Appendix B: Department Internal Control Questionnairevcportal.ventura.org/auditor/docs/ICGuidelines/06_Appendix_B-2015.… · COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM

2015 B1

Appendix B: Department Internal Control Questionnaire Purpose: The purpose of this Questionnaire is to assist departments in the self-assessment of internal control. This Questionnaire focuses on universal control activities. Control activities are the specific policies and procedures used to keep the organization, its programs, and processes on track. Taken together, the responses for each area, e.g., Cash, serve as a basis to assess the adequacy of controls.

This Questionnaire is designed to address common internal control areas and should be used only as a starting point. To the extent that a department has operations that are not sufficiently covered by this Questionnaire, the department should consider those objectives, risks, and internal controls using the CSA Worksheet at Appendix C.

Instructions: This Questionnaire is best answered by a high-level manager, or group of managers, familiar with all operational areas within the organization. Therefore, the first step is to designate a CSA Project Coordinator. The Coordinator may delegate select portions of the Questionnaire to others with more specific knowledge of the area under review. Control Questions should be answered as follows:

Yes, No, or N/A (Not Applicable) – Test whether the internal control is currently in place and operating effectively, then answer the question by checking the appropriate column. A “No” answer should generally indicate a control weakness that requires improvement actions.

Note: The answer to any question should represent the current state of the internal control, not what was done in the past or what will be done in the future.

Method of Verification – Document how the control was evaluated (i.e., by observation, review of documentation, discussion, or a combination of these). Provide the following information in the appropriate column(s); do not simply check the column:

Operation Observed – Describe the personnel (names and titles) and/or procedures observed.

Documentation Reviewed – Describe the specific records reviewed (e.g., dates of deposits tested to determine whether funds were deposited timely).

Personnel Discussed – List the personnel (names and titles) with whom the controls were discussed.

Comments – Using the space available after each question, provide any comments necessary to clarify answers.

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE

2015 B2

At the end of each Section:

Summarize your conclusions on whether internal controls are adequate.

Complete the grid to document planned improvement actions:

CSA Item # – List each Item Number from the Section that was answered as “No”. List additional Item Numbers, even if answered as “Yes” or “N/A”, if they relate to additional planned improvement actions.

Planned Improvement Action (or Rationale for No Action Needed) – Explain the planned improvement actions for the Item Number, or provide rationale for why no improvement actions are needed.

Division(s) Impacted – Specify the divisions or units impacted by the planned improvement actions.

Person(s) Responsible – Identify the personnel responsible for completing the planned improvement actions.

Planned Completion Date – Estimate the date that the planned improvement actions will be completed. A separate copy of the Questionnaire may be used for the various locations and/or operational divisions within the organization. Responses to the questions must be based on observed facts, desk audits, analyses, or statements by knowledgeable persons obtained by the Coordinator or assisting staff. Rationale and support for responses should be documented and retained by the Coordinator for subsequent Auditor-Controller validation. Example: Below is an excerpt from the Questionnaire with sample responses provided. This example is provided for illustration purposes only.

Section 1.4 – Commitment to Competence

Section 1.4 – Commitment to Competence Method of Verification (Provide Description)

Comments Control Questions Yes No N/A Operation

Observed Documentation

Reviewed Personnel Discussed

a) Are competent personnel recruited?

X Resumes of 2 employees hired during FY 14-15

Reviewed resumes showed that the 2 employees met or exceeded the minimum requirements for each position.


2015 B3


Comments Control Questions Yes No N/A

Operation Observed

Documentation Reviewed

Personnel Discussed

b) Are managers and employees held accountable for satisfactory completion of performance elements?

X Performance review form for Dept managers

Forms include evaluation of contributions to strategic goals and assigned projects. Managers are responsible for goal-setting with supervised employees to ensure achievement of strategic goals.

c) Are sufficient training opportunities available to improve competency and update employees on new policies and procedures?

X B. Jones, Finance Div

Manager (11/30/15)

Additional training for accounting personnel is needed in new revenue recognition methods related to upcoming regulatory changes.

d) Does management get involved in training?

X B. Jones, Finance Div

Manager (11/30/15)

Finance Division management creates annual training calendars and approves individual employee training requests.

Overall Conclusion on the Control Environment: Based on the above answers, are controls adequate to ensure a strong control environment?

Yes; however, additional training opportunities in revenue recognition are needed.

How can controls be improved? For every “No” answer in this section, specify either the planned improvement action or a rationale for why no improvement is needed. Please also list any “Yes” or “N/A” answers for which additional improvement actions are planned.

CSA Item # Planned Improvement Action

(or Rationale for No Action Needed) Division(s) Impacted Person(s) Responsible Planned Completion Date

1.4.c Identify and arrange for revenue recognition training for accounting staff.

Finance Division B. Jones, Finance Div Manager

12/31/15


2015 B4

TABLE OF CONTENTS

Page

SECTION 1 – CONTROL ENVIRONMENT .......................................................................................................................................... B5

SECTION 2 – FISCAL ADMINISTRATION AND BUDGETING .......................................................................................................... B12

SECTION 3 – CASH .......................................................................................................................................................................... B16

SECTION 4 – REVENUE AND RECEIVABLES ................................................................................................................................. B25

SECTION 5 – COUNTY PROPERTY AND INVENTORIES................................................................................................................ B30

SECTION 6 – PURCHASING, PAYABLES, AND CREDIT CARDS ................................................................................................... B37

SECTION 7 – PAYROLL AND PERSONNEL ..................................................................................................................................... B45

SECTION 8 – INFORMATION SYSTEMS.......................................................................................................................................... B49

SECTION 9 – COMPLIANCE AND REPORTING .............................................................................................................................. B64

SECTION 10 – FEDERAL AWARD COMPLIANCE REQUIREMENTS .............................................................................................. B68


2015 B5

SECTION 1 – CONTROL ENVIRONMENT

Section 1.1 – Control Environment Overview The control environment includes management activities such as department planning, performance monitoring, and communications with staff regarding the organization’s structure and procedures. a) By Chart of Accounts number, identify the division and group(s) being reviewed in this Questionnaire:

b) Name of person(s) completing this Questionnaire:

Section 1.1 – Control Environment Overview Method of Verification (Provide Description)


Operation Observed


Personnel Discussed

c) Has a formal mission or value statement been established and communicated throughout the agency?

d) Have managers been provided with clear goals and direction from the governing body or top management?

e) Do officials submit conflict of interest statements as required by County Policy and Sections 1090 and 87100 of the Government Code?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 1: CONTROL ENVIRONMENT

2015 B6

Section 1.1 – Control Environment Overview Method of Verification (Provide Description)




f) Has a code of professional ethics and/or a code of conduct been made available to all employees?

g) Does management take appropriate disciplinary action in response to departures from the code of conduct? Do employees understand the consequences of violating the code of conduct?

h) Have transactions been executed in accordance with integrity and ethical values/codes?

i) Does the organization have policies and procedures in place to ensure persons in protected classes (e.g., race, color, national origin, religion, sex, disability, etc.) are not discriminated against?

j) Does the organization have policies and procedures in place to ensure a drug-free workplace?

k) Does the organization have policies and procedures in place to ensure a safe and secure workplace?


