State Accounting Office selected summary financial information for the state of Georgia, independent accountant's report on applying agreed-upon procedures for the fiscal year ended June 30, 2005

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~TE OF GEORGIA

LJcPARTMENT OF AUDITS AND ACCOUNTS

Russell W. Hinton State Auditor

STATE ACCOUNTING OFFICE SELECTED SUMMARY FINANCIAL INFORMATION
FOR THE STATE OF GEORGIA
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING. AGREED-UPON PROCEDURES
FOR THE FISCAL YEAR ENDED JUNE 30, 2005

STATE ACCOUNTING OFFICE SELECTED SUMMARY FINANCIAL INFORMATION
FOR THE STATE OF GEORGIA -TABLE OF CONTENTS-

INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES

EXHIBITS

GENERAL FUND (STATUTORY BASIS)

A CALCULATION OF SURPLUS WORKSHEET

2

B SCHEDULE OF STATE REVENUE COLLECTIONS BY DEPARTMENTS

5

C SCHEDULE OF CASH RECEIPTS, TRANSFERS AND

CHANGES IN FUND BALANCES

6

D ANALYSIS OF REVENUE SHORTFALL RESERVE

7

DEPARTMENT OF AUDITS AND ACCOUNTS

254 Washington Street, S.W., Suite 214

w. RUSSELL

HINTON

STATE AUDITOR (404) 656-2174

Atlanta, Georgia 30334-8400

August 31, 2005

Honorable Lynn H. Vellinga, State Accounting Officer State Accounting Office 200 Piedmont Avenue 1604 West Tower Atlanta, Georgia 30334

Independent Accountant's Report on Applying Agreed-Upon Procedures

Dear Mr. Vellinga:

We have performed the procedures enumerated below, which were agreed to by the State Accounting Office on behalf of management of the State of Georgia, solely to assist you in assessing the accuracy of the State of Georgia's 2005 Calculation of Surplus Worksheet, hereafter referred to as "Exhibit "A", and the supporting 2005 Schedules: Schedule of State Revenue Collections by Departments, Schedule of Cash Receipts, Transfers and Changes in Fund Balances, and Analysis of Revenue Shortfall Reserve, hereafter referred to as "Exhibit B", "Exhibit C" and "Exhibit D" , respectively. Exhibits "A" through "D" are attached to this report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

1.

Examine the 2004 audit adjustments made to the Office of Treasury and Fiscal

Services' (OTFS) financial statements and trace each amount to ensure they have been

correctly applied to Exhibits "A", "B" and "C".

We did not note any exceptions as a result of our procedures.

2.

Examine the Department of Revenue (DOR)/Office of Treasury and Fiscal Services

reconciliation of revenue collections transmitted by DOR/received by OTFS. Trace

reconciling items to Exhibit "A" and/or to Exhibits "B" and "C". Determine if there are

misstatements to Exhibits "A", "B" and "C" greater than $1 million.

We did not note any exceptions as a result of our procedures.

3.

Select the top five remitting departments (other than the Department of Revenue) listed

on Exhibit "B" and confirm amounts with the remitting agency (either by PeopleSoft

query or agency personnel) to ensure amounts reported on Exhibit "B" is not

different by more than $1 million for each Department tested.

We did not note any exceptions as a result of our procedures.

4.

Confirm remittances by the DOR to OTFS for the following tax types included in Exhibit

"C" with the Department of Audits and Accounts (DOAA) auditors at DOR.

Determine if there are variances that are greater than $1 million for any of the selected

tax types:

a. Corporate Income Tax

b. Individual Income Tax

c. General Sales and Use Tax

d. Motor Fuel Tax

e. Tobacco Tax

We did not note any exceptions as a result of our procedures.

5.

Using the amount confirmed for Motor Fuel Tax in procedure No. 4 along with the

amounts recorded as revenue on the DOR Motor Fuel Tax Unit records, recalculate the

motor fuel reserve and compare to the amount indicated on Exhibit "A".

