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 AgenciesCounties – CitiesTowns – TownshipsSchools – Special DistrictsLibraries – Public HospitalsNot-for-profits 180 field staff in 18 districts throughout the State

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.