2 What is Sarbanes-Oxley? Myth: It is an additional workload.Fact: It is simply following the processes and procedures that exist.Myth: Only pertains to retail transactionsFact: It is all financial transactionsMyth: Only for customer servicesFact: It is everyone’s responsibilityKey Points:Compliance with SOX is not a one-time event. Improving corporate governance and reducing opportunity for fraudulent practices changes the way a company does business and how they are perceived in the public’s eye.The Securities and Exchange Commission (SEC) administers the SOX program and has published guidance on best practices for implementing a SOX compliance program.However, the Postal Service reports to the Postal Regulatory Commission (PRC), not the SEC.2
3 Accurate Timely Authorized SOX Buzz wordsWhat are the three buzz words for SOX, that if you follow, you will usually be in compliance?AccurateTimelyAuthorized
4 FY 11 will be BMA/DMU, PVDS, PRU, Voyager, Smartpay and BRM USPS is testing the effectiveness of financial controls at postal facilities across the country. This phase is an important step as USPS works toward Oct 1, 2010, when its finances will be subject to the terms of the Sarbanes-Oxley (SOX) Act. (USPS News Link Sept 23)Need to be at least 95% compliance in all financial aspectsFY 10 Focused on BMA/DMU and PVDSFY 11 will be BMA/DMU, PVDS, PRU, Voyager, Smartpay and BRM
5 In Compliance Success: BMEU and BRM – Negative balances Inactive AccountsLate Mailing StatementsVoyager-Reconciling statementsAudits-Clerk cash countsSIA retail floor auditsPurchasing-Smartpay cardeBUYBRM FY08 South florida district $5.2 mil vs FY 09 $5.2 New area FY 08 $2.2 mil VS $2.2 mil
6 SOX Tips of the Week PS FORM 3971 Detailed information can be found in Field Finance Training: TimekeepingPS Form 3971, Request for or Notification of Absence: A PS Form 3971 must be completed for every period of leave taken. This is the supporting documentation for the leave entered.Unscheduled Leave: Employee’s time card is attached to the PS Form 3971 and kept in the Supervisor/Manager office. Employee meets with Supervisor to retrieve their time badge and signs the PS Form Supervisor finalizes the form and files it in the centralized location in the unit by employee name.Scheduled Leave: Except for emergencies and unexpected illness or injury, leave for all employees must be requested and approved in advance by the appropriate supervisor on a PS Form Sufficient leave balance to cover the period requested should be verified.
7 SOX Tips of the Week PS FORM 3971 Detailed information can be found inField Finance Training: TimekeepingFuture leave:PS Forms 3971 for future leave are kept in a central location in each unit and Plant. The Plants file by tour by date and the Units file by date. Supervisor verifies the leave slips when making the schedule for the following week, inputs the leave into eRMS and finalizes the PS Form The form is then filed in the central location by employee name.****see next slide for a properly completed PS Form 3971****
8 Completing Time and Attendance Forms PS Form 3971, Request for or Notification of Absence
9 Steps Necessary for Compliance CommunicationFollow policies and proceduresContinue to be aware of policy and procedures changesPromote good business practices; reinforce accountabilityEnsure processes are in placeProvide oversight and follow up
10 Daily SOX BMEU Certification Daily CertificationDaily SOX BMEU CertificationNot just a writing exerciseMust be completed same dayEffective Oct 1st , this will be included in the escalation processDaily SOX CertificationCertifying you are completing the checklists and itemsTracks the employee who was logged in compares to name typed in
11 Reviewing documentation Money ordersClerk found guilty of converting money orders for personal use $42,000.PS Form 3533 RefundsClerk issues false refundsConverting Postal Funds for personal useClerk does not input each transaction and pockets the fundsNot conducting actual auditsHides shortages
12 Financial transactions eTRAVELLocal travelDuplicate paymentsWithin 5 days of returnPurchasingeBuySmartpay CardInvoicesTimekeepingPS Form 3971PS 1017A & BPS Form 1723Clock rings
13 Importance of Key Financial Activities Fully performing the financial activities will help prevent loss of revenueActivities ensure timely and appropriate revenue and expense recognitionThe absence of any one or a combination of key financial activities could result in a material weakness.
14 Benefits of Compliance Reinforces public trust in our financial reportingStandardization and streamlining of processes and systemsIncreased accountability and ownership of controlsImproved structure to solve operational issues by working together across functionsConsistent documentation of processes and systemsKey Points:14