INTERNAL CONTROLSASSESSOR OF PROPERTY

2016

CTAS.TENNESSEE.EDU

INTERNALCONTROLS

April2016

TableofContents1.Introduction.............................................................................................................................................3

2.InternalControlsQuestionnaire.............................................................................................................4

3.InternalControlsAssessment.................................................................................................................9

4. Appendix

a)PublicChapter112.............................................................................................................................16

b)Sample Risk Assessment.....................................................................................................................18

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INTRODUCTIONAsgovernmentalentitiesacrossthecountyhaveseenanincreasewithwaste,fraudandabusetheTennesseeGeneralAssemblytookproactivestepsthislegislativesessionbypassingPublicChapter112whichamendedT.C.A.9-18-102(a).Theamendmentprovidesthefollowing:

Whetherobligationsandcostsoftheoperationareincompliancewithapplicablelaw;(II)Whethercountyfunds,propertyandotherassetsthataredesignated/assignedtotheassessorofpropertyaresafeguardedagainstwaste,loss,unauthorizeduseormisappropriationand(III)Whetherrevenuesandexpendituresintheassessorofproperty’sfeeaccountandcountygeneralfund(asitrelatestotheassessorofproperty)areproperlyrecordedandaccountedfortopermitthepreparationofaccurateandreliablefinancialandstatisticalreportsandtomaintainaccountabilityovertheassets.

ToassistTNcountieswithcomplianceCTAShasworkeddiligentlytoprepareanInternalControlstoolbox.The toolbox consists of the following tools: (1) internal controls questionnaire, (2) internalcontrolsassessment, a n d (3) sample internal controls risk assessment. Inaddition to the tool boxCTAS has prepared a 4-hour internal control class. Beginning January 7, 2016, CTASwill begin theinternalcontrolstrainingonastatewidebasisandconcludinginMarch.

WeatCTAShopeeachelectedofficialandtheirstafftakeadvantageofourtrainingandourtoolboxtopreparetheirinternalcontrolsthatwillallowthemtocomplywithPC112andtoprovideabettersystemoffinancialmanagement.

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ASSESSOROFPROPERTY

SAMPLEINTERNALCONTROLSQUESTIONNAIRE

April2016

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SampleInternalControlsQuestionnaire:AssessorofProperty

General:

1. Doestheofficehaveawrittenorganizationalchart?2. Dotheofficeemployeeshavewrittenjobdescriptions?3. Doestheofficehaveawritten,updatedpersonnelpolicyandisthisprovidedtotheoffice

employees?4. Doestheofficehaveacopyoftheadoptedcountyethicspolicyavailablefortheofficialand

theofficeemployees?

Physicalsecurityoftheoffice:

1. Whoallhasakeytotheoffice?2. Howoftenarethelockschanged?3. Istheofficemonitoredwithsurveillancecameras?4. Isthereavaultintheoffice?5. Whenisitlocked?6. Whohasaccesstothevault?

Purchasing:

1. Whatistheadoptedcountypurchasingpolicy/purchasinglawthattheofficeoperatesunder?

Purchaseorders:

1. Whofillsoutpurchaseorderrequisitionsfortheoffice?2. Whocoordinateswiththemayor’sofficeforpurchaseorders?3. Howisitknownwhetherfundingisavailableinthebudgetfortherequestedexpenditure

andwhichobjectcodetoencumberwiththepurchaseorder?4. Whomaintainsalistofapprovedvendors?5. Whoauthorizespurchaseorders(countyfinance/mayor)?6. Whointheassessor’sofficeplacesordersforgoods?7. Whoverifiesthatthegoodsarereceived?8. Whosignstheinvoice?9. Whogetstheinvoiceafteritissignedbytheoffice?10. Arechargeaccountsallowedatlocalstores?

Storecards:

1. Doestheassessor’sofficehaveastorecard?2. Ifnot,doestheofficehaveaccesstoastorecardmaintainedbyanotheroffice(county

finance/mayor)?Isthereawrittenstorecardpolicyunderwhichtheofficeoperates?3. Whatformsmustbefilledoutandsignedbeforethecardischeckedout?

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4. WhoisauthorizedtousethestorecardintheAssessorofProperty’soffice?5. HowdoestheAssessorverifythatonlylegitimatepurchasesaremadewiththestorecard?6. Howisunspentmoneyonthepurchaseorderdealtwith?7. Whoensuresthatthepurchaseorderisclosedout?

