Internal Audits, Investigations and Program Evaluations - May 2012 Revision

Definitions

For purposes of this procedural directive, “whistleblower” means a person who reveals any suspected wrongdoings or malpractices that are taking place within an organization via the contracted service the district provides.

For purposes of this procedural directive, “whistleblower complaint” means the information, complaint or concern received from a whistleblower.

For purpose of this procedural directive, “inquiry” means a search for knowledge and understanding about a matter.

For purposes of this procedural directive, “investigation” means a formal, systematic, detailed examination into a matter.

For purposes of this procedural directive, “audit” means the formal examination of an individual’s or department’s accounting records, financial situation or compliance with some other set of standards.

For purposes of this procedural directive, “program evaluation” means a systematic inquiry into the efficiency and effectiveness of accomplishing stated objectives; ethical issues; adherence to applicable federal and state law and regulation; responsible and appropriate use of resources, including funds, property and personnel; adequate operating and administrative processes, practices and internal management controls of specific projects and/or services administered by the district.

Responsibilities of the Director of Internal Audit and Scope of Work

The director of Internal Audit still shall be responsible for ensuring provisions of this procedural directive have been met. The director of Internal Audit may designate personnel within the Internal Audit Department, as appropriate, to complete provisions outlined in this procedural directive.  .

Director of Internal Audit Reporting Responsibilities

The director of Internal Audit shall report any issues to the superintendent and/or the chief operations officer, as outlined below, so appropriate internal procedures are followed to solve the issue.  Administrative issues to report to the chief operations officer include, but are not limited to, requests for leave, evaluations and the annual department budget.  Functional issues to report to the superintendent and the chief operations officer include preparation and presentation of primary and subsequent reports of investigations, program evaluations and the number and type of whistleblower complaints prior to presentation to the Board of Education, with the exception of those outlined in the procedural directive when an alternate reporting mechanism is outlined.  The director of Internal Audit only shall report directly to the president of the Board of Education if there is a suspected allegation under investigation or violation of district policy and procedural directive by the superintendent.

In the absence of the superintendent, the director of Internal Audit shall request approval and assistance from the chief operations officer if an emergency investigation is necessary.  In cases when the emergency investigation would regard environment, health, maintenance and/or safety and the superintendent is absent, the director of Internal Audit shall request approval and assistance from the chief of staff.

Scope of Work

The director of Internal Audit shall provide independent, objective assurance and consulting services designed to add value and improve Albuquerque Public Schools operations.  The director of Internal Audit shall:

• Develop a flexible annual audit plan of district finances, fraud, misappropriations in addition to any risks or concerns identified by the superintendent, or his/her designee
• Submit the annual audit plan to the superintendent and 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, his/her designee(s), the chief operations officer 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 operations officer and Audit Committee informed of emerging trends and successful practices in internal auditing
• Monitor reports, claims and allegations made under whistleblower provisions. 
  • The director of Internal Audit also shall monitor concerns, which are received by the Internal Audit Department,  that are raised by the community, personnel and/or outside parties regarding the operations and instruction of Albuquerque Public Schools.
  • The director of Internal Audit shall resolve whistleblower complaints in need of inquiry by working with the appropriate department.
  • Complete investigations, audits and/or program evaluations as assigned by the superintendent and maintain communication with the chief operations officer and superintendent regarding areas of concern that the director of Internal Audit believes may necessitate an investigation, audit or program evaluation.
  • Comply with all requirements outlined in this procedural directive.

Access to Property, Equipment, Facilities, Records and Information

All employees and contractors of the district shall supply the department designated to conduct an investigation, audit or program evaluation, within the scope of this procedural directive, with 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 contractor having custody of such records shall conduct a search and forward such requested exhibits to the department/individual designated to conduct the investigation, audit or program evaluation.

If employee and/or contractors refuse to produce the aforementioned information or allow access, the department designated to conduct an investigation, audit or program evaluation shall make a written request to the chief operations 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 department designated to conduct an investigation, audit or program evaluation may remove any book, paper or record that is found to be germane to the investigation, audit or program evaluation with the exception of personal property of an employee or contractor, unless that personal property was used inappropriately during contracted work time.

Criminal and Unethical Conduct Investigations

Albuquerque Public Schools Police Department shall take appropriate action and complete an investigation of suspected criminal activity, if necessary, in compliance with the department’s approved practices.

Suspected unethical conduct may require an investigation.  The assistant superintendent of Human Resources shall conduct an investigation regarding suspected unethical activity of a district employee with the exception of the superintendent.  The president of the Board of Education, and/or his/her designee, shall conduct investigations regarding suspected unethical conduct by the superintendent.

The department designated to conduct an investigation shall compile a report of the findings of the investigation and shall forward that report to the appropriate authority for review, comment and further action.

Criminal investigation reports may be forwarded to the Albuquerque Police Department, the district attorney, the superintendent and/or Albuquerque Public Schools legal counsel, whichever is appropriate.

