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

MANAGEMENT REPORT AUGUSTA TECHNICAL INSTITUTE
AUGUSTA, 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

AUGUSTA TECHNICAL INSTITUTE MANAGEMENT REPORT - TABLE OF CONTENTS -

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHIBITS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGET FUND

2

SCHEDULES OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

B

"A"DEPARTMENTOFTECHNICALANDADULTEDUCATION

3

C

"B" LOTTERY FOR EDUCATION

4

D RECONCILIATION OF SALARIES AND TRAVEL

5

:5.

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

SECTIONID 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 1, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe State Board of Technical and Adult Education Members ofthe Local Board of Directors
and Honorable Terry Elam, President Augusta Technical Institute
Ladies and Gentlemen:
As part of our audit of the statutory basis fmancial 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 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 Augusta Technical Institute. Accordingly, the financial statements and compliance activities of Augusta Technical Institute were examined to the extent considered necessary in order to express opinion as to the fair presentation of the fmancial 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 ofAugusta 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 ofmanagement of Augusta Technical Institute. However, this report is a matter of public record and its distribution is not limited.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp

SECTION I SELECTED FINANCIAL INFORMATION

AUGUSTA 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"
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 Reserved Fund Balance Carried Over from
Prior Year as Funds Available

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

$

749,003.79

294,80 $

$

749,298.59 $

$ 96.68
96.68 $

$

536.46

512,534.48 $

$

513,070.94 $

$
0.00 0.00 $

$

294,80 $

185,52

39.43

416,130.01

$

416,649.76 $

96.68 $ 96.68 $

TOTAL
749,003.79 391.48
749,395.27
536.46 512,534.48
0,00 513,070.94
391.48 185.52
39.43 416,130.01 416,746.44

FUND BALANCE - JUNE 30,1997

$

845,719.77 $

0.00 $ =====8.4.=.5,=71=9=.7==7

SUMMARY OF FUND BALANCE
Reserved Federal Financial Assistance For Expired Grant Balances Inventories Live Work Projects Prior Year Local Funds Student Services
Surplus

$

329,84

351,441.76

118,758.39

133,087.34

241,994,54

107.90 $

$ 0.00

329,84 351,441.76 118,758.39 133,087.34 241,994,54
107.90

$

845,719.77 $

-2-

0.00 $ =====8=4=5,=71=9.,.7..=7

AUGUSTA 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"

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

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 9,513,996.00 $ 9,512,161.09 $

2,747,790.00

1,959,069.81

3,884,647.00

3,627,536.45

$ 16,146,433.00 $ 15,098,767.35 $

-1,834.91 -788,720.19 -257,110.55
-1,047,665.65

0.00

416,130.01

416,130.01

$ 16,146,433.00 $ 15,514,897.36 $ _ _...;-6;.;,3.;.:1,.;.53;.;5...;.64..;.

EXPENDITURES
Personal Services-Institutions Operating Expenses-I nstitutions Quick Start Program Adult Literacy Grants Job Training Partnership Act

$ 10,143,400.00 $ 3,307,458.00 378,327.00 540,180.00 1.777,068.00

9,955,685.64 $ 3,112,033.84
378,327.00 531,144.50 1,025,171.90

187,714.36 195,424.16
0.00 9,035.50 751,896.10

$ 16,146,433.00 $ 15,002,362.88 $ _ _1..:....,1_44..;.:,_07...;.0....;.1.;;;..2

Excess of Funds Available over Expenditures

$ 512,534.48 $ ===5=12=::,=534====:.4=8

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AUGUSTA TECHNICAL INSTITUTE 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 Appropriations

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 113,326,00 $ 113,326.00 $

0_,0_0

EXPENDITURES Equipment-Technical Institutes

$ 113,326.00 $ 113,326.00 $

...;0...;.0..;...0

Excess of Funds Available over Expenditures

$

0.00 $=======0=,0=0

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AUGUSTA 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

SALARIES $ 8,749,853.20 $

TRAVEL 110,675.72

39,833.01 -35,535.48

$ 8,754,150.73 $ 110,675.72

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

AUGUSTA 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

824-96-01 824-96-02

Umesolved - See Corrective ActionlResponses Umesolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Equipment Inventory Records Finding Control Number 824-96-01

Measures have been taken to train personnel in the responsible department the importance of performing accurate inventory reviews and the importance of maintaining their inventory, as well as notifying the property clerk when changes occur. There are still some discrepancies in the inventory listing. Departments will complete a physical inventory in FY '98. Each supervisor will be responsible for the accuracy of the inventories.

REVENUES/RECEIVABLES/RECEIPTS Inadequate Accounting Control Procedures Finding Control Number 824-96-02

(1) Outstanding receivables are monitored throughout the year and attempts are made to collect monies owed to the Institute.

