Auxiliary OrganizationsSummary of Audit Findings for

FY13/14 and Corrective Action Plan

Evajoy Tito, Manager, Financial Reporting, FS / SFSR

Chancellor’s Office

May 19, 2015

Learning Objectives:At the end of the presentation, the participants should be able to:• Identify some of the deadlines for component unit

reporting relating to corrective action plan• Know the audit findings statistics for component units

from FY2012, FY2013 and FY2014• Describe the necessary actions to be taken when there is

an internal control finding for the component unit• Know how to complete the corrective action plan template• Understand the process flow of monitoring and reporting

component units with internal control findings.

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Timeline

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Oct

30Fri

• Submission of Single Audit OMB A-133 reports• Submission of Auditors’ Communications to

Management

Nov

18

Wed

• Provide the corrective action plan template to component units

Dec 2

Wed

• Submission of completed corrective action plan template and evidence of completion

Internal Control Findings: Statistics

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FY2014 FY2013 FY2012

Number of Component Units 10 5 5

Internal Control Findings

Material Weakness

Financial Statements 3 1 2

Significant Deficiency

Financial Statements 9 5 3

OMB A-133 4 1 1

Total Findings 16 7 6

Internal Control Findings FY2014

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Internal Control Finding Corrective Action Plan

Lack of internal control process to ensure that journal entries are properly approved (4)

Generate a monthly journal entry report and compare to journal entry support binders to ensure all entries are properly initiated, reviewed, approved and with appropriate support.

No control procedures to identify that transactions are classified into the appropriate net asset category (2)

Creation of new funds are evaluated to determine their appropriate net asset category and to use the appropriate accounting guidance (GASB, FASB) in evaluating how the transaction should be classified.

Internal Control Findings FY2014 (cont.)

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Internal Control Finding Corrective Action Plan

Lack of internal control to ensure compliance with subrecipient monitoring requirements (2)

Implementation of a new process to ensure that all requirements for subrecipient monitoring are met before, during and after the subaward.

Lack of internal control to ensure compliance with reporting requirements in accordance with OMB A-110, Federal contracts, etc. and timely submission (2)

Implementation of a new process to ensure that all requirements for reporting are identified and performed for all Federal contracts. A reminder will also be set in place to ensure that reports are submitted on a timely basis.

Knowledge Check Question #1Select one of the most common internal control findings during FY13/14

a. Net asset classification

b. Procurement, suspension and debarment (OMB A-133)

c. Reconciliation of general and subledgers

d. Revenue recognition

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Auditors’ communication• The auditors’ communication is usually in the form of the

following:• SAS114 Letter: The Auditor’s Communication with Those

Charged with Governance• SAS115 Letter: Communicating Internal Control Related Matters

Identified in an Audit

• An auditor does not issue a communication stating that no significant deficiencies were found.

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Corrective Action Plan Template

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1 Significant Deficiency or Material Weakness?

9 Corrective Action Plan

2 Type 10 Status

3 Program 11 Completion Date

4 Criteria 12 Reason for Extended Remediation Period

5 Condition/Context 13 Documentary Evidence

6 Cause 14 Contact Person

7 Effect 15 Signature

8 Recommendation

Knowledge Check Question #2Select one of the sections in the corrective action plan template

a. Objective

b. Conclusion

c. Procedures

d. Condition

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What’s Next?

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Submission of completed corrective action plan and documentary evidence

SFSR review

Finance Management reviewOffice of Audit and Advisory

Services Review

Presentation to the Board of Trustees

Knowledge Check Question #3Which of the following departments in the Office of the Chancellor reviews the corrective action plan?

a. Management & Accounting Practices Office

b. Accounting

c. Office of Audit & Advisory Services

d. Capital Planning Design & Construction

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www.calstate.edu

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