Appalachian Technical College, Jasper, Georgia, management letter, October 22, 2008

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

DEPARTMENT OF AUDITS AND ACCOUNTS
EDUCATION AUDIT DIVISION
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 22, 2008

Members of the State Board of Technical and Adult Education Members of the Local Board of Directors
and Honorable Sanford Chandler, President Appalachian Technical College

Ladies and Gentlemen:
In planning and performing our audit ofthe financial statements ofAppalachian Technical College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2008, in accordance with standards generally accepted in the United States of America, we considered Appalachian Technical College's internal control over financial reporting as a basis for designing our audit procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness ofthe Technical College's internal control. Accordingly, we do not express an opinion on the effectiveness of the Appalachian Technical College's internal control.
A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the Appalachian Technical College's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Appalachian Technical College's financial statements that is more than inconsequential will not be prevented or detected by the Appalachian Technical College's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Appalachian Technical College's internal control.
Our consideration of internal control was for the limited purpose described in the first paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. Any identified deficiencies in internal controls that we

consider to be significant deficiencies and/or material weaknesses will be communicated to management and those charged with governance within the findings section of our report on Appalachian Technical College's basic financial statements dated October 22, 2008. We noted certain other matters involving the internal control and operations ofAppalachian Technical College that are presented in this management letter for your consideration. This letter does not affect our report dated October 22, 2008, on the financial statements of Appalachian Technical College.
We will review the status of these comments during our next engagement. Our comments and recommendations, all ofwhich have been discussed with appropriate members ofmanagement, are intended to improve the entity's internal control or result in other operating efficiencies. We will be pleased to discuss these comments in further detail at your convenience. Our comments are summarized as follows:
BUDGETARY OVEREXPENDITURE The approved budget ofAppalachian Technical College provided for expenditures ofAdult Literacy funds totaling $650,572.00 which included a $43,000.00 component for other funds. A comparison of anticipated funds available and expenditures by budgetary line item indicated that the Adult Education Other Funds category was overspent by $3,861.69. This budget was not increased to reflect the total revenue of $46,861.69. Technical colleges should closely monitor their internal control procedures over budget expenditures to prevent expenditure of funds in excess of budget approval.
In the normal course of the audit process, the auditor is required to obtain an understanding of the entity and its' environment including internal control, sufficient to assess the risk of material misstatement of the financial statements and to design the nature, timing and extent of audit procedures. As such, we strongly recommend that management evaluate the effectiveness of the entity's system ofinternal controls. This evaluation should reaffirm management's responsibility for establishing and maintaining an adequate system ofinternal controls and financial reporting. Strong and effective internal controls are the responsibility ofmanagement and we believe that this practice, conducted on an annual basis, will be of significant benefit in enhancing internal controls and preventing fraud and abuse.
We believe that the implementation ofthese recommendations will provide Appalachian Technical College with a stronger system ofinternal accounting controls while also making its operations more efficient. This communication is intended solely for the information and use of management and others within the organization and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~-.OQ_W~
~sell W. Hinton, CPA, CGFM State Auditor
cc: Claire Arnold Lisa Eason, Assistant Commissioner of Administration