Examiners Update to County Administrators
Examiners Update to
County Administrators
Presented by: James E. Hall, CPA
Director County Audit Division
Examiners of Public Accounts
State of Alabama
Disclaimer
This information was presented to the Association of
County Commissions of Alabama’s (ACCA) Annual
Conference on May 13, 2015.
This presentation represents the audit position of the
Department of Examiners of Public Accounts as of that
date.
Objectives…
GASB Statements
Common Problems
Financial Statements
GASB Updates
GASB FY2014
Statement No 67 – Financial Reporting for Pension
Plans – An Amendment to GASB Statement No. 25
Statement No 70 – Accounting and Financial
Reporting for Nonexchange Financial Guarantees
Statement No 70 – Accounting
and Financial Reporting for
Nonexchange Financial
Guarantees
Applies to governments who guarantee the financial
obligations of others in a nonexchange transaction
Other entities may include governments or authorities,
not-for-profits, private companies and individuals
Must recognize a liability if it is more likely than not
(more than 50%) that the government will be required
to make a payment on the guarantee.
GASB 70
Note Disclosures
Regardless of whether the governmental entity determines
that it is more likely than not that a payment will be required,
GASB requires the entity to make certain disclosures for all
nonexchange financial guarantees.
A description of the nonexchange guarantee
The legal authority and limits for extending the guarantee
and the types of obligations guaranteed
Relationship between guarantor and the entity issuing the
obligations that are guaranteed
Description of recovery arrangements
Length of time of the guarantees
Total amounts of all guarantees extended that are
outside of the reporting date.
GASB 70
Note Disclosure
In addition to previous disclosures, governments that have
recognized a liability or made payments during the year
there are additional disclosures
Description of changes in recognized liabilities, including
beginning and end of year balances, increases,
decreases and adjustments
Discussion of timing of recognition & measurement
Amount of outstanding guarantees
Amount of commitments to extend guarantees
Cumulative amount paid towards outstanding
guarantees
Amounts expected to be recovered
GASB 70
Note Disclosures
Governments with obligations guaranteed by another
entity in a nonexchange transactions should disclose the
following:
Name of entity providing the guarantee
Amount of obligations guaranteed
Length of time of the guarantee
Amount paid by guarantor during the audit period
Cumulative amount paid by guarantor on outstanding
obligations.
Description of requirements to repay
Outstanding amounts to be repaid to the guarantor
GASB FY2015
Statement No. 68 – Accounting and Financial Reporting
for Pensions
Statement No. 69 – Government Combinations and
Disposals of Government Operations
Statement No. 68 –
Accounting and Financial
Reporting for Pensions
Must report the net pension liability on the
government-wide and enterprise fund type financial
statements.
GASB Statement 69
Government Combinations and
Disposals of Government
Operations
GASB Statement 69
Government Combinations and
Disposals of Operation
Statement identifies 3 types of combinations
Merger - assets and liabilities are recognized at their
carrying value
as of
the merger date
Acquisition - assets and liabilities are recognized at
acquisition cost
as of
the acquisition date, except for
Employee benefit arrangements
Landfill and pollution remediation liabilities
Investments and derivatives reported at fair value
Deferred Outflows and Deferred Inflows
Transfer of Operations – assets and liabilities are recognized at their
carrying value
as of the merger date
GASB Statement 69
Government Combinations and
Disposals of Operation
Merger
– combination of legally separate entities with no significant
exchange of consideration and either
2 or more governments cease to exist as entities and are combined to
form one or
A legally separate entity ceases to exist and the operations are
absorbed into a continuing government
GASB Statement 69
Government Combinations and
Disposals of Operation
Acquisitions
– combination in which a government acquires another
entity or operations of another entity in exchange for significant
consideration
Transfer of Operations
– Involves combination of operations rather
and legally separate entities in which no significant consideration is
exchanged
Can be a transfer of operations to a continuing government or a newly
formed government.
Common Problems and
Ways to Correct
16
Cash and Investments
Not making deposits in a timely manner.
Not performing bank reconciliations
Investing in items not authorized by the
Code of
Alabama 1975
, Section
11-8-11 and 11-81-21
17
Proper Procedures -
Depositing
Funds should be deposited in a timely manner; daily –
recommended.
If deposit cannot be made before the bank closes, a
locked night deposit bag should be used to secure
funds in the bank’s night depository.
Pre-printed, duplicate deposit slips containing the
account name and bank account number should be
used.
Proper Procedures -
Depositing
Checks should be endorsed with “For Deposit Only”,
along with account name and bank account number.
The deposit slip should contain the receipt numbers of
the funds deposited.
The deposit date and deposit amount should be
noted on the last receipt included in the deposit.
Proper Procedures -
Depositing
Daily receipts should be deposited intact.
Do not cash checks with the funds received.
