Management report, Pickens Technical Institute, Jasper, Georgia, an organizational unit of the state of Georgia, year ended June 30, 1999

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MANAGEMENT REPORT PICKENS TECHNICAL INSTITUTE
JASPER, GEORGIA AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 1999
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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400

PICKENS TECHNICAL INSTITUTE
MANAGEMENT REPORT
-TABLE OF CONIENTS -

LETTER OF TRANSMTITAL

SECTION I

SELECTED FINANCIAL INFORMATION

EXHffiiTS

A ANALYSIS OF CHANGES IN FUND BALANCE

BUDGETFUND

1

B

SCHEDULEOFFUNDSAVAILABLEANDEXPEND~S

COMPARED TO BUDGET

BUDGET FUND

"A" DEPARTMENT OF TECHNICAL AND ADULT EDUCATION

2

C RECONCILIATION OF SALARIES AND IRAVEL

3

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

RussELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND AccoUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
September 15, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly of Georgia Members ofthe State Board of Technical and Adult Education Members of the Local Board ofDirectors
and Honorable Nancy G. Proffitt, President Pickens Technical Institute
Ladies and Gentlemen:
As part ofour audit of the statutory basis financial statements of the State of Georgia presented in the State of Georgia Report of the 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 of and for the year ended June 30, 1999, we have performed certain audit procedures at Pickens Technical Institute. Accordingly, the financial statements and compliance activities ofPickens Technical Institute were examined to the extent considered necessary in order to express an 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 ofPickens Technical Institute as of and for the year ended June 30, 1999. The particular information provided is enumerated in the Table of Contents.
This report is intended solely for the information and use ofmanagement and members ofthe Local Board of Directors ofPickens Technical Institute and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
'11.azt.O.~ R"ussell W. Hinton State Auditor
RWH:gp

SECTION I SELECTED FINANCIAL INFORMATION

PICKENS TECHNICAL INSTITUTE ANALYSIS OF CHANGES IN FUND BALANCE
BUDGET FUND YEAR ENDED JUNE 30. 1999

EXHIBIT"A"

FUND BALANCE - JULy 1I 1998
Reserved Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures
Exhibit"B"
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Georgia Department of Technical and Adult Education - Administrative Central Office Year Ended June 30, 1998
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
FUND BALANCE- JUNE 30. 1999

"A" DEPARTMENT OF
TECHNICAL AND ADULT EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

$

124,729.81

$ 124,729.81

681478.25 $

31191.00

711669.25

$

1931208.06 $

31191.00 $ 1961399.06

$

1,876.65 $

1151471.09

$

117 347.74 $

178.20 $ 178.20 $

2,054.85 1151471.09 1171525.94

$

68,478.25 $

3,191.00 $

71,669.25

9,796.20

9,796.20

55,760.98

55,760.98

681968.83

681968.83

$

2031004.26 $

31191.00 $ 2061195.26

$

107,551.54 $

178.20 $ 107,729.74

SUMMARY OF FUND BALANCE

Reserved

Federal Financial Assistance

For Refund to Georgia Department of Technical and

Adult Education - Administrative Central Office

$

For Refund to Grantor Agency

For Continuation of Program

Live Work Projects

PriorYearLocaiFunds

Private Grants

Surplus

$ -1 -

17,683.71 82.56
7,475.57 36,665.88 29,046.69
2,276.68 141320.45 $

$ 178.20

17,683.71 82.56
7,475.57 36,665.88 29,046.69
2,276.68 141498.65

s_ _ _ s 107,551.54

1_7.-8.2..o..,

107,729.74

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. 1999

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)

$ 2,986,946.00 $ 2,986,946.00 $

1,066,047.00

851,200.92

904,518.00

858,351.40

$ 4,957,511.00 $ 4,696,498.32 $

0.00 -214,846.08
-46,166.60
-261 ,012.68

0.00

681968.83

681968.83

$ 4,957,511.00 $ 4,765,467.15 $ _ _ _-_19_2....:...,0_4_3._85_

EXPENDITURES
Personal Services-Institutions Operating Expenses-! nstitutions Adult Literacy Grants

$ 2,969,626.00 $ 2,881,123.76 $

1,563,194.00

1 ,344,891.30

424,691.00

423,981.00

88,502.24 218,302.70
710.00

___ __ $ 4,957,511.00 $ 4,649,996.06 $

30_..7..:,,.5. 14.94

Excess of Funds Available over Expenditures

$ 115,471.09 $ =====1=15i:l::,4=7=1=09=

-2-

PICKENS TECHNICAL INSTITUTE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1999

EXHIBIT"C"

Totals per Annual Supplement
Accruals June 30, 1998

SALARIES

TRAVEL

$ 2,651 ,286.55 $

46,065.96

-23,531.20

$ 2,627,755.35 $====='4::i6,=06=5=.9=6

-3-

SECTION II AUDITEE'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. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

840-97-01 840-97-02 FS-840-98-0 1 FS-840-98-02 FS-840-98-03

Previously Reported Corrective Action Implemented Further Action Not Warranted Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUNALENTS Inadequate Accounting Procedures Finding Control Number: FS-840-98-01

Progress has been made on reconciliation of the operating account. Would like to see an audit adjustment for prior year "ghosts".

The pell account is reconciled.

EXPENPITURES/PAYABLES/DISBURSEMENTS Agency Fund Overpayments Finding Control Number: FS-840-98-02

Work is continuing, partially resolved.

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequate Property Management Procedures Finding Control Number: FS-840-98-03

Inventory was taken in FY 99. Plan to dispose of surplus property and take another physical in FY 00.

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

PICKENS TECHNICAL INSTITIITE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED WNE 30. 1999
FINANCIAL STATEMENT FINDINGS AND Q!JESTIONEP COSTS
CASH AND CASH EQUNALENIS Inadequate Accounting Procedures Finding Control Number: FS-840-99-01
The Institute's accounting procedures were insufficient to 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 oftime.
(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 $1,908.77 and $44.00, respectively, between the reconciled bank balance and the book balance at June 30, 1999.
(3) The monthly bank statements for the payroll account were not reconciled to the general ledger for any month ofthe fiscal year, resulting in an unidentified variance of$112,405.43 between the bank balance and general ledger at June 30, 1999.
These deficiencies were the result ofmanagement's disregard ofproper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard and report the cash and cash equivalents ofthe Institute. It is management's responsibility to establish appropriate internal controls to ensure that bank statements are reconciled with the accounting records monthly and that all adjustments are identified and recorded on the books ofthe Institute in a timely manner.
EXPENDITURES/PAYABLES/DISBURSEMENTS Agency Fund Overpayments Finding Control Number: FS-840-99-02
The Institute's accounting procedures were insufficient to provide for adequate internal control over Agency Funds. A deficit balance of $21.50 existed at year end within the Student Insurance account. This deficit balance was attributable to activities that occurred in prior periods that could not be explained by Institute personnel.
The Institute should establish appropriate internal controls to ensure that these accounts are reconciled monthly and needed adjustments are recorded on a timely basis. Appropriate action should be taken by the Institute to secure reimbursement ofany overpayments. Payments should not be made in excess ofcollections for Agency Funds.