prudently budget and allocate tax money to satisfy expectations regarding public safety, public works, and other community service needs. Taxpayers and citizens fully understand whether services provided by government are supported by tax revenues, thus providing them a basis for which to evaluate any new funding measures that may need to be imposed.
repayment of the debt as well as the guaranteed return on their investment.
Closing the Trust Gap Reliable financial statements represent the key to meeting stakeholder expectations. To ensure reliability and strengthen public trust, both auditors and auditees must pay close attention to detail when preparing for the audit. I’m a firm believer in the philosophy of “Garbage in, garbage out!”
Grantors and other oversight groups Even though the process can be – Government programs are often streamlined through technology, subsidized by federal, state, and a good audit still requires a other local grant funding. By significant level of manual providing the necessary input. Otherwise, the financial support, grantors process becomes robotic and oversight agencies “(Spring) For and the utility of the have the responsibility government resulting information to ensure that these agencies, it’s also suffers. A good audit programs are free of the busiest time of always starts with good fraud, waste, abuse planning - and that the year.” and other forms of responsibility falls on the mismanagement. The auditors, as well as the financial statements can auditees. To ensure reliable provide information about financial statements, here are few the sources and programmatic guidelines to follow: uses for these funds, and effectively create the audit trail. Monitoring actual 1. Understand the ordinance or compliance with budgeted public charter and identify any unique policies can produce performance requirements outside of those measures that promote transparency and associated with a general-law accountability. city. Bondholders and others in the financial community –
Governments issue municipal securities to finance a wide variety of projects and generate necessary cash flows. The debt service payments may come from general revenues of the issuer, specific tax receipts, or even revenues generated from a public project. These municipal securities may be secured by letter of credit, other government guarantee, or an insurance policy. Audited financial statements are arequired part of continuous disclosures and provide bondholders with comfort and confidence regarding the
People are the key to any organization. However, agencies should ensure that information is transparent and properly communicated to the right audiences.
6. Organizations should continuously monitor results and make necessary adjustments based on changing conditions 7. Evaluate the user of the financial statements and put yourself in their shoes. Ask the question: If things go wrong, what are the major consequences? 8. Identify any unique transactions that require additional attention. Invest the incremental resources needed to fully address them.
Takeaway Without auditors and auditees understanding – and, more importantly, embracing – proper process, the audit can become a commodity of questionable value. Kenneth Pun, CPA, CGMA, is Managing Partner of The Pun Group, a full-service CPA firm headquartered in Orange County, California.
2. Evaluate the “Tone at the Top” to ensure that the organization promotes high integrity and retains competent employees for its mission 3. Evaluate internal controls and perform risk assessment. By understanding the risk appetite, you can deploy the necessary resources to those high-risk areas and eliminate any waste of resources. 4.
Organizations should embed design, implementation and proper internal control measures to mitigate risk.
25 CSMFO MAGAZINE MAY 2016