The State Auditor s Office Workshop: Are You Ready For Your Next Audit?

Transcription

1 Washington State Auditor s Office I n d e p e n d e n c e R e s p e c t I n t e g r i t y Troy Kelley The State Auditor s Office Workshop: Are You Ready For Your Next Audit? Washington Association of District Employees Conference Leavenworth, Washington June 17, 2014 Joshua Collette, Conservation District Specialist Tina Watkins, Program Manager

2 Presentation Topics State Auditor s Office resources Review of required schedules Expenditures Effective Procedures Gifting of Public Funds Feedback from the Districts regarding Schedule 22 or any other audit related topic W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 2

3 State Auditor Website Resources Website address: W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 3

4 State Auditor Website Resources Local Government Services File Reports Online Budget Accounting and Reporting System (BARS) Manual Local Government Performance Center Client Subscription Services W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 4

5 Budget Accounting and Reporting System (BARS) Manual The manual can be updated at anytime Directions to view the BARS manual Click on Local Government tab on the left side of the page Click on the BARS Manual link Select Conservation Districts (Cash Basis) link towards the bottom of the page W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 5

6 Local Government Performance Center Resource Center Templates Case studies Other tools to improve operations and communicate with citizens Training Opportunities Lean Academy W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 6

7 Other Actions Resource Client Subscription Services Submit Helpdesk Question Submit Loss Report Submit Customer Services Survey Contact Information for Your Audit Team Audit Preparation Accountability Resources Fraud Prevention Resources Federal Grant Management Link to the Local Government Performance Center under the Program tab W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 7

8 Directions to locate the Client HelpDesk Client HelpDesk Click on Local Government tab on the left Click on the Sign In/Sign Up for Client Services link Log into your account for subscriptions and client portal Click on the Other Actions tab towards the top of the page, and then click on the Submit HelpDesk Question link. Read the information on the page. At the bottom of the page, click on the Create New Request button to start the process W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 8

9 Fund Resources and Uses Arising From Cash Transactions (Statement C-4) Revenues/Expenditures/Expenses (Schedule 1) Liabilities (Schedule 9) Required Schedules Expenditures of Federal Awards and State Financial Assistance (Schedule 16) Labor Relations Consultants (Schedule 19) Risk Management (Schedule 21) Annual Questionnaire for Accountability Audit (Schedule 22) W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 9

10 Fund Resources and Uses Arising from Cash Transactions Financial activities are reported on this statement The statement is required if the District has revenues in excess of two million dollars or any other requirement to prepare financial statements or receive a financial statement audit Presentation of reserved and unreserved cash and investment balance is required W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 10

11 Revenues/Expenditures/Expense The schedules presentation should be consistent with the financial statements (Statement C-4). Districts are required to update incorrect data reported on this schedule. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 11

12 Liabilities Provides information of the general obligation debt, including: general obligation bonds, bond anticipation notes, claims and judgments, installment sales contracts, lease purchase agreements, etc. Districts will also need to include other liabilities such as compensated absences, self-insurance liabilities, and environmental liabilities for the annual report. Exclude disbursement expected to be made during the normal course of business and operating leases. Districts are required to update incorrect data reported on this schedule. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 12

13 Expenditures of Federal Awards and State Financial Assistance The Schedule is an essential document for planning and conducting the audit of the government. Schedule 16 is comprised of two schedules: Schedule of Expenditures of Federal Awards (SEFA) Schedule of State Financial Assistance W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 13

14 Schedule of Expenditures of Federal Awards (SEFA) Include all expenditures of federal awards that were received directly from a federal agency and indirectly (pass-through) from a state agency or local government. Include amounts expended from federal loan proceeds. If the District expends $500,000 or more in federal awards in a year, it must contact the State Auditor s Office and arrange for a single audit under OMB Circular A-133. Remember to complete the Notes to the Schedule of Expenditures of Federal Awards. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 14

15 Schedule of State Financial Assistance List expenditures from grants received directly or indirectly from state agencies. State-funded loans do not need to be reported on this schedule, but be sure that any loans received from state agencies are not actually federal in origin. Remember to complete the Notes to the Schedule of State Financial Assistance. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 15

16 Labor Relations Consultants This schedule is required to be filed with the State Auditor s Office whether or not the District has labor relations consultants. This schedule is used to identify expenditures for labor relations consultants, and disclosure should include identification of each consultant and the terms and conditions of each agreement. Labor relations includes employee representation issues, negotiation of contracts, and preparation and conduct of interest arbitrations. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 16

17 Labor Relations Consultants A labor relations consultant is someone who agrees to perform such services for compensation. A labor relations consultant includes an attorney or other professional engaged by the local government to negotiate a collective bargaining agreement. It would not include a firm engaged to establish a personnel manual or to prescreen job applicants. The determining factor is the substance of services the consultant has been engaged to perform. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 17

18 Annual Questionnaire for Accountability Audit Contains questions that help evaluate risks and key control activities in place over key accounting functions. Includes guidance for individual questions. Assists with the District s own self-assessment. It is required for all conservation districts to submit the schedule with their annual reports. Please submit all required signatures! W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 18

19 Expenditures Common Issues Inadequate policies and procedures Inadequate documentation to support payments Personal charges to credit cards Inability to demonstrate valid business purpose of expenditures. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 19

20 Expenditures Best Practices Only pay on original detailed invoices Ensure all payments are approved, supported and for a valid public purpose Establish policies and procedures and ensure they are enforced (practice = policy) Ask questions!!!! W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 20

21 Expenditures Best Practices Is it an appropriate expenditure? What benefit does the District receive? Is there a donative intent? Is the benefit equitable to the amount paid? Does the expenditure carry out a fundamental purpose of the District? Consult your legal counsel when the legality of an expenditure is unclear!!! W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 21

22 Gift of Public Funds Article VIII Section 7 of the Washington State Constitution No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation. W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 22

23 Feedback of Questions? W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 23

24 Contact Information Troy Kelley State Auditor (360) Tina Watkins, CPA Program Manager (360) ext. 106 Joshua Collette Assistant State Auditor (360) Website: W a s h i n g t o n S t a t e A u d i t o r s O f f i c e 24