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Examiners Update to County Administrators
Presented by: James E. Hall, CPA
Director County Audit Division
Examiners of Public Accounts
State of Alabama
Disclaimer
This information was presented to the Association of County Commissions of Alabama’s (ACCA) Annual Conference on May 13, 2015.
This presentation represents the audit position of the Department of Examiners of Public Accounts as of that date.
Objectives…
GASB Statements
Common Problems
Financial Statements
GASB Updates
GASB FY2014
Statement No 67 – Financial Reporting for Pension Plans – An Amendment to GASB Statement No. 25
Statement No 70 – Accounting and Financial Reporting for Nonexchange Financial Guarantees
Statement No 70 – Accounting and Financial Reporting for Nonexchange Financial Guarantees
Applies to governments who guarantee the financial obligations of others in a nonexchange transaction
Other entities may include governments or authorities, not-for-profits, private companies and individuals
Must recognize a liability if it is more likely than not (more than 50%) that the government will be required to make a payment on the guarantee.
GASB 70Note Disclosures
Regardless of whether the governmental entity determines that it is more likely than not that a payment will be required, GASB requires the entity to make certain disclosures for all nonexchange financial guarantees.
A description of the nonexchange guarantee
The legal authority and limits for extending the guarantee and the types of obligations guaranteed
Relationship between guarantor and the entity issuing the obligations that are guaranteed
Description of recovery arrangements
Length of time of the guarantees
Total amounts of all guarantees extended that are outside of the reporting date.
GASB 70 Note Disclosure
In addition to previous disclosures, governments that have recognized a liability or made payments during the year there are additional disclosures
Description of changes in recognized liabilities, including beginning and end of year balances, increases, decreases and adjustments
Discussion of timing of recognition & measurement
Amount of outstanding guarantees
Amount of commitments to extend guarantees
Cumulative amount paid towards outstanding guarantees
Amounts expected to be recovered
GASB 70Note Disclosures
Governments with obligations guaranteed by another entity in a nonexchange transactions should disclose the following:
Name of entity providing the guarantee
Amount of obligations guaranteed
Length of time of the guarantee
Amount paid by guarantor during the audit period
Cumulative amount paid by guarantor on outstanding obligations.
Description of requirements to repay
Outstanding amounts to be repaid to the guarantor
GASB FY2015
Statement No. 68 – Accounting and Financial Reporting for Pensions
Statement No. 69 – Government Combinations and Disposals of Government Operations
Statement No. 68 – Accounting and Financial Reporting for Pensions
Must report the net pension liability on the government-wide and enterprise fund type financial statements.
GASB Statement 69Government Combinations and Disposals of Government Operations
GASB Statement 69Government Combinations and Disposals of Operation
Statement identifies 3 types of combinations
Merger - assets and liabilities are recognized at their carrying value as of the merger date
Acquisition - assets and liabilities are recognized at acquisition cost as of the acquisition date, except for
Employee benefit arrangements
Landfill and pollution remediation liabilities
Investments and derivatives reported at fair value
Deferred Outflows and Deferred Inflows
Transfer of Operations – assets and liabilities are recognized at their carrying value as of the merger date
GASB Statement 69Government Combinations and Disposals of Operation
Merger – combination of legally separate entities with no significant exchange of consideration and either
2 or more governments cease to exist as entities and are combined to form one or
A legally separate entity ceases to exist and the operations are absorbed into a continuing government
GASB Statement 69Government Combinations and Disposals of Operation
Acquisitions – combination in which a government acquires another entity or operations of another entity in exchange for significant consideration
Transfer of Operations – Involves combination of operations rather and legally separate entities in which no significant consideration is exchanged
Can be a transfer of operations to a continuing government or a newly formed government.
16 Common Problems and Ways to Correct
17 Cash and Investments
Not making deposits in a timely manner.
Not performing bank reconciliations
Investing in items not authorized by the Code of Alabama 1975, Section 11-8-11 and 11-81-21
Proper Procedures - Depositing
Funds should be deposited in a timely manner; daily – recommended.
If deposit cannot be made before the bank closes, a locked night deposit bag should be used to secure funds in the bank’s night depository.
Pre-printed, duplicate deposit slips containing the account name and bank account number should be used.
Proper Procedures - Depositing Checks should be endorsed with “For Deposit Only”,
along with account name and bank account number.
The deposit slip should contain the receipt numbers of the funds deposited.
The deposit date and deposit amount should be noted on the last receipt included in the deposit.
Proper Procedures - Depositing Daily receipts should be deposited intact.
Do not cash checks with the funds received.
Do not use cash receipts for change cash.
