Don’t Forget about your Retainages

Most companies have a variety of projects going on every year.  One of the things that is negotiated early in the process of creating a contract for a project is if a retainage will be built into the terms.  A retainage refers to a portion of the payment that is withheld until the project is …

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Self-Fulfilling Going Concerns

In this heated political environment combined with one of the largest recessions in a century, it is no surprise to find that governments are slashing budgets and will no doubt continue to cut programs across the country.  Recently we were on an audit of an entity that relied heavily on government funding for its programs, …

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Governments Get Special Treatment

Recently our audit team had been presented with an unusual circumstance regarding losses due to impairment of capital assets.  While performing research surrounding this situation I was reminded of the three different ways a governmental agency can present a loss due to impairment, one of which is different from that of a private entity. GASB …

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Government Asset Impairment Determination

According to GASBS 42: A capital asset is considered impaired if the following apply: 1.) The decline in service utility of the capital asset is large in magnitude and 2.) The event or change in circumstances is outside the normal life cycle of the capital asset. However, it is not necessary to repeatedly review all assets for …

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Increasing Financial Transparency

Over the past several years more and more citizens have pushed for an increase in the transparency of financial reporting of governments. As the economy has struggled, citizens have grown more concerned with how their tax dollars are being spent. The Government Finance Officers Association (GFOA) has long encouraged governments to demonstrate transparency by making …

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International fraud awareness week puts spotlight on fraud

International Fraud Awareness Week is an initiative to raise fraud awareness. Here are some basics that all organizations should follow to prevent and detect fraud, according to the Fraud Week website. Establish a fraud policy  This policy outlines what activities are considered and how they should be reported to management or the board of directors. …

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Why Per Diem Travel Might be a Good Idea

Work-related travel is commonplace and often necessary these days, but that doesn’t mean there aren’t a multitude of implications related to this topic.  A recent article in the November/December 2011 issue of FRAUD Magazine touched upon a variety of fraud schemes related to employee travel.  The article, titled “Traveling in High Style on the Organization’s …

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Determining if July Debt Payments should be Accrued in Governmental Funds

Is your government about to obtain new debt in their governmental funds? If there is a payment in July following fiscal year end; should the payment be recorded in the current year or next fiscal year? Under cash basis, there should not be an expenditure recorded until amounts are due and payable; however there is …

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How to Make Your Auditor Smile (Or Getting Organized for Your Audit)

Most financial staff members do not look forward to their annual financial audit.  I have met an exception to this, however, and here was her method for going into the audit feeling comfortable and confident.  Let’s refer to this individual as Sally. Sally began her audit preparation by using her normal monthly closing procedures which …

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Adoption of A Capitalization Policy

One of the ways a Henry & Horne auditor can add value to a client’s audit, is to provide recommendations for client staff economies in bookkeeping.  Over the past year, one of the recommendations that I have been able to make is the following: In small governments (e.g. Special Districts), an often overlooked item is the …

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