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Robert Gray, cgfm USDA-OIG regional Inspector General (ret) robertgray60@gmail

Robert Gray, cgfm USDA-OIG regional Inspector General (ret) robertgray60@gmail.com. AGENDA. Introduction. Why Internal Controls are often not Effective. Basic for this AGA Audience but means Success or Failure for Participating Organizations. The Child and Adult Care Food Program.

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Robert Gray, cgfm USDA-OIG regional Inspector General (ret) robertgray60@gmail

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  1. Robert Gray, cgfmUSDA-OIG regional Inspector General (ret)robertgray60@gmail.com

  2. AGENDA • Introduction. • Why Internal Controls are often not Effective. • Basic for this AGA Audience but means Success or Failure for Participating Organizations. • The Child and Adult Care Food Program. • Roles of the Auditors and Those Being Audited. • Summary.

  3. USDA – A Profile of America or I’ll bet that you’ve participated in a USDA Program. USDA programs include everything from farming, forest service, business loans, housing loans, to all of the USDA feeding programs – food stamps, feeding infants and the elderly to the school lunch program. Even if you lived in Beverly Hills and went to Beverly Hills High School (90210), if you ate in the school cafeteria, you participated in USDA.

  4. Let me tell you about one USDA program. Child and Adult Care Food Program (CACFP) • $2.5 billion program. • Feeding 3+ million children and adults daily. • In over 200,000 day care homes and centers. • One of my last national audits. Results were significant. • Complete breakdown in Internal Controls. • Program could have been terminated.

  5. Post-Retirement • Deer in the Headlights. • Instead of Gotcha - A Better Way to Help. • It’s all about Internal Controls. • Back to the Basics. • Do Federal Regulations Help? • Is there a Need? • Response has been Amazing.

  6. MY CLIENTS NOW INCLUDE • INDIVIDUAL BUSINESSES. • STATEWIDE ORGANIZATIONS IN WASHINGTON, OREGON, WISCONSIN, UTAH, CALIFORNIA, LOUISIANA. • NATIONAL ORGANIZATIONS THAT REPRESENT BUSINESSES THAT PARTICIPATE IN USDA AND OTHER FEDERAL/STATE PROGRAMS. • SOFTWARE COMPANY THAT PARTICIPATES IN USDA PROGRAMS. • NATIONAL LOBBY FIRM.

  7. ARE AGENCIES TAKING CONTROLS FOR GRANTED? DEAR MR. GRAY, OUR ANNUAL CONFERENCE OF DAY CARE PROVIDERS WILL BE HELD ON MAY 21-23, 2009. WE WOULD BE HONORED TO HAVE YOU SPEAK ABOUT THE IMPORTANCE OF ESTABLISHING INTERNAL CONTROLS DURING OUR CONFERENCE. SINCERELY, (STATE) OFFICE OF EDUCATION CHILD NUTRITION PROGRAMS

  8. Role of Federal Auditors: • Are we fulfilling our mission? • What does this mean: “Work with management teams in activities that promote economy, efficiency, and effectiveness or that prevent and detect fraud and abuse….” • What do the Gov. Auditing Standards say about Internal Controls?

  9. How do we convince Agencies of the Importance of Internal Controls? • How about the Gov. Audit Standards? • Look to the real world – so many examples. • My grandson’s tatoos. • Root of all problems. • Preparation for an audit – from two weeks to two days. • Why wouldn’t an agency want controls? • Not hard to convince.

  10. Example - Do Regulations Help? 7 CFR 226 States: Each or renewing institution must submit information sufficient to document that it has internal controls in effect to ensure accountability. Internal Controls are defined as: The policies, procedures, and organizational structure designed to reasonable assure that: • Program achieves its intended results. • Program resources are used in a manner that protects against fraud, waste, and mismanagement.

  11. “Work With Management Teams to … Prevent and Detect Fraud and Abuse.” A Better Way to “Work With” - Reach Out, Teach, and Then Audit. Auditors are the Experts (role of AGA?): • Define Internal Controls. • Teach the Audit Process. • Help Agencies to Understand the Yellow Book, Develop Internal Control Handbooks, and to Conduct Self-Assessments.

  12. Speak to the Basics Doesn’t have to be complicated: • Separation of Duties. • Second Party Reviews. • Adequate Documentation. • Training.

  13. What are not internal controls: • Trust is NOT an internal control. • Expertise and Experience are NOT internal controls. • Friendship is NOT an internal control. • Having a relative working for you is NOT an internal control. • Being intelligent is NOT an internal control.

  14. Walk through the Audit Process: • Stay involved. Appoint a “go-to” person. • Know your rights and responsibilities according to audit standards. • Understand audit evidence. • Frequent Meetings – Not Just Entrance and Exit Conferences. The “drop-by” meeting. • Resolve Issues as soon as possible. • Vital to understand Internal Controls – Impact on Audit Process.

  15. Summary - 1 Auditors – “We are Here to Help.” • Auditors and Accountants are the Internal Control Experts. • Work with Managers to Prevent Fraud, Waste and Abuse. • Use Preventive Audit Approaches.

  16. Summary - 2 Auditees - “We are glad to see you.” • Understand the Audit Process – Your Rights and Responsibilities, Audit Evidence, Stay Involved. • Government Audit Standards. • Internal Controls are the First Line of Defense. • Create an Internal Control Handbook. • Conduct a Self-Assessment. • Document Everything.

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