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APS Internal Audit Department Audit Committee Internal Audit Work Plan Recommendation October 19, 2017 John Mickevice

APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

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Page 1: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

APS Internal Audit Department

Audit Committee Internal Audit Work Plan

Recommendation

October 19, 2017

John Mickevice

Page 2: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Presentation Overview

• Overview of Internal Audit at APS

• Criteria Used to Select Possible Projects

• Projects Selected per Risk Assessment

• Follow-up on Prior Audits

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Page 3: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Overview of APS Internal Audit

What is Internal Audit?

• Independent appraisal activity for the review of operations as a service to the administration or Board.

• Managerial control that functions by measuring and evaluating the effectiveness of other controls.

What is the purpose of Internal Audit?

• Provide operational, financial, and compliance audit services to APS

• Advisor and resource to school leadership and School Board on policy, internal controls and best practices in fiscal and business operations

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Page 4: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Overview of APS Internal Audit

Internal Audit reports to the Board through the Audit Committee.

Audit Plan is developed …

• In Consultation with the Audit Committee;

• With Priorities based on

–Risk Assessment

– Input from School Board and Staff.

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Page 5: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Criteria Used to Identify Possible Projects

• Discussions with APS Directors and Supervisors:

– identify exposures that may exist for APS,

– identify controls that may mitigate these exposures,

– evaluate the risk

• 62 APS process areas identified– Each process area evaluated based on 5 factors:

• Quality and Stability of Control Environment

• Business Exposure

• Public and Political Sensitivity

• Compliance Requirements

• Data Processing and Management Reporting

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Page 6: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Project Selection

• Process areas were ranked into three priority groups.

• Most areas fall in the medium risk group.

• Areas ranked low risk, while important to APS, do not warrant as close attention as the higher risk areas.

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Page 7: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Internal Audit Project Recommendations

• Compare new school construction costs in Arlington to comparable school districts

• Activity Revenues: Lease/Purchase Funding, High School Gate Receipts and Tuition Other Districts

• Review school facility rentals

• Review APS assets assigned to students

• Review Medicaid Annual Cost Report and payments received for school-based services

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Page 8: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Comparison of New Construction Costs

O’Connor Construction Mgmt. Inc. was selected to provide independent comparison of APS new construction costs to comparable school districts.

Internal Audit will work with APS staff to coordinate and communicate APS requirements and APS cost information needed by the vendor to complete this project.

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Page 9: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Activity Revenues

• Review Lease/Purchase Funding, High School Gate

Receipts and Tuition Other Districts.

• Document all processes currently in place that help

assure the accuracy and completeness of revenues.

• Identify any gaps in each process and its possible

effect.

• Evaluate overall level of assurance.

• Test and evaluate compliance with selected Federal,

State, County and APS Policies and Procedures.

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Page 10: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

School Facility Rentals

• Review space allocation by priority order and fee assessment by user type.

• Review for submission of all required user documents.

• Identify and review all expenses incurred to set-up, support and clean-up after each event.

• Review expense allocation per County agreement.

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Page 11: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

APS Assets/Medicaid Reimbursement

APS Assets Assigned to Students

• Review controls over the assignment and tracking of APS devices assigned to students

Medicaid Reimbursement

• Review FY17 Annual Cost Report and final payments received for school-based services

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Page 12: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Follow-up on FY 2015 Audits

Payroll Processing and Controls

• Follow-up with management on planned actions:

– Increased restrictions on electronic access to human resources and payroll data;

– Implement a checks and balances process to ensure accurate payment adjustments;

– Provide payroll output reports for review by Principals and Department Heads.

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Page 13: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Follow-up on FY 2016 Audits

Financial Controls at the Schools

• Follow-up with management on planned actions:– Document standard school treasurer financial

functions in a Best Practices Manual;– Encourage the use of technology to enhance

efficiencies;– Strengthen strategies for Treasurer vacancies and

absences.

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Page 14: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Follow-up on FY 2017 Audits

Design & Construction Financial Controls

Follow-up on implementation of post occupancy

steps;

Follow-up on documentation of financial,

procurement and project management controls.

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Page 15: APS Internal Audit Department Audit Committee Internal Audit … · 2019. 5. 31. · Internal Audit Plan Approval Next Step is Internal Audit Plan Approval Arlington School Board

Internal Audit Plan ApprovalNext Step isInternal Audit Plan Approval

Arlington School Board Action Item:• ARLINGTON PUBLIC SCHOOLS Policy 10-4.01 –

Internal Audit requires that “subsequent to (Audit) Committee approval, the (internal audit) plan shall be submitted to the School Board for final approval…”

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