central - april 22, 2014

Tuesday – April 22, 2014

6 CITYPLACE DR, SUITE 900│ ST. LOUIS, MISSOURI 63141│ 314.983.1200 1520 S. FIFTH ST., SUITE 309 │ ST. CHARLES, MISSOURI 63303 │ 636.255.3000

2220 S. STATE ROUTE 157, STE. 300 │ GLEN CARBON, ILLINOIS 62034 │ 618.654.3100

Ron [email protected]

Government Risk Briefing

The Auditors are Coming…

How Prepared are You?

mailto:[email protected]

• Introductions• Top 10 Steps to Audit Excellence – State Auditor• Discussion on the 10 Steps

© 2013 All Rights Reserved Brown Smith Wallace LLC

Government Financial Audit Discussion

• Name• Organization• Title• What do you hope to learn today?


Introductions


Top 10 Steps to Audit Excellence

• Missouri State Auditor• Video Presentation http://www.youtube.com/watch?feature=player_detailpage&v=l7BBElMy3XA

http://www.youtube.com/watch?feature=player_detailpage&v=l7BBElMy3XA




# 10 - Cooperate

• Provide auditors with requested data.

• Respond to citizens’ inquiries promptly and appropriately.

• Failure to cooperate = suspicious auditors.


# 9 – Respect Public Assets

• Manage and protect physical assets: Asset tags. Regular inventories. Monitor vehicle use.

• Protect monetary assets: Protect financial health.

Maintain bond rating. Avoid excessive debt.

Spend responsibly. Establish policies with reasonable limits to guide

spending decisions. Do not reimburse unallowable, excessive or

undocumented expenses. Monitor government issued credit cards. Conduct adequate reviews and reconciliations

and require supporting documentation.


# 8 – Follow Personnel Policies

• Establish and document personnel and payroll policies.

• Monitor payroll for “mystery employees”

• Ensure timesheets approved by employee and supervisor.

• Abide by leave balance maximums and watch for negative balances.

• Ensure overtime and compensatory time is approved in advance and monitored.

• Avoid the appearance of nepotism.

• No extra compensation for normal work or severance in disguise.


# 7 – Carefully Plan and Monitor Projects• Plan at beginning to prevent cost overruns,

inefficiencies and performance problems.

• Be aware of financing terms.

• Do not borrow or buy to soon.

• Learn technical facts before starting.

• Document decisions made.

• Ensure appropriate price.

• Monitor and document completion of each milestone or contract requirement.

• Ensure audit clause in any contract and audit as necessary.


# 6 – Use Good Procurement Practices• Establish and document procurement policies and

procedures.

• Bid contracts.

• Beware of conflicts of interest and related parties.

• Manage scope changes.

• Ensure audit clause in any contract and audit as necessary.


# 5 – Develop and Execute Budgets Properly• Ensure budgets are complete and contain all required

elements.

• Document formal approval of budgets.

• Do not deficit budget.

• Compare actuals to budget regularly so proper adjustments can be made.

• Ensure budget amendments are formally approved.

• Set taxes and fees at legal and justifiable rates.


# 4 – Abide by Sunshine Laws

• Missouri’s Sunshine Laws guarantee citizens access to public meetings, records, votes, actions and deliberations.

• Presume all public entity meetings are open.

• When necessary, close meetings properly: Include closed meeting on agenda. Start in open meeting and document vote to close. Limit closed meetings to topics allowed by law.

• Maintain minutes.

• Adopt a Sunshine policy.


# 3a – Use Strict Receipting Practices• Develop receipting policies and procedures.

• Segregate duties.

• Document method of payment and immediately issue receipts.

• Reconcile daily receipts to deposits.

• Secure monies and restrictively endorse checks immediately.

• Reconcile bank accounts.

• Conduct surprise cash counts.


# 3b – Use Strict Disbursement Practices• Develop disbursement policies and procedures.

• Segregate duties.

• Obtain proper approval of disbursements.

• Maintain adequate supporting documents for disbursements.

• Reconcile bank accounts.

• Consider positive pay.

• Maintain, monitor and review master vendor file.


# 2 – Preserve Information

• Maintain required records.

• File all required reports.

• Prepare for problems = implement and follow a data recovery plan as part of a broader disaster recovery plan.

• Implement and follow a clear and lawful document destruction policy.


# 1 – Watch Out For Criminals

• Implement and monitor accounting controls to help prevent and detect theft.

• Be aware of issues that could cause an otherwise good person to steal.

• Watch for Red Flags of Fraud (Pressure, Opportunity, Rationalization):


Questions/Answers

central - april 22, 2014

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