Audit Core Team
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Audit Core Team
Audit Core TeamResponsibilitiesProceduresDeadlines
Presented by:Sandra Hoffman, Mike Chertude, Mindy Bates, and Steve Krovitz
2014 CSP Contract Compliance Audit1Audit Core TeamWhat is this??The Audit Core Team is defined within Rule 806.3 Administration of the Compliance Audit of Streamlined Sales Tax Rules and Procedures.2Defined Per Rule Rule 806.3.1(C) Authority
The Streamlined Sales Tax Governing Board designates the Audit Core Team to perform contract compliance audits for member states and to coordinate the tax compliance audits of Model 1 seller transactions processed by the CSP as authorized by the Governing Board. 3Defined Per Rule Rule 806.3.2(E) Audit Core Team
The Audit Core Team is a group of designated representatives from full member states who are responsible for coordinating compliance audits, performing contract compliance audits and compiling feedback reports for the Governing Board. 4Defined Per Rule Rule 806.3.4(B) Audit Core Team - Reporting Relationship
The Audit Core Team will report to the Streamlined Sales Tax Governing Board Executive Director or its designee for audit assignments, guidance and support.5Who is the Core Team?Sandra HoffmanKentucky Department of Revenue
Mike ChertudeWashingtonDepartment of Revenue
6Who is the Core Team?Mindy BatesIndianaDepartment of RevenueSteve KrovitzMinnesotaDepartment of Revenue
Lets go over the Core Team concept?8Simply stated: The Core Team willComplete audit steps and procedures to assess whether the CSP complied with the detailed requirements of the CSP contract.
Review areas generic to all the SST Member and Associate Member States (e.g., whether compensation is calculated in accordance with the contract).
Coordinate a tax compliance audit of the CSP transactions with the State Auditors.
9Simply stated: The State Auditors willComplete the tax compliance audit steps as part of the CSP contract audit that are specifically related to their state (e.g., whether the transactions were taxed correctly).
Complete a Sales Tax Audit using their specific states policies and procedures.
10The SST Rules Define the Compliance Audit ProcessRule 806.3.5 Compliance Audit of a CSPA. The Compliance Audit of a CSP and its Model 1 sellers will include a contract compliance audit of the CSP and tax compliance audits of Model 1 seller transactions processed through the CSPs system.
B. The contract compliance audit of the CSP will be performed by the Audit Core Team. The tax compliance audits of the Model 1 seller transactions will be performed by the member states under the coordination of the Audit Core Team.11Clear as Day!(Right!!!!)
12The Audit Core Team:
Will evaluate all pertinent elements of the current contract between the CSPs and the Streamlined Sales Tax Governing Board and assess each CSPs compliance with the terms of the contract.
As part of this contract compliance audit, the core team will audit areas where they are in a unique position to review.
Will advise the Member and Associate Member State Auditors if problems exist that would impact the tax compliance audits.
13Will perform tax compliance audits on sales transactions of Model 1 sellers processed by the CSPs.
As part of the CSP compliance audit process, they will report audit exceptions to the Audit Core Team (e.g., tax returns not filed timely).The Member and Associate Member State Auditors:14
When the rubber hits the road, it could still be a little bumpy from time to time. Why.?15BecauseAlthough this is the fourth audit cycle, there have been several CSP contract changes that impact the tax compliance audit (e.g., changes to Appendix F regarding quarterly downloads).
Theory does not always equal practice.
Sometimes the road to knowledge can be full of potholes (large and small).16Solution The Core Team will: work hard attempt to communicate effectively with everyone be flexible in its approach keep the goal in focus strive to hold to the audit timelineThe SST Audit Committee has:listened to the concerns of the Core Team, the CSPs, and the statesdiligently attempted to address areas of concern learned during previous audit cycles17GoalTo complete a timely, accurate, and professional audit that meets the needs and expectations of the Streamlined Sales Tax Governing Board.
18The Core Team will provide the State Auditors with two reports.A preliminary report of findings will be issued to the state auditors by the end of May 2014. This report will include any audit results discovered by the Core Team that could be relevant to the tax compliance audits.
