Administrative Assistant Performance Expectation by olx20715

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									The Expectation
of Accountability
   for Agency
    Business
 Administrators
With agency funding
and budgetary concerns
across the state,
there’s an increased
expectation of
accountability for
business administrators
             The Expectation
            of Accountability
           means that every
   agency employee is
accountable (responsible)
for the proper custody and
 use of state resources…
         … and takes every
         possible action both to
protect the agencies’ resources
and use the resources in the
best interest of the state and
its citizens.
 How do business
  managers, department
   administrators, and
   others in positions of
    responsibility develop
     and apply a personal
expectation of accountability?
      Four Step Process
1. Understand accountability
      Four Step Process
1. Understand accountability
2. Understand basic internal
    control concepts
      Four Step Process
1. Understand accountability
2. Understand basic internal
    control concepts
3. Develop an awareness about
    the potential for fraud
      Four Step Process
1. Understand accountability
2. Understand basic internal
    control concepts
3. Develop an awareness about
    the potential for fraud
4. Implement a monitoring
    and management plan
Accountability
Accountability
means…
  • Answerable;
  • Responsible;
  • Liable;
  • Held to higher standards;
       and sometimes…
  • ‗Blame‘
  Authority
    vs.
Responsibility
What is the difference
 between authority
 and responsibility?
Old adage is true….
you can delegate
authority but you
cannot delegate
responsibility
For example…
Procurement cards may be assigned to
any number of individuals
in a department or business
unit, but their proper use
remains the responsibility
of the unit head
Or…
a unit head may ‗allow‘ a staff
member to sign off on various
documents for the unit
head, but the unit head
remains responsible
for the accuracy and
appropriateness of
the transaction
being approved.
Accountability begins when the individual
who is accountable recognizes that
accountability and responsibility cannot
be transferred to another, and that
there are consequences when
they either do not fulfill his/her
responsibility or try to
transfer that responsibility
or accountability to another.
Most importantly,
accountability is not just a
 management responsibility -
 it is every staff members‘
  responsibility, no matter
   what the organizational
    level is of that individual.
 Basic Internal
Control Concepts
Internal control
            is….
anything you do to safeguard,
manage, or monitor state and
 agency resources, or make
 more efficient and effective
   use of those resources
  Internal control
         is….
People
People…
are the most important element of any
system of internal control.

However, employment of competent, honest
people is not, in itself, sufficient to make a
system of internal control satisfactory.

Specific responsibility for the performance of
duties must be assigned to specific staff if the
system of internal control is to operate efficiently
and effectively.
The Expectation of Accountability means
  you hire, train, and support the best
 people you can find, and then monitor
 and protect them from unsubstantiated
      allegations of wrong-doing,

                 but…
   You apply consistent disciplinary
  consequences for any wrong-doing
        that actually occurs.
  Internal control
              is….
Personnel
Separation of duties
Separation of duties
  means…

• Separating custody of assets from
  accounting for assets.
• Separating operational responsibility
  from record keeping responsibility.
• Separating the authorization of
  transactions from the custody of
  the related assets.
The Expectation of Accountability
means you separate duties to the
    greatest extent possible

               and…
      You apply monitoring and
reconciliation processes to mitigate
  risks that cannot be addressed
    through separation of duties.
  Internal control
              is….
Personnel
Separation of duties
Authorization procedures
  Authorization procedures…
assure that all transactions are being made in
  the best interest of the state and agency.

            WARNING!!!!!!
   Every time you authorize a transaction
   without reading what you sign, you are
       giving someone the authority to
      commit fraud with your approval.
The Expectation of Accountability means
    you read, review, and verify every
  transaction for which you have direct
   signature authority or responsibility

                and…
  You apply consistent monitoring and
  review processes to transactions for
  which you have indirect authority or
             responsibility.
   Internal control
               is….
Personnel
Separation of duties
Authorization procedures
Audit trails
        Audit trails…

allow you to document the
actions you take, or review a
transaction‘s history, to assure it
meets all the criteria of a properly
authorized and reasonable
transaction.
  The Expectation of Accountability
   means you maintain records of
    transactions and activities in
accordance with policies, procedures,
   guidelines, or other regulatory
 standards, and in accordance with
state record retention guidelines and
      other mandated retention
            requirements.
   Internal control
               is….
Personnel
Separation of duties
Authorization procedures
Audit trails
Physical control
   Physical control…
is one of the most important,
and easiest, protective measures
you can take to assure records
and assets are safeguarded.

It can be as simple as locking
your doors and desks, or limiting
access to only those authorized
to have access.
The Expectation of Accountability means
    you take every action possible to
safeguard your agency‘s data and assets
    that are under your authority and
              responsibility

                   and…
    You proactively correct any asset
protection or security failures you identify.
   Internal control
               is….
Personnel
Separation of duties
Authorization procedures
Audit trails
Physical control
Internal verification
   Internal verification…
includes any reconciling, verifying,
monitoring, or checking of actual
to recorded transactions.

