“Successfully Navigating Your CalPERS Audit” -- webinar ...

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“Successfully Navigating Your CalPERS Audit” -- webinar 2:00 - 3:30 p.m., Wednesday, April 23, 2014 CSMFO Coaching Program Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/843192441 Webinar Topics: 1. What are the critical issues that CalPERS looks at in an audit? 2. What are effective ways to address them? 3. How can you learn from the experience of others? Presenter: * Margaret Junker, Chief, Auditing Services, CalPERS Commentator: * Scott Catlett, Asst. Finance Director, Riverside Get connected with these steps. 1. Register in advance for the webinar: There is no charge for participating in the webinars, but each requires advance registration. *** Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/843192441 2. Connect with the webinar and audio: Use your logon information from the email confirmation you receive via email from GoToWebinar. We recommend the telephone option dial-in number provided by GoToWebinar for sound quality. Depending upon your internet connection, VOIP option for audio (computer speakers) can have delays or sound quality issues. 3. Ask questions: You may submit questions anonymously via email to [email protected] in advance or via the webinar during the panel discussion. As moderator for the session, Don Maruska will pose the questions. 4. Presenters’ presentation materials: We post these with the agenda at “Agendas & Archives” tab of www.csmfo.org/training/webinars. The PPT will be available at least 2 hours before the webinar. After a webinar occurs, a digital recording along with the PowerPoint materials and results of the polling questions will be available after 24 hours at the "Agendas & Archives" tab of www.csmfo.org/training/webinars.

Transcript of “Successfully Navigating Your CalPERS Audit” -- webinar ...

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“Successfully Navigating Your CalPERS Audit” -- webinar 2:00 - 3:30 p.m., Wednesday, April 23, 2014

CSMFO Coaching Program Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/843192441 Webinar Topics: 1. What are the critical issues that CalPERS looks at in an audit? 2. What are effective ways to address them? 3. How can you learn from the experience of others? Presenter: * Margaret Junker, Chief, Auditing Services, CalPERS Commentator: * Scott Catlett, Asst. Finance Director, Riverside Get connected with these steps. 1. Register in advance for the webinar: There is no charge for participating in the webinars, but each requires advance registration. *** Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/843192441 2. Connect with the webinar and audio: Use your logon information from the email confirmation you receive via email from GoToWebinar. We recommend the telephone option dial-in number provided by GoToWebinar for sound quality. Depending upon your internet connection, VOIP option for audio (computer speakers) can have delays or sound quality issues. 3. Ask questions: You may submit questions anonymously via email to [email protected] in advance or via the webinar during the panel discussion. As moderator for the session, Don Maruska will pose the questions. 4. Presenters’ presentation materials: We post these with the agenda at “Agendas & Archives” tab of www.csmfo.org/training/webinars. The PPT will be available at least 2 hours before the webinar. After a webinar occurs, a digital recording along with the PowerPoint materials and results of the polling questions will be available after 24 hours at the "Agendas & Archives" tab of www.csmfo.org/training/webinars.

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CPE Credits: If you are a member of CSMFO and wish to obtain CPE credit, you need to register and attend in your name, respond to at least 75% of the live polling questions, and pay $25 to CSMFO after notice from CSMFO following the webinar. After payment, CSMFO emails the CPE certificate as a PDF. Post-Webinar Group Discussions Many agencies are organizing groups to participate in the webinars (live or recorded) and discuss the topics among themselves after the webinars. Some are summarizing their discussions and distributing them to managers throughout their organizations. Use the CSMFO Coaching Program as an effective way to enhance professional development in your agency. Here are some discussion starters for this session: a. What areas in our agency are likely to attract audit attention? b. What can we do to avoid these problems? c. How can we be prepare and respond to audit issues? MORE RESOURCES--See the "Coaching Corner" at www.csmfo.org/coaching for valuable resources to boost your career. These include a Financial Management Skills Inventory, Resource Matrix, Coaches Gallery of 24 volunteer CSMFO Coaches willing to help you on a one-to-one basis, and an archive of digital recordings and materials from past webinars at www.csmfo.org/training/webinars. Enjoy the resources to help you succeed in local government finance. Don Maruska, Master Certified Coach Director, CSMFO Coaching Program; [email protected] Author “Take Charge of Your Talent” www.TakeChargeofYourTalent.com

Margaret Junker, Chief Auditor, CalPERS Margaret is Chief Auditor of the California Public Employees’ Retirement System (CalPERS), a position she has held since May 2009. CalPERS is the largest public pension system in the U.S. with approximately $283 billion in assets. Margaret joined CalPERS Office of Audit Services in 1999 following three years with the California Bureau of State Audits. She also has private sector experience in accounting and financial analysis. Margaret holds an MBA from Golden Gate University and a Bachelor of Science in Business Administration from Notre Dame de Namur University in Belmont, California. She also holds the Certified Public Accountant, Certified Internal Auditor, Certified Information Systems Auditor, and Certified Investments and Derivatives Auditor designations.

