Sample Reference Letter Custody Case - Excel by jsk19954


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									Audit Division Form                            Index No.               B1
Auditee:        Sample County Department       Prepared by:           KLA
Purpose:        Bank Reconciliation Analysis   Date:
Period Audited:

   Prog. Ref.                                                  Reference
900.BA031       Bank Reconciliations                          B2-B13



                                   ____________ COUNTY, TEXAS
                                         AUDIT FILE INDEX

   Auditee:                                                            Audit Type:
   Auditor:                                                            Audit Date:
Audit From:                                                              Audit To:

  USED          SECTION                                        DESCRIPTION

                       100   Audit Report/Management Letter
                       200   Audit Program / Time Summaries
                       300   Arrangements/Correspondence
                       400   Reportable Conditions Point Sheets (Audit Points/Audit to Dos)
                       500   Overall Findings/Recommendations and Written Response of Official
                       600   Preliminary Review/Internal Control Environment-Reviewer Comments
                       700   Follow-up Review/Notes For Subsequent Audit
                       800   Permanent File (Statutes, Internal Control Questionnaire, etc.)
                       900   Audit Fieldwork Index

                ABBREV.                  FIELDWORK DESCRIPTIONS
                  AP         Accounts Payable
                  AR         Accounts Receivable
                  BA         Bank Activity
                  CC         Cash Counts
                  CD         Cash Disbursements
                  CF         Confirmations
                  CR         Cash Receipts
                  FA         Fixed Assets
                  FB         Fund Balance
                  GL         General Ledger
                  IC         Internal Control
                  IN         Inventories
                  MS         Miscellaneous Functions
                  PC         Change Funds and Imprest Funds
                  PR         Purchasing
                  RP         Auditee Reports
                  RV         Revenues
                  SL         Salaries

               PROG. REF.            SAMPLE AUDIT PROGRAM AREAS:                    WORK PAPER REF.
              900.RP020      Copies Of Reports Prepared By The Auditee
              900.RP021          Summary of Collections For The Audit Period
              900.RP025          Reports Made By Auditee To Other Agencies
              900.BA030      Bank Activity                                       B1
              900.BA031          Bank Reconciliations
              900.BA032          Proof of Cash (Ownership)
              900.BA033          Copies of Bank Statements
              900.CC040      Cash Counts
              900.CC041          County Change Funds
              900.CC042          Sheriff Travel Imprest
              900.CC043          Confidential Funds
              900.CC044          Surprise Cash Counts
              900.CC045          Rapid Deposit Compliance
              900.GL050      General Ledger Analysis
              900.GL051          Trial Balance
              900.GL052          Receivables (including due from State Agencies)
              900.GL053          Liabilities (Including due to State Agencies)
              900.GL054          Funds Held In Escrow
              900.GL055          Fund Balance Reconciliation
              900.CR060      Receipt Tests
              900.CR061          Checks by mail
              900.CR062          Deposit warrants/Receipt issuance
              900.CR.063         Misc. Deposits (ACH, WT, Drop Box)
              900.CD070      Disbursement Tests
              900.CD071          Payroll Sample
              900.CD072          Accounts Payable Sample
              900.CD073          Direct Payment Sample
              900.CD074          Professional Services Sample
              900.CF080      Confirmations
              900.CF081          Investments
              900.CF082          Fines/Fees/Court Cost Paid
              900.CF083          Case Dismissals
              900.IN090      Inventories
              900.IN091          General Office Supplies
              900.IN092          Bulk Inventory Items-Stockpiling test

                                                    99c82d40-1ecc-434f-986a-2690f04f5854.xls 900-Internal Audit File Index
900.FA100   Fixed Asset Analysis
900.SL110   Payroll Process Evaluation
900.SL111       Scheduled Payroll Audit with External Auditors

                                     99c82d40-1ecc-434f-986a-2690f04f5854.xls 900-Internal Audit File Index
                          _______________ COUNTY, TEXAS                                                    Page 1 of 2