Do not use cash receipts for change cash.
Do not use cash received for expenses.
Do not use correction fluid or erase mistakes on
deposit slips.
The bank should authenticate the duplicate deposit
slip at the time of deposit and be retained for audit.
Receivables
Not recording receivables for amounts earned during
the fiscal year but not received until the next fiscal
year.
If in doubt of year end receivables, it is OK to make an
estimate!
21
Inventories
Commission not recording any inventories when
material amounts are on hand. Examples include
road department supplies, gas, water treatment
supplies, etc.
22
Capital Assets
Not performing a physical inventory at least once
every 2 years (federal requirement)
Amounts recorded as Capital Outlay do not agree
with additions to Capital Assets
23
Liabilities
Failure to record debt refundings or new debt issued
Improperly recording principal and interest payments
Payables subsidiary listing not agreeing with general
ledger
Due to / Due From not agreeing
24
Revenues/ Receipts
Not reporting all income earned or received during
the year.
Receipt books were not retained or made available
for review.
Voided Receipts not being maintained.
25
Revenues/Receivables
Proper Procedures
Voided receipts must be retained in the receipt book.
Do not use correction fluid or erase mistakes.
Secure funds received
Do not cash checks with funds received
No money should be left in office overnight
All receipts books should be logged and secured
when not in use.
26
Payroll / Personnel
Not reporting vehicle usage as income on individual’s
W-2 (IRS Pub 13b)
Personnel files not being updated.
Promotions/raises not indicated in files
27
Expenditures
Expenditures did not contain the proper supporting
documentation.
Expenditures were not properly coded in the
accounting system.
Failure to follow the Alabama Competitive Bid Law
and/or the Alabama Public Works Law
Transfers In / Transfers Out not agreeing
Proper Procedures -
Expenditures
Do not sign blank checks – must contain payee name
and amount.
Do not pay for items in advance of receipt of
materials, supplies, or equipment.
Invoices and supporting documents should be
provided with the check to be signed.
Invoices should be cancelled (marked PAID) when the
check is signed.
Proper Procedures -
Expenditures
Vendors should be paid in a timely manner to avoid
late fees.
Checks should be used in numerical order.
Checks must be secured at all times.
Voided checks must be retained for audit.
Checks outstanding for more than 60 days should be
investigated.
Bid Law
Goods and Services in excess of $15,000 not being bid
in accordance with Code of Alabama 1975, Section
41-16-50.
Be very careful using credit cards and purchasing cards –
still subject to bid law!
Not following all aspects of public works law
Contact Information
Managers
Robin Lakey – Madison; Colbert; Franklin; Marion; Winston;
Lawrence
Randy O’Bannon – Lauderdale; Limestone; Jackson;
Morgan; Marshall; Cullman
Gwyn Griggs – DeKalb; Etowah; Cherokee; Calhoun;
Cleburne
Whitney Atchison – Jefferson; St Clair; Blount; Walker;
Fayette
Nikki Morrison – Shelby; Talladega; Clay; Coosa;
Randolph; Tallapoosa
Shelley Patrenos – Lamar; Pickens; Tuscaloosa; Sumter;
Greene; Hale
32
Contact Information
Managers
Emily Tyler – Bibb; Perry; Dallas; Marengo; Choctaw
Teresa Dekle – Chilton; Autauga; Elmore; Lowndes;
Montgomery
Tammy Shelley – Chambers; Lee; Macon; Russell;
Barbour
Brian Wheeler – Mobile; Baldwin; Washington; Monroe
Christina Smith – Clarke; Wilcox; Conecuh; Escambia
Lynn Otto – Butler; Crenshaw; Covington; Coffee;
Geneva
Cherie Raffle – Houston; Henry; Dale; Pike; Bullock
33
Managers Information
Email is First Name.Last
Name@Examiners.Alabama.Gov
Robin Lakey (256-314-5783)
Randy O’Bannon (256-532-
3509)
Gwyn Griggs (256-927-8649)
Whitney Atchison (205-325-
5680)
Nikki Morrison (256-215-3041)
Shelley Patrenos (205-652-
2285)
Emily Tyler (334-295-2241)
Teresa Dekle (334-832-7713)
Tammy Shelley (334-619-
1517)
Brian Wheeler (251-937-
0338)
Christina Smith (251-867-
0296)
Lynn Otto (334-347-8820)
Cherie Raffle (334-677-4768)
34
Contacting the Department
•
Located in the Gordon Persons Administrative Building
at 50 North Ripley Street, Room 3201 in Montgomery,
AL
•
Mailing Address – P. O. Box 30225
Montgomery, AL 36130-2251
•
Phone – 334-242-9200
•
Fax – 334-242-1775
•
Email –
info@examiners.alabama.gov
•
Website –
www.examiners.alabama.gov
Hotline
To report Fraud, Waste & Abuse:
1-844-56F-RAUD
1-844-563-7283
Email:
Report.Fraud@Examiners.Alabama.Gov
Other Issues
Financial Statements…
Questions
38
This presentation by James E. Hall, CPA at the Association of County Commissions of Alabama's Annual Conference covers GASB updates, common financial statement problems, and GASB Statement No. 70 on financial reporting for nonexchange financial guarantees. It emphasizes the importance of recognizing liabilities and making required disclosures for nonexchange guarantees.
