Internal Audit - April 1997 Revision
Scope of Audits
The Internal Auditor shall have the responsibility to conduct audits of all departments, programs, activities, and schools of the district to independently determine whether:
- Activities and programs being implemented have been authorized by the Board of Education, state law, or applicable federal law or regulation;
- Activities and programs are being conducted in a manner contemplated to efficiently and effectively accomplish the objectives intended by the Board of Education, law, and regulation;
- Funds are being expended in compliance with applicable laws;
- Revenues are being properly collected, deposited, and accounted for;
- Resources, including funds, property, and personnel, are adequately safeguarded, controlled, and used in a faithful, effective, and efficient manner;
- Financial and other reports are being provided that disclose fairly and fully all information that is required by law, that is necessary to ascertain the nature and scope of programs and activities, and that is necessary to establish a proper basis for evaluating the programs and activities;
- There are adequate operating and administrative procedures and practices, accounting internal control systems, and internal management controls which have been established by management.
In the selection of audit areas, the determination of audit scope, and the timing of audit work, the Internal Auditor should consult with federal and state auditors and independent auditors so that the desirable audit coverage is provided and audit effort may be properly coordinated.
Responsibility to Notify Internal Audit
District employees and officials shall promptly notify the Internal Auditor of instances of theft or other disappearance of cash, checks, or property, of misfeasance or nonfeasance, defalcations, and non-compliance with laws and regulations of which they are aware.
Access to Records and Property
All officials, contractors, and employees of the district shall furnish the Internal Auditor with requested information and records within their custody. In addition, they shall provide access for the Internal Auditor to inspect all property, equipment, and facilities within their custody. If such officials or employees fail to produce the aforementioned information, the Internal Auditor shall notify the APS Audit Committee and shall make a written request to the Superintendent for his assistance in causing a search of district property to be made and germane exhibits to be taken from any book, paper, or record of any such official or employee, excepting personal property. Every office having the custody of such records shall make a search and forward such requested exhibits to the Internal Auditor.
Each audit will result in a written final report. If appropriate, the audit report shall contain the professional opinion of the Internal Auditor or the contract auditor concerning the financial statements issued by the auditees, or the professional conclusions of the audit regarding the management activities audited. The auditor shall include in the audit reports where applicable:
- A precise statement of scope encompassed by the audit;
- 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 of significant audit findings, including a statement of the underlying causes, evaluative criteria used, and the current and prospective significance of the findings;
- A statement that internal control systems were examined and a report of any material weaknesses found in the internal control systems;
- Statements of response submitted by the auditees relevant to the audit findings;
- A concise statement by the auditees of the corrective actions previously taken or contemplated as a result of the audit findings and a timetable for their accomplishment;
- Recommendations for additional necessary or desirable action.
A preliminary draft of the audit report will be forwarded to the auditees and the APS Audit Committee for review and comment before it is released. The auditees, including departments whose assistance is needed in order to accomplish a recommendation, shall respond in writing specifying agreement with each of the audit findings and recommendations or reasons for disagreement with findings and/or recommendations, and auditee plans for implementing solutions to identified problems including a timetable to complete such
activities. The written response to the preliminary draft of the audit report shall be forwarded to the Internal Auditor within 14 calendar days of receipt of the audit report. Auditee comments to the preliminary draft may be utilized to amend the report if appropriate. If the preliminary audit report is amended, the auditees will be given a copy of the amended draft, and the auditees will be given seven to fourteen calendar days, as determined by the Internal Auditor and the Auditee, to respond to the amended draft of the audit
report. The Internal Auditor shall include the auditees' response in the audit report.
Prior to final report publication the Internal Auditor with the approval of the Superintendent, may share selected audit information with other district departments if the information is needed for decision-making purposes.
All final audit reports shall be promptly published and made available to the public; except, the Internal Auditor shall delay making audit reports public when criminal conduct is found in the audit, the appropriate law enforcement authority is pursuing an investigation, and release of the report would jeopardize further such investigation or when the report discusses district personnel issues. A report whose release has been delayed shall be released promptly at the end of the condition giving rise to the delay.
The Internal Auditor shall make reports at least quarterly to the APS Audit Committee on the status of the work plan.
Report of Irregularities
If the Auditor detects apparent violation of law or apparent instances of misfeasance or nonfeasance by an officer or employee or information that indicates dereliction may be reasonably anticipated, the Internal Auditor shall report the irregularities in writing to the APS Audit Committee. If the irregularity is criminal in nature, the Auditor shall also immediately notify the Superintendent, Chairperson of the APS Audit Committee, and APS legal counsel who shall notify the appropriate prosecuting authority.
- Board Policy D.07
- Annual District Audit directive
NSBA/NEPN Classification: DIE
Revised: April 1996
Reviewed: April 1997