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  • Review the effectiveness of FBT administration

    Internal reviews

    There are a number of review activities that can assist in identifying areas of potential improvement in FBT administration including:

    • Regular reviews of relevant general ledger codes or software programs to provide assurance that all fringe benefits have been captured.
    • Preparation of a mid-year return or quarterly or mid-year data integrity reviews, particularly of those transactions that have a significant FBT impact to help ensure that year end data is accurate and complete. The frequency of data integrity reviews will depend on such things as the size of your government organisation, the number and types of benefits provided and the maturity of FBT controls and processes.
    • A pre-lodgment review that examines FBT return data and calculations. Pre-lodgment reviews can be undertaken as a staged approach as information relating to certain benefit types is finalised or completed when the FBT return has been prepared but not yet lodged. Such a review should be undertaken by staff responsible for overall FBT responsibility in your organisation and include the following steps
      • compare the current year return to prior year returns and investigate any significant discrepancies
      • review data provided by external organisations to ensure that it has been accurately processed
      • review a sample of transactions to check that they have been correctly reported
      • perform a review of calculations to check that any formulas used are correct, and
      • perform an overall 'reasonableness' review of the return, including a high-level review of all working papers.
       
    • A post-lodgment review that examines FBT return data, calculations and processes. Post-lodgment reviews should be undertaken after the FBT return has been lodged but while the process is still fresh in the minds of those staff who prepared the return. The review should address two main questions
      • What aspects of the process went well?
      • What aspects of the process require improvement?
       

    Some organisations find maintaining a central issues log a useful tool to enable issues arising from such review activities to be appropriately recorded, addressed and communicated. For an issue log to be useful, all substantive issues and errors must be captured. The log itself should be reviewed periodically to ensure that, where necessary, corrective action has been taken.

    Independent reviews

    Independent reviews conducted by your organisation's internal audit team or an external service provider can be useful in providing assurance that:

    • ongoing compliance obligations are met
    • processes are working as effectively as possible
    • senior managers and executive are aware of potential risk exposures.
      Last modified: 06 Feb 2018QC 18627