FY 2008 CAFR/Audit Highlights

County of Riverside ■ Office of the Auditor-Controller

FY 2008 CAFR/Audit Highlights

Robert E. Byrd, CGFM

County Auditor-Controller


CAFR and PAFR

CAFR and PAFR can be found at:http://www.auditorcontroller.org/opencms/publications/index.html


Official County Reports

• Dazel Reports (July 2008 tab) include:– June Final thru Period 12 Report

• Run August 08, 2008.

• This includes Period 1-12 only.

– FY2008 Final Report• Run January 17, 2009

• This includes Period 1-12 and Period 998 adjustments for FY 2008.


CAFR/Audit Highlights

• Audit was completed 1st week of December.

• Positive feedback from external auditors.

• Component Units submitted separate audited financial statements earlier than previous years.


SAS 112

Communicating Internal Control Related Matters Identified in an Audit.•Requires auditors to communicate matters related to an entity’s internal control over financial reporting in 3 categories.

• Control Deficiency

• Significant Deficiency

• Material Weakness


SAS 112-Continued

Material Weakness

Significant Deficiency

Control Deficiency

• Material Weakness:– Identification of a misstatement

by the auditor

• Significant Deficiency:– Lack of controls over YE

financial reporting

• Control Deficiency

– Lack of controls in one area


Management Letter

• Control deficiencies were reduced from five in FY07 to three in FY08.1. Comprehensive capital assets report is not

available in the Financial System.

2. Lack of County-wide Fraud Prevention Program

3. Lack of proper documentation for terminating Financial System Users.


SAS 114 Report

• The Auditor’s Communication with those Charged with Governance

• Requires external auditors to communicate certain significant matters related to the audit:– Significant findings

– Accounting practices and policies

– Accounting estimates

– Difficulties encountered during the audit

– Disagreements with management

– Uncorrected misstatements (Passed audit differences)


SAS 114 - Continued

• What are Passed Audit Differences?

Immaterial, uncorrected audit differences identified during the course of the audit process.


Passed Audit Differences

Why passed audit differences are important?

• The sum of multiple passed audit differences could accumulate to a material balance.

• In FY08, two items were reported to the Board of Supervisors on SAS 114 Report:– Prior period adjustment posted in the current year.

– Due to Other Governments: GL amount did not match YE Schedule for one selected department.


Passed Audit Differences - Continued

Fiscal year 2008 SAS 114 Report to the Board:


What is the County Departments Role?

DAILY:• Ensure activity is properly posted to the proper

Fund, Department and Account.

• Establish and maintain internal controls to ensure information is properly and timely booked in the Financial System.

• Follow generally accepted accounting principles.


What is the County Departments Role?-Continued

MONTHLY:• Reconcile Trial Balances:

– Assets and liabilities must be supported by proper documentation (ie: outstanding billing invoices, outstanding vouchers, excel spreadsheets, etc.)

– Accounts must have a natural balance Research unusual credits in asset or expenditure accounts Research unusual debits in liability and revenue accounts

– Most balance sheet accounts should clear within a year.


What is the County Departments Role?-Continued

MONTHLY-Continued:• Perform monthly invoicing to external/internal

entities.– Do not wait until Year End (or the following year).

• Submit Capital Assets forms and maintain AM Module up-to-date.


What is the County Departments Role? - Continued

QUARTERLY:

• Reconcile, reconcile, reconcile.

• Provide quarterly flux and analysis to ACO as requested.

• 3rd Quarter:– Submit Forms S-9, T-9 and V-9 timely and accurately.

Must tie to GL (Deferred Revenue, DFOG and DTOG)

– Ensure your department will have sufficient appropriations for YE Accounts Payable Accrual!



YEAR-END:

• Become familiar with the YE Calendar deadlines.

• Submit all schedules and accruals by the due date (usually 3rd week in July).

• Confirm data on YE Schedules:– Is it accurate?

– Does it tie to the general ledger?

– Is all supporting documentation included?



AUDIT PROCESS:

• Provide comprehensive data to auditor’s inquiry.

• Make information available to ACO and auditors such as billing invoices, receipts, payments, reports, spreadsheets, etc.


What is the ACO’s Role in the Audit Process?

• Audits the daily information provided by departments through journals, vouchers and receipts.

• Publishes SPM’s and YE Manual to assist all departments maintain county-wide policies and procedures.


What is the ACO’s Role in the Audit Process?-Continued

• Reviews and implements new GASB pronouncements.

• Establish chart of accounts.

• Provides guidance and assistance to departments as needed.


What is the ACO’s Role in the Audit Process?-Continued

• Compiles all YE Schedules, reconciliations and communications for external auditors.

• Coordinates audit process with the external auditors.

• Compiles the financial data into the CAFR.


How can we work as team?

Communicating

Training

Cooperation with one another


2009 CAFR/AUDITQ:When does the 2009 audit process start?

A: July 1, 2008

Q: Who are the external auditors?

A: Current RFP in progress to hire the new audit firm.


2009 CAFR/AUDIT - Continued

INTERIM AUDIT:

• Tentatively schedules for April/May 2009

• Auditors may select multiple departments to evaluate internal controls.

• Be available to meet auditors, discuss controls, document processes, explain programs, etc.


2009 CAFR/AUDIT-Continued

Component Units:

ACO to schedule annual meetings for April 2009 with each Component Unit.


2009 CAFR/AUDIT Continued

NEW GASB Implementations for FY 2009:

• GASB 49-Accounting and Financial Reporting for Pollution Remediation Obligations.


Who to Contact

Chart of Accounts

[email protected]

Simpler/CAFR/New GASB

[email protected]

Year End

[email protected]


Questions

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The End

Documents

FY 2008 CAFR/Audit Highlights