Training Treasurers Office IA 20091007

8/14/2019 Training Treasurers Office IA 20091007

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SchoolsSchoolsInternal AuditInternal Audit

Treasurers Office Presentation

Internal Audit Plan Fiscal Year2009/10

Michael Alao

October 8, 2009


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AgendaAgenda

IntroductionIntroduction

Internal Audit FunctionInternal Audit Function

Internal ControlInternal Control

Internal Audit PlanInternal Audit Plan

Questions, comments, concernsQuestions, comments, concerns


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IntroductionIntroduction

Name: Michael AlaoName: Michael Alao

Education: B.S. Accounting, VCU 1999Education: B.S. Accounting, VCU 1999

Certification:Certification:

Certified Public Accountant (VA, OH)Certified Public Accountant (VA, OH)

Certified Internal AuditorCertified Internal AuditorCertified Fraud ExaminerCertified Fraud Examiner


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Introduction cont.Introduction cont.

Experience:Experience:

10 years of audit experience10 years of audit experience

State of Virginia, Richmond, VAState of Virginia, Richmond, VA International Paper, Memphis, TNInternational Paper, Memphis, TN

FedEx, Memphis, TNFedEx, Memphis, TN

PricewaterhouseCoopers, DC & BaltimorePricewaterhouseCoopers, DC & Baltimore

Wolseley, Reading, United KingdomWolseley, Reading, United Kingdom


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What is internal auditing?What is internal auditing?

Internal Auditing is an independent,Internal Auditing is an independent,objective assurance and consulting activityobjective assurance and consulting activitydesigned to add value and improve andesigned to add value and improve anorganizations operations.organizations operations.

It helps an organization accomplish itsIt helps an organization accomplish itsobjectives by bringing a systematic,objectives by bringing a systematic,

disciplined approach to evaluate anddisciplined approach to evaluate andimprove the effectiveness of riskimprove the effectiveness of riskmanagement, control, and governancemanagement, control, and governanceprocesses.processes.


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cont.cont. IndependentIndependent ObjectiveObjective

Concerned with:Concerned with:

Effectiveness and efficiency of operations;Effectiveness and efficiency of operations; Reliability and integrity of financial andReliability and integrity of financial and

operational information;operational information;

Safeguarding of assets; andSafeguarding of assets; and

Compliance with laws, regulations, andCompliance with laws, regulations, andcontracts.contracts.


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cont.cont. IndependenceIndependence

Board of Education

Finance Committee

Audit Committee

Internal Auditor

SuperintendentCFO/Treasurer


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cont.cont.


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cont.cont.

Independence per CPS IA Charter:Independence per CPS IA Charter:

the Internal Auditor shall have no directthe Internal Auditor shall have no direct

responsibility or any authority over any ofresponsibility or any authority over any ofthe activities or operations subject tothe activities or operations subject to

review. The Internal Auditor shall notreview. The Internal Auditor shall not

develop and install procedures, preparedevelop and install procedures, prepare

records, or in engage in activities whichrecords, or in engage in activities whichwould normally be reviewed by internalwould normally be reviewed by internal

auditors.auditors.


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cont.cont.

ObjectivityObjectivity

- An unbiased mental attitudeAn unbiased mental attitude

- Use of testing and evidenceUse of testing and evidence

- The whole pictureThe whole picture


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cont.cont.

External AuditExternal Audit Internal AuditInternal Audit

Legal requirementLegal requirement

CAFR andCAFR and

compliance onlycompliance only High materialityHigh materiality

Independent CPAIndependent CPA

firmfirm

Not requiredNot required

Financial,Financial,

compliance, andcompliance, andoperationaloperational

Low materialityLow materiality

District employeeDistrict employee


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cont.cont.

Why have an internal audit function?Why have an internal audit function?

SEC requirement for public companiesSEC requirement for public companies

State requirement (e.g. NY schoolState requirement (e.g. NY schooldistricts)districts)

Reactive response to fraudReactive response to fraud

ProactiveProactive


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cont.cont.

Cincinnati Public SchoolsCincinnati Public SchoolsBoard of EducationBoard of Education

Fiscal Accountability PledgeFiscal Accountability Pledge

Approved Unanimously 2/20/2008Approved Unanimously 2/20/2008

To ensure fiscal accountability, the BoardTo ensure fiscal accountability, the Boardhas established an internal audit position andhas established an internal audit position andan external audit committee with aan external audit committee with acommitment to report quarterly to the publiccommitment to report quarterly to the publicon financial management.on financial management.


