KEEPING STATE FISCAL OFFICIALS INFORMED VOLUME 34, NUMBER 11 | NOVEMBER 2014

NASACT WEATHERS 2014 ELECTION SEASON With 48 member seats in question, the November worked on legislation that eventually became 2014 elections carried the potential for signifi cant Act 1088, which regulates the state’s treasury change within NASACT’s member ranks. management practices and procedures to ensure Elections results aff ecting member offi ces are prudent investment and management of public funds outlined below by state. Questions about this article entrusted to the state treasurer. Milligan will replace may be directed to Neal Hutchko, policy analyst, at Charles Robinson, who was named temporarily [email protected] or (202) 624-5451. in May 2013 to replace former treasurer Martha Shoff ner and was not eligible for re-election. ALABAMA Treasurer: Young Boozer, III (R), running unopposed, retained his seat. Th is will be his second Comptroller: (D) won her race to become term as state treasurer. the new state controller. She previously served as the chief deputy director for budget with the California ARIZONA Department of Finance. She earned her bachelor Treasurer: Jeff DeWit (R), who ran unopposed, is of arts degree in sociology from the University of Arizona’s new state treasurer. DeWit is an investment California, Berkeley, and her master’s degree in public professional and soft ware company owner with a administration from , San degree from the University of Southern California Francisco. She replaces John Chiang, who was term in business administration and a minor in fi nance. limited. He will replace Doug Ducey, who ran a successful Treasurer: John Chiang (D) won the state treasurer campaign for . seat by a signifi cant margin. Chiang graduated from the University of South Florida with a degree in fi nance and received his law degree from the *Comptroller: Term-limited State Rep. Andrea Georgetown University Law Center. He will replace Lea (R) is the new . She has a bachelor Bill Lockyer, who is retiring. of science degree in emergency management and administration from Arkansas Tech University. She COLORADO will replace Charlie Daniels, who is retiring. Treasurer: Walker Stapleton (R) retained his seat. Treasurer: Saline County Circuit Clerk Dennis Th is will be his second term as state treasurer. Milligan (R) won the state treasurer seat. Milligan Continued, next page

MEMBER CHANGES TO COME WITH 2015 INAUGURATIONS Thirty-one NASACT members were successful in their re-election bids and will be returning to the association’s ranks following inaugurations in 2015. Seventeen new names and faces will be coming onto the scene (this number includes 11 new state treasurers, three new state comptrollers, two new state auditors, and one official that fills both the comptroller and treasurer function—Texas). The 2015 NASACT Directory will be printed in late-February. To view NASACT’s up-to-date member roster at any time, visit www.nasact. org/af_memberdirectory.asp.

NASACT News | November 2014 1 ASSOCIATION NOTES

2014 ELECTION RESULTS continued from previous page IOWA Comptroller: (D) retained his seat. Auditor: Mary Mosiman (R) retained her seat, Th is will be his second term as comptroller. winning her fi rst full term as auditor of state. She was Treasurer: Denise L. Nappier (D) retained her seat, appointed in May 2013 to fi ll the unfi nished term winning her fi ft h term as state treasurer. of David Vaudt, who left to become chairman of the Governmental Accounting Standards Board. DELAWARE Treasurer: Michael L. Fitzgerald (D) retained his Auditor: R. Th omas Wagner, Jr. (R) retained his seat, seat, winning his ninth term as state treasurer. winning his seventh term as auditor of accounts. KANSAS Treasurer: Ken Simpler (R) won the race for state treasurer. Simpler is currently co-owner and chief Treasurer: Ron Estes (R) retained his seat, fi nancial offi cer of Seaboard Hotels. He replaces winning his second term as state treasurer. Chipman Flowers, Jr., who did not seek re-election. MARYLAND FLORIDA Comptroller: (D) retained his seat, *Comptroller/Treasurer: Jeff Atwater (R) retained winning his third term as comptroller. his seat as chief fi nancial offi cer of the Department of Financial Services. Th is will be his second term. Auditor: Suzanne Bump (D) retained her seat, IDAHO winning her second term as state auditor. Comptroller: Brandon D. Woolf (R), who ran Treasurer: (D) won the state treasurer unopposed, retained his seat. Th is will be his fi rst full seat. She was a selectman in the town of Brookline term; he was appointed in 2012 to fi nish the term of and became its chair. She replaces Steven Grossman, former State Controller Donna Jones. who ran to be the Democratic nominee for governor.

Treasurer: Ron Crane (R) retained his seat, winning MINNESOTA his fi ft h term as state treasurer. Auditor: Rebecca Otto (DFL) retained her seat, winning her third term as state auditor.

