Compliance issues and audits
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Compliance Issues and Audits. Nov. 30, 2004. TOPICS TO BE DISCUSSED. Audits – definition, types of auditors, types of audits Role of WSU Internal Auditor Internal controls – definitions and types Selected compliance issues. Roles and Responsibilities.

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Compliance issues and audits

Compliance Issues and Audits

Nov. 30, 2004


Topics to be discussed

TOPICS TO BE DISCUSSED

  • Audits – definition, types of auditors, types of audits

  • Role of WSU Internal Auditor

  • Internal controls – definitions and types

  • Selected compliance issues


Roles and responsibilities

Roles and Responsibilities

  • Controller’s office – establishes, maintains and reviews the system of internal control.

  • Organizational unit managers - responsible for internal control within that unit.


Objectives

OBJECTIVES

  • Provide employees with knowledge and skills so that we can be better prepared for an audit.


Objectives1

OBJECTIVES

  • Encourage all employees to “take ownership”


Objectives2

OBJECTIVES

  • Decrease overall risk for WSU Extension/CAHNRS


Objectives3

OBJECTIVES

  • Create/maintain organizational efficiencies and local control


Compliance issues and audits

BUSINESS AFFAIRS/CONTROLLER’S OFFICE OTHER CENTRAL SERVICES

EXTENSION, CAHNRS, VETMED, SCIENCES, ETC.

DEPARTMENT /DISTRICT ADMINISTRATIVE ASSTS.

COUNTIES

PRINCIPAL INVESTIGATORS, PROGRAM DIRECTORS, LEARNING CENTER COORDINATORS; INSTRUCTORS; EXTENSION ADMINISTRATOR

EMPLOYEE


What is an audit

What is an Audit?

  • Systematic review

  • Evaluate conformance to some norm or benchmark


Types of auditors

Types of Auditors

  • Internal – WSU Employees

  • External – State Auditors, Private Firms

  • Governmental Audit Agencies (GAA)


Types of audits

Types of Audits

  • Financial Statement Audits - assure users that statements are fairly presented (External and GAA)

  • Compliance Audits – obtain reasonable assurance of compliance with state and local laws and regulations (Internal, External, GAA)


Types of audits1

Types of Audits

  • Single Audits – meet the needs of all federal grantor agencies (External, GAA)

  • Investigative – Fraud, whistleblower (Internal, GAA)

  • Performance - Coming soon?


Frequency of audits

FREQUENCY OF AUDITS

  • CAHNRS – last six month period

    • Compliance audit – payroll, external auditor

    • Whistleblower


Consequences of audit findings

CONSEQUENCES OF AUDIT FINDINGS

  • Financial Statement Audit: Restatement

  • Compliance Audit:

    • Implementation of Internal Controls to Avoid Future Findings;

  • Investigative

    • Repayment, dismissal, hard-time


  • Consequences of audit findings1

    CONSEQUENCES OF AUDIT FINDINGS

    • Single Audit

      • Repay unallowed costs

      • Extrapolate to all of WSU

  • Performance

  • All Audits: Unwanted publicity, loss of respect and/or trust


  • Internal auditor s office

    INTERNAL AUDITOR’S OFFICE

    • Presentation by Norm Coffman


    Internal controls

    Internal Controls

    • Management process for keeping an entity on course in achieving it’s organizational objectives.

    • Provide reasonable assurance that entity objectives are being met.


    Entity objectives

    Entity Objectives

    • Compliance with state laws and regulations

    • Reliability of financial reporting

    • Effectiveness and efficiency of operations


    Internal control system requirements

    Internal Control System Requirements

    • Should provide reasonable assurance that an organization will accomplish its objectives

    • Reasonable assurance recognizes that cost of an internal control should not exceed the benefit derived therefrom


    Internal control system requirements1

    Internal Control System Requirements

    • Management defines level of risk the organization is willing to accept and strives to maintain risk within those levels


    Types of internal controls

    Types of Internal Controls

    • Control Environment – sets the tone of an organization, influences control consciousness of its people, foundation for all other components.


    Types of internal contols

    TYPES OF INTERNAL CONTOLS

    • Risk Assessment – Identification and analysis of relevant risks to achieving the objectives


    Types of internal controls cont

    Types of Internal Controls (cont)

    • Information and Communication – Pertinent information must be identified, captured and communicated in a form and time frame that enables people to carry out responsibilities.


    Types of internal contols1

    TYPES OF INTERNAL CONTOLS

    • Control Activities – Internal policies and procedures that help address the risks.


    Types of internal contols2

    TYPES OF INTERNAL CONTOLS

    • Monitoring – Assess quality of performance over time.


    Single audit act

    SINGLE AUDIT ACT

    • Selected items specifically related to Sponsored Projects by Dorothy Heitter


    Temporary employment

    TEMPORARY EMPLOYMENT

    • Selected items specifically related to Temporary Employment by Trudy Kenny


    Travel

    TRAVEL

    • Selected items specifically related to Travelling for WSU business by Michelle Ely.


    Cash handling compliance and investigative

    Cash Handling – Compliance and Investigative

    • Auditor’s check list for Cash Handling by Tucson Smith


    Purchasing compliance audits

    Purchasing – Compliance Audits

    • Do purchases meet local, WSU, state, guidelines for allowability?

    • Highest risk – purchases under $2,500 (k-orders, purchasing cards)

    • Internal controls

      • Communication – BPPM, training, BFO

      • Approval – somebody who has knowledge

      • Review


    Purchasing investigative audits

    Purchasing – Investigative Audits

    • Investigative Audit – Are state funds being used for personal gain?

      • Examples (non-existent vendors, purchasing goods for self)

    • Counties and small departments – segregation of duties can be problematic.


    Purchasing investigative audits1

    Purchasing – Investigative Audits

    • Internal Controls – local level highly important

      • Authorization

      • Review – purchases for authorization

        - budget statements for purchases


    Purchasing investigative audits cont

    Purchasing – Investigative Audits (cont)

    • Internal Controls

      • Risk Assessment – is there adequate separation of duties?

      • Control Activities – authorized signatures, review budget statements

      • Monitoring – review orders for signature, sample orders from budget statements


    Asset monitoring audits

    ASSET MONITORING - Audits

    • Compliance Audit: Are assets being used for mission of university?

    • Investigative Audit: Are assets being used for personal gain?


    Asset monitoring controls

    ASSET MONITORING - Controls

    • Physical Safeguarding

      • Cash, mail meters

  • Written policies regarding usage

    • Challenge course equipment

    • Volunteers using assets


  • Asset monitoring controls1

    ASSET MONITORING - Controls

    • Authorization codes

      • Phones, fax machines,

  • Review budget statements


  • Questions

    QUESTIONS?


    The end

    THE END

    • THANK YOU FOR JOINING US!


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