1. Surviving Your First Audit AASBO Winter Conference Breakout Session III Nate Bowler, Buckeye Elementary

2. New Business Manager

3. Agenda Why you are being audited? How to get ready? What to do when they are here? What to do when they leave?

4. Why you need to be audited Single Audit Act Amendments of 1996 Regulations of Office of Management and Budget (OMB) Circular A-133 “Single Audit” – prior to Circular A-133 different funds were audited differently – “Single Audit” means looking at your entire entity

5. Why you need to be audited An A-133 Single Audit is required when an entity’s Federal Award Expenditures exceeds $500,000 Can be direct federal funds or “pass through” funds coming from Federal indirectly

6. Which kind of audit? Districts Not subject to a Single Audit and M&O expenditures more than $2 million, must contract for an Annual Financial Statement Audit Less than $2 million but more than $700K Biennial Financial Statement audit Less than $700K Procedural review by Auditor General

7. Audit

8. Audit Objectives Internal Controls Compliance

9. Audit Objectives Internal Controls ▫Test of internal controls ▫Internal control structure ▫Policies and Procedures ▫Segregation of duties Compliance ▫Following laws and regulations

10. Internal Controls & Compliance Testing internal controls over compliance ▫Selecting samples ▫“Effective” controls ▫Design, effectiveness ▫Walkthrough of understanding Documentation of controls Can not use auditors as of internal controls!!! Not the auditors responsibility to know all the compliance requirements – it’s yours

11. Other Audit Objectives Risk Assessment and Major program determination Evaluate findings ▫Internal Control Findings ▫Compliance Findings ▫Compliance finding means breakdown of internal control ▫There will be perspective (1 out of 15, 3 out of 5) Follow up on prior year findings – Follow through on improvements

12. How to Get Ready

13. How to Get Ready! USFR Memorandum No. 240 Read your Audit RFP and Contract Award ▫Audit services award ▫Be familiar with who your auditor is and what their qualifications are ▫Know what your auditor is supposed to do USFR Compliance Questionaire Be aware of deadlines of reports ▫Late reports are “red flag” of weaknesses in procedures

14. How to get Ready! Past audits Past audit finding summaries ▫Be aware that if there are findings they WILL ask and look at them again closely ▫Status of prior findings ▫Corrected or not corrected ▫Corrective action plans ▫Planned action completion date explanation AZ Auditor General FAQ’s ▫http://www.azauditor.gov/Reports/School_Districts/FAQs ▫Audit Contracts ▫Deadlines for Reports

15. They’re Here!!!

16. Plan Auditor needs you to make the audit successful Start early and schedule your audit early Ask your auditors early for your PBC’s (Prepared By Client document) Use your staff

17. They’re Still Here!!! Don’t delay, ignore or hide from the auditors Communicate – if you don’t know what they need – Ask! Keep in mind - You hired them Auditor is there to help you Have what they need when they arrive before they arrive Documentation drives quality and it makes auditors feel good

18. They’re Here!

19. They’re Still Here! Be there during field work Be actively involved – try to understand what your auditor is doing and ask questions At the exit ask lots of questions, audit opinion, recommendations Ask what findings mean Don’t be afraid to dispute findings – (if you have a reason to)

21. What to do after they leave Share the findings with management and staff Implement a corrective action plan to address findings Manage the corrective action plan Document the plan

22. What to do after they leave Document the solution to findings Assign the plan to be done Share with your auditor your plan and show documentation Your auditors will follow up in the following year on findings

23. Common Problem Areas Common findings ▫Capital Assets ▫Attendance Procedures ▫Cash reconciliations Federal Compliance for Grants ▫Time & Effort ▫Documentation ▫Title I requirements USFR compliance ▫Calendar items - Timely filing of Reports ▫Cash receipts

24. Discussion and Questions?