Comptroller: Judy Baar Topinka (R) retained her MISSOURI seat, winning her second term as state comptroller. Auditor: Th omas A. Schweich (R), running Treasurer: More than two weeks aft er the election, unopposed, retained his seat. Th is will be his second (D) has emerged as the apparent term as state auditor. winner of the state treasurer race aft er his opponent (R) conceded the closely contested race. Frerichs will replace who ran for Auditor: Th e new state auditor is governor. (R), a state senator, president and CEO of RTG Medical, and a U.S. Navy veteran of the Persian Gulf War. He will replace Mike Foley, who ran for *Comptroller: (R) retained her lieutenant governor. seat, winning her fi rst full term as Indiana’s auditor of state. She was appointed in January 2014 to fi nish the Treasurer: Don Stenberg (R) retained his seat, term of her predecessor, . winning his second term as state treasurer. Treasurer: (R) won the state treasurer seat. Former treasurer, , resigned Comptroller: Ron Knecht (R) won the state before the end of his second term in August 2014, controller seat. He was elected to the Nevada Board before a cut in retirement benefi ts for state workers of Regents, District 9, in 2006 and re-elected in 2012. took eff ect. Dan Huge was appointed as interim state He chaired the Business and Finance and Audit treasurer at that time. On November 18, Governor committees for two years each, and has served on the appointed Mitchell to fi nish the last few Investment and Major Projects Committee. months of Mourdock’s term. Continued, next page

NASACT News | November 2014 2 ASSOCIATION NOTES

2014 ELECTION RESULTS continued from previous page

Previously, he served in the from 2002-04. He will replace Kim Wallin, who is term- Comptroller: (R) has been limited. elected to a fourth term as South Carolina’s Treasurer: (R) won the state treasurer comptroller general. seat. Schwartz served in the U.S. Army from 1972-74 Treasurer: Curtis Loft us (R), running unopposed, before working in the fi nancial industry in Houston retained his seat. Th is will be his second term as state and . He then moved to Hong Kong to treasurer. become CEO of Asian Venture Capital Journal. He is also the founder and CEO of Qiosk.com. He will replace Kate Marshall, who is term-limited. *Comptroller: Steve Barnett (R), running unopposed, retained his seat. Th is will be his second term as state auditor. Auditor: State Sen. Majority Whip Tim Keller (D) won the seat being vacated by , Treasurer: (R) running unopposed, who won his election to become the state’s attorney retained his seat. Th is will be his second term as the general. Keller has a bachelor’s degree from the state treasurer, having also served two terms as state University of Notre Dame and an M.B.A. with honors auditor. from the . TEXAS Treasurer: Former State Sen. (D) *Comptroller/Treasurer: Glen Hegar (R) won the won the state treasurer seat. Eichenberg has operated race to be comptroller of public accounts. He is a a small business for over 30 years as a property state senator and chairman of the Subcommittee on tax consultant, state certifi ed appraiser, general Fiscal Matters. He will replace Susan Combs, who is contractor and real estate broker. He is currently a retiring. ward chair and a state central committee member for the Democratic Party. He replaces James B. Lewis, who is term-limited. Auditor: Doug Hoff er (D/P), running unopposed, NEW YORK won his second two-year term as state auditor. *Auditor/Comptroller: Th omas P. DiNapoli Treasurer: (D) retained her seat, (D) retained his seat, winning a second term as winning a third two-year term as state treasurer. comptroller. WISCONSIN OHIO Treasurer: Matt Adamczyk (R) won the seat for state Auditor: Dave Yost (R) retained his seat, winning a treasurer on the platform of saving tax dollars by second term as auditor of state. eliminating the position, pledging to work tirelessly to eliminate the entire Offi ce of State Treasurer. He Treasurer: Josh Mandel (R) retained his seat, has served as a senior adviser to multiple elected winning a second term as state treasurer. offi cials at the state capitol for the past ten years. He OKLAHOMA replaces Kurt Schuller, who is retiring. Auditor: Gary Jones (R), running unopposed, retained his seat. Th is will be his second term as state *Comptroller: Cynthia Cloud (R), running auditor and inspector. unopposed, won her second term as state auditor. Treasurer: Ken Miller (R) running unopposed, Treasurer: (R), running unopposed, retained his seat. Th is will be his second term as state won his fi rst full term as state treasurer. He was treasurer. appointed in 2012 to fi ll the vacancy following the RHODE ISLAND death of former State Treasurer Joseph Meyer. Treasurer: (D) won the state *** treasurer seat. He is a vice president with Trillium *Denotes function within state government, which is not Asset Management. He replaces Gina Raimondo, the same as the offi cial job title in all states. who ran a successful campaign to become the state’s governor.