Unethical conduct investigations shall be forwarded to the superintendent regarding district staff and to the president of the Board of Education regarding the superintendent.

If deemed necessary by the superintendent, the superintendent may himself/herself, or through a designee, investigate the Albuquerque Public Schools Police Department for failure to comply with provisions of this procedural directive and take necessary action.

Audits

The superintendent, at his/her discretion, may order an audit of any aspect of Albuquerque Public Schools, including locally-authorized charter schools, at any time.

All audits of finances, fraud, waste, abuse and misappropriations of funds shall be completed by the director of internal audit.  The director of internal audit, in conjunction with the external auditor, also shall complete an audit of school activity funds at least annually.

The director of internal audit 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 problematic findings
• examine accounting records and the financial situation 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 shall be presented to the Audit Committee.  Therefore, the director of internal audit shall compile a draft report of its findings from the audit.  The director of internal audit shall follow necessary steps for primary reports.

Program Evaluations

The superintendent, at his/her discretion, may order a program evaluation of any aspect of Albuquerque Public Schools operations at any time.  If he/she chooses to conduct a program evaluation, he/she shall assign a department to complete the program evaluation.  The assigned department shall follow all provisions of this procedural directive.

The department/individual designated to complete a program evaluation 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 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

Program evaluation reports shall be presented to the Audit Committee.  Therefore, the department/individual shall compile a draft report of its findings from the program evaluation and shall follow necessary steps for primary reports to the director of internal audit.

Exceptions to Reporting

The director of Internal Audit may report any findings from a criminal or unethical conduct investigation directly to the president of the Board of Education if the findings include misconduct by the superintendent.

If an investigation, audit or program evaluation of the Albuquerque Public Schools Police Department is conducted, the draft report shall be provided directly to the superintendent.

Reporting Requirements

Draft Report of Findings

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

• The whistleblower/concern that prompted the audit or program evaluation (if applicable)
• The department responsible for conducting the audit or program evaluation
• The department/individual being audited or evaluated
• A precise statement of the scope of the audit or program evaluation
• 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 program evaluation
• Recommendations for additional necessary or desirable action to solve any of the findings from the audit or program evaluation

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

If the draft report is amended, the department/individual designated to conduct the audit or program evaluation shall provide a copy of the revised draft report to the subject of the audit or evaluation.  The subject of the audit or evaluation shall have seven (7) calendar days to respond to the amended draft report.  The department/individual designated to conduct the audit or program evaluation shall include the subject of the audit or evaluation’s response in the draft report.

The department/individual responsible for conducting the audit or program evaluation shall provide a final draft report to the director of Internal Audit for a primary report to the superintendent, chief operations officer and the superintendent’s designee(s).  The director of Internal Audit may request additional documentation for this report as necessary.

Primary Report

The director of Internal Audit shall present reports of investigations (if appropriate), audits, program evaluations and the number of and important information about whistleblower complaints completed by him/her and any other department at least three weeks prior to the Audit Committee meeting at which the report will be presented.  The chief operations officer may request to review a draft of the primary report prior to the presentation of the primary report but the chief operations officer shall not be permitted to change any of the findings in the report.  This primary report shall be presented to the superintendent, the chief operations officer, and the superintendent’s designee(s).  The superintendent’s designee(s) for the primary report shall be appropriate for the situation and shall attempt to avoid any potential conflicts of interest.  No information shall be deleted from any reports by any party present at primary reporting.

The director of Internal Audit shall present recommendations to solve the issues investigated, audited or evaluated.  These recommendations may be discussed by the individuals present and those individuals may suggest additional or revised recommendations for consideration.  Upon approval from the superintendent, or his/her designee, the director of Internal Audit may share selected investigation, audit or program evaluation information with other district departments to gather information for decision-making purposes.  If additional or revised recommendations are agreed upon, the director of Internal Audit shall include those recommendations on all future reports of the investigation, audit or program evaluation.

The primary report shall include:

• Numbers, types and additional information regarding whistleblower complaints
• Investigation, audit and program evaluation draft reports which include:
  • The whistleblower complaint (if applicable) that prompted the investigation, audit or program evaluation
  • The department responsible for the investigation, audit or program evaluation
  • A precise statement of the scope of the investigation, audit or program evaluation
  • 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 investigation, audit or program evaluation
  • Statements of response submitted by the subject of the audit or evaluation relevant to the audit, investigation or audit findings
  • A concise statement by the subject of the audit or evaluation of the corrective actions previously taken or contemplated as a result of the audit or program evaluation findings and a timetable for their accomplishment
  • Recommendations for additional necessary or desirable action to solve any of the findings from the investigation, audit or program evaluation
  • An action plan by the subject of the audit or evaluation to solve any findings from the investigation, audit or investigation

The director of Internal Audit may request additional documentation for this report as necessary.