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Presentation Transcript
Examiners Update to County Administrators Presented by: James E. Hall, CPA Director County Audit Division Examiners of Public Accounts State of Alabama
Disclaimer This information was presented to the Association of County Commissions of Alabama s (ACCA) Annual Conference on May 13, 2015. This presentation represents the audit position of the Department of Examiners of Public Accounts as of that date.
Objectives GASB Statements Common Problems Financial Statements
GASB FY2014 Statement No 67 Financial Reporting for Pension Plans An Amendment to GASB Statement No. 25 Statement No 70 Accounting and Financial Reporting for Nonexchange Financial Guarantees
Statement No 70 Accounting and Financial Reporting for Nonexchange Financial Guarantees Applies to governments who guarantee the financial obligations of others in a nonexchange transaction Other entities may include governments or authorities, not-for-profits, private companies and individuals Must recognize a liability if it is more likely than not (more than 50%) that the government will be required to make a payment on the guarantee.
GASB 70 Note Disclosures Regardless of whether the governmental entity determines that it is more likely than not that a payment will be required, GASB requires the entity to make certain disclosures for all nonexchange financial guarantees. A description of the nonexchange guarantee The legal authority and limits for extending the guarantee and the types of obligations guaranteed Relationship between guarantor and the entity issuing the obligations that are guaranteed Description of recovery arrangements Length of time of the guarantees Total amounts of all guarantees extended that are outside of the reporting date.
GASB 70 Note Disclosure In addition to previous disclosures, governments that have recognized a liability or made payments during the year there are additional disclosures Description of changes in recognized liabilities, including beginning and end of year balances, increases, decreases and adjustments Discussion of timing of recognition & measurement Amount of outstanding guarantees Amount of commitments to extend guarantees Cumulative amount paid towards outstanding guarantees Amounts expected to be recovered
GASB 70 Note Disclosures Governments with obligations guaranteed by another entity in a nonexchange transactions should disclose the following: Name of entity providing the guarantee Amount of obligations guaranteed Length of time of the guarantee Amount paid by guarantor during the audit period Cumulative amount paid by guarantor on outstanding obligations. Description of requirements to repay Outstanding amounts to be repaid to the guarantor
GASB FY2015 Statement No. 68 Accounting and Financial Reporting for Pensions Statement No. 69 Government Combinations and Disposals of Government Operations
Statement No. 68 Accounting and Financial Reporting for Pensions Must report the net pension liability on the government-wide and enterprise fund type financial statements.
GASB Statement 69 Government Combinations and Disposals of Government Operations
GASB Statement 69 Government Combinations and Disposals of Operation Statement identifies 3 types of combinations Merger - assets and liabilities are recognized at their carrying value as of the merger date Acquisition - assets and liabilities are recognized at acquisition cost as of the acquisition date, except for Employee benefit arrangements Landfill and pollution remediation liabilities Investments and derivatives reported at fair value Deferred Outflows and Deferred Inflows Transfer of Operations assets and liabilities are recognized at their carrying value as of the merger date
GASB Statement 69 Government Combinations and Disposals of Operation Merger combination of legally separate entities with no significant exchange of consideration and either 2 or more governments cease to exist as entities and are combined to form one or A legally separate entity ceases to exist and the operations are absorbed into a continuing government
GASB Statement 69 Government Combinations and Disposals of Operation Acquisitions combination in which a government acquires another entity or operations of another entity in exchange for significant consideration Transfer of Operations Involves combination of operations rather and legally separate entities in which no significant consideration is exchanged Can be a transfer of operations to a continuing government or a newly formed government.
Common Problems and Ways to Correct 16
Cash and Investments 17 Not making deposits in a timely manner. Not performing bank reconciliations Investing in items not authorized by the Code of Alabama 1975, Section 11-8-11 and 11-81-21
Proper Procedures - Depositing Funds should be deposited in a timely manner; daily recommended. If deposit cannot be made before the bank closes, a locked night deposit bag should be used to secure funds in the bank s night depository. Pre-printed, duplicate deposit slips containing the account name and bank account number should be used.
Proper Procedures - Depositing Checks should be endorsed with For Deposit Only , along with account name and bank account number. The deposit slip should contain the receipt numbers of the funds deposited. The deposit date and deposit amount should be noted on the last receipt included in the deposit.
