Legal and Audit Update

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Arabella Lambert
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1 Ohio Township Association Winter Conference Legal and Audit Update Presented by: Robert R. Hinkle, Chief Deputy Auditor 1 Brendan M. Inscho, Deputy Chief Legal Counsel

2 Overview Trustee Compensation Fiscal Officer Compensation Providing Health Insurance Preparing for an Audit 2

3 Overview (continued) Audit or an Agreed Upon Procedures GASB 68 New Annual Financial Report Filing Public Records & Public Meetings Questions 3

4 Trustee and Fiscal Officer Salary from Restricted Funds Our Concern: (Annual) Salary from Restricted Funds Two Questions: Generally, when appropriate at all?, and When appropriate, how much? Not our Concern: Per Diem Pay Pay from General Fund 4

5 Trustee and Fiscal Officer Salary from Restricted Funds (continued) Pre - HB 153: Still permissible to be paid via annual salary Per Attorney General Opinion , Fiscal Officers and Trustees required to document time spent on restricted funds e.g., calendars 5

6 Trustee and Fiscal Officer Salary from Restricted Funds (continued) HB 153: Now requires certification for Trustees and Fiscal Officers Shall certify Reflecting the amount of work performed 6

7 Trustee and Fiscal Officer Salary from Restricted Funds (continued) Auditing Requirements under new Certification Requirement: shall means no paycheck unless certification is submitted Certifying time spent 100% on any given restricted fund Example: attending regular meetings 7

8 Trustee and Fiscal Officer Salary from Restricted Funds (continued) Other Compensation Problems: Increases in budgets and potential salary increases/decreases Effects of voluntarily accepting less-thanstatutory compensation 8

9 Health Insurance Concerns: What are we talking about: Public Money What are we not talking about: Your Personal Money 9

10 Health Insurance (continued) Statutes: R.C R.C (Also and ) 10

11 Health Insurance (continued) R.C Permits Your Township To Provide for various health care insurance policies Pay for out-of-pocket premiums of employees who either were denied coverage or chose an outside plan 11

12 Health Insurance (continued) R.C Permits Your Township To: Opt not to procure its own health insurance, but reimburse where 3 conditions are met Pass a resolution indicating intent not to provide healthcare coverage; Set a ceiling above which the township will not pay; and Specify the benefits listed in R.C

13 Health Insurance (continued) Common Problems: No Resolution! Under , reimbursing for the wrong things Mid-year changes to health care coverage (cost v. coverage) Compensating for out-of-pocket expenses 13

14 Preparing for an Audit What is expected of the Client? Maintain accurate and up-to-date records Maintain records orderly 14

15 Preparing for an Audit (continued) What is expected of the Client? Reconcile timely and have it approved File financial statements timely with AOS 15

16 Preparing for an Audit (continued) What is expected of the Client? Where significant and/or unusual transactions are present, document them Consult with proper parties prior to significant transactions 16

17 Audit or an Agreed Upon Procedures AUP versus an Audit Audit engagement in which the auditor obtains reasonable assurance about whether the financial statements as a whole are free from material misstatement 17

18 Audit or an Agreed Upon Procedures AUP versus an Audit Agreed Upon Procedures (AUP) engagement in which the client engages the auditor to perform specific procedures and report results of those procedures 18

19 Audit or an Agreed Upon Procedures Some Eligibility Criteria: Budget of less than $5 million Regulatory, Cash or Modified Cash Basis No fiscal officer change Prior engagement (or two) was an audit Clean audit report Not a high risk or in fiscal emergency 19

20 Governmental Accounting Standards What is GASB 68? Governmental Accounting Standards Board Statement 68 An accounting rule issued by the GASB Effective for Townships for calendar year

21 Governmental Accounting Standards (continued) What will GASB 68 mean for my township? Will there be additional Cost? Must we take Action? Do we have Reporting requirements? 21

22 Governmental Accounting Standards (continued) The net pension liability is a liability to employees for pension payments already earned. The net pension liability represents the Township s proportionate share of the difference between what PERS has accumulated and what is owed to date. 22

23 New Annual Financial Report Filing Annual Financial Data Reporting System It will replace the current model of filing financial statements The initial reporting cycle will be for financial statements for 2014 in

24 New Annual Financial Report Filing (Continued) If you are a UAN user filing will not be substantially different than the current process If you use other accounting software the current plan is for entry into a database prepared by the AOS 24

25 What is a Public Record? Records R.C (G): Have information stored on fixed media (paper, tapes, electronic text, photos, films, videos, etc.), and Are created or received by, or come under the jurisdiction of, a public office, and Document what the public office does: the organization, functions, policies, decisions, procedures, operations, or other activities of the office 25

26 What is a Public Record? (continued) Public Records R.C (A) includes records kept by any public office Kept by means any record that is actually in existence and in the possession of the public office or person responsible for public records Examples of records not kept by a public office: (1) a record not yet in existence, (2) a record that has been disposed of lawfully 26

27 Open Meetings - Definition Public Body: Any decision-making body of the state, its political subdivisions, and school districts (including any committee or sub-committee of each body) Meeting: (1) Prearranged gathering of (2) a majority of members of public body (3) conducting or discussing public business 27

28 Notes 28

29 88 East Broad Street Columbus, Ohio Robert R. Hinkle, Chief Deputy Auditor Brendan M. Inscho, Deputy Chief Legal Counsel Presenter Phone: (800) Presenter Fax: (614)

30 88 East Broad Street Columbus, Ohio Phone: (800) Fax: (614)

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