How to Nail Your School Audit in Four Easy Steps
As another school year is coming to an end, audit season is nearing. State governments want to ensure their public funds are being properly utilized for public schools while donors of private/choice schools are expecting the same financial accountability and transparency—henceforth the need to perform an education audit. What is an audit? An audit is an independent examination and evaluation of financial and operational records, policies, and procedures to ensure accuracy, accountability, compliance, and efficiency. It involves reviewing and testing internal controls, financial statements, transactions, processes, and systems to assess for potential risks, errors, fraud, or noncompliance. Auditors can also provide recommendations for improvement to these processes.
To ensure your school audit is well-prepared, review this blog to find four easy steps to take to prepare for your audit and potential questions an external auditor may ask you.
- Understand Your Audit Requirements
The first step in preparing for an audit is understanding what the auditor will examine. Educating yourself on the audit requirements and standards will allow you and your auditor a smoother audit process. Keep in mind, the audit may be broad, covering both the financial and operational areas of your business. Therefore, it is essential to understand what the auditor is looking for and what areas of your business they will be evaluating.
- Collect and Organize Necessary Documentation
Once the scope of the audit is known, begin organizing the required documentation in a structured manner. You can begin by developing a checklist to ensure no items are overlooked and each item is accounted for. Auditors will rely heavily on source documentation related to your financial records, employee files, contracts, operations, and more. Having these documents organized will help make headway for a swift review.
Important Documents to Collect:
- The GASB’s Statement 96 offers direction on how governmental entities should account for and disclose the costs and investments associated with subscription-based information technology arrangements (SBITAs). This standard takes effect for fiscal years starting after June 15, 2022, and it is paramount to commence its adoption now.
- Schools receive various different state or federal funding and it’s important to gather all documentation from these grants and agreements to provide to your auditor.
- Communicate with Stakeholders
It is important to communicate with all relevant stakeholders, such as teachers, staff, administrators, and parents about the upcoming audit so they are aware of their roles and responsibilities. Identify these key stakeholders and communicate with them about the process and objectives you have set-forth for their role. Ensure stakeholders have access to all necessary information, and that they understand the importance of the audit—this helps establish the significance of the audit and having cooperation amongst the group.
A follow-up to communicating could be providing training for staff and teachers to ensure compliance with regulatory requirements and internal policies. This could include training on topics such as record keeping, financial management, and data privacy.
- Hire an External Audit Professional
Lastly, schools can seek professional help from a CPA firm or audit consultant to help review your record-keeping, internal controls, financial statements, and overall audit preparedness. They can provide an objective assessment of your business, offering insight into how to prepare for the audit and addressing any potential issues which may arise.
By following these steps, you can ensure your audit is well-organized, efficient, and provides maximum value to your organization.
Prepare Even Further
Before meeting with a CPA firm or audit consultant, it may be beneficial to prepare answers ahead-of-time to typically asked questions to amplify the process. These questions come up in pre-audit meetings or phone calls so the auditor can get a gauge of your background and needs. It is important to note there is no one-size-fits all with audits, and some questions may not be as relevant to your specific district as others. Below are some frequently asked questions, along with how to prepare in a typical audit planning meeting:
“What are areas of concern and what caused significant changes from the previous year?”
This question will help provide insights for the auditor to understand your internal audit procedures and likelihood of accuracy, and if any concerns have risen from your previous year audit. It can also help determine if your internal audit was done to the best of its abilities, or if the auditor can share further analysis on improvements for the future. It’s important to showcase how you perform your internal audits, the processes and steps you take, the overall findings, and how effective—or ineffective—this process was previously.
“Did you have any changes to the school’s financial policies and procedures?”
This is a useful prompt for acknowledging how systems and processes change overtime, and it’s important to disclose these to your auditor. This question will shed light on if you are handling change appropriately, and unravel why changes have been made. It’s good to be honest about any changes and explain why you transformed these procedures. Provide any paperwork explaining new policies compared to the old policies, and same goes for procedures. This gives your auditor clear direction on why/how things have changed.
“Have there been any changes in payroll or large-scale adjustments in positions?”
This question voices understanding on how a district’s budget is being utilized for employee pay. How employees are compensated plays a role in culture, turnover rates, and overall regard towards internal operations. If there have been substantial increases in pay or position changes in management, it may be a red flag on an audit. Auditors may be able to uncover areas where budgets may be spent ineffectively on salary or other internal processes, and provide suggestions for how to improve/reduce liability.
“Has there been any recent breaches in compliance or confidentiality, or other concerning circumstances?”