The final contract compliance report will be distributed by the Governing Board Executive Director to each Member and Associate Member State.19Audit Core Team ResponsibilitiesRule 806.3.4(D)(1)
The Audit Core Team is responsible for performing contract compliance audits and coordinating tax compliance audits with member states. Rule 806.3.4(D)(2)
Outlines eleven (11) specific tasks the Audit Core Team is responsible for completing. 20Rule 806.3.4(D)(2)(i)
The Audit Core Team will: Create a uniform audit plan with a timeline to establish the projected dates that various audit steps are to be completed by the state audit representatives and the Audit Core Team.The audit timeline has been established and will be reviewed in the following slides.21Important Dates for Member and Associate Member State Auditors
January 13, 2014Audit Core team submitted questionnaires to member/associate member states.MondayFebruary 10, 2014All questionnaires must be returned to Audit Core Team by end of business today.MondayFebruary 17, 2014The CSPs will have completed the delivery of the quarterly download files for quarter 4 per Appendix F.22Important Dates for Member and Associate Member State AuditorsFebruary 17, 2014through February 28, 2014
Follow-up with Member/Associate Member States to ensure that they have received all CSP download files and that they have thoroughly completed their questionnaires.
March 15, 2014 to June 15, 2014
Member/associate member states will review the sales transaction records provided by the CSP and prepare reports that notify the Audit Core Team of their findings.
The member/associate member state auditors should immediately advise the Core Team if they discover any reporting problems not previously reported on their state questionnaires. Important Dates for Member and Associate Member State AuditorsFriday
May 30, 2014
The Audit Core team will forward to member/associate member states preliminary reports detailing work completed to date and outlining any potential audit adjustment areas that are discovered.
June 16, 2014
The member and associate member states Preliminary State Tax Compliance Feedback Audit Reports must be forwarded to the Audit Core Team by the end of business on June 16th.
24Important Dates for Member and Associate Member State AuditorsJune 15, 2014to July 10, 2014The Audit Core Team will work with the CSPs and the states to resolve any issues that are a result of communication problems or misunderstandings.July 10, 2014toAugust 11, 2014The CSP will review and comment on the preliminary findings of the compliance audit. Comments will be sent to the Audit Core Team and member/associate member states.FridayAugust 15, 2014
The member and associate member states Final State Tax Compliance Feedback Audit Reports must be forwarded to the Audit Core Team by the end of business on August 15th.
25Important Dates for Member and Associate Member State AuditorsAugust 11, 2014 to September 14, 2014The Audit Core Team and member/associate member states will amend their findings, if necessary.MondaySeptember 15, 2014The final contract compliance audit report on each CSP will be forwarded to the Executive Director. Rule 806.3.4(D)(2)(g)
The Audit Core Team will: Acquire a list of sellers represented by each CSP and provide this information to the Streamlined Sales Tax Governing Board member states.This information will be requested and forwarded to the various states. Audit Core Team Responsibilities (Continued)Rule 806.3.4(D)(2)(h)
The Audit Core Team will: Coordinate with state auditors to ensure they have received a download of the audit work files from the CSP.The states should have already received the quarterly downloads from the CSPs except for Quarter 4 of 2013 which isnt due until February 15. By no later than March 15 all the data will be summarized and placed in your states ShareFile folder. Rule 806.3.4(D)(2)(e)
The Audit Core Team will: Verify tax collected was remitted to the appropriate tax authority.1.) The Core Team will verify that all tax collected is remitted to a state.2.) The Core Team will rely on information received from the states that the tax was appropriately and timely remitted.Rule 806.3.4(D)(2)(f)
The Audit Core Team will: Verify sales were accurately reported by the CSP/Seller on simplified electronic returns (SERs).1.) The Core Team will verify that simplified electronic returns are being filed by the CSP for all sellers.2.)The Core Team will review the CSPs procedures for extracting the SER data.3.)The Core Team will rely on information from the states that the SERs are accurate. Rule 806.3.4(D)(2)(d)
The Audit Core Team will: Verify appropriate entity use exemption data elements are captured by the CSP system. 1.) The Core Team will evaluate the CSPs system to be assured it has t