Do not use cash received for expenses.
Do not use correction fluid or erase mistakes on deposit slips.
The bank should authenticate the duplicate deposit slip at the time of deposit and be retained for audit.
21 Receivables
Not recording receivables for amounts earned during the fiscal year but not received until the next fiscal year.
If in doubt of year end receivables, it is OK to make an estimate!
22 Inventories
Commission not recording any inventories when material amounts are on hand. Examples include road department supplies, gas, water treatment supplies, etc.
23 Capital Assets
Not performing a physical inventory at least once every 2 years (federal requirement)
Amounts recorded as Capital Outlay do not agree with additions to Capital Assets
24 Liabilities
Failure to record debt refundings or new debt issued
Improperly recording principal and interest payments
Payables subsidiary listing not agreeing with general ledger
Due to / Due From not agreeing
25 Revenues/ Receipts
Not reporting all income earned or received during the year.
Receipt books were not retained or made available for review.
Voided Receipts not being maintained.
26 Revenues/ReceivablesProper Procedures
Voided receipts must be retained in the receipt book.
Do not use correction fluid or erase mistakes.
Secure funds received
Do not cash checks with funds received
No money should be left in office overnight
All receipts books should be logged and secured when not in use.
27 Payroll / Personnel
Not reporting vehicle usage as income on individual’s W-2 (IRS Pub 13b)
Personnel files not being updated.
Promotions/raises not indicated in files
Expenditures
Expenditures did not contain the proper supporting documentation.
Expenditures were not properly coded in the accounting system.
Failure to follow the Alabama Competitive Bid Law and/or the Alabama Public Works Law
Transfers In / Transfers Out not agreeing
Proper Procedures - Expenditures Do not sign blank checks – must contain payee
name and amount.
Do not pay for items in advance of receipt of materials, supplies, or equipment.
Invoices and supporting documents should be provided with the check to be signed.
Invoices should be cancelled (marked PAID) when the check is signed.
Proper Procedures - Expenditures
Vendors should be paid in a timely manner to avoid late fees.
Checks should be used in numerical order.
Checks must be secured at all times.
Voided checks must be retained for audit.
Checks outstanding for more than 60 days should be investigated.
Bid Law
Goods and Services in excess of $15,000 not being bid in accordance with Code of Alabama 1975, Section 41-16-50.
Be very careful using credit cards and purchasing cards – still subject to bid law!
Not following all aspects of public works law
32 Contact InformationManagers
Robin Lakey – Madison; Colbert; Franklin; Marion; Winston; Lawrence
Randy O’Bannon – Lauderdale; Limestone; Jackson; Morgan; Marshall; Cullman
Gwyn Griggs – DeKalb; Etowah; Cherokee; Calhoun; Cleburne
Whitney Atchison – Jefferson; St Clair; Blount; Walker; Fayette
Nikki Morrison – Shelby; Talladega; Clay; Coosa; Randolph; Tallapoosa
Shelley Patrenos – Lamar; Pickens; Tuscaloosa; Sumter; Greene; Hale
33 Contact InformationManagers
Emily Tyler – Bibb; Perry; Dallas; Marengo; Choctaw
Teresa Dekle – Chilton; Autauga; Elmore; Lowndes; Montgomery
Tammy Shelley – Chambers; Lee; Macon; Russell; Barbour
Brian Wheeler – Mobile; Baldwin; Washington; Monroe
Christina Smith – Clarke; Wilcox; Conecuh; Escambia
Lynn Otto – Butler; Crenshaw; Covington; Coffee; Geneva
Cherie Raffle – Houston; Henry; Dale; Pike; Bullock
34Managers InformationEmail is First Name.Last [email protected]
Robin Lakey (256-314-5783)
Randy O’Bannon (256-532-3509)
Gwyn Griggs (256-927-8649)
Whitney Atchison (205-325-5680)
Nikki Morrison (256-215-3041)
Shelley Patrenos (205-652-2285)
Emily Tyler (334-295-2241)
Teresa Dekle (334-832-7713)
Tammy Shelley (334-619-1517)
Brian Wheeler (251-937-0338)
Christina Smith (251-867-0296)
Lynn Otto (334-347-8820)
Cherie Raffle (334-677-4768)
Contacting the Department
• Located in the Gordon Persons Administrative Building at 50 North Ripley Street, Room 3201 in Montgomery, AL
• Mailing Address – P. O. Box 30225 Montgomery, AL 36130-
2251
• Phone – 334-242-9200
• Fax – 334-242-1775
• Email – [email protected]
• Website – www.examiners.alabama.gov
Other Issues
Financial Statements…
38 Questions
