AGA - National Internal Control and Fraud Conference

Marianne M. Jennings, JD, Professor of Legal and Ethical Studies, Arizona State University

One of AGA’s most popular speakers and Journal authors is back to entertain and enlighten attendees on ethical issues in government financial management. Jennings has conducted more than 200 workshops on the subject to numerous audiences. (Jennings on Enron: “Never trust the people who cheat with. They will throw you under the bus.”) Jennings believes managers must act like parents, setting good examples for their children, because ethics is instilled from the top. Jennings makes a persuasive argument that ethics makes more than good moral sense, but good business sense as well.

9:10– 10:15 a.m.
M101: Addressing Fraud and Internal Controls at all Levels of Government

Arthur A. Hayes, JD, CGFM, CPA, Director, Division of State Audit, Comptroller of the Treasury, State of Tennessee

Sam M. McCall, CGFM, CPA, CIA, CGAP, Auditor, City of Tallahassee; AGA Past National President

This session sets the stage and tone for the technical part of the conference. The speakers discuss the current environment for auditors and other accountability professionals relating to responsibilities for fraud, waste and abuse and includes a discussion of the interrelationships of fraud, risk and internal controls, and how accountability professionals can integrate those subjects into an effective approach for preventing and detecting fraud, waste and abuse.

11 a.m. – 12:30 p.m.
M102: Strengthening Controls to Mitigate Risk & Eliminate Improper Payments - a HUD Success Story

James M. Martin, Deputy Chief Financial Officer, U.S. Department of Housing and Urban Development

John McCarty, Assistant Inspector General for Investigation, U.S. Department of Housing and Urban Development

Hear from HUD’s CFO and IG offices about how they teamed up to eliminate improper payments in the agency’s housing subsidy and other financial assistance programs. The “double punch” impressed GAO so much that after 13 long years, it dropped HUD from the latest report on federal programs at high risk for fraud, waste, abuse and mismanagement.

Stan Dore, Chief Risk Officer, Office of Federal Student Aid, U.S. Department of Education

Gregory L. Evans, Assistant Director, Division of Reserve Bank Operations and Payment Systems, Federal Reserve Board

OMB Circular A-123 and other regulations have spurred an ever-increasing focus on risk management. The intent of this session is to discuss how an Enterprise-wide risk management framework, such as the COSO ERM framework, can be leveraged in the public sector for effective internal controls, appropriate budgeting and cost accounting, and aid overall in improving performance objectives to manage for results.

11 a.m. – 12:30 p.m.
M104: Internal Controls: It’s Not Just Financial Reporting

Mary Jean Buhler, CGFM, CMA, CPA, Chief Financial Officer, U.S. Capitol Police

Dana James, Accountant, Office of Federal Financial Management, U.S. Office of Management and Budget

Loren J. Phillips, CGFM, Senior Associate, Internal Controls & Quality Assurance, National Science Foundation

Two federal officials give attendees a big-picture view of why internal controls are critical to efficient operations. Beefed-up internal controls over financial reporting are required under the Circular A-123, but a strong system of internal controls can do even more. It can form the foundation for reliable and timely financial information that can be used by decision-makers to better serve citizens.

Jane Duffield, Chief, Payment Accuracy Branch, Food Stamp Program, Food and Nutrition Service, U.S. Department of Agriculture

Preston Mears, EBT Program Analyst, Food Stamp Program, Food and Nutrition Service, U.S. Department of Agriculture

The Food and Nutrition Service of USDA has taken great strides to ensure that Program Integrity is maintained in the Food Stamp Program as the Program meets the nutritional needs of low income households across the country. This session will look at some of those efforts which are directed at preventing fraud by both recipients and the food retailers that participate in the Program.

Ethical decision-making is crucial within any organization. We read, hear and see ethical lapses on a daily basis. But what are the components of ethical decisions, items to take into consideration and your role, responsibility and accountability in various situations? How does the organizational culture and tone, internal politics and code of ethics influence your actions? Do you have the knowledge to do the "right thing" when no specific guidance is available?

