Internal Controls

1
Internal Controls and Financial Reporting for
Executive Boards
Eva Rooks, MAHealth Services Administrator/Traine
rHealth Systems Quality Assurance
DivisionWashington State Department of Health
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Executive Boards Financial Oversight

• Handling money in a secure manner
• Helpful policies and procedures to increase
  safety
• Red flags of financial trouble
• Financial reports
• Safeguarding financial data
• Resources

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Handling Money in a Secure Manner

• Checks
• Unissued checks should be in a secure location
• Checks made to Cash or Bearer should be
  prohibited
• Abbreviated payee names should be prohibited
• Voided checks should be cancelled and retained

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Handling Money in a Secure Manner

• Checks
• Restricted endorsements (For Deposit Only) should
  be placed on all check remittances upon receipt
• Follow up on outstanding checks
• Supporting documents (invoices) should be marked
  as paid with the check number when the check is
  prepared

5
Handling Money in a Secure Manner

• Bank statements
• Opened and reviewed by the Executive Board
• Bank reconciliation should be reviewed, initialed
  and retained by the Executive Board monthly

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Handling Money in a Secure Manner

• Bank statements
• Review the bank statement and reconciliation for
  interbank transfers, missing and voided checks.
• Review cancelled checks for authorized
  signatures, unusual endorsements and alterations.

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Policies and Procedures

• Expenses
• Gas and other expenses should be closely reviewed
  for irregularities
• Non-reimbursed expenses should include parking
  tickets and moving violations.

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Policies and Procedures

• Procedures
• Date stamp all incoming mail
• Credit card statements should be reconciled like
  a bank statement, be accompanied by receipts and
  reviewed by the Executive Board

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Red Flags Embezzlement / Fraud

• Financial difficulties
• Living beyond ones means
• Regularly comes to work early and leaves late
• Works nights and weekends

• Seldom absent or on vacation
• Comes into the office during days off
• Asks others to hold work while away from the
  office

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Review Reports Sent to DOH

• Balance Sheet Prior Year Comparison
• Profit Loss Prior Year Comparison
• Budget Status Report
• General Ledger, with bank reconciliation
• Misc. other reports

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Safeguarding Financial Data

• Backup computer files should be stored in a
  location secure from fire and theft
• A Washington State Patrol background check should
  be obtained on all employees
• Employees with access to cash and other assets
  should have fidelity bond insurance

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Resources

• Washington State Ethics BoardEthics Help Line
  360.664.0781www.ethics.wa.gov
• Your current CPA or accounting firm

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Questions?
Questions?