NASACT News | November 2014 3 NEWS FROM WASHINGTON

ACA EMPLOYER MANDATE COMING SOON — ARE YOU READY?

Th e Aff ordable Care Act’s employer mandate is set Areas such as determining an employee’s work to go into eff ect on January 1, 2015, for employers status as full or part-time require accurate records with 100 or more full-time employees and on January as the regulations allow employers to use a monthly 1, 2016, for those with between 50 and 99 full-time calculation or an optional look-back measurement employees. Are you prepared for the associated based on the hours of service the employee worked reporting requirements? in a prior period. Employers should consult the Employers, including state and local governments regulations for guidance on the treatment and with more than 50 full-time employees, are required calculation of hours for various types of employees. to provide aff ordable health insurance to any State and local government accounting departments employee who works 30 or more hours per week should also be consulting with their human resource (or 130 hours per month). While a safe harbor for department to determine who will be responsible certain penalties exists for states who off er coverage for the reporting and whether required employee to at least 95 percent of their eligible employees, information is already being collected. penalties of $2,000 or $3,000 per full-time worker Finally, states that self-insure should note that may be imposed depending on the circumstances additional reporting is required under Internal (transitional relief in year 2015 provides that Revenue Code Section 6055. Section 6055 requires coverage is 70 percent instead of 95 percent of full- entities to report information to the IRS for each time employees). individual to whom they provided minimum Specifi cally, under Section 6056, large employers essential coverage. A statement must also be provided (those with 100 or more employees) will be required to the individual. Minimum essential health coverage to provide information to employees and the includes health insurance coverage off ered in the IRS concerning health insurance off ered by the individual market, an employer-sponsored plan, or employer. Th e required information will include a government-sponsored program. Health insurance details about the employer off ering coverage issuers are the parties responsible for reporting, (contact information and the number of full-time therefore states that are sponsors of self-insured employees) and on each full-time employee, as well health coverage are responsible for reporting under as information about the coverage off ered to the section 6055. Th e reporting will allow taxpayers to employee, by month, including the lowest cost of establish and the IRS to verify minimum essential self-only coverage off ered. coverage and months of enrollment during the Section 6056 information will be reported to calendar year. employees on Form 1095-C and transmitted to the Regulations for the new reporting can be found at: Internal Revenue Service on Form 1094-C. Form • Essential Minimum Coverage, Section 1095-C must be furnished to each full-time employee 6055: https://www.federalregister.gov/ on or before January 31 of the year following the articles/2014/03/10/2014-05051/information- calendar year to which the information relates. reporting-of-minimum-essential-coverage Th is means that for 2015 the statement must be provided to the employee no later than February 1, • Applicable Large Employers, Section 2016 (January 31, 2016 is a Sunday). Th e 1094-C 6056: https://www.federalregister.gov/ transmittal form must be fi led with the IRS on or articles/2014/03/10/2014-05050/information- before February 28, or March 31 if fi led electronically, reporting-by-applicable-large-employers- of the year following the calendar year in which the onhealth-insurance-coverage-off ered-under employer provided minimum essential coverage. In • ACA Information Reporting Fact Sheet: http:// other words, for 2015 the form must be fi led no later www.treasury.gov/press-center/press-releases/ than March 1, 2016 (February 28, 2016 is a Sunday), Pages/jl2310.aspx or March 31, 2016, if fi led electronically. Questions about the ACA employer mandate may be Although no reporting is required until 2016, directed to Cornelia Chebinou, Washington director, employers should already have a plan in place to or Neal Hutchko, policy analyst, in NASACT’s assure that the appropriate recordkeeping is being Washington offi ce at (202) 624-5451. done to comply with the new reporting requirements.

NASACT News | November 2014 4 NEWS FROM WASHINGTON

NFMA’S GO BOND DISCLOSURE DOCUMENT BUILDS ON NASACT BEST PRACTICES FOR VOLUNTARY INTERIM FINANCIAL DISCLOSURE

Th e National Association of Municipal Analysts has Th e NFMA’s disclosure guidelines are meant to issued draft best practices for state general obligation “capture the key information that analysts deem (GO) bond disclosure. Th e document incorporates necessary to gain a fuller understanding of the credit and builds on NASACT’s Voluntary Interim Financial quality of the debt issues covered in fulfi llment Reporting: Best Practices for State Government, which of their fi duciary obligations when reviewing, was issued in August 2013. researching and analyzing state credits.” While not all NFMA’s Recommended Best Practices in Disclosure the recommended disclosures will be applicable to all for State Government General Obligation and issuers, the document attempts to provide a checklist Appropriation Debt applies to a broad range of of information that may already be part of the offi cial state issuers and debt issues of varying sizes and statement or the annual or interim disclosure. complexity. Th e document applies specifi cally “to A link to NFMA’s practice document can be found at debts secured by a general obligation or appropriation www.nfma.org/disclosure-guidelines. pledge and that are repaid from state general fund resources, which oft en include income, sales and corporate taxes and other revenues.”