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Scott Catlett, Assistant Finance Director, Riverside, CA Scott Catlett has been the Assistant Finance Director for the City of Riverside for the past three years. Previously Scott was the Financial Resources Division Manager, where he supervised the preparation of the City’s Annual Budget and Capital Improvement Program documents and managed the City’s debt portfolio. Prior to joining the City, he worked as a Management Consultant specializing in the development of capital improvement financing plans for municipalities and large commercial airports. Scott has a Bachelor of Science degree in Finance from Tulane University and a Masters of Public Administration degree from California State University San Bernardino. He is a member of the Government Finance Officers Association (GFOA) and the California Society of Municipal Finance Officers (CSMFO). He serves as a budget reviewer for both organizations’ budget awards programs, is the current Chair of the CSMFO Career Development Committee, and is a past Chair of the Professional Standards and Recognition Committee and of the Inland Empire Chapter.

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Successfully Navigating a CalPERS Audit

Coaching Program April 23, 2014

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Coaching Program: 16th year as member benefit

Career Development Committee

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Overview of Session 1. What are the critical issues that CalPERS looks at in an audit? 2. What are effective ways to address them? 3. How can you learn from the experience of others? Presenters: Margaret Junker, Chief, Audit Services, CalPERS Commentator: Scott Catlett, Asst. Finance Director, Riverside, CA Moderator: Don Maruska, Director, CSMFO Coaching Program

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Polling Question #1

How many persons are participating at your location?

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Margaret Junker, Chief CalPERS Office of Audit Services

How to Successfully Navigate Your CalPERS Audit

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How to Successfully Navigate Your CalPERS Audit

Overview of Presentation • Objectives of an Audit/Compliance Review • How Employers are Selected for Review • What to Expect During the Audit Process • What Information Do We Review • Frequently Identified Issues • Reporting and Findings Resolution • Effective Ways to Improve Compliance • Questions and Answers

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How to Successfully Navigate Your CalPERS Audit

Objectives of a Compliance Review

To ensure employers correctly enroll members and report compensation in accordance with: • California Government Code (“PERL”) • California Code of Regulations • Employer’s Contract with CalPERS

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Polling Question #2

What’s been your agency’s experience with CalPERS audits?

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Audit Plan Select Employer Entrance Letter Fieldwork at Employer’s Site

Analysis and Write-Up

Quality Review

Draft Report Issued

Employer Response

Final Report Issued

CalPERS Program Follow-Up and

Resolution

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Overview of Audit Process

Presentation Title

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How to Successfully Navigate Your CalPERS Audit

How Employers Are Selected for Review • Board Approved Plan based on risk assessment • Board directive • Request by program area • Tips • Media reports • Employer request • Currently approximately 80 reviews in progress

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How to Successfully Navigate Your CalPERS Audit

Preparing the Annual Plan • Risk assessment process • Risk factors and scoring • Risk rank all contracting agencies • The risk assessment provides a foundation for the annual

audit plan, but the plan may be adjusted for other factors

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Polling Question #3

How are Finance and HR working to address CalPERS compliance issues?

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How to Successfully Navigate Your CalPERS Audit

If Your Agency is Selected for Audit • You will receive an entrance letter • Auditor will call to schedule the on-site visit • We will request documents prior to visit • Request other documentation be ready upon visit • Follow up to obtain any missing documents • Providing all requested information will decrease the time

needed at audit site

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How to Successfully Navigate Your CalPERS Audit

What to Expect During an Audit • Pre-field work • Arrival on site • Entrance conference • On-site work averages 4 days • Preliminary exit conference – discuss all issues identified

and determine whether agency agrees • Follow-up questions and information post field work • Ongoing communication

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How to Successfully Navigate Your CalPERS Audit

Information Reviewed On-Site

• Personnel and payroll records for a selected sample of

employees including summary reports and CalPERS listings • Pay schedules, labor agreements, employment contracts,

agency policies and procedures • Any other relevant documentation • All applicable records not previously obtained or requested

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How to Successfully Navigate Your CalPERS Audit

Critical Areas Reviewed by CalPERS

• Compensation and payroll • Payrates • Special compensation • Membership enrollment • Part-timers, temporaries, retired annuitants • Unused sick leave • Independent contractors – affiliated agencies

