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Activity Funds, Internal Audits and Investigations

Definitions

For purposes of this procedural directive, “internal audit” means the formal examination, monitoring and analysis of activities related to the District’s operations and finances to ensure compliance with laws, policies, procedures and best practices and to assess the effectiveness of the organization’s internal control system.

For purposes of this procedural directive, “investigation” means a formal, systematic, detailed examination aimed at uncovering hidden facts and establishing the truth.

Responsibilities of the District Controller and Scope of Work

The District Controller and the Activity Fund Support Supervisor, in consultation with the Executive Director of Accounting, shall be responsible for ensuring provisions of this procedural directive have been met. The District Controller and Activity Fund Support Supervisor may designate personnel within the Activity Fund Support Office, as appropriate, to complete the provisions outlined in this procedural directive. 

Activity Fund Support Supervisor Reporting Responsibilities

The Activity Fund Support Supervisor shall report any issues to the district controller, superintendent and/or the chief financial officer, as outlined below, so appropriate internal procedures are followed to address the issue.  Issues to report to the controller, superintendent and the chief financial officer include preparation and presentation of a summary of reports of activity fund audits and draft reports of investigations.  When possible instances of fraud or illegal activities are suspected, the district controller, superintendent, CFO and the Albuquerque Public Schools Police Department shall be notified immediately.  If possible instances of unethical behavior are suspected, the associate superintendent of human resources shall also be notified.  Depending on the severity of the situation, the situation may also need to be reported to the Board of Education outside of the Audit Committee’s regularly scheduled meetings. 

Scope of Work

The Activity Fund Support Supervisor shall provide independent, objective assurance and consulting services designed to add value and improve Albuquerque Public Schools operations.  The supervisor shall:

  • Develop a flexible annual audit plan of district activity fund finances in addition to any risks or concerns identified by the superintendent, chief financial officer or his/her designee
  • Submit the annual audit plan to the Audit Committee for review, revision and approval
  • Implement the annual audit plan, as approved
  • Issue  reports at least three times a year to the superintendent, the chief financial officer, district controller and the Audit Committee summarizing the results of audit and other assigned activities
  • Maintain a professional audit staff with sufficient knowledge, skills, experience and professional certifications to meet the requirements of this procedural directive
  • Keep the superintendent, his/her designee, chief financial officer, district controller and Audit Committee informed of emerging trends and successful practices in internal auditing

Access to Property, Equipment, Facilities, Records and Information

All employees and contractors of the district shall supply all requested information and records within their custody.  All employees and contractors of the district shall provide access for the department/individual to inspect all property, equipment and facilities within their custody at a mutually agreed upon date and/or timeline.  All employees and contractors having custody of such records shall provide such requested documentation to the individual designated to conduct the investigation or audit.

If an employee and/or contractor refuses to provide the aforementioned information or allow access, the individual designated to conduct an audit or investigation shall make a written request to the chief financial officer and superintendent for his/her assistance in obtaining information and records and gaining access to inspect property, equipment and facilities within their custody.

The individual designated to conduct an investigation or audit may remove any book, paper or record that is deemed relevant to the investigation or  audit, with the exception of personal property of an employee or contractor, unless that personal property was used inappropriately during contracted work time.

Activity Fund Audits

The Activity Fund Support Office shall complete an audit of school/department activity funds at least annually.

The auditor shall, at a minimum:

  • examine the area being audited or evaluated for compliance with applicable laws,  regulations, district policies and procedural directives and note all findings
  • examine accounting and financial records for compliance with applicable laws, regulations, district policies and procedural directives
  • examine internal control systems, report any material weaknesses in those control systems
  • examine standards and expectations for the area and note failures to abide by those standards and meet expectations

Audit reports, including a summary of findings, shall be presented to the school/department being audited.  A summary report of the school/department audited and the compliance rating earned, shall be presented to the Audit Committee.  The supervisor shall follow necessary steps for reports.

