FY 2008 CAFR/Audit Highlights

1. FY 2008 CAFR/Audit Highlights Robert E. Byrd, CGFM County Auditor-Controller

2. CAFR and PAFR CAFR and PAFR can be found at: http://www.auditorcontroller.org/opencms/publications/index.html

3. Official County Reports • Dazel Reports (July 2008 tab) include: • June Final thru Period 12 Report • Run August 08, 2008. • This includes Period 1-12 only. • FY2008 Final Report • Run January 17, 2009 • This includes Period 1-12 and Period 998 adjustments for FY 2008.

4. CAFR/Audit Highlights • Audit was completed 1st week of December. • Positive feedback from external auditors. • Component Units submitted separate audited financial statements earlier than previous years.

5. SAS 112 Communicating Internal Control Related Matters Identified in an Audit. • Requires auditors to communicate matters related to an entity’s internal control over financial reporting in 3 categories. • Control Deficiency • Significant Deficiency • Material Weakness

6. SAS 112-Continued • Material Weakness: • Identification of a misstatement by the auditor • Significant Deficiency: • Lack of controls over YE financial reporting • Control Deficiency • Lack of controls in one area

7. Management Letter • Control deficiencies were reduced from five in FY07 to three in FY08. • Comprehensive capital assets report is not available in the Financial System. • Lack of County-wide Fraud Prevention Program • Lack of proper documentation for terminating Financial System Users.

8. SAS 114 Report • The Auditor’s Communication with those Charged with Governance • Requires external auditors to communicate certain significant matters related to the audit: • Significant findings • Accounting practices and policies • Accounting estimates • Difficulties encountered during the audit • Disagreements with management • Uncorrected misstatements (Passed audit differences)

9. SAS 114 - Continued • What are Passed Audit Differences? Immaterial, uncorrected audit differences identified during the course of the audit process.

10. Passed Audit Differences Why passed audit differences are important? • The sum of multiple passed audit differences could accumulate to a material balance. • In FY08, two items were reported to the Board of Supervisors on SAS 114 Report: • Prior period adjustment posted in the current year. • Due to Other Governments: GL amount did not match YE Schedule for one selected department.

11. Passed Audit Differences - Continued Fiscal year 2008 SAS 114 Report to the Board:

12. What is the County Departments Role? DAILY: • Ensure activity is properly posted to the proper Fund, Department and Account. • Establish and maintain internal controls to ensure information is properly and timely booked in the Financial System. • Follow generally accepted accounting principles.

13. What is the County Departments Role?-Continued MONTHLY: • Reconcile Trial Balances: • Assets and liabilities must be supported by proper documentation (ie: outstanding billing invoices, outstanding vouchers, excel spreadsheets, etc.) • Accounts must have a natural balance • Research unusual credits in asset or expenditure accounts • Research unusual debits in liability and revenue accounts • Most balance sheet accounts should clear within a year.

14. What is the County Departments Role?-Continued MONTHLY-Continued: • Perform monthly invoicing to external/internal entities. • Do not wait until Year End (or the following year). • Submit Capital Assets forms and maintain AM Module up-to-date.

15. What is the County Departments Role? - Continued QUARTERLY: • Reconcile, reconcile, reconcile. • Provide quarterly flux and analysis to ACO as requested. • 3rd Quarter: • Submit Forms S-9, T-9 and V-9 timely and accurately. • Must tie to GL (Deferred Revenue, DFOG and DTOG) • Ensure your department will have sufficient appropriations for YE Accounts Payable Accrual!

16. What is the County Departments Role? YEAR-END: • Become familiar with the YE Calendar deadlines. • Submit all schedules and accruals by the due date (usually 3rd week in July). • Confirm data on YE Schedules: • Is it accurate? • Does it tie to the general ledger? • Is all supporting documentation included?

17. What is the County Departments Role? AUDIT PROCESS: • Provide comprehensive data to auditor’s inquiry. • Make information available to ACO and auditors such as billing invoices, receipts, payments, reports, spreadsheets, etc.

18. What is the ACO’s Role in the Audit Process? • Audits the daily information provided by departments through journals, vouchers and receipts. • Publishes SPM’s and YE Manual to assist all departments maintain county-wide policies and procedures.

19. What is the ACO’s Role in the Audit Process?-Continued • Reviews and implements new GASB pronouncements. • Establish chart of accounts. • Provides guidance and assistance to departments as needed.

20. What is the ACO’s Role in the Audit Process?-Continued • Compiles all YE Schedules, reconciliations and communications for external auditors. • Coordinates audit process with the external auditors. • Compiles the financial data into the CAFR.

21. How can we work as team? Communicating Training Cooperation with one another

22. 2009 CAFR/AUDIT • Q:When does the 2009 audit process start? A: July 1, 2008 • Q: Who are the external auditors? A: Current RFP in progress to hire the new audit firm.

23. 2009 CAFR/AUDIT - Continued INTERIM AUDIT: • Tentatively schedules for April/May 2009 • Auditors may select multiple departments to evaluate internal controls. • Be available to meet auditors, discuss controls, document processes, explain programs, etc.

24. 2009 CAFR/AUDIT-Continued Component Units: ACO to schedule annual meetings for April 2009 with each Component Unit.

25. 2009 CAFR/AUDIT Continued NEW GASB Implementations for FY 2009: • GASB 49-Accounting and Financial Reporting for Pollution Remediation Obligations.

26. Who to Contact • Chart of Accounts Chartofaccounts@co.riverside.ca.us • Simpler/CAFR/New GASB ACOreports@co.riverside.ca.us • Year End ACOYearEnd@co.riverside.ca.us

27. Questions ? ? ? ? ? ? ? ? ? ?

28. The End