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

MANAGEMENT REPORT MOULTRIE AREA TECHNICAL INSTITUTE
MOULTRIE, 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

MOULTRIE AREA TECHNICAL INSTITUTE MANAGEMENT REPORT - TABLE OF CONTENTS -

LETTER OF TRANSMITTAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXIDBITS

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 ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

CLAUDE L. VICKERS
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
October 29, 1997

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe State Board of Technical and Adult Education Members of the Local Board of Directors
and Honorable Michael D. Moye, President Moultrie Area 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 ofthe 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 perfonned certain audit procedures at Moultrie Area Technical Institute. Accordingly, the financial statements and compliance activities of Moultrie Area 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 infonnation pertinent to the fmancial and compliance activities of Moultrie Area Technical Institute as of and for the year ended June 30, 1997. The particular infonnation provided is enumerated in the Table of Contents.
This report is intended solely for the use of management of Moultrie Area 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

MOULTRIE AREA TECHNICAL INSTITUTE ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30, 1997

EXHIBIT "A"

FUND BALANCE - JULY 1. 1996
Reserved
ADDITIONS
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures
Exhibit "B" Exhibit "C" Reimbursement of Prior Year Expenditures
DEDUCTIONS
Reserved Fund Balance Carried Over from Prior Year as Funds Available

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTIERYFOR
EDUCATION

TOTAL

$

184,117.85 $

0.00 $

184,117.85

$

770.18

110,501.26 $
173.92

$

111,445.36 $

$ 0.00 0.00 $

770.18
110,501.26 0.00
173.92
111,445.36

$

103,211.01 $

0.00 $

103,211.01

FUND BALANCE - JUNE 30. 1997

$

192,352.20 $

0.00 $ =====1=92=,3==:5=2::::.2::::0

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 Inventories Prior Year Local Funds
Surplus

179.38 257.35 96,500.00 95,274.13 141.34 $

$
--::;o~.O~O

179.38 257.35 96,500.00 95,274.13 141.34

$

192,352.20 $

0.00 $ =====1=9.2..,=35=:2:=.2=0

-2-

MOULTRIE AREA 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)

$ 3,099,039,00 $ 3,099,039.00 $

694,222.00

670,847.86

789,553.00

777,177.29

$ 4,582,814,00 $ 4,547,064.15 $

0.00 -23,374.14 -12,375.71
-35,749.85

102,000.00

103,211.01

1,211.01

$ 4,684,814.00 $ 4,650,275.16 $

-..;,.34~,_53'-'-8'-'-.8_4

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

$ 3,064,115.00 $ 3,059,205,22 $

1,001,337.00

839,746.22

410,135.00

430,959.10

209,227.00

209,863.36

4,909.78 161,590.78 -20,824.10
-636.36

Excess of Funds Available over Expenditures

$ 4,684,814.00 $ 4,539,773.90 $ - - - -14-5',0-40-,1-0

$

110,501.26 $ ===1=1=0~,5=0=1.=26=

-3-

MOULTRIE AREA 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

VARIANCEFAVORABLE (UNFAVORABLE)

$

80,720.00 $

80,720.00 $

0_.0_0

EXPENDITURES Equipment-Technical Institutes

$

80,720.00 $

80,720.00 $

-=0-:.0:....;..0

Excess of Funds Available over Expenditures

$

0.00 $ ======0=.0=0

-4 -

MOULTRIE AREA TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1997

EXHIBIT"D"

Totals per Annual Supplement
Accruals June 30, 1997

SALARIES $ 2,917,380.46 $

TRAVEL 43,249.30

48.50

$ 2,917,380.46 $=====4=3'529=7=,8==

- 5-

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

MOULTRIE AREA 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

837-96-01 837-96-02

Partially Resolved,.. See Corrective Action/Responses Previously Reported Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number 837-96-01

Significant improvements were made in the performance of accounting functions with the addition ofan accounting manager and implementation ofprocedures. However, the function ofmaking and recording some deposits is not yet adequately separated. Procedures will be implemented in the subsequent period to separate the functions for those deposits.

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

837-96-02 837-96-03 837-96-04 837-96-05 837-96-06

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

CORRECTIVE ACTIONIRESPONSES

FEDERAL FINANCIAL REPORTS Federal Cash Transaction Report Not Reconciled Finding Control Number 837-96-03

The Institute is in the process of reconciling the Federal Cash Transactions Report. The reconciling items have been identified and the Institute is in the process of documenting the reconciling items. The reconciling items include $20,739.00 in expenditures for fiscal year ended June 30, 1995 that were not funded by U.S.DOE. The Institute is seeking funding through the audit resolution process.

- 1-

MOULTRIE AREA 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 CASH MANAGEMENT Excessive Cash Balances Finding Control Number 837-96-05 The Institute drew excess Pell cash by mistake in June 1996. The excess funds were returned in December 1996. Additionally, the Institute implemented procedures to ensure compliance subsequent to December 1996. ELIGIBILITY Disbursements in Excess ofNeed Finding Control Number 837-96-06 The Institute has contacted the grantor and is awaiting a response to resolve this finding.
-2-

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

MOULTRIE AREA TECHNICAL INSTITUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number: FS-837-97-01

For the year under review, the Moultrie Area Technical Institute did not provide for adequate separation of duties in the performance of accounting functions and related procedures for the following control categories:

(1) Cash and Cash Equivalents

(3) General Ledger

(2) Revenues/Receivables/Receipts

Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and financial statements are accurate and complete. This deficiency was a result of management not assigning employee duties in a manner to adequately safeguard assets and/or to promote efficiency in key accounting functions.

The Institute should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories, and implement those procedures to strengthen the internal controls over the accounting functions.

FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

CASH MANAGEMENT Excessive Cash Balances Finding Control Number: FA-837-97-01

A review ofthe cash management procedures for the Pell Grant Program disclosed that cash draws were made in advance of immediate cash needs. On August 29, 1996, Moultrie Area Technical Institute used the ACH/EFT method to drawdown funds which were disbursed from Agency funds on September 26, 1996.

Federal cash drawdowns should not exceed the immediate need. For institutions using the ACH/EFT method, immediate need is defined as need for a three-day period.

The excessive cash balances are a result of management's failure to adequately forecast the cash needs of this program. Procedures should be implemented by the Institute to ensure that requests for cash draws do not exceed the immediate need.

Federal Program/Awards Affected:

Student Financial Aid Cluster Program U. S. Department of Education Federal Pell Grant Program - CFDA No. 84.063