                                               AUDIT WORK ORDER
Audit Date:     /    /          Audit PeriodFrom:                                    To:
                                        Full Scope                              Full Scope - Surprise
Audit Type:                             Limited Scope                           Special Conditions
Audit Requirements (M=Monthly, Q=Quarterly, A=Annual)


                                  TOTAL                                                                    ACTUAL
                                 PLANNED                            DATE                                    HOURS
        AUDIT STEPS               HOURS           /       /           /              /            /        WORKED
Permanent File
Office Organization
Contract File
Internal Control Questions
Audit Program
Permanent File

Reportable Cond. Point Sheets
Preliminary Report
Review Prelim. Report
Exit Interview-Official
Finalize Report
Issue Report

Notes for Future Audits
Tidy Workfile

Total Hours:

                                                       99c82d40-1ecc-434f-986a-2690f04f5854.xls 200-InternalAuditFileOrg
                             _______________ COUNTY, TEXAS                                                     Page 2 of 2
                                INTERNAL AUDIT FILE ORGANIZATION

                                         AUDIT REVIEW AND SIGN OFF
                            Steps                                     Auditor        Date        Review           Date
Report - Preliminary draft written and ready for review.
Report - Preliminary draft and workpapers reviewed.
Exit Interview conducted with official.
Report - Final draft prepared.
Copies of final report issued to:
        Commissioners Court
               District Judges

                                                           99c82d40-1ecc-434f-986a-2690f04f5854.xls 200-InternalAuditFileOrg
                                                      _______________ COUNTY, TEXAS
                                                             BANKING ACTIVITY
                                                              PROOF OF CASH

                   Account Name
                   Auditor:                                                          Date:

                                                                  Beginning                                              End
                                  Description                     Of Month           Additions       Reductions       Of Month
                                                                    /   /                                                 / /

                                      Per Bank Statement $                       $               $                $

                   Deposits In Transit, Beginning             +                  -

                   Deposits In Transit, End                                      +                                +

                   Outstanding Checks, Beginning              -                                  -

                   Outstanding Checks, End                                                       +                -

                   Other Reconciling Items

                                                  Per Books $                    $               $                $

                                                                        Ownership Of Cash On Hand:
                                                                  Due To Co. Treasurer - General                  $
                                                                  Due To Co. Treasurer - Debt Service
                                                                  Due To Co. Treasurer - R & B
                                                                  Due To State
                                                                  Due To TxDOT
                                                                  Due To Parks and Wild Life
                                                                  Due To Other Governmental Entity
                                                                  Due To Other Taxing Entities
                                                                  Due to Other County Offices
                                                                  Due to Delinquent Tax Attorneys
                                                                  Refunds Due to Plaintiffs
                                                                  Refunds Due To Payers
                                                                  Returned Checks Held
                                                                  Bonds Held In Escrow
                                                                  Funds Held For Out Of County Service

                                                                                                           Totals $

99c82d40-1ecc-434f-986a-2690f04f5854.xls, 400-Proof of Cash                                                                      JTR/11-95
                                             ______________ COUNTY, TEXAS
                                              INTERNAL CONTROL REVIEW
                                           SEPARATION OF DUTIES WORKSHEET
                                                                            Prep. By:            Date:

                                                                            Rev. By:             Date:

                                                          FUNCTION          PERSON      PERSON   PERSON   PERSON
              DUTY/RESPONSIBILITY                           TYPE               A           B        C        D