NASACT PARTICIPATES IN SINGLE AUDIT ROUNDTABLE

Th e Single Audit Roundtable met on October 29 • Green Book issuance and preliminary research in Washington, D.C. Representing NASACT were for Yellow Book revisions. Kinney Poynter, executive director, and Cornelia • Government Audit Quality Center update. Chebinou, Washington director. George Strudgeon (VA) also attended on behalf of NASACT. Attendees • Status of 2014 submissions to the Federal Audit heard general updates from representatives of the U.S. Clearinghouse, including common errors noted Offi ce of Management and Budget, U.S. Government in submissions. Accountability Offi ce, American Institute of Certifi ed • Various other state and federal auditor issues. Public Accountants, Federal Audit Clearinghouse, If you are interested in a summary of the meeting, and federal inspectors general community. please contact Sherri Rowland at srowland@nasact. Topics discussed at the roundtable included: org or (859) 276-1147. • Uniform Grant Guidance, including the 2015 Th e next Single Audit Roundtable will take place on Compliance Supplement update. Wednesday, April 29, 2015. • DATA Act update.

IRS ADVISORY COMMITTEE SEEKS INPUT ON FSLG EFFORTS

Th e Internal Revenue Service’s Advisory Committee To assist in this eff ort, the ACT’s FSLG Subcommittee on Tax-Exempt and Government Entities (ACT) is is conducting a confi dential survey to provide data seeking input on the outreach and communication analysis of opinions on IRS/FSLG communication eff orts of the Federal, State and Local Governments tools and practices. (FSLG) Division of the Internal Revenue Service. Th ose interested in providing feedback should Th e purpose of the project is to determine how complete the brief survey no later than 5:00 p.m. ET FSLG outreach eff orts are used and how they can be on February 27, 2015. improved, given limited resources. Th e information will be used in the next ACT committee report to Th e survey can be accessed at https://www. suggest improvements to current FSLG policies, surveymonkey.com/r/ACT_FSLG_2014. programs and procedures.

NASACT News | November 2014 5 ASSOCIATION NOTES

NASACT AND NAST PARTNER TO EXAMINE SEC AMENDMENTS TO 2a-7 AND THE IMPACTS ON LGIPs NASACT/NAST WORKGROUP NASACT and the National governments. On October 31, the Association of State Treasurers workgroup submitted a letter to NASACT recently created a workgroup to the Governmental Accounting Marty Benison, Comptroller of the examine amendments to Rule Standards Board requesting that Commonwealth (MA) 2a-7 approved this summer by GASB: Gerry Boaz, Technical Manager, State the U.S. Securities and Exchange • Add the issue to its technical Audit, Office of the Comptroller of the Commission. Th e amendments agenda. impact money market mutual Treasury (TN) funds (MMFs), specifi cally • Consider options that will Randy Roberts, Director, Professional requiring, among other things, allow LGIPs to continue using Practice, Office of the Auditor General (AZ) that MMFs adopt a fl oating net amortized costs (i.e., stable Alan Skelton, State Accounting asset value (NAV) instead of the NAV). Officer (GA) traditional stable NAV. Th e full letter, with much more Th e workgroup has focused background and details, is NAST primarily on the impacts the available at www.nasact.org. Neria Douglas, State Treasurer (ME) amendments will have on local Questions about the workgroup’s , State Treasurer (VA) government investment pools eff orts may be directed to Kinney , State Treasurer (MD) (LGIPs), which are in many Poynter at [email protected] or Steve McCoy, State Treasurer (GA) instances operated by state (859) 276-1147.

2  CELEBRATE  Chicago0 100 YEARS OF EXCELLENCE ears 2015 1 100 Y 1915 - 2015 1915 Celebrating 5 WE’LL SEE YOU IN CHICAGO!

