Collaboration with Internal Audit

Transcription

1 Collaboration with Internal Audit Bookkeepers Meeting February 2013 John Wallingford Director of Finance Vivian McGettigan Chief Internal Auditor Common Misunderstandings and Common Audit Findings

2 What Documents do I Need to Have for PTAs/Booster Clubs? Before an Internal Audit the Auditor will check the School s Website for active organizations and read the minutes Maintain copies: Forms 1, 2 & 3 (Form 2 only if your school holds the funds) (Treasurers and Presidents signatures are important) IRS Form 990 (separate tax ID) Independent Auditors Report 2

3 PTA/Booster Clubs No Formal Audit Findings in the Past Due to Common Non-Compliance and Need to Communicate Requirements 2013 Reports will Include Findings External Auditor Data Collection Form 3

4 Recent Questions How Do I Close a PTO into an Activity Fund? (no active officers) What Do I Do When the Officers won t Provide the Information? (Internal Audit has Prepared a Summary of Policies, Regulations & FGM. Call Finance or Internal Audit) 4

5 Procurement Cards Logs Must be Attached to the Monthly Reconciliations Sent to Finance 5

6 Procurement Card Study Outstanding Example of Collaboration Internal Audit Findings and Recommendations ICAC (Thank Bookkeepers From Team) Formal Presentations to Internal Audit Committee New Policy and Updated Regulation 6

7 Procurement Cards New Travel Form Retraining and New Cards 7

8 Reminder - Internal Auditor Does Not Create the Rules Auditor must Follow the Legal Requirements (IRS) and Best Practices Auditor must Follow Current Policies, Regulations, Other Guidance (Financial Guidelines Manual, Food Service Operations Manual, Forms) using Judgment as guidance can not be comprehensive (i.e. p-card logs & stolen property) Auditor makes recommendations management creates policies and determines actions - not the auditor. 8

9 Auditor Independence If you have a question, the auditor can answer questions on current guidance and offer suggestions but she will always refer undefined areas to the Finance Director. Please do not be offended if she refers questions. This is intentional as she must maintain independence. 9

10 Internal Control Advisory Council Mission: To use a team-based approach to systematically review key processes with the goal of improving efficiencies partially through the use of automated processes while enhancing our internal control environment. 10

11 Future ICAC Project Property Reviews Draft Audit Report - Auditor has Finished a 2 Year Review and Provided a Report with Common Findings and Her Recommendations (17 Findings, 16 Recommendations) Thank Bookkeepers - Many of her Recommendations came from Suggestions from You During Meetings at Your Schools ICAC Team (Volunteers) 11

12 Property ICAC Subcommittee A few of the topics Labeling Property Under $500 Log Formats for Property Under $500 Maintaining Portable Assets (tablets, slates) Loan Forms and Logs Group Training for Property Custodians Forum to Discuss Good Examples for New Custodians 12

13 Sharing Audit Findings Goal - Reduce Findings in the Future While Providing Transparency 13

14 Top 10 List: Results of First 18 School Audits 1.Lack of Supporting Documentation for Business Meals - IRS compliance (9) 2.Lack of Full Accounting for Travel (9) 3.Meals Purchased on Procurement Card Lacked Prior Approval of Principal and/or Associate Superintendent (8) 14

15 Results of First 18 School Audits - Continued 4. Late Submission of Procurement Card Reconciliation with Supporting Receipts (7) 5. Lack of Log for Procurement Card Purchases (5) 6. Failure to Record Property Purchased on Procurement Cards (5) 15

16 Results of First 18 School Audits - Continued 7. Procurement Card Logs Utilized by the Budget Holder but not Submitted with the Procurement Card Reconciliations (4) 8. Lack of Use of Release Forms Authorized by Principal's Signature for Equipment Removed from School (4) 9. Expendable Property Listing Not Maintained (4) 10.Personal Items Purchased with Public Funds (4) 16

17 2013 Unannounced Audits Start Next Week 15 Schools Focus: Procurement Cards Property Management Payroll (Ensuring Leave is recorded, overtime approved) PTO/Booster Club Compliance 17

18 Student Activity Fund Audits Findings approximately 250 findings Repeat findings 6 years, 5 years, 3 years many with single year New Process 18

19 Findings

20 Findings Lost library book fees not remitted to PWCS 27 Unrelated disbursement from profit centers/accounts 25 PTA/Booster data documentation form not on hand or incomplete 24 Lack of supporting documentation for check written 23 School ended year with deficit balances in accounts 16 Deposit not made in accordance with PWCPS policy 15 Accounts are not grouped in proper category 12 Lost textbook fees not remitted to PWCS Sales Tax paid on purchase in excess of $ Reimbursement check signed by payee of check 10 Checks outstanding for over one year 8 Bank account not reported as public deposit account 8 Transmittal forms did not include date funds received 7 20

21 Findings Cont. Building use funds not remitted to PWCPS 6 Yearbook lost substantial money 6 Book fairs sales reports differ from school's general ledger 5 Lack of approval of supporting documentation by auth. individual 5 Inappropriate transfers made to faculty accounts 5 Transmittal forms incomplete/incorrect 4 Checks contained only one signature 4 Staff of school did not remit collections to bookkeeper timely 4 Drivers Ed collections not remitted to PWCPS in accordance with policy 3 Receipt was not written to individual remitting funds to school 3 Standard cash transmittal form not used by school 3 Gift Cards purchased but lack of documentation to whom given 2 21

22 Findings Cont. Deposits in transit on year end bank rec could not be verified 2 Receipts were not written in numerical sequence 2 Uncleared adjustments on year end bank reconciliations 2 E-script funds not remitted to PWCS in accordance with policy 2 School failed to obtain quotations for purchase exceeding $3,000 2 Request from bank copies of cancelled checks 2 Transfers and adjustments not approved by principal 2 School's portion of building use not transferred out of clearing account 2 22