Management report, Albany Technical Institute, Albany, Georgia, an organizational unit of the state of Georgia, year ended June 30, 1997

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MANAGEMENT REPORT ALBANY TECHNICAL INSTITUTE
ALBANY, 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

ALBANY TECHNICAL INSTITUTE 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" 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 III 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
December 5, 1997

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors
and Honorable Anthony Parker, President Albany Technical Institute
Ladies and Gentlemen:
As part of our audit of the 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 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, 1997, we have performed certain audit procedures at Albany Technical Institute. Accordingly, the fmancial statements and compliance activities of Albany 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 fmancial and compliance activities of Albany 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 of Albany Technical Institute. However, this report is a matter of public record and its distribution is not limited.

CLV:jy

Claude L. Vickers State Auditor

SECTION I SELECTED FINANCIAL INFORMATION

ALBANY 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" Reimbursement of Prior Year Expenditures
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 Human Resources Child Care and Development Block Grant
Randolph County Board of Education Tech Prep Education
Southwest Georgia Regional Development Center Job Training Partnership Act
Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCE - JUNE 30. 1997

flAil
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

"8 11 LOTIERYFOR
EDUCATION

TOTAL

$

618,243.42

7,917,53 $

$

626,160,95 $

$ 0,00
0,00 $

618,243.42 7,917,53
626,160,95

$

24,615,52 $

6,905,57 $

31,521,09

426,502,77 641.90

10,517.35

426,502,77 10,517.35 641,90

$

451,760,19 $

17,422.92 $

469,183,11

$

7,917,53 $

514,00

208.03

472.59

226,94

495,506,74

$

504.845,83 $

0,00 $

7,917.53 514.00

0,00 $

208,03 472.59 226,94 495,506.74 504,845,83

$

573,075,31 $

17,422,92 $ ====5=90..,.4=9;,;;8=.2=3

SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance For Refund to Georgia Department of Technical and Adult Education - Administrative Central Office For Expired Grant Balances For Other Flood Recovery Insurance Proceeds Inventories Live Work Projects Prior Year Local Funds
Surplus

$
$
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2,744,61 513,64
1,512.06 214,34
121,696.44 31,920,53
390,021,66 24,452,03 $

$ 17,422,92

2,744,61 513,64
1,512.06 214,34
121,696.44 31,920,53
390.021,66 41,874.95

573,075,31 $

17,422,92 $

590,498,23

ALBANY 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 Quick Start Program Adult Literacy Grants Job Training Partnership Act
Excess of Funds Available over Expenditures

$ 11,678,978.00 $ 11,127,562.26 $ - - - --55-1',4-15-.7-4

$ 6,281,595.00 $ 6,217,117.34 $

4,569,622.00

3,734,334.69

8,202.00

8,087.00

588,563.00

570,518.59

230,996.00

171,001.87

64,477.66 835,287.31
115.00 18,044.41 59,994.13

$ 11,678,978.00 $ 10,701,059.49 $

9_77-:.,_91_8_.5_1

$ 426,502.77 $ ===4=26=,5=0=2=.7==7

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ALBANY 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

VARIANCE FAVORABLE (UNFAVORABLE)

$ 154,180.00 $ 153,915.09 $ - - - --26-4.9-1

EXPENDITURES Equipment-Technical Institutes

$ 154,180.00 $ 143,397.74 $

10-,-,7_8_2_.2_6

Excess of Funds Available over Expenditures

$

10,517.35 $ ====10:::!::,5=1::::::7,=3=5

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ALBANY TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1997

EXHIBIT"D"

Totals per Annual Supplement
Accruals June 30, 1997 June 30, 1996
Adjustments Seals, Louie C. Parker, Anthony

SALARIES $ 5,401,415.04 $

TRAVEL 38,251.18

124,070.59 -56,366.91

402.23 -1,449.86

33.50 465.73

$ 5,469,118.72 $=====3d7,=70:.=2,;,,;,.7=8

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

ALBANY 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

820-96-01 820-96-02

Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

INVENTORIES Inadequate Resale Inventory Records Finding Control Number: 820-96-01

Effective Spring Quarter 1997, Albany Technical Institute has implemented an average costing method of resale inventory. At this time all current inventory prices were updated to reflect an average cost calculation for all existing inventory and a spreadsheet devised to calculate new costs when items are purchased.

The Bookstore Coordinator will be responsible for completing the updates on costs for the resale inventory. The Accounting Manager verifies the price updates quarterly.

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Equipment Inventory Records Finding Control Number: 820-96-02

See our corrective action/response to fmding number 820-96-02 in the Prior Year Federal Awards Findings and Questioned Costs.

