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School Board Audit Committee Training

Introduction

Overview of Provincial Initiatives - Audit Committees & Internal Audit

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After completing this session you will better understand:

o The Audit Committee and Internal Audit Initiative for the Province of Ontario

Session objectives

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Background

Province transfers $20+ billion in funding to the school board sector

Transparency and accountability – key to public confidence

Ministry identified opportunities to modernize governance in the sector Audit Committees Internal Audit

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Pillars of Effective Governance

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Role of Audit Committees

The primary role of the audit committee is to assist the board of trustees in fulfilling its duties related to governance and oversight

The Audit Committee is a committee of the board and will report to the board of trustees, as such all final decisions rest with the board of trustees.

The Audit Committee duties include reviewing: the financial reporting process internal controls internal auditing external auditing compliance matters risk management any other board proposed activity

The Audit Committee is also responsible for recommending approval of the financial statements to the board of trustees

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Audit Committee Regulation

Regulation has been drafted in consultation with the 9 district school board Senior Business Officials and outlines: Composition (external members) Term of service Appointment of members Meetings Duties and powers Reports to board of trustees

Sector consultation on the Regulation (March 2010)

Effective date (September 2010)

Every board shall establish an audit committee in accordance with the Regulation no later than January 31, 2011

The first meeting of an audit committee shall be held no later than March 31, 2011

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Role of Internal Audit

Internal audit will support the Audit Committees by providing advice and recommendations on: Financial and administrative policies Controls Compliance Financial reporting matters Risk management activities

The internal audit function will report to the Audit Committee through the Regional Internal Audit Manager

Internal audit is not responsible for the execution of the school board’s operational activities. They advise the audit committee and management regarding how to better execute their responsibilities

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Internal Audit Objectives

The Ministry’s funding model for internal audit is intended to promote the following 3 main objectives:

To promote the efficient use of resources through collaboration among boards

Share best practices in internal audit and risk management using a team approach

Equitable distribution of resources taking into consideration board size, language and geographic coverage

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Internal Audit Operational Model

FRENCH LANGUAGE (12)CSD cath du Centre-Est (Host)CSD catholique Franco-NordCSD cath des Aurores-BoréalesCSD cath des Grandes RivièresCSD cath du Nouvel-OntarioCSD du Grand Nord de l’OntarioCSD du Nord Est de l’OntarioCSD catholique Centre-SudCSD des écoles cath Sud-OuestCSD du Centre Sud-OuestCSD des écoles publiquesCSD cath de l’Est ontarien

BARRIE (9)Simcoe County DSB (Host)Bluewater DSBBruce-Grey Catholic DSBDurham Catholic DSBDurham DSBKawartha Pine Ridge DSBPeterborough V N C Cath DSBSimcoe Muskoka Cath DSBTrillium Lakelands DSB

SOUTH (10)Thames Valley DSB (Host)Avon Maitland DSBBrant Hald. Norfolk Cath DSBGrand Erie DSBGreater Essex County DSBHuron-Perth Catholic DSBLambton Kent DSBLondon Catholic DSBSt. Clair Catholic DSBWindsor-Essex Catholic DSB

Regional model Based on geography (excluding French region) Impacted by other boards in your region

Introducing concept of host board Funding flowed to host board

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Internal Audit Operational Model

NORTH BAY/SUDBURY (8)Sudbury Catholic DSB (Host)Algoma DSBDSB Ontario North EastHuron-Superior Catholic DSBNear North DSBNipissing-Parry Sound Cath DSBNortheastern Cath DSBRainbow DSB

THUNDER BAY (8)Thunder Bay Catholic DSB (Host)Keewatin-Patricia DSBKenora Catholic DSBLakehead DSBNorthwest Catholic DSBRainy River DSBSuperior North Catholic DSBSuperior-Greenstone DSB

WEST OF CENTRAL (10)Waterloo Region DSB (Host)DSB of NiagaraHalton Catholic DSBHalton DSBHamilton-Wentworth Catholic Hamilton-Wentworth DSBNiagara Catholic DSBUpper Grand DSBWaterloo Catholic DSBWellington Catholic DSB

TORONTO & AREA (6)Peel DSB (Host)Dufferin-Peel Catholic DSBToronto Catholic DSBToronto DSBYork Catholic DSBYork Region DSB

OTTAWA (9)Ottawa Catholic DSB (Host)Algonquin & Lakeshore DSBCath DSB of Eastern OntarioHastings & Prince Edward DSBLimestone DSBOttawa Carleton DSBRenfrew County Catholic DSBRenfrew County DSBUpper Canada DSB

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Pictorial Illustration of Regional Funding Model

Audit Manager

Sr Auditor

Boards A to C

Sr Auditor

Boards D to F

Auditor

Boards A & B

School Board A

School Board B

School Board E

SAMPLE REGION # 1

Auditor

Boards C & D

Auditor

Boards E & F

Auditors have a portfolio of

boards

School Board C (Host)

School Board D

School Board F

Audit Committee

Board of Trustees

Hiring Panel

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Internal Audit Funding

Funding allocation $2M for 2009-10 $5M for 2010-11 and onwards

Funding is part of board administration and governance allocation

Funding is enveloped – can only be spent to support internal audit function

2 components: Staffing representing 85% of allocation Other representing 15% of allocation for professional development,

travel, supplies, etc.