We did not note any exceptions as a result of our procedures.

6.

Review the following distributions applicable to fiscal year ended June 30, 2005 made

during July 2005 by the DOR (and any adjustments made by the State Accounting

Office) to ensure they have been accurately adjusted on Exhibits "A", "B" and "C".

a. Education Local Option Sales Tax

b. Local Option Sales Tax

c. MARTA Sales Tax

d. Special Purpose Tax

We did not note any exceptions as a result of our procedures.

7.

Review Undistributed Sales Tax documentation to ensure it has been accurately

adjusted on Exhibits "A", "B" and "C".

We did not note any exceptions as a result of our procedures.

8.

Confirm that the last remittance of FY 2005 Lottery proceeds has been included in

Exhibit "A".

We did not note any exceptions as a result of our procedures.

9.

Trace appropriate entries into the Motor Fuel interest calculation prepared by the OTFS.

Ensure that the interest earned on local government accounts in the Georgia Extended

Asset Pool have not been included in the calculation. Determine if the calculation is

misstated by an amount greater than $1 million. Also, determine if the correct amount of

interest was used in determining the Motor Fuel Reserve as listed on Exhibit "A".

We did not note any exceptions as a result of our procedures.

10. Confirm that the Office of Planning and Budget has concluded the warrant process and that the allotments included on Exhibit "A" agree with the DOAA worksheet for the FY 2005 Amended Appropriations Act.

We did not note any exceptions as a result of our procedures.

11. Examine the final budget adjustment for the Department of Community Health nursing home fees to determine if the amount in Exhibits "A", "B" and "C" for nursing home fees equals the final budgeted amount.
We did not note any exceptions as a result of our procedures.
12. Recalculate the following reserved fund balances according to applicable statutes and determine if the amounts indicated on Exhibit "A" and "D" are correct: a. Lottery Reserve b. Revenue Shortfall Reserve c. Tobacco Settlement Reserve d. Motor Fuel Reserve
We did not note any exceptions as a result of our procedures.
We were not engaged to, and did not conduct an examination, the object of which would be the expression of an opinion on Exhibits "A" through "D''. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted, ~
w.
Ru ell W. Hinton, CPA, CGFM State Auditor
RWH:dp

EXHIBITS -1-

STATE ACCOUNTING OFFICE SELECTED SUMMARY FINANCIAL INFORMATION
FOR THE STATE OF GEORGIA GENERAL FUND (STATUTORY BASIS) CALCULATION OF SURPLUS WORKSHEET
JUNE 30 2005 1

EXHIBIT "A"

Carryover of Prior Year Fund Balance Reserved for Appropnat1on to Department of Transportation Midyear Adjustment Reserve Lottery for Education Tobacco Settlement Funds Old State Debt
Unreserved Undes 1gnated
Total Carryover of Pnor Year Fund Balance
Funds Available Net Revenue Collect1ons Revenue Collections, Net of Refunds, Per Office of Treasury and Fiscal Services (OTFS)
Adjustments Local Option Sales Tax D1stnbubon T1m1ng Differences June MonthEnd 01stnbut1on Report Amounts D1stnbuted, included in OTFS Revenue Collections Educat10n Local Option Sales Tax June 2004 Amounts Distributed Less: July 2004 Receipts included in June 2004 Amounts
June 2005 Amounts Dtstnbuted Less July 2005 Receipts included in June 2005 Amounts
Homestead Local Option Sales Tax June 2004 Amounts Distnbuted Less: July 2004 Receipts included in June 2004 Amounts
June 2005 Amounts D1stnbuted Less: July 2005 Receipts included in June 2005 Amounts
Local Option Sales Tax June 2004 Amounts Distnbuted Less: July 2004 Receipts included 1n June 2004 Amounts
June 2005 Amounts D1stnbuted Less. July 2005 Receipts included 1n June 2005 Amounts
MARTA Sales Tax June 2004 Amounts D1stnbuted Less July 2004 Receipts included in June 2004 Amounts
June 2005 Amounts D1stnbuted Less July 2005 Receipts included in June 2005 Amounts
Special Purpose Local Option Sales Tax June 2004 Amounts D1stnbuted Less July 2004 Receipts included in June 2004 Amounts
June 2005 Amounts D1stnbuted Less. July 2005 Receipts included in June 2005 Amounts
Und1stnbuted Local Optton Sales Tax included in OTFS Revenue Collections June 30, 2004 June 30, 2005
Revenue Collections m Transit June 30, 2004 June 30, 2005
Refund Checks 1n Transit to Department of Revenue June 30, 2004 June 30, 2005

