significant audit & risk assessment

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Significant Audit & Risk Assessment. Presented by Sandra Healy, CGFM Principal Auditor Idaho Transportation Department. Audit of Idaho Transportation Dept’s Division of Motor Vehicles - 2009. Vehicle Services Section & Financial Unit Fraud discovered at a county DMV office Data analysis . - PowerPoint PPT Presentation

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Significant Audit & Risk Assessment

Significant Audit & Risk AssessmentPresented by Sandra Healy, CGFMPrincipal AuditorIdaho Transportation Department1Audit of Idaho Transportation Depts Division of Motor Vehicles - 2009Vehicle Services Section & Financial UnitFraud discovered at a county DMV officeData analysis

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2County Headline

33DMV & CountiesDMV works closely with countiesMOAs with Assessors & Sheriffs OfficesRisks & Internal ControlsData analysis of all countiesVisits to 23 assessors offices/44 counties

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4Visits to CountiesGoal: Gather best practicesOffer suggestions to improve internal controlsWide range of cash handling proceduresCounties welcomed internal control ideasAda County Internal Auditor

55Assessors ConferencePresented on cash handling internal controlsShared concerns about safeguarding cashBest practices to be distributed to counties

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6Results of DMV AuditFinancial unit became the Internal Control, Fraud Prevention and Finance unitIncreased emphasis on internal controls, fraud detection & preventionCentralized DMV mail handling to secure receipts and distribute work to unitsProvided Items for Consideration in development of new data base system

77Individual Audit Risk AssessmentRisk assessment for internal auditsImprove Internal Control awareness and educationSurvey of employees on their units internal controls

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8Pilot Training ProgramDeveloped Internal Control training for front line employees

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9ObjectivesInteractionIncrease awarenessIncrease understandingConfidence to speak upConfidence to suggest improvementsSurvey10

10BrainstormingWhat are Internal Controls?What is the purpose of Internal Controls?What is ethical behavior?11

11Understanding Internal ControlsYou may or may not realize that you are affected by internal controls throughout your daily lives.12

12COSO MODEL13

13Control EnvironmentFoundation of internal controlsBaseball exampleIntegrity and ethical valuesCommitment to competency (staff)Managements philosophy & operating styleManaging changeCommunication14

14Control Environment15Your SectionDMVITDAccountabilityTransparencyEfficiencyCustomer Service15Risk AssessmentKnow your goals & objectivesIdentify potential risks to the achievement of goals & objectives. Risks are the opposite of goals & objectivesRisks are what are addressed by internal controls16

16Control ActivitiesPolicies, procedures and other safeguards to ensure objectives are accomplished17

17MonitoringEvaluation and feedback processes (self evaluations, performance evaluations, peer reviews, audits, reports)Monitor organizations performance over timeMonitoring should be a regular activityPart of culture19

19Internal Control SurveySend employees link to survey in SharePointPositive statements on internal controlsStatements grouped by 5 componentsStrongly agree to strongly disagreeComment section for disagree and strongly disagree responsesCalculated weighted average for each componentCompiled commentsSurveys were anonymous

2020Results

2121Survey ResultsSignificant # of commentsUsed in audit planning for Motor Carrier Services UnitShared with DMV management and HRHeld meetings with employees to discuss resultsRequested feedback on the training & survey2222In SummaryDMV is inherently a high risk areaInternal Control training at staff level beneficialEmployees felt a part of the processSurvey provided insight into the units environmentAudit planning feedbackSurvey designed for use in any section

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23Thank You24

24Contact InformationSandra Healy, CGFM Principal AuditorIdaho Transportation DepartmentOffice of Internal ReviewPO Box 7129Boise, ID 83707-1129sandra.healy@itd.idaho.gov

2525Chart12.682.722.882.522.53

Sheet1Control EnvironmentRisk AssessmentControl ActivitiesInformation & CommunicatonMonitoring2.682.722.882.522.53Objective:To plot the results of a survey conducted with DMV Motor Carrier Services on the five components ofInternal Control in order to assess the level and quality of controls in the Motor Carrier section.Scope:The DMV Motor Carrier Services section was selected as a pilot subject for a survey on Internal Controls.The resulting graph is based on weighted averages for each of the five components of Internal Control.Data is based on survey results as of 5/7/12.Methodology:We assigned the value of four to 'strongly agree,' three to 'agree,' two to 'disagree,' and one to 'strongly disagree.'The survey statements, when agreed to, indicate a positive control; therefore, weighted averages of three or moreindicate a positive or strong control.Results:The Motor Carrier survey results ranged from 2.5 to just under 2.9 which indicates a slightly less than positivecontrol environment. Information & communication and monitoring were the two lowest areas, whilecontrol activities was the closest to a positive environment at 2.9.

&CIdaho Transportation Department - Office of Internal ReviewGraph of Internal Control Survey Results for DMV Motor Carrier ServicesMay 7, 2012

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