(2) Outstanding receivable for insufficient funds from prior years are pursued for collection. Every student with fees due is shown in our Banner student system and their accounts are placed on hold status, preventing them from all transactions until their fees are paid. In FY '93, procedures were developed, and remain as policy in FY '94, to remove students from classes if their check for fees is returned.

(3) For FY '93 Tuition Work Assistance outstanding receivables were established in exchange for the student working for the Institute, however, balances remaining in these accounts resulted from the student withdrawing from school before completing the hours required to work. Efforts are being made to collect these debts and holds have been placed on the student's account. In FY '94, with the implementation of the Hope Grant Program, the need for Tuition Work Assistance was eliminated.

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AUGUSTA 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 CORRECTIVE ACTIONIRESPONSES REVENUESIRECEIVABLESIRECEIPTS Inadequate Accounting Control Procedures Finding Control Number 824-96-02 (4) The Financial Aid Office eligibility determination has been improved upon through the utilization of the Banner Financial Aid System and the Electronic Data Exchange System software packages, allowing ineligibility to be detected sooner. Also a more intense screening before approval has been implemented. Attempts are made to collect the debt from the student and a hold is placed on the student's file.
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SECTIONlli CURRENT YEAR FINDINGS AND QUESTIONED COSTS

AUGUSTA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Equipment Inventory Records Finding Control Number: FS-824-97-01
For the year under review, our examination included a review ofthe internal accounting controls utilized by Augusta Technical Institute in maintaining their State Property System. A sample of 30 equipment items was selected to test the accuracy of the Institute's property management records. These items contained a value of $130,320.61 out of a population of $4,978,406.51 and were selected for the purpose of locating the equipment as recorded in the inventory records. The results of our testing procedures disclosed that two items, with a total cost of $4,000.00 could not be located. In addition to the unlocated items noted above, additional procedures disclosed that one item with an acquisition cost of$2,355.19 was not included on the inventory listing.
The Institute is required to maintain equipment inventories in accordance with provisions ofthe State Property Management System Manual. The discrepancies identified were caused by the Institute's failure to follow guidelines for maintaining equipment inventories.
The Institute should follow established procedures to ensure that equipment inventory records are maintained in accordance with the State Property Management System Manual.
REVENUES/RECEIVABLES/RECEIPTS Inadequate Accounting Control Procedures Finding Control Number: FS-824-97-02
The following deficiencies were noted in procedures and documentation of the "Other" accounts receivable balances as of June 30, 1997:
(1) The "Other" accounts receivable category included $490.16 in student receivables outstanding from FY '96, $1,431.65 from fiscal year 1992, $2,779.96 from fiscal year 1991, and $22,071.97 from fiscal year 1990.
Tests of underlying documentation to support these receivables disclosed numerous instances where supporting documentation was not adequate to determine if the amounts recorded were actually valid receivables.
(2) The "Other" accounts receivable category included $9,019.86 in checks returned for insufficient funds from fiscal year 1996 or earlier.
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AUGUSTA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1997
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS Inadequate Accounting Control Procedures Finding Control Number: FS-824-97-02
(3) The "Other" accounts receivable category included $589.89 in accounts receivable for tuition and fees from fiscal year 1993 for which payment was deferred by the Institute under a "Tuition Work Assistance Agreement" to enroll and attend classes at the Institute. Under this agreement, students were allowed to enroll and attend classes in exchange for work for the Institute. The "Tuition Work Assistance" policy was discontinued as of June 30, 1993.
(4) The "Other" accounts receivable category included $2,764.98 in accounts receivable for tuition and fees for which payment was deferred by the Institute. These deferments were a result of the Institute's approving a number of students for Pell Grants only later to find the students were ineligible.
Deferring payment of tuition and fees without approved fmancial aid is beyond the authority granted to the Institute by the Administrative Central Office of the Georgia Department of Technical and Adult Education. This practice by the Institute should be discontinued.
The Institute should initiate collection procedures in an effort to collect all amounts due to the Institute. Furthermore, the Institute should review all delinquent student accounts receivable to determine if the amounts accurately reflect amounts owed to the Institute.
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number: FS-824-97-03
For the year under review, Augusta Technical Institute's accounting procedures did not provide for adequate internal control over the bank reconciliation process. The following deficiencies were noted:
(1) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time.
(2) There was no administrative review to determine that bank reconciliations were correct and that all required adjustments had been made.
This condition resulted from the Institute's failure to implement adequate internal controls over the bank reconciliation process. The Institute should implement appropriate procedures and controls to ensure that all reconciling items are identified and corrected promptly. Administrative reviews should be performed and documented to ensure that bank reconciliations are accurate and performed in a timely manner.
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