COMMERCIAL WARRANT AUDIT WORKSHOP San Diego County Office of Education APRIL 30, 2009

1. COMMERCIAL WARRANT AUDITWORKSHOPSan Diego County Office of EducationAPRIL 30, 2009

2. WELCOMEWe’re Happy You’re Here! • IntroductionsAudit TeamAudience • Purpose of WorkshopIn Depth Review of Audit ProceduresUnderstanding the “Why” Behind the Payments • FormatInteractiveWebcast Available for Viewing Later • Topics to be Covered • Other Areas of Audience Interest?

3. CRITICAL FUNCTIONS OF ACCOUNTS PAYABLE (A/P) • Facilitating Prompt Payment of Goods and Services • Recording, analyzing & summarizing of financial activities involving the payment of funds for non-salary expenditures • Specific functions vary with size of district • Goal of A/P staff is to provide for prompt payment for receipt of goods & services procured in accordance w/governing board policies

4. CRITICAL FUNCTIONS OF ACCOUNTS PAYABLE (A/P) • Assuring Compliance: Laws, Regulations and Board Policies • Education Code • Public Contract Code • Government Code • Labor Code • Civil Code • Health and Safety Code • Federal and State Tax Laws & Regulations • Etc., Etc., Etc.!

5. CRITICAL FUNCTIONS OF ACCOUNTS PAYABLE (A/P) • Performing & Monitoring Internal Controls • Adequate internal controls are critical to the financial success of the school district • System of checks and balances and the segregation of duties • Development and adherence to effective internal fiscal controls are the responsibility of each member of the financial management team • A/P staff are important members of the financial management team!

6. CRITICAL FUNCTIONS OF ACCOUNTS PAYABLE (A/P) • Providing Checks & Balances for Purchasing Department • Through routine review and monitoring of purchase orders, contracts, invoices and receiving documentation • Budget Monitoring • Inherent in A/P and critical component of budget management with the district • Review appropriateness of account codes

7. CRITICAL FUNCTIONS OF ACCOUNTS PAYABLE (A/P) • Preserving District Records and Audit Trail • Complete and organized auditable records are essential to effective fiscal management • Communicating With Vendors & Colleagues • Clear, consistent, cooperative communication is vital to effective school district operations • Representing the district in vendor relations is important role of the A/P staff • A/P staff are key players in the district’s fiscal management team. Each A/P transaction processed affects the fiscal operations of the district.

8. WHAT DOES THE SUCCESSFUL A/P TECHNICIAN NEED TO KNOW? • School District Accounting Practices • Accounts Payable Processes • Bids and Bidding Laws and Practices • Legal and Illegal Purchasing Issues • Internal Controls and Approval Processes • Sales, Use, Excise and Fuel Taxes • Independent Contractor Regulations and Tax Reporting • Contract Payment Procedures for Personal Services, Construction, and Lease-Purchase Contracts

9. WHAT DOES THE SUCCESSFUL A/P TECHNICIAN NEED TO KNOW? • Credit Card Procedures for School District • Travel and Conference Guidelines and Procedures • Revolving and Petty Cash Fund Operations • Regulations Governing Special Activities & Field Trips • Student Body Accounts Payable Practices • Records Retention Regulations • Year-End Closing Procedures & Preparation for Audit • WHERE TO GO FOR HELP

10. BASIC ACCOUNTS PAYABLE PROCESS • Payment Verification • Match invoice to purchase order/contract and receiving documentation • Validate proper approval • Verify items/services received • Verify price/cost • Math check invoice • Validate sales/use tax • Check for independent contractor status • Confirm fund, program and object coding • Check line item budget for adequate funds

11. BASIC ACCOUNTS PAYABLE PROCESS • Payment Verification 10. Calculate applicable discounts • Disencumber funds • Process for payment • Cancel the invoice • Note amount paid and items received for total or partial payment • Note progress payment and total spent to date on blanket/open purchase order/contract

12. BASIC ACCOUNTS PAYABLE PROCESS • File Maintenance • Combine warrant copy (if used) with original invoice and receiving copy of the purchase order • File according to district practices • Maintain purchase order in numeric order • Retain records as prescribed by Education Code

13. BASIC ACCOUNTS PAYABLE PROCESS • Exceptions • Documents missing • No purchase order/contract issued/executed • Invoice exceeds encumbrance balance of purchase order/contract • Insufficient funds available in line item budget • Incorrect funds, program or object code • Prices does not agree with purchase order/contract • Math errors

14. BASIC ACCOUNTS PAYABLE PROCESS • Exceptions • Sales tax not correct/Use tax not charged • Noncompliance with contract terms • Items not received • Incorrect items received • Damaged goods received

15. BASIC ACCOUNTS PAYABLE PROCESS • Invoice Tracking • Tracking of unpaid invoices • Research unpaid invoices • Unresolved invoices • Purchase Orders and Encumbrance Tracking • Review outstanding purchase orders and encumbrances • Refer questions • Prior Year Accounts Payable • Clear prior year accounts payable

16. WHERE TO GO FOR HELP • District’s Board Policies, Administrative Regulations and Procedure Manuals • California Codes • California School Accounting Manual • County Office of Education (Commercial Warrant Claims Manual on website) • External Auditor • Colleagues • Professional Organizations (i.e., CASBO) • Immediate Supervisor • Government Agency Websites: IRS, FTB, EDD, BOE

17. REVIEW OF CLAIMS MANUAL

18. REVIEW OF AUDIT STATUS DATABASE

19. THANK YOU FOR ATTENDING!