{"response":{"docs":[{"id":"dlg_ggpd_y-ga-ba800-b-pr1-bh54-b1999-h2003","title":"Audit report, Governor's Office of Highway Safety, an organizational unit of the state of Georgia, for the period July 1, 1999 through April 30, 2003","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Dept. of Audits and Accounts"],"dc_date":["2003-04-30"],"dcterms_description":["July 1, 1999-Apr. 30, 2003; title from cover."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Dept. of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Financial statements--Georgia","Auditors' reports--Georgia"],"dcterms_title":["Audit report, Governor's Office of Highway Safety, an organizational unit of the state of Georgia, for the period July 1, 1999 through April 30, 2003"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-bh54-b1999-h2003"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-bh54-b1999-h2003"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"@ \n!~@ ,JID'fl \nIH'l 9Si'~/;itf!J,,J \nSTATE OF GEORGIA \nDEPARTMENT OF AUDITS AND ACCOUNTS \nRussell W. Hinton State Auditor \nAUDIT REPORT \nGOVERNOR'S OFFICE OF IIlGHWAY SAFETY \nAN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY -TABLE OF CONTENTS- \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION \n \nEXHIBITS \n \nFINANCIAL STATEMENTS \n \nA BALANCE SHEET (STATUTORY BASIS) BUDGET FUND \nB STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS) BUDGET FUND \nC STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGETFUND \nD NOTES TO THE FINANCIAL STATEMENTS \n \nSUPPLEMENTARY INFORMATION \n \nE BALANCE SHEETS (STATUTORY BASIS) \n \nBUDGETFUND \n \nF \n \nSTATEMENTS OF CHANGES IN FUND BALANCE \n \n(STATUTORY BASIS) \n \nBUDGET FUND \n \nG STATEMENTS OF FUNDS AVAILABLE AND \n \nEXPENDITURES (STATUTORY BASIS) \n \nBUDGET FUND \n \nPage \n1 \n6 7 8 9 \n19 20 21 \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY -TABLE OF CONTENTS- \n \nSECTION II \n \nCOMPLIANCE AND INTERNAL CONTROL REPORT \n \nREPORT ON COMPLIANCE AND ON INTERNAL CONTROL \n \nOVER FINANCIAL REPORTING BASED ON AN AUDIT OF \n \nFINANCIAL STATEMENTS PERFORMED IN ACCORDANCE \n \nWITH GOVERNMENT AUDIT/NG STANDARDS \n \n25 \n \nSECTION III \n \nFINDINGS AND QUESTIONED COSTS \n \nSCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n33 \n \n(Including Management's Response to Findings and Questioned Costs) \n \n SECTION I FINANCIAL \n \n w. RUSSELL HINTON \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n254 Washington Street, S. W., Suite 214 Atlanta, Georgia 30334-8400 \nJuly 10, 2003 \n \nHonorable Sonny Perdue, Governor Members of the General Assembly of Georgia \nand Honorable Robert F. Dallas, Director Governor's Office of Highway Safety \nINDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION \nLadies and Gentlemen: \nWe have audited the accompanying financial statements (Exhibits A through D) of the Governor's Office of Highway Safety, an organizational unit ofthe State ofGeorgia, as ofand for the period July 1, 1999 through April 30, 2003. These financial statements are the responsibility of the Office's management. Our responsibility is to express an opinion on these financial statements based on our audit. \nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. \nAs described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations ofthe State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. \nIn our opinion, the financial statements referred to above present fairly, in all material respects, \n-1- \n \n  the financial position (statutory basis) of the Governor's Office of Highway Safety, an organizational unit ofthe State of Georgia, as of April 30, 2003, and the results of its operations (statutory basis) for the period July 1, 1999 through April 30, 2003, on the basis of accounting described in Note 1. \nThe financial statements referred to above, however, were not intended to nor do they present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the Governor's Office of Highway Safety, an organizational unit of the State of Georgia, as of April 30, 2003, and the results of its operations for the period July 1, 1999, through April 30, 2003. \nIn accordance with Government Auditing Standards, we have also issued a report dated July 10, 2003 on our consideration of the Governor's Office of Highway Safety's internal control over financial reporting and on our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report considering the results of our audit. \nOur audit was made for the purpose offorming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibits E through G) is presented for purposes of additional analysis and is not a required part of the financial statements of the Governor's Office of Highway Safety, an organizational unit of the State of Georgia. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. \nRespectfully submitted, \n~.,aiw4d-~ ';;:I.ell W. Hinton, CPA, CGFM State Auditor \nRWH:jsa \n-3- \n \n  FINANCIAL STATEMENTS -5- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY BALANCE SHEET (STATUTORY BASIS) BUDGET FUND APRIL 30, 2003 \nASSETS Accounts Receivable \nState Appropriation Federal Financial Assistance \nTotal Assets LIABILITIES AND FUND EQUITY Liabilities Cash and Cash Equivalents (Overdraft) Accounts Payable Payroll Withholdings Total Liabilities Fund Equity Fund Balance Unreserved Undesignated \nSurplus \nTotal Liabilities and Fund Equity \n \nEXHIBIT\"A\" \n \n$ \n \n20,814.76 \n \n1,339,229.27 \n \n$ 1,360,044.03 \n \n$ \n \n574,037.25 \n \n764,491.19 \n \n21 515.59 \n \n$ 1,360,044.03 \n \n0.00 $ 1,360,044.03 \n \nThe notes to the financial statements are an integral part of this statement. -6- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS) \nBUDGET FUND FOR THE PERIOD JULY 1. 1999 THROUGH APRIL 30. 2003 \n \nEXHIBIT\"B\" \n \nFUND BALANCE - JULY 1. 1999 \nReserved Unreserved \nUndesignated Surplus \nADDITIONS \nAdjustments to Prior Year's Contracts and Accounts Payable \nDEDUCTIONS \nUnreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1999 Year Ended June 30, 2000 Year Ended June 30, 2001 Year Ended June 30, 2002 \nAdjustments to Prior Year's Accounts Receivable \nExcess of Expenditures over Funds Available Exhibit \"C\" \nFUND BALANCE - APRIL 30. 