1:45– 3:15 p.m.
M107: Data Mining Revisited: Continuous Auditing Initiatives, Analytic Techniques and Lessons Learned

Bertis B. Little, Ph.D., Associate Vice President for Research and Professor of Computer Science and Math, Tarleton State University

Edward Slevin, Director, Computer Assisted Assessment Techniques (CAATs), Office of the Inspector General, U.S. Postal Service

Roland Wong, CISA, Director, CAATS, Office of Inspector General, U.S. Department of Education

Fraud, waste, and abuse cost government agencies millions—even billions—every year. Agency programs, such as purchase cards and workers' compensation, are examples of the many critical areas where abuse and errors are rampant, with taxpayers footing the bill. Many agencies have begun data mining initiatives in anticipation of uncovering hidden patterns, errors and waste. This session presents how the U.S. Postal Service and Department of Education OIGs successfully implemented their data mining projects. Experts discuss their analytical techniques for detecting anomalies, best practices for implementing a data-mining project and lessons learned.

3:45– 4:45 p.m.
M108: Prosecuting Fraud: Cooperation Between The Investigator & Prosecutor Community

William D. Hamel, Assistant IG for Investigations, U.S. Department of Education

Linda Dale Hoffa, Chief, Criminal Division, U.S. Attorney's Office, Eastern District of Pennsylvania, U.S. Department of Justice

This panel discussion demystifies the working relationship between law enforcement and prosecutors as it relates to fraud and corruption. The panel, consisting of two federal prosecutors and one federal law enforcement officer, address various issues related to how these two professions cooperate to build successful cases for prosecution, demonstrating the important role government financial managers play in these investigations. Last, the panel debunks some of the misconceptions about the relationship between law enforcement and prosecutors that have been generated by the media, Hollywood and popular culture.

David R. Dugas, United States Attorney for the Middle District of Louisiana, U.S. Department of Justice

Billy Marshall Sabin, Deputy Assistant Attorney General, U.S. Department of Justice

State and federal officials discuss the fraud and mismanagement that occurred in the aftermath of 2005’s Hurricane Katrina, and the lessons that can be applied after future disasters so governments can launch a swift and effective response while limiting fraud and corruption.

9:15– 10:15 a.m.
T101: How to Use Internal Controls Initiatives to Improve Program Operations

Janet Hayes, CPM, Director, Public Audit Interface Division, Office of the State Auditor, State of North Carolina

Barbara Harris, CPA, Chief Financial Officer, Centers for Disease Control (Invited)

Good internal controls can be used for far more than just making sure we have the right numbers in the financial statements. Good controls can improve accountability, prevent problems, and most importantly, improve the delivery of services to the public. And one area is grants management. Find out how one state is using controls to improve its grants management, using internal controls for better oversight of and accountability for grants all the way down to the subrecipient level.

Joseph A. Kapelewski, CGFM, CPA, CIA, Assistant Director, Accounting and Internal Control Compliance Oversight Unit, Department of Accounts, Commonwealth of Virginia

Martha J. Stearns, Central Site Director, Cleveland Center, Defense Finance and Accounting Service

Too often government professionals focus on a budget cycle or a governor's or president's term. Projects come and go. How does an organization build and sustain a strong internal control environment that doesn't fall into complacency? Hear how the state of Virginia is building its internal control program, and then from the Defense Finance and Accounting Service on its Enterprise Risk Management Program (ERMP) and Business Modernization Activity (BAM).

9:15– 10:15 a.m.
T103: Personal Information and Fraud– Managing the Privacy Risk

Jonathan Lasher, Deputy Chief Counsel for External Relations, Office of Inspector General, U.S. Social Security Administration

This session covers the role personal information plays in fraud and the actions organizations should take to mitigate risk. Key topics include: how criminals obtain personal information and how they use it; the role of the insider threat in perpetrating identity-related fraud; the unintentional misuse and exposure of personal information; and regulatory provisions that attempt to limit harm to individuals. The presentation closes with ways to lower fraud risks and the criteria and process for privacy audits.

