Financial Audits

The Auditor of State is the constitutional officer responsible for auditing all public offices in Ohio, which encompasses more than 5,900 local governments, agencies and organizations.

Audit Division

The Audit Division is charged with the duty of verifying that public funds are spent appropriately and lawfully.

The Auditor of State's office conducts audits of cities, villages, schools, universities, counties, fire districts, townships, cemeteries, libraries, state and county agencies, and commissions.

The chief deputy auditor manages the entire Audit Division, which encompasses a staff of more than 600 auditors. The division is made up of several smaller sections, which includes the Financial Audit Group, the Center for Audit Excellence, and the Medicaid/Contract Audit Section. The Audit Division is managed from the main office in Columbus, as well as in seven regional offices in the Central, East, Northeast, Northwest, Southeast, Southwest and West areas of Ohio. In addition to the seven regional offices, the State Region (also located in Columbus) audits state offices, boards, commissions and agencies.

Financial Audit Group

The Financial Audit Group is responsible for conducting financial audits of all public entities as required under Ohio law.

Generally, the Auditor of State’s office is required to perform these financial audits at least once every two fiscal years; however, many audits are performed annually. The office must review the methods, accuracy and legality of the accounts, financial reports, records and files of all public entities. It is the responsibility of the Financial Audit Group to determine whether or not the entity has complied with the law, rules, ordinances and orders pertaining to the office.

Each fiscal year, the Auditor of State’s office releases approximately 4,000 financial audits. A portion of the audits are conducted by Independent Public Accounting (IPA) firms.

Unauditable List

An entity is determined to be in an unauditable condition when its accounts, records, files, or reports have been improperly maintained and are not adequate to complete the audit. The Auditor of State’s office will provide the entity with notification of the procedures needed to bring its accounts, records, files or reports into an auditable condition to complete the audit. Failure to bring records into an auditable condition could result in legal action. An entity is removed from the unauditable list once the audit is completed and released to the public.

Agreed Upon Procedures & Basic Audits

 

Agreed-Upon Procedures

An AUP saves governments up to 50% of total audit costs

Since November 2009, the Auditor of State has helped lower the audit costs for Ohio’s smaller entities through the use of Agreed-Upon Procedures (AUP). AUP engagements narrow the scope of work to review key internal controls and perform targeted testing of significant transactions for qualifying public offices. The process allows for lower audit costs and reduced billed hours while providing accountability for the public dollars government entities receive and spend.

To make these affordable audits available to more governments, the Auditor of State’s office recently expanded access to AUP engagements for governments with annual expenditures of less than $5 million, up from $1 million previously. Traditionally, an AUP engagement saves governments anywhere from 25 to 50 percent of full audit costs, leaving more chances to put taxpayer money where it does the most good – toward providing services. As many as 1,400 of Ohio’s local governments may be eligible for AUP engagements.

 

Basic Audits

Basic audits save an average of 75% of full audit costs

For Ohio’s smallest entities, the Auditor of State’s office offers a basic audit option. The basic audit is an on-site limited review available to qualifying governments that disburse less than $100,000 annually. Entities that undergo a basic audit typically save between 70 and 80 percent of full audit costs.

 

Medicaid & Contract Audits

With Medicaid absorbing 30 percent of Ohio’s annual state budget, the Medicaid/Contract Audit Section is a standalone department under the Audit Division dedicated to ensuring that Ohio’s Medicaid dollars are not illegally spent or wasted by private and public providers participating in the Medicaid program.

The Medicaid/Contract Audit Section identifies and reports instances of noncompliance with federal and state Medicaid rules to minimize the state’s exposure to fraud, waste and abuse in the Medicaid program. This section’s work supplements the audit efforts of other state agencies and is governed by interagency agreements with these agencies. The Medicaid/Contract Audit Section is an active member of an interagency Medicaid integrity team tasked with combating fraud, waste and abuse in Ohio.

The Medicaid/Contract Audit Section currently performs work under three interagency agreements:

  • Ohio Department of Job and Family Services – to audit reimbursement claims submitted by private Medicaid providers, and assess controls employed by state agencies to minimize Medicaid fraud, waste and abuse;
  • Ohio Department of Developmental Disabilities – to audit the cost reports prepared by public Medicaid providers (i.e., county Boards of Developmental Disabilities and intermediate care facilities for the mentally retarded) which are used to set payment rates;
  • Ohio Department of Mental Health – to audit the cost reports of community mental health agencies which are used to set payment rates.