PRIOR YEAR FEDERAL AWARDS FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

820-94-07 820-96-02 820-96-03

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

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ALBANY TECHNICAL INSTITUTE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997
PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Equipment Inventory Records Finding Control Number: 820-96-02 Additions are posted to the inventory records prior to each month's general accounting close and deletions are made on an as they occur basis. Capital leases are also now recorded in the equipment inventory records. REPORTING Federal Cash Transaction Report Not Reconciled Finding Control Number: 820-96-03 The corrective action plan was implemented to correct the "cash on hand" through an adjustment of$12,265.00 which was made to the Winter Quarter 1997 Pell drawdown to balance the Federal Cash Transactions Report. Voids ofpayments from prior fiscal years (FY 95) have caused the Federal Cash Transaction Report to again be out of balance. Albany Technical Institute will be soliciting assistance from both Department of Technical and Adult Education and our regional Department of Education office in Atlanta to resolve the prior year adjustments.
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SECTIONlli CURRENT YEAR FINDINGS AND QUESTIONED COSTS

ALBANY TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number: FS-820-97-01
For the year under review, accounting deficiencies were noted in the accounting records of Albany Technical Institute as described below:
(1) Numerous posting errors in balance sheet, revenue and expenditure accounts were identified and corrected during the course of our field work.
(2) The Institute failed to include a new bank account on the accounting records. The account was opened in January of 1997.
(3) Accounts receivable and accounts payable subsidiary records as presented for review were not properly reconciled to the general ledger control accounts. Numerous adjustments were necessary to reconcile subsidiary records to the accounting records.
(4) Numerous adjustments were necessary to reconcile salary payments made to employees as reported to the Georgia Department of Audits with the amounts recorded as salaries in the general ledger.
These deficiencies occurred because of management's failure to establish procedures to review and reconcile balances on the general ledger with supporting records and to ensure that all bank accounts were included on the Institute's accounting records. The Institute should establish appropriate procedures to ensure that the general ledger is posted, balanced and reviewed on a monthly basis and that detail records supporting the general ledger are complete, accurate and reliable. Corrective action should be taken to ensure that the accounting records include all bank accounts and transactions.
GENERAL LEDGER Agency Fund Overpayments Finding Control Number: FS-820-97-02
At June 30, 1997, Albany Technical Institute had a deficit balance of$15,983.10 in the Fiduciary Fund TypeAgency Funds - HOPE Scholarship Program. This deficit balance is the result of disbursing funds in excess of available funds. Payments should not be made in excess of collections for Agency Funds.
Appropriate action should be taken by the Institute to secure reimbursement of this overpayment.
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ALBANY TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number: FS-820-97-03
For the year under review, it was noted that the Institute's accounting procedures did not provide adequate internal control over the bank reconciliation process. The accounting procedures related to cash were found to be deficient as follows:
(l) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.
(2) Numerous adjustments were necessary to reconcile the accounting records with bank statements.
These conditions occurred because management did not implement appropriate procedures and controls to ensure that all bank statements were reconciled to the general ledger on a timely basis and that reconciling items were identified and corrected promptly.
The Institute should implement appropriate procedures and controls to ensure that all bank statements are reconciled to the general ledger on a timely basis and that reconciling items are identified and corrected promptly. The Institute should establish procedures which ensure that cash and cash 'equivalents are adequately safeguarded.
INVENTORIES Inadequate Resale Inventory Records Finding Control Number: FS-820-97-04
A review ofthe Institute's procedures for costing ofresale inventories revealed that inventory was not properly updated for new costs when items were purchased.
This condition occurred because management failed to adequately monitor activity for the resale inventory records. The Institute should implement appropriate procedures to ensure that the resale inventory system is updated for new costs when items are purchased.
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Finding Control Number: FS-820-97-05
A review of the equipment inventory records revealed that an unidentified variance of $230,719.49 existed between the equipment inventory records and the general ledger at June 30, 1997. Also, the equipment inventory records were not updated for all equipment purchases made in fiscal years 1996 and 1997.
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ALBANY TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Finding Control Number: FS-820-97-05

These deficiencies occurred due to management's failure to ensure that equipment inventory records were properly updated and reconciled to the general ledger. The Institute should establish the necessary controls to ensure that equipment inventories are maintained in accordance with provisions of the State Property System Manual.

FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

REPORTING Federal Cash Transaction Report Not Reconciled Pell Grant Program (CFDA 84.063) Finding Control Number: FA-820-97-01

For the year under review, "cash on hand end of period" reported on the Institute's final monthly fiscal year 1997 Federal Cash Transaction Report - Status of Federal Cash to the U. S. Department of Education could not be reconciled to the accounting records as indicated below:

Report Date

Cash on Hand End of Period Reported on FormPMS 272

Ending Cash Per Accounting
Records

Difference

June 30, 1997

$

562.00 $ 7,208.44 $ -6,646.44

This difference occurred due to failure to reconcile records maintained by the Financial Aid Office, which are used to prepare the Federal Cash Transaction Report, with the formal accounting records maintained in the Business Office.

Procedures should be established to ensure that all Federal Cash Transactions Reports are reconciled to the Institute's formal accounting records, and documentation should, be maintained reflecting this reconciliation. The Institute should contact its grantor agency regarding this unreconciled difference.

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