Secondary Report

The director of Internal Audit shall present revised reports of investigations, audits or program evaluations completed by him/her and any other department at least one week prior to the Audit Committee meeting at which the reports will be presented.  The secondary report shall be presented to the chairperson of the Audit Committee, the superintendent, the chief operations officer, the superintendent’s designee(s) and the executive director of Board Services.  The chairperson of the Audit Committee may discuss any additional concerns he/she has with the report at this time with the superintendent and director of Internal Audit.  The superintendent may include solutions, which shall be included in the report to the Board of Education, to these additional concerns at the time of the Audit Committee meeting after consultation with the appropriate department/individual and the director of Internal Audit. No information shall be deleted from any reports by any party present for secondary reporting.

The secondary report shall include:

• The material from the primary report
• Revisions of or additional recommendations to solve any of the findings from the investigation after the primary report

The director of Internal Audit may request additional documentation for this report as necessary.

Reporting to the Board of Education

The director of Internal Audit and the department/individual designated to conduct the investigation, audit or program evaluation shall present a final draft report, which shall include solutions to any of the chairperson of the Audit Committee’s concerns, to the Audit Committee.  This presentation may be done in closed or executive session in compliance with the Open Meetings Act.

Final Report

After presentation to the Board of Education, and inclusion of relevant recommendations and/or comments from the members of the Audit Committee, the director of Internal Audit shall publish all investigation (if appropriate), audit and program evaluation final reports.  The director of Internal Audit shall delay making investigation, audit and program evaluation reports public when criminal conduct is found in the investigation, audit or program evaluation, 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.

Locally Authorized Charter Schools

Locally authorized charter schools shall have access to whistleblower services.  Albuquerque Public Schools shall have the right to conduct an investigation, audit or program evaluation of a locally authorized charter school, within the parameters of this procedural directive, if there is a whistleblower complaint or concern.  The superintendent or Board of Education may direct the director of Internal Audit to complete an investigation, audit or program evaluation, within the parameters of this procedural directive, if there is an egregious concern about a locally authorized charter school brought to their attention.

Charter School Finances

If the nature of a concern is about the finances of a locally authorized charter school, the director of Internal Audit, or his/her designee, shall conduct an audit.  The director of Internal Audit, or his/her designee, shall compile a report of its findings, recommendations and any other documentation as necessary.    The investigation shall align with all requirements in this procedural directive.  Due to the nature of locally authorized charter schools as component units of Albuquerque Public Schools, the district reserves the right to audit finances of locally authorized charter schools and complete a report for its own purposes.

The director of Internal Audit shall present this report for primary reporting to the superintendent, chief operations officer, assistant superintendent for school and community support services, the superintendent’s designee(s) and the executive director of Board Services.  The report on finances of a locally authorized charter school shall follow the reporting standards contained in this procedural directive, including the secondary report, report to the Board of Education and the final report.  The Board of Education may take appropriate action as outlined in the Charter Schools Procedural Directive regarding financial problems at locally authorized charter schools.

Charter School Personnel

If the nature of a concern is about a personnel issue at a locally authorized charter school, the director of Internal Audit immediately shall forward the concern to the assistant superintendent for school and community support services and the Albuquerque Public Schools Charter/Magnet School director of the concern.  The Albuquerque Public Schools Charter/Magnet Schools director immediately shall notify the governing body and head administrator of the locally authorized charter school of the concern.  The governing body and head administrator of the locally authorized charter school may designate an individual to complete an investigation and resolve the issue.

Charter School Compliance

If the nature of a concern is about a compliance issue at a locally authorized charter school, the director of Internal Audit immediately shall notify the assistant superintendent for school and community support services and Albuquerque Public Schools Charter/Magnet School director.  The assistant superintendent for school and community support services, or his/her designee, shall immediately notify the governing body of the locally authorized charter school to conduct a program evaluation.  The locally authorized charter school shall compile a report of its findings, recommendations and any other documentation as necessary.  Due to the authority as the authorizer of a locally authorized charter school, Albuquerque Public schools reserves the right to audit or evaluate compliance issues of locally authorized charter schools and complete a report for its own purposes if it finds the program evaluation and report from the locally authorized charter school inadequate.

If necessary, the assistant superintendent of school and community support services, or his/her designee shall present this report for primary reporting to the superintendent, chief operations officer, and the superintendent’s designee(s).  The report on compliance of a locally authorized charter school shall follow the reporting standards contained in this procedural directive, including the secondary report, report to the Board of Education and the final report.  The Board of Education may take appropriate action as outlined in the Charter Schools Procedural Directive regarding compliance issues at locally authorized charter schools.

Administrative Position: Chief Operations Officer

Department Director: Director of Internal Audit

References

Legal Cross Ref.:

• §22-8-12.3 NMSA 1978

Board Policy Cross Ref.:

• BD2 – Audit Committee
• GB7 - Whistleblower Complaints

Procedural Directive Cross Ref.:

• Charter School Procedural Directive
• Annual District Audit
• Whistleblower Complaints

NSBA/NEPN Classification: DIE

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

This page was last updated on: December 9, 2009.