Fiscal Year Dr--rt--nt 201 1 I of U r n - - - 7 Services Budgetary Compliance Report For the Fiscal Year Ended June 30,2011 Department of Audits and Accounts Russell W. Hinton State Auditor State Government Division John A. Thornton, Director BUDGETARYCOMPLIANCREPORT FORTHE FISCALYEAR ENDEDJUNE 30,2011 m COMPLIANCE SECTION 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 ..........................................................................26 (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 Clyde L. Reese, TIT, 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 201 1 Appropriations Act, as amended, (Final Budget) and Article VTT, Section TV Paragraph VTII of the Constitution of the State of Georgia for fiscal year ended June 30,20 11 . Also included in our examination was the following administratively attached organization, whose budget was included in Section 27: Human Services, Department qf of the 201 1 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 (#budgetary control (funding source within program). This means that amounts reflected in the "variance" column 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 VTTI 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 organizations' compliance with the specified requirements; however, our report may be useful to legal counsel or others in making such determinations. The responsible parties of the Georgia Department of Human Services were unable to provide written, conclusive representation as to the fair presentation of the Statement ofFunds Available and Expenditures Compared to Budget and Fund Balance by Program and Funding Source. Such representations are required under attestation standards. As a result, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on whether the Department complied, in all material respects, with the 201 1 Appropriations Act, as amended, (Final Budget) and Article VII, Section IV Paragraph Vm of the Constitution of the State of Georgia for the fiscal year ended June 30,201 1. In our opinion, the Concil on Aging complied, in all material respects, with the aforementioned requirements for the fiscal year ended June 30,201 1. 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 2011 Appropriations Act, a s amended, (Final Budget) and Article VII, Section IV Paragraph VIII of the Constitution of the State of Georgia for fiscal year ended June 30,201 1; 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, as applicable, disclosing other information pertinent to the financial and compliance activities of the organization. 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 . . 11 (This page intentionally left blank) 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, November 1 1,201 1 ~ u d e lWl . Hinton, CPA, CGFM State Auditor Department of Human Services Shtement of Funds Available and Expenditures Compared to Budget By Program and Funding Source Budget Fund For the Fiscal Year Ended June 30,2011 Deparbnenhl Adminbtmtlon State Appmpristim State General Funds Tobacco Senlement Funds Statc Gcncral Funds - Prior Ycar Fedeml Funds CCDF Mandatory & Matching Funds Child Care and Development Block Cnant Comnunity Mental Health Services Block Grant C~lTIlIUllitySMCBlo~ckSCklIlt Foster Care Title IV-E Low-lncom Home Energy Assistance Maternal and Child Health Sclvices Block Grant Medical Assistance Program Prevention and Treatment of Substance Abuse Block Grant Preventive Health and Health Services Block Gmnl Social Services Block Grant T A W Unobligated Balance Temporary Assistance for Needy Families Fedcml Funds Not SpsificaUy Identified Other Funds 01igid Approprlntbn Amended Approphhbn Addrscent and Adult He* P d o n Statc Appropriation State Gened Funds Tobacco SettlementFunds Federal Funds Medical Assistance Program Temptnary Assistance for Needy Fanilies Block Grant Federal Funds Not Specifically Identified Other Funds Tdpl Adolesant and Adult Health Promotloo Adoptbn Scrvices State Appropriation State General Funds W r a l Fund9 Foster Care Title IV-E Temporary Assistance for Needy Families Block Grant Federal Funds Not Specifically Identified American Recovery and Reinvesbnent Act of 2039 Foster Can: Title