2003 \n \n$ \n \n0.00 \n \n24444.56 \n \n$ \n \n24444.56 \n \n$ \n \n1,119,693.49 \n \n$ \n \n24,444.56 \n \n18,905.96 \n \n, 114,974.49 \n \n78,781.89 \n \n2,114.08 \n \n904,917.07 \n \n$ \n \n1,144,138.05 \n \n$ = = = = = = 0.0=0 \n \nThe notes to the financial statements are an integral part of this statement. -7- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES \nBUDGET FUND FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nEXHIBIT\"C\" \n \nFUNDS AVAILABLE \nREVENUES \nState Appropriation Federal Revenues Other Revenues Retained \nEXPENDITURES \nPersonal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem and Fees Contracts Highway Safety Grants \nExcess of Expenditures over Funds Available \n \n$ \n \n2,270,937.00 \n \n39,354,788.32 \n \n28,500.00 \n \n$ 41,654,225.32 \n \n$ \n \n6,483,031.76 \n \n3,914,501.49 \n \n271,304.22 \n \n75,965.15 \n \n276,537.86 \n \n245,885.30 \n \n450,705.85 \n \n189,435.07 \n \n3,230,916.63 \n \n2,348,592.89 \n \n25,072,266.17 \n \n$ 42,559,142.39 \n \n$ \n \n904 917.07 \n \nThe notes to the financial statements are an integral part of this statement. - 8- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30, 2003 \n \nEXHIBIT \"D\" \n \nNOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \n \nREPORTING ENTITY The Governor's Office of Highway Safety (Office), an organizational unit of the State of Georgia, was created by the General Assembly of Georgia and is administratively assigned to the Department ofPublic Safety (Department) in accordance with Official Code ofGeorgia Annotated Section 50-43. The Director ofthe Office is appointed by the Governor and serves at his pleasure. The Official Code of Georgia Annotated Section 50-4-3 provides that any agency attached to a department for \"administrative purposes only\" will exercise its policy-making function, prepare its budget and submit its budget requests through the department, and hire its own personnel ifprovided for by the State of Georgia's Constitution or by statute. The code section further directs the department to which an agency is assigned to provide attached units with the necessary administrative functions, and to include within the departmental budget the agency's budgetary request as a separate part of the budget and exactly as prepared and submitted by the agency. \n \nThe Governor's Office of Highway Safety receives appropriations of State funds through the Department of Public Safety but has no authority to determine the amount of funding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Office also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Governor's Office of Highway Safety is reported as an organizational unit of the primary government of the State of Georgia for financial reporting purposes. These reporting entity relationships .are defined in Section 2100 of the Governmental Accounting Standards Board Codification ofGovernmental Accounting and Financial Reporting Standards. \n \nFUND ACCOUNTING The Governor's Office of Highway Safety uses a fund to report on its financial position and the results ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. \n \nA fund is a separate accounting entity with a self-balancing set of accounts. The fund presented in the accompanying financial statements is as follows: \n \nGOVERNMENTAL FUND TYPE BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Acts of 1999-2000, 2000-2001, 2001-2002 and 2002-2003. The Budget Fund is similar in nature to a General Fund as defined in generally accepted accounting principals in that the Budget Fund is used to account for all activities except those required to be accounted for in another fund. \n \nBASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGETFUND \nThe Office maintains its Budget Fund on a regulatory basis of accounting (statutory basis). This \n \n-9- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30, 2003 \n \nEXHIBIT\"D\" \n \nregulatory basis is similar to the modified accrual basis ofaccounting in that revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). Revenues are considered to be \"measurable\" when the amount ofthe transaction can be determined and \"available\" when they are collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. Revenues that are accrued include primarily State appropriations, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Expenditures are generally recorded when the related fund liability is incurred as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due. This regulatory basis of accounting is a comprehensive basis of accounting other that generally accepted accounting principles. Exceptions to generally accepted accounting principles are as follows. \n \nIn accordance with accounting practices prescribed or permitted by statutes and regulations of the \nState of Georgia, the Budget Fund remits its unreserved fund balance (surplus) to the Office of Treasury and Fiscal Services in the subsequent fiscal year. This differs from generally accepted accounting principles in that current year revenue should be reduced by the amount of surplus due back to the State Treasury at fiscal year end. \n \nContractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. \n \nPrior period adjustments and certain other items are reported as additions to and deductions from fund balances of the Budget Fund in the accompanying financial statements. This differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. \n \nBUDGET \nAppropriation allotments to the Department of Public Safety on behalf ofthe Governor's Office of Highway Safety are on the basis ofbudgets submitted by the Office to the Department and approved by the Legislature and the Governor. The budgets are adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia and are compiled in the same manner as all State departments. Expenditures are classified by budget unit object classes as provided in the appropriation acts as amended. These budgets are considered to be appropriated budgets and are referred to in these notes as the Amended Appropriations Acts. The Office's budgets are commingled in the Department of Public Safety \"B\" budget unit with other agencies administratively attached to the Department and therefore are not shown separately in the Amended Appropriations Acts. As a result, budget comparisons are not shown in these financial statements. \n \n-10- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30, 2003 \n \nEXHIBIT \"D\" \n \nThe statutory basis ofreporting resulted in a negative excess offunds available over expenditures for certain