AUD UDIT ITING H HAVA F FUND UNDS February 2011 Who o is s - - PowerPoint PPT Presentation

U. U.S. E Election n Assi ssist stanc ance C Com

• mmission

Offi ffice of

• f the Insp

nspector G Gene neral al

AUD UDIT ITING H HAVA F FUND UNDS

February 2011

2

Who

• is

s the I e IG and w nd what doe does h he e do? do?

 The Ins

nspector G Gene neral i is an n inde ndependent o

• fficer
• f th

the E EAC e establ tablished by by HAVA an and th the Ins nspector G Gene neral A Act of 1978 (I 1978 (IG Act).

 The

he I IG Ac Act and HAV AVA g A give E EAC AC’s ’s IG author hority to:

• :

 Cond

nduct and nd re repo port o

• n

n audits and nd inv nvestigations re related to EAC AC pro programs ( (bo both int nternal and nd ext xternal)

 Review and

nd c comment on n exi xisting o

• r

r pro propo posed le legisla lation

 Recom

• mmend p

policies s and conduct a t activities t s to promot

• te

eco economy an and ef efficiency in in an and to prev event w was aste, f frau aud and nd abu buse i in n EAC AC pro programs

 To

To issu ssue se semiannual reports ts to to Con

• ngr

gress a and th the EAC that re repo port o

• n

n fra raud, pro probl blems, abu buses and nd deficiencies in n EAC AC pro programs

3

Who

• is

s the I e IG and w nd what doe does h he do? do?

 Tools giv

iven to to th the I IG to G to c car arry out t his is dutie ties:

 Acc

ccess to al all reco ecords rel elat ated to the e programs an and

• perations o
• f the EA

EAC (and that trickles down to other

• rgani

nization n which a admini nister r HAVA A funds).

 Ability to

to request any infor

• rmati

tion or

• r assi

ssista tance nec ecessary from an any Fed eder eral, St Stat ate, o

• r local

cal g government

• r u

r uni nit there reof

 Auth

thority ty to to issu ssue su subpoenas f for

• r th

the prod

• duction of
• f

recor

• rds

s

 Authority t

to ad administer oat aths an and take ake sworn statem emen ents

 Dir

irect an and prompt acc access to the e EAC Chair air

 Authority t

to receiv ceive e and inves estig igat ate e complain aints from emp mplo loyees and me d memb mbers of the he p pub ubli lic

4

IG’s P Program ams a and A Activ ivitie ities

 Audi

uditing H HAVA fundi unding ng p progr grams

 30

30 stat ates hav ave been een au audit ited

 Audits co

cover near early $1. $1.3 3 bi billion

 Audi

udits ha have r result ulted in:

 Questio

ioning ning $ 18.1 m million in c n costs

 Ident

ntif ifying ng $13.1mil illio ion n th that m t mus ust t be us used for p program pu purpo rposes  Auditing E

EAC pr programs an and fin inan ancial al s state tatements

 Issu

Issued 15 15 re repo ports

 Int

nternal a and nd Externa nal I Inv nvestigations

 Conduct

cted 3 3 investi stiga gati tion

• ns:

s: 2 2 int nterna nal, 1 1 ext xternal

 All r

repo ports ar are av avail ailabl able at at www.eac ac.gov

5

EAC EAC STATE AUDIT

DIT PROGRAM

The states for review are selected based

 on the amount of money the state has expended,  the results of single audits, and  results of any reviews by the state or other

auditors, and

 special requests.

To date, the primary reason for scheduling an audit of a state has been the amount of money expended by the state. Currently the OIG is using an independent public accounting firm – Clifton Gunderson LLP to conduct audits of state’s use

• f HAVA funds

6

Meet t the IG he IG and nd his his st staff

Curtis Crider, Inspector General Arnie Garza Assistant Inspector General for Audits Juliet Hodgkins, Counsel to the Inspector General

7

AU AUDIT ITIN ING H G HAV AVA A FUNDS S – What to t to exp xpect

 These Slides will cover:

 The audit process from announcement letter to final

report

 Identify what topics and funding will be covered by the

audit

 Identify what information auditors will need  Identify the statutory and regulatory authorities that

auditors will be using to evaluate your management and use of HAVA funds

 Communications that you can expect from the auditors

and IG

 Provide some examples of findings from previous

audits and how to avoid a similar finding

8

AUDITING HAVA F AVA FUNDS Gettin tting S g Starte ted:

