Office of the Chief Financial Officer
Executive Summary for Closed Reports
Report No. IA:OTR:2807-M04: Results of our Review of OTR Refunds, dated March13, 2009.
Follow-up Report: IS:0011-0088A, dated April 20, 2012. “We consider OTR's actions responsive to this recommendation.”
Chief Risk Officer’s Risk Assessment
The Inherent Risk Rating for fraud risk is High. Therefore, particular attention is paid all recommendations from OIO.
Overview of Recommendations
OIO offered five recommendations. All five were implemented to further strengthen existing internal controls.
- OTR has designed, developed and implemented a database that uses fraud risk factors to derive risk scores to identify potential fraud. This more systematic approach replaces random sampling.
- As of January 2008, the Refund Control Unit (RCU) performs a 100% review of all SOAR manual refunds regardless of the dollar amount.
- OTR finalized the Refund Directive on May 15, 2009. OTR launched a series of refund workshops to educate the OTR Directors and staff of the recent changes, which are updated annually. The Refund Directive does provide guidance on interest calculations.
- RCU has established a 72 hour turnaround time for all refunds that require additional documentation/correction. RCU maintains a log of all refund requests and notes the status of each, recording any that are rejected. Monthly, RCU sends a report identifying those items that are still outstanding. In addition, RCU sends, quarterly, a second notification report identifying any refunds that have not been resubmitted. RCU is aware that a small number of rejections require more than 72 hours to resolve because they involve correspondence with the taxpayer, and has established a process to monitor the resolution of these items. RCU performs periodic control tests to monitor adherence to the 72 hour timeframe. When refunds are rejected, RCU clearly notes the reason on the referral to Director, and includes common rejection reasons in its annual training for OTR staff.
- Three specific items that came to the attention of OIO during the review were reviewed and resolved.
To view the full report, Click: Review of OTR Refunds Full Report