Contracts:

1. Whoisauthorizedtosignallcountycontracts(e.g.software,useragreements,copiers)dealingwithpurchasingfortheAssessorofPropertyoffice?

2. Aretherecertaincontractsthatrequirecountylegislativebodyapproval(longerthanayearinlength)?

3. Istherearequirementforthecountyattorneytoreviewproposedcontracts(includingleaseagreements)beforesigning?

4. Iftherearecapitalleasesforequipment(copiers),doesthecountycommissionandOfficeofLocalFinanceapprovethesepriortosigning?

5. WhoservesasthecontractmonitorfortheAssessorofProperty’soffice?6. Howisthecontractmonitoredforvendorcompliance?

EmergencyPurchases:

1. Whointheassessor’sofficecoordinateswiththecountyfinancedepartment/mayorintheeventofemergencypurchases?

2. Isthereawrittenpolicythataddressesemergencypurchases?3. Whointheassessor’sofficeisresponsibletoensuredocumentationofemergency

purchasestoverifycompliancewithcountypurchasing

Payroll:

1. HowispayrollauthorizedandprocessedfortheAssessor’soffice?2. Whattypeofaccountsinthebudgetisusedtopayemployees?Doesallpayforemployees

comefrompayrolllineitems(notvendorchecks)?3. HastheAssessorreceivedacopyoftheadoptedbudget?Istheactualadoptedbudget

postedcorrectlytothemonthtodatereportsthattheAssessorreceivesfromcountyfinance/mayor’soffice?

4. HowdoestheAssessor’sofficekeepuptodateintermsofthebudgetandexpendituresfortheoffice?Monthlyreportsfromfinance/mayor’soffice?

5. DoestheAssessorofPropertyprovidecomporovertime?Istheamountofaccruedcompensatorytimewithinwageandhourandpersonnelpolicylimits?

Officeoperations:

1. Whatsystem(computer/manual)doestheAssessor’sofficeuseforreceiptingfundsreceivedintheoffice?

2. WhoisauthorizedtoreceiptpaymentsintheAssessor’soffice?3. Doeseachpersonthatreceipthaveaseparatecashdrawerorlockablebankbagassignedto

them?

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4. Howarethecashboxessecuredwhenthedeputiesarenotphysicallyattheirstations(lunch,bathroombreaks)?

5. Wherearetheboxesstoredattheendoftheworkday?6. Howisthecomputersystembackedup(offsite)?Howoften?Isthereawrittendisaster

recoverypolicy?

Inventoryofofficeequipment:

1. WhokeepsanupdatedinventoryofallStateandCountycomputerequipment?2. Isacopyoftheinventorykeptinthedisasterrecoveryplan?3. Whereisthedisasterrecoveryplankept?4. Arevehiclesassignedtothepropertyassessor’sofficeinventoriedandhaveapermanent

non-removabledecaltoidentifythattheyarecountyproperty?5. Whoisinvolvedinpreparinganannualphysicalinventoryofthecomputerequipment?6. Doestheofficehaveanyassetsthatmeetcapitalizationthresholdsforexternalfinancial

reporting?WhointheAssessor’sofficecoordinateswithcountyfinance/mayor’sofficetotrackcapitalizedassets?

MaterialExpenditureLineItems(reviewbudgetlinesitemsformaterialexpenditureamounts)

Payroll:

1. Howdoestheofficeprotectitselfagainstpayrollfraud(illegaldeductionsfrompaychecks,ghostemployees,andunauthorizedbonuspayments)?

2. Doallemployeeshaveanupdatedpersonnelfile?3. Howdoemployeesrecordtheirtimeworked?4. Areemployeesallowedtoworkofftheclock?Doemployeesunderstandtheycannotwork

offtheclock?5. WhomaintainsanaccrualofvacationandsicktimeforAssessordeputies?6. Whoreviewsthepayrollinformation(timeworked)priortopayrollprocessingtoensure

accuracyandlegitimatepayments?

AuditServices/DataProcessingServices:

1. Arecontractsonfileforaudit/dataprocessingservices?WhointheAssessor’sofficereviewtheinvoicesfromthesevendorspriortopaymentbythecountyfinance/mayor’soffice?