 Call th

the S Sta tate te

 Arr

Arrange f for an an au audit st star art d dat ate ( (ab abou

• ut

three wee eeks) form th the da date te o

• f th

the e ini nitial c cal all

 Send

nd for formal al annou announce ncement l letter t to

• chief st

f stat ate election offi n official

9

AUDITING HAVA F AVA FUNDS Announcemen ement L Letter: r:

 St

States t the a audit obje jective ves

 Ask

sks s for for offi

• ffice sp

spac ace for for two au

• auditors

 Ask

sks s for for telephone ne and and dat ata l a line nes s for for two

• comput

uters

 Li

List sts t the infor nformat ation w n we plan an to

• exam

amine ne

10

AUDITING HAVA F AVA FUNDS Informatio ation t to be exam xamined:

 All

ll audit r repo eports a and othe her rev eview ews r rela lated to the O Offi ffice’s ’s fi financ nancial al m manag anagement sy syst stems and and t the H HAVA prog

• gram

am for for the l last ast 5 5 year ars. s.

 Poli

lici cies es, pr proced cedures a and regu gula lations f for the he Offi ffice’s ac accou count nting ng, p perso sonne nnel, p pay ayroll, property, y, a and pro rocur urement s systems a as they relate to to th the state’s ’s ad admini nistration of n of HAVA fu fund nds and and prog

• gram

ams.

11

AUDITING HAVA F AVA FUNDS Informatio ation t to be exam xamined:

 An

An org

• rganizational c

cha hart rt of

• f the

he offi ffice and a nd a l list of a all ll full ull a and nd part-time e emplo loyees o

• f the offi

ffice in indic icat ating th those e empl ployees w whose s sal alar ary is is fin inan anced w with ith HAVA f funds. (If appl applic icabl able, al also id identi tify o

• th

ther emplo loyees f from t the state tate wh whose s sala lary i is paid i d in n full ull

• r in

in par part w t with ith HAVA f funds).

 Time s

sheets/certifications o

• f wo

work p performed f for full ull - tim time and nd par part-tim time HAV AVA e A employ

• yees.

 Inv

nventory li list o

• f all

ll equi quipment p pur urchased wi with H HAVA fund unds.

12

AUDITING HAVA F AVA FUNDS Infor formation n to b be E Examine ned: d:

 Cont

ntract a and nd procurement f file les for

• r procur

urement nts ( (i.e. voter r regi gistration s system a and nd ele lection s systems).

 Source/sup

upporting d ng document nts f for payment nts m made with HA HAVA VA f funds.

 List o

• f all

ll agr greements p providing H HAVA funds unds t to countie ties.

 County f

fin inan ancial al r repo ports s subm bmit itted to to th the offi ffice.

13

AUDITING HAVA F AVA FUNDS Informatio ation t to be exam xamined:

 Stat

ate l law aws t s that at est stab ablished and and impac act t the election fu n fund nd.

 Descriptio

iption o

• f offi

ffice’s me methods o

• f

f acco ccounting fo for any y inc ncome, s suc uch a as revenu nue f from e equi quipment le leases, ge gene nerated b by HAVA progr grams.

 Ide

dent ntification o n of the expend nditure o

• f fund

unds i in n fiscal year 2000 f 2000 for the le level l of effort f for section 251 251-ty type pe ac activ tivities an and th the suppo pport f for th those e expe penditures. .

14

AUDITING HAVA F AVA FUNDS Informatio ation t to be exam xamined:

 Appr

ppropriat ations an and expe penditure r repo ports f for S State tate fund unds us used t d to maint ntain t the le level o l of expens nses f for ele lections a at le least e equa qual t l to the amoun unt e expende nded i in n fiscal year 2000 2000 and nd to meet t the f five p percent matching r requi quirement f for section 251 251 requi quirements pay payments.

 Source/sup

upporting d ng document nts f for the maintena nance

• f e

f effo ffort and ma match ching contribut utions ns i includi ding a ng any pl plan an f fil iled w with ith th the EAC.

15

AUDI UDITING H HAVA VA FUN UNDS DS Cri riteri eria f for

• r Ev

Evalua luation:

HAVA VA

Id Iden entifies ac activ ivities f for whic ich funds may may be e used ed an and cond ndit itio ions ns f for receipt o

• f funds, s

such as matching ing, maintena nanc nce o

• f effort,

an and el elec ection f fund r req equiremen ents f for 251 pay aymen ments.

