School Finance - Week 4 Assignment, Part 5

I found the interview with my assistant superintendent of finance very informative. Every year I am informed of the results of the audit while at a board meeting and/or during an administrative meeting. However, I have not known how the auditor is selected, nor what the logistics of conducting the audit are. Here is what I found out:

The auditor is selected in this manner:

• A call for proposals from auditors is advertised in the local newspapers and on our website.
• The proposals are reviewed, references are called, etc. – very much like an individual applying for a job position.
• The cost of the auditor’s fees are considered in deciding who to contract – though the lowest cost is not always the best to hire.

The auditor conducts the audit in this manner:

• Typically a team of four to five auditors visit the district in the summer, for approximately a week, to conduct an interim audit.
• The team of four to five returns, for approximately a week, shortly after the close of the fiscal year to complete the details of the audit.

The auditor makes the following conclusions about the financial procedures and actions:

• The auditors check for coding errors – use of grants, federal and state funds, etc.
• They look for internal controls, such as procedures that build in redundancy to ensure appropriate actions are made with regard to revenues and expenditures.

The results of the audit are communicated in this manner:

• The auditor prepares a written report that is usually received by the district in November.
• The report is presented to the Board of Trustees for approval at the next regular board meeting.
• After board approval, the report is posted on the district’s website and in the local newspapers (legal requirement).

My assistant superintendent pointed out that they choose an auditor that is reputed to be very thorough, will point out mistakes, and/or ways in which the district can improve. He also mentioned that it is important that the auditor have a strong school finance background. There are reputable financial auditors that are experienced in business and corporate finance, but are not proficient in school finance.