NASACT News | November 2014 6 ASSOCIATION NOTES

WYOMING IS LATEST PARTICIPANT IN BENCHMARKING PROGRAM

NASACT’s benchmarking It also allows comparisons of working with Th e Hackett Group program off ers services in four agencies within the state to each to complete various project phases areas: other and to agencies within for the benchmarks. 1. Financial management. other states. Benchmark-related Any state interested in learning consulting services are also 2. Information technology. more about the benchmarking available. program can contact Kim O’Ryan 3. Human resources/payroll. Wyoming is the latest participant at NASACT at [email protected] 4. Procurement. in the program. In May 2014, or (859) 276-1147 or Dale Agee Wyoming signed a statement with Th e Hackett Group at dagee@ Th e program allows states to of work for two functional thehackettgroup.com or (770) compare themselves to other states benchmarks: fi nance and human 225-7203. and private sector companies. resources. Wyoming has been

NASACT Benchmarking Program: Background and Participants NASACT started its benchmarking program on August 4, 2005. The project was conceived as a way for states to more easily procure benchmarking services and compare programs and agencies to each other to facilitate measurable improvements to systems and operations. Since 2005, 18 states have participated. The program also offers advisory services for states needing assistance to implement recommendations resulting from the benchmark studies.

NASACT News | November 2014 7 NEWS FROM AROUND THE NATION

FAF NAMES JAN SYLVIS VICE CHAIR OF GASB, SYLVIS ANNOUNCES RETIREMENT FROM STATE OF TENNESSEE Jan I. Sylvis, a current member Sylvis also recently announced her new pension standards and a of the Governmental Accounting retirement from her position as proposed standard for other Standard Board, has been named chief of accounts for the Tennessee postemployment benefi ts. GASB vice chair. Th e appointment Department of Finance and Sylvis began her fi rst term on the was announced November 19 Administration, a position she has part-time Board on July 1, 2007. by the Financial Accounting held since 1995. Her retirement She was reappointed to a second, Foundation, which oversees the from the state of Tennessee will be fi ve-year term on the GASB on GASB and its sister organization, eff ective December 31, 2014. July 1, 2012. the Financial Accounting Th e position of GASB vice chair Standards Board. Sylvis is a past president of was created early in the GASB’s NASACT and a past president Her appointment is eff ective history, but was later retired. In of the National Association of January 1, 2015. In this new role, response to increasing demands State Comptrollers. She earned Sylvis will serve the Board on on the time of the GASB chair, the her bachelor’s degree from the a half-time basis. (Th e GASB FAF trustees decided to reinstate University of Memphis. She is a chair position is full-time, while the position, in part because of certifi ed public accountant and other Board members spend a strategic focus on expanding a certifi ed government fi nancial approximately a third of their time outreach to stakeholders. Recent manager. on GASB matters.) outreach has focused on GASB’s

FAF CREATES NEW COO POSITION, SELECTS MARY CROTTY TO SERVE

On October 23, the Financial to FAF President and Chief to that, Crotty held a variety of Accounting Foundation named Executive Offi cer Teresa S. Polley. roles, including global compliance Mary P. Crotty to the new position She joins FAF from Bank of risk chief operating offi cer and of chief operating offi cer. In her America, where she was a business support executive in new role, Crotty will manage managing director and, for the Global Markets and Global the FAF’s business operations, past four years, leader of the Research. Earlier, Crotty was a including technology, fi nance, Corporate Compliance and managing director at J.P. Morgan publications, and other key Regulatory Relations groups. Prior Securities, Inc. business activities. She will report

FAF LAUNCHES GAAP EDUCATION PAGE ONLINE Th is week the Financial reports according to GAAP. other users—on how GAAP Accounting Foundation launched While many regard GAAP as is essential to the effi cient a new web page focused on the the “gold standard” of fi nancial functioning of our capital markets benefi ts of generally accepted reporting for public companies and the strengthening of our accounting principles—GAAP— and state governments, there are economy and governments. to public companies, private many private companies, not-for- Th e webpage also contains a section companies, not-for-profi t profi ts, local governments, and dedicated to how the Financial organizations, and state and others that may not be familiar Accounting Standards Board and local governments in the U.S. with the benefi ts of using GAAP. the Governmental Accounting Th e webpage is available at www. Standards Board are simplifying and accountingfoundation.org/gaap. Th is initiative explores those benefi ts and also seeks to educate improving GAAP. Th is educational portal is part of a and inform all stakeholders— broader FAF initiative to highlight including preparers, investors, the benefi ts of preparing fi nancial lenders, auditors, taxpayers, and

NASACT News | November 2014 8 UPDATE FROM GASB

Th e exposure draft is available at www.gasb.org. Stakeholders are encouraged to review the proposals and provide comments by January 30, 2015.