IV-E Federal Funds Not Specifically Identified Other Funds PPnal Budget Funds Curmni Year Revenues Available Compared to Budget Prior Year Reserve PtoerunTnmfem Carry-Over ~~~djushnonts Totd Funds Avaihbk Variance Positive (Negative) Expendlturea Compared to Budget Vnrimnce Actual d F& ~vailpble OverWnder) Expenditures 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 30,2011 Aduk Addktive Diwpse SeviFe State Appropriation State General Funds Federal Funds Prevention and Treatment of Substance Abuse Block G~ant Federal Punds Not Specifically Identified Ockr Funds TdPl A d a Addletive DiseaseService Adult Developmenth b i l i t y State Appmptiatim State General Funds Tobacco Senlement Funds Other Funds Tdrl Adult DevelopmentDbbility Adult Essenoial HealthTreatment State Appropriation State General Funds Tobacco Settlement Funds Federal Funds Medical Assistance Pmgnun Preventive Health and Health Services Block Chml Federal Funds Nor Specifically Identified Other Funds ToW Adult E s e d a l H d t h Treatment Adult Farmak Services State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified T a l Adult Fomllsk Servicca Adult Mmtd H d t h S e h s Statc Appmpriatim State General Funds Federal Funds Connvlnity Mental Health Services Block Granl Federal Funds Nat Specifically Identified Other Funds TOMAdult Menu Hal* Servlcs Adult NurslngHome S e h e State Appmpriaticm State General Funds Other Funds ToW Adult Nursing Hane Service Amended Appropriathn Find Budget Funds Cumnt Year Revenues Available Compared to Budget Priw Yenr Reserve Progrpm T m f e t a Carry-Over or Adjusbnenlo T0t.l Funds Available Variance Positive (Neeptlve) Expenditures Cornpad to Budget Varburce Actual Positive (Neeptive) d Funds ~ v d l a b l e Over/(Under) Expenditures 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 30,2011 After Sehod Care Federal Funds Temporary Assistance for Needy Families Block Grant Other Fund5 TotalAfter !%C~arIeooI Child and Adok%xol Addicthe State Appropriation State General Funds Chlld and Addurecnt Development State Appropriation State General Funds Other Funds T d a l Cbild and Addercent Development Child and Adolescent F o d c State Appropriation State General Funds Other Funds Total Child d Adolcswnt Forensic Chlld d Adolescent Mental Health State Appropriaticm State General Funds Federal Funds Comnunity Mental Health Sewices Block Grant Federal Funds Not Specifically Identified Other Funds Total Child d Adolescent M e n u Health Child Care S e d w State Appropriation State General Funds Federal Funds CCDF Mandatoly & Matching Funds Child Care and Development Block Gram Said Services Block Grant Tempomy Assistance for Needy Families Blwk Grant Federal Funds Not SpeciftcaUy Identified American Recovery and Reinvcshllent Act of 2009 Child Care and Development Block Grant Other Funds T o b l Child Care Scrvias Vriginrl Appropriation Amnded Appropriation Dnal Budget Funds Current Year Revenues Available Compared to Bud@ - Prior Y a r Reserve r ramT d e r s Carry-Over or AcUustments TaW Fuads Avaihbk Varhnee Positive (Negative) Expenditur~sCanpared to Budget Varimnce Actual Pasithe (NeppOlve) .- --- - - - - - - - ~ -,* of F d s Available Over/(Under) Expenditures 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 30,2011 Child Support Sewices State Appmpriation State General Funds Federal Funds Social Services Block Grmt Fcderal Funds Not Specifically Identified American Recovery and Reinvestment Act of 2009 Federal Funds Not SpecificallyIdentified Other Funds Total Chlld Support Servioer Child Welfam Services State Appmpriation State General Funds - State General Fwds Prior Year Federal Funds CCDF Mandatory & Matching Funds Comnunity Services Blwk Grant Foster Care Tile IV-E Medical Assistance Pmgram Social Services Block Grant T A W - Block Grant Transfersto Social Services Black Crant Temporary Assistance for Needy Families Block Grant Federal Funds Na SpecificallyIdentified h r i c a n Recovery and Wivesbnent Act of UX)9 Foster Care Title IV-E Other Funds Total Child Wclhre Services D i d Cam Support S e d State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified OlherFunds TOMMrect Care Support