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How to Successfully Navigate Your CalPERS Audit

Frequently Identified Issues

• Salary schedule not compliant with

Government Code section 20636 and California Code of Regulations section 570.5

• Special compensation reporting errors • Retired annuitant issues • Part-timers, temporary employees • Unused sick leave at retirement • Independent contractors or affiliated agencies

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How to Successfully Navigate Your CalPERS Audit

Example of an Actual Audit Finding

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Recommendation: The City should implement procedures to review and monitor the number of hours worked in a fiscal year by all employees hired through temporary employment agencies and enroll employees when membership requirements are met. The City should work with CASD to assess the impact of this membership eligibility issue and determine what adjustments are needed. Condition: The City did not enroll six employees hired through various temporary employment agencies into CalPERS membership when eligibility requirements were met. Specifically, OAS found six temporary part-time employees worked for the City in an employer/employee relationship in fiscal year 2011/2012 and met CalPERS membership by working more than 1,000 hours. The employees should have been enrolled into CalPERS membership not later than the first day of the first pay period of the month following the month in which 1,000 hours of service were competed. Criteria: Government Code: § 20044, § 20160, § 20305(a)(3)(B)

Finding 11: Employees hired through a temporary employment agency were not enrolled into membership.

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How to Successfully Navigate Your CalPERS Audit

Reporting Audit Results • Communicate results to employer • Complete audit report and issue draft • Request employer’s written response • Final report will include employer’s

response • Audit process feedback survey • Final report is a public document

and is posted to CalPERS On-Line

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How to Successfully Navigate Your CalPERS Audit

Final Audit Reports on CalPERS On-Line

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How to Successfully Navigate Your CalPERS Audit

Audit Findings Follow-Up and Resolution • CalPERS Program Areas Work with Employers to Resolve

Findings and Implement any Corrective Action – Program will send letter following issuance of final report – Contact names for each finding – Goal is to resolve all findings within 120 days

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How to Successfully Navigate Your CalPERS Audit

Potential Financial Impacts to Employer No fines for audit findings per se; however, can be financial impact for: • Late membership enrollment • Late payroll • Retroactive reinstatement of retired annuitants • Excess of estimated time for audit

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Polling Question #4

What’s your perspective on the CalPERS audit process?

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How to Successfully Navigate Your CalPERS Audit

Effective Ways to Improve Compliance • Pay schedules meet all PERL and CCR criteria • Special Compensation – ensure all requirements including

conditions for payment of special compensation are included in an MOU and are exclusively listed and identified in CCR 571

• Membership – Ensure membership enrollment is accurate • Retired Annuitants comply with all PERL requirements • Independent Contractors – common law test

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How to Successfully Navigate Your CalPERS Audit

Effective Ways to Improve Compliance (continued) Be familiar with relevant PERL and CCR sections Be on the lookout for Circular Letters Check CalPERS website for latest news and updates Reach out to CalPERS program areas if you have questions We can be reached at: 888-CalPERS (or 888-225-7377)

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Polling Question #5

Which of the following compliance issues has your agency satisfied?

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Questions?

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How to Successfully Navigate Your CalPERS Audit

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Contacts Presenters: Margaret Junker, Chief, Audit Services, CalPERS, [email protected] Commentator: Scott Catlett, Asst. Finance Director, Riverside, CA [email protected] Moderator: Don Maruska, Director, CSMFO Coaching Program [email protected]

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Post-Webinar Discussion Questions

a. What areas in our agency are likely to attract audit attention?

b. What can we do to avoid these problems?

c. How can we be prepare and respond to audit issues?

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Resources and Feedback A digital audio recording of the session and an Agenda packet with PDF of the PPT with polling results and other materials will become available in ~ 24 hours at the “Live Audio & Archives” tab of www.csmfo.org/training/webinars Other coaching resources, including volunteer 1-1 coaches are available at www.csmfo.org/training/coaching Please complete the follow up survey.

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Polling Question #6

How was the webinar of value for you and your agency?

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Upcoming webinar CSMFO Coaching Program: Latest Accounting Updates 10:00 – 11:30 a.m. Pacific Time, Thursday, May 15 register now: https://www1.gotomeeting.com/register/642041032 What a Finance Director Needs to Know about HR 10:00 – 11:30 p.m. Pacific Time, Thursday, June 26 register now: https://www1.gotomeeting.com/register/239900632

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Polling Results from “Successfully Navigating a CalPERS Audit” – webinar

April 23, 2014

152 locations; 355 estimated participants in live audience