallooel Purposes Collectlon Cost Special Purpose Sales Tax CoUecbOn Coat Other Fees
Fees on Contracts 'UQUOI' lnvesbgabon Fees MascellaneOus Coaections
Net to State Caah Balance
July 1 2001 June 30 2002

s

855 255 00

9 498 033 26

2 915 617 78

335 865 68

1181956307

7 335 466 52

s

7 220 00

6860000

63 BG 462 00

63,562,282 00

s

96,322,083 31

s

102 155 708 25

s

-28,719 10

-5 804 906 84

-5 833 624 94

s

96 322 083 31

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

DEPARTMENT OF REVENUE 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-474-00-01 FS-474-00-02 FS-474-00-03 FS-474-01-01 FS-474-01-02 FS-474-01-03

Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

REVENUE/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1enc1es m the State Revenue Collections Fund (Overall) Fmdmg Control Number FS-474-01-02

The Department implemented a PeopleSoft revenue collections system on July 1, 2001
Deficiency number 1 - Previously reported corrective actions implemented
Deficiency number 2 - Previously reported corrective actions implemented
Deficiency number 3 - Previously reported corrective actions partially resolved Policies and procedures have been put mto place dunng the current fiscal year. The Sales Tax D1v1s1on subs1d1ary ledgers are now being reconciled to the PeopleSoft general ledger We are currently work.mg with other dIvIsIons to address the reconcIhatIon deficiency and sImIlar policies and procedures will be implemented.
Deficiency number 4 - The Department recognizes its defic1encIes m this area and we are looking mto a more feasible and agreeable resolution to the problem
Deficiency number 5 - Policies and procedures have been put mto place during the subsequent fiscal year Mail cash and EFT collections are reconciled daily to the general ledger

DEPARTMENT OF REVENUE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FJNDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES REVENUE/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1encIes in the Income Tax D1v1sIon SubsIdIary Records Finding Control Number FS-474-01-03 We concur with this finding However. the feas1b1hty. practicality and financial responsIbI1ity of captunng withholding information for approximately 3 million (+) ind1v1dual tax returns with present resources would be a shift in the strategic direction of the Department of Revenue Previously. the Department did a limited manual sampling of comparing business W-2 information to indIvIdual tax returns This sampling indicated extremely low non-compliance The Department has agreed. within budget restraints. to expand this pilot program to a limited systematic matching of electronic W-2 information to ind1v1dual filings
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SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

DEPARTMENT OF REVENUE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1enc1es in the State Revenue Collections Fund (Overall) Finding Control Number FS-474-02-01
Our examination included a review of the internal accounting controls and accounting procedures utilized by the Department of Revenue (Department) in maintaining their State Revenue Collections Fund This examination included procedures to provide reasonable assurance that revenue collections received by the Department through either the Mail Cash System (manual deposits by the Department) or the Electronic Funds Transfer Maintenance Unit (electronic fund transfers from taxpayers) were adequately accounted for by the Department's general ledger system maintained by the Central Accounting Unit and were properly recorded in the subsId1ary ledgers and associated records maintained by the D1v1s1ons and ind1v1dual tax unrts Our procedures also included a reconcIliat1on of the revenue collections received and subsequently transferred by the Department to the Office of Treasury and Fiscal Services (OTFS), which acts as the State Treasury The following defic1enc1es and inappropriate practices were found to exist
1) The maJorrty of entnes made to the general ledger system were made by manual Journal entry The ut1hzatJon of only manual Journal entnes increases the nsk of erroneous postings Our review disclosed multiple instances where entries were posted twice to the general ledger The resulting overstatements made the reconc1hatIon of revenue collections received wrth amounts transferred to OTFS unduly difficult
The Department should develop procedures through which the act1v1ty of the subs1d1ary revenue collect1on records are properly recorded wrthin the general ledger system used by the Department, the statewide Phoenix accounting system
2) The Department has not established an internal control system whereby the subs1d1ary ledgers and associated records properly roll-up" into the general ledger As a result, the general ledger system and the subs1d1ary ledger system operate independently of each other and are not reconciled penod1cally In addrt1on, there Is no consistent cut-off date established between the two sets of records The lack of controls, which ensure a prompt reconc11iat1on of the general ledger and subs1dIary records, has resulted in the Department's accounting records in the DIv1s1ons and individual tax unrts being inconsistent, and in certain instances not reconcilable wrth the general ledger