Servlas Elder Abuse Investiptiomand Prevention State Appmpriation State General Funds Federal Funds Social SewicesBlwk Grant FederalFunds NIASpecifically Identified h r i c a n Recovery and Reinvesbllent Act of 2009 Medical AssistanceProgram Other Funds TOMElder A b m Investigatiarsand Prevention Origiml Appmprhthn Amended Appmpriation FlNll Budget Funds Curtent Year Reveaues A v d l l e Comparedto Budge4 Prior Year Resewc ProfmmT d e r s Carry-Over &~djustments TOW FWAvsihbk Vahce Positive (Negative) Erpenditurea Comparedto Budget Va- Actual PosiaVc (Negative) Ex- (Ddidemy) d Fund$ Available Over/(Undcr) Expeadibm 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 30,2011 Elder Community Living Services State Appropriation Stab General Funds T o k c o SettlementFunds Federal Funds Medical Assistance Program Social Services Block Grant Federal Funds Not Specificallyldentified Amrican Recovery and Rcinvesbnent Ad of 2009 Federal Funds Not Specifically ldentified Other Funds ToW Elder Coamunity Living Servkes Elder Support Servlms State Appmpriation State General Funds Tobacco Settlement Funds Federal Funds Federal Funds Not Specifically Identified A~lpricanRecovcly and Reinvestment Act of UX)9 Federal Funds Not Specifically Identified Other Funds Total Elder Supper( Servim Elgibilhy Determinullon State Appmpriaticm State General Funds Federal Funds Medical Assistance Pmgram Tempomy Assistance for Needy Families Block Grant Fedcral Funds Not Specifically Identified Other Funds Appropriatbn Amended Approprintbn Emergacy PrepnRdnesdFrama State Appropriation State Creneral Funds Federal Funds Preventive Health and Health Senices Block Grant Federal Funds Not Specifically Identified Other Funds ToW Emergency Prepredness/TrPum Entrgy Assistance Federal Funds Low-Incom: Home Energy Assistance Other Funds Tdal Energy Assislance Final Budget Funds Current Year Revenues Available Compared to Budget Prior Year Reaewe P~.agr~Tmm f e r s Clry-Over or Adjustments TdPl Funds Available Varhnee Pmitive (Negaave) Expmdltures Campad to Budget of Funds ~ v a i l a i e Variance OveriIUnder) Achd Positive (Negative) Expenditures 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 30,2011 Epldc-w State Appmpriatim State General Funds Tobacco Setllement Funds Federal Funds Medical Assistance P m p m Preventive Health and Health Services Block Grant Federal Funds Not Specifically Identified Other Funds Odgilnl Appropriatbn Amended Appropriation Child Care kensing Stak Apprcpriatim State General Fun& T o b ~ c oSeitlementFunds Federal Funds Foster Care Title I V E Medical Assistance P m p m Temporary Assistancefor Needy Fanily FederalFunds Not Specifically Identified O t h r Funds TOW CWd Care Wecrrsiog Fpnily Videme Services State Appropriation State General Funds Federal Funds Preventive Health and Health Serviccs Block Grant Temporary Assistance for Needy Families Block Grant Federal Funds Not Specifically Identified Other Funds Totnl F d g Violence Services Federal UnoMig~tedBalancw Federal Funds - TANF Block Grant Unobligated Balance F o d Stamp Eligibility and BenefitP State Appmpriatim State General Funds Federal Funds FederalFunds Not Specifically Identified Orher Funds TOMFood StampEllgiblllty and BcncfitP Imnunlmlition State Appmpriatim State General Funds Federal Funds Medical Assistance Pmgram Pederal Fmds Not Specifically Identified TOW ImmPlizPtbn Final Budget Funds Current Year Rev- Available Compared to Budget Prior Ycnr Reserve P r w ~ mT d e r s Carry-Over ~'~djustmenb Totrl huds Available Varhnce Poslthre Wegative) Expenditurn C r m p a d to Budget of ~und.s~ v n i l n b i Variance OverMlnderj Achul Positive (Negative) Expemtitures 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 30,2011 Idant and CNld Essential Health Statc Appropriation State General Funds Federal Funds Maternal and Child Health Senices Block Grant Medical Assistance Program Federal Funds Not Specifically Identified Total Infant and Child EssentiPlHealth Infant and CHld Health Plwnotbn State Appmpriation Stare General Funds Tobacco Settlement Funds Federal Funds Maternal and Child Hcalth Services Block Grant Medical Assistance Pmgram F'reventive Health