Presented by Sandra Healy, CGFM Principal Auditor Idaho Transportation Department.

Significant Audit & Risk Assessment

Presented by Sandra Healy, CGFMPrincipal Auditor

Idaho Transportation Department

Audit of Idaho Transportation Dept’s Division of Motor Vehicles - 2009Vehicle Services Section & Financial UnitFraud discovered at a county DMV officeData analysis

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County Headline

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

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Visits to CountiesGoal:

Gather best practicesOffer suggestions to improve internal controls

Wide range of cash handling proceduresCounties welcomed internal control ideasAda County Internal Auditor

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

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Results of DMV AuditFinancial unit became the Internal Control,

Fraud Prevention and Finance unitIncreased emphasis on internal controls,

fraud detection & preventionCentralized DMV mail handling to secure

receipts and distribute work to unitsProvided ‘Items for Consideration’ in

development of new data base system

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Individual Audit Risk Assessment

Risk assessment for internal auditsImprove Internal Control awareness and

educationSurvey of employees on their unit’s internal

controls

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Pilot Training Program

Developed Internal Control training for front line employees

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Objectives

InteractionIncrease awarenessIncrease understandingConfidence to speak upConfidence to suggest improvementsSurvey

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

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Understanding Internal ControlsYou may or may not realize that you are

affected by internal controls throughout your daily lives.

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COSO MODEL

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Control EnvironmentFoundation of internal controls

Baseball exampleIntegrity and ethical valuesCommitment to competency (staff)Management’s philosophy & operating styleManaging changeCommunication

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Control Environment

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Your Section

DMV

ITD

Accountability

Tra

nsp

are

ncy

Efficiency

Cu

stom

er

Serv

ice

Risk AssessmentKnow your goals & objectivesIdentify potential risks to the achievement of

goals & objectives. Risks are the opposite of goals & objectivesRisks are what are addressed by internal

controls

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Control ActivitiesPolicies, procedures and other safeguards to

ensure objectives are accomplished

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Information & CommunicationInformation must be identified, captured and

communicatedCommunication must go up, down and across

an organization and must be timelyCommunication enables people to carry out

their responsibilities

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MonitoringEvaluation and feedback processes (self

evaluations, performance evaluations, peer reviews, audits, reports)

Monitor organizations performance over timeMonitoring should be a regular activity

Part of culture

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Internal Control SurveySend employees link to survey in SharePointPositive statements on internal controlsStatements grouped by 5 componentsStrongly agree to strongly disagreeComment section for ‘disagree’ and ‘strongly

disagree’ responsesCalculated weighted average for each

componentCompiled commentsSurveys were anonymous

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Results

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Survey ResultsSignificant # of commentsUsed in audit planning for Motor Carrier

Services UnitShared with DMV management and HRHeld meetings with employees to discuss

resultsRequested feedback on the training & survey

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In SummaryDMV is inherently a high risk areaInternal Control training at staff level

beneficialEmployees felt a part of the processSurvey provided insight into the unit’s

environmentAudit planning feedbackSurvey designed for use

in any section

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Thank You

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Contact InformationSandra Healy, CGFM Principal AuditorIdaho Transportation DepartmentOffice of Internal ReviewPO Box 7129Boise, ID [email protected]

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