School District Audit Readiness Checklist

School District Audit Readiness Checklist

Putting in the time and effort to prepare for an audit can help your district facilitate a smooth process that saves time and money; leads to a reliable and objective audit report; and helps detect and rectify potential issues before the audit begins.

Here’s a checklist of what to do before an audit to help streamline the actual audit itself, meet key deadlines (and avoid delays), and even possibly lead to better outcomes:

  • Familiarize yourself with the audit process and standards such as Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) guidelines.
  • Create an audit committee and select its lead. Discuss the audit process, requirements, roles and responsibilities, and a timeline of key dates and activities.
  • Meet with the Committee and auditors to review the audit plan.
  • Meet with business office staff to discuss the implementation of any new accounting standards.
  • Request, collect, and organize documentation and information from appropriate departments and staff, per the audit requirements. This includes income statements, balance sheets, and cash flow statements, bank statements, invoices, receipts, payroll records, purchase orders, contracts, and other financial documents.
  • Gather information about new or closed bank accounts; new charters and activities; Board members and Administrators; and any debt and attorney information necessary for confirmations. Remember, you must report any material financial or management changes.
  • Prepare copies of current Risk Assessment documents, Claims Auditor reports, Internal Audit reports, OSC audits and corrective action plans, OPEB actuary reports, lease agreements, subscription-based IT arrangements, and tax abatement information.
  • Coordinate with firms providing financial services (i.e., maintaining depreciation records or preparing financial statements) to obtain the required documentation.
  • Reconcile all accounts by checking that amounts match between accounting records and the actual cash, assets, liabilities, equity, revenue, and expenses.
  • If applicable, review records of student activity funds. These funds are often audited separately and require special attention.
  • If you received grant funding, ensure all documents relating to the grant are available and organized. This includes grant agreements, receipts of expenditures, and performance reports.
  • Maintain up-to-date and complete inventory records of capital assets, including property and equipment.
  • Prepare a Management Discussion and Analysis (MD&A) report that includes financial highlights, an overview of the financial statements, and a description of the district’s financial performance.
  • Review and document internal processes and controls (they’ll be evaluated in their effectiveness at preventing fraud and errors).
  • Conduct a self-audit or internal review to identify and address any potential problems. Perform a fraud risk brainstorm.
  • Review federal and state regulations to ensure that all compliance requirements are met. This includes funding guidelines, procurement procedures, and payroll laws.
  • Review any prior audit findings and recommendations to ensure corrective action was implemented.
  • Make sure the initial resolution for funding of district reserves is passed by June 30 and any follow-up resolutions are completed before the tax levy is set.
  • Present results to the Board and ensure the audit is filed by the October 15 deadline.

As you prepare for your audit, please know you can always count on RBT CPAs for accounting, audit, advisory, and tax assistance. Contact us to learn how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Expense Accounts and Credit Cards: Are Your Union’s Practices in Check?

Expense Accounts and Credit Cards: Are Your Union’s Practices in Check?

In the interest of transparency and accountability, there are stringent laws governing the use of credit cards and expense accounts for unions. These laws are intended to safeguard the funds of union members and ensure that all expenditures are in line with the interests of the union.

At the federal level, the Labor-Management Reporting and Disclosure Act (LMRDA) sets the foundation for these regulations. It mandates that unions maintain precise records of all income and expenditures, including credit card transactions and expense accounts. Any form of misuse or misappropriation of funds is considered a severe violation of this law and can result in hefty penalties or even imprisonment.

Still, expense accounts and credit cards provide a convenient and efficient method of paying for union activities.

A union expense account is designed to cover costs related to union activities. Permissible expenses include union meeting costs, training events, legal fees, and administrative expenses like office supplies and utilities. Funds can also be used for lobbying and campaigning initiatives that support the interests of the union members. However, there are strict limits on personal expenses. Funds cannot be used for personal trips, non-union-related meals, or personal items. Also, any kind of expenditure that could be seen as a conflict of interest, such as gifts to union officials, are strictly prohibited.

Credit cards, on the other hand, offer a convenient way to pay for union expenses, while offering the added benefit of providing detailed statements to track spending. However, they cannot be used for personal purposes or non-union expenses. It’s vital that cardholders adhere to guidelines set by the union to ensure financial transparency and responsible spending.

Compliance in managing these financial tools helps ensure a union’s financial stability by preventing unnecessary or excessive spending. It safeguards a union from potential legal implications related to misuse or fraudulent activity. It maintains trust among union members, as they can see their dues being used responsibly and transparently.

To promote compliance and reduce risks, union leaders should implement stringent policies and procedures around the use of expense accounts and credit cards by:

  1. Establishing Clear Policies: Develop comprehensive guidelines that outline what expenses are permissible, the approval process for expenses, and the consequences of misuse.
  2. Conducting Regular Audits: Regularly review and audit expense account and credit card statements to identify any irregularities.
  3. Training: Provide training to all union members who have access to these financial tools. They should understand the policies and procedures, and the importance of compliance.
  4. Limiting Access: Restrict the number of people who have access to union credit cards and expense accounts to minimize the risk of misuse.
  5. Promoting Transparency: Regularly share financial reports with union members to promote transparency and accountability.

If you need any assistance setting up financial controls for credit card and expense account use and approvals or conducting an internal audit, as well as any accounting, advisory, audit or tax support, you can count on RBT CPAs professionals. Contact us to learn how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.