SF Week 4 Part 5

District Leader Interview Regarding Financial Audits

In discussing this process with my Financial Officer he stressed the importance of the duty of the school board to oversee the use of the taxpayers' dollars. One of the most important ways this can be done is through the annual audit. The audit process evaluates the district's financial statements, determines the district's accuracy of providing financial information to the state through the Public Education Information Management System(PEMIS) and the results are also reflected in the Financial Integrity Rating System of Texas (FIRST). TEA provides the FASRG (Financial Accountability System Resource Guide) that provides directions for how the audition process should occur. He said the district's audit process is addressed in the TASB policy CFC(LEGAL).

How are external auditors selected?
The Board and Administration work together to hire auditors on the basis of their competencies and qualifications. The auditors must be certified public accountants. They cannot select on the basis of competitive bids. The auditors present their proposals. Then the Board reviews what is presented. He stressed the it is important for the Board to select the auditors that are best for the district. The auditors will work directly for the Board.

How does the auditor conduct the audit?
Mr. Johnson said he helps provide the information, documents, processes and procedures to the auditors that they will need to conduct the audit, but he is not involved in the audit itself. The auditors examine all the necessary documents, purchasing procedures, bank balances, financial statements,etc. to see if everything is accurate for the fiscal year being audited.

What does the audit conclude about district financial procedures and actions?
The audit is used to determine if the financial procedures and actions truly represent the district's financial position and if those policies are being done. If there is an area of concern they indicate that as a material weakness. Mr. Johnson referenced the last year's audit information on line and I looked it up. The firm also listed the government auditing standards which required them to communicate information under the following topics: significant audit findings, other audit findings or issues, qualitative aspects of accounting practices,difficulities encountered in perfomring the audit, corrected and uncorrected misstatements, disagreements with management, management representations, and management consultaions with other independent accountants.

How are the results are communicated?
The auditors provide a report to the board when they are finished. They will usually present a letter at the first that states the general opinion of the audit followed by the report. They usually discuss this report orally with the board.This gives the board the opportunity to ask questions about the audit. If there are material weaknesses, then the board and auditors will discuss to help determine how to correct the concerns. Once they approve the audit the district then files a copy with TEA.

This was very enlightening for me because I truly did not understand the statement, "the auditors were coming" like I do now. In the past several years my district has implemented new ways of accountability from our pre acqusitions to purchasing and funding. We have implemented EDPro to help us in tracking and approving our pre-acqs and other financial reports. This program is new to me this year, but I can already see the value in this technology. Our Financial Officer came into our district at a time when accountability was being redesigned. He and our superintendent have done a magnificent job in restructuring our procedures and processes to make our financial accountability system more successful for our district.