Ot Othe her Fede deral l Gui Guida dance

U.S. Of Offic ice o

• f Man

anag ageme ment an and Bu Budget et Cir ircular ar A A-87, Cost P Pri rinciples f for r State, L Local al, a and Indian T ian Tribal G Governm nment nts ( (2 CFR 225).

EAC Gui C Guida dance

HAV AVA FUNDS MAN MANAGING, R RECORDKEEPING, R REPORTING, AN AND AUDIT ITIN ING and EAC a advisorie ies, o

• pinio

nions ns a and f frequent ntly asked questio ions ns. Common R n Rule, Uniform Adminis inistrat ativ ive R Requir irement nts for Grants a and Cooperat ativ ive Agreement nts w with S State a and L Local al G Governm nment nts (41CF CFR 105-71).

16

AUDITING HAVA F AVA FUNDS Audi ditor

• rs’

s’ Preparator

• ry W

y Work:

Revie

iew Fin Finan ancial al Statu tatus R Repo ports

 Determine a

amounts s spent, t, k kinds s

• f expe

xpend nditures, and nd int nterest repo port rted.

Read

ad s state tate pl plan an

 Lea

Learn ab about p program an and if if/h /how fun unds ds de deli livered to coun unties.

Revie

iew pr prio ior au audit its

 Identify i

issues and determine if f scope o

• f our

ur audi udit wi will b ll be cur urtaile led.

Check s

state tate w webs bsit ite

 Get

et per ertinent law aws an and regulation

• ns

s and information

• n on

pro procurement nt a and nd pro prope perty manag agem ement.

17

AUDITING HAVA F AVA FUNDS Fi Fiel eld W Work rk - Expenditu itures:

Record k

keeping

Are

e there s e separ arat ate e acco counts to track ck the uses of 101, 101, 102, 102, and nd 251 251 fund nds?

Do

Do th the amou

• unts

ts repor

• rted on
• n th

the 269s s ag agree wit ith t the e acc accounting reco ecords?

Audi

udit t tests

Are sal

alar aries ad adeq equately supported?

Are

Are ind ndirect costs pro prope perly charged?

Are

e purch chas ases es compet etit itiv ivel ely m made? e?

Is equi

uipme ment adequa uately ly safegua uarde ded d and t tracke cked?

Co

County y expendi ditur ures

If a state granted f

funds to its co counties, the e sam ame e ques estions ar are e an answered f for t the e co county act activities.

18

AUDITING HAVA F AVA FUNDS Field ldwork rk - Complia iance:

EL ELEC ECTI TION F FUN UND

Is there a

a state e ele lection f fund? und?

Have a

all H ll HAVA p payment nts been n de deposited in n the fund? und?

Has

as th the state tate m matc atch be been pr prope perly c compu puted an and de deposited int nto t the f fund? und?

Has i

int nterest b been n earne ned a d and nd properly r recorded?

Is us

use o

• f the f

fund und restricted to 251 251-rela lated a d activities?

19

AUDITING HAVA F AVA FUNDS Field ldwork rk - Complia iance:

MA MATC TCHING

HAVA s

secti tion 2 253 (b) b)(5): “The S State tate h has as appr appropriat ated funds f for

• r carry

rrying ou

• ut t

the he activities f for

• r whi

hich t the he requi quirements p payment i is made de in n an n amount unt e equa qual t l to 5 5 pe percent o

• f th

the to total tal am amount to to be be spe pent f for such ac activ tivit ities (tak taking in into to ac account th the requir irements pay payments an and th the am amount s spe pent by by th the State tate) . . . .“ Requ quirements p payment e equa quals ls $40, $40,000,000. Wro Wrong - - $40, 0,000, 000,000 000 x 5 5% = $ $2,000, 000,000. 000. Right t - - $40,000, 000,000/ 000/95% 95% = = $42,105, 105,263 263. $42,10 105, 5,263 x 263 x 5 5% = $2,105, 105,263. 63.

20

AUDITING HAVA F AVA FUNDS Communic icatio ations:

 Notif

ific icatio tion o

• f

Findi ndings a and nd Recommenda ndations ns

 Auditors g

give ve s state w written summaries of f fi findings and recom

• mmendati

tion

• ns f

s for feedback while

• n
• n si

site te.

Exit C

Conf nference

 Audi

uditors brief s state o

• n all

ll repo port rtable matters rs upon leaving ng the audit s site.

