association of local government auditors 1 best practices for effective internal controls - citywide...
TRANSCRIPT
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Association of Local Government Auditors
Best Practices for Effective Internal Controls - Citywide
Presentation to:California Society of Municipal Finance
OfficersFebruary 20, 2009
Ann-Marie Hogan, CIA, CGAPCity Auditor, Berkeley, [email protected]
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Association of Local Government Auditors
1. Review the unique internal control challenges of cities
2. Explain the challenges for finance directors in impacting “tone at the top” of the organization and operating departments
3. Best practices and bright ideas
Objectives
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Association of Local Government Auditors
• Control Environment (tone at the top: elected and appointed managers)
• Risk Assessment (absent the profit motive, how thoroughly is risk assessed?)
Internal Control: COSO and Cities...
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Association of Local Government Auditors
• Control Activities (invisible activities and problems)
• Information and Communications (frank communication in a fishbowl)
• Monitoring (and airing dirty laundry)
Internal Control: COSO and Cities...
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Association of Local Government Auditors
Leadership Challenges
“Tone at the Top” - Leading the way
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Association of Local Government Auditors
• City Manager
• Human Resources Director• Information Technology• Police Chief
Leadership… Building Alliances
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• Consistent message
• Good delivery • Timing is all
Leadership…
Persistence and Opportunism
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Association of Local Government Auditors
• Change in leadership
• Negative press
Opportunity Knocks
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Association of Local Government Auditors
Leadership: Walking the Walk
You can start in your own department
• Internal Controls Training
• Testing and Certification
• Policies: Ethics, Internal Controls
• Who should you tell?
• Defining workforce skills needs
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Association of Local Government Auditors
Best practices: Does your city have…
• Agreement on what responsibilities are centralized where?
• Clear expectations for the role of the Finance Department?
Best Practices and Bright Ideas
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Association of Local Government Auditors
Best practices: Does your city have…
• An Ethics Policy• An Audit Committee• Performance Measures• A Whistle Blower Hot Line (or
equivalent)
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An independent performance auditor?
California Government Code section 1237: “All state and local agencies with an aggregate
spending of fifty million dollars ($50,000,000) or more annually shall consider establishing an ongoing audit function.”
Best practices: does your city have…
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Association of Local Government Auditors
Getting the message out:
On site training – PowerPoint• City of Berkeley Finance Department: Cash
Handling• City of Riverside Internal Controls
On line training – videos • Maricopa County Auditor
Bright Ideas
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Berkeley Finance Department Training
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Association of Local Government Auditors Inserting Videos in PowerPoint
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Finance Directors can…Create a PowerPoint (City of Riverside)
What Is Risk?
Anything that could negatively impact the City’s ability to meet it’s operational objectives.
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Finance Directors can…Create a Video
• Maricopa County, Arizona posts several on the Auditor’s web site
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Association of Local Government Auditors
Finance Directors Can…
Educate Management
• One page bulletins on Internal Control for managers from the Maricopa County auditor’s web site
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Maricopa County Control Bulletins
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Association of Local Government Auditors
ALGA Resources
These resources and more are on websites for Maricopa County, City of Riverside and the City
of Berkeley: see “ALGA Members – Member Web Sites” on the ALGA website.
www.governmentauditors.org
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Association of Local Government Auditors
Considering a performance audit function or audit committee??
• The Role of Auditing in Public Sector Governance and Practice Advisory 1110-2: CAE Reporting Lines www.theiia.org
• Model Legislation Guidelines for Local Government Auditors and A Government Official’s Guide to Establishing a Performance Audit Function www.governmentauditors.org
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Association of Local Government Auditors
THANK YOU
FOR ADDITIONAL INFORMATION, CONTACT:ASSOCIATION OF LOCAL GOVERNMENT AUDITORS (ALGA)
MEMBER SERVICES
449 LEWIS HARGETT CIRCLE, SUITE 290
LEXINGTON, KY 40503
or
or visit the ALGA website at:http://www.governmentauditors.org