Avoiding Pitfalls

525 Park Street, Suite 500, Saint Paul, Minnesota 55103

| Accounting Policies | Administrative Penalties | Audits | Bonds | Compensation | Computers | Conflicts of Interest | Contracting | Data Practices/Records | Deposits & Investments | Disaster Plan | Disbursement Process | Employee Expenses | Employee Payroll | Fire Departments & Relief Associations | Fraud Prevention | Gifts | Internal Controls | Inventory | Meetings | Municipal Liquor Stores | Public Purpose | Purchasing | Receipts | Reporting Obligations | Tax Issues | TIF |

Administrative Penalties

Administrative Traffic Citations

Accounting Policies

Documentation of Accounting Policies and Procedures

Examine Bank Statements Promptly to Preserve Potential Claims

Internal Controls for Special Events

Policy for Account Adjustments and Write-offs

Uncashed Checks

Audits

Audit Follow-Up

Fire Relief Association Audit Requirements – Part I

Fire Relief Association Audit Requirements – Part II

Fraud Risk Questions During an Audit

Bonds

Bonds for Public Employees and Officers

Change in Bonded Officers

Contractors' Performance and Payment Bonds

Obtaining Loans or Lines of Credit

Compensation

County Commissioner Compensation

Local Government Compensation Limit

Pay and Benefits Documentation

Salary Adjustments

Computers

Computer Access by Employees

Computer Access - Passwords

Computer Scams

Dangerous E-mails

Personal Portable Computing Devices

Phishing Scams

Security For Portable Computing and Media Devices

Update Computers With Windows XP or Office 2003

Conflicts of Interest

Contracts and Conflicts of Interest

Mayors and Council Members May Not Be Full-Time Permanent City Employees

Sale of Public Property to Public Officers and Employees

Contracting

Check the CPV for Purchases over $25,000

Contracting Procedures

Contractors' Performance and Payment Bonds

Contracts and Conflicts of Interest

Contract Quotations

Cooperative Purchasing Venture

Disregarding Policies is a Risk

Joint Powers Agreements – Part I

Joint Powers Agreements – Part II

Monitor Contract Prices of Supplies

Pay and Benefits Documentation

Plowing Snow on Private Property

Surety Deposits for Non-Minnesota Construction Contractors

Written Contracts

Data Practices/Records

Records Retention

Data Practices

Recording Closed Meetings

Release of Not Public Data to the State Auditor

Deposits & Investments

Broker Certifications

Collateralization

Depositories – Federal Deposit Insurance

Monitoring Risks with Certificates of Deposit

Disaster Plan

Disaster Recovery Plan

Disbursement Process

Approval of Claims

Claim Approval by the Governing Body

Claims Payment Period

Credit Cards - Detailed Receipts Required

Disregarding Policies is a Risk

Documentation For Claims - Original Itemized Receipts/Invoices

Electronic Funds Transfers

Issuance of Checks

Monitor Federal Grant Subrecipients

Multiple Signatures on Checks

Paying Vendors

Petty Cash (Imprest) Funds – Part I

Petty Cash (Imprest) Funds – Part II

Petty Cash (Imprest) Funds – Part III

Prompt Payment of Local Government Bills

Timely Recording of Expenditures

Town Disbursement Process

Update Bank Signature Cards

Use of Credit Cards

Employee Expenses

Disregarding Policies is a Risk

Meal Reimbursements May Be Taxable

Meeting Meals for Board or Council Members

Taxable Employee Expense Reimbursements

Uniform/Clothing Allowances

Employee Payroll

Direct Deposit of Payroll

Employee Timekeeping and Payroll Procedures

IRS Form W-2 and Form 1099

Payroll Entries

Payroll-Related Tax Issues

Pay and Benefits Documentation

Fire Departments & Relief Associations

Approval of Relief Association Expenditures

Donations of Gambling Funds

Donations to Fire Departments

Establishing Separate Relief Association Accounts

Fire Department Checking Accounts

Fire Relief Association Audit Requirements – Part I

Fire Relief Association Audit Requirements – Part II

Fire State Aid in "Combination" Communities

Minimum Retirement Age for Relief Association Members

Municipal Ratification of Relief Association Benefit Levels

Municipal Representation on Fire Relief Association Boards

Open Meeting Law Requirements Apply to Relief Associations

Fraud Prevention

Cash Drawer Accountability

Cash Register Theft Schemes: Voids and Returns

Computer Scams

Employee Fraud

Employee Tips

An Environment Where No "Borrowing" of Funds is Allowed

Fraud Increases During Economic Downturn

Fraud Prevention - The Perception of Detection

Fraud Schemes Related to the Coronavirus (COVID-19) Pandemic

The "Fraud Triangle"

Indirect Cost of Fraud

Internal Control -- More than the Annual Audit

Mandatory Vacations

Monitoring Internal Controls

Phantom Vendors

Phishing Scams

Segregation of Billing Duties

Use "2020" Instead of Just "20" When Dating Signatures or Documents

Gifts

Acceptance of Gifts to an Entity

Donations of Gambling Funds

Donations to Fire Departments

Donations to Non-Profit Entities by Governmental Units

Vendor Gifts

Internal Controls

Audit Follow-Up

Cash Drawer Accountability

Cashing Checks

Cashing Personal or Third-Party Checks

Cash Register Theft Schemes: Voids and Returns

Documentation For Claims - Original Itemized Receipts/Invoices

Employee Timekeeping and Payroll Procedures

Examine Bank Statements Promptly to Preserve Potential Claims

General Ledger Journal Entries

Indirect Cost of Fraud

Intact Deposits

Internal Control Environment

Internal Control -- More than the Annual Audit

Internal Controls for Special Events

Management Override

Monitoring Internal Controls

Municipal Liquor Store Internal Controls

Need for Cross-Training

Pre-numbered Receipts for Payments Received

Reconciliations

Reconciling Bank Balances/Federal Check 21 Act

Risk Assessments

School Cash Handling Procedures

Security for Checks

Segregation of Billing Duties

Segregation of Duties - Part I

Segregation of Duties - Part II

Small Entities: Review of Checks

Timely Deposits

Update Bank Signature Cards

Use of Credit Cards

Inventory

Asset Inventories

Unclaimed Property

Meetings

Approval of Town Meeting Minutes

First Meeting of the Year

Holding Public Body Meetings During Times of Emergency

Meeting Meals for Board or Council Members

Meeting Minutes

Open Meeting Law Requirements Apply to Relief Associations

Municipal Liquor Stores

Hearings on Municipal Liquor Store Losses

Municipal Liquor Store Internal Controls

Public Purpose

Alcohol and Spouse/Family Expenses

Donations to Non-Profit Entities by Governmental Units

Meeting Meals for Board or Council Members

Purchasing

Check the CPV for Purchases over $25,000

Claims Payment Period

Cooperative Purchasing Venture

Fuel Purchases

Monitor Contract Prices of Supplies

"Phantom Vendors"

Surety Deposits for Non-Minnesota Construction Contractors

Use of Credit Cards

Receipts

Consolidation of Cash Collection Points

Intact Deposits

Pre-numbered Receipts for Payments Received

Schools - Cash Receipts

Scrap and Salvage Proceeds

Segregation of Billing Duties

Ticket Sales

Timely Deposits

Reporting Obligations

Accountants' Obligation to Report Evidence of Misconduct

Change in Bonded Officers

Report Evidence of Wrongdoing

Tax Issues

IRS Form W-2 and Form 1099

Meal Reimbursements May Be Taxable

Meeting Meals for Board or Council Members

Payroll-Related Tax Issues

Taxable Employee Expense Reimbursements

Tax Identification Numbers

Uniform/Clothing Allowances

TIF

Confirm Decertification Dates of TIF Districts

TIF Interfund Loans

The Office of the State Auditor prepares Avoiding Pitfalls to provide an educational resource to auditors, local governments and the public. The Avoiding Pitfalls address topics that have arisen or may arise as a result of the State Auditor’s oversight of local government. Avoiding Pitfalls are not legal advice and should not be relied upon in lieu of legal advice, and may be revised from time to time.