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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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Presentation Transcript
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
slide8
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
the end
THE END
  • THANK YOU FOR JOINING US!
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