Draf

aft A Audit R it Repo port

 Audito

tors issu ssue non

• n-pub

ublic d draft report to state w which r requests writte ten comments w s within 3 30 days. s.

Fin

Final al A Audit R it Repo port

 Auditors, af

after er rece eceipt of comments, s, issu sue p public final report to EA EAC recommending that it it en ensure t that at al all mat atters ar are e resol solved.

21

AUDITING HAVA F AVA FUNDS Audit R it Resolutio tion:

Fin

Final al A Audit R it Repo port

EAC E

Execu cutiv ive e Direct ector h has 60 day ays to is issue a a deci ecision res esolving any audit f findings

Appe

ppeal al

If a

a stat ate e dis isag agrees wit ith t the e fin inal al dec ecision, it it has as 30 day ays to ap appea eal the d decisi sion

• n to the Commiss

ssion

• n

Hearing

ng

Commission can

can gran ant a a hear earing to collect ect eviden ence a ce and hear f from the ap e appea ealing stat ate

Fin

Final al D Decis ision

Commissi

ssion

• n has 60 days f

from the e dat ate e of ap appea eal to ren ender a a fi final and binding decision o

• n the

appeal eal.

22

AUDITING HAVA F AVA FUNDS Findi nding ngs: s:

Inadequate Accounting Non-Competitive Contracting Unsupported Salaries Unsupported Trans. – non salary Improper Election Fund Incomplete Records of Equipment Unaccounted for Program Income Undocumented Maintenance of Effort Unapproved Equipment Purchase Understated Match Lost Interest Deficient Monitoring of County Acts. Ineligible Activities Incorrect Indirect Costs Duplicate Costs Weak Cash Mgt. for County Grants

23

AU AUDIT IT F FIN INDIN INGS: GS: HOW TO AV AVOID ID T THEM Unsu Unsupported sal salar aries

• Documentation is

is requir ired to to suppo pport s sal alar aries paid paid w with ith H HAVA funds – See OM OMB B Ci Circu cular A A- 87, A , Attachme ment B, B, 8.

• Fo

For empl ployees w whose s sal alar aries ar are par partial tially paid paid w with ith H HAVA funds, th the state tate m must s t show a a time s sheet do docum umenting t the amount unt o

• f time

the emplo loyee s spent nt o

• n

n HAVA-relate ated activitie ities

• For
• r employees w

whose hose sa salari ries a are re whol holly p paid with ith H HAVA funds, th the state tate m must s show, at at leas ast, a a certif tification o

• f th

that at th the empl ployee’s entir tire job b was as H HAVA r relate ated

24

AU AUDIT IT F FIN INDIN INGS: GS: HOW TO AV AVOID ID T THEM

Inco comple lete Re Reco cords ds of Equi quipment

• Pr

Property r records mus must b be ma maintained tha hat includ lude

• a

a descrip iptio tion of th the p property ty

• a

a serial ial number o

• r oth

ther id identif tificati ation n number

• the s

e sourc rce o

• f pro

proper erty

• who holds titl

title, , th the ac acqu quis isitio ition date ate, an , and cost t of th the p property ty

• perc

percentage of F Fed eder eral pa participa pation in t the e cost of t the e pro propert perty

• the loc

location

• n, use

se and con

• ndition
• n of
• f the prop
• perty, a

and

• any ultimate d

disposition d data including the date of disposal a and sale pri price of t the pro e proper perty.

• A

A ph physical inv nvent ntory o

• f the pro

prope perty must be be taken a and nd the res esults reco econciled wit ith the e property reco ecords at at leas east o

• nce

ce eve very t two ye years.

• A con
• ntrol
• l sy

syste stem m must st be developed to to ensu sure a adequate te sa safeguards to to prevent l loss,

• ss, damage, or
• r th

theft t of

• f th

the prop

• perty.

Any lo loss, da dama mage, o

• r the

heft s sha hall ll be investigated.

• Adeq

equat ate m e mainten enan ance ce p proced cedures es must be devel eloped ed to keep the pro prope perty in n good c cond ndition.

OMB Circ rcular A r A-102, C Common n Rule, S Sectio ion . n .32, Equip ipment nt

25

U.S. ELECTION ASSISTANCE COMMISSION OFFICE OF INSPECTOR GENERAL 1201 NEW YORK AVENUE, NW Suite 300 WASHINGTON, D.C. 20005 202-566-3125 1-866-552-0004 ccrider@eac.gov