Internal Control for Local Governments
Internal Controls for Local Government
A Training Presentation for City of Tampa’s Leaders
Training Objectives
What you should know after this class:
• • • • • Types of risk Who commits fraud and why Internal controls - who needs them 5 internal control components What you can do!
2
What are Internal Controls?
To put it simply, internal controls are an exercise of common sense. You are practicing good internal controls when you? • Balance your checkbook • Keep your ATM/debit card pin number separate from your card • Keep copies of your tax return • Compare your monthly credit card statement to the credit card receipts • Lock your car doors • Other examples….???
3
What are Internal Controls?
Internal controls are an integral part of any organization’s financial and business policies and procedures. Internal controls consist of all the measures taken by the organization for the purpose of: • Protecting its resources against waste, fraud and inefficiency • Ensuring accuracy and reliability of accounting and operating data • Ensuring compliance with the policies of the organization • Evaluating the level of performance in all organizational units of the organization
4
What are Internal Controls?
Important concepts concerning internal controls include: • Internal control is a process. It is a means to an end, not an end itself. • Internal control is effected by people. It’s not merely policy manuals and forms, but people functioning at every level of the institution. • Internal control is geared to the achievement of objectives in several overlapping categories. • Internal control only provides reasonable assurance to an institution’s leaders regarding achievement of operational, financial reporting and compliance objectives. 5
What are Internal Controls?
What Internal Controls Do... • Promote orderly, economical, efficient and effective operations. • Safeguard resources against loss due to waste, abuse, mismanagement, errors and fraud.
A Training Presentation for City of Tampa’s Leaders
Training Objectives
What you should know after this class:
• • • • • Types of risk Who commits fraud and why Internal controls - who needs them 5 internal control components What you can do!
2
What are Internal Controls?
To put it simply, internal controls are an exercise of common sense. You are practicing good internal controls when you? • Balance your checkbook • Keep your ATM/debit card pin number separate from your card • Keep copies of your tax return • Compare your monthly credit card statement to the credit card receipts • Lock your car doors • Other examples….???
3
What are Internal Controls?
Internal controls are an integral part of any organization’s financial and business policies and procedures. Internal controls consist of all the measures taken by the organization for the purpose of: • Protecting its resources against waste, fraud and inefficiency • Ensuring accuracy and reliability of accounting and operating data • Ensuring compliance with the policies of the organization • Evaluating the level of performance in all organizational units of the organization
4
What are Internal Controls?
Important concepts concerning internal controls include: • Internal control is a process. It is a means to an end, not an end itself. • Internal control is effected by people. It’s not merely policy manuals and forms, but people functioning at every level of the institution. • Internal control is geared to the achievement of objectives in several overlapping categories. • Internal control only provides reasonable assurance to an institution’s leaders regarding achievement of operational, financial reporting and compliance objectives. 5
What are Internal Controls?
What Internal Controls Do... • Promote orderly, economical, efficient and effective operations. • Safeguard resources against loss due to waste, abuse, mismanagement, errors and fraud.