Revenueandexpenditures:

1. Whoisresponsibleforcoordinatingwiththetrusteeofficetoensureallreceiptedfundsarecodedtothecorrectrevenuelineitems(greenbeltlatefees,GISrevenues,documentfees)andforitemspurchasedthoseexpendituresarecodedtothecorrectobjectcodeinthebudget?

Qualifyingandapplicationsforagreenbeltassessmenttoensureaccuracyingreenbelt

1. WhointheAssessor’sofficeisassignedtocoordinatewiththeRegisterofDeed’sofficetoreviewnewdeedswithappraisalcardstoidentifylandsplits?

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2. WhointheAssessor’sofficeisresponsibleforcoordinatingwithnewpropertyownerstoverifyifthenewpropertyqualifiesforthegreenbeltprogram?

3. Ifnewparcelsofpropertydonotqualifyforgreenbelt,whointheAssessor’sofficeisresponsibleformonitoringandpreparingallassessmentrollbackdocuments?

4. WhointheAssessor’sofficeisresponsiblewithcoordinatingwiththeCountyTrustee’sofficetobesurechangeofassessmentformsarepromptlysenttotheTrustee’soffice?

5. WhointheAssessor’sofficeisresponsibleformonitoringcompliancewiththegreenbeltprogramasitrelatestotheparcelsthatqualifyfortheprogramunderforestland?

6. WhointheAssessor’sofficeisassignedtoreviewchangesonappraisalcardsandnewassessmentsasacheckforkeyingerrors?

Newconstructioneachyear(foraccuratecountypropertytaxrevenuerecognition)

1. WhatistheprocessandwhointheAssessor’sofficeisresponsibleforidentifyingnewconstructionannually?

2. WhointheAssessor’sofficeisassignedtodotheannualfieldinspectionsofparcelsforthesixyearreappraisalplan?

3. WhointheAssessor’sofficeisresponsibleforupdatingtheCAMAsystemwithanychangesnotedduringfieldreviews?

4. WhointheAssessor’sofficereviewsappraisalcardchangesdonebythefieldappraiserstoensurenewassessmentsareaccurateanddonotcontaindataentryerrors?

VisualinspectionsanderrorsnotedbytheTennesseeDivisionofPropertyAssessments

1. WhointheAssessor’sofficeisassignedtoreviewtheDPAAssessmentreportstoidentifyanyerrorsnotedbytheDPAanddeterminetheactionsitemsneededtocorrectanyidentifiedissues?

2. WhointheAssessor’sofficeisassignedtofollowuptoensureallneededcorrections/identifiederrorsnotedbytheDPAhavebeenpromptlyaddressedbythecountyAssessor’soffice?

Prorationofpropertiestransferredbetweentaxexemptandnonexemptstatus

1. WhointheAssessor’sofficeisresponsibleforanannualreviewofnewdeedstoidentifypropertiesthathavebeentransferredbetweentaxexemptandnonexemptentities?

2. WhointheAssessor’sofficeareresponsibleforappraisalcardchangesandtocoordinatewiththeCountyTrustee’sofficetoensurepickupoftaxableamountsfromthesechanges?

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ASSESSOROFPROPERTY

SAMPLEINTERNALCONTROLSASSESSMENT

April2016

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SampleInternalControlsAssessment

AssessorofProperty

Purpose:TodocumentanunderstandingandassesstheinternalcontrolsoftheSampleCountyAssessorofPropertyasitpertainstothefollowing:

1. Theobligationsandcostsoftheoperationareincompliancewithapplicablelaw.2. Toascertainifcountyfunds,propertyandotherassetsthataredesignated/assignedtothe

assessorofpropertyaresafeguardedagainstwaste,loss,unauthorizeduse,ormisappropriation.

3. Revenuesandexpendituresintheassessorofproperty’sofficeandcountygeneralfund(asitrelatestotheassessor)areproperlyrecordedandaccountedfortopermitthepreparationofaccurateandreliablefinancialandstatisticalreportsandtomaintainaccountabilityovertheassets.

Overview:Samplecountyassessorofproperty’sofficeconsistsoftheassessor,GISmapper,personalpropertyspecialist,fieldappraiserandadataspecialist.Anin-depthanalysisoftheinternalcontrolenvironmentfortheoperationsofthesampleassessorofproperty’sofficewasperformedbytheassessor,hisemployees,andaCTASCountyGovernmentConsultant.