      Receive Money                                         Custody

      Issue Receipts                                        Custody

      Open Mail/List Receipts                               Custody

      Prepare Bank Deposits                                 Custody

      Approve Bank Deposits                                 Approve

      Record Receipts                                        Record

      Access To Unused Receipts                             Custody

      Prepares Inventory Unused Receipts                     Record

      Receives Bank Statement                               Custody

      Prepares Bank Reconciliation                          Custody

      Reviews Bank Reconciliation                           Approve

      Prepares Billings                                     Custody

      Sends Billings                                        Approve

      Authorized to Make Purchases                          Custody

      Receives Invoices                                     Custody

      Prepares Requisitions                                 Custody

      Approves Requisitions                                 Approve

      Authorized to Make Refunds                            Approve

      Prepares Check For Refund                             Custody

      Signs Check For Refund                                Approve

      Authorized to Make Disbursement                       Custody

      Signs Check For Disbursement                          Approve

      Prepares Delinquency Letters                          Custody

      Prepares Monthly Reports                               Record

      Approves Monthly Reports                              Approve

      Prepares Time Reports                                 Custody

      Approves Time Reports                                 Approve

      Receives Payroll Checks                               Custody

      Distributes Payroll Checks                            Approve

99c82d40-1ecc-434f-986a-2690f04f5854.xls, 600-SeparationofDutiesWorksheet                                     JTR/11-95
                              600-INTERNAL CONTROL QUESTIONNAIRE

                                                                YES   NO   N/A   COMMENTS
 1.   Does your office have a procedures manual?
 2.   Does the procedures manual cover all duties
      and responsibilities?
 3.   Do you periodically review and update your
      procedures manual?
 4.   Are the officeholder's and employees' duties
      and responsibilities fixed?
 5.   Do you periodically rotate duties?
 6.   Do you require all employees to take vacations?
 7.   Is the work of employees on vacation performed
      by someone else during their absence?
 8.   Are all employees adequately trained?
 9.   Do you periodically assess training needs?
10.   Is the officeholder appropriately bonded?
11.   Are the other employees appropriately bonded?
12.   Do you periodically review the adequacy of
13.   Are employees performing their duties
14.   Is the workload current?
15.   Is the office understaffed?
16.   Do you have an inventory of all tangible assets?
17.   Is the inventory up-to-date?
18.   Is responsibility for the assets fixed?
19.   Do you periodically review your inventory and
      account for all assets?
20.   Does an internal/external auditor periodically
      audit your office?
21.   Do you implement the auditor's appropriate
22.   Do you implement the auditor's recommendations
      on a timely basis?

 1.   Are receipts filled out when money is received?
 2.   Are all receipts sequentially prenumbered?
 3.   Do you have adequate control over unissued
 4.   Do you periodically account for all unissued
 5.   Are all receipts dated and signed (or initialed) by
      the persons who issue them?
 6.   Are your receipts in at least three-part form?
       KDC/aek                                              9                       11/22/2010
                             600-INTERNAL CONTROL QUESTIONNAIRE

                                                               YES   NO   N/A   COMMENTS
 7. Is a copy of the receipt given to each person
    paying money?
 8. Is a copy of the receipt kept by your office?
 9. Is a copy of the receipt given to the accounting
10. Do receipts contain adequate space for

11.   Are employees instructed to ensure that the
      person paying appropriately completes a check
      before they issue a receipt?
12.   Does your office have a policy of immediately
      stamping all checks with a restrictive
13.   If applicable, do you compare receipt amounts
      with supporting documentation to ensure the
      amounts are correct?
14.   Does each person receiving cash have a
      separate cash drawer or register?
15.   Is access to cash drawers or registers restricted
      to the persons responsible for them?
16.   Does each person with a cash drawer or register
      balance out daily?
17.   Is the balancing verified by someone who is not
      taking in money?
18.   Are these persons collecting the appropriate
      amounts? (e.g., according to statutes,
      ordinances, etc.)
19.   Is each person receiving money aware of the
      amounts that should be collected?
20.   Do you periodically review the collected fine/fee
21.   Does your office adequately safeguard money
      until it is deposited or remitted?
22.   Does someone other than the person receiving
      money prepare the bank deposit?
23.   Are bank deposits or remittances made daily?
24.   Do you periodically compare receipt copies with
      bookkeeping entries?
25.   Do you account for change funds?
26.   Do you periodically review the adequacy of