years; however, as disclosed on Exhibit \"F\", this did not result in deficit fund balances nor was it an indication of over-expenditure of the Governor's Office of Highway Safety's budget. \n \nCASH AND CASH EQUIVALENTS Cash and cash equivalents consists offunds on deposit with the Georgia Department ofPublic Safety and a demand deposit with a bank. \n \nINVENTORIES No inventories of supplies are reported in these financial statements. Expendable supplies are recorded as expenditures at the time of purchase. \n \nCAPITAL ASSETS Capital assets consist of equipment and vehicles. These items are capitalized when the cost of individual items exceeds $5,000 and the estimated useful life exceeds one year. Donated capital assets are recorded at fair value on the date donated and disposals are deleted at recorded cost. The costs of normal maintenance and repairs that do not add to the value of assets or materially extend asset lives are not capitalized. Capital assets and associated depreciation are not reflected in these financial statements. \n \nCOMPENSATED ABSENCES Compensated absences represent obligations ofthe Governor's Office ofHighway Safety relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation offunds each year to the Office to cover the cost of annual leave paid to terminated employees. Long-term debt associated with compensated absences is not reflected in these financial statements. \n \nFUND BALANCE SURPLUS \nThe Budget Fund's surplus is remitted to the Office of Treasury and Fiscal Services in the subsequent fiscal year. This amount of unexpended general appropriations is designated for reappropriation by the State in subsequent years. \n \nNOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS \n \nSTATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: \n \n(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia. \n \n-11- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30. 2003 \n \nEXHIBIT \"D\" \n \n(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia. \n \n(3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. \n \n(4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia. \n \n(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Association. \n \n(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. \n \nAs authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia the option of exempting demand deposits from the collateral requirements. \n \nCATEGORIZATION OF DEPOSITS Certain funds of the Governor's Office of Highway Safety are on deposit with the Georgia Department of Public Safety, to whom the Office is assigned for administrative purposes, and will not be included in the following categorization of deposits. For purposes ofanalysis of custodial credit risk, cash deposits consist of all bank balances that include demand deposits and/or interest bearing accounts. The bank balances as ofApril 30, 2003, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk. \n \nCategory 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Office or by its agent in the Office's name. \n \nCategory 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Office's name. \n \nCategory 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution or by its trust department or agent, but not in the Office's name, and amounts uncollateralized. \n \nCash Deposits \n \nCarrying Amount \n$-5,001.47 \n \nBank Balances \n$317,489.37 \n \nRisk Categories \n \n2 \n \n3 \n \ns100,ooo.oo s_ _~o=.o=o s 211,489.37 \n \n-12- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30, 2003 \n \nEXHIBIT \"D\" \n \nNOTE 3: CAPITAL ASSETS \nThe Governor's Office of Safety was unable to provide an analysis of capital asset activity for the period under review. \nNOTE 4: LONG-TERM DEBT \nThe Governor's Office ofSafety was unable to provide an analysis oflong-term debt activity for the period under review. \nNOTE 5: RISK MANAGEMENT \nPublic Entity Risk Pool The Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State ofGeorgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units ofgovernment participating in the plan, and appropriations made by the General Assembly of Georgia. The Department ofCommunity Health has contracted with Blue Cross Blue Shield ofGeorgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the Department ofCommunity Health. Financial activity relative to the plan will be presented in the State ofGeorgia Comprehensive Annual Financial Report for the year ended June 30, 2003. \nOther Risk Management The Office is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and injuries to employees. The State ofGeorgia utilizes self-insurance programs established by individual agreement, statute or administrative action, to provide property insurance covering fire and extended coverage and automobile insurance and to pay losses that might occur from such causes; liability insurance for employees against personal liability for damages arising out ofperformance oftheir duties; survivors' benefits for eligible members ofthe Employees' Retirement System; consolidating processing of unemployment compensation claims against State agencies and payment of sums due to the Department of Labor; and workers' compensation insurance coverage for employees of the State and for receipt of benefits as prescribed by the workers' compensation statutes ofthe State ofGeorgia. These self-insurance funds are accounted for as internal service funds ofthe State ofGeorgia where assets are set aside for claim settlements. The majority of the risk management programs are funded by assessments charged to participating organizations. A limited amount ofcommercial insurance is purchased by the self-insurance funds applicable to property, employee and automobile liability, fidelity and certain other risks to limit the exposure to catastrophic losses. Otherwise, the risk management programs service all claims against the State for injuries and property damage. Financial activity relative to the self-insurance funds will be presented in the State ofGeorgia Comprehensive Annual Financial Report for the year ended June 30, 2003. \n \n-13- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30, 2003 \n \nEXHIBIT\"D\" \n \nNOTE6: RETIREMENTPLANS \nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description \nThe Office participates in the Employees' Retirement System ofGeorgia (\"ERS\"), a single-employer defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State