DEPARTMENT OF REVENUE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1enc1es in the State Revenue Collections Fund (Overall) Finding Control Number FS-474-02-01 (continued)
The Department should establish policies and procedures that will establish managerial control for the Central Accounting Unit over the subs1d1ary ledgers and associated records through use of an integrated general and subs1d1ary ledgers system In add1t1on, consistent cut-off dates should be established between the two systems and all subs1d1ary ledgers and associated records should be reconciled to the general ledger on a monthly basis
3) The Department has not established an internal control system that requires cash receipts and disbursements to be posted in the accounting penod in which they occur, allowing dIscretIonary shifting of cash receipts and disbursements between accounting penods This "shifting of funds" Is inconsistent wrth the Cash Receipts and Disbursements basis of accounting and compounds the problems associated with reconciling the general ledger system and the subs1d1ary ledgers and associated records rnaintamed by the D1vis10ns
State Revenue Collections Funds are maintained on the Cash Receipts and Disbursements basis of accounting as prescnbed or permitted by statutes and regulallons of the State of Georgia The Department should develop and implement procedures to ensure that cash receipts and disbursements are recorded in the general ledger at the llme of occurrence, as required by the Cash Receipts and Disbursements basis of accounting In add1t1on, the Department should develop and implement procedures to ensure that posting dates and accounting penod cut-offs in the general ledger are consistent wrth the posting dates and accounting penod cut-offs in the subsIdIary ledgers and associated records
4) The Department has not established an internal control system which ensures that revenue collections received by the Department through either the Mail Cash System and/or the Electronic Funds Transfer Maintenance Unrt are reconciled to the general ledger
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DEPARTMENT OF REVENUE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1enc1es in the State Revenue Collections Fund (Overall) Finding Control Number FS-474-02-01 (continued)
The Department should develop and implement procedures to ensure that all receipts are reconciled to general ledger postings on at least a monthly basis Fa1lure to reconcile receipts to postings in the general ledger could result in misstatements to the financial statements not being detected, prevented or corrected
5) The Department converted the State Revenue Collections Fund to the statewide Phoenix accounting system as of July 1, 2001 The new accounting system provided for separate program information for each type of revenue received by the Department However, the dIstnbubon of cash balances by tax type was incorrect This deficiency resulted in extensive time and effort being required to review and correct the financial activity for reporting by tax type
The defic1enc1es noted above are a result of the Department's failure to integrate rts accounting system and to provide for strong, clear lines of authonty and internal controls. The Department should carefully evaluate each of these defic1enc1es and take appropnate action to resolve these matters
REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1enc1es in the Income Tax DivIsIon Subs1dIary Records Finding Control Number FS-474-02-02
Our examination included a review of the internal accounting controls and accounting procedures utIhzed by the Income Tax Div1s1on (D1vis1on) of the Department of Revenue (Department) for maintaining subs1d1ary ledgers and associated records. This review revealed that there Is a deficiency in the maintenance of subsIdIary records by the D1v1sIon The D1v1s1on does not adequately track data received from both companies and 1nd1v1duals concerning taxpayer wages. income tax withholdings or estimated payments of Georgia income tax Only limited work in regard to individual confirmation of Form W-2 information Is performed by the Department.
As a result of this deficiency, the D1v1sIon cannot ensure, in all cases, that the withholding amount claimed by the taxpayer on the annual tax return Is accurate or
3

DEPARTMENT OF REVENUE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Defic1enc1es in the Income Tax D1v1s1on Subs1d1ary Records Finding Control Number FS-474-02-02 (continued) that known taxable income 1s reported as income This condrt1on resulted due to the Department's failure to design and implement needed procedures, programs or systems The Department should design and implement a system that will provide for the systematic reconc1hat1on of income and withholding data received from employers and ind1v1duals wrth Form W-2 and other documents filed with year-end ind1v1dual
tax returns
4