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Significant Audit & Risk Assessment

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

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  1. Significant Audit & Risk Assessment Presented by Sandra Healy, CGFM Principal Auditor Idaho Transportation Department

  2. 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

  3. County Headline

  4. 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

  5. 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

  6. Assessors’ Conference • Presented on cash handling internal controls • Shared concerns about safeguarding cash • Best practices to be distributed to counties

  7. 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

  8. Individual Audit Risk Assessment • Risk assessment for internal audits • Improve Internal Control awareness and education • Survey of employees on their unit’s internal controls

  9. Pilot Training Program • Developed Internal Control training for front line employees

  10. Objectives • Interaction • Increase awareness • Increase understanding • Confidence to speak up • Confidence to suggest improvements • Survey

  11. Brainstorming • What are Internal Controls? • What is the purpose of Internal Controls? • What is ethical behavior?

  12. Understanding Internal Controls • You may or may not realize that you are affected by internal controls throughout your daily lives.

  13. COSO MODEL

  14. Control Environment • Foundation of internal controls • Baseball example • Integrity and ethical values • Commitment to competency (staff) • Management’s philosophy & operating style • Managing change • Communication

  15. Control Environment Accountability ITD DMV Your Section Transparency Customer Service Efficiency

  16. 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

  17. Control Activities • Policies, procedures and other safeguards to ensure objectives are accomplished

  18. 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

  19. 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

  20. 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

  21. Results

  22. 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

  23. 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

  24. Thank You

  25. 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

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