Proper Procedures - Depositing Daily receipts should be deposited intact. Do not cash checks with the funds received. Do not use cash receipts for change cash. Do not use cash received for expenses. Do not use correction fluid or erase mistakes on deposit slips. The bank should authenticate the duplicate deposit slip at the time of deposit and be retained for audit.
Receivables 21 Not recording receivables for amounts earned during the fiscal year but not received until the next fiscal year. If in doubt of year end receivables, it is OK to make an estimate!
Inventories 22 Commission not recording any inventories when material amounts are on hand. Examples include road department supplies, gas, water treatment supplies, etc.
Capital Assets 23 Not performing a physical inventory at least once every 2 years (federal requirement) Amounts recorded as Capital Outlay do not agree with additions to Capital Assets
Liabilities 24 Failure to record debt refundings or new debt issued Improperly recording principal and interest payments Payables subsidiary listing not agreeing with general ledger Due to / Due From not agreeing
Revenues/ Receipts 25 Not reporting all income earned or received during the year. Receipt books were not retained or made available for review. Voided Receipts not being maintained.
Revenues/Receivables Proper Procedures 26 Voided receipts must be retained in the receipt book. Do not use correction fluid or erase mistakes. Secure funds received Do not cash checks with funds received No money should be left in office overnight All receipts books should be logged and secured when not in use.
Payroll / Personnel 27 Not reporting vehicle usage as income on individual s W-2 (IRS Pub 13b) Personnel files not being updated. Promotions/raises not indicated in files
Expenditures Expenditures did not contain the proper supporting documentation. Expenditures were not properly coded in the accounting system. Failure to follow the Alabama Competitive Bid Law and/or the Alabama Public Works Law Transfers In / Transfers Out not agreeing
Proper Procedures - Expenditures Do not sign blank checks must contain payee name and amount. Do not pay for items in advance of receipt of materials, supplies, or equipment. Invoices and supporting documents should be provided with the check to be signed. Invoices should be cancelled (marked PAID) when the check is signed.
Proper Procedures - Expenditures Vendors should be paid in a timely manner to avoid late fees. Checks should be used in numerical order. Checks must be secured at all times. Voided checks must be retained for audit. Checks outstanding for more than 60 days should be investigated.
Bid Law Goods and Services in excess of $15,000 not being bid in accordance with Code of Alabama 1975, Section 41-16-50. Be very careful using credit cards and purchasing cards still subject to bid law! Not following all aspects of public works law
Contact Information Managers 32 Robin Lakey Madison; Colbert; Franklin; Marion; Winston; Lawrence Randy O Bannon Lauderdale; Limestone; Jackson; Morgan; Marshall; Cullman Gwyn Griggs DeKalb; Etowah; Cherokee; Calhoun; Cleburne Whitney Atchison Jefferson; St Clair; Blount; Walker; Fayette Nikki Morrison Shelby; Talladega; Clay; Coosa; Randolph; Tallapoosa Shelley Patrenos Lamar; Pickens; Tuscaloosa; Sumter; Greene; Hale
Contact Information Managers 33 Emily Tyler Bibb; Perry; Dallas; Marengo; Choctaw Teresa Dekle Chilton; Autauga; Elmore; Lowndes; Montgomery Tammy Shelley Chambers; Lee; Macon; Russell; Barbour Brian Wheeler Mobile; Baldwin; Washington; Monroe Christina Smith Clarke; Wilcox; Conecuh; Escambia Lynn Otto Butler; Crenshaw; Covington; Coffee; Geneva Cherie Raffle Houston; Henry; Dale; Pike; Bullock
Managers Information Email is First Name.Last Name@Examiners.Alabama.Gov 34 Robin Lakey (256-314-5783) Randy O Bannon (256-532- 3509) Gwyn Griggs (256-927-8649) Whitney Atchison (205-325- 5680) Nikki Morrison (256-215-3041) Shelley Patrenos (205-652- 2285) Emily Tyler (334-295-2241) Teresa Dekle (334-832-7713) Tammy Shelley (334-619- 1517) Brian Wheeler (251-937- 0338) Christina Smith (251-867- 0296) Lynn Otto (334-347-8820) Cherie Raffle (334-677-4768)
Contacting the Department Located in the Gordon Persons Administrative Building at 50 North Ripley Street, Room 3201 in Montgomery, AL Mailing Address P. O. Box 30225 Montgomery, AL 36130-2251 Phone 334-242-9200 Fax 334-242-1775 Email info@examiners.alabama.gov Website www.examiners.alabama.gov
Hotline To report Fraud, Waste & Abuse: 1-844-56F-RAUD 1-844-563-7283 Email: Report.Fraud@Examiners.Alabama.Gov
Other Issues Financial Statements
Questions 38