2015 B7

Section 1.2 – Management’s Philosophy and Operating Style


Method of Verification (Provide Description)

Comments

Control Questions Yes No N/A Operation Observed


Personnel Discussed

a) Has a strategic planning process been implemented that integrates the County of Ventura Strategic Plan?

b) Does the department periodically evaluate the efficiency, economy, and effectiveness with which its program goals and objectives are achieved?

c) Is the internal control structure supervised and reviewed by management to determine if it is operating as intended?

d) Has management identified and analyzed entity risks relating to change, such as high turnover, new technology, new regulations, restructuring, or rapid growth?

e) Does management consider the potential for fraud when identifying, analyzing, and responding to risks?


2015 B8



Comments



Personnel Discussed

f) Has management analyzed the potential monetary impact associated with financial and operational risks?

g) Are official bonds and insurance policies adequate for the needs of the department and, where appropriate, have they been submitted to the County’s Risk Management Department for review?

h) Has management established backup plans for sudden or significant changes in personnel?

i) Does management actively follow-up on complaints from customers?

j) If areas of knowledge are limited, has help been enlisted from peers, auditors, or outside consultants to identify alternatives/suggest solutions?


2015 B9

Section 1.3 – Assignment of Authority and Responsibility



Comments



Personnel Discussed

a) Is the organization chart current and accurate?

b) Are lines of authority and responsibility clearly defined in writing and communicated?

c) Are responsibilities divided so that no single employee controls all phases of a transaction?

d) Are policies and procedures documented, kept current by way of annual review, and readily available for use by all employees?

e) Have written policies and procedures been developed for all major areas of the organization?

f) Have written policies and internal operating procedures been approved by the governing body or top management?

g) Are policies and procedures consistent with statutory authority?


2015 B10



Comments



Personnel Discussed

h) Are written policies and internal operating procedures adequate to identify and react to changes that can have an adverse effect on the organization?

i) Are supervisors readily available to help personnel with non-routine problems?

j) If the agency’s operations are decentralized, is monitoring of the decentralized areas adequate?

Section 1.4 – Commitment to Competence





a) Are competent personnel recruited?

b) Are managers and employees held accountable for satisfactory completion of performance elements?


2015 B11





c) Are sufficient training opportunities available to improve competency and update employees on new policies and procedures?

d) Does management get involved in training?

Overall Conclusion on the Control Environment: Based on the above answers, are controls adequate to ensure a strong control environment?



(or Rationale for No Action Needed) Division(s) Impacted Person(s) Responsible

Planned Completion Date


2015 B12

SECTION 2 – FISCAL ADMINISTRATION AND BUDGETING

Section 2.1 – Fiscal Administration

Section 2.1 – Fiscal Administration Method of Verification (Provide Description)




a) Are operating and accounting policies and procedures documented and provided to employees in desk manuals, memoranda, etc.?

b) Are accounting records and accounting employees at all locations under the supervision of the principal accounting officer?

c) Are valuable accounting and financial records stored in secure areas?

d) Is a record retention policy in place to ensure retention of records in accordance with legal, program, and audit requirements?

e) Have staff training and competency standards been established consistent with program and service delivery goals?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 2: FISCAL ADMINISTRATION AND BUDGETING

2015 B13

Section 2.2 – Budgeting

Section 2.2 – Budgeting Method of Verification (Provide Description)




a) Are budget requests prepared and approved by appropriate department staff before submittal to the County Executive Office?

b) Have procedures been adopted and communicated establishing authority and responsibility for General Fund advances and/or budget transfers (budget revisions) between budget categories?

c) Is available cash in excess of operations monitored as a means of anticipating advance repayments to the General Fund?

d) Are budgetary increases or decreases (as they relate to programs) communicated in a timely manner to operating departments?

e) Is an encumbrance system used to ensure that actual expenditures do not exceed budgeted amounts?


2015 B14

Section 2.2 – Budgeting Method of Verification (Provide Description)




f) Are actual expenditures and revenues compared to budgeted amounts monthly and on a timely basis?

g) Are budget revisions approved by an authorized person before being entered into the accounting system?

h) Are restricted revenues segregated to ensure that the revenues are used only for restricted purposes?

i) Does the accounting department or budget officer submit approval as to availability of funds before the issuance of a purchase order or expenditure commitment?

j) Are over expenditures or under realized revenues discussed with department personnel, and are explanations provided for significant variations from budgeted amounts?


2015 B15

Overall Conclusion on Fiscal Administration and Budgeting: Based on the above answers, are controls adequate to ensure fiscal administrative objectives and budgetary objectives are met and communicated to employees?






2015 B16

SECTION 3 – CASH

Section 3.1 – Cash Collections Cash collections include any cash, checks, and electronic payments accepted by the department. The highly liquid nature of cash requires that controls be established over all phases of cash handling operations.

Section 3.1 – Cash Collections Method of Verification (Provide Description)


Operation Observed


Personnel Discussed

a) Are the following duties segregated among different individuals?

Accept cash receipts

Record cash receipts

Authorize cash receipts

Deposit cash receipts

Reconcile cash receipts

b) Are cash collections recorded immediately upon receipt in a journal or by means of a cash register or similar device?

c) Are electronically transmitted remittances confirmed in writing with identification of payer, amount, and purpose?

d) Is cashing of personal checks against collections prohibited?

e) Are different forms of payment (e.g., checks, cash, etc.) accounted for separately?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 3: CASH

2015 B17





f) Are mailed checks opened and logged by an individual with no other responsibility for depositing or reconciling receipts?

g) Are checks restrictively endorsed immediately upon receipt?

h) Are checks reviewed for accuracy and authenticity before acceptance?

i) Is a receipt issued for every cash/check payment?

j) Are receipt forms pre-numbered and periodically accounted for?

k) Are cash collections balanced to receipts and deposits?

l) Are cash drawers counted in the presence of at least two people?

m) Are cash shortages/overages for each cashier documented, and are variances investigated if material or recurring?

n) Are cash shortages/overages recorded separately rather than offset against overages or current collections?


