Parker Van Erden, an analyst on the local government team, walked attendees through the auditor's fraud risk assessment and implementation guide, saying the instrument is a diagnostic tool to identify and reduce fraud risk.

Van Erden explained that the assessment is supplemental to financial reports and is due at the same time as the entity's financial report. He recommended that first-time users consult the preparation checklist to gather required information and use the implementation guide to address deficiencies.

He stressed that the assessment's first question, which covers basic separation of duties (for example, the board chair, clerk and treasurer being separate people), is critical: that question is worth 200 points and a single "no" on an item in that checklist can prevent an entity from obtaining full credit and will place the entity in a higher-risk category. Van Erden said the separation-of-duties question is also the one that is statutorily required.

Van Erden advised small entities that score low to prioritize addressing the separation-of-duties items first and to use the implementation guide to phase in other best practices. He said the office does not withhold funds based on a low score but will follow up to offer help and may request corrective actions for repeated deficiencies.

Ending: Staff advised entities to answer the fraud risk assessment honestly, retain training certificates where relevant and treat the assessment as a continuous-improvement tool rather than a punitive measure.