       KDC/aek                                            10                       11/22/2010
                            600-INTERNAL CONTROL QUESTIONNAIRE

                                                             YES   NO   N/A   COMMENTS
      change fund amounts?
27.   Does your office open mail daily?
28.   Is the mail opened by someone other than the
      persons taking in office receipts?
29.   Does the person opening the mail prepare a
      record of the checks and cash received?
30.   Does your office have a policy of immediately
      stamping checks received through the mail with
      a restrictive endorsement?
31.   Is the bank deposit prepared by someone other
      than the person opening the mail?
32.   Are mail receipts deposited or remitted daily?
33.   Does your office have a system to account for
      installment or periodic payments?

34. Does your office have a system to keep up with
    payment due dates?
35. Are all outstanding amounts known and
    accounted for?
36. Is there a control total for all outstanding
37. Do you periodically compare the control total
    with subsidiary records?
38. Is there a sufficient amount of double-checking
    of other employees' work?
39. Does the amount of double-checking increase/
    decrease when staff size increases/decreases?

 1. Are all disbursements made by check?
 2. Are all checks sequentially prenumbered?
 3. Are all checks preprinted with the name of the
    entity and other appropriate information, such as
    the name of the office and the name of the
 4. Do you account for and adequately safeguard
    all unused checks?
 5. Are all voided checks marked "void" and
    accounted for?
 6. Are checks prepared only when supporting
       KDC/aek                                          11                       11/22/2010
                            600-INTERNAL CONTROL QUESTIONNAIRE

                                                              YES   NO   N/A   COMMENTS
      documentation is present and after such
      documentation is verified?
 7.   Are checks prevented from being made out to
      "cash" and "bearer"?
 8.   Is the payee line completed on all checks prior
      to approval?
 9.   Are checks approved by someone other than the
      person responsible for the bookkeeping?
10.   Are checks prevented from being presigned?
11.   Do you keep authorized check signatures to a
12.   If a "stamp" or "check-signing" device is used,
      do you safeguard it and restrict access to it?
13.   Does your office prepare and mail (or deliver)
      checks timely?
14.   Are checks mailed without returning them to the
      person who approves them or who does the
15.   If applicable, are supporting documents, such as
      invoices and statements, canceled upon


16. Is there a sufficient amount of double-checking
    of other employees' work?
17. Does the amount of double-checking increase/
    decrease when staff size decreases/increases?

 1.   Does your office maintain only the minimum
      number of bank accounts?
 2.   Are balances appropriately safeguarded
      according to provisions in the County depository
      contract or FDIC insurance?
 3.   Does your office reconcile bank accounts
      promptly after receiving bank statements?
 4.   Are reconciliations done by someone other than
      the person who prepares bank deposits and
      approves checks?
       KDC/aek                                           12                       11/22/2010
                            600-INTERNAL CONTROL QUESTIONNAIRE

                                                                YES   NO   N/A   COMMENTS
 5. Does the person who reconciles the bank
    statements receive those statements unopened
    from the bank?
 6. Do you compare deposits shown on the bank
    statement with accounting records as to date
    and amount?
 7. Do you verify the amount of service charges?
 8. Do you account for all canceled checks?
 9. Do you compare canceled checks with
    accounting records as to check number, date,
    amount and payee?
10. Do you examine canceled checks for alterations?
11. Do you examine canceled checks for
    unauthorized signatures?
12. Do you examine canceled checks for irregular
13. Are items returned or rejected by the bank
    properly investigated and accounted for?
14. Are completed bank reconciliations reviewed and
    approved by someone other than the person
    performing the original reconciliation?
15. Is there a time period or date printed on the
    checks, after which they become void?
16. Are outstanding checks appropriately handled
    and accounted for once they become void?
17. Does your office policy prohibit pre- or post-dating
    of checks?