2015 B18





o) Is an approved fee levied for all returned checks?

p) Are cash register tapes, check logs, etc., reconciled to deposits at least monthly by someone not otherwise involved in the cash receipt process?

q) If the department accepts credit card payments, is there documentation of the department’s compliance with Payment Card Industry (PCI) standards?

Section 3.2 – Transmittal to County Treasury

Section 3.2 – Transmittal to County Treasury Method of Verification (Provide Description)




a) Are all collections transmitted to the Treasury through secure means on a regular (e.g., daily, weekly) basis? Indicate the frequency in the Comments.

b) Is the money transmitted verified at both ends of transmission?


2015 B19

Section 3.3 – Departmental Funds Departmental funds include petty cash, change funds, trust funds, and outside bank accounts.

Section 3.3 – Departmental Funds Method of Verification (Provide Description)




a) Is an up-to-date inventory of all cash funds maintained, showing location, amount, custodian, and authorized signatures?

b) Are all department funds established pursuant to specific written authorization by the Board of Supervisors, Treasury, and Auditor-Controller?

c) Is formal responsibility for each fund (including signature authority) vested in a specific County official?

d) Are outside bank accounts established in the name of the authorized County official?

e) Are department funds reconciled to their account balances on a monthly basis as required by County policy?

f) Are reconciliations performed or reviewed by a high-level official or someone other than the person who handles funds day to day?


2015 B20





g) Is cash (including coin, checks, money orders, etc.) safeguarded in a physically secure area?

h) Are procedures for use of department funds clearly established, including:

Clear definition of authorized uses?

Expenditure approval requirements?

Reimbursement only upon submission of original receipt?

i) Are cash overages/shortages in departmental funds identified, reported, and corrected on a timely basis and in accordance with the guidelines set forth in the County Administrative Policy on Cash Handling Responsibilities?

j) Are trust funds used only to hold assets temporarily for a third party or to discharge a fiduciary obligation?

k) Are petty cash replenishments based only on documented actual expenditures?


2015 B21





l) Are cash funds periodically verified by supervisors on a surprise basis?

m) Are procedures adequate to ensure petty cash funds are not co-mingled with change funds, cash collections, and other funds?

n) Are cash collections maintained in outside bank accounts deposited promptly and at least daily?

o) Is cash in outside banks within the protection range of the FDIC insurance, i.e., does not exceed $250,000 per depositor per insured bank?

p) Is the level of usage monitored to detect and close inactive department funds?


2015 B22

Section 3.4 – Department Disbursements Department disbursements include payments for public assistance, grants, monies held in trust, or related duties as delegated by the Auditor-Controller.

Section 3.4 – Department Disbursements Method of Verification (Provide Description)




a) Are the following duties segregated among different individuals?

Approving disbursements

Preparing vouchers/checks

Disbursing funds

Reconciling disbursements

b) Does a policy exist which clearly defines authorized disbursements?

c) Are disbursements immediately recorded with all relevant detail (i.e., date, payee, amount, and purpose) in a cash disbursement journal/register?

d) Are disbursements supported by properly approved claims or vouchers?

e) Are cash advances prohibited unless specifically authorized by the Auditor-Controller?


2015 B23





f) Are disbursements made only from authorized cash funds, bank accounts, or through check requests?

g) Are disbursements by check specifically authorized by the Auditor-Controller?

h) Are blank checks and signature plates safeguarded in physically secure areas?

i) Do only authorized personnel sign checks or check requests?

j) Do check and warrant request signers review supporting documentation before signing?

k) Are all check and warrant signers deputized by the Auditor-Controller?

l) Are signed checks immediately distributed or mailed out by someone who did not prepare them?

m) Are disbursements by means of electronic transmission specifically authorized by the Auditor-Controller?


2015 B24





n) Is each electronic disbursement confirmed in writing with the intended recipient?

Overall Conclusion on Cash: Based on the above answers, are controls adequate to ensure proper accountability for cash and cash transactions?






2015 B25

SECTION 4 – REVENUE AND RECEIVABLES

Section 4.1 – Revenue Recognition

Section 4.1 – Revenue Recognition Method of Verification (Provide Description)




a) Are the following duties performed by separate individuals?

Providing services

Preparing billings

Approving billings

Receiving payments

Posting, adjusting, and reconciling accounts

b) Are charges for goods or services based on authorized fees and rates, where applicable?

c) Does a procedure exist to identify new revenue sources arising from changes in laws and regulations?

d) If revenue is in the form of a tax or license, is there a method to identify all assessable activities or properties?

e) Is the maximum amount of revenue recognized to the extent allowed by laws and accounting standards?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 4: REVENUE AND RECEIVABLES

2015 B26

Section 4.1 – Revenue Recognition Method of Verification (Provide Description)




f) Is the cumulative revenue compared to prior years to detect any unusual changes?

g) Are year-end revenue accruals reviewed for compliance with applicable accounting policies, including generally accepted accounting principles, County guidelines, and funding agency requirements?

Section 4.2 – Cost Recovery

Section 4.2 – Cost Recovery Method of Verification (Provide Description)




a) Are the costs of services or goods sold to outside organizations computed?

b) Are all allowable costs including indirect costs included in the computation?

c) Are billing rates and service fees reviewed periodically to ensure that costs are recovered to the fullest extent allowable?


2015 B27

Section 4.3 – Collection of Receivables

Section 4.3 – Collection of Receivables Method of Verification (Provide Description)




a) Do procedures exist to ensure timely generation of invoices for all services rendered, goods sold, and costs incurred?

b) Are all billings promptly recorded as accounts receivable?

c) Are invoices pre-numbered and periodically accounted for?

d) Are billings checked for accuracy before mailing?

e) Are statements of accounts regularly sent to all debtors?

f) Are the outstanding balances of individual accounts receivable summarized and reconciled to control balances on a regular basis?

g) Are credits and refunds reviewed and/or approved at an appropriate level of authority?


2015 B28





h) Is an accounts receivable aging report (i.e., a listing of receivables grouped by age) reviewed on a regular basis to evaluate the collection process and identify accounts which should be pursued for collection or discharge from accountability?

i) Does the department have formal policies and procedures for collection activities that reflect the department’s statutory authority (e.g., authority to impose interest, penalties, late fees, garnishments, etc.)?

j) Does the department use an allowance for doubtful or uncollectible accounts, if applicable?

k) If the department uses an allowance for doubtful or uncollectible accounts, does the department have a written methodology for calculating the allowance?

l) Are overdue accounts pursued for collection and, if appropriate, referred to a collection agency?


2015 B29





m) Are uncollectible accounts identified and submitted to the Auditor-Controller on an annual basis for discharge from accountability?