1. Obligationsandcostsoftheoperationareincompliancewithapplicablelaw.

HumanResources:Theassessor’sofficehasanorganizationalchartandwrittenjobdescriptionsforalloftheofficeemployees.Theassessor’sofficehasanupdatedpersonnelpolicyandacopyofthecounty’sethicspolicyonfile.

PhysicalSecurity:Eachassessor’sofficeemployeesandthecountymayorhaveakeytotheassessor’soffice.Locksarerekeyedeveryfouryearsinaccordancewiththecountypolicyunlesstheassessorrequestsanadditionalrekeybetweentheregularchanges.Theofficeisdoesnotuseanytypesurveillanceequipmentintheoffice,howeverthereisacamerasystemthatmonitorsthehallwayoutsidetheofficedoor.Theassessor’sofficehasavaultthatisonlyusedbytheemployeesintheoffice.Thevaultislockedattheendoftheday.

Purchasing:Theassessor’sofficecomplieswiththecounty’spurchasingpolicyasadoptedbythecountylegislativebodyin2003.Thecountyhasnotadoptedanylocaloptiongeneralorprivateactsthatgovernpurchasing.Therefore,thecountydepartmentsinthegeneralfund(includingtheassessor’soffice)fallsundergeneralcountypurchasinglaws.

PurchaseOrders:Thepurchasingpolicyrequirestheelectedofficialordepartmentheadtocompletetherequisitionformpriortoreceivingapurchaseordernumber.EithertheassessorortheGISspecialistrequestsapurchaseorderfromthemayor’soffice.Thebookkeeperinthemayor’sofficereviewstherequestandcheckstheassessor’sbudgetforavailablefunding.Ifthefundsareavailable,themayor’sofficeissuesthepurchaseorderwhichauthorizesthepurchasetobemade.Whenthegoodsarrive,eithertheassessororGISspecialistwillverifythatthegoodsreceivedareitemizedontheinvoice.The

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invoiceisthensignedasgoodsreceivedandforwardedtothemayor’sofficeforpaymentbythebookkeeper.Therearenochargeaccounts(openpurchaseorders)atlocalstores.

StoreCards:Theassessorofproperty’sofficedoesnothaveanassignedstorecard.However,iftheassessororGISspecialistneedtousethestorecardorthecounty’screditcard,theyhaveaccesstothecard(s)throughthemayor’soffice.Whentheassessor’sofficeneedstopurchaseanitemfromWalmart,orpurchaseanitemonlinetheassessororGISspecialistwillgotothemayor’sofficeandrequestthecardandfilloutapurchaseorder(nottoexceedacertaindollaramount)withthebookkeeper.TheassessororGISspecialistwillpurchasethegoodsandbringthesignedreceiptandcardbacktothemayor’soffice.AnyunspentamountofthepurchaseorderisclosedaftertheassessororGISspecialistverifiesthatgoodswerereceived.Thecountyhasanadoptedcreditcardpolicyandacopyofthisismaintainedonfileintheassessor’soffice.

Contracts:Perthecounty’spurchasingpolicy,thecountymayorsignsallcountycontractsdealingwithpurchasing.Allvendorcontractsthatareoveroneyearinlengthareapprovedbythecountycommissionafterthecountyattorneyreviewsthem.Theassessorofpropertycoordinateswiththemayor’sofficetoensurecontractcompliancepercountypurchasingpolicy.Theassessordoesnotsignanyvendorcontracts.

EmergencyPurchases:Theassessorwillcoordinatewiththemayor’sofficeinthecaseofemergencypurchasesthatarisefromunforeseeneventsthatwillrequirenormalbiddingprocedurestobecircumventedbecauseofthenatureoftheemergencyathand.Thecountypurchasingpolicyaddressesemergencypurchasesandtheassessor’sofficecomplieswiththesepolicies.

CountyOwnedVehicles:Theassessorisassignedacounty-ownedvehicletouseforfieldworkandfortripstothestoreforsupplies.ThevehicleisassignedaFuelmanfuelcardthatiskeptsecuredinsidethevehicle.Whentheassessororoneofhisemployeesusesthecard,thecurrentodometerreadinghastobeenteredintothegaspumpalongwithauserID.TheassessorreviewstheFuelmaninvoiceeachmonthtoensurethatfuelusageisreasonableandmatchesthevehicle’sodometer.Aftertheassessorreviewsthefuelcardinvoice,heinitialstheinvoiceandforwardsittothemayor’sbookkeeperforpayment.

