auditor general
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Auditor General. Role of the Auditor In the Procurement Process Presenter: Nancy Tucker, CPA June 3, 2008. Discussion Points. Objectives of AG Audits and Reports Types of Audits Planning Audits Auditing the Procurement Process Audit Expectations Audit Interactions Other Audit Issues - PowerPoint PPT PresentationTRANSCRIPT
Auditor GeneralAuditor General 22
Auditor GeneralAuditor General
Role of the Auditor
In the
Procurement Process
Presenter: Nancy Tucker, CPA
June 3, 2008
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Discussion PointsDiscussion Points Objectives of AG Audits and Objectives of AG Audits and
ReportsReports
Types of AuditsTypes of Audits
Planning AuditsPlanning Audits
Auditing the Procurement ProcessAuditing the Procurement Process
Audit ExpectationsAudit Expectations
Audit InteractionsAudit Interactions
Other Audit IssuesOther Audit Issues
MFMPMFMP
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Objectives of Audits and ReportsObjectives of Audits and Reports
Audit General provides Audit General provides independent, unbiased, independent, unbiased, objective information on:objective information on: Fiscal integrity of State Fiscal integrity of State
government and other government and other governmental entitiesgovernmental entities
Public resources raisedPublic resources raised Purposes for which Purposes for which
resources were spentresources were spent
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Objectives of Audits and ReportsObjectives of Audits and Reports
Identifies and audits areas considered Identifies and audits areas considered most vulnerablemost vulnerable
Communicates, by on-site presence and Communicates, by on-site presence and other audit procedures, other audit procedures, the Legislature’s the Legislature’s expectationexpectation that entity management and that entity management and employees are accountable for:employees are accountable for: Proper administration of public funds Proper administration of public funds Achievement of entity objectivesAchievement of entity objectives
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Objectives of Audits and ReportsObjectives of Audits and Reports
Report on whether expenditures:Report on whether expenditures: Served public purpose Served public purpose Made in compliance with laws, rules, and regulations Made in compliance with laws, rules, and regulations Administered in economic, efficient, effective mannerAdministered in economic, efficient, effective manner
Report on whether:Report on whether: Governmental entities have established proper Governmental entities have established proper
management and accounting controlsmanagement and accounting controls Financial reports and records are reliableFinancial reports and records are reliable Assets are safeguardedAssets are safeguarded Fraud, omissions, and illegal acts have a reasonable Fraud, omissions, and illegal acts have a reasonable
chance of being discovered.chance of being discovered.
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Purpose of Audits and ReportsPurpose of Audits and Reports
Published reports:Published reports: Strive to make fair and balanced Strive to make fair and balanced
presentations of findingspresentations of findings Agency management responsesAgency management responses Recommendations to the Legislature to Recommendations to the Legislature to
amend lawsamend laws
Report distribution and availabilityReport distribution and availability
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Types of AuditsTypes of Audits
Periodic OperationalPeriodic Operational AuditsAudits- - State AgencyState Agency Universities/CollegesUniversities/Colleges District School BoardsDistrict School Boards
Multi-Agency Operational Multi-Agency Operational AuditsAudits
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Types of AuditsTypes of Audits
Financial AuditsFinancial Audits StateState Colleges and Colleges and
UniversitiesUniversities District School BoardsDistrict School Boards LotteryLottery LGSFTFLGSFTF
Federal moneys Federal moneys provided to the State provided to the State of Floridaof Florida
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Types of AuditsTypes of Audits
Information TechnologyInformation Technology
Legislative Auditing Legislative Auditing Committee and Citizen Committee and Citizen PetitionPetition
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Planning AuditsPlanning Audits
Planning PhasePlanning Phase Planning engagement letterPlanning engagement letter
Risk AssessmentRisk Assessment Prior audit findingsPrior audit findings New laws, programs, New laws, programs,
systems, contractssystems, contracts Appropriations, revenues, Appropriations, revenues,
and expendituresand expenditures Legislative interestLegislative interest Internal Audit StaffInternal Audit Staff AllegationsAllegations
Engagement letterEngagement letter Entrance conferenceEntrance conference
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Auditing the Procurement Auditing the Procurement ProcessProcess
Purchasing Process: Purchasing Process: Gain understanding of internal controlsGain understanding of internal controls
• Review policies and proceduresReview policies and procedures• Tone at the TopTone at the Top• Interview staff and observe operationsInterview staff and observe operations
Analyze transactions for unusual patternsAnalyze transactions for unusual patterns Test transactions Test transactions
• Ensure controls are working Ensure controls are working • Purchase was in compliance with laws, rules, and Purchase was in compliance with laws, rules, and
regulationsregulations
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Auditing the Procurement Auditing the Procurement ProcessProcess
Contract ManagementContract Management Gain understanding of internal controlsGain understanding of internal controls
• Review policies and proceduresReview policies and procedures• Interview staffInterview staff
Review and evaluate business case, cost-benefit analysis, Review and evaluate business case, cost-benefit analysis, risk analysisrisk analysis
Analyze evaluation criteriaAnalyze evaluation criteria Assess independence of evaluation and negotiation teamsAssess independence of evaluation and negotiation teams Review documentation in contract fileReview documentation in contract file Evaluate contract provisionsEvaluate contract provisions Analyze contract costsAnalyze contract costs Review/test payments to vendorsReview/test payments to vendors Evaluate adequacy of monitoringEvaluate adequacy of monitoring
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Audit ExpectationsAudit Expectations
Management RepresentationsManagement Representations Made appropriate decisions Made appropriate decisions Complied with applicable laws and rulesComplied with applicable laws and rules Implemented effective internal controls Implemented effective internal controls andand Maintained public records to support Maintained public records to support
decisionsdecisions
Professional SkepticismProfessional Skepticism
Who/How/When/What?Who/How/When/What?