Breaches in confidentiality or non-compliance can be huge liability risks for an organization or district. Furthermore, if a district displays unethical behavior or poor compliance, risking the integrity of their core values and jeopardizing public perception, morale will be low and turnover rates may increase. It is difficult to overcome negative perceptions after unethical behavior is brought to light, and some districts may wrongly attempt to sweep these actions under the rug. It is the role of the auditor to find any potential liabilities in your district’s policies, procedures or management, and put an end to them. If your auditor team should have any concern for your operational controls, it’s best to bring this to the auditors attention to get to the bottom of it.
“Do you have any budgetary concerns?”
This is your time to speak up, and share your concerns now so they can be addressed long before the process is underway. The answer to this question will help set the tone for the audit, and provide clarity on potential new ideas, possibilities, or concerns which may affect the audit process. Communication between client and auditor plays a critical role in a successful audit. Providing your budgetary concerns with an auditor can help open a door to new insights and may even provide feedback on how to budget appropriately moving forward. An open environment can relieve stress, tension, and unsettled feelings during the process, so be sure to share any concerns/questions upfront.
For more potential questions with internal and external auditors, review this BDO article.
KerberRose Auditing
As Trusted Advisors who specialize in auditing, we understand the stress of undergoing this process — it’s important to know we have our clients’ best interests at heart and only want success for your school or organization. Do not hesitate to ask questions or address concerns you may have regarding your audit or the audit preparation process. KerberRose can provide you an independent audit which can ensure an accurate examination of your district. Reach out today to begin preparing for your external audit service needs, and start implementing these four easy school audit steps today.
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How to Nail Your School Audit in Four Easy Steps
As another school year is coming to an end, audit season is nearing. State governments want to ensure their public funds are being properly utilized for public schools while donors of private/choice schools are expecting the same financial accountability and transparency—henceforth the need to perform an education audit. What is an audit? An audit is an independent examination and evaluation of financial and operational records, policies, and procedures to ensure accuracy, accountability, compliance, and efficiency. It involves reviewing and testing internal controls, financial statements, transactions, processes, and systems to assess for potential risks, errors, fraud, or noncompliance. Auditors can also provide recommendations for improvement to these processes.
To ensure your school audit is well-prepared, review this blog to find four easy steps to take to prepare for your audit and potential questions an external auditor may ask you.
- Understand Your Audit Requirements
The first step in preparing for an audit is understanding what the auditor will examine. Educating yourself on the audit requirements and standards will allow you and your auditor a smoother audit process. Keep in mind, the audit may be broad, covering both the financial and operational areas of your business. Therefore, it is essential to understand what the auditor is looking for and what areas of your business they will be evaluating.
- Collect and Organize Necessary Documentation
Once the scope of the audit is known, begin organizing the required documentation in a structured manner. You can begin by developing a checklist to ensure no items are overlooked and each item is accounted for. Auditors will rely heavily on source documentation related to your financial records, employee files, contracts, operations, and more. Having these documents organized will help make headway for a swift review.
Important Documents to Collect:
- The GASB’s Statement 96 offers direction on how governmental entities should account for and disclose the costs and investments associated with subscription-based information technology arrangements (SBITAs). This standard takes effect for fiscal years starting after June 15, 2022, and it is paramount to commence its adoption now.
- Schools receive various different state or federal funding and it’s important to gather all documentation from these grants and agreements to provide to your auditor.
- Communicate with Stakeholders
It is important to communicate with all relevant stakeholders, such as teachers, staff, administrators, and parents about the upcoming audit so they are aware of their roles and responsibilities. Identify these key stakeholders and communicate with them about the process and objectives you have set-forth for their role. Ensure stakeholders have access to all necessary information, and that they understand the importance of the audit—this helps establish the significance of the audit and having cooperation amongst the group.
A follow-up to communicating could be providing training for staff and teachers to ensure compliance with regulatory requirements and internal policies. This could include training on topics such as record keeping, financial management, and data privacy.
- Hire an External Audit Professional
Lastly, schools can seek professional help from a CPA firm or audit consultant to help review your record-keeping, internal controls, financial statements, and overall audit preparedness. They can provide an objective assessment of your business, offering insight into how to prepare for the audit and addressing any potential issues which may arise.
By following these steps, you can ensure your audit is well-organized, efficient, and provides maximum value to your organization.
Prepare Even Further
Before meeting with a CPA firm or audit consultant, it may be beneficial to prepare answers ahead-of-time to typically asked questions to amplify the process. These questions come up in pre-audit meetings or phone calls so the auditor can get a gauge of your background and needs. It is important to note there is no one-size-fits all with audits, and some questions may not be as relevant to your specific district as others. Below are some frequently asked questions, along with how to prepare in a typical audit planning meeting:
“What are areas of concern and what caused significant changes from the previous year?”