Payroll:Payrollisauthorizedeachfiscalyearthroughtheadoptionofthecountybudget.Theassessorreceivesacopyoftheadoptedbudgetafterthecountycommissionapprovesitthenreceivesamonthlyyear-to-dateexpenditurevs.budgetreportfrommayor’sofficeeachmonth.Themayor’sofficeprocessestheassessor’sofficepayrollafterreceivingthepayrollsheetsfromtheassessor.Eachemployeepreparestheirtimesheetandisreviewedandapprovedbytheassessorbeforesubmissiontothemayor’soffice.Theassessor’sofficedoesnotprovidecompensatorytimeorovertimeastheonlyemployeewhowouldworkmorehoursthanwasoriginallybudgetedforistheassessor.Allpaymentstoemployeesarepaidthroughpayrollaccounts(notvendoraccounts)inordertocomplywithIRStaxcodeforpayrolltaxes,stateunemploymentcompensation,workercomplawsandTCRSrequirements.

2. Toascertainifcountyfunds,property,andotherassetsthataredesignated/assignedtothecountyassessoraresafeguardedagainstwaste,loss,unauthorizeduse,ormisappropriation.

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AnalysisofExpenditures:Theauditedfinancialreportdetailedexpenditurestatementswasreviewedtoidentifyexpendituresofmaterialamounts.Intheassessorofproperty’soffice,materialexpenditureamountswerefoundinpayrollandauditinganddataprocessingservices.Internalcontrolsoverthesematerialassets/costswerescrutinized.

OfficeCashOperations(receipt/disburse/deposit/reconcile/segregationofdutiesovercash):Theassessor’sofficeutilizesanofficialpre-numberedreceiptbooktoreceiptallfundsreceivedintheoffice.Theassessor’sofficereceivesrevenuesforgreenbeltapplicationlatefees,GISmapsanddocumentcopies.GISspecialistisassignedtoreceiptfundsatthecounterandinherabsence,theassessorwillreceiptfunds.AllreceiptedfundsarestoredinalockablebankbagthatisplacedinGISspecialist’sdesk.Atnight,allreceiptedfundsareplacedintheoffice’slockedvault.EveryTuesdayandThursdayafternoon,theassessordepositsallreceiptedfundswiththecountytrustee’sofficeandverifiesthatthedepositequalsthetotalofreceipts.Hebringsthetrusteeofficereceiptbacktotheofficeandthepaperclipsthetrusteereceipttotheassessorofficereceiptsthatmakeupthedeposit.Theassessormaintainsnocashonhandorpettycashinhisoffice.

InventoryofOfficeEquipment:Theassessorkeepsanupdatedinventorylistofallcomputerequipmentandthevehiclethatisassignedtohisoffice.TheassessorcompletesanannualcapitalassetsreportwiththeStateDivisionofPropertyAssessmentsforallstateoperatedequipmentinhisoffice.Theassessoralsoreviewshiscountyownedassetinventoryonceayearwiththemayor’soffice.

Internalcontrolsovermaterialexpenditurelineitems:

Payroll:Toprotectagainstfraud(ghostemployees,unauthorizedbonuspayments,etc.),allassessorofpropertyemployeeshaveapersonnelfilemaintainedbythecountymayor’soffice.Theassessordoesnotallowemployeestoperformanyworkofftheclock.Theassessormaintainsanaccrualofvacationandsicktimeforallhisemployees.Theassessorreviewseachemployee’smanualtimesheetforthepayperiodandsignsoffonthetimesheetforpaymentbythemayor’soffice.Theassessorreviewstheendofyearvacationandsickleaveaccrualforhisofficetoensureaccuracy.

AuditingandDataProcessingServicesContract:TheassessorhasacontractwithGovernmentServicesAdministration(GSA)forpersonalpropertyauditsandamemorandumofunderstandingwiththeDivisionofPropertyAssessment(DPA)ondataprocessingservices.TheassessorreviewstheinvoicesfromGSAandDPAbeforetheinvoicesaresubmittedtothemayor’sofficeforpaymenttoensurebillingaccuracyforworkperformed.ThecontractisapprovedbytheSampleCountyCommissionandacopyofthecontractisonfileintheassessor’soffice.