45,333,051.01 95,560,454.66 559,364,024 50 168,261,286 72
26,980.00

868,545,796.89

868,545,796,89

16,966,538,897 49

114,980,045.35 (2,235,488.09)
(112,955,005,07) 4,000,084.32
B,912,59119 (227,886.17)
(8,882,73313) 340,695.52
89,638,305,08 (1,771,19890) (99,980,614.40) 3,627,654 97
24,574,975.61 (477.92711)
(26,369,631.53) 963,114.69
84,996,433.51 (1,562,662 50) (83,321,31835) 2,885,739 77
76,200,000.00 (102,900,000.00)
(167,508,457 82) 97,064,342.09
9,324,100.09 (6,220 66)

(2,864,825.24) (26,700,000.00) (70,444,115.73)
9,317,879.43

-2 -

STATE ACCOUNTING OFFICE SELECTED SUMMARY FINANCIAL INFORMATION
FOR THE STATE OF GEORGIA GENERAL FUND (STATUTORY BASIS) CALCULATION OF SURPLUS WORKSHEET
JUNE 30, 2005

EXHIBIT"A"

Funds Available

Net Revenue Collections

AdJustments (Continued)

Amounts included in "Net Revenue C0Uect1ons , Not Included in OTFS Revenue Conect1ons

OTFS Fund 3 (Georgia Fund 2)

Interest Earned

38,675,545.80

AdJustment to Remove Pooled Part1c1pants' Interest

(27,716,112.35)

Georgia Extended Asset Pool Transfer Fee

(701,736.08)

Purchased Accrued Interest

(1,578,767.37) $

OTFS Fund 6 Interest Earned Purchased Accrued Interest Annual Fees

12,400,697.69 (99,361.11) (29,041.75)

OTFS Fund 7 Interest Earned Purchased Accrued Interest Annual Fees
OTFS Fund 8 Interest Earned Local Government Investment Pool Administrative Fees Purchased Accrued Interest Annual Fees
OTFS Fund 23 Interest Earned
Cancellation of Income Tax Refund Requ1s1t1on reported 1n Fiduciary Account
at Department of Revenue, added back to OTFS receipts 1n August 2005

3,605,019.67 (208,479.17) (17,366 28)
3,358,493.38 (1,226.13)
(271,158.00) (161,083 99)

Correction of Posting Errors (Interest)

Amounts included in OTFS Revenue Collections, Not Included in "Net Revenue Collections''

Federal Powers Act Funds

CMIA Reimbursement Funds

Brain and Spinal lnJury Trust Fund

Lottery for Education

Lottery Receipts
auarter 4 - FY 2004

(193,568,000 00)

Quarters 1 through 3 - FY 2005

(599,514,000.00)

Interest

(127,437 43) $

(793,209,437.43)

Lottery Interest Revenue

July through June

(11,279,658.78)

Tobacco Settlement Fund Receipts and Interest

Return of Surplus - Account 1114

Returned by Cash

(2,640,173.67)

Allotment Reduction

(123,760,414.05)

Net Revenue Collections

Other Funds Available Federal Revenue Federal Powers Act Funds CMIA Reimbursement Funds Other Revenues Retained Brain and Spinal lnJury Trust Fund Lottery for Education Lottery Receipts
a uarters 1 through 3 - FY 2005
Interest Quarter 4 - FY 2005 Lottery Interest Revenue July through June Tobacco Settlement Fund Receipts and Interest

