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Internal Audit

What is Internal Audit?. Internal Audit reviews or audits procedures and processes to determine if a school or department handles areas properly and to make suggestions on improving the areas reviewed or audited. If concerns are noted, Internal Audit works with pertinent personnel to resolve the co

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Internal Audit

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    1. 01/14/2011 1 Internal Audit Presented by: Carol Oman Director of Internal Audit

    2. What is Internal Audit? Internal Audit reviews or audits procedures and processes to determine if a school or department handles areas properly and to make suggestions on improving the areas reviewed or audited. If concerns are noted, Internal Audit works with pertinent personnel to resolve the concerns and prevent them in the future. 01/14/2011 2

    3. Responsibilities Determine if internal controls (checks & balances) are in place to safeguard assets. Determine if procedures are being followed. Provide an independent / objective perspective. Conduct investigations of fraud. Uncover problems and concerns before they become material. 01/14/2011 3

    4. Reporting Structure Reports functionally to the Board of Trustees. Reports administratively to the Superintendent. Follows the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing. 01/14/2011 4

    5. Annual Audit Plan Projects performed annually High Risk Areas based on a risk assessment Requests from Board or upper management Special Projects & Questions 01/14/2011 5

    6. Major Project Areas Annual Financial Audit Conflict of Interest Employees with Primary Purchasing Responsibilities Vendors Officers & Board Members Financial Audits – Schools & Depts. Human Resources / Payroll Salaries Parent Organizations PTOs Booster Clubs Travel Expenditures 01/14/2011 6

    7. Audit Process Contact Principal about the audit (unless a surprise audit). Petty cash is always a surprise audit. Document procedures. Perform testing. Discuss results of the audit with the Principal. 01/14/2011 7

    8. Audit Process Draft of report is provided to the Principal. If concerns are noted, Internal Audit will make recommendations. The Principal will provide responses to the recommendations. If no material concerns are noted, this will also be included in the report. 01/14/2011 8

    9. Audit Process Report is issued and distributed to: Principal Associate Superintendent for Curriculum and Instruction and School Administration Reports related to financial matters - - Assistant Superintendent / Business & Financial Services Associate Superintendent / Business & Financial Services Superintendent Board of Trustees External Auditors 01/14/2011 9

    10. Financial Audit - Schools Money received should be: receipted, recorded to the proper account, and deposited daily. Money expended should be: approved, paid to appropriate vendors for school-related expenses, and paid through the District’s Accounts Payable Department. 01/14/2011 10

    11. Financial Audit - Schools Fund-Raisers Fund-Raising Activity Report must be completed by employee or PTO / Booster Club holding a fund-raiser. The form is used to approve fund-raisers and to account for the results of the fund-raisers. For fund-raisers by the school or school groups, the financial secretary should verify the deposits and expenditures reported on the form. For PTOs / Booster Clubs verification should be performed by their Treasurer. 01/14/2011 11

    12. Financial Audit - Schools Fund-Raisers – IRS Prohibitions Can not require anyone to participate in a fund-raiser. Can not require that a certain amount be sold or that a certain amount be donated in lieu of fund-raising. Can not penalize anyone for not participating in a fund-raiser. Can not use individual accounts. Can not credit an individual based on revenues raised to offset that individual’s expenses. Amount raised must benefit a campus / organization as a whole. 01/14/2011 12

    13. Financial Audit - Schools Reconciliations Financial secretary must reconcile the school’s accounting records with the general ledger balances monthly. Document the reconciliations. 01/14/2011 13

    14. Financial Audit - Schools Petty Cash Money on hand plus receipts must equal the petty cash amount allocated for your school. No cash advances should be made. 01/14/2011 14

    15. Suggestions - Reconciliations Review monthly reconciliations. Agree the reconciliations to the school’s accounting records maintained by the financial secretary and to the general ledger balances. Indicate your approval of the reconciliation in writing with the date. 01/14/2011 15

    16. Suggestions – Safes Check the contents of the school safe periodically to ensure that money is being deposited daily. Have the financial secretary and another person present when the safe is checked. Maintain a log of when these checks are conducted and have pertinent people initial the log. 01/14/2011 16

    17. Suggestions – Petty Cash Count the petty cash and receipts periodically to ensure the total agrees to the amount allocated for your school. Have the petty cash person and another person present when the petty cash is counted. Maintain a log of when these counts are conducted and have pertinent people initial the log. 01/14/2011 17

    18. Suggestions – Money Handling Do not allow any money to be kept in a desk, filing cabinet, or other location. All money should be kept in the safe. Activity funds are centralized; therefore, no bank accounts, except those set up by the Finance Office, should be used. Do not allow any petty cash funds or change funds except for those approved by the Finance Office. 01/14/2011 18

    19. Suggestions - Purchases When approving purchase orders, ask these questions: Are funds available for the purchase? Do you know this vendor? Are the items being purchased appropriate for the school? Were quotes received if purchase is more than $5,000 and less than $25,000? If no, is a bid or contract number indicated? 01/14/2011 19

    20. Who Audits the Auditors? In accordance with the Institute of Internal Auditors’ Standards, a quality assessment review of the Internal Audit Department must be performed every five years by an independent external reviewer. Conroe ISD performed the last review in November 2006. 01/14/2011 20

    21. Internal Audit Staff Carol Oman, CPA, CIA Director of Internal Audit 281-897-4111 carol.oman@cfisd.net Pat Stefan Internal Auditor III 281-517-6537 patricia.stefan@cfisd.net 01/14/2011 21

    22. Contacts Audit, Fraud, PTO & Booster Club Questions Internal Audit Financial Questions Karen Smith Assistant Supt / Business & Financial Services 281-897-4020 karen.smith1@cfisd.net Fund-Raisers Marty Edwards, Director of General Administration 281-517-6367 terry.edwards@cfisd.net 01/14/2011 22

    23. Handouts Fund-Raising Activity Report Example Budget Reconciliation and Detail Requirements for Competitive Quotes and Bids 01/14/2011 23

    24. Questions??? 01/14/2011 24

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