of Georgia. The benefit structure ofERS is defined by State statute and was significantly modified on July l, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July l, 1982, is an \"old plan\" member subject to the plan provisions in effect prior to July 1, 1982. All other members are \"new plan\" members subject to the modified plan provisions. \nUnder both the old plan and the new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age. \nRetirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest twenty-four consecutive calendar months ofsalary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \nIn addition, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion ofERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415. \nThe ERS issues a separate stand-alone financial audit report and a copy can be obtained through the Georgia Department of Audits and Accounts. \nFunding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivision, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Office's payroll for the period ended April 30, 2003, for employees covered by ERS was $4,654,696.26. The Office's total payroll for all employees was $4,770,728.32. \nUnder the old plan, member contributions consist of4% ofannual compensation up to $4,200.00 and 6% of annual compensation in excess of $4,200.00. Ofthese member contributions, the employee pays the first 1.25% and the employer pays the remainder on behalfofthe employee. Under the new \n-14- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30. 2003 \n \nEXHIBIT \"D\" \n \nplan, member contributions consist solely of 1.25% ofannual compensation paid by employee. The Office also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the period ended April 30, 2003, the ERS employer contribution rate for the Office amounted to 12.45% ofcovered payroll and included the amounts contributed on behalf ofthe employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees. \n \nEmployer contributions made to the plan during the period ended April 30, 2003, amounted to $594,198.99. These contributions met the requirements ofthe plan. Employee contributions were not available. There is no net pension obligation for the plan. Employer contributions (annual pension cost) for the current fiscal year and the preceding three fiscal years are as follows: \n \nFiscal Year \n2003 2002 2001 2000 \n \nAnnual Pension Cost (APC) \n$ 117,206.44 $ 140,352.33 $ 186,356.65 $ 150,283.57 \n \nPercentage ofAPC \nContributed \n100% 100% 100% 100% \n \nNet Pension Obligation \nNIA NIA NIA NIA \n \nActuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2003, financial audit report which may be obtained through the Georgia Department of Audits and Accounts. \n \nGEORGIA DEFINED CONTRIBUTION PLAN Plan Description \nCertain employees ofthe Office participate in the Georgia Defined Contribution Plan (\"GDCP\"), a single-employer defined contribution plan established by the Georgia General Assembly for the purpose of providing retirement coverage for State employees who are not members of a public retirement or pension system. The ERS Board of Trustees administers GDCP. \n \nBenefits A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $ 3,500 credit to their account, the Board has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death ofa member, a lump sum distribution equaling the amount credited to their account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. \n \nThe ERS issues a separate stand-alone financial audit report and a copy can be obtained through the Georgia Department of Audits and Accounts. \n \nContributions and Vesting Member contributions are 7.5% ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner \n \n-15- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY NOTES TO THE FINANCIAL STATEMENTS APRIL 30. 2003 \n \nEXHIBIT \"D\" \n \nestablished by the Board. Upon termination ofemployment, the amount ofthe member's account is refundable upon request by the member. The Office's payroll for the period ended April 30, 2003, for employees covered by GDCP was $116,032.06. The Office's total payroll for all employees was $4,770,728.32. \n \nTotal contributions made by employees during the period ended April 30, 2003, amounted to $8,702.40, which represents 7.5% ofcovered payroll. These contributions met the requirements of the plan. \n \nNOTE 7: POSTEMPLOYMENT BENEFITS \n \nIn addition to the pension benefits described in Note 6, the State of Georgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to OCGA Section 4518. An individual eligible for these benefits must have been a full time employee at the time of retirement of either the State of Georgia or a county social service agency and must be receiving monthly retirement benefits from either the ERS or a county employees' retirement system. The State Health Benefit Plan (Plan) is a public entity-risk pool funded by employee and employer contributions. Employees and retirees subject to the Plan contribute amounts determined by the \nI \nDepartment of Community Health for various health insurance plans. The various agencies of the State contribute to the health insurance fund based upon amounts recommended by the Department ofCommunity Health and set forth in the State ofGeorgia's Appropriations Act. The plan is funded on a \"pay-as-you-go\" basis. Expenses ofthe Plan include provisions for incurred but not reported claims. The portion of employer contributions and expenses attributable to postretirement health care benefits cannot be reasonably estimated. \n \nNOTE 8: LEAVE POLICIES \n \nEmployees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment. \n \nEmployees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences. Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. \n \nNOTE 9: CONTINGENCIES \n \nLitigation, claims and assessments filed against the Governor's Office ofHighway Safety, ifany, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2003. \n \n-16- \n \n SUPPLEMENTARY INFORMATION - 17 - \n \n  GOVERNOR'S OFFICE OF HIGHWAY SAFETY BALANCE SHEETS {STATUTORY BASIS} BUDGET FUND \nFOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nEXHIBIT\"E\" \n \nASSETS \nAccounts Receivable State Appropriation Federal Financial Assistance \nTotal Assets \nLIABILITIES AND FUND EQUITY \nLiabilities Cash and Cash Equivalents (Overdraft} Accounts Payable Payroll Withholdings Deferred Revenue \nTotal Liabilities \nFund Equity Fund Balance Unreserved Undesignated Surplus \nTotal Liabilities and Fund Equity \n \nJUNE 30, 2000 \n \nFOR THE PERIOD ENDED JUNE 301 2001 JUNE 301 2002 \n \nAPRIL 301 2003 \n \n$ \n \n-5,500.00 $ \n \n28,600.00 \n \n$ \n \n20,814.76 \n \n1,038,487.95 \n \n2,999,617.71 $ 2,527,472.58 \n \n1,339,229.27 \n \n$ 1,032,987.95$ 3,028,217.71 $ 2,527,472.58$ 1,360,044.03 \n \n$ \n \n465,196.72$ 2,073,484.98 $ 1,700,510.83$ \n \n574,037.25 \n \n548,885.27 \n \n839,758.24 \n \n436,781.64 \n \n764,491.19 \n \n21,515.59 \n \n311,398.22 \n \n$ 1,014,081.99$ 2,913,243.22 $ 2,448,690.69 $ 1,360,044.03 \n \n18,905.96 \n \n114,974.49 \n \n78,781.89 \n \n0.00 \n \n$ 1,032,987.95 $ 3,028,217.71$ 2,527,472.58$ 1,360,044.03 \n \nSee notes to the financial statements. \n \n- 19 - \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY STATEMENTS OF CHANGES IN FUND BALANCE (STATUTORY BASIS} \nBUDGET FUND FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nEXHIBIT \"F\" \n \nFUND BALANCE - JULY 1 \nReserved Unreserved \nUndesignated Surplus \nADDITIONS \nAdjustments to Prior Year's Contracts and Accounts Payable \nDEDUCTIONS \nUnreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1999 YearEndedJune30,2000 Year Ended June 30, 2001 YearEndedJune30,2002 \nAdjustments to Prior Year's Accounts Receivable \nExcess of Expenditures over Funds Available Exhibit\"G\" \n \nJUNE 3012000 \n \nFOR THE PERIOD ENDED \n \nJUNE 3012001 \n \nJUNE 3012002 \n \nAPRIL 30, 2003 \n \n$ \n \n0.00 $ \n \n0.00 $ \n \n0.00 $ \n \n0.00 \n \n24 444.56 \n \n181905.96 \n \n114 974.49 \n \n78i781.89 \n \n$ \n \n24 444.56 $ \n \n181905.96 $ \n \n114 974.49 $ \n \n78 781.89 \n \n$ \n \n811928.12 $ \n \n961201.03 $ \n \n7871502.30 $ \n \n1541062.04 \n \n$ \n \n24,444.56 \n \n$ \n \n18,905.96 \n \n$ \n \n114,974.49 \n \n$ \n \n78,781.89 \n \n1,943.52 \n \n170.56 \n \n631022.16 \n \n-18 773.46 \n \n706 776.89 \n \n153 891.48 \n \n$ \n \n871466.72 $ \n \n132.50 $ \n \n823,694.90 $ \n \n2321843.93 \n \nFUND BALANCE - JUNE 30 \n \n$ ===1=81=9=05==96=$ \n \n114 974.49 $ \n \n78 781.89 $=====0==00= \n \nSee notes to the financial statements. \n \n-20- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY STATEMENTS OF FUNDS AVAILABLE AND EXPENDITURES (STATUTORY BASIS) \nBUDGET FUND FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30. 2003 \n \nEXHIBIT\"G\" \n \nFUNDS AVAILABLE \nREVENUES \nState Appropriation Federal Revenues Other Revenues Retained \nEXPENDITURES \nPersonal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem and Fees Contracts Highway Safety Grants \nExcess of Funds Available over (under) Expenditures \n \nJUNE 30, 2000 \n \nFOR THE PERIOD ENDED \n \nJUNE 30, 2001 \n \nJUNE 30, 2002 \n \nAPRIL 30, 2003 \n \nTotal \n \n$ \n \n384,368.00 $ \n \n617,083.00 $ \n \n690,719.00 $ \n \n578,767.00 $ \n \n2,270,937.00 \n \n4,993,261.63 \n \n8,715,389.36 \n \n11,360,829.39 \n \n14,285,307.94 \n \n39,354,788.32 \n \n28,500.00 \n \n28,500.00 \n \n$ \n \n5,377,629.63 $ \n \n9,360,972.36 $ 12,051,548.39 $ 14,864,074.94 $ 41,654,225.32 \n \n$ \n \n1,401,931.46 $ \n \n1,757,490.54 $ \n \n1,795,619.20 $ \n \n1,527,990.56 $ \n \n6,483,031.76 \n \n166,564.63 \n \n985,288.61 \n \n1,447,151.58 \n \n1,315,496.67 \n \n3,914,501.49 \n \n55,678.69 \n \n75,307.76 \n \n86,858.93 \n \n53,458.84 \n \n271,304.22 \n \n75,965.15 \n \n75,965.15 \n \n22,190.18 \n \n216,114.69 \n \n20,510.27 \n \n17,722.72 \n \n276,537.86 \n \n97,846.05 \n \n93,012.68 \n \n33,418.43 \n \n21,608.14 \n \n245,885.30 \n \n89,748.98 \n \n115,349.14 \n \n107,999.63 \n \n137,608.10 \n \n450,705.85 \n \n23,457.22 \n \n30,874.38 \n \n57,385.68 \n \n77,717.79 \n \n189,435.07 \n \n1,306,852.40 \n \n1,565,631.56 \n \n316,954.32 \n \n41,478.35 \n \n3,230,916.63 \n \n1,147,439.58 \n \n1,201,153.31 \n \n2,348,592.89 \n \n2,276,382.18 \n \n4,503,129.54 \n \n7,669,022.51 \n \n10,623,731.94 \n \n25,072,266.17 \n \n$ \n \n5,440,651.79 $ \n \n9,342,198.90 $ 12,758,325.28 $ 15,017,966.42 $ 42,559,142.39 \n \n$ \n \n-63,022.16 $ \n \n18 773.46 $ \n \n-706,776.89 $ \n \n-153,891.48 $ \n \n-904,917.07 \n \nSee notes to the financial statements. \n \n-21 - \n \n  SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT \n- 23 - \n \n  RussELL W. H1NTON \nSTATE AUDITOR (404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 \nJuly 10, 2003 \n \nHonorable Sonny Perdue, Governor Members of the General Assembly of Georgia \nand Honorable Robert F. Dallas, Director Governor's Office of Highway Safety \nREPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nLadies and Gentlemen: \nWe have audited the financial statements of the Governor's Office of Highway Safety, an organizational unit of the State of Georgia, as of and for the period July 1, 1999 through April 30, 2003, and have issued our report thereon dated July 10, 2003. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. \nCompliance As part of obtaining reasonable assurance about whether the Governor's Office of Highway Safety's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. \nInternal Control Over Financial Reporting In planning and performing our audit, we considered the Governor's Office ofHighway Safety's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on \n-25- \n \n  the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgment, could adversely affect the Governor's Office of Highway Safety's ability to record, process, summarize and report financial data consistent with the assertions ofmanagement in the financial statements. The following reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs. \n(1) Accounting Controls (Overall) Deficiencies in Internal Control Finding Control Number: FS-466GOHS-03-01 \n(2) General Ledger Ending Balances in Balance Sheet Clearing Accounts Finding Control Number: FS-466GOHS-03-02 \n(3) General Ledger Inadequate Accounting Procedures Finding Control Number: FS-466GOHS-03-03 \n(4) General Ledger Inadequate Accounting Procedures Finding Control Number: FS-466GOHS-03-04 \n(5) Capital Assets Inadequacies in Operation of Property Management System Finding Control Number: FS-466GOHS-03-05 \n(6) Expenditures/Liabilities/Disbursements Exceptions Related to Expenditure Sampling Finding Control Number: FS-466GOHS-03-06 \n(7) Expenditures/Liabilities/Disbursements Exceptions Related to Expenditure Sampling Finding Control Number: FS-466GOHS-03-07 \n(8) Expenditures/Liabilities/Disbursements