One purpose of comparing
actual to recorded transactions is to
ensure that all transactions, authorized
or not, have been recorded.
The Expectation of Accountability
means (in simplest terms)…


     Do the job you
    were hired to do!!
One more thing….
            Internal control
                              is….
                    Internal Audit
Do you…
• Solicit input and internal control advice from your
  Internal Auditors when you change polices, procedures,
  or practices?
• Ask for guidance on internal control or potential fraud issues?
• Drop in at the Internal Audit office occasionally just to say
  ‘hello?’
• Support the importance of Internal Audit’s work to your
  colleagues and associates?
• Resist the temptation to ‘shoot the messenger’
  when Internal Audit issues a report on your area?
Fraud
Awareness
        The Facts about employee
      dishonesty and theft (fraud)…
• Organizations lose 6% of revenues to
  employee dishonesty and theft each
  year.*




* As reported by the Association of Certified Fraud
  Examiners in the 2006 Report to the Nation on
  Occupational Fraud and Abuse
        The Facts about employee
      dishonesty and theft (fraud)…
• Organizations lose 6% of revenues to
  employee dishonesty and theft each
  year.*
• The average organization loses more than
  $9 per day per employee to employee
  dishonesty and theft.*



* As reported by the Association of Certified Fraud
  Examiners in the 2006 Report to the Nation on
  Occupational Fraud and Abuse
        The Facts about employee
      dishonesty and theft (fraud)…
• Organizations lose 6% of revenues to
  employee dishonesty and theft each
  year.*
• The average organization loses more than
  $9 per day per employee to employee
  dishonesty and theft.*
• Most incidents of employee dishonesty
  and theft are committed by long term,
  trusted employees.
* As reported by the Association of Certified Fraud
  Examiners in the 2006 Report to the Nation on
  Occupational Fraud and Abuse
    The Myths about employee
      dishonesty and theft…

• Most people will not commit fraud.
Fraud Fact…
Unfortunately, many people
will commit dishonest acts or
steal if presented with a certain
combination of circumstances
(the Fraud Triangle).
 Fraud Triangle…

May be financial,
emotional, medical,
or some other
need
 Fraud Triangle…

May be financial,     What makes it
emotional, medical,   ‗alright‘ in the
or some other         individual‘s mind
need
 Fraud Triangle…

May be financial,                         What makes it
emotional, medical,                       ‗alright‘ in the
or some other                             individual‘s mind
need



                      The capability to
                      commit the fraud


                Opportunity
Fraud Triangle…   A well structured
                  and practiced
                  system of internal
                  controls is the only
                  effective method to
                  limit ‗opportunity,‘
                  which is the only
                  aspect of the fraud
                  triangle an agency
                  can really control.

  Opportunity
     The Myths about employee
       dishonesty and theft…

• Most people will not commit fraud.
• Fraud (theft) is not usually material.
Fraud Fact…
Fraud very often is material,
because immaterial fraud has a
tendency to become material fraud.

―Just this once‖ situations become recurring
situations in far too many of the frauds that
occur, often because the person committing
the fraud realizes how ‗easy‘ it was.
Examples of Cases Involving University or College Frauds
Christy Ann T., a former administrative           Raymond K., Manhattan College's
assistant at the University of Missouri-          former financial-aid director, was
Columbia, was sentenced to seven                  sentenced in White Plains federal court
years in prison for taking more than              to 23 months in prison for defrauding the
$663,000 in University money. She                 federal Department of Education of about
forged graduate students names on cash            $160,000 in phony student loans.
advance forms for trips, collected the            [Raymond] admitted in court that he had
advance, then faked the receipts.                 written up several fake student-loan
                                                  applications in his own name while he
Diane S., a former University of
                                                  was supposed to be guiding students at
Nebraska-Lincoln administrative
                                                  the Bronx college.
secretary suspected of diverting about
$177,000 in school funds for her own
                                                  Barbara Ann E. pleaded guilty in
use, pleaded guilty …. to one count of
                                                  Federal court to one felony count of
theft. According to investigators, [she]
                                                  embezzlement from Webster University
created a phantom employee and
                                                  where she was a cashier for 13 years.
diverted $177,000 to pay [the
                                                  The University says she took more than
phantom]…on a monthly basis beginning
                                                  $559,822 in a three year period.
in June 1989 [a seven year fraud].
(Excerpts taken from newspaper accounts of higher education related frauds)
   Examples of Frauds at One Major University (not UNT)
- Employee with cash register responsibility pocketed cash – Known loss over $100

- Employee with credit card credit-issuing responsibility issued undeserved credits to own personal
   credit card – Known loss over $7,000.

- Employee with authority to issue refunds falsified refund documents and kept the cash for personal use–
   Known loss over $12,000; possible loss over $25,000.

- Employee with purchasing, receiving, and reconciliation authority purchased items for personal use—
  Known loss over $360.

- Employee with payroll responsibility set up a ‗ghost‘ employee—Known loss over $150,000.

- Employee with on-going cash register responsibility pocketed cash – Known loss over $400; possible
  loss up to $50,000.

- Employee with cash register responsibility changed recorded sales amounts – Known loss $100;
  possible loss over $300.