Overall Conclusion on Revenue and Receivables: Based on the above answers, are controls adequate to ensure proper accountability for County revenues and receivables?






2015 B30

SECTION 5 – COUNTY PROPERTY AND INVENTORIES

Section 5.1 – Accountability for County Property County property includes all non-monetary assets including land, buildings, fixtures, equipment, and furnishings owned or leased by the County. Information system assets are also to be considered in this section.

Section 5.1 – Accountability for County Property Method of Verification (Provide Description)


Operation Observed


Personnel Discussed


Authorizing purchase, transfer, or disposal of property

Posting, adjusting and reconciling property records

Custody/use of property

Periodic inventory and reconciliation to accountable balances

b) Is physical access to valuable or sensitive property, including computers, sufficiently restricted to prevent unauthorized use, theft, or damage?

c) Does a written policy exist, acknowledged by employees, restricting cellular telephones, cameras, and other County property to business use?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 5: COUNTY PROPERTY AND INVENTORIES

2015 B31





d) Are items owned by the County tagged or otherwise specifically identifiable when required by County policy?

e) Are detailed records of property maintained showing identification number, description, location, and original cost?

f) Is responsibility for the safe custody and maintenance of properties assigned to specific individuals?

g) Are the physical existence, condition, and location of properties annually verified and reconciled to property records as required by County policy?

h) Is property maintained according to a regular schedule to ensure functionality and value?

i) Are property purchases promptly reported to GSA and to the Auditor-Controller’s Office when required by County policy?

j) Are procedures in place to document loss, transfer, and retirement of properties?


2015 B32





k) Are policies established to ensure that obsolete and inactive items are identified as surplus property?

Section 5.2 – Inventories Inventories include supplies used in the course of providing goods and services to customers (e.g., vehicle parts for fleet maintenance; medical supplies for health clinics; etc.). If the department only maintains a minor stock of office supplies, please skip Section 5.2 and enter “N/A” in the following space: ______.

Section 5.2 – Inventories Method of Verification (Provide Description)




a) Do procedures define the responsibilities of ordering, accepting, approving, processing, and recording of the inventory?

b) Are policies established to ensure that inventories are not stockpiled or to prevent over-ordering?

c) Does the department maintain perpetual inventory records and are all inventory items accounted for in the perpetual inventory system?

d) Are receiving reports used to record purchases to the perpetual inventory records?


2015 B33





e) Are entries to perpetual inventory records made timely upon the receipt of goods?

f) Are the following duties performed by different people:

Receiving and issuing inventory and the operational duties?

Receiving and issuing inventory and taking the physical inventory?

Receiving and issuing inventory and the approving of expenditures, recording transactions in the general ledger, and reconciliation of subsidiary records to control accounts?

g) Are work orders required to be presented and approved by appropriate designated officials as a basis for issuing inventories?

h) When issuing inventory, is the proper fund, division/unit, and object charged in the general ledger?

i) Is physical security for inventories adequate?


2015 B34





j) Is physical access to inventories restricted to authorized personnel?

k) Is insurance coverage appropriate for significant inventories?

l) Are written instructions given and explained to all personnel involved in the annual physical count of the inventory?

m) Are physical inventory counts:

Supervised by someone independent of the custodial or recordkeeping functions?

Conducted by employees independent of the department being inventoried?

Recorded on permanent inventory count sheets?

Planned for proper cut-off of receipts and issues?

Reflected in the perpetual records based on the actual inventory quantities?

n) Is access to the perpetual inventory records limited to authorized individuals?


2015 B35





o) Are adjustments to inventory records approved by a properly designated official?

p) Are perpetual inventory balances reconciled against the general ledger control accounts at least annually?

q) Does management review the reconciliations at year-end?

r) Are inventory deviations followed up on by management in a timely manner?

s) Does management monitor and approve the write-off/removal of obsolete and inactive inventories?

t) Does management assess inventory policies and procedures periodically?


2015 B36

Overall Conclusion on County Property and Inventories: Based on the above answers, are controls adequate to ensure proper accountability and security for County property and inventories?






2015 B37

SECTION 6 – PURCHASING, PAYABLES, AND CREDIT CARDS

Section 6.1 – Needs Assessment

Section 6.1 – Needs Assessment Method of Verification (Provide Description)




a) Are needs evaluated and verified prior to making purchase decisions?

b) Are requisitions prepared in sufficient detail to minimize the risk of erroneous purchases?

c) Is the availability of items from GSA’s Surplus Property Program considered prior to purchasing new items?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 6: PURCHASING, PAYABLES, AND CREDIT CARDS

2015 B38

Section 6.2 – Department Purchasing

Section 6.2 – Department Purchasing Method of Verification (Provide Description)




a) Are department staff making purchases or incurring travel sufficiently familiar with County purchasing, credit card, and conflict of interest policies to ensure compliance? Specifically, do staff:

Receive appropriate training (e.g., GSA - R.A.P. training)?

Have ready access to purchasing guidelines and restrictions?

Provide regular written acknowledgements of policies?

b) Are purchases and leases made in conformance with County purchasing guidelines?

c) Do procedures ensure compliance with the County policy on contracts and agreements?

d) Do procedures ensure that staff check for the availability of a Countywide Price Agreement/ Contract before initiating a purchase?


2015 B39

Section 6.2 – Department Purchasing Method of Verification (Provide Description)




e) Do procedures ensure goods and services are obtained at competitive prices? Is competitive bidding used to the extent practicable?

f) Is splitting orders to avoid higher levels of approval prohibited?

g) Is availability of funds verified before incurring expenditures?

Section 6.3 – Receiving

Section 6.3 – Receiving Method of Verification (Provide Description)




a) Are goods and services inspected for damage/ conformance with purchase orders, including confirming the count of goods received?

b) Are vendors promptly notified in writing of non-conforming goods and services and/or shortages?

c) Are goods and services received documented in writing at the time of receipt?


2015 B40

Section 6.3 – Receiving Method of Verification (Provide Description)




d) Upon receipt of goods, does the signed receiving report go to the accounting office?

Section 6.4 – Payables

Section 6.4 – Payables Method of Verification (Provide Description)





Receiving goods

Preparing vouchers or checks

Approving vouchers and/or authorizing disbursements

Posting adjustments and reconciling accounts

b) Are payment authorizations by department officials based on reviews of original vendor invoices or claims as prescribed in the County Administrative Policy on Claims Processing?


2015 B41

Section 6.4 – Payables Method of Verification (Provide Description)




c) Are invoices/claims verified against authorizing documents, such as:

Contracts?

Purchase orders?