Exceptions Related to Expenditure Sampling Finding Control Number: FS-466GOHS-03-08 \nA material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that all of the reportable conditions described above are material weaknesses. \n-27- \n \n  This report is intended solely for the information and use ofmanagement and management ofthe State of Georgia, and is not intended to be and should not be used by anyone other than these specified parties. \nRespectfully submitted, \n~~:44.: \nRus 11 W. Hinton, CPA, CGFM State Auditor RWH:jsa \n-29- \n \n  SECTION III FINDINGS AND QUESTIONED COSTS (Including Management's Response to Findings and Questioned Costs) \n- 31 - \n \n  GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-01 ACCOUNTING CONTROLS (OVERALL) Deficiencies in Internal Control \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual, Section V, Page 51-2 states in part: \"Each state organization is responsible for adopting an internal control framework that is suitable for the type of service they provide......Each state organization has a responsibility to assess their internal control system and use this information to design, implement, and monitor internal controls that are suitable for their organization.\" \n \nCondition: \n \nDuring the performance of our audit procedures, we observed deficiencies in the internal control system as follows: \n-requests for proposals (RFP) requirements were not followed in the awarding of grants and contracts \n-improper separation of duties in the reconciliation of bank accounts and purchase procedures -written procedures for the following controls do not exist: \n-management override of internal controls -purchasing -personnel access to data, assets, and computer programs -transaction authorization -changes to computer programs -new vendor verification process was not performed -purchase orders and requisitions are not prenumbered -purchase orders and requisitions are not always used when required -cancelled checks are not examined for proper payee, endorsement, or date -duplicate invoices received are not destroyed. \n \nCause: \n \nManagement failure to comply with provisions of the State ofGeorgia Accounting Procedures Manual. \n \nEffect: \n \nViolation of state accounting procedures that might result m misappropriation of assets. \n \nRecommendation: \n \nEngage the services ofa professional for a complete study and evaluation of internal control. Implement recommendations and establish formal written policies and procedures to ensure adequate system maintenance. \n \n-33- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1. 1999 THROUGH APRIL 30. 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-02 GENERAL LEDGER Ending Balances in Balance Sheet Clearing Accounts \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual, Section II provides for clearing accounts in the State Chart of Accounts to facilitate the accumulation of transactions, which are subsequently distributed to appropriate accounts. At year-end, no balances should remain in the clearing accounts. \n \nCondition: \n \nOur examination revealed that, at two of the three years-end under review, the Office's general ledger balance sheet clearing accounts contained ending balances. \n \nCause: \n \nManagement failure to monitor the clearing accounts, and use them as prescribed in the State ofGeorgia Accounting Procedures Manual. \n \nEffect: \n \nPossible material misstatement of general ledger accounts leading to erroneous decisions by the Office's management and the State ofGeorgia executive decision makers. \n \nRecommendation: \n \nEnsure that clearing accounts have been distributed to appropriate accounts at the end of each accounting period, and that no balances remain in the clearing accounts at year-end. \n \nFinding Control Number: FS-466GOHS-03-03 GENERAL LEDGER Inadequate Accounting Procedures \n \nCriteria: \n \nNormal account balances are defined in accounting procedures as a debit for accounts receivable, and a credit for accounts payable and fund balance. \n \nCondition: \n \nA review of the general ledger for the federal programs at the program level revealed that many had negative (credit) accounts receivable balances, and positive (debit) accounts payable and fund balance account balances at year-end. \n \nCause: \n \nThese deficiencies were a result ofthe Office's failure to monitor federal program codes within the general ledger in a timely manner. \n \n-34- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1. 1999 THROUGH APRIL 30. 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nEffect: \n \nFailure to monitor federal program codes within the general ledger in a timely manner could affect the proper recording of revenue and expenditures, resulting in financial statement misstatements. \n \nRecommendation: \n \nThe Governor's Office of Highway Safety should review current policies and procedures regarding federal grant general ledgers to ensure adequate and accurate recording of transactions, and that account balances are properly stated. \n \nFinding Control Number: FS-466GOHS-03-04 GENERAL LEDGER Inadequate Accounting Procedures \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual Section I, page 1-91 states in part: \"State organizations included within the Appropriations Act must prepare financial statements in conformity with the State's budgetary policy and procedures... \". Accurate financial statements necessitate accurate general ledger account balances. \n \nCondition: \n \nAccounting procedures ofthe Governor's Office ofHighway Safety were insufficient to provide adequate internal controls over the general ledger accounts. \n \nCause: \n \nOn a monthly basis, the general ledger was not reviewed at the agency level to ensure accurate account balances. Audit adjustments were necessary to correctly reflect the status of the Office's fund balance at each year-end. \n \nEffect: \n \nFailure to maintain accurate general ledger account balances may result in inaccurate financial statements possibly leading to erroneous management decisions. Failure to produce accurate financial statements is a violation of the State ofGeorgia Accounting Procedures Manual. \n \nRecommendation: \n \nThe Office should establish appropriate procedures to ensure that general ledger accounts are posted, balanced, reconciled if necessary, and reviewed on a monthly basis, and that detailed records supporting general ledger account balances are complete, accurate and reliable. \n \n-35- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual, Section III, Page 31-23 states in part: \"Accurate subsidiary fixed asset inventory records must be maintained. Balances and additions to the fixed assets inventory records should be reconciled periodically (monthly) to the general ledger.