SUMMARY OF TECHNICAL PLAN FOR THE FINAL THIRD OF 2014 NOVEMBER 2014 Th is high-level summary of the GASB’s technical plan for the fi nal third of 2014 includes information GOVERNMENTS WOULD DISCLOSE TAX ABATEMENT INFORMATION UNDER GASB PROPOSAL on the projects on Asset Retirement Obligations and Blending Requirements for Certain Business-Type Th e Governmental Accounting Standards Board Activities that the Board voted to add to the current has issued for public comment an exposure draft of technical agenda. Information also is included on the a proposed statement, Tax Abatement Disclosures, pre-agenda research initiated on External Investment which would require state and local governments to Pools. disclose information about property and other tax abatement agreements. BOARD MEETING HIGHLIGHTS Under a tax abatement agreement, a government Th e GASB held public meetings August 20–22 and agrees to reduce the taxes a taxpayer would otherwise September 8 (by teleconference), 2014, to discuss owe in return for an action that contributes to issues associated with its projects on Leases, Fiduciary economic development or provides another benefi t Responsibilities, Tax Abatement Disclosures, and to the government or its citizens. Th e disclosure Irrevocable Charitable Trusts. Th e Board also requirements proposed by the GASB are designed reviewed and approved the technical plan for the to provide fi nancial statement users with essential fi nal third of 2014. Th is article addresses key tentative information about these programs. decisions made by the Board during its deliberations on these topics. For complete minutes of the Board To help users, preparers, and auditors of fi nancial meeting, visit the project pages devoted to each statements familiarize themselves with the exposure project on the GASB website. draft , the GASB developed a web page that features new plain-language resources.

NASACT MEMBERS: GASB’s comment deadline is January 30, 2015. The Board has asked for comments on all PROVIDE YOUR INPUT! In order to include your comments in matters in this proposed statement. The Board requests that you explain the reasons for your Tax Abatement Disclosures NASACT’s response letter, please submit comments no later than Wednesday, views, including alternatives that you believe NASACT, through its Committee on Accounting, January 7, 2015. Comments may be sent should be considered. Where possible, please Reporting and Auditing, will be developing to Kim O’Ryan ([email protected]) or Sherri provide a paragraph reference. an association response to the GASB ED Tax Rowland ([email protected]). Abatement Disclosures.

CHECK OUT NASACT’S TRAINING SEMINARS PROGRAM!

Through the Training Seminars Program, NASACT An all-inclusive seminar fee covers consultant members can schedule specialized training fees and expenses, as well as planning services seminars tailored to meet targeted staff training provided by NASACT. The state hosting the needs. Experienced consultants conduct the training coordinates on-site logistics and provides sessions, which can cover topics ranging from CPE credit. auditing and accounting to human resources and To find out more, contact Kathleen Young at information technology. (859) 276-1147 or [email protected].

NASACT News | November 2014 9 ASSOCIATION NOTES

WHAT’S NEW AT www.nasact.org? implementation of the Uniform Guidance: Administrative Requirements, Cost Principles, and Th e following new items have been posted on Audit Requirements for Federal Awards. Th e link to NASACT’s website: the recorded version of the COFAR webcast can be • NASACT/NAST joint letter to the Governmental found at https://cfo.gov/cofar/. Accounting Standards Board regarding changes to SEC Rule 2a-7 and the impacts on local government investment pools at www.nasact. TRAVEL ASSISTANCE OPPORTUNITIES org/gasb. FOR MEMBERS IN 2015 • Th e following technical inquiries from state Travel assistance may be used by members in comptrollers (members only content): good standing (or their designees) for registration, travel or hotel costs. All assistance is provided as - Duplicate Payment Audits a reimbursement following the conferences. Th e - Electronic Payments Questions following travel assistance opportunities are available in 2015: • Th e following technical inquiries from state auditors (members only content): • 2015 NASC Annual Conference, March 11-13, Richmond, VA: State comptrollers in good - Audit of State Police standing (or designees) are eligible to receive up - Attestation Engagements to $1,000 to attend this conference. - Audit of Virtual Schools - Single Audit Representation Letters • 2015 NSAA Annual Conference, June 9-12, - Data Warehouses and Data Mining Little Rock, AR: State auditors in good standing - Audit Staffi ng (or designees) are eligible to receive up to $1,000 - Encryption Services to attend this conference. New state auditors - Charter Schools (who took offi ce aft er the 2014 NSAA Annual Conference) are also eligible to receive a free registration to attend. COFAR MAKES AVAILABLE WEBCAST • 2015 NASACT Annual Conference, August 23- ON UNIFORM GUIDANCE 26, Chicago, IL: All members in good standing Th e Council on Financial Assistance Reform (or designees) are eligible to receive up to $2,000 has posted its most recent webcast concerning to attend this conference.