599,514,000.00 127,437.43
202,569,000 00

Total Funds Available

8,678,930 00
12,272,294.83
3,379,174.22
2,925,025.26 72,924.66
2,650,895.51 110,323.98 (1,439 28) 2,051.50
(1,689,400.00)
(804,489,096.21) (159,362,266.07) (126,400,587.72)
802,210,437.43 11,279,658.78

30,089,568.46
(1,091,940,73778) 1,439.28 (2,051.50)
1,689,400.00
813,490,096.21 159,362,266.07

15,813,996,666 63
974,541,15006 16,788,537,816.69

-3-

STATE ACCOUNTING OFFICE SELECTED SUMMARY FINANCIAL INFORMATION
FOR THE STATE OF GEORGIA GENERAL FUND (STATUTORY BASIS) CALCULATION OF SURPLUS WORKSHEET
JUNE 30, 2005

EXHIBIT "A"

Transfers FY 2005 Legislative AppropnatIon to Spending Umts House Bill 1182 (Ongmal Appropnat1on) Regular Lottery for Education Tobacco Funds Indigent Care Trust Fund
House Bill 84 (Amended Appropnat1on) Regular Lottery for Education
Budget AdJustments Indigent Care Trust Fund
less Current Year Funds Lapsed Unreserved, Undesignated
Less: Unreserved Fund Balance (Surplus) Lapsed Surplus Collected from 2004 Reports Regular Lottery for Education Tobacco Funds Early Remrttance of FY 2005 Surplus Guaranteed Revenue Debt Common Reserve Fund Department of Labor Georgia State Financing and Investment Comm1ss1on Secretary of State Ment System of Personnel Admm1strabon State Board of Workers' Compensation
Total Transfers
Total Fund Balance

15,338,540,478 00 771,553,228.00 156,370,000.00 109,857,425 00

16,376,321,131.00

$

185,877,529 00

5,338,879.00

191,216,40800

(8,427,117 00) $ 16,559,110,422.00

(3,620,808.00)

(101,863,472.06) (16,917,204.44) (1,970,349.28) $
(1,387,395 91) (1,278,478.00)
(138.38) (328.11) (691,601.00) (2,514,787.00)

(120,751,025.78) (5,872,728 40)

(126,623,754.18) 16,428,865,859.82

1,228,217,753.76

Analysis of Fund Balance Reserved for Appropnat,on to Department of Transportation Old State Debt Lottery for Education Tobacco Settlement Funds Revenue Shortfall Reserve
Unreserved Undes1gnated
Tota! Fund Balance

60,940,019.39 26,980 00
612,879,218.15 173,223,902 07 381,147,63415

1,228,217,753.76 0.00
1,228,217,753.76

-4-

STATE ACCOUNTING OFFICE

EXHIBIT "B"

SELECTED SUMMARY FINANCIAL INFORMATION

FOR THE

STATE OF GEORGIA

GENERAL FUND (STATUTORY BASIS)

SCHEDULE OF STATE REVENUE COLLECTIONS BY DEPARTMENTS

FOR THE YEAR ENDED JUNE 30, 2005

Collecting Unit
Administrative Services, Department of Properties Commission, State
Agriculture, Department of Audits and Accounts, Department of Banking and Finance, Department of Community Health, Department of Corrections, Department of General Assembly of Georgia Go-..ernor, Office of the Human Resources, Department of Insurance, Department of ln-..estigation, Georgia Bureau of Judicial Branch Labor, Department of Motor Vehicle Safety, Department of Natural Resources, Department of Pardons and Paroles, State Board of Public Service Commission Re-..enue, Department of School Readiness, Office of Secretary of State Student Finance Commission, Georgia Superior Court Clerk's Authority Transportation, Department of Treasury and Fiscal Services, Office of Workers' Compensation, State Board of

