Management report, Georgia Student Finance Commission, an organizational unit of the state of Georgia, year ended June 30, 1997

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MANAGEMENT REPORT GEORGIA STUDENT FINANCE COMMISSION 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

GEORGIA STUDENT FINANCE COMMISSION MANAGEMENT REPORT - TABLE OF CONTENTS -

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXlllBITS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGET FUND

2

SCHEDULES OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

B

"A" STUDENT FINANCE COMMISSION

3

C

liB" LOTTERY FOR EDUCATION

4

D RECONCILIATION OF 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
October 28, 1997

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the Board of Commissioners
and Honorable E. Glenn Newsome, Executive Director Georgia Student Finance Commission
Ladies and Gentlemen:
As part of our audit of the statutory basis financial statements ofthe 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 the Georgia Student Finance Commission. Accordingly, the financial statements and compliance activities of the Georgia Student Finance Commission 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 the Georgia Student Finance Commission 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 of the Georgia Student Finance Commission. However, this report is a matter of public record and its distribution is not limited.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm

SECTION I SELECTED FINANCIAL INFORMATION

GEORGIA STUDENT FINANCE COMMISSION ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30,1997

EXHIBIT "A"

FUND BALANCE - JUNE 30,1997
SUMMARY OF FUND BALANCE Reserved Lottery for Education Surplus

$

124,847.81 $ 5,978,229.67 $ 6,103,077.48

$ 3,916,932.08 $ 3,916,932.08

$

124,847.81

2,061,297.59

2,186,145.40

$

124,847.81 $ 5,978,229.67 $ 6,103,077.48

-2-

GEORGIA STUDENT FINANCE COMMISSION SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" STUDENT FINANCE COMMISSION YEAR ENDED JUNE 30,1997

EXHIBIT"B"

FUNDS AVAILABLE
REVENUES
State Appropriation Other Revenues Retained

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 32,757,855.00 $ 32,754,952.00 $

11,453.00

15,950.00

-2,903.00 4,497.00

$ 32,769,308.00 $ 32,770,902.00 $

~1'.;;...;594:.....;....;;'0~0

EXPENDITURES
Personal Services Regular Operating Expenses Travel Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Guaranteed Educational Loans Tuition Equalization Grants Student Incentive Grants Law Enforcement Personnel Dependents' Grants North Georgia College ROTC Grants Osteopathic Medical Loans Georgia Military Scholarship Grants

$

425,609.00 $

315,647.90 $

15,000.00

10,819.93

16,000.00

13,752.79

2,500.00

2,479.08

13,822.00

13,594.28

45,600.00

39,674.08

12,000.00

11,323.98

61,453.00

61,433.73

3,292,641.00

3,292,645.00

25,452,487.00

25,452,487.00

2,216,321,00

2,216,321.00

64,000.00

64,000.00

321,875.00

321,875.00

100,000.00

100,000.00

730,000.00

730,000.00

109,961.10 4,180.07 2,247.21 20.92 227.72 5,925.92 676.02 19.27 -4.00 0.00 0.00 0.00 0.00 0.00 0.00

$ 32,769,308.00 $ 32,646,053.77 $ _ _--..,;1.::.23.:..:.,2;;;;..:5:....:4..;,;;;.2~3

Excess of Funds Available over Expenditures - 3-

$

124,848.23 $==~1;24~,84~8,;.;;;.2~3

GEORGIA STUDENT FINANCE COMMISSION SCHEDULE OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30,1997

EXHIBIT"C"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 161,118,161.00 $ 161,118,161.00 $

0.00

2,006,536.09

$ 161,118,161,00 $ 163,124,697.09 $

0.00 2,006,536,09
2,006,536.09

0.00

11,000,000.00

11,000,000.00

$ 161,118,161.00 $ 174,124,697.09 $_----:1~3~,O..::..:06:.!.,5:..:3~6.:...:;.0..::..:9

EXPENDITURES
Hope Financial Aid - Tuition Hope Financial Aid - Books Hope Financial Aid - Fees Tuition Equalization Grants Georgia Military College Scholarships LEPD Scholarship Teacher Scholarships Promise Scholarships

$ 75,213,784.00 $ 77,402,704.91 $

21,277,807.00

26,420,476.82

14,498,583.00

17,285,182.66

37,325,387.00

35,543,341,23

567,000.00

437,497.30

235,600.00

149,388.00

10,000,000.00

10,000,000.00

2,000,000.00

962,638.00

-2,188,920.91 -5,142,669,82 -2,786,599.66 1,782,045.77
129,502.70 86,212.00 0.00
1,037,362.00

$ 161,118,161.00 $ 168,201,228.92 $ _ _-..:..7~,0..::..:83:.!.,O:...:6..:..7.:...:;.9.::..2

Excess of Funds Available over Expenditures

$

5,923,468.17 $ ===5:1:::,9=23~,4~6=8,;,.;.1=7

-4-

GEORGIA STUDENT FINANCE COMMISSION RECONCILIATION OF TRAVEL YEAR ENDED JUNE 30. 1997
Total per Annual Supplement Accruals
June 30, 1996

EXHIBIT"D"

$

33,190.21

-901.29

$ ======3:=2=,2:;::::::88=,9:=2

-5-

SECTIONll AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA STUDENT FINANCE COMMISSION 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

476-96-01

Further Action Not Warranted

CORRECTIVE ACTIONIRESPONSES

BUDGET PREPARATIONIEXECUTION Overexpenditure ofBudget Unit Object Classes Finding Control Number 476-96-01

Controls implemented during fiscal year 1997 ensured that Budget Unit "A" did not violate expenditure limits for any budgeted object class.

However, Budget Unit "B" did violate those laws because the Agency did not submit a budget amendment request to properly allocate the reserve which had been established at the end of fiscal year 1996. Detailed instructions have now been issued which describe the prescribed procedures to ensure that such amendments will be submitted using the appropriate procedures designated to properly allocate any such reserves.

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA STUDENT FINANCE COMMISSION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1997

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

BUDGET PREPARATIONIEXECUTION Overexpenditure of Budget Unit Object Classes Finding Control Number: FS 476-97-01

The total approved budget for the Georgia Student Finance Commission provided for expenditures of $32,769,308.00 in Budget Unit "A", and $161,118,161.00 in Budget Unit "B". A comparison of anticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicated that the Budget Unit "A" object class, Guaranteed Educational Loans, was overspent by $4.00.

In addition, the following Budget Unit "B" object classes were overspent by the amounts identified below:

Hope Financial Aid - Tuition Hope Financial Aid - Books Hope Financial Aid - Fees

$ 2,188,920.91 $ 5,142,669.82 $ 2,786,599.66

The overexpenditures identified above are in violation of Section 58 of the Amended Appropriations Act of 1996-1997. These overexpenditures were caused by the Commission's failure to monitor the expenditure of funds against the budgeted expenditures by object class.

The Georgia Student Finance Commission should review its internal control procedures over budget operations, design procedures which would prohibit the expenditure of funds in excess of budget approval, and implement those procedures to strengthen the internal controls over the budget function.