Receiving reports?

d) Are invoices checked for mathematical accuracy prior to approval for payment?

e) Are invoices and supporting documents canceled to prevent their reuse?

f) Are there steps in the invoice processing procedures to prevent or detect duplicate payments?

g) Do procedures ensure available vendor discounts are taken?

h) Do procedures provide for approval of invoices, card statements, and required supporting documents within the time frame necessary to effect timely vendor payments?


2015 B42

Section 6.5 – Procurement and Travel Cards

Section 6.5 – Procurement and Travel Cards Method of Verification (Provide Description)




a) Are department reviews, consistent with GSA Procurement Credit Card procedures, performed before authorizing payment of monthly card statements? Specifically:

Is a written “Order Log” used to track charges?

Do cardholders compare charges to the Order Log?

Does a department official with sufficient knowledge of cardholder job duties review and approve charges?

Does fiscal staff maintain appropriate supporting documentation and approve VCFMS coding?


2015 B43





b) Are department travel policies consistent with the Administrative Manual Policy on employees’ business expenses and the Auditor-Controller Travel Credit Cardholder Instructions? Specifically, do department policies include:

Selection of the lowest reasonable cost lodging?

Prohibited use of card for personal or non-County expenses?

Observance of prescribed dollar limits on meals?

Timely return of travel cards (within 5 days of trip)?

Required supporting documents (e.g., receipts) and “Detail of Trip Expenses” log (sent to the Auditor-Controller’s Office)?

c) Has the department established appropriate review procedures for authorization of employee travel requests and the subsequent actual expenditures?

d) Is responsibility for department travel cards vested in a single responsible custodian?


2015 B44





e) Does the travel credit card custodian maintain a written record of assignments and inventory cards at least annually?

f) Do department exit procedures include a request to surrender credit cards previously assigned to the departing or transferring employees?

Overall Conclusion on Purchasing, Payables, and Credit Cards: Based on the above answers, are controls adequate to ensure proper accountability for County purchases, payables, and credit cards?






2015 B45

SECTION 7 – PAYROLL AND PERSONNEL

Section 7.1 – Payroll

Section 7.1 – Payroll Method of Verification (Provide Description)





Authorization of changes in payroll status (hiring, promotion, termination)

Approval of time cards

Data entry of payroll information

Distribution of payroll checks

b) Are controls over employee timekeeping adequate? Specifically:

Are all employees required to prepare and sign time cards?

Is leave (vacation, sick leave) approved by the immediate supervisor?

Does an immediate supervisor compare time cards to time-off records and approve time cards?

Is overtime authorized at an appropriate level of authority?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 7: PAYROLL AND PERSONNEL

2015 B46

Section 7.1 – Payroll Method of Verification (Provide Description)




c) Is employee time documented in sufficient detail so salaries can be allocated to programs and functions for management analysis?

d) Are individual employee leave records reconciled, at least annually, to appropriate records maintained for accumulated employee leave benefits?

e) Do payroll clerks run recommended queries in VCHRP each pay period to detect/correct payroll errors?

f) Are comparisons of gross pay of current to prior period payrolls reviewed for reasonableness by a knowledgeable person not otherwise involved in payroll processing?

g) Is employee eligibility for pay premiums (e.g., certification pay) periodically verified?

h) Are unclaimed payroll checks properly accounted for and returned to a custodian independent of the payroll department?


2015 B47

Section 7.2 – Personnel

Section 7.2 – Personnel Method of Verification (Provide Description)




a) Are County personnel policies and procedures regarding job descriptions, hiring, promotion, termination, timekeeping, salary rates, and labor contract provisions in place?

b) Do all supervisors and managers have an adequate working knowledge of the County’s personnel policies and procedures?

c) Are accurate, up-to-date position descriptions available?

d) Are all employees given an annual performance evaluation?

e) Are changes in employee status (hiring and termination) approved by appropriate management and reported promptly to Human Resources?

f) Is authorizing documentation on file for each employee regarding appointment, job classification, salary rate, proof of citizenship, and other required documentation?


2015 B48

Section 7.2 – Personnel Method of Verification (Provide Description)




g) Are sufficient background checks performed on individuals hired for sensitive positions?

h) Is information on employment applications verified and are references contacted?

Overall Conclusion on Payroll and Personnel: Based on the conclusions above, are controls over department payroll and personnel activities adequate?






2015 B49

SECTION 8 – INFORMATION SYSTEMS

Section 8.1 – Entitywide IT Security Management a) List the department’s critical business applications (or attach the listing from the department’s Disaster Recovery Plan):

b) Describe the department’s IT support structure (e.g., number and type of in-house IT support staff, specific ITSD services used, etc.):

Section 8.1 – Entitywide IT Security Management Method of Verification (Provide Description)




c) Does the agency periodically perform a comprehensive, high-level assessment of risks to its information systems? Consider the following:

Are risk assessments performed and documented regularly and whenever systems, facilities, or other conditions change?

Are final risk determinations and managerial approvals documented and kept on file?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 8: INFORMATION SYSTEMS

2015 B50





d) Has the agency developed a written plan that clearly describes the entitywide security program and policies and procedures that support it?

e) Has senior management established a structure to implement and manage the security program throughout the agency, and are security responsibilities clearly defined?

f) Does the agency monitor the security program’s effectiveness and make changes as needed? Consider the following:

Does management periodically assess the appropriateness of security policies and compliance with them?

Are corrective actions promptly and effectively implemented and tested, and are they continually monitored?

g) Has the agency implemented effective security-related personnel policies, including disciplinary processes?


2015 B51





h) Are employee history and/or background checks performed on staff who have access to confidential/sensitive information or critical systems?

i) Are security and confidentiality requirements for third-party providers coupled with procedures to monitor compliance? Are the requirements stipulated in the acquisition-related documents, such as service-level agreements and contracts?

Section 8.2 – Systems Access Control

Section 8.2 – Systems Access Control Method of Verification (Provide Description)




a) Have policies and processes been established to classify information in terms of its value, legal requirements, sensitivity, and criticality to the organization?


2015 B52





b) Is data classification used to determine what security measures to employ, including encryption or physical measures? Consider the following:

Is data protected from unauthorized disclosure during transmission?

Is data that needs additional protection stored on pre-defined servers, rather than on computing devices, for both data protection and backup/recovery reasons?

Are policies and procedures in place to protect data on portable storage media, including laptops, CDs, and USB drives?

c) Has management implemented a formal security administration process for granting, changing, and removing direct access to data/databases?

d) Does a unique login name and password identify and authenticate users when appropriate to do so (e.g., no group user IDs)?


