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MANAGEMENT REPORT PICKENS TECHNICAL INSTITUTE 
JASPER, 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 
 
 PICKENS 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" 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 
November 20, 1997 
 
Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members of the State Board of Technical and Adult Education Members of the Local Board of Directors 
and Honorable Nancy G. Proffitt, President Pickens 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 Pickens Technical Institute. Accordingly, the financial statements and compliance activities of Pickens 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 financial and compliance activities of Pickens 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 Pickens Technical Institute. However, this report is a matter of public record and its distribution is not limited. 
Respectfully submitted; 
t1~~ 
Claude L. Vickers State Auditor 
CLV:dt 
 
 SECTION I SELECTED FINANCIAL INFORMATION 
 
 PICKENS TECHNICAL INSTITUTE ANALYSIS OF CHANGES IN FUND BALANCE 
BUDGET FUND YEAR ENDED JUNE 30, 1997 
 
EXHIBIT "A" 
 
FUND BALANCE - JULY 1,1996 
Reserved Unreserved 
Designated 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 
Georgia Department of Technical and Adult Education - Administrative Central Office Federal Financial Assistance 
Reserved Fund Balance Carried Over from Prior Year as Funds Available 
 
nAu 
DEPARTMENT OF TECHNICAL AND ADULT EDUCATION 
 
ItBII 
LOTTERY FOR EDUCATION 
 
TOTAL 
 
$ 
 
43,850.03 
 
3,270.06 $ 
 
$ 
 
47,120.09 $ 
 
$ 
0.00 0.00 $ 
 
43,850,03 
3,270.06 47,120.09 
 
$ 
 
5,915.72 
 
$ 
 
5,915.72 
 
77,149.52 $ 
 
821.84 
 
77,149.52 821.84 
 
$ 
 
83,065.24 $ 
 
821.84 $ 
 
83,887.08 
 
$ 
 
3,270.06 $ 
 
1,391,00 
 
191.84 
 
43,658.19 
 
$ 
 
48,511.09 $ 
 
0.00 $ 
 
3,270.06 1,391.00 
 
0.00 $ 
 
191.84 43,658.19 48,511.09 
 
FUND BALANCE - JUNE 30, 1997 
 
$ 
 
81,674.24 $ 
 
821.84 $ ===8=2,=49=6=.0==8 
 
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 Other Live Work Projects Prior Year Local Funds Private Grants 
Surplus 
 
$ 
 
713.70 
 
82.56 
 
29,374.82 
 
15,647.39 
 
34,209.73 
 
1,646.04 
 
_______ $ 
 
$ ..:8:::2c.:.,;1.:,:::84..:.. 
 
713.70 82.56 
29,374.82 15,647.39 34,209.73 
1,646.04 821.84 
 
$ 
-2- 
 
81,674.24 $ 
 
821.84 $ ===8=2,=49=6=.0~8 
 
 PICKENS 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 
 
VARIANCE FAVORABLE (UNFAVORABLE) 
 
$ 2,801,463.00 $ 2,801,463.00 $ 
 
838,356.00 
 
752,260.36 
 
915,216.00 
 
825,788.90 
 
$ 4,555,035.00 $ 4,379,512.26 $ 
 
0.00 -86,095.64 -89,427.10 
-175,522.74 
 
27,000.00 
 
43,658.19 
 
16,658.19 
 
$ 4,582,035.00 $ 4,423,170.45 $ _ _.....;-1...:...58.:...:.,.;;...86~4.;.,;;.5~5 
 
EXPENDITURES 
Personal Services-Institutions Operating Expenses-Institutions Adult Literacy Grants 
 
$ 2,947,632.00 $ 2,845,225.88 $ 
 
1,196,784.00 
 
1,063,547.82 
 
437,619.00 
 
437,247.23 
 
102,406.12 133,236.18 
371.77 
 
$ 4,582,035.00 $ 4,346,020.93 $ _ _-=2:..:..3~6,...:...01.....;4....._;.70_ 
 
Excess of Funds Available over Expenditures 
 
$ 
 
77,149.52 $ ==~7,.;,7:b:'1:...;4.;:9.~52= 
 
-3- 
 
 PICKENS 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) 
 
$ 243.909.00 $ 243,909.00 $ 
 
. . .;0. . .;.0:. .:. .0 
 
EXPENDITURES Equipment-Technical Institutes 
 
$ 243,909.00 $ 243,087.16 $ 
 
--'-82....;1....;.8_4 
 
Excess of Funds Available over Expenditures 
 
$ 
 
821.84 $ ====82=1:=.8::::::4 
 
-4 - 
 
 PICKENS TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND TRAVEL 
YEAR ENDED JUNE 30, 1997 
 
EXHIBIT"D" 
 
Totals per Annual Supplement 
Accruals June 30,1996 June 30, 1997 
 
SALARIES $ 2,562,637,72 $ 
 
TRAVEL 52,862.73 
 
-18,485.60 87,123.02 
 
-283.73 
 
$ 2,631,275.14 $ ======5=2,=57=9=,0::::::0 
 
- 5- 
 
 SECTIONll AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 PICKENS 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 
 
840-93-02 840-96-01 
 
Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses 
 
CORRECTIVE ACTIONIRESPONSES 
 
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number 840-96-01 
 
The lack of personnel in the Business Office precludes complete separation of duties. During 1997, a complete study of internal control affecting ExpenditureslLiabilities/Disbursements for Pickens Technical Institute will be conducted, with the possibility of involving personnel from other departments to be investigated. 
 
 SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS 
 
 PICKENS 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-840-97-01 
For the year under review, Pickens 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) General Fixed Assets/Property Management 
(2) Expenditures/Liabilities/Disbursements 
This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. 
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Audit Control Number: FS-840-97-02 
For the year under review, the Institute's accounting procedures were insufficient to provide for adequate internal control over the bank reconciliation process. The following deficiencies were noted: 
(l) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time. 
(2) The monthly bank statements for the operating account and Federal funds account were not reconciled to the general ledger resulting in unidentified variances of $4,545.81 and $12.00, respectively, between the reconciled bank balance and the book balance. These variances remained unresolved at June 30, 1997. 
These deficiencies were the result of management's disregard of proper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard and report the cash and cash equivalents of the Institute. The Institute should establish appropriate interna]. controls to ensure that bank statements are reconciled with the accounting records monthly and that needed adjustments are recorded on a timely basis.