and Health Senices Block Grant Ternpomy Assistance for Needy Familics Block Orant Federal Funds Not Specifically Identified Other Funds TdPl Infant and Child Health Promotion Inleetbus DLsuse Contrd State Appropriation State General Funds Federal Funds Medical Assistance Pmgram Federal Funds Not Speci6eallyIdentified Other Funds Total Infectrou. D B e w Contrd laJuly Prevention State Appropriation State General Funds Federal Funds Medical Assistance Pmgram F'reventive Health and Health Services Block Grant Federal Funds Not Specifically Identilied Total IMry F'revenlinn Inspectlorn snd Envlmnmeotal State Appropriation State General Funds Federal Funds Fedcral Funds Not Specifically Identified Other Funds 01igjnal Appropriabbn Amended Appropriation Final Budget Funds C u m n t Year Revenws Available Compred to Budget Prior Year Reserve Program Tralrsfers Carry-Over wAdjhnts TOW Fuods Available Varbrnce Positive (Negative) Expenditures C o m p n d to Budget Vatinme Actual Positive (Negative) Excess (Defldencv) of F& ~vailabi; OverWnder) Expenditures 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 30,2011 0ut.d-Home Care State Appmpriaticm State General Funds Federal Funds Foster Can Xrlc IV-E State Childmn's Insurance Program TANF Unobligated Balance Temporary Assistance for Needy Farrilis Federal Funds Not Specifically Identified American Recovery and Reimveshlrnt Act of 24W Foster Care Title IV-E Othcr Funds Odginml Appropriation Amended Appropriation Re* Assistance State Appropriation State General Funds Federal Funds Medical Assistance Program Federal Funds Not Specifically Identified Other Funds SubstanceA b m Prevenlim Service Federal Funds Preventim and Treatment of Substance Abusc Block Grant Federal Funds Not Specifically Identified Tdal Substame Abuse Pmvedon Seda - Supportfor Needy Familks Bndr A6sistnofe State Appropriation State General Funds Federal Funds T A W - Block Grant Unobligated Balance Temporary Assistance for Needy F a d i e s Block Grant Federal Funds Not Specifically Identified Other Funds - Tdnl Suppoltfor Needy Funilies Basic Assislanee Final Bud~et Funds Current Year Reveows Avdabk Compared lo Budget Prior Year Reserve Pmgmm Trnmfers Caq-Over or-~djustmenb TOW Funds Avdbble Variance Positive (Neptlve) Expendtures Campnrcd to Budget Variance Acid Poaltive (Negative) of F ~ I &AVPIIPM; Over/(Umler) 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 30,2011 - Support for Needy FomilSos Fnmlly Assistance State Appropriation State General Funds Federal Funds CCDF Mandatory & Matching Funds Cornunity Services Block Grant - TANF Block Grant UnobligatedBalance Temporary Assistance for Needy Families Block Gram Federal Funds Not Specifically Identified American Recovery and Reinvestment Act of 2009 Federal h d s Not Specifically Identified Other Rnds Total Support for Needy Families -Family AssisEPna - Support for Needy F a d l i e s Work Assistance State Appmpriaticm State General Funds Federal Funds CCDF Mandatory & Matching Funds Medical Assistance Pmgram T A W Unobligated Balance Temporary Assistance for Needy F d l i e s Fedcral Funds Not Specifically Identified American Recovery and Reinvesnnent Act of 2009 Temporary Assistance for Needy Families Block Grant Federal Funds Not SpecificallyIdentified Other Funds - T d d Support for Needy Familis Work Assistance vital Records State Appropriation Stau: Gcneral funds Federal Funds Fedeta1 Funds Not Specifically Identified T d a l VIW R m r d s Federal EllgibiliIy -at Senicls State Appropriation State General Funds Pederal h d s CCDF Mandatory & Matching Funds Child Care and Development Block Grant Cornunity Mental Health Services Block Grant Cornunity Services Block Grant Foster Can: Title IV-E Low-Incorn Home Energy Assistance Medical Assistance Pmgnun Temporary Assistance for Needy Families Block Grant Federal Funds Not Specifically Identified American Recovery and Reinvestment Act of 2Ml9 Child C m and DevelopmentBlock Grant Federal Funds Noc Spe~ificallyIdentified Other Funds T d d F e d e d Eligibility Benefit Services Origilral Appropriation Amended Appropriation Fllul Bud@ mda Current Yenr Revenues Avaihble am pared to B- Wor Year R M N ~ Program Transfen (Lrry-Over or-~d~ustrnents Tdrl Fuods Available Variance Positive (Negative) ~xpendituresComparedto Budget Variance Actual Positive (Neptive) d Funds ~ v . i l a b j i Over/(Under) Expeadllures 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 30,2011 Brain and Spinal Injury TRst Fund Ocher Funds Georgia C o m i l M Developmental Disabilities Federal Funds Federal Funds Not Specifically Identified Other Funds Origirnl Appropriation Amended Appropriation F n d l y Coanedion State Appropriation Stau:General Funds Federal Funds Medical Assistance Program Temporary Assistance for Needy Families Block Grant Federal Fund T d e r s to Otber Agencies Federal Funds CCDF Mandatory and Matching Funds Child C m and Development Block Grant Social Services Block Grant Temporary Assistance for Needy Families Block Grant Talnl Federd Fund Transiersto Other Agenda S e d Offeader Review Board State Appropriation State General Funds Child Fntnlity 1nvestig.tions State Appropriation State General Funds - Child Welfare Senices Spaial Project Federal Funds Temporary Assistance for Needy Fanilies Block Grant - Total Chlld Welfare Services SpecialPraject Commtmity Seniees Federal Funds Community Service Block Grant Amrican Recovery and Reinvesmnt Act of 2009 Federal Fun& Not Specifically Identified TOMComrnuniQ Services Fsd Budget Fwlds Current Year Revenues Avdnble Caapred to Budget Prim Year Reserve P r o g m T d e r s Carry-Over or Adjustments Tdll Funds AvliLbk VsrlsKe P0Sith.e (Negntive) ExpenditurnCaapared to Budget Vske Actual Posithre (Negative) Excess (Deficiency) d Funds ~vnilsble Over/(Under) Expenditurn 799.890.31 (799,890.31) 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 30,2011 ProgramN d Identilied State Appmpriatim State General Funds Brain and Spinal Injury T n s t Fund Tobacco Settlement Funds Federal Funds CCDF Mandatory & Matching Funds Child Care and Development Block Grant Comnunity Mental Health Services Block Grant Maternal and Child Health Services Block grant Medical Assistance Program Prevention and Treatment of Substance Abuse Block Grant Preventive Health and Health Services Block Grant TANF - Block Grant Unobligated Balance Ternpmary Assistaxe for Needy Families Fcdcral Funds Not Specifically Identified Other Rnds Apndes Attached for Adminbtrative Purposes Council On Aging State Appropriation State General Funds Bdget Unit This OrigiaPl Appropriation Amended Appropriation Fiud Budwt Funds Current Y e a r Revenues Available Comparul to Budget Prior Year Regerve -ram Tmwfem Carry-Over TOW Varinnce P d t h e (Negative) Expenditures Campand to Budget Variance of Funds~vnilabie Over/(Uder) Expenditures (This page intentionally left blank) (This page intentionally left blank) DEPARTMENOFTHUMANSERVICES Schedule of Findings and Questioned Costs For the Fiscal Year Ended June 30,201 1 Finding Control Number: FS-427-11- 100 THE BUDGET Failure to Certify the Accuracy of the Budgetary Compliance Report Condition: Our cursory review of the Statement of Funds Available and Expenditures Compared to Budget by Program and Funding Source presented in the Budgetary Compliance Report (BCR) revealed the following instances of noncompliance for the Department of Human Services (Department): 1)Adoption Servicesl Federal Funds Not Specifically Identified Expenditures exceeded Funds Available by $1,000 2) Child Support Servicesl Federal Funds Not Specifically Identified Expenditures exceeded Funds Available by $23.18 3) Child Support Services1American Recovery and Reinvestment Act of 2009- Federal Funds Not Specifically Identified Expenditures exceeded Funds Available by $45.01 4) Child Welfare Servicesl Other Funds Expenditures exceeded Funds Available by $104,086.75 5) Energy Assistance1Other Funds Expenditures exceeded Funds Available by $568,858.00 6) Support for Needy Families-Basic AssistancemANF-Block Grant Unobligated Balance Expenditures exceeded Funds Available by $4,361,567.00 7) Support for Needy Families-Work AssistanceIFederal Funds Not Specifically Identified Expenditures exceeded Authorized Budget by $8,084,767.94 8) Federal Eligibility Benefit ServicesIFederal Funds Not Specifically Identified