2015 B53





e) Is access to systems removed for terminated or transferred staff in a timely manner?

f) Do computing devices display a password-protected lock screen after a reasonable idle period (e.g., after 7 minutes of inactivity)?

g) If a user incorrectly enters a password five or fewer times in a row, does the computer system deny the user access to the computer system for at least 15 minutes (or until reset by the system administrator)?

h) Is physical access to facilities containing information systems controlled and an individual’s authorization verified before granting access?

i) Does the agency regularly monitor information systems access, investigate apparent violations, and take appropriate remedial and disciplinary action?


2015 B54





j) Have system logging procedures been implemented to retain logs of system changes, security events, system failures, etc., and is log information placed where it cannot be manipulated or altered?

Section 8.3 – Application Software Development and Change Control

Section 8.3 – Application Software Development and Change Control


Comments



Personnel Discussed

a) Are information system processing features and program modifications properly authorized?

b) Is all new or revised software thoroughly tested and approved?


2015 B55

Section 8.4 – System Software Control

Section 8.4 – System Software Control Method of Verification (Provide Description)




a) Does the agency appropriately control access to system software by:

Assigning access rights based on job responsibilities?

Ensuring users have the lowest privilege level necessary and appropriate to execute legitimate and authorized business applications?

Ensuring access assignments are approved and documented?

b) Are non-essential services disabled or removed from servers/computing devices when their use is not necessary as a means to eliminate unnecessary risk?

c) Is access to and use of system software monitored?


2015 B56

Section 8.4 – System Software Control Method of Verification (Provide Description)




d) Are changes to the information systems controlled and documented? Are the changes reviewed and approved in accordance with written policy and procedures, including a process for emergency changes?

e) Can the information systems/applications detect and protect against unauthorized changes to software and information?

Section 8.5 – Segregation of Information Systems Duties

Section 8.5 – Segregation of Information Systems

Duties Method of Verification (Provide Description)

Comments



Personnel Discussed

a) Have incompatible information system duties been identified and policies implemented to segregate those duties?

b) Have access controls been established to enforce segregation of duties?


2015 B57

Section 8.5 – Segregation of Information Systems Duties


Comments



Personnel Discussed

c) Does the agency exercise control over personnel activities through the use of formal operating procedures, supervision, and review?

Section 8.6 – Service Continuity

Section 8.6 – Service Continuity Method of Verification (Provide Description)




a) Are necessary environmental controls properly maintained based on requirements, including but not limited to: backup power to facilitate an orderly shutdown process; fire detection and suppression; temperature and humidity controls; and water damage detection and mitigation?

b) Are backup copies of information and software accomplished on a routine schedule, tested regularly, and stored off-site?

c) Is there a written Disaster Recovery Plan in place that supports the current business continuity needs of the agency?


2015 B58

Section 8.6 – Service Continuity Method of Verification (Provide Description)




d) Does the Disaster Recovery Plan include identification of the following?

Critical applications?

Staff responsibilities?

Steps for recovery of the system?

Computer equipment needed for temporary processing?

Location that could be used to process critical applications in the event of an emergency?

e) Does the agency regularly update and periodically test the Disaster Recovery Plan, making adjustments as appropriate?

f) Are incident response procedures consistent with applicable laws and regulations?


2015 B59

Section 8.7 – Countywide IT Policies

Section 8.7 – Countywide IT Policies Method of Verification (Provide Description)




a) Do employees and contractors sign an acknowledgement of the County’s Employee Technology Use Policy at the time of hire and on a reoccurring basis as appropriate?

b) Does the agency have a multi-year IT strategic plan that is aligned with the County’s Strategic Plan and updated on a regular (e.g., annual) basis?

c) Are operating system and application level updates, patches, and hot fixes applied as soon as they become available and are fully tested?

d) Do all agency computers (including servers) use a recognized anti-virus (AV) or end-point security program? Does the agency run the AV program on a regular schedule?

e) If the department has a critical information system that is connected to an outside network, is it protected by a firewall?


2015 B60





f) Are appropriate wireless network access restrictions in place, including organizational control over access points, monitoring against rogue access points, and appropriate configuration of wireless routers and user devices?

g) Does the agency conduct an annual review to ensure the following?

An inventory of hardware and installed software is performed and reconciled to IT asset tracking records.

All software is properly licensed using either a site or individual licensing agreement.

h) Does the agency comply with the County’s policy for the Institutional Use of Social Media, including ensuring that the account and postings are approved in advance by the department head, and that comments are monitored and removed if required?


2015 B61





i) Does the agency comply with the County’s Cellular Device Policy, including performing an annual inventory of cellular devices, assignments, and a revalidation of ongoing needs?

j) Are processes in place to permanently remove any sensitive data and/or licensed software prior to disposal of equipment?

Section 8.8 – Application Control

Section 8.8 – Application Control Method of Verification (Provide Description)




a) Are source documents controlled and authorized? Consider the following:

For batch application systems, are batch control sheets used providing information such as date, control number, number of documents, and control totals for key fields?

Does supervisory or independent review of data occur before it is entered into the application system?


2015 B62

Section 8.8 – Application Control Method of Verification (Provide Description)




b) Are master files and exception reporting used to ensure that all data processed are authorized?

c) Are all authorized transactions entered into and processed by the computer?

d) Are reconciliations performed to verify data completeness?

e) Do information systems and applications check data inputs for accuracy, completeness, and validity?

f) Are output reports reviewed to help maintain data accuracy and validity?

g) Do procedures ensure that the current version of production programs and data files is used during processing?

h) Does the application protect against concurrent file updates?


2015 B63

Overall Conclusion on Information Systems: Based on the above answers, are controls over County information systems adequate?






2015 B64

SECTION 9 – COMPLIANCE AND REPORTING

Section 9.1 – Compliance with Legal and Program Requirements a) List the major applicable codes, laws, regulations and guidelines which govern and have a significant impact on the organization’s operations and

reports:

Section 9.1 – Compliance with Legal and Program Requirements


Comments



Personnel Discussed

b) Has the organization established procedures to ensure that the applicable legal and program requirements are identified and communicated to staff?

c) Has the organization established procedures to ensure compliance with applicable legal and program requirements?

Section 9.2 – Reporting

Section 9.2 – Reporting Method of Verification (Provide Description)




a) Do accounting and finance staff receive adequate training on County financial reporting requirements?

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 9: COMPLIANCE AND REPORTING

2015 B65





b) Is there a ready audit trail from department source documents to amounts recorded in the County accounting system (VCFMS)?

c) Are internal department accounting ledgers periodically reconciled to VCFMS?

d) Are reports to the Auditor-Controller and outside regulatory agencies prepared based on official VCFMS accounting system data?

e) Have adequate tracking systems been established to support accurate reporting of program expenditures, statistics, and other data reported to funding and regulatory agencies?

f) Are documents maintained by fiscal staff (e.g., internal reports, ledgers, and schedules) periodically evaluated for usefulness and necessity?

g) Is a schedule utilized to ensure timely filing of statutory reports and other information required by funding and regulatory agencies?


