1. BONDS, CRIME and PROPERTY FARA on the behalf of the Office of Risk Management Revised 06/2011

2. BONDS AND CRIME Does it apply to you?

3. WHO DOES THE PROGRAM APPLY TO? Any agency that: owns property; has petty cash; receives funds; pays out funds; or handles any other type of negotiables (e.g. bus tokens)

4. PROGRAM GOAL To provide a comprehensive system of internal fiscal control as well as property control.

5. PURPOSE Assign responsibility Establish each employee’s accountability Reduce the State’s exposure and losses and safeguard assets Maintain public confidence Protect assets from theft and robbery

6. HOW IS PREMIUM DETERMINED? Agency’s “exposure” to risk Frequency and severity of claims Implementation of a Bonds/Crime Program

7. BONDS/CRIME COVERAGE Fidelity Bonds - mandatory, as required by legislative auditor, with $1,000 deductible Property Manager Bonds - mandatory, as required by statute, with $1,000 deductible

8. BONDS/CRIME COVERAGE (cont.) Postal Bond – mandatory with no deductible Notary Bond – mandatory, as required by revised statute, with $1,000 deductible

9. BONDS/CRIME COVERAGE (cont.) Public Official Bond - mandatory with $1,000 deductible Crime Policy-(inside/outside premises, money & securities, depositors forgery)- mandatory with $1,000 deductible

10. Conditions for Coverage Money and securities must be kept in a safe when the custodian is not on the premises. When transporting money and securities over $50,000, an armed escort recommended.

11. Condition for Coverage (cont.) Armed escorts are recommended as follows: –one armed escort for up to $65,000 –two armed escorts for up to $85,000 –three armed escorts for up to $125,000 –OR contract an armored vehicle service

12. COMPONENTS OF PROGRAM Agency Policy and Procedures Each agency is responsible for developing and implementing a written program

13. COMPONENTS OF PROGRAM (cont.) Agency Policy & Procedures Must: Designate “responsible” employees Provide Training for “responsible” employees Provide for regular program audits Delineate investigation procedures

14. COMPONENTS OF PROGRAM (cont.) Policies must address: Responsibilities and accountability Communication/organization Training Accident Analysis Loss Prevention Audits/CRs & Recordkeeping

15. RESPONSIBILITIES FARA - will assist agencies in organizing, directing, implementing and controlling an internal fiscal control program

16. RESPONSIBILITIES (cont.) Department and Agency Heads –implementation of program –reviewing the program regularly –reviewing ORM audit/CR findings and implementing the recommendations

17. RESPONSIBILITIES (cont.) Supervisors –ensuring employees are trained and training is documented –ensuring safeguards are followed –reviewing the program for protection of the State’s assets and property from losses

18. RESPONSIBILITIES (cont.) Employees –following the fiscal control program –reporting discrepancies or problems to their supervisors

19. INTERNAL CONTROL PROCEDURES Each agency should establish a system of internal accounting and administrative controls

20. INTERNAL CONTROL PROCEDURES (cont.) Reasonable assurance Attitude Competent personnel Documentation including recording transactions Internal control objectives

21. INTERNAL CONTROL PROCEDURES (cont.) Obligations and costs comply with applicable state law - State contracts - Bid process

22. INTERNAL CONTROL PROCEDURES (cont.) Safeguard funds, property, & other assets against waste, loss, unauthorized use or misappropriation

23. INTERNAL CONTROL PROCEDURES (cont.) Procedures for: –locking and unlocking of buildings –security systems –procedures used throughout the day –computer security

24. INTERNAL CONTROL PROCEDURES (cont.) Procedures to safeguard against damage to property: - employee/student accountability for equipment and property - devices to prevent damage

25. INTERNAL CONTROL PROCEDURES (cont.) Procedures to safeguard against losses: - security of cash, checks, stamps - equipment check-in and-out & security - collections from stadiums, dormitories, & other fees etc.

26. INTERNAL CONTROL PROCEDURES (cont.) Procedures to safeguard against unauthorized use or misappropriations: - computer use agreements - internet use agreements - equipment use agreements (e.g. TV/VCR, camera, vehicle) - funds including petty cash

27. INTERNAL CONTROL PROCEDURES (cont.) Revenues and expenditures are recorded and accounted for.

28. INTERNAL CONTROL PROCEDURES (cont.) Separation of duties Supervision Access to resources Address audit findings