Importance of Government Auditing and Fiscal Oversight for Boards
Government auditing plays a crucial role in ensuring accountability to legislators and the public, with divisions like the Legislative Counsel Bureau Audit Division and the Executive Branch Division of Internal Audits conducting thorough reviews. Fiscal oversight is particularly important for boards as it helps in preventing fraud and maintaining strong internal controls, as highlighted by recent board fraud cases. The Sunset Subcommittee of the Legislative Commission also conducts reviews to determine the continuation or termination of various entities.
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Presentation Transcript
Legislative Counsel Bureau Audit Division Auditing Boards and Commissions Training November 18, 2019
Audit Division Government auditing is essential in providing accountability to legislators, oversight bodies, those charged with governance, and the public. Government Auditing Standards - 1.03
Executive Branch Division of Internal Audits Conducts audits approved by the Executive Branch Audit Committee Provides training and assists agency staff in developing internal controls Reviews internal controls and expenditures for adherence to state requirements 3
Legislative Branch- Legislative Counsel Bureau Audit Division Conducts audits: Of State agencies based on schedule approved by the Legislative Commission Based on specific request by the Legislative Commission As mandated through legislation 4
Sunset Subcommittee of the Legislative Commission NRS 232B Conducts reviews of boards and similar entities Selects entities to review each interim Determines whether those entities should be continued, modified, consolidated, or terminated Can request LCB Audit to audit boards 5
Why is Fiscal Oversight Especially Important for Boards? Boards budgets are not included in Executive Budget Budgetary oversight is reduced Higher risk of weak internal controls Increased risk of fraud 6
Recent Board Frauds 2002 - $760k embezzled from Dental Examiners 2005 - $38k embezzled from Certified Court Reporters 2006 - $62k embezzled from Osteopathic Medicine 2008 - $11k embezzled from Osteopathic Medicine 2014 - $35k embezzled from Board of Podiatry 2016 - $unknown Board of Physical Therapy 2017 - $9k embezzled from Board of Examiners for Marriage and Family Therapists and Clinical Professional Counselors 2018 - $20k diverted in unauthorized pay from Board of Massage Therapy 7
Audit Requirements NRS 218G.400 Annual audit or other financial information annually Due December 1 Annual revenues > $200k CPA-prepared annual audit Annual revenues < $200k self-prepared annual balance sheet 8
Biennial Report Option In lieu of annual audit or balance sheet, Board can elect to have CPA-prepared biennial audit Boards that do not submit quarterly disciplinary and regulatory reports, required by NRS 622.100, will be required to have an annual audit 9
Quarterly Reporting Requirements NRS 622.100 Information required to be submitted to LCB: Number of licenses issued Number of applications received for licensure Applications rejected as incomplete Average number of days between rejection and resubmission of completed application 10
Quarterly Reporting Requirements NRS 622.100 Number of applications denied Reasons for application denial Number of applications reviewed individually Number of petitions received from potential applicants with a criminal history Number of disqualifications made for those petitioning with a criminal history and the reason therefore 11
Suggestions for Board Members Be an active participant in financial oversight Follow up on findings in audit reports to ensure corrective action is taken Request copies of balance sheets and financial statements and ask questions ask questions 12
Other Suggestions Be aware of delays in submitting financial and disciplinary information Consider risks associated with biennial audits Ask questions of Board management and members, and utilize available resources 13
Questions? 14
Where to Turn For Help? Sandra McGuirk, Deputy Legislative Auditor smcguirk@lcb.state.nv.us Shannon Ryan, Chief Deputy Legislative Auditor sryan@lcb.state.nv.us (775) 684-6815 15