 1. Does your office maintain a bookkeeping system
    to account for all financial-related transactions?
 2. Do you maintain books of original entry?
 3. Do you maintain adequate subsidiary records?
 4. Does your office enter transactions daily?
 5. Are transactions entered from appropriate
    sources (e.g., receipt copies, check copies)?
 6. Do you verify daily entries for mathematical

      KDC/aek                                              13                       11/22/2010
                            600-INTERNAL CONTROL QUESTIONNAIRE

                                                              YES   NO   N/A   COMMENTS
 7.   Are the entries periodically reviewed by someone
      other than the person making them, comparing
      the entries with appropriate source documents?
 8.   Do you maintain a good audit trail for all
      transactions from source documents to
      accounting records, and from accounting
      records to source documents?
 9.   Do you maintain docket books as required by
      law? (J. P., District & County Courts)
10.   Is all required information entered into the
      docket books? (J. P., District & County Courts)
11.   Are entries to docket books current? (J. P.,
      District and County Courts)
12.   Do you periodically compare the docket books
      to source documents and other accounting
      records for accuracy? (J. P., District and
      County Courts)
13.   Is the bookkeeping performed by someone
      other than the persons receiving cash, preparing
      bank deposits, and approving disbursements?
14.   Does your office prepare and submit reports
15.   Do you compare reports against accounting
      records for accuracy?
16.   Are reports reviewed and approved by someone
      other than the person preparing them?
17.   Are reports audited monthly by the County
18.   Is there a sufficient amount of double-checking
      of others' work?
19.   Does the amount of double-checking increase/
      decrease when staff size decreases/increases?

       KDC/aek                                           14                       11/22/2010
                            600-INTERNAL CONTROL QUESTIONNAIRE

                                                              YES   NO   N/A   COMMENTS
1.   Are requisitions required to obtain supplies?
2.   Does your office have procedures and
     safeguards to prevent unauthorized use of
     supplies, especially those that are desirable for
     personal use?
3.   Are procedures in place to transfer unneeded
     supplies to others who can use them?
4.   Do you rotate responsibilities for supplies to
     avoid collusion?

      KDC/aek                                            15                       11/22/2010
                                                                                          Handout 4

                                 ______________ COUNTY, TEXAS
                                200-SAMPLE SIZE DETERMINATION

To determine the adequate sample size for testing the following data is to be used:
       Confidence                       Acceptable        Upper                Minimum
          Level        Confidence        Sample          Precision              Sample
        Desired        Coefficient      Error Rate         Limit                 Size
          68%             1.00             0%               3%                    35
          80%             1.35             0%               3%                    54
          85%             1.50             0%               3%                    66
          90%             1.64             0%               3%                    75
          95%             1.96             0%               3%                    100
          97%             2.00             0%               3%                    132
         99.70%           3.00             0%               3%                    150

        To generate a random number sequence from an established population using EXCEL:

                   Designate Manual / Take the (x) off of Recalculate Before Save

      The Cell Formula Is As Follows:

        = RAND()* (Ending Sequence No. - Beginning Sequence No.) + Beginning Sequence No.

      Follow these steps in attribute sampling. Document in work papers.
                 1 State the objectives of the audit test.
                 2 Define the population.
                 3 Define the sampling unit.
                 4 Define the attributes to be tested.
                 5 Specify an acceptable error rate.
                 6 Specify the required confidence level.
                 7 Specify the estimated error rate.
                 8 Determine the initial sample size.
                 9 Randomly select a sample.
                10 Perform the audit procedures as outlined in the Audit Program
                      and document the results.
                11 Generalize from the sample to the population based on the results.
                12 Perform error analysis (qualitative evaluation).
                13 Decide on the acceptability of the population.

Conclusions are to be documented. Reliance must be stated and formalized in workpapers.

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