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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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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 Districts 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 individuals 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 schools 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 schools 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.
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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, CIADirector of Internal Audit281-897-4111carol.oman@cfisd.net
Pat StefanInternal Auditor III281-517-6537patricia.stefan@cfisd.net 01/14/2011 21
22. Contacts Audit, Fraud, PTO & Booster Club Questions
Internal Audit
Financial Questions
Karen SmithAssistant Supt / Business & Financial Services281-897-4020karen.smith1@cfisd.net
Fund-Raisers
Marty Edwards, Director of General Administration281-517-6367terry.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