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Repeat Findings: What are they and how to avoid them

Repeat Findings: What are they and how to avoid them. Mike Bozymski, CPA Deputy State Examiner Indiana State Board of Accounts. About the State Board of Accounts. Created in 1909 Audit clients: State Agencies Counties Cities Towns Townships Schools Special Districts Libraries

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Repeat Findings: What are they and how to avoid them

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  1. Repeat Findings: What are they and how to avoid them Mike Bozymski, CPA Deputy State Examiner Indiana State Board of Accounts

  2. About the State Board of Accounts • Created in 1909 • Audit clients: • State Agencies Counties • Cities Towns • Townships Schools • Special Districts Libraries • Public Hospitals Not-for-profits • 180 field staff in 18 districts throughout the State

  3. Types of Audits and Exams • Financial • Federal A-133 • Compliance • Special Investigations or Fraud Audits

  4. Frequency of Audits • Annual • State of Indiana • Cities • Counties • Towns with population greater than 5,000 • Public hospitals • Biennial • All others

  5. Findings – What are They? • Federal • OMB Circular A-133 • Compliance Supplement • Non-federal audits • Failure to comply with specific law • Failure to comply with uniform compliance guideline

  6. Common Federal Findings • Inadequate Monitoring of Grant Awards • Cash Management • Inaccurate Reporting to Grantor Agency • Inadequate Monitoring of Subrecipients • Overpayments or Improper Payments • Lack of Internal Controls

  7. Common Local Government Findings • Daily Deposits • Bank Reconcilements • Capital Asset Records • Condition of Records • Overdrawn Cash or Appropriation Balances • Old Outstanding Warrants • Official Bonds • Not Adhering to Ordinances and Resolutions • Lack of Internal Controls

  8. Common State Agency Findings • Contract Violations • Collection of Revenue Issues • Capital Asset Violations • Violations of Procurement Regulations • Lack of Internal Controls

  9. Causes of Findings and Repeat Findings • Lack of Internal Controls • Lack of Knowledge • Turnover of Personnel • Indifference • Lack of Penalties

  10. How to Avoid Repeat Findings • Strengthen Internal Controls • Education and Training • SBOA Manuals • SBOA Bulletins • SBOA Conferences • Government Associations – AIC, IACT, etc. • Legislative Changes

  11. Charge Audits • What are they? • Interaction with Other Agencies • Recent Examples

  12. Town of Brownstown • $393,96.98 Charge • Salary Overpayment • Unauthorized Personal Services • Penalties and Interest • Internal Controls • Incorrect Bank Reconcilements • Lack of Posting • Lack of Supporting Documentation

  13. East Chicago Public Library • Library Board Member Compensation • Per IC 36-12-2-21 “A member of a library board shall serve without compensation….” • Over a 3-year period the Library paid $200,948.32 in health, dental, vision and life insurance premiums on behalf of the board members.

  14. Town of Poseyville • $53,557 Charge • Salary Overpayment • Personal Charges on Purchasing Card • Internal Controls • No Bank Reconcilements • Altered Bank Statements

  15. Town of West Terre Haute • $391,564.69 Charge • Undeposited Utility Receipts • Expenditures Without Supporting Documentation • Internal Controls • Lack of Segregation of Duties • Deputy Clerk Bypassed Controls

  16. Town of Merrillville Court • $310,325 Charge • Cash Bond Collections Not Deposited • Internal Controls • Lack of Segregation of Duties • Controls in Software Program Not Being Used • Signature Stamps Not Safeguarded

  17. City of Hammond Water Utility • Unallowable Expenses • Golf Outing • Limo Bus Service to Cellular One Field • Guideline • Expenses paid should be directly related to the operation of the utility.

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