Department of Driver Services budgetary compliance report for the fiscal year ended June 30, 2010 [June 30, 2010]

Fiscal

Year
2010

Department of Driver

Services

Budgetary Compliance
Report
For the Fiscal Year Ended June 30,2010

Department of
Audits and Accounts
Russell W. Hlnton State Auditor
State Government Divlslan John A. Thornton, D i r e r

COMPLIANSCEECTION
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
Scheduleof Findings and Questioned Costs......................................

...........................6

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DEPARTMEONFTAUDITSAND ACCOUNTS

270 Washington St. S.W. Suite 1-156

RUSSELWL . HINTON

Atlanta, Georgia 30334

STATE AUDITOR (4W)6562 174

INDEPENDENT ACCOUNTANT'S REPORT
The Honorable Gregory Dozier, Commissioner Department of Driver Services
and Members of the Department of Driver Services
We have examined the Department of Driver Services' compliance with the 20 10 Appropriations
Act, as amended, (Final Budget) and Article V11,Section IV Paragraph VIII of the Constitution
of the State of Gcorgia for fiscal ycar cndcd June 30,2010. Management is responsible for the Department of Drivcr Services' compliance with the following requirements:
An appropriated budget unit cannot overspend their authorized budgeted amounts at the Iegul level ofbudgetary control (fimding source within program). This means that amounts reflected in the "variance"column under the heading of Expenditures Cnmpared to Budget in the Statement of Funds Available and Expenditures Compured to Budget by Program and Funding Source Budget Fund are not negative variances.
Article VII, Section IV Paragraph VIIl 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 ofFunds Available and Expendirures Compared to Budget by Program and Funding Source Budget Fund are not negative variances.
Our responsibility is to express an opinion on compliance with the aforementioned requirements for the Department of Driver Services based on our examination.
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 Department of Driver Services' compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We

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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, our report may be usehl to legal counsel or others in making such determinations.
In our opinion, the Department of Driver Services complied in all material respects, with the aforementioned requirements for the fiscal year ended June 30,2010.
In the Schedule of Findings and Questioned Cost section of this report, we have reported all findings and questioned costs related to the Department of Driver Services' compliance with the 2010 Appropriations Act, as amended, (Final Budget) and Article VII, Section IV Paragraph VIIl of the Constitution of the State of Georgia for fiscal year ended June 30,20 10; including any idcntiiied deficiencies in internal control over conlpliance 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 Department of Driver Services disclosing other information pertinent to the fiiancial and compliance activities of the organization.
This report is intended solely for the information and use of the Board and management of the Department of Driver Services 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 no1 limited.
Respectfully submitted,

December 7,20 10

~us4elWl . Hinton, CPA. CGFM State Auditor

Department of Driver 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

Cllstwer SetviceSupport State Apppiatiun St* Genenrl Funds Federul Funds Federal Funds Not Spifically Identified Other Funds
Tobl CustihnerServia Support
Li~Inslrp.ce
State Appprktion Sturn Genernl Funds
Feded Fluids Federal Punds Not Specificslly Identiid
American Remvay and Reinvestment ACT of 2009 Federal Pun& Not Specifically Itlentifred
Omer Fun&

Origin8l Appmpriscba

Amedded Appmpriatiaa

Reguhbty Conpliancc Stute Apppriatiw State General Funds Federal Funds Federal Funds Not SpecificallyIdentified Other Rnds

Finel Budget

Funds Current Year
Revenues

Budget U d t TotPLs

AvlilPbk Compmred to Badgt

Prior Year Carryaver

Totel Funk A d l a b *

Vsrisrc Paeitivc ( N m t i n )

Expaarbm Cmnpamd toBudget

Actual

Varhm Posllive (Neptive)

Execss (Defi&acy) d Fuds AvanPbk
Dver/(Uader) B*p&m

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DEPARTMEONFTDRIVESRERVICES
Schedule of Findings and Questioned Costs For the Fiscal Year Ended June 30.2010

Finding Control Number: FS-475-10-100 THE BUDGET Overexpenditure of State General Funds

Condition:

The Department of Driver Services (Department) spent or contractually obligated $1,438.69 in excess of the State general funds which it had available in its License Issuance program after undertaking allotment reductions in June 2010. As a result, an audit adjustment was necessary which deencumbered $1,438.69 from an open purchase order at June 30, 2010, in order to bring the License Issuance program into compliance with the current Appropriations Act, as amended, (Final Budget).

Criteria:

Each budget unit subject to the allotment process is required to limit the total of its expenditures and contractual obligations of State general funds to the reduced amount in appropriations. 1975Op.Attorney Gen. 75-88.

Information:

On June 17, 2010, the Governor, estimating that actual revenues would fall
short of appropriations of State general funds, acted under the Budget Act to withhold a percentage of State allotments, including a percentage of the Department's remaining allotment. The amount of the withheld allotment in State general funds for the Department was $103,278.77,

In addition, all appropriated budget units were also encouraged by the State's management to not drawdown State appropriations unnecessarily. As a result, the Department elected to not drawdown an additional $435,851.00 of its fiscal year 2010 State appropriation.

Cause:

The Department did not have adequate controls in place to prevent overexpenditures at the legal level of budgetary control when allotment reductions occurred.

Effect:

An audit adjustment, which deobligakd open purchase orders, was necessary to prevent an overexpenditure of State General Funds in the amount of $1,438.69 in their License Issuance program.

Recommendation:

The Department of Driver Services should monitor its budgetary activity in order to avoid any overexpenditures at the legal level which is funding source within program.