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According to Florida Statutes:

“Fraud” means obtaining something of value through willful misrepresentation, including, but not limited to, intentional misstatements or intentional omissions of amounts or disclosures in financial statements to deceive users of financial statements, theft of an entity’s assets, bribery, or the use of one’s position for personal enrichment through the deliberate misuse or misapplication of an organization’s resources.

“Waste” means the act of using or expending resources unreasonably, carelessly, extravagantly, or for no useful purpose.

“Abuse” means behavior that is deficient or improper when compared with behavior that a prudent person would consider a reasonable and necessary operational practice given the facts and circumstances. The term includes the misuse of authority or position for personal gain.

Directive controls ensure a particular outcome is achieved. Examples include guidelines, training and incentives.

Preventive controls are designed to reduce the chance that errors or irregularities may occur.  For example, tone at the top, authorization, segregation of duties and password protection.

Detective controls are designed to detect errors or irregularities after they have occurred so that they can be corrected.  Examples include reconciling the bank statement and performing periodic inventories of property.

Corrective (or compensating) controls correct undesirable outcomes that have occurred or reduce risk to an acceptable level when other controls have failed or are not cost-effective.  Examples include close supervision and management review.

Everyone plays a part in the district’s internal control system. Management ensures that controls are in place and every employee makes sure the internal control system functions by following the controls and reporting any breakdowns in them. Internal Board Audit examines the adequacy and effectiveness of the District’s internal controls and makes recommendations where control improvements are needed.

• Risk assessment

Managers should identify and analyze relevant risks to the achievement of business unit goals and objectives by determining what could go wrong, what areas have more risk, what assets are at risk, and who is in positions of risk. Risks may include:

Damage to reputation and public image

Revenues not received

Assets not used efficiently

Assets not used properly

Assets diverted to outside or personal use

Unreliable, untimely or unavailable information needed for decision making

• Reasonable assurance

Internal controls should provide reasonable assurance that the objectives of the systems will be accomplished.

• Supportive attitude

Managers and employees should maintain and demonstrate a positive and supportive attitude towards internal controls at all times.

• Competent personnel

Managers and employees should have personal and professional integrity and maintain a level of competence that allows them to accomplish their assigned duties. They should also understand the importance of establishing and implementing good internal controls. 

Personal and professional integrity is demonstrated when you: 

Commit to honesty and fairness

Respect the organization and authority

Adhere to laws and policies

Respect the rights of all employees

Commit to excellence

Control objectives

• Control techniques

Our specific standards of internal control involve the following techniques:

Documentation – adequate records of all internal control systems and all transactions and events should be maintained.

Records – all transactions and events should be recorded promptly and accurately.

Authorization – all transactions and events should be authorized and executed by persons within the scope of their authority.

Structure – key duties and responsibilities in authorizing, processing, recording and reviewing transactions should be separated.

Supervision – adequate supervision should be provided to ensure that internal control objectives are achieved.

Security – access and accountability for assets and records should be limited to authorized individuals.

• Inadequate segregation of duties
• Inappropriate access to assets
• Inadequate knowledge of District policies and procedures
• When control procedures are performed in a perfunctory manner (e.g., when a reviewing manager signs a document without adequate review and evaluation)
• Overridden controls
• When inherent limitations cannot be overcome by compensating controls