3. Revenuesandexpendituresintheassessor’sfeeaccountandcountygeneralfund(asitrelatestotheassessor)areproperlyrecordedandaccountedfortopermitthepreparationofaccurateandreliablefinancialandstatisticalreportsandtomaintainaccountabilityovertheassets.

Theassessorisresponsibleforcoordinatingwiththecountytrustee’sofficetoensurethatallreceiptedfundsarecodedtothecorrectrevenuelineitems(greenbeltlateapplicationfee/GISmappinganddocumentcopies.).Theassessorreviewsthemonthendrevenueandexpenditurereportforhisofficetoensurethatrevenuesandexpendituresareproperlyrecorded.

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Qualifyingandapplicationsforagreenbeltassessmenttoensureaccuracyingreenbeltassessments(foraccuratecountypropertytaxrevenuerecognition):

Currently,thefieldappraiserdownloadsandprintsthenewdeedcopiesfromtheregisterofdeed’soffice.Appraisalcardsarepreparedthatmatchthenewdeedswiththeupdateddeedinformation.ThosethatrequiredmapchangessuchaslandsplitsaregiventoGISspecialisttobemappedandnewappraisalcardscreatedwhereneeded.Theassessorreviewsallnewdeedsandapprovesalldeedtransfers.TheGISspecialistwouldenterthosedeedupdatesandwouldkeytheotherdeedupdates.Duringtheprocessofupdatingtheassessmentswiththenewdeeds,propertiesthatqualifyforthegreenbeltassessmentprogramarenoted.Thesenotesgenerateletterssenttothenewownersexplainingthegreenbeltassessmentprogramandtheapplicationprocess.ThelettersarepreparedbyeitherthefieldappraiserortheGISspecialistthenreviewedandsignedbytheassessor.EachletterstatesthedeadlinesforapplicationsasestablishedunderTennesseelaw.

TheGISspecialistmonitorsandpreparesallgreenbeltassessmentrollbackdocuments.Lettersaresenttoboththepreviousandnewownerconcerningtherollbacktaxinsituationswhereitwouldapply.Theletterexplainsthegreenbeltassessmentrollbackprogramandspecifiestheamountoftherollbacktaxthatwouldbedue.Thisinformationisreviewedbytheassessorandsigned.Changeofassessmentformsarepreparedforthetrusteewiththerollbackinformation,reviewedandsignedbytheassessor,andhanddeliveredtothetrustee’soffice.

TheGISspecialistalsomonitorstheforestmanagementplanstoinsurefullcompliancewiththeforestgreenbeltassessment.ThepropertyownerfilesaforestgreenbeltapplicationbyMarch1inthecurrentyear.ThepropertyownerhasuntilMarch1ofthefollowingyeartohavetheforestmanagementplancompletedandfiledwiththeoffice.Failuretodosoresultsinremovalofagreenbeltassessmentandagreenbeltassessmentrollbacktax.

TheGISspecialistreviewsthechangesontheappraisalcardsandnewassessmentsasacheckforkeyingerrors.Iferrorsarefound,theyarecorrectedandre-entered.TheTennesseeDivisionofPropertyAssessmentalsoprovidesoversightofgreenbeltassessmentsthroughtheirannualmonitoringoftheassessorofpropertyoffices.

Newconstructioneachyear(foraccuratecountypropertytaxrevenuerecognition):

Eachyear,theassessorandfieldappraiserdrivethecountybyassessmentmapstoreviewallparcelsfornewconstruction.Reviewofthesixyearreappraisalplanparcelsforeachyearisalsodoneduringthisprocess.Thecountyhasnotadoptedcountywidezoninganddoesnothavecountybuildingpermits.Eitherthroughpersonalknowledge,propertyownerstatements,stateelectricalpermits,orrecordednoticesofcompletion,certainparcelsarenotedtobereviewed.Ifnecessary,otherstaffmembersassisttheassessorinthefieldreviews.ThefieldappraiserentersthefieldreviewinformationintotheCAMAsystem.Thefieldappraiserwouldreviewtheappraisalcardchangesandnewassessmentsasacheckfordataentryerrors.Iferrorsarefound,theyarecorrectedandre-entered.

Whenanewstructureisassessed,thevalueisbasedonthedegreeofcompletionasofJanuary1ofthatyear.Itisnotedontheappraisalcardthestructureisunderconstructionandnotcompleted.ThestructureisreviewedagainbeforeJanuary1ofthenextyeartodeterminethelevelofcompletion.

