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POWER LUNCH

ALASBO. POWER LUNCH. AUDIT PREPARATION. MIKUNDA, COTTRELL & CO. Certified Public Accountants and Consultants 3601 “C” Street, Suite 600 Anchorage, Alaska 99503 (907) 278-8878. Problems with Terminology.

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POWER LUNCH

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  1. ALASBO POWER LUNCH AUDIT PREPARATION MIKUNDA, COTTRELL & CO. Certified Public Accountants and Consultants 3601 “C” Street, Suite 600 Anchorage, Alaska 99503 (907) 278-8878

  2. Problems with Terminology The “Single Audit” for which all of your School Districts are preparing is actually two audits (sometimes three): • Financial Statement Audit • Single Audit: • Federal • State of Alaska

  3. Basic Tips • Prepare a binder in which to include all items initially requested by auditors. • Specify if documents are originals you expect to have returned • Understand the purpose of additionally requested items. • Once auditors have begun final field work, do not post Journal Entries. • If Journal entries are necessary, coordinate with auditors. • Finish on the same page.

  4. Similarities in Different Audits Basic Phases: • Risk Assessment • Performance • Reporting

  5. Financial Statement Audit Risk Assessment • Preliminary TB • Identify key control procedures and the objectives they meet. • Prepare for “Test of Controls”

  6. Financial Statement AuditPerformance • Reconcile – it’s a matching thing • Bank Reconciliations • Other Balance Sheet and footnote items • Does the beginning balance agree with the prior year financials? • Detail or ledger reports vs. general ledger • Grants • Are all expenses accrued? (including “indirect expense” calculations) • Expenditures in the GL vs. grant reports • Grant Revenues = grant expenditures • Other revenues • Agree beginning fund balance to prior year financials • Add up the due to and due from accounts – net to zero • Add up transfers in and transfers out – net to zero • Watch the 70% rule – obtain a waiver if you don’t meet this

  7. Financial Statement AuditPerformance, cont • GASB 34 items : Beg + Additions – Deletions = Ending by Function • Capital Assets • Cost • Accumulated Depreciation • Long-Term liabilities • LT debt, including capital leases • Accrued Leave – included hours and ending pay rates • PERS and TRS • On-behalf • Alaska school districts directed to record the full on-behalf in the operating fund • Allocate on-behalf expenditures to functions based on covered payroll – follow DEED guidance • Provide documentation to DEED • Provide information and supporting documentation related to actual employer and employee contributions

  8. Financial Statement AuditPerformance, cont • Other commonly requested items • List of checks issued after year end • AP detail by invoice as of year end • Payroll register for pay period including the year end date • Bank and/or Investment statements as of year end and the month following • Inventory: • Year end counts • Documentation of purchases for the year • Auditor may determine need for other specific information

  9. Single AuditRisk Assessment • Prepare and provide supporting documents for Grant Analysis Worksheets • Prepare Federal and State schedules of grant expenditures • Communicate with program managers

  10. Single AuditPerformance • TB for major program • Accessible detail of expenditures for the program • Identify key control procedures and the objectives they meet. • Copies of granting agency’s “Site Reviews” • Communicate with program managers

  11. Reporting What needs to be reported? • Financial Statements • Significant deficiencies and material weaknesses in internal control over financial reporting • All instances of fraud and illegal acts unless inconsequential • Material violations of provision of contracts and grant agreements • Material abuse

  12. Reporting What needs to be reported?, cont. • Federal and State Single Audit • Significant deficiencies and material weaknesses in internal control over major program compliance • Material noncompliance with the provisions of the major program • “Questioned” costs • Known fraud affecting an award • Material abuse • Status of prior audit findings

  13. "Chance favors the prepared mind." --  Louis Pasteur

  14. Resources Websites: Governmental Accounting Standards Board www.gasb.org Government Finance Officers Association www.gfoa.org CFDA.gov www.cfda.gov Office of Management and Budget www.whitehouse.gov/omb American Institute of Certified Public Accountants www.aicpa.org Alaska Association of School Business Officials www.alasbo.org State of Alaska Department of Education and Early Development www.eed.state.ak.us

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