This question will help provide insights for the auditor to understand your internal audit procedures and likelihood of accuracy, and if any concerns have risen from your previous year audit. It can also help determine if your internal audit was done to the best of its abilities, or if the auditor can share further analysis on improvements for the future. It’s important to showcase how you perform your internal audits, the processes and steps you take, the overall findings, and how effective—or ineffective—this process was previously.
“Did you have any changes to the school’s financial policies and procedures?”
This is a useful prompt for acknowledging how systems and processes change overtime, and it’s important to disclose these to your auditor. This question will shed light on if you are handling change appropriately, and unravel why changes have been made. It’s good to be honest about any changes and explain why you transformed these procedures. Provide any paperwork explaining new policies compared to the old policies, and same goes for procedures. This gives your auditor clear direction on why/how things have changed.
“Have there been any changes in payroll or large-scale adjustments in positions?”
This question voices understanding on how a district’s budget is being utilized for employee pay. How employees are compensated plays a role in culture, turnover rates, and overall regard towards internal operations. If there have been substantial increases in pay or position changes in management, it may be a red flag on an audit. Auditors may be able to uncover areas where budgets may be spent ineffectively on salary or other internal processes, and provide suggestions for how to improve/reduce liability.
“Has there been any recent breaches in compliance or confidentiality, or other concerning circumstances?”
Breaches in confidentiality or non-compliance can be huge liability risks for an organization or district. Furthermore, if a district displays unethical behavior or poor compliance, risking the integrity of their core values and jeopardizing public perception, morale will be low and turnover rates may increase. It is difficult to overcome negative perceptions after unethical behavior is brought to light, and some districts may wrongly attempt to sweep these actions under the rug. It is the role of the auditor to find any potential liabilities in your district’s policies, procedures or management, and put an end to them. If your auditor team should have any concern for your operational controls, it’s best to bring this to the auditors attention to get to the bottom of it.
“Do you have any budgetary concerns?”
This is your time to speak up, and share your concerns now so they can be addressed long before the process is underway. The answer to this question will help set the tone for the audit, and provide clarity on potential new ideas, possibilities, or concerns which may affect the audit process. Communication between client and auditor plays a critical role in a successful audit. Providing your budgetary concerns with an auditor can help open a door to new insights and may even provide feedback on how to budget appropriately moving forward. An open environment can relieve stress, tension, and unsettled feelings during the process, so be sure to share any concerns/questions upfront.
For more potential questions with internal and external auditors, review this BDO article.
KerberRose Auditing
As Trusted Advisors who specialize in auditing, we understand the stress of undergoing this process — it’s important to know we have our clients’ best interests at heart and only want success for your school or organization. Do not hesitate to ask questions or address concerns you may have regarding your audit or the audit preparation process. KerberRose can provide you an independent audit which can ensure an accurate examination of your district. Reach out today to begin preparing for your external audit service needs, and start implementing these four easy school audit steps today.
How to Nail Your School Audit in Four Easy Steps
As another school year is coming to an end, audit season is nearing. State governments want to ensure their public funds are being properly utilized for public schools while donors of private/choice schools are expecting the same financial accountability and transparency—henceforth the need to perform an education audit. What is an audit? An audit is an independent examination and evaluation of financial and operational records, policies, and procedures to ensure accuracy, accountability, compliance, and efficiency. It involves reviewing and testing internal controls, financial statements, transactions, processes, and systems to assess for potential risks, errors, fraud, or noncompliance. Auditors can also provide recommendations for improvement to these processes.
To ensure your school audit is well-prepared, review this blog to find four easy steps to take to prepare for your audit and potential questions an external auditor may ask you.
- Understand Your Audit Requirements
The first step in preparing for an audit is understanding what the auditor will examine. Educating yourself on the audit requirements and standards will allow you and your auditor a smoother audit process. Keep in mind, the audit may be broad, covering both the financial and operational areas of your business. Therefore, it is essential to understand what the auditor is looking for and what areas of your business they will be evaluating.
- Collect and Organize Necessary Documentation
Once the scope of the audit is known, begin organizing the required documentation in a structured manner. You can begin by developing a checklist to ensure no items are overlooked and each item is accounted for. Auditors will rely heavily on source documentation related to your financial records, employee files, contracts, operations, and more. Having these documents organized will help make headway for a swift review.