Non-Activity Fund Audits

The superintendent, at his/her discretion, may order an audit of any aspect of Albuquerque Public Schools operations at any time.  If he/she chooses to conduct a non-activity fund audit, he/she may contract with an external agency, approved by the State Auditor’s Office, to perform the audit.  The objectives of the audit may include at a minimum:

  • examine the area being audited or evaluated for compliance with applicable laws, regulations, district policies and procedural directives and note all problematic findings
  • examine internal control systems, report any material weaknesses in those control systems
  • examine the efficiency and effectiveness of accomplishing stated objectives
  • examine the use of resources, including funds, property and personnel
  • examine operating and administrative processes, practices and internal management controls

A draft report of findings and recommendations shall be presented to the Superintendent, District Controller and Chief Financial Officer for subsequent presentation to the Audit Committee.

Activity Fund Investigations

The Activity Fund Support Office shall take appropriate action and complete an investigation of suspected fraudulent financial activity, if necessary, in compliance with the department’s approved practices.

The Activity Fund Support Office shall compile a report of the findings of the investigation and shall forward that report to the APS School Police and Human Resources Departments for further review and action.

A draft report of findings and recommendations shall be presented to the Superintendent, District Controller and Chief Financial Officer for subsequent presentation to the Audit Committee. 

When suspected instances of fraud or illegal activity are suspected, the Supervisor shall notify the Albuquerque Public Schools Police Department and the Associate Superintendent of Human Resources.  In cases where unethical behavior is suspected, the Supervisor shall notify the Associate Superintendent of Human Resources.

The Activity Fund Support Office, when necessary, shall provide the APS Police Department and the Human Resources Department with all documentation related to the investigation.

Reporting Requirements

Draft Report of Findings

The department shall compile a draft report of its findings from the audit or investigation.  The draft report shall include:

  • The concern that prompted the audit or investigation (if applicable)
  • The individual responsible for conducting the audit or  investigation
  • The department/individual/program being audited or  investigated
  • A precise statement of the scope of the audit or  investigation
  • A statement that an examination for compliance with applicable laws, policies, and regulations was conducted, and a presentation of the findings associated with that examination
  • A statement that internal control systems were examined and a report of any material weaknesses found in the internal control systems
  • The findings of the audit or  investigation
  • Recommendations for additional necessary or desirable action to address any of the findings from the audit or  investigation

The subject of the audit or investigation shall respond in writing specifying agreement with each of the findings and recommendations and/or reasons for disagreement with findings and recommendations.  The response shall include an action plan from the subject of the audit or review outlining steps to implement solutions to identified problems including a timetable to complete such activities.  The subject of the audit or  review shall complete the written response and forward it to the department/individual designated to conduct the audit or review within fourteen (14) calendar days of the receipt of the draft report. The written response, and when necessary, the action plan, shall be included in the final report.

The individual responsible for conducting the audit or investigation shall provide a final draft report to the Activity Fund Support supervisor for a report to the superintendent, chief financial officer and district controller.  The Activity Fund Support supervisor may request additional documentation for this report as necessary.

Final Report

After presentation to the Audit Committee of the Board of Education, and inclusion of relevant recommendations and/or comments from the members of the Audit Committee, the Activity Fund Support supervisor shall publish all investigation (if appropriate), and audit final reports.  The Activity Fund Support supervisor shall delay making investigation and audit reports public when criminal conduct is found in the investigation or audit, and when appropriate the appropriate law enforcement authority is pursuing an investigation and release of the report would jeopardize such investigation or when the report discusses district personnel issues. A report for which release has been delayed shall be released promptly upon resolution of the condition giving rise to the delay.

Administrative Position: Chief Financial Officer

Department Director: Executive Director of Accounting

References

Legal Cross Ref.:

  • §22-8-12.3 NMSA 1978

Board Policy Cross Ref.:

Procedural Directive Cross Ref.:

NSBA/NEPN Classification: DIE

Revised: April 1996
Reviewed: April 1997
Reviewed: June 14, 2010
Reviewed: May 1, 2012
Revised: May 4, 2012
Revised: March 8, 2017

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