Presented by: Carol Oman Director of Internal Audit 12/06/20131

Internal Audit

Internal AuditPresented by:Carol OmanDirector of Internal Audit

12/06/201311What 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 these areas.

If concerns are noted, Internal Audit works with pertinent personnel to resolve the concerns and prevent them in the future.12/06/20132ResponsibilitiesDetermine 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.12/06/20133Reporting StructureReports 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.12/06/20134Annual Audit PlanProjects performed annually

High Risk Areas based on a risk assessment

Requests from Board / Superintendent / Associate Superintendents / Principals

Special Projects & Questions12/06/20135Annual Project AreasAnnual Financial AuditConflict of InterestEmployees with Primary Purchasing ResponsibilitiesVendorsOfficers (Superintendent) & Board MembersFinancial Audits Schools & DepartmentsHuman Resources / PayrollSalariesParent OrganizationsPTOsBooster ClubsTravel Expenditures12/06/20136Audit ProcessContact Principal about the audit (unless a surprise audit). Petty cash is always a surprise audit.

Document procedures and processes.

Perform testing.

Discuss results of the work.12/06/20137Audit ProcessDraft ReportProvided to the Principal for reviewIncludes:Details and results of testing performed.Commendations for areas being handled well.Recommendations & Responses if concerns are noted.

Final Report12/06/20138CFISD Compliance CourseFinancial Section (New)Money Handling Procedures

Purchasing Procedures

Fund-Raisers

Conflict of Interest12/06/20139Financial Audit - SchoolsMoney Received

All money received should be:receipted or documented on a Cash Receipt Sheet,counted in front of the person turning in the money (face-to-face count), anddelivered to the Financial Secretary daily for deposit.

12/06/201310Financial Audit - SchoolsMoney HandlingMoney should not be kept in a desk, filing cabinet, or other location. All money should be kept in the schools safe.

Activity funds are centralized; therefore, no bank accounts, except those set up by the Finance Office, should be used.12/06/201311Financial Audit - SchoolsMoney HandlingAll money received must be submitted to the Financial Secretary daily. Money cannot be held to make change and cannot be used to make purchases.

Money received cannot be used to cash personal checks.

All petty cash funds or change funds must be approved by the Principal and the Finance Office.

12/06/201312Financial Audit - SchoolsFace-to-Face CountWhen money is to be placed in the safe and a face-to-face count (verification) cannot be done at that time:Money should be put in a sealed courier bag with the name of the person turning in the money, the date, the club or reason money was collected.Financial Secretary should also sign and date the sealed courier bag and then secure the bag in the safe.The sealed courier bag should not be opened unless the person turning in the money and the Financial Secretary are present.12/06/201313Financial Audit - SchoolsPurchasesMoney expended should be:Approved prior to order being placed,paid to appropriate vendors,for school-related expenses, andpaid through the Districts Accounts Payable Department or reimbursed through Petty Cash.12/06/201314Financial Audit - SchoolsPurchasesAre funds available for the purchase?

Are the items being purchased appropriate for the school?

How was the vendor selected? Has this vendor been used before?

12/06/201315Financial Audit - SchoolsHow to select a Vendor for a PurchaseAvailable from the Distribution Center?

Included in a Bid or Contract?

If not in bid or contract, then estimate annual district purchases of type of item.Less than $5,000 No Quotes$5,000 to less than $25,000 Written Quotes$25,000 or more Competitive Bids / Proposals by Purchasing Dept.12/06/201316Financial Audit - SchoolsPurchasesBid or ContractUse the bid or contract price.Document bid or contract # on PO.

Quotes - $5,000 or more and less than $25,000Receive written quotes.Complete quotation form.Indicate quote # on the PO.Submit the quotation form and written quotes to the Finance Office.

12/06/201317Financial Audit - SchoolsPetty CashMoney on hand plus receipts must equal the petty cash amount allocated for your school.

No cash advances should be made.

No personal checks should be cashed.12/06/201318Financial Audit - SchoolsFund-RaisersFund-Raising Activity ReportPermission to hold fund-raiserAccount for the fund-raiser

School / School Group Fund-RaisersFinancial Secretary - Verify the deposits and expenditures reported on the Operating Report.

PTO / Booster Club Fund-RaisersTreasurer Verify Operating Report information.

12/06/201319Financial Audit - SchoolsFund-Raisers IRS ProhibitionsCannot require anyone to participate in a fund-raiser.Cannot require that a certain amount be sold or that a certain amount be donated in lieu of fund-raising.Cannot penalize anyone for not participating in a fund-raiser.Cannot use individual accounts.Cannot credit an individual based on revenues raised to offset that individuals expenses.Amount raised must benefit a campus / organization as a whole.12/06/201320Financial Audit - SchoolsCollections for Specific Individuals & FamiliesService projects or fund-raisers cannot be held at the school or in the name of the school for individuals or families for death or injuries in tragic accidents, major illnesses, fires, or similar situations.Family can establish a special account at a bank or credit union.Donations can be sent by individuals or businesses to the bank or credit union.Donations are not tax deductible.

12/06/201321Financial Audit - SchoolsReconciliationsFinancial secretary must reconcile the schools accounting records with the general ledger balances monthly.

Document the reconciliations.

Principal should review and approve the monthly reconciliations.12/06/201322Financial Audit - SchoolsSpot Checks by PrincipalSuggest that the Principal check the contents of the school safe periodically to ensure that money is being deposited timely.

Suggest that the Principal do surprise counts of petty cash periodically.

Have the financial secretary and another person present when these counts / checks are done.

Maintain a log of when these counts / checks are conducted and have pertinent people initial the log.

12/06/201323WebsitesFinance http://inside.cfisd.net/depts/finance/default.htm

Financial Procedures ManualSales Tax Tips

Purchasing http://inside.cfisd.net/depts/purchasing/purchasing.htm

Requirements for Competitive Quotes and BidsBid and Contract Awards12/06/201324WebsitesFund-Raisers http://inside.cfisd.net/policies/fundraiser.htm

Fund-Raiser GuidelinesWord Version of Fund-Raising Activity ReportApproved Fund-Raiser Vendors List

Booster Clubs http://www.cfisd.net/campuses/booster/booster.htm

PTOs http://www.cfisd.net/campuses/pto/pto.htm

12/06/201325Internal Audit StaffCarol Oman, CPA, CIADirector of Internal [email protected]

Pat StefanInternal Auditor [email protected]

Janett Tapia-GonzalezInternal Auditor [email protected]

12/06/201326ContactsAudit, Fraud, PTO & Booster Club QuestionsInternal Audit

Financial QuestionsKaren SmithAssistant Supt. / Business & Financial [email protected]

Mable IslesDirector of Financial [email protected]

12/06/201327ContactsAccounts Receivable and Sales TaxSharla SheffieldAccounts Receivable [email protected]

Fund-RaisersMarty Edwards (Retiring 12/2013)Director of General [email protected]/06/201328HandoutsBudget Reconciliation and DetailFinance WebpagePurchasing WebpageRequirements for Competitive Quotes and BidsFund-Raiser Information WebpageFund-Raising Activity Report ExampleExcerpt from Financial Procedures ManualFund-RaisersCommunity Service ProjectsCollections for Needy FamiliesCollections for Specific Individuals and FamiliesPTO and Booster Club Webpages12/06/201329Questions???12/06/201330

Documents

Presented by: Carol Oman Director of Internal Audit 12/06/20131