$

7,600,613.99

9,781,730.52

4,110,584.42

20,682,946.48

103,716,500.28

14,546,661.59

102,110.26

669,845.41

17,637,660.13

358,443,674.80

1,437,499.28

437,157.29

31,444,019.47

335,757,075.97

47,452,336.37

3,671,358.16

2,073,148.75

14,678,591,048.65

20,747.00

53,524,647.11

838,109.30

56,851,847.86

970.00

50,904,059.42

13,700,314.12

$ 15,813,996,666.63

-5-

STATE ACCOUNTING OFFICE

EXHIBIT "C"

SELECTED SUMMARY FINANCIAL INFORMATION

FOR THE

STATE OF GEORGIA

GENERAL FUND (STATUTORY BASIS}

SCHEDULE OF CASH RECEIPTS, TRANSFERS AND CHANGES IN FUND BALANCES

YEAR ENDED JUNE 30, 2005

Cash Receipts: Taxes Income Corporate Individual General Sales Selective Sales Motor Fuel Excise and Motor Carrier Mileage Tax Prepaid Motor Fuel Sales Tax Alcoholic Beverages Tobacco Products Insurance Premium Estate Motor Vehicle License Tax Property Departmental Regulatory Fees and Sales Federal Revenue Reimbursement for Petroleum Violation Escrow Funds Reimbursement for CMIA Other Revenues Retained Brain and Spinal Injury Trust Fund Georgia Lottery Corporation Lottery Proceeds Interest Earned Tobacco Settlement Funds and Interest Tobacco Settlement Received Interest Earned
Total Cash Receipts
Transfers Legislative Appropriation to Spending Units for Fiscal Year Ended June 30 Less: Current Year Funds Lapsed Less: Unreserved Fund Balance (Surplus) Lapsed
Net Transfers
Excess of Cash Receipts Over Net Transfers
Fund Balance July 1, 2004
Fund Balance June 30, 2005

$

729,640,399.55

7,276,607,819.36

5,215,447,136.29

487,295,726.32 330,537,284.53 152,459,424.70 249,070,469.66 331,612,138.51 42,930,113.22 285,353,901.78
66,489,431.45 646,552,821.26
1,439.28 (2,051.50)
1,689,400.00
802,083,000.00 11,407,096.21
156,427,234.07 2,935,032.00
$ 16,788,537,816.69

$ 16,559,110,422.00 (3,620,808.00)
(126,623,754.18)
$ 16,428,865,859.82

$

359,671,956.87

868,545,796.89

$ 1,228,217,753.76

Analysis of Fund Balance Reserved for Appropriation to Department of Transportation Lottery for Education Old State Debt Revenue Shortfall Reserve Tobacco Settlement Funds
Total Fund Balance June 30, 2005

$

60,940,019.39

612,879,218.15

. 26,980.00

381,147,634.15

173,223,902.07

$ 1,228,217,753.76

-6-

STATE ACCOUNTING OFFICE SELECTED SUMMARY FINANCIAL INFORMATION
FOR THE STATE OF GEORGIA GENERAL FUND (STATUTORY BASIS) ANALYSIS OF REVENUE SHORTFALL RESERVE
JUNE 30, 2005

EXHIBIT"D"

Revenue Shortfall Reserve June 30, 2005 Net Revenue Collections for the Year Ended June 30, 2005

$

381,147,634

$

15,813,996,667

Statutory Limits/Availability Maximum Reserve - 10% of Net Revenue Collections Current Year Reserve as a Percentage of Net Revenue Collections

Statutory Limit

$

1,581,399,667

2.41%

Breakdown of Reserve

Availability of Funds for FY 2006 Appropriation K-12 Needs 1% of Net Revenue Collections
Available for Governor's Release for Appropriation Balance in Excess of 4% of Net Revenue Collections
Remaining Reserve
Total Reserve

$

158,139,967 $

158,139,967

$

632,559,867

0 223,007,667

$ ===-3_81_,=14-7=,6-3=4

-7-