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CY2021 Financial Audit Report
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DESCRIPTION: Request Acceptance of the 2021 Financial Audit and the Statewide Agreed-Upon Procedures Report conducted by Carr Riggs & Ingram |
AGENDA NO: Click or tap here to enter text. |
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ACTION REQUEST: ☒ Approval ☐ Review Comment ☐ Information Only ☐ Other |
RECOMMENDATION:
recommendation
Acceptance of the 2021 Financial Audit and the Statewide Agreed-Upon Procedures Report conducted by Carr Riggs & Ingram
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ISSUE/BACKGROUND:
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Carr Riggs & Ingram has conducted and completed the financial statement audit for the year ending December 31, 2021, in accordance with generally accepted auditing standards in the United States of America and standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. The financial audit aims to ensure that RTA is accountable for public funds, has adequate controls to remain transparent in its economic activities, and remains compliant with state and federal laws, regulations, and award programs.
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DISCUSSION:
Acceptance of the 2021 Financial Audit and the Statewide Agreed-Upon Procedures Report is requested from the Board of Commissioners.
Carr Riggs & Ingram conducted an in-depth review of internal control systems, financial statements, and supporting documents. In their evaluation of the data given to the OPEB Actuary, Carr Riggs & Ingram found a significant deficiency. To determine the entire OPEB Liability and its corresponding balances, the RTA provided incomplete census data through its third-party administrator for their OPEB plan, which led to underreporting of the total OPEB liability in earlier years.
This was attributed to a failure to thoroughly evaluate census data and information provided by the third-party administrator by someone other than the third-party administrator to find material inaccuracies.
As the values are estimated based on the available census data, the exact actuarial consequence of the error has not been determined, but the value on December 31, 2021, was approximately $516,000, which has been adjusted in the OPEB valuation for the year ended December 31, 2021.
The auditor advises the Human Resources Department to thoroughly review the data supplied by the third-party administrator to ensure the discovery and rectification of any material inaccuracies or significant errors.
Carr Riggs & Ingram performed random selections for testing procedures and audit sampling on control and compliance (C/C) areas identified in the Louisiana Legislative Auditors (LLA’s) Statewide Agreed-Upon Procedures (SAUPs). The timeframe selected was January 1, 2021 through December 31, 2021. According to application and testing of agreed-upon procedures, Carr Riggs & Ingram found non-compliance in the following two areas:
1. Ethics Training
2. Sexual Harassment Training
Both findings related to testing agreed-upon procedures referenced employee Ethics and Sexual Harassment Training. Using 5 randomly selected employees from Procedure #16 under “Payroll and Personnel” obtain ethics documentation from management and
1. Observe whether the documentation demonstrates each employee/official completed one hour of ethics and sexual harassment training during said period.
The overall results indicate non-compliance and exceptions noted by auditor due to two (2) of five (5) selected employees had no documentation of completed training during said period.
In addition, Carr Riggs & Ingram had one observation and recommendation relative to the monitoring of changes to the Self-Insurance Case Reserves and Structured Settlements. Management has submitted a Corrective Action Plan to address this matter.
FINANCIAL IMPACT:
None
NEXT STEPS:
None
ATTACHMENTS:
Board Resolution
CY2021 Financial Audit Report
CY2021 Statewide Agreed-Upon Procedures
CY2021 Memorandum of Advisory Comments
Prepared By: Dacia D. Johnson
Title: Administrative Analyst
Reviewed By: Mark A. Major
Title: Deputy Chief Executive Officer Administration and Finance
Reviewed By: Gizelle Johnson-Banks
Title: Chief Financial Officer
7/22/2022
Alex Wiggins Date
Chief Executive Officer