Peace Corps Office of Inspector General

DIREC TOR OF MANAG EMENT AND OPERATIONS ( AN D AD MI N I ST R AT I VE STAFF) BEST PRACTICES

Overseas Training, Fall 2012

Post Audits

Each fall we issue our OIG Annual Plan, including a list of posts.

Official announcement approx. 30 days before our visit Review documents and files at Peace Corps Washington Contact post to request information and interview CD and DMO Set the scope, schedule the site visit, and conduct our audit

We review financial and administrative operations relevant to the post, but will almost always include:

Imprest Funds Bills of Collection Property & Vehicles

Contracts & Leases Credit Cards Vouchers

Medical Supplies PEPFAR -other funds Value added tax

Posts are also subject to visits by our contracted auditors performing the annual audits of the Peace Corps financial statements.

Find More Information on our

Intranet Office & Units Office of Inspector General External Site at www.peacecorps.gov/oig

Federal managers must carefully consider the appropriate balance between controls and risk in their programs and operations. OMB Circular A-123
"There is nothing so useless as doing efficiently that which should not be done at all."
Peter Drucker

"Those who cannot tell what they desire or expect, still sigh and struggle with indefinite thoughts and wishes."
Ralph Waldo Emerson

Risk comes from not knowing what you're doing.

Warren Buffett

Risk

What Concerns you for your post?

What could go wrong?

Where are you the first

line of defense?
Where are you liable?

Internal Controls

effectiveness and efficiency of operations reliability of financial reporting, and

compliance with applicable laws and regulations.

The Five Standards for Internal Control

Control Environment Risk Assessment Control Activities Information and Communications Monitoring

Standards for Internal Control in the Federal Government

-Government Accountability Office, GAO/AIMD-00-21.3.1

Internal Control
Control Environment Risk Assessment

The control environment is the organizational structure and culture created by management and employees to sustain organizational support for effective internal control.

Management should identify internal and external risks that may prevent the organization from meeting its objectives.

Control Activities
Control activities include policies, procedures and mechanisms in place to help ensure that agency objectives are met.

Internal Control
Information Communication Monitoring

Information should be communicated to relevant personnel at all levels within an organization.

Monitoring the effectiveness of internal control should occur in the normal course of business.

Imprest Fund

Risks
Errors

Controls
Voucher Review Market Research Monthly Review of BOCs
Separation of billing and

Miscalculations Typos
False receipts Fake vendors Receiving kickback from vendors Collecting more than owed Voiding BOCs and collecting $ Lowering accountability and embezzling the difference Borrowing the funds

Theft

collection functions
Complete 365 reconciliation

Vehicles

Risks
Usage

Controls

Availability Inappropriate personal use

Fake Bidders Inflated Offer Skimming Collections Using for personal vehicles Personal use

Separate Duties: Billing Officer, Collection Officer, GSO Observe the auction Verify bids, match list of property sent to auction and receipts

Sales

Fuel use is tracked and reconciled with mileage Usage logs sent to the billing officer VMIS tracks mileage DMO reviews usage

Fuel

What are the risks?

Identifying Risks

Your staff complain of running out of pens, paper, and other supplies.
Your GSO buys all the supplies using an interim advance for less than $3,000. The GSO always returns from buying the supplies with a similar receipt.

and
Reviewing Controls

What controls would you review?

Check receipts
Review roles proper separation? Can you rotate responsibility

Get Quotes
Review supply purchases frequency, amounts, anomalies

Common Audit Findings

Vouchers

Value Added Tax

Date Stamped Properly Authorized Fully supported Disbursement matches obligation

Value Added Tax eliminated at point of sale when possible Tracking and monitoring refunds

Volunteer Reimbursements

Credit Card

Safeguard purchase and travel cards Monthly approving officer review in CitiDirect within 8 business days Purchases are not: in excess of $3,000; split to avoid the limit; or for prohibited items

Verify the list for accuracy Check for outliers convert to USD is helpful to identify anomalies

Common Audit Findings

Contracts and Leases

Use of Template Full and open competition Completed OACM checklist

PEPFAR

Reasonable allocation of costs Legitimate Purpose Aligned with COP

Grants

ICASS

Monitor grants as projects near completion and PCVs COS Completion reports are incomplete or not supported by receipts

Services are authorized Modified rates when applicable

Report Process
A briefing to post and region management on the results of our work A preliminary written report Executive Summary Individual Findings/Results Recommendations for Corrective Actions An opportunity to comment (6 weeks). Comments are sent to the Chief

Compliance Officer for consolidation.

Finalization of the Preliminary Report, including as an appendix:

Management response to our reported results OIG comments on management responses

All Final Reports are available on the Peace Corps Intranet and Internet

Contact Us
OIG

Audit Unit
Brad Grubb, Assistant Inspector General/Audit 202-692-2914 bgrubb@peacecorps.gov Hal Nanavati Lead Auditor 202-692-2929 snanavati@peacecorps.gov Becca Underhill Lead Auditor 202-692-2351 runderhill@peacecorps.gov

Kathy Buller, Inspector General Email: oig@peacecorps.gov Write: Peace Corps Office of Inspector General P.O. Box 57129 Washington, DC 20037 Hotline: 202.692.2901 or 800.233.5874 Website: www.peacecorps.gov/OIG