- Employee with purchasing responsibility purchased items on federal grants for personal use – Known
  loss over $100, total loss unknown.

- Employee with cash handling responsibility deposited incoming department funds into an external
  department checking account and withdrew for personal use – Known loss over $61,000.

- RIF‘d employee with system administrator access installed virus on unit server designed
   to activate after the of termination of the RIF‘d employee deleting server files–
  Loss averted through early detection by systems analyst.
     The Myths about employee
       dishonesty and theft…

• Most people will not commit fraud.
• Fraud (theft) is not usually material.
• Fraud (theft) usually goes undetected.
Fraud Fact…
       Employee dishonesty
       and theft is detected
       through regularly
       practiced internal
       control processes.
     The Myths about employee
       dishonesty and theft…

• Most people will not commit fraud.
• Fraud (theft) is not usually material.
• Fraud (theft) usually goes undetected.
• Fraud (theft) is usually well concealed.
Fraud Fact…
There is often ample evidence of
dishonest acts or thefts, especially as
the acts become more extensive
and bold.
Management‘s responsibility
is to be aware of what this
evidence may be, and be
alert for indications fraud may
be occurring.
An additional fact…
        Other employees in a
        department very often
        are aware that
        unusual or suspect
        actions are occurring.
One more fact…

They fail to report their suspicions
because they have not sensed a
‗tone from the top‘ that
encourages reporting
potential fraud situations,
    or…
they were ‗never asked‘.
Fraud
Awareness
Recognize that fraud can and does
happen in all business environments.
Be aware of the fraud potential in your
agency and area of responsibility, and
regularly re-evaluate the potential.
How do you evaluate
fraud potential?
  • Know your operations.
  • Know the warning
    signs of fraud.
  • Act if you suspect fraud.
Know Your Operations…
• Know what your ‗normal‘ revenue, expenditure, and
  activity transactions and patterns are, and look closely
  at those that don‘t ‗fit.‘
• Maintain a working knowledge of all regular processes,
  including primary or shadow systems.
  (Note: Never let one person be your ‗sole expert‘ or ‗sole
  resource‘ on any system or process.)
• Monitor the transactions of your department on
  a continuing basis, looking for anomalies.
• Be aware of the fraud risk potential in your
  operations, and fraud red flags.
• Establish a pattern of practicing and enforcing
  internal controls - don‘t circumvent them, EVER!
Know the Warning Signs of Fraud…
• Employee lifestyle inconsistent with known income
• Unexplained changes in employee work behavior
• Long term or ‗model‘ employees who never
  take vacation or sick leave time
• Accounting records that do not balance
  or cannot be reconciled
• Suspicious behavior by two or more
  employees suggestion collusion
• Too much ‗ownership‘ of records, processes, or
  systems by one employee.
• Calls at work from creditors/collection agencies
Act if You Suspect Fraud…
Contact the appropriate offices, such
as your internal audit department or
the state fraud and abuse hotline,
to discuss your concerns
and suspicions.
Don‘t ignore the situation,
and don‘t confront the
suspected individual yourself.
Monitoring and
 Management
     Plan
Key word is….
    Plan
Accountability
 and internal
 control don’t
 just happen
 Business
 Process
Assessment
 Checklist
 Business Process
Assessment Checklist
The Business Practices
Assessment Checklist is
designed to allow you to
perform a self assessment
of basic internal control
processes that should be in
place in your business unit.
 Business Process
Assessment Checklist
It is not an all-inclusive
checklist, but is a starting
point for you to monitor
your internal control
readiness and improve your
fraud risk awareness.
The Business Process
Assessment Checklist
provides a basic internal
control and fraud risk
awareness checklist
covering ten essential
areas to consider
Checklist Topics…
General Financial
Cash Handling
Payroll
General Expenditures
Safeguarding Assets
Administration of Sponsored Programs
Petty Cash/Change Funds
Accounts Receivable
Miscellaneous Department Operations
Information Technology Management
(Checklist downloadable in Adobe Acrobat .pdf format.)
Do you recognize these names?


     • Coleen Rowley

     • Sherron Watkins

     • Cynthia Cooper
"They were people who did right by just
doing their jobs rightly... with the
bravery the rest of us always hope we
have and may never know if we do.‖
        From Time Magazine, December 2004
Comment from a juror in the WorldCom trial….

―If I have an accountant doing my taxes, he does it, I sign it,‖
one juror says. ―I don‘t look it over carefully, but if it goes to
the IRS and they find a problem, I‘m the person that has to
pay the penalty – not my accountant. I still have to be
accountable.‖

      Quoted from a Wall Street Journal report in Cynthia Cooper‘s book,
  ―Extraordinary Circumstances, The Journey of a Corporate Whistleblower‖
               The Expectation
               of Accountability
              means that every
     agency employee is
accountable (responsible) for
 the proper custody and use
     of state resources…
       … and takes every
       possible action both to
protect the resources and use
the resources in the best
interest of the agency, state,
and its citizens.
        Don Holdegraver
     Chief Internal Auditor
University of North Texas System
          Denton, Texas
 donald.holdegraver@unt.edu
          940-565-2355

								
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