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Significant Audit & Risk Assessment. Presented by Sandra Healy, CGFM Principal Auditor Idaho Transportation Department. Audit of Idaho Transportation Dept’s Division of Motor Vehicles - 2009. Vehicle Services Section & Financial Unit Fraud discovered at a county DMV office Data analysis.
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Significant Audit & Risk Assessment Presented by Sandra Healy, CGFM Principal Auditor Idaho Transportation Department
Audit of Idaho Transportation Dept’s Division of Motor Vehicles - 2009 • Vehicle Services Section & Financial Unit • Fraud discovered at a county DMV office • Data analysis
DMV & Counties • DMV works closely with counties • MOA’s with Assessors & Sheriffs Offices • Risks & Internal Controls • Data analysis of all counties • Visits to 23 assessors offices/44 counties
Visits to Counties • Goal: • Gather best practices • Offer suggestions to improve internal controls • Wide range of cash handling procedures • Counties welcomed internal control ideas • Ada County Internal Auditor
Assessors’ Conference • Presented on cash handling internal controls • Shared concerns about safeguarding cash • Best practices to be distributed to counties
Results of DMV Audit • Financial unit became the Internal Control, Fraud Prevention and Finance unit • Increased emphasis on internal controls, fraud detection & prevention • Centralized DMV mail handling to secure receipts and distribute work to units • Provided ‘Items for Consideration’ in development of new data base system
Individual Audit Risk Assessment • Risk assessment for internal audits • Improve Internal Control awareness and education • Survey of employees on their unit’s internal controls
Pilot Training Program • Developed Internal Control training for front line employees
Objectives • Interaction • Increase awareness • Increase understanding • Confidence to speak up • Confidence to suggest improvements • Survey
Brainstorming • What are Internal Controls? • What is the purpose of Internal Controls? • What is ethical behavior?
Understanding Internal Controls • You may or may not realize that you are affected by internal controls throughout your daily lives.
Control Environment • Foundation of internal controls • Baseball example • Integrity and ethical values • Commitment to competency (staff) • Management’s philosophy & operating style • Managing change • Communication
Control Environment Accountability ITD DMV Your Section Transparency Customer Service Efficiency
Risk Assessment • Know your goals & objectives • Identify potential risks to the achievement of goals & objectives. • Risks are the opposite of goals & objectives • Risks are what are addressed by internal controls
Control Activities • Policies, procedures and other safeguards to ensure objectives are accomplished
Information & Communication • Information must be identified, captured and communicated • Communication must go up, down and across an organization and must be timely • Communication enables people to carry out their responsibilities
Monitoring • Evaluation and feedback processes (self evaluations, performance evaluations, peer reviews, audits, reports) • Monitor organizations performance over time • Monitoring should be a regular activity • Part of culture
Internal Control Survey • Send employees link to survey in SharePoint • Positive statements on internal controls • Statements grouped by 5 components • Strongly agree to strongly disagree • Comment section for ‘disagree’ and ‘strongly disagree’ responses • Calculated weighted average for each component • Compiled comments • Surveys were anonymous
Survey Results • Significant # of comments • Used in audit planning for Motor Carrier Services Unit • Shared with DMV management and HR • Held meetings with employees to discuss results • Requested feedback on the training & survey
In Summary • DMV is inherently a high risk area • Internal Control training at staff level beneficial • Employees felt a part of the process • Survey provided insight into the unit’s environment • Audit planning feedback • Survey designed for use in any section
Contact Information Sandra Healy, CGFM Principal Auditor Idaho Transportation Department Office of Internal Review PO Box 7129 Boise, ID 83707-1129 sandra.healy@itd.idaho.gov