FY 2009 Audit – MISSA sets unprecedented records
Posted 3/30/10
The Administration’s external auditors have once again commended MISSA for its quest to remain one of the country’s leading government agencies in terms of accountability and good governance.
During the exit conference between Dan Fitzgerald, Director of Deloitte & Touche and the MISSA Board of Directors held on January 28, 2010, the Administration received the final audit report for FY 2009. The report was dated November 12, 2009 and contains MISSA’s audited basic financial statements for FY 2009 and the independent auditor’s’ report on compliance with laws and regulations.
The early completion of the audit was attributed to the timely submission of audit requirements by Sheryl Profeta (MISSA’s former Finance Manager and currently the Administration’s Deputy Administrator & CFO) who was able to provide the trial balance and schedules in just 22 days after the close of FY 2009 in September. Because of her initiative, MISSA became the first government agency to have its books audited for FY 2009.
With the early completion and release of the MISSA audit report, the Office of the Auditor General was able to include it in their January 2010 semi-annual report to the Nitijela.
Quoting a recent report by a local newspaper, “The Marshall Islands Social Security Administration set two records with the introduction of the Auditor General’s (AG) semi-annual report to the Nitijela last week.”
“First, it is the only government entity to produce eight consecutive years of “findings” (problems) free audit reports.”
“The second record is one of speed. The inclusion in the January 2010 AG’s report of the MISSA FY 2009 report - the fiscal year ended on September 30, is apparently the first time that a fiscal year audit has been included in the following January AG’s report to the Nitijela. Normally, fiscal year audits do not make it into the AG’s report until August of the following year or January, two years after the end of the fiscal year.”
During the exit conference with the MISSA board, Mr. Fitzgerald also congratulated the Administration as the MISSA audit was the earliest audit to be completed for a government agency for FY 2009, within the entire Pacific region comprised of 13 APIPA member countries.;
As in previous years, the Administration has earned once again an “unqualified” opinion from its auditors.
An unqualified opinion is formed and expressed when, after performing their audit, the auditors found that the financial statements that have been prepared by management with the oversight of the Board of Directors, were presented fairly, in all material respects and in conformity with generally accepted accounting principles.
Except for minor issues that were enumerated in their management letter, the report did not include any matters involving MISSA’s internal control over financial reporting that were considered to be significant control deficiencies under standards established by the American Institute of CPA’s, and on its compliance with certain provision of laws, regulations, contracts, and grant agreements and other matters.
In layman’s terms, this kind of report signifies a “no finding” or clean audit. The FY 2009 audit is the 8th year in a row that MISSA earned a clean audit.
A control deficiencyexists when the design or operation of a control does not allow management of employees, in the normal course of performing their assigned functions, to prevent or detect misstatement on a timely basis.
A significant deficiency is a control deficiency, or combination of control deficiencies that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with accounting principles generally accepted in the U.S. such that there is more than a remote likelihood that misstatement of the entity’s financial statements that is more than inconsequential will not be prevented or detected by the entity’s internal control.
It is noteworthy to recall that at the onset of the new millennium, MISSA’s books from 1997 through 2000 were in disarray. But with a new management team, the Administration was able to attain full accountability of its financial records.
The restructuring efforts enabled MISSA to reconstruct hundreds of transactions, recover missing or misplaced documents and correct erroneous records. Subsequently, the audited financial statements from FYs 1997 through 2000 were released and all audit findings were cleared and accounted for. Likewise, the auditors also issued unqualified opinions which signified that MISSA’s financial records were clean.
In FY 2002, MISSA was able to earn its first “no audit finding” in the audit of the Retirement Fund. From then on, the Administration was able to maintain strong internal controls over financial reporting that led to MISSA earning five (5) consecutive no finding audits until the departure of Alice Sanchez, MISSA’s former CFO, in 2006.
Alice was subsequently replaced by Sheryl Profeta in late 2006. Sheryl’s effective handling of Finance and Accounting, together with strict compliance to internal controls, policies and procedures by all department heads and staff, led MISSA to earn another no finding audits for FYs 2007 through 2009.