Important Documents to Collect:
- The GASB’s Statement 96 offers direction on how governmental entities should account for and disclose the costs and investments associated with subscription-based information technology arrangements (SBITAs). This standard takes effect for fiscal years starting after June 15, 2022, and it is paramount to commence its adoption now.
- Schools receive various different state or federal funding and it’s important to gather all documentation from these grants and agreements to provide to your auditor.
- Communicate with Stakeholders
It is important to communicate with all relevant stakeholders, such as teachers, staff, administrators, and parents about the upcoming audit so they are aware of their roles and responsibilities. Identify these key stakeholders and communicate with them about the process and objectives you have set-forth for their role. Ensure stakeholders have access to all necessary information, and that they understand the importance of the audit—this helps establish the significance of the audit and having cooperation amongst the group.
A follow-up to communicating could be providing training for staff and teachers to ensure compliance with regulatory requirements and internal policies. This could include training on topics such as record keeping, financial management, and data privacy.
- Hire an External Audit Professional
Lastly, schools can seek professional help from a CPA firm or audit consultant to help review your record-keeping, internal controls, financial statements, and overall audit preparedness. They can provide an objective assessment of your business, offering insight into how to prepare for the audit and addressing any potential issues which may arise.
By following these steps, you can ensure your audit is well-organized, efficient, and provides maximum value to your organization.
Prepare Even Further
Before meeting with a CPA firm or audit consultant, it may be beneficial to prepare answers ahead-of-time to typically asked questions to amplify the process. These questions come up in pre-audit meetings or phone calls so the auditor can get a gauge of your background and needs. It is important to note there is no one-size-fits all with audits, and some questions may not be as relevant to your specific district as others. Below are some frequently asked questions, along with how to prepare in a typical audit planning meeting:
“What are areas of concern and what caused significant changes from the previous year?”
This question will help provide insights for the auditor to understand your internal audit procedures and likelihood of accuracy, and if any concerns have risen from your previous year audit. It can also help determine if your internal audit was done to the best of its abilities, or if the auditor can share further analysis on improvements for the future. It’s important to showcase how you perform your internal audits, the processes and steps you take, the overall findings, and how effective—or ineffective—this process was previously.
“Did you have any changes to the school’s financial policies and procedures?”
This is a useful prompt for acknowledging how systems and processes change overtime, and it’s important to disclose these to your auditor. This question will shed light on if you are handling change appropriately, and unravel why changes have been made. It’s good to be honest about any changes and explain why you transformed these procedures. Provide any paperwork explaining new policies compared to the old policies, and same goes for procedures. This gives your auditor clear direction on why/how things have changed.
“Have there been any changes in payroll or large-scale adjustments in positions?”
This question voices understanding on how a district’s budget is being utilized for employee pay. How employees are compensated plays a role in culture, turnover rates, and overall regard towards internal operations. If there have been substantial increases in pay or position changes in management, it may be a red flag on an audit. Auditors may be able to uncover areas where budgets may be spent ineffectively on salary or other internal processes, and provide suggestions for how to improve/reduce liability.
“Has there been any recent breaches in compliance or confidentiality, or other concerning circumstances?”
Breaches in confidentiality or non-compliance can be huge liability risks for an organization or district. Furthermore, if a district displays unethical behavior or poor compliance, risking the integrity of their core values and jeopardizing public perception, morale will be low and turnover rates may increase. It is difficult to overcome negative perceptions after unethical behavior is brought to light, and some districts may wrongly attempt to sweep these actions under the rug. It is the role of the auditor to find any potential liabilities in your district’s policies, procedures or management, and put an end to them. If your auditor team should have any concern for your operational controls, it’s best to bring this to the auditors attention to get to the bottom of it.
“Do you have any budgetary concerns?”
This is your time to speak up, and share your concerns now so they can be addressed long before the process is underway. The answer to this question will help set the tone for the audit, and provide clarity on potential new ideas, possibilities, or concerns which may affect the audit process. Communication between client and auditor plays a critical role in a successful audit. Providing your budgetary concerns with an auditor can help open a door to new insights and may even provide feedback on how to budget appropriately moving forward. An open environment can relieve stress, tension, and unsettled feelings during the process, so be sure to share any concerns/questions upfront.
For more potential questions with internal and external auditors, review this BDO article.
KerberRose Auditing
As Trusted Advisors who specialize in auditing, we understand the stress of undergoing this process — it’s important to know we have our clients’ best interests at heart and only want success for your school or organization. Do not hesitate to ask questions or address concerns you may have regarding your audit or the audit preparation process. KerberRose can provide you an independent audit which can ensure an accurate examination of your district. Reach out today to begin preparing for your external audit service needs, and start implementing these four easy school audit steps today.