Interview
I interviewed Tim Brittain, our CFO at Huffman ISD. He has been very helpful and is extremely knowledgeable about the process. The following is both a summary and reflection of the audit process:
- How is the external auditor selected?
The auditor is selected through an interview process. Initially there is an RFQ (request for qualifications). The superintendent, in cooperation with the business manager, then selects the auditor. Mr. Brittain was quick to point out that you can’t do a competitive bid. It must be through the interview process and the district should choose one that best suits the needs of their particular district. Ours rotate through two year contracts and must have board approval.
- How does the auditor conduct the audit?
Our district initially sends any requested information that generally includes both general ledger and financial records. The auditor reviews the information and inputs it into their accounting system for analysis. At that point the auditor comes on site (usually for about a week) and reviews records. They randomly select files such as personnel folders, vendor records, etc. for review. At the conclusion of the onsite visit they return to their offices and develop a detailed summary audit report. It is due to TEA 120 days after the end of the fiscal (normally around January 28).
- What does the audit conclude about district financial procedures and actions?
If all affairs are in order, they will issue a summary statement basically stating that they didn’t find any material weaknesses. If there are paperwork issues that can be resolved, there is a possibility to correct. Unfortunately, if there is a material weakness, it is basically irresolvable at that particular point and will end up going to TEA.
- How are the results communicated?
Initially the auditors will meet with the audit committee which consists of the superintendent and three board members. Next they will have an exit interview with both the business manager and superintendent. It is at that point that they present the summary to the board for approval and signing off on at the January board meeting. Then it starts all over. J
Reflection
This was an exceptional assignment for me as this was one area that I was completely unfamiliar with. I have never played any role whatsoever in a district level audit so all the information was new to me. From time to time we hear issues arise in area districts concerning mismanagement of funds. I am fortunate to have never worked in any of these districts. For us, it has always been about the kids.
2 comments:
Great job. Unlike your district our firm presented the report to the board and superintendent at the same time, and did not conduct an exit meeting.
Robert,
Your post was very informative. This assignment was a learning experience for me as well.
Good job.
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