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VisualinspectionsanderrorsnotedbytheTennesseeDivisionofPropertyAssessments(foraccuratecountypropertytaxrevenuerecognition):

Whilemonitoringtheworkoftheassessorofpropertyoffice,theTennesseeDPAnotesanyassessmenterrorsthatarefound.Theseerrorsarereportedtotheassessorofpropertyofficetobecorrected.ThisreportisreviewedbytheassessorandGISspecialisttodeterminewhatactionsareneededtocorrectassessments,ifany.Ifnecessary,visualinspectionsaredonebytheassessorandastaffmember.TheGISspecialistentersthecorrectionsandreportstotheDPAwhenthelistisdone.Thisisconsideredpartoftheannualpropertyreview.

Prorationofpropertiestransferredbetweentaxexemptandnonexemptstatus(foraccuratecountypropertytaxrevenuerecognition):

Duringtheannualprocessingofnewdeeds,propertiesbeingtransferredbetweentaxexemptentitiesandnonexemptentitiesarenotedbythefieldappraiser.Newdeedinformationispreparedfortheassessor.Theassessorproratesthevaluesasofthedateofsale.Insomecases,thistransfermayrequireachangeofassessmentforthetrustee’sofficetopickupthetaxableamount.TheseappraisalcardchangesarereviewedbyGISSpecialistanddataentryerrorsarecorrected.

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APPENDIX

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PASSED:

APPROVED this

SENATE BILL NO. 413

March 30, 2015

HOUSE OF REPRESENTATIVES

2015

BILL HASLAM, GOVERNOR

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Sample Risk Assessment for TN County Office and/or Department

Review, gain an understanding of, and document the internal control procedures that your office already has in place and is currently practicing. Internal control is defined as a process affected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. Internal controls should address specific risks associated with the day-to-day operations and transactions in the county offices that will be utilizing or accounting for public funds and assets. The objectives of your internal controls should be to provide reasonable assurance that your office can document and demonstrate the following:

I. The obligations and costs of the operation are in compliance with applicable law

II. To ascertain if county funds, property and other assets that are designated/assigned to theoffice/department are safeguarded against waste, loss, unauthorized use, ormisappropriation

III. Revenues and expenditures are properly recorded and accounted for to permit thepreparation of accurate and reliable financial and statistical reports and to maintainaccountability over the assets

Hold a formal meeting with key employees of the county office, if a larger office. Consider including the county finance and/or county trustee office in the sections that deal with financial reporting issues that have an impact on their offices as well.

• Obtain the county’s most recent annual financial and compliance audit and reviewapplicable audit findings that identified significant or material weaknesses ininternal controls of the county office. Have these identified internal controlweaknesses been corrected or has compensating internal controls been put intoplace to offset these identified weaknesses?

• Ask yourself (and the group if appropriate) their thoughts on how assets andfunding assigned to the county office could possibly be misappropriated, wasted orabused. You, or the group, should brainstorm about the possibility of circumventionof the internal controls that are in place and discuss any needed changes to policiesand procedures to eliminate/reduce significant internal control weaknesses that havebeen identified by the internal control assessment that was performed in-house.

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• If delegating authority to make changes, determine who will be the senior level employee in your office designated for addressing internal control weaknesses identified by the external audit as well as issues that were identified by the internal control assessment that was performed in-house. Be sure to involve legal counsel to review any updates to office written policies (personnel, purchasing, etc.) prior to any official policy change.

• Based on any corrective actions and updates to policies and procedures effecting internal controls of the office, update your written internal control assessment to reflect these changes made.

• Assign senior level staff (if not yourself) to continue to monitor the updated internal control procedures to help ensure compliance with adopted policies and procedures

The group should have at least one formal 'follow up" meeting in the near future to determine if all the material identified internal control risks that were identified in the first meeting have been mitigated. The group should also consider having at least an annual management meeting to ensure that any concerns that arise dealing with internal control issues are addressed, objectives of the office are being met, and proper accounting and reporting requirements are being achieved. If the office is currently receiving federal grant funding, it is recommended that the senior accounting official consult with the State or Federal department, which the grant funding is being received from, prior to each meeting to identify any new internal control or reporting issues that need to be addressed by county management at this time.

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