UPCOMING INFORMATION SHARING CALLS

DECEMBER JANUARY NASC Electronic Payments – Dec 2 NSAA Pension Audit – Jan 8 NASACT Pension – Dec 11 NSAA HR Info Sharing – Jan 28 NASC SWCAP – Dec 16 FEBRUARY NSAA Performance Audit – Dec 18 NASC Payroll Info Sharing – Feb 11 NASC Travel & P-Card – Feb 18

GET INVOLVED! For information on participating in any of these calls, contact NASACT’s headquarters office at (859) 276-1147.

NASACT News | November 2014 10 CORPORATE ASSOCIATE SPOTLIGHT

BOOST YOUR STATE’S ROI WITH ADVANCED FRAUD ANALYTICS BY CHRISTOPHER WESTPHAL, DIRECTOR OF ANALYTICS TECHNOLOGY, RAYTHEON CYBER PRODUCTS

If you’ve seen the classic fi lm, Th e Th ey can, for example, comb through merchants) build up a track record Shawshank Redemption, you may recall Social Security records looking for of good credit/payment histories for that the main character, Andy Dufresne, individuals using multiple identifi cation an account. Th en, they “bust out” by pulled off a memorable money laundering numbers. But they typically aren’t initiating chargebacks and stopping scam by setting himself up with numerous confi gured to cross-reference that data payments, and abandon the account. accounts at diff erent banks. (He took the with, say, workers’ compensation claims Th ey frequently open up account in cash and fl ed to a beach in Zihuatanejo, to assess whether the individuals are using multiple states and regions. Mexico.) Because the movie was set in the additional numbers to make a series of • Unusually high volumes of pre-digital era, there weren’t any advanced bogus claims. prescriptions being written by analytical systems to “tell” the individual To overcome the limitations, states the same doctor, for drugs oft en bank offi cers that something suspicious must turn to advanced, investigative containing opiates. When one doctor was going on. If they knew, they’d surely analytics solutions. Instead of being approves of signifi cantly more opiates intervene. Aft er all, common sense would confi gured to “do” just a certain number than his or her peers, this fl ags a question why anyone would need so many of “things,” these tools cover a wider and possible black market “pill mill” accounts for legitimate purposes? more dynamic range of data, and are operation. Well, it would be nice to say that modern- readily customized to respond to specifi c Th is is hardly the stuff of fantasy. Over the day technology has made it diffi cult for a requirements and search requests. What’s many years of deploying our Raytheon criminal to get away with such a bold plot. key is detecting anomalies that emerge Data Clarity Platform to a wide range of However, most organizations aren’t as far from patterns and trends within the commercial and government agencies, along in deploying available detection and data. Advance analytics solutions prove billions of dollars’ worth of questionable prevention systems, which is keeping them valuable because they can detect unusual transactions have been identifi ed. from acquiring a state of total awareness patterns in a wealth of state-owned when it comes to fraud. databases, including those related to And speaking of fantasy, there’s always motor vehicle departments, homestead Andy Dufresne and his money laundering Th e ensuing cost has been severe: fraud scam. If bank offi cials of his era had accounts for $3.7 trillion in global losses, exemptions, prescription drug monitoring programs, workers’ compensation, housing investigative analytics at their disposal, and the typical organization loses fi ve they’d catch him in the act – and Andy percent of revenue each year due to these assistance, unemployment and medical assistance programs, among others. With would be sent straight back to prison crimes, according to the Association instead of living the good life in Mexico. of Certifi ed Fraud Examiners. State that, your solution team members are fully auditors, comptrollers and treasurers are empowered on what they can discover, *** hardly immune to such abuses. Filing including: false government documents–like tax • Inconsistencies to fl ag suspects who Mr. Westphal is director of analytics forms and applications for benefi ts– are using false driver’s licenses. Many technology at Raytheon Cyber Products represents the most widespread form of states “code” license numbers using www.raytheon.com/cyberproducts. He is ID theft , according to the Federal Trade formulas which link the number to the a recognized authority in the detection Commission. Nationwide, ID theft s total spelling of the driver’s name, gender and exposure of complex patterns. Today, $24.7 billion a year, according to the Justice and date-of-birth. When analytics he and his team support a broad range of Department’s Bureau of Justice Statistics. demonstrates that a driver’s name organizations that include federal and state/ local law enforcement, all major intelligence Clearly, tackling the problem requires doesn’t match the license number, it’s a agencies, the Department of Defense, investment into IT systems for better sign of potential fraud. civilian agencies, international fi nancial detection. • Transactions in which the same credit intelligence units and large corporations. card number is used in multiple It would be shortsighted to devote all He is the author of several publications, states or regions. Th is speaks to available funding to traditional detection including Data Mining for Intelligence, the M.O. of a “bust out” scheme, systems. Th ey’re oft en designed to do a Fraud and Criminal Detection. fi xed set of limited checks and look-ups. in which criminals (operating as