Expenditures exceeded Authorized Budget by $122,168.46 The Department of Human Services, however, declined to sign the "Letter of Representation" certifying the accuracy of the amounts reported by fund source within budgetary program. As a result, we did not perform detailed testing of the underlying documentation supporting the amounts reported in the BCR. Accordingly, we were unable to determine the Department's compliance with the requirements of the current Appropriations Act, as amended, (Final Budget) and the Constitution of the State of Georgia. DEPARTMEONFTHUMANSERVICES Schedule of Findings and Questioned Costs For the Fiscal Year Ended June 30,2011 We did, however, perform a cursory review of the Preliminary BCR and Post-Closing Adjustments done by the Department and discovered the following: 1) On the Preliminary BCR, expenditures for thirty (30) line items in various programs exceeded authorized budget for a total of $82,349,869.93. In addition twelve (12) line items in various programs had expenditures that exceeded funds available for a total of $675,359.3 1. 2) Thirty-two (32) Post-Closing Adjustments were submitted by the Department and the State Accounting Office posted an additional seventeen (17) entries to the BCR. Based on our cursory review of these entries and inquiries of management, we determined that most of the journal entries lacked appropriate supporting documentation, and were being made by the agency without the necessary research to determine what the appropriate entry should be to correct the underlying issues. Criteria: The Appropriations Act, as amended, (Final Budget) prohibits an agency from overspending their authorized budgeted amounts at the legal level of budgetary control (funding source within program). As applied here, this means that amounts reflected in the "variance" columns of the appropriated budget unit's budgetary comparison schedule at the legal level of budgetary control are not negative variances and do not result in a deficiency of funds available under expenditures. 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. Cause: Due to the uncertainty regarding the accuracy of the Statement of Funds Available and Expenditures Compared to Budget by Program and Funding Source, the Department declined to prepare and sign a letter of representation for the examination engagement of the organization's compliance with the 201 1 Appropriations Act, as amended. Effect: The amounts reported in the Department's BCR for the programs identified should not be used for decision-making purposes at the legal level of budgetary control because of the lack of assurances by management and the likelihood that the BCR contains material errors. DEPARTMENOTF HUMASNERVICES Schedule of Findings and Questioned Costs For the Fiscal Year Ended June 30,2011 Recommendation: The Department should manage its budgetary activity at the legal level of control, which is fund source within program. In order to produce accurate and useful BCR reports in the future, actions to be taken by the Department should include, but not be limited to, the following: 1 . Improve controls over Manual Journal Entries to ensure that adequate documentation is provided for each journal entry, including listing the actual invoices being moved when expenditures are rerated to other fund sources. Details and totals on supporting documentation must tie to the amounts on the journal entry. 2. Revise the review process to ensure that the personnel who are approving journal entries understand the effect that each journal entry will have on the accounts, fund sources, and programs. 3. Monitor transactions posted during the fiscal year on a regular basis rather than relying on journal entries to correct problems identified at year-end. 4. Revise the Cash Management policies and procedures for requesting, recording, and distributing Federal funds to ensure that they are adequate to meet cash management objectives. 5. Review all funds sources and programs for compliance with the State Chart of Accounts and the Appropriations Act. Provide SAO with information for correcting any errors noted in the set up of fund sources and programs.