11 a.m. – 12:15 p.m.
T104: Using Fraud Hotline Benchmarking and Best Practices

C.O. Hollis Jr., Director of College Auditing and Advisory Services, Morehouse College

Robert L. Meekins, Deputy Assistant Inspector General for Resource Management, U.S. Social Security Administration

Gerald Schaefer, CISA, CIA, CFE, CGAP, Financial Systems Audit Manager, City Auditor's Office, City of Atlanta, GA

Join recognized industry leaders as they share techniques for developing and maintaining an effective ethics hotline program within a government agency. The presentation and discussion will examine the three critical stages: planning prior to launch, communicating to stakeholders about the hotline and reacting to hotline tips. This knowledgeable and experienced panel compares notes on how they have reduced occupational fraud and abuse within their own agencies while providing attendees with the framework for creating and maintaining an effective anonymous reporting program.

James H. Angel, Jr., Director, Office of Enterprise Risk Management, Federal Deposit Insurance Corporation

Susan S. K. Lee, CPA, Director, Assurance and Compliance, Immigration and Customs Enforcement, U.S. Department of Homeland Security

Tom Sadowski, CGFM, CPA, Director of Accounting, OA - Division of Accounting, State of Missouri; AGA Past National President, AGA Past National Treasurer, AGA National Treasurer

This panel of state and federal experts discuss the connection between fraud and ethics at the top of the organization. Management's behavior sends a clear message, and in effect determines the effectiveness of an organization's internal control environment. Leading by example spreads the correct ethical tone throughout the organization, reduces the risk of misconduct and establishes a culture of compliance.

Arthur A. Hayes, Jr., MBA, CGFM, CPA, CFE, Director, State Audit, Comptroller of the Treasury, State of Tennessee

This session presents the requirements of SAS 99 relating to management override of controls and provides practical guidance for identifying when management override may have occurred, how to determine its extent and ways to attempt to control such overrides in the first place. Learn who is "management" and how any “entrepreneur” can act like a big wheel and run over, around or through most internal controls. After all, not all fraud occurs at the very top of the organizational chart.

1:30– 2:45 p.m.
T107: Improving the Accuracy and Integrity of Federal Payments

Sally Clark Beecroft, Senior Policy Analyst, Financial Integrity Analysis Branch, U.S. Office of Management and Budget

David R. Hancox, CGFM, CIA, Director of State Audits, Office of the State Comptroller, State of New York

Fraud can go undetected, even in organizations where government and public accountants, auditors, examiners, quality control experts, mid-level managers and executives have described and reported the internal controls as working well. “Soft control” failures contribute to internal controls not working as intended, and “strong controls” can be the wrong controls, thereby leaving the door open to fraudulent activities.

William J. Cordrey, CGFM, CPA, Assistant Director, U.S. Government Accountability Office

This session focuses on the auditor’s responsibilities to plan for, search out and report on fraud under the new Government Auditing Standards (Yellow Book) issued by GAO in July 2007. Hear a discussion of the auditor’s responsibility to assess the risk of fraud in financial statement audits, attestation engagements and performance audits.

T110: Perspectives on Public Transparency–Will New Disclosures Raise the Stakes on Transparency?

Richard L. Fair, CGFM, CPA, State Auditor, State of New Jersey; AGA National President

Michael H. Granof, Ph.D., Professor of Accounting, University of Texas at Austin

Martha M. Haines, Chief, Office of Municipal Securities, U.S. Securities and Exchange Commission

States are under increasing pressure to take a longer-range view of their financial future. The Governmental Accounting Standards Board (GASB) is requiring disclosure of health-care liabilities on state balance sheets starting next year. While the impact of such disclosures has not yet to be felt, one state, Texas, has passed a bill allowing alternative accounting rules, and other states are likely to look closely at the requirement. Meanwhile, U.S. Securities and Exchange Commission has suggested that Congress bolster GASB by making its rules mandatory, to ensure municipal bond investors have comparable and consistent financial information. This session takes a hard look at challenges to the states and their financial reporting requirements in an era of enhanced transparency.