Week 4 Assignment 5: Fincancial Audits

In our district, an external auditor is selected through the Request for Proposal process. Typically, the selected auditor will sign a one year contract that is renewable for four years. The firm will rotate its staff during these years to provide a different perspective to the process. The cost to our district ranges from $60,000 to &70,000.

Once the external auditor is selected, they spend one week with our Business/Financial Department. Then they return to the district for another three weeks to examine all of the District documents and receipts. They perform tests for compliance with certain provisions of laws, regulations, contracts and grant agreements.  Most of their time is spent focusing on payroll, debt expenditures, capital projects and tax collection statements and files.

The results of the external audit, which includes an opinion letter, ensure that all financial statements prepared by the district are reported fairly and accurately and are free of material misstatement. They also prepare a report on internal control to ensure that their tests do not disclose any instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

The external auditor results are prepared for the Board of Trustees, District management, federal awarding agencies and pass-through entities. Results from the audit are used to report to TEA through TEASE in November and PEIMS in January. The District Financial Department prepares the Comprehensive Annual Financial Report (CAFR) each year. This report includes the financial statements prepared by the district and the external auditor’s results. The CAFR is presented to the Board of Trustees in December at the monthly board meeting and is available to all stakeholders through our website.

After interviewing our District CPA, Executive Director of Business Services, I realized how vital the management of our money is. Not only at the central office level in the business and financial departments but also at the campus and department levels. It is crucial that anyone that manages a budget or is responsible for the inputting data is accurate. The audit is the result of a year-round process that involves the “checking” of numerous employees’ work. We are so fortunate to not only have proven systems in place but knowledgeable staff in our business and finance departments that continue to receive excellent audits and Superior Achievement Ratings on our FIRST reports.