WHY?WHY?
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Audit InteractionsAudit Interactions
Gathering Audit EvidenceGathering Audit Evidence Interviews and inquiriesInterviews and inquiries SurveysSurveys Observations (Walk-Through)Observations (Walk-Through) Records RequestsRecords Requests
• Nonpublic InformationNonpublic Information MemosMemos
• Request documentsRequest documents• Clarify understandingClarify understanding
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Audit InteractionsAudit Interactions Ethics Policies and Ethics Policies and
Procedures were Procedures were communicatedcommunicated
Purchase complied with Purchase complied with laws, rules, contract laws, rules, contract terms terms
Good business practicesGood business practices Goods and services were Goods and services were
receivedreceived Procurement P&P were Procurement P&P were
communicated and communicated and followedfollowed
Management oversight.Management oversight.
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Other Audit IssuesOther Audit Issues
MisconceptionsMisconceptions Gotcha vs. No SurprisesGotcha vs. No Surprises Auditors audit to the criteria; Auditors audit to the criteria;
auditors do not create the auditors do not create the criteriacriteria
Auditors are not part of the Auditors are not part of the agency’s internal controlagency’s internal control
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Other Audit IssuesOther Audit IssuesF F _ _ _ __ _ _ _ FRAUD FRAUD TriangleTriangle
Incentives/PressuresIncentives/Pressures OpportunitiesOpportunities Rationalization/AttitudeRationalization/Attitude
FRAUDFRAUD inquiriesinquiries Assess susceptibility of Assess susceptibility of
agency/program to fraudagency/program to fraud Status of internal controls to Status of internal controls to
detect and prevent frauddetect and prevent fraud Risk that managementRisk that management could could
override internal controlsoverride internal controls FRAUD FRAUD detectiondetection
Design procedures to provide Design procedures to provide reasonable assurance of reasonable assurance of detecting fraud.detecting fraud.
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Other Audit IssuesOther Audit Issues
Coordination with other audit Coordination with other audit groupsgroups
Other side of the fenceOther side of the fence
CommunicationCommunication
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MFMP Audit Report 2007-076MFMP Audit Report 2007-076 System PerformanceSystem Performance Agency UtilizationAgency Utilization Monitoring of Transactions Fees/ExemptionsMonitoring of Transactions Fees/Exemptions Risk AssessmentsRisk Assessments Security of Data and IT ResourcesSecurity of Data and IT Resources Application systems Change ManagementApplication systems Change Management Data ManagementData Management Agency Procedural DeficienciesAgency Procedural Deficiencies Statistical Sampling of PaymentsStatistical Sampling of Payments Continuity of ServiceContinuity of Service
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Annual ReportAnnual Report
Auditor General Annual ReportsAuditor General Annual Reports
http://www.myflorida.com/audgen/http://www.myflorida.com/audgen/
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New Auditor GeneralNew Auditor General
David Martin was David Martin was sworn in as the new sworn in as the new Auditor General on Auditor General on October 1, 2007October 1, 2007
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Contact InformationContact Information
Nancy Tucker, Audit ManagerNancy Tucker, Audit ManagerState Government AuditsState Government [email protected]@aud.state.fl.us(850) 487-4370(850) 487-4370
Don Hancock, Deputy Auditor GeneralDon Hancock, Deputy Auditor GeneralState Government AuditsState Government [email protected]@aud.state.fl.us(850) 487-4999(850) 487-4999
Jim Valenzuela, Deputy Auditor GeneralJim Valenzuela, Deputy Auditor GeneralEducational Entities & Local GovernmentEducational Entities & Local [email protected]@aud.state.fl.us487-4998487-4998
Dorothy Gilbert, Deputy Auditor Dorothy Gilbert, Deputy Auditor GeneralGeneral
Information TechnologyInformation [email protected]@aud.state.fl.us488-4983488-4983