Internal Audit Findings Finance Enhancing Processes
Bookkeeper In-ServiceAugust 17, 2011
John Wallingford, Director of Financial ServicesVivian McGettigan, Chief Internal Auditor
Outline
1. Update on Internal Control Advisory Council and/or Finance Guidance
2. Update on Audit Findings
3. How to Avoid Audit Findings
4. Activity Fund Audits
2
Focus Group Meetings Continue and Learning from Initial Audits• Bookkeepers’ Feedback (Standardize
Forms and Provide Guidance)• Regulations/Policies Inconsistent with
Practices:– Nightly Deposits ($25) evening events– Audits of Booster Clubs– Level Associate’s Approval of Meals– Full Accounting for Travel
3
ICAC or Finance Projects
• Nightly Deposits (Evening Events)• Meals (Level Associate Approvals)• Full Accounting (Standard Form and Guidance)• PTA/Booster Club Guidance (Checklist for
Bookkeeper Review)• Expendable Property Management (logs &
labels)• Coaching Supplements Reconciliation
Spreadsheet
4
Summary Results of Current Audits
• Enhance Physical Security Over Cash:– Secure keys to Safe– Regular Nightly Deposits– Teachers Holding Cash in the Classroom
overnight• Enhance Password Protection:
– Store Passwords Away from the Computer
6
Audit Results - Continued
• Enhance Management of Procurement Cards– Lack of Log– Frequent Late Submissions of Reconciliation– Meals Lacked Level Associate prior approvals– Lack of Supporting Documentation for Meals– Meals for Non-employees (spouses)– Lack of Full Accounting for Travel– Failure to Utilize Sales Tax Exemption– Use of School Activity Fund Cards for Site Based Charges– Tips in Excess of 15%
7
More Audit Results
• Enhance Management Over School Payroll– Lack of Professional Leave Requests– Use of Instructional Supplements to Pay Additional
Coaching Supplements– Set-up of Temp Teachers Prior to HR’s approval– Authorization of Staff Roster resulting in paying a
terminated employee– Lack of Principal’s approval for overtime.
8
Even More Audit Findings
• Enhance Security Over School Division Equipment:– Use of Release Forms – Equipment Removed
from School– Update Inventory for Transferred Assets– Expendable Property Listing not Maintained– Lack of Management of Computer Equipment
9
Lack of Oversight Over Public Funds
• Responsibilities:– Legal– Ethical – Fiduciary (Spectrum of Opinions for
Appropriate versus Non-appropriate)
Reminder - All Purchases are Public Record
10
Lack of Oversight Over Public Funds
• Failure to Cancel Hotel Reservations Resulting in Charge to Procurement Card
• Numerous Expensive Restaurant Charges Contributing to Overspending the Budget
• Expensive Retreat Contributing to Overspending the Budget
• Gifts Purchased for Staff Using Public Funds• Personal Items Purchased with Public Funds
Internal Control Environment is Established Within Each School
11
Frequency of FindingsD
ocum
enta
tion
to s
uppo
rt ch
ecks
& a
ppro
ved
Out
stan
ding
che
cks
Def
icit
bala
nces
Dep
osit
in ti
mel
y fa
shio
n
Stand
ard
Trans
mitt
al fo
rm n
ot u
sed
Out
stan
ding
adj
ustm
ents
Staff
held
mon
ey fo
r dep
osit
Yearb
ook
lost
mon
ey (n
o pr
ofits
)
Post t
o ge
nera
l ledg
er a
fter d
epos
iting
in b
ank
Build
ing
use
not p
aid/
trans
ferr
ed
One
sig
natu
re o
n ch
eck
Ticke
t sal
es le
ss th
an ti
cket
repo
rts
Books
sal
es n
ot m
atch
repo
rt
Che
ck m
ade
paya
ble
to b
kpr,
prin
cipa
l, as
sist
pr s
igne
d by
sel
f
Dep
osit
post
ed m
ulitp
le ti
mes
Inst
rum
ent r
enta
l not
sub
mit
Adjus
tmen
t & T
rans
fer J
ourn
al e
ntrie
s ne
ed a
ppro
val p
rior t
o m
akin
g
Out
stan
ding
Dep
osit
Paid
Sales
Tax
Signa
ture
sta
mp
used
Use
app
ropr
iate
acc
ount
s
Inap
prop
riate
tran
sfer
to fa
culty
acc
ount
from
C &
D a
ccts
Begin
ning
bal
ance
diff
eren
t tha
n en
ding
bal
ance
of p
rior y
ear
Bids
on p
urch
ases
ove
r $30
00
Driv
ers
Ed m
oney
not
rem
itted
per
FG
M
Fundr
aise
r nee
d to
be
sepa
rate
to d
eter
min
e pr
ofit
or lo
ss
Gift
Car
d fo
r tea
cher
, no
rece
ipt o
f giv
en
Min
niel
and
chec
k no
t sen
t to
SBM
Neg
ativ
e ch
eck
Rec
eipt
not
to in
divu
al b
ut g
ener
ic "T
each
er"
Rec
eipt
out
of o
rder
Took
mon
ey o
ut fo
r NSF b
efor
e de
posi
ted
Una
ble
to fi
nd c
lear
d ch
ecks
Unt
imel
y m
onth
ly b
ank
rec
Void
chec
k no
t mut
ilate
d in
sig
natu
re lin
es
Void
chec
ks le
ft ou
tsta
ndin
g
0369
12151821
12
Frequency of Recommendations
Accou
nts
not h
ave
gro
up
unre
lated
disb
urse
men
t fro
m p
rofit
cen
ters
Trans
mitt
al fo
rm n
ot in
clude
dat
e
Credit
car
ds s
kews
from
SBM
acc
ount
Buildin
g us
e no
t paid
?tra
nsfe
rred
Depos
it idl
e m
oney
in m
oney
mar
ket o
r CD
Separ
ate
fund
raise
r ro
refle
ct p
rofit
cash
dec
reas
ed d
uring
yr
Check
to b
kpr,
princ
ipal,
assis
t pr s
igned
by
self
Depdo
ts o
ne a
t tim
e, th
en ru
n jou
rnal
for d
ays
no v
endin
g co
mm
ission
not i
mm
ediat
ely s
tam
ped
depo
sit o
nly
one
signa
ture
on
chec
k
trans
fer &
Adj
not s
igned
by
princ
ipal
Unclea
red
adjus
tmen
ts05
101520253035
13
Findings per School
5 5 5 5 5 5 5 5 5 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 20
1
2
3
4
5
6
7
8
9
14