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Internal ControlsInternal Controls

What is internal control?What is internal control?

A process effected by the entitys board ofA process effected by the entitys board of

directors, management, and otherdirectors, management, and otherpersonnel, designed to provide reasonablepersonnel, designed to provide reasonable

assurance regarding the achievement ofassurance regarding the achievement of

objectives in effectiveness and efficiencyobjectives in effectiveness and efficiency

of operations, reliability of financialof operations, reliability of financialreporting, and compliance with applicablereporting, and compliance with applicable

laws and regulations.laws and regulations.


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Internal Controls cont.Internal Controls cont.

What are internal controls?What are internal controls?

Procedures to safeguard assets and make moreProcedures to safeguard assets and make moreefficient and effective use of these assets.efficient and effective use of these assets.

Procedures to ensure compliance with DistrictProcedures to ensure compliance with Districtpolicy, State, and Federal laws.policy, State, and Federal laws.

Examples:Examples:

Budget process, reconciliations, segregation ofBudget process, reconciliations, segregation ofduties, policies and proceduresduties, policies and procedures


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Why are internal controls important?Why are internal controls important?

Ensure mission accomplishmentEnsure mission accomplishment Reduce fraud opportunitiesReduce fraud opportunities Prevent loss of funds or other resourcesPrevent loss of funds or other resources Establish standards of performanceEstablish standards of performance Assure compliance with lawsAssure compliance with laws Preserve integrityPreserve integrity Eliminate adverse publicityEliminate adverse publicity

Assure public confidenceAssure public confidence

For our own protectionFor our own protection


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Who is responsible for internal controls?Who is responsible for internal controls?

All staff responsible for following internal control proceduresAll staff responsible for following internal control procedures

Management is keyManagement is key

Establishes policies and proceduresEstablishes policies and procedures Monitors and evaluates proceduresMonitors and evaluates procedures

Must demonstrate commitment to abide by policiesMust demonstrate commitment to abide by policies

Must set a high standard and lead by exampleMust set a high standard and lead by example


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Internal auditors are responsible for evaluatingInternal auditors are responsible for evaluatingthe adequacy and effectiveness of internalthe adequacy and effectiveness of internal

controls, and making recommendations wherecontrols, and making recommendations where

control improvements are needed.control improvements are needed.

Management is not required to followManagement is not required to follow

recommendations, but must then accept risk.recommendations, but must then accept risk.


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FY 2010 Internal AuditFY 2010 Internal Audit

PlanPlan

Types of Internal Audit EngagementsTypes of Internal Audit Engagements

AuditsAudits

Consulting ReviewsConsulting Reviews

InvestigationsInvestigations

Assisting External AuditorsAssisting External Auditors


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FY 2010 Internal Audit PlanFY 2010 Internal Audit Plan

cont.cont.

Process Assessments for Internal AuditsProcess Assessments for Internal Audits

Assessment Definition

Satisfactory A well-controlled process with nosignificant audit findings.

Marginal A process with weaknesses in key controlswhich, if not corrected, could result in anunacceptable environment.

Unsatisfactory A process with significant control issues.


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FY 2010 Internal Audit PlanFY 2010 Internal Audit Plan

cont.cont.

Internal Audit Plan DevelopmentInternal Audit Plan Development

Risk assessmentRisk assessment

Review of prior audit findingsReview of prior audit findings

Discussions with management andDiscussions with management and

staffstaff

Board and Audit Committee inputBoard and Audit Committee input

and approvaland approval


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FY 2010 Internal AuditFY 2010 Internal Audit

PlanPlan

Schedule of Expenditures of Federal AwardsSchedule of Expenditures of Federal Awards Consultant APD Approval ProcessConsultant APD Approval Process Blanket Purchase OrdersBlanket Purchase Orders Supplemental Educational Services (SES) ProvidersSupplemental Educational Services (SES) Providers

PNC Purchase CardsPNC Purchase Cards Student Activity FundsStudent Activity Funds Non-School Organizations (NSO)Non-School Organizations (NSO) Payroll CyclePayroll Cycle Progress on Performance Audit RecommendationsProgress on Performance Audit Recommendations

Progress on Business Operations Efficiency ReviewProgress on Business Operations Efficiency ReviewRecommendationsRecommendations


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Questions, comments,Questions, comments,

concernsconcerns


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Contact Information

Michael Alao

(513) 363-0433

[email protected]

Training Treasurers Office IA 20091007

Documents

Transcript of Training Treasurers Office IA 20091007