\" \n \nCondition: \n \nFixed asset accounting procedures of the Office do not include monthly reconciliations of either beginning to ending inventory balances, or additions per inventory to purchases per general ledger. \n \nCause: \n \nManagement failure to follow fixed asset accounting procedures as detailed in the State ofGeorgia Accounting Procedures Manual. \n \nEffect: \n \nFailure to maintain accurate fixed asset records may result in inaccurate internal management reports and resulting decisions concerning current and future fixed asset needs, and possible misappropriation of assets. \n \nRecommendation: \n \nThe Office should establish the necessary internal controls, and implement procedures to ensure fixed asset inventories are maintained in compliance with requirements of state law and the State of Georgia Accounting Procedures Manual. \n \n-36- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-06 EXPENDITURES/LIABILITIES/DISBURSEMENTS Exceptions Related to Expenditure Sampling \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual, Section V, Page 54-2 states in part: \"Documentation involves preserving evidence to substantiate a decision, event, transaction or system. All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations, and assist in analyzing operations.\" \n \nCondition: \n \nOur review included an examination ofdocumentation over the four-year period involving administrative expenditures. We tested a total of 791 voucher packages for compliance with the above quoted provisions ofthe State of Georgia Accounting Procedures Manual. Following are exceptions found in that test work: \n \n-Missing Original Documentation \n \n111 \n \n-Travel did not Involve Employees \n \n7 \n \n-Not Approved for Funding by an \n \nAuthorizing Official \n \n76 \n \n-Documentation not Cancelled \n \n37 \n \n-Purpose of Travel not Documented \n \n7 \n \n-No Evidence of Receipt of Goods or Service \n \n52 \n \n-Missing Documentation \n \n24 \n \n-Inadequate Documentation \n \n335 \n \nCause: \n \nThese exceptions were due to the failure of management to enforce documentation guidelines as established for state agencies. \n \nEffect: \n \nPossible misappropriation of assets, inaccurate decisions regarding current and future purchasing decisions, lack ofrequired information for reporting both to state and federal agencies. \n \nRecommendation: \n \nThe Governor's Office of Highway Safety should establish controls to ensure compliance with documentation guidelines, and adequate audit trail information for every expenditure transaction. \n \n-37- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-07 EXPENDITURES/LIABILITIES/DISBURSEMENTS Exceptions Related to Expenditure Sampling \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual, Section V, Page 54-2 states in part: \"Documentation involves preserving evidence to substantiate a decision, event, transaction or system. All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers m controlling their operations, and assist in analyzing operations.\" \n \nCondition: \n \nOur review included an examination ofdocumentation over the four-year period involving contract and sub-grant expenditures. We tested a total of 112 contracts and sub-grants for compliance with the above quoted provisions of the State of Georgia Accounting Procedures Manual. Following are exceptions found in that test work: \n \n-Missing Claim for Reimbursement \n \n64 \n \n-Missing Cost Category Detail \n \n21 \n \n-No Supporting Documentation \n \n23 \n \n-Payments not Authorized by an Appropriate \n \nOfficial \n \n82 \n \n-Inadequate Documentation \n \n106 \n \n-No On-Site Monitoring \n \n81 \n \nCause: \n \nThese exceptions were due to the failure of management to enforce documentation guidelines as established for state agencies. \n \nEffect: \n \nPossible misappropriation of assets, inaccurate decisions regarding current and future decisions involving contracts and sub-grants, lack of required information for reporting both to state and federal agencies. \n \nRecommendation: \n \nThe Governor's Office of Highway Safety should establish controls to ensure compliance with documentation guidelines, and adequate audit trail information for every contract and sub-grant expenditure transaction. \n \n-38- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1. 1999 THROUGH APRIL 30. 2003 \n \nFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-08 EXPENDITURES/LIABILITIES/DISBURSEMENTS Exceptions Related to Expenditure Sampling \n \nCriteria: \n \nThe State ofGeorgia Accounting Procedures Manual, Section V, Page 54-2 states in part: \"Documentation involves preserving evidence to substantiate a decision, event, transaction or system. All documentation should be complete, accurate, and reported promptly. Documentation should contribute to achieving the State organization's mission, help managers in controlling their operations, and assist in analyzing operations.\" In addition, the Governor's Office of Highway Safety Purchasing Card Policies and Procedures Manual limits purchasing card transactions to that involving supplies, materials, and equipment. The manual also prohibits purchases involving services, travel, cash advances, fuel, and vehicle repair. Further, the Department of Administrative Services contract with the Bank of America to service state purchasing card transactions limits a single transaction to $5,000.00. \n \nCondition: \n \nOur review included an examination of documentation over the four-year period involving state purchasing card transactions. We tested a total of 37 monthly credit card statements for compliance with the above sources. Following are exceptions found in that test work: \n \n-Purchases of Items not Allowed \n \n176 \n \n-Circumvented Single Transaction Dollar \n \nLimit \n \n1 \n \nCause: \n \nThese exceptions were due to the failure of management to enforce documentation guidelines as established for state agencies. \n \nEffect: \n \nPossible misappropriation of assets, inaccurate decisions regarding current and future purchasing card decisions, lack ofrequired information for reporting both to state and federal agencies. \n \nRecommendation: \n \nThe Governor's Office of Highway Safety should establish controls to ensure compliance with documentation guidelines, and adequate audit trail information for every purchasing card expenditure transaction. \n \n-39- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1. 1999 THROUGH APRIL 30. 2003 \n \nMANAGEMENT'S RESPONSE TO FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-0l ACCOUNTING CONTROLS (OVERALL) Deficiencies in Internal Control \n \nWe concur with this finding. GOHS will engage the services of a professional for a complete study and evaluation of internal controls. GOHS will implement the recommendations and establish formal written policies and procedures to ensure adequate system maintenance. December 31, 2003 is the projected completion date for this task. \n \nContact Person: \n \nClifton W. Jenkins, Director of Administrative Services \n \nTelephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \n \nFinding Control Number: FS-466GOHS-03-02 GENERAL LEDGER Ending Balances in Balance Sheet Clearing Accounts \n \nWe concur with this finding. However, at year end 06/30/03, no balances remained in the clearing accounts. GOHS finance staffwill monitor clearing account activity and make sure the clearing accounts are distributed to appropriate accounts at the end of each accounting period. This process will begin with the September 2003 accounting period. \n \nContact Person: \n \nClifton W. Jenkins, Director of Administrative Services \n \nTelephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \n \nFinding Control Number: FS-466GOHS-03-03 GENERAL LEDGER Inadequate Accounting Procedures \n \nWe concur with this finding. However, at year end 06/30/03, the General Ledger reflected normal balances for accounts receivable (debit), accounts payable (credit) and fund balance (credit). Effective immediately, .GOHS finance staffwill monitor federal program codes within the General Ledger to ensure adequate and accurate recording of transactions, and that account balances are properly stated. \n \nContact Person: \n \nClifton W. Jenkins, Director of Administrative Services \n \nTelephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \n \n-40- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \n \nMANAGEMENT'S RESPONSE TO FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: FS-466GOHS-03-04 GENERAL LEDGER Inadequate Accounting Procedures \n \nWe concur with this finding. In cooperation with the Department ofPublic Safety, by 09/30/03, OOHS will establish appropriate procedures to ensure that general ledger accounts are posted, balanced, reconciled if necessary, and reviewed on a monthly basis. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls. \n \nContact Person: \n \nClifton W. Jenkins, Director of Administrative Services \n \nTelephone: 404-657-4197; Fax: 404-651-~107; E-mail: cjenkins@gohs.state.ga.us \n \nFinding Control Number: FS-466GOHS-03-05 CAPITAL ASSETS Inadequacies in Operation of Property Management System \n \nWe concur with this finding. By 11 /30/03, OOHS will establish the necessary internal controls, and implement procedures to ensure fixed asset inventories are maintained in compliance with requirements of State law and the State of Georgia Accounting Procedures Manual. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls. \n \nContact Person: \n \nClifton W. Jenkins, Director of Administrative Services \n \nTelephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \n \nFinding Control Number: FS-466GOHS-03-06 EXPENDITURES/LIABILITIES/DISBURSEMENTS Exceptions Related to Expenditure Sampling \n \nWe concur with this finding. Effective immediately, OOHS will begin establishing the necessary controls to ensure compliance with documentation guidelines and adequate audit trail information for every expenditure transaction. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls. \n \nContact Persons: Clifton W. Jenkins, Director of Administrative Services Telephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \nSpencer Moore, Director of Program and Planning Telephone: 404-656-6997; Fax: 404-651-9107; E-mail: smoore@gohs.state.ga.us \n \n-41- \n \n GOVERNOR'S OFFICE OF HIGHWAY SAFETY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD JULY 1, 1999 THROUGH APRIL 30, 2003 \nMANAGEMENT'S RESPONSE TO FINDINGS AND QUESTIONED COSTS Finding Control Number: FS-466GOHS-03-07 EXPENDITURES/LIABILITIES/DISBURSEMENTS Exceptions Related to Expenditure Sampling We concur with this finding. Effective immediately, OOHS will begin establishing the necessary controls to ensure compliance with documentation guidelines, and adequate audit trail information for every contract and sub-grant expenditure transaction. This procedure will be reviewed in conjunction with the retention of an accounting professional to review and make recommendations on our overall internal controls. Contact Persons: Clifton W. Jenkins, Director of Administrative Services Telephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \nSpencer Moore, Director of Program and Planning Telephone: 404-656-6997; Fax: 404-651-9107; E-mail: smoore@gohs.state.ga Finding Control Number: FS-466GOHS-03-08 EXPENDITURES/LIABILITIES/DISBURSEMENTS Exceptions Related to Expenditure Sampling We concur with this finding. By 09/30/03, OOHS will establish the necessary controls to ensure compliance with documentation guidelines, and adequate audit trail information for every purchasing card expenditure transaction. This procedure will be reviewed in conjunction with the retention ofan accounting professional to review and make recommendations on our overall internal controls. Contact Persons: Clifton W. Jenkins, Director of Administrative Services Telephone: 404-657-4197; Fax: 404-651-9107; E-mail: cjenkins@gohs.state.ga.us \n-42- \n \n "}],"pages":{"current_page":1,"next_page":null,"prev_page":null,"total_pages":1,"limit_value":10,"offset_value":0,"total_count":1,"first_page?":true,"last_page?":true},"facets":[{"name":"type_facet","items":[{"value":"Text","hits":1}],"options":{"sort":"count","limit":16,"offset":0,"prefix":null}},{"name":"creator_facet","items":[{"value":"Georgia. 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