2015 B66





h) Are internal and external financial reports reviewed and approved by an appropriate fiscal manager prior to filing?

i) Are the department’s fiscal managers required to report significant deviations from accounting principles or instances of management override of internal controls to the Auditor-Controller?

j) Are there proper channels for reporting suspected improprieties in the use of County or grant funds?

Overall Conclusion on Compliance and Reporting: Based on the conclusions above, are controls adequate to ensure compliance with laws and regulations and that reports are reliable and useful?


2015 B67






2015 B68

SECTION 10 – FEDERAL AWARD COMPLIANCE REQUIREMENTS

Section 10 should be completed by departments receiving Federal awards, either directly from the Federal Government or via pass-through agencies such as the State and other local governments. If your department does not receive such funding, please skip Section 10 and enter “N/A” in the following space: ______.

Section 10.1 – Office of Management and Budget (OMB) Grant Reform

Section 10.1 – OMB Grant Reform Method of Verification (Provide Description)




a) Do grant fiscal and program administrators have a sufficient understanding of the changes created by the OMB’s new Uniform Guidance (2 CFR Part 200, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”)?

b) Has the department made plans to ensure that awards made on or after December 26, 2014, will meet the new requirements in the Uniform Guidance if applicable? Consider updates to Federal requirements for:

Procurement

Allocating indirect costs

Time and effort reporting

Subrecipient monitoring (including risk assessment)

Internal control

COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND CONTROL SELF-ASSESSMENT PROGRAM APPENDIX B: DEPARTMENT INTERNAL CONTROL QUESTIONNAIRE SECTION 10: FEDERAL AWARD COMPLIANCE REQUIREMENTS

2015 B69

Sections 10.2 through 10.13 contain questions that broadly cover each of the 12 Federal Award Compliance Requirements applicable to Federal awards made prior to December 26, 2014, outlined in Part 3.1 of the OMB’s 2015 Compliance Supplement. The additional requirements in Part 3.2 of the 2015 Compliance Supplement apply if Federal awards were made on or after December 26, 2014, or if the awarding entity considers incremental funding to be an opportunity to change award terms and conditions to the new Uniform Guidance (2 CFR Part 200). Please refer to the award terms and conditions, or contact the awarding entity, to confirm the applicable compliance requirements.

Section 10.2 – Activities Allowed or Unallowed

Section 10.2 – Activities Allowed or Unallowed Method of Verification (Provide Description)




a) Does information from the Federal agency flow to personnel responsible for determining if activities are allowable?

b) Are supporting documents reviewed for allowable services information?

c) Are comparisons made between prior year services and current year services?


2015 B70

Section 10.3 – Allowable Costs/Cost Principles

Section 10.3 – Allowable Costs/Cost Principles Method of Verification (Provide Description)




a) Does the department maintain written policies and procedures regarding expenditures eligible for Federal reimbursement (direct or indirect)?

b) Are grant agreements, program regulations, and cost principles circulars available to staff responsible for determining allowable costs (direct and indirect)?

c) Are costs (including indirect costs) charged to Federal programs determined in accordance with Federal cost principles?

d) Is the indirect cost rate reconciled to the agency’s budget report(s) and the general ledger?

e) Are records maintained supporting the basis for allocating cost?

f) Are allocated costs periodically reviewed to determine that the costs were properly allocated?


2015 B71





g) Are allocations that are based on budgets or other estimates adjusted to actual allowable costs?

h) Are procedures in place to ensure that there are no duplicate or double charging of costs through allocations?

i) Are approved indirect cost rates applied to the proper base for each grant program?

j) Are costs treated consistently?

k) Are the following duties performed by different people?

Coding expenditures to Federal programs

Reviewing and approving expenditures

l) Are personnel responsible for coding expenditures to Federal programs properly trained to determine expenditures that are allowable and allocable to the Federal programs?


2015 B72





m) Are expenditures and supporting documents reviewed for allowable costs and approved by a person knowledgeable of the provisions of Federal cost principles?

n) Are comparisons made between budget and actual allowable costs, and are large variances between estimated and actual cost investigated?

o) Are procedures in place to ensure that questioned costs and other reported audit findings are reviewed and corrected in a timely manner?

Section 10.4 – Cash Management

Section 10.4 – Cash Management Method of Verification (Provide Description)




a) Have written policies been established to ensure compliance with Federal cash management requirements?


2015 B73





b) Is responsibility for requesting grant drawdowns and monitoring interest earned on advances assigned to a person knowledgeable of the cash management requirements?

c) Are the following duties performed by different people?

Estimating or determining cash requirements for the agency

Reviewing and approving the request for advance or reimbursement

d) Does the department have established procedures for estimating or determining cash requirements?

e) Are requests for reimbursements based on actual cash outlays required by the program?

f) Are requests for advances or reimbursements reviewed and approved by persons with approval authority?

g) Does a cash log or record show expenditures and cash balances for Federally funded programs?


2015 B74





h) Is the Federal cash drawdown appropriate to prevent excess positive or negative cash balances from accumulating?

i) Are grant funds accounted for separately in the accounting system?

Section 10.5 – Eligibility

Section 10.5 – Eligibility Method of Verification (Provide Description)




a) Do written policies exist that provide direction for making and documenting eligibility determinations?

b) Is staff responsible for eligibility determination knowledgeable of the program requirements and adequately trained?

c) Are standardized checklists or templates used in making eligibility determinations?


2015 B75





d) Are the following duties performed by different staff?

Verifying the information on the applications

Determining eligibility

Calculating the assistance payment

Approving eligibility determinations and assistance calculations

Performing quality control reviews of eligibility determinations

e) Is the information provided by the applicant verified for accuracy with independent sources and for completeness?

f) Is documentation of eligibility determination in accordance with program requirements?

g) Are eligibility determinations approved by a designated official before assistance payments begin?

h) Are applicants periodically reviewed to determine continued eligibility?


2015 B76





i) Does a quality control function exist which selects a sample of eligibility determinations for review? If no quality control function exists, is a sample of eligibility determinations reviewed for quality control?

j) Are error rates of incorrect eligibility that are identified by the quality control unit within acceptable limits?


2015 B77

Section 10.6 – Equipment and Real Property Management



Comments



Personnel Discussed

a) Are records maintained for equipment acquired with Federal funds that include all required information elements?

Description (including serial/ID number)

Source of funds

Name of title holder

Acquisition date and cost

Percentage of Federal participation in project cost

Location, use, and condition of the property

Disposition information (date of disposal, sales price, valuation method)

b) Is the equipment adequately safeguarded and maintained?

c) Has any disposition of equipment been accomplished in accordance with Federal requirements?

d) Has the Federal awarding agency been appropriately compensated for its share of any property sold or converted to non-Federal use?


2015 B78



Comments



Personnel Discussed

e) Has the department performed required physical inventories of Federally-funded equipment at least once every 2 years, and reconciled the physical counts to equipment records?

Section 10.7 – Matching, Level of Effort, Earmarking

Section 10.7 – Matching, Level of Effort, Earmarking Method of Verification (Provide Description)




a) Are there written policies that outline the following for matching, level of effort, and earmarking:

Responsibilities for determining required amounts or limits?

Methods of valuing matching requirements, i.e., “in-kind” contributions of property and services, calculations of levels of effort?

Allowable costs that may be claimed?

Methods of accounting for and documenting amounts used to calculate amounts claimed?


2015 B79

Section 10.7 – Matching, Level of Effort, Earmarking Method of Verification (Provide Description)




b) Are matching, level of effort, and earmarking requirements considered when the budget is established?

c) Is appropriate supporting documentation for “in-kind” contributions and volunteer services retained?

d) Is there a system in place to ensure that expenses/ expenditures, refunds, and cash receipts or revenues are properly classified and recorded only once as to their effect on matching, level of effort, or earmarking?

e) Does management review the source of funds for the budgeted amounts to ensure that they are allowable?

f) Are budget reports reviewed periodically to determine that requirements are being met as scheduled?


2015 B80

Section 10.8 – Period of Performance

Section 10.8 – Period of Performance Method of Verification (Provide Description)




a) Is staff knowledgeable of grant cut-off dates?

b) Does the accounting system prevent obligation of Federal funds outside of the funding and liquidation period?

c) Are unliquidated commitments canceled or extensions obtained at the end of the period of availability?

d) Is there periodic reporting of unliquidated balances to appropriate levels of management and is follow-up pursued?

e) Does management perform periodic reviews of expenditures before and after the grant cut-off date to ensure compliance with the period of availability requirements?

f) Does management review budget and actual reports for the period?


2015 B81

Section 10.9 – Procurement and Suspension and Debarment



Comments



Personnel Discussed

a) Do written policies for procurement and contracts establish:

Maintenance of contract files?

Methods of procurement, contractor selection or rejection, basis of contract price?

Verification of full and open competition?

Requirements for cost or price analysis?

Obtaining and reacting to suspension and debarment certifications?

Other applicable requirements for Federal procurement?

b) Is the contractor’s performance with the terms, conditions, and specifications of the contract monitored and documented?


2015 B82



Comments



Personnel Discussed

c) Are procedures established to achieve one or both of the following?

Verify that vendors providing goods and services under the award have not been suspended or debarred by the Federal Government.

Obtain a signed affirmation from the vendor that the vendor is not debarred in accordance with Federal requirements.

d) Does management perform periodic reviews of procurement and contracting activities to determine whether policies and procedures are being followed?

Section 10.10 – Program Income

Section 10.10 – Program Income Method of Verification (Provide Description)


Operation Observed


Personnel Discussed

a) Are collection policies and procedures clearly documented and communicated to personnel responsible for program income?


2015 B83

Section 10.10 – Program Income Method of Verification (Provide Description)




b) Are policies and procedures in place to ensure program income is deposited in the bank and recorded as earned?

c) Do policies and procedures provide for the correct use of program income as directed by Federal program requirements?

d) Does management compare actual program income to budget and investigate significant differences?

Section 10.11 – Reporting





a) Is there a written policy that establishes responsibility and provides procedures for periodic monitoring, verification, and reporting of program progress and accomplishments?

b) Is the general ledger or other reliable source the basis for the reports and is the account structure adequate to the task of producing accurate information?


2015 B84





c) Is the staff responsible for reporting knowledgeable of the Federal requirements and due dates?

d) Is a tracking system used to inform staff of report due dates?

e) Are reports reconciled to the general ledger or other accounting records?

f) Does management review the reports to assure the accuracy and completeness of data included in the reports?


2015 B85

Section 10.12 – Subrecipient Monitoring

Section 10.12 – Subrecipient Monitoring Method of Verification (Provide Description)




a) Does the department have controls in place to ensure subrecipients are monitored for compliance with contracts, grant agreements, and other requirements stipulated by funding sources? This may include, but is not limited to:

Political activity

Prevailing wages

Civil rights

Cash management

Federal financial reporting

Cost principles

Single Audit

Matching

Eligibility

b) Do contracts specify Federal award information, including the requirement for subrecipients to obtain a Single Audit when applicable?

c) Is a master list maintained of all subrecipients that is updated as disbursements are made or as contracts are signed?


2015 B86





d) Are cash requirements for subrecipients monitored to prevent excess cash transfers?

e) Is a cost settlement performed at the end of each year for each subrecipient with actual expenditures compared to cash advances/reimbursements?

f) Are subrecipients monitored using standard procedures to ensure compliance with program regulations?

g) Do written procedures exist for resolution of compliance issues and questioned costs identified during monitoring visits?

h) Are monitoring findings and resolutions reviewed and approved by a person with approval authority?

i) Are supervisory reviews performed to determine the adequacy of subrecipient monitoring?

j) Are audit findings identified in subrecipients’ audit reports assigned to appropriate personnel to resolve the findings?


2015 B87





k) Are subrecipient audit findings and responses entered into a tracking system or otherwise identified for follow-up?

l) Is the audit resolution process documented and maintained in an orderly manner?

m) Does the audit resolution process ensure timely corrective action of audit findings?

Section 10.13 – Special Tests and Provisions

Section 10.13 – Special Tests and Provisions Method of Verification (Provide Description)




a) Are procedures adequate to identify whether any specific tests and provisions are applicable to the Federal program?

b) Have adequate internal controls been established and maintained to assure compliance with these specific tests and provisions?


2015 B88

Section 10.13 – Special Tests and Provisions Method of Verification (Provide Description)




c) If the Federal award is subject to Wage Rate Requirements (i.e., the Davis-Bacon Act), does the department have procedures in place to ensure a prevailing wage rate clause is included in the contract, and that contractors submit certified payrolls as required?

Overall Conclusion on Compliance with Federal Award Requirements: Based on the above answers, are controls adequate to ensure compliance with Federal award requirements?





Documents

Appendix B: Department Internal Control Questionnairevcportal.ventura.org/auditor/docs/ICGuidelines/06_Appendix_B-2015.… · COUNTY OF VENTURA – INTERNAL CONTROL GUIDELINES AND