= Year I 2010 Department of Human Services Budgetary Compliance Rrqort For the Fiscal Year Ended June 30,2010 Department of Audits and Accounts Russell W. Hintan State Auditor State Government Division John A. Thornton, Director BUDGETARCYOMPLIANCREEPORT FORTHE FISCALYEARENDEDJUNE30,2010 -TABLEOF CONTENT- S Page Independent Accountant's Report .......................................................................................................i. Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source Budget Fund ............................................................................................................1... Current Year Findings and Questioned Costs Schedule of Findings and Questioned Costs ..........................................................................25 (This page intentionally left blank) (This page intentionally left blank) DEPARTMEONFTAUDITASND ACCOUNTS 270 Washington St. S.W. Suite 1-156 Atlanta, Georgia 30334 RUSSELWL . HINTON STATE AUDITOR (404) 656-2174 INDEPENDENT ACCOUNTANT'S REPORT The Honorable B.J. Walker, Commissioner Georgia Department of Human Services and Members of the Georgia Department of Human Services The Honorable Kathryn Fowler, Executive Director Council on Aging and Members of the Council on Aging We were engaged to examine the Georgia Department of Human Services' compliance with the 2010 Appropriations Act, as amended, (Final Budget) and Article VII, Section IV Paragraph VIII of the Constitution of the State of Georgia for fiscal year ended June 30,2010. Also included in our examination was the following administratively attached organization, whose budget was included in Section 27: Human Services, Department oj of the 2010 Amended Appropriations Act: Council on Aging. Management for each of these organizations is responsible for their compliance with the following requirements: An appropriated budget unit cannot overspend their authorized budgeted amounts at the legal level of budgetary control (funding source within program). This means that amounts reflected in the "variancettcolumn under the heading of Expenditures Compared to Budget in the Statement of Funds Available and Expenditures Compared to Budget by Program and Funding Source Budget Fund are not negative variances. Article VII, Section IV Paragraph VIII of the Constitution of the State of Georgia provides, in part, "...the credit of the State shall not be pledged or loaned to any individual, company, corporation or association." As applied here, this means that amounts reflected in the "variance" column under the heading of Excess (Deficiency) of Funds Available Over/(Under) Expenditures in the Statement of Funds Available and Expenditures Compared to Budget by Program and Funding Source Budget Fund are not negative variances. (This page intentionally left blank) Our responsibility is to express an opinion on compliance with the aforementioned requirements for the Georgia Department of Human Services and the Council on Aging based on our examination. Except as discussed in the following paragraph, our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, include examining, on a test basis, evidence about the Georgia Department of Human Services' and the Council on Aging's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the aforementioned organization's compliance with the specified requirements; however, o w report may be useful to legal counsel or others in making such determinations. The Georgia Department of Human Services has excessive unsubstantiated manual journal entries, excessive cash management shortages and overages, fund sources set up using invalid or incorrect Catalog of Federal Domestic Assistance (CFDA) numbers, state fund sources set up as Federal, and makes entries to "PROGRAM NOT IDENTIFIED." The Department also uses a Cost Allocation method that leads to extreme inconsistencies in the allocation of standard operating expenditures over set programs. As a result, we do not express an opinion on whether the Georgia Department of Human Services complied, in all material respects, with the 20 10 Appropriations Act, as amended, (Final Budget) and Article VII, Section IV Paragraph VIII of the Constitution of the State of Georgia for the fiscal year ended June 30,2010. In our opinion, the Council on Aging complied, in all material respects, with the aforementioned requirements for the fiscal year ended June 30,2010. A summary of our opinions on compliance for the Georgia Department of Human Services and the Council on Aging is as follows: Organization Department of Human Services Council on Aging Unqualified Qualified Adverse Disclaimer Opinion Opinion Opinion (No Opinion) x x In the Schedule of Findings and Questioned Cost section of this report, we have reported all findings and questioned costs related to the Georgia Department of Human Services' compliance with the 2010 Appropriations Act, as amended, (Final Budget) and Article VII, Section IV Paragraph VIII of the Constitution of the State of Georgia for fiscal year ended June 30,2010; including any identified deficiencies in internal control over compliance which were determined to be either material weaknesses or significant deficiencies. A separate management report will be issued to the Board and management of the Georgia Department of Human Services and the Council on Aging disclosing other information pertinent to the financial and compliance activities of the organization. (This page intentionally left blank) This report is intended solely for the information and use of the Board and management of the Georgia Department of Human Services and the Council on Aging and management of the State of Georgia, including the Governor and the Georgia General Assembly. This report is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Respectfully submitted, December 15,2010 Russell W. Hinton, CPA, CGFM State Auditor Department of Human Services Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source Budget Fund For the Fiscal Year Ended June 30,2010 Deparlmenial Administration State Appropr~ation State General Funds Tobacco Settlement Funds Brain and Spinal Injury Trust Funds Federal Funds CCDF Mandatory & Matching Funds Child C a n and Development Block Grant Community Mental Hcalrh Services Block Grant Community Services Block Grant Foster Care Title I V - E Low-Income Home Energy Ashistance Maternal and C h ~ l dHcalrh Serv~ceaBlock Grant Medical Ahhistance Program neventive Health and Health Services Block Grant Prevention and Treatment of Substance Abuse Block Grant Social Srrv~ce*Block Grant Temporary Assistance for Needy R m i l ~ e sBlock Grant 'I'ANI' - Block Grant Unoblignted Balance Federal Funds Not Spec~ticallyIdentilied Other Pundb Tolal Depsrtmenlal Administration Adoption Services State Appropriation State General Funds Federal Fund.\ Foster Care Title IV-E Tempnrary Assistance for Needy Families Block Grant Federal Funds Not Specifically Identified American Recovery and Reinvestment Act of 2009 h)stcr Carr Tirlc IV-E Federal Funds Not Specifically Identified Other Funds Total Adoption Services Total Adult Development Disability Adult Essential Health Treatment Sure Appropriation State General Funds Tobacco Settlement 1:unds Federal Funds Med~caAl ssistance Program Prevenrivr Health and tlcalth Services B l ~ Gkrant l.edrral Fund, Not Spectfically Idenrtlicd Other Fund5 Total Adult Essential Health Treatment Original Appropriation Amended Aropriation Final Budget Funds Current Year Revenues Department of Human Services Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source Budget Fund For the Fiscal Year Ended June 30,2010 After School Care State Approprvarlon Smte General Funds Rdcral Funds 'fenipornry Ass15tancefor Necdy 17arnilicsBl