This article was prepared by Raytheon Cyber Products, a member of NASACT’s Corporate Associates Program. To find out more about the Corporate Associates Program, visit www.nasact.org/caps or call NASACT headquarters at (859) 276-1147.

NASACT News | November 2014 11 CALENDAR

2015

February 11 | WEBINAR – GAO’s New Green Book: A Revised Internal Control Framework for Government VOLUME 34, NUMBER 11 | NOV 2014 March 10 | NASACT Executive Committee Meeting, Richmond, VA

R. Kinney Poynter March 11-13 | NASC Annual Conference, Richmond, VA Executive Director April 14-16 | NASACT Middle Management Conference, Raleigh, NC Cornelia Chebinou April 23-24 | Tennessee Training Seminars, Chattanooga, TN Washington Office Director Glenda Johnson April 27-28 | Tennessee Training Seminars, Nashville, TN Communications Manager May 4-5 | Tennessee Training Seminars, Jackson, TN

National Association of State May 7-8 | Tennessee Training Seminars, Morristown, TN Auditors, Comptrollers and Treasurers June 9-12 | NSAA Annual Conference, Little Rock, AR Headquarters Office August 23 | NASACT Executive Committee Meeting, Chicago, IL 449 Lewis Hargett Circle, Suite 290 Lexington, KY 40503-3590 August 23-26 | NASACT Annual Conference, Chicago, IL P (859) 276-1147, F (859) 278-0507 September 22-25 | NSAA IT Workshop & Conference, Hartford, CT Washington Office 444 N. Capitol Street, NW, Suite 234 Washington, DC 20001 NASACT ANNUAL CONFERENCE LOCATIONS ANNOUNCED P (202) 624-5451, F (202) 624-5473 THROUGH 2017 www.nasact.org BY DONNA MALOY, CONFERENCE MANAGER

NASACT OFFICERS Th e 2014 NASACT Annual Conference was held in Santa Fe, New Mexico, this past William G. Holland August. Th en-President James B. Lewis, state treasurer of New Mexico, presided. Th e President conference was a huge success! Registrants attended a variety of technical sessions and Auditor General, Illinois many networking opportunities with their peers. Th e conference attendees and registered guest enjoyed a number of social events that highlighted the rich history of Santa Fe and Calvin McKelvogue the state of New Mexico. First Vice President Chief Operating Officer 2015: CHICAGO, ILLINOIS State Accounting Enterprise, Iowa Th e 2015 NASACT Annual Conference will be hosted by William Holland, Illinois Richard K. Ellis auditor general and current NASACT President, and his co-hosts, Judy Baar Topinka, state comptroller, and the incoming state treasurer, Mike Frerichs. Th is will be NASACT’s Second Vice President 100th annual conference! Th e conference will be held August 22-26, 2015, at the Chicago State Treasurer, Utah Marriott Downtown in Chicago, Illinois. Stay tuned for details about this conference as Debra K. Davenport planning ramps up in the next few months. Secretary 2016: , INDIANA Auditor General, Arizona Th e 2016 NASACT Annual Conference will be hosted by Paul Joyce, Indiana state D. Clark Partridge examiner, and his two co-hosts, Auditor of State Suzanne Crouch and State Treasurer Kelly Treasurer Mitchell. Calvin McKelvogue, Iowa’s chief operating offi cer will be preside as NASACT’s State Comptroller, Arizona president. Th e conference will be held August 13-17, 2016, at the Marriott Indianapolis Downtown.

NASACT News is published monthly. 2017: SALT LAKE CITY, UTAH To submit articles, photos or ideas, Th e 2017 NASACT Annual Conference will be held in Salt Lake City. Th e dates and hotel contact Glenda Johnson at have not yet been selected. Th e conference will be hosted by Richard K. Ellis, who is [email protected] or